00 CS FOR SENATE BILL NO. 141(L&C) 01 "An Act relating to possession of an electronic smoking product by a minor and to 02 selling or giving an electronic smoking product to a minor; relating to business license 03 endorsements to sell cigarettes, cigars, tobacco, products containing tobacco, electronic 04 smoking products, or products containing nicotine; and relating to citations for certain 05 offenses concerning tobacco or nicotine products." 06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 07  * Section 1. AS 11.76.105(a) is amended to read: 08 (a) A person under 19 years of age may not knowingly possess a cigarette, an  09 electronic smoking product, a cigar, tobacco, or a product containing tobacco in this 10 state. This subsection does not apply to a person who is a prisoner at an adult 11 correctional facility. 12  * Sec. 2. AS 11.76.107(a) is amended to read: 13 (a) A person commits the offense of failure to supervise a [CIGARETTE] 01 vending machine if the person owns premises licensed as a beverage dispensary under 02 AS 04.11.090 or licensed as a club under AS 04.11.110 or licensed as a package store 03 under AS 04.11.150 and with criminal negligence fails to have an employee supervise 04 a vending machine on those premises that dispenses cigarettes, cigars, tobacco, [OR] 05 products containing tobacco, electronic smoking products, or products containing  06 nicotine as required by AS 11.76.100(b)(1)(B) and 11.76.109(f)(1)(B). 07  * Sec. 3. AS 11.76.109(a) is amended to read: 08 (a) A person commits the offense of selling or giving an electronic smoking  09 product or a product containing nicotine to a minor if the person 10 (1) negligently sells an electronic smoking product or a product 11 containing nicotine to a person under 19 years of age; [OR] 12 (2) is 19 years of age or older and negligently exchanges or gives an  13 electronic smoking product or a product containing nicotine to a person under 19 14 years of age;  15 (3) maintains a vending machine that dispenses electronic smoking  16 products or products containing nicotine; or  17 (4) holds a business license endorsement under AS 43.70.075 and  18 allows a person under 19 years of age to sell an electronic smoking product or a  19 product containing nicotine. 20  * Sec. 4. AS 11.76.109(b) is amended to read: 21 (b) The provisions of (a) of this section do not apply to the sale, exchange, or 22 gift to a person under 19 years of age of 23 (1) an electronic smoking product that  24 (A) is being marketed and sold solely for the approved  25 purposes; and  26 (B) is  27 (i) prescribed by a health care professional;  28 (ii) given to a person by the person's parent or legal  29 guardian;  30 (iii) provided by a state-approved tobacco cessation  31 program administered by the Department of Health and Social  01 Services; or  02 (iv) provided by a pharmacist to a person 18 years of  03 age or older without a prescription; or  04 (2) a product containing nicotine that is intended or expected to be 05 consumed without being combusted if the product 06 (A) [(1)] has been approved by the United States Food and 07 Drug Administration for sale as a tobacco use cessation or harm reduction 08 product or for other medical purposes; 09 (B) [(2)] is being marketed and sold solely for the approved 10 purposes; and 11 (C) [(3)] is 12 (i) [(A)] prescribed by a health care professional;  13 (ii) [(B)] given to a person by the person's parent or 14 legal guardian; 15 (iii) [(C)] provided by a state-approved tobacco 16 cessation program administered by the Department of Health and 17 Social Services; or 18 (iv) [(D)] provided by a pharmacist to a person 18 years 19 of age or older without a prescription.  20  * Sec. 5. AS 11.76.109 is amended by adding new subsections to read: 21 (f) Notwithstanding (a)(3) of this section, a person who maintains a vending 22 machine is not in violation of (a)(3) of this section if the vending machine is located 23 (1) on premises licensed as a beverage dispensary under AS 04.11.090, 24 licensed as a club under AS 04.11.110, or licensed as a package store under 25 AS 04.11.150, and is located 26 (A) as far as practicable from the primary entrance; and 27 (B) in a place that is directly and continually supervised by a 28 person employed on the licensed premises during the hours the vending 29 machine is accessible to the public; or 30 (2) in an employee break room or other controlled area of a private 31 work place that is not generally considered a public place and the room or area 01 contains a posted warning sign at least 11 inches by 14 inches indicating that 02 possession of electronic smoking products or products containing nicotine by a person 03 under 19 years of age without a prescription is prohibited under AS 11.76.109. 04 (g) The court shall forward a record of each person convicted under this 05 section who holds a business license endorsement under AS 43.70.075, or who is an 06 employee or agent of a person who holds a business license endorsement under 07 AS 43.70.075, to the Department of Commerce, Community, and Economic 08 Development. 09  * Sec. 6. AS 11.81.900(b) is amended by adding a new paragraph to read: 10 (67) "electronic smoking product" 11 (A) means 12 (i) an electronic cigarette, electronic cigar, electronic 13 cigarillo, electronic pipe, or other similar device that is used to 14 aerosolize and deliver nicotine, a synthetic of nicotine, or another 15 substance that may cause an adverse effect on the person inhaling from 16 the device; and 17 (ii) a component, solution, alternative tobacco product, 18 e-liquid, e-juice, vapor product, flavoring, or other related product of an 19 electronic cigarette, electronic cigar, electronic cigarillo, electronic 20 pipe, or other similar device of any size or shape used for, or to assist 21 with, aerosolizing and inhaling chemical substances that may cause an 22 adverse effect on human health; 23 (B) does not include a drug, device, or combination product, as 24 those terms are defined in 21 U.S.C. 301-399f (Food, Drug, and Cosmetic 25 Act), that is approved for sale by the United States Food and Drug 26 Administration. 27  * Sec. 7. AS 43.50.105(b) is amended to read: 28 (b) A person who is licensed under this chapter may not ship or cause to be 29 shipped cigarettes to a person in this state unless the person receiving the cigarettes 30 (1) is licensed under this chapter; 31 (2) holds a business license [TOBACCO] endorsement under 01 AS 43.70.075; 02 (3) is an operator of a customs bonded warehouse under 19 U.S.C. 03 1311 or 19 U.S.C. 1555; 04 (4) is an instrumentality of the federal government or an Indian tribal 05 organization authorized by law to possess cigarettes not taxed under this chapter; or 06 (5) is an individual 19 years of age or older receiving the cigarettes for 07 personal consumption and the tax imposed on the cigarettes under this chapter has 08 been paid. 09  * Sec. 8. AS 43.70.075(a) is amended to read: 10 (a) Unless a person has a business license endorsement issued under this 11 section for each location or outlet in a location where the person offers tobacco 12 products, electronic smoking products, or products containing nicotine for sale, a 13 person may not sell or allow a vending machine to sell in its location or outlet 14 cigarettes, cigars, tobacco, [OR OTHER] products containing tobacco, electronic  15 smoking products, or products containing nicotine as a retailer at that location or 16 outlet. Each endorsement required under this section is in addition to any other license 17 or endorsement required by law. A person may not apply for an endorsement under 18 this section for a location or outlet if an endorsement issued for the same location or 19 outlet is currently suspended or revoked. An endorsement issued for a location or 20 outlet to a person in violation of this subsection is void. 21  * Sec. 9. AS 43.70.075(d) is amended to read: 22 (d) If a person who holds an endorsement issued under this section, or an 23 agent or an employee of a person who holds an endorsement issued under this section 24 acting within the scope of the agency or employment, has been convicted of violating 25 AS 11.76.100, 11.76.106, [OR] 11.76.107, or 11.76.109, the department shall impose 26 a civil penalty as set out in this subsection. However, following a hearing under (m) of 27 this section, and based on evidence admitted at that hearing concerning questions 28 specified in (m)(4) and (6) of this section, the department may reduce by not more 29 than 10 days a suspension under (1) of this subsection, or by not more than 20 days a 30 suspension under (2) of this subsection, or increase by not more than 10 days a 31 suspension under (1) of this subsection, or by not more than 20 days a suspension 01 under (2) of this subsection. If a hearing is not requested, or if a hearing is requested 02 and the department determines that the evidence admitted does not support increasing 03 or decreasing the suspension, the department shall suspend the endorsement for a 04 period of 05 (1) 20 days and impose a civil penalty of $300 if the person has not 06 been previously convicted of violating AS 11.76.100, 11.76.106, [OR] 11.76.107, or  07 11.76.109 and is not otherwise subject to the sanctions described in (2) - (4) of this 08 subsection; 09 (2) 45 days and impose a civil penalty of $500 if, within the 24 months 10 before the date of the department's notice under (m) of this section, the person, or an 11 agent or employee of the person while acting within the scope of the agency or 12 employment of the person, was convicted once of violating AS 11.76.100, 11.76.106, 13 [OR] 11.76.107, or 11.76.109; 14 (3) 90 days and impose a civil penalty of $1,000 if, within the 24 15 months before the date of the department's notice under (m) of this section, the person, 16 or an agent or employee of the person while acting within the scope of the agency or 17 employment of the person, was convicted twice of violating AS 11.76.100, 11.76.106, 18 [OR] 11.76.107, or 11.76.109, or a provision of this section or a regulation 19 implementing this section adopted under AS 43.70.090; or 20 (4) one year and impose a civil penalty of $2,500 if, within the 24 21 months before the date of the department's notice under (m) of this section, the person, 22 or an agent or employee of the person while acting within the scope of the agency or 23 employment of the person, was convicted more than twice of violating AS 11.76.100, 24 11.76.106, [OR] 11.76.107, or 11.76.109. 25  * Sec. 10. AS 43.70.075(f) is amended to read: 26 (f) A person who holds a license endorsement issued under this section shall 27 post on the licensed premises a warning sign as described in this subsection. A 28 warning sign for tobacco products required by this subsection must be at least 6 29 inches by 18 inches and must read, in lettering at least 1.25 inches high: "The sale of 30 tobacco products to persons under age 19 is illegal." A warning sign for electronic  31 smoking products and products containing nicotine must be at least 6 inches by  01 18 inches and must read, in lettering at least 1.25 inches high: "The sale of  02 electronic smoking products or products containing nicotine to a person under 19  03 without a prescription is illegal." A person holding an endorsement issued under this 04 section shall display the appropriate sign in a manner conspicuous to a person 05 purchasing or consuming tobacco products, electronic smoking products, or  06 products containing nicotine on the licensed premises. The department shall, without 07 charge, furnish the appropriate warning signs required under this section to a person 08 who holds an endorsement issued under this section or a person who requests the sign 09 with the intention of displaying it. 10  * Sec. 11. AS 43.70.075(i) is amended to read: 11 (i) The commissioner or the commissioner of revenue may seize cigarettes,  12 electronic smoking products, or products containing nicotine that do not comply 13 with this section. After notice and an opportunity for a hearing, the commissioner or 14 the commissioner of revenue shall destroy cigarettes, electronic smoking products,  15 or products containing nicotine seized under this subsection. 16  * Sec. 12. AS 43.70.075(l) is amended to read: 17 (l) Notwithstanding (a) of this section, a person owning vending machines that 18 offer tobacco products, electronic smoking products, or products containing  19 nicotine for sale need obtain only one business license endorsement under this section 20 even if the person has vending machines in more than one outlet or location in the 21 state. The person who owns a vending machine that offers tobacco products,  22 electronic smoking products, or products containing nicotine for sale and the 23 person who owns the premises where the vending machine is located are both required 24 to obtain a business license endorsement issued under this section. If the endorsement 25 of the person owning the vending machine is suspended or revoked, the person may 26 not sell cigarettes, cigars, [OR OTHER] products containing tobacco, electronic  27 smoking products, or products containing nicotine during the period of suspension 28 or revocation through the use of vending machines at the location or outlet where the 29 violation occurred. During the period of suspension or revocation, the person owning 30 that vending machine may not use that machine to sell tobacco products, electronic  31 smoking products, or products containing nicotine at another location or outlet. 01  * Sec. 13. AS 43.70.075(m) is amended to read: 02 (m) The department may initiate suspension of a business license endorsement 03 or the right to obtain a business license endorsement under this section by sending the 04 person subject to the suspension a notice by certified mail, return receipt requested, or 05 by delivering the notice to the person. The notice must contain information that 06 informs the person of the grounds for suspension, the length of any suspension sought, 07 and the person's right to administrative review. A suspension begins 30 days after 08 receipt of notice described in this subsection unless the person delivers a timely 09 written request for a hearing to the department in the manner provided by regulations 10 of the department. If a hearing is requested under this subsection, an administrative 11 law judge of the office of administrative hearings (AS 44.64.010) shall determine the 12 issues by using the preponderance of the evidence test and shall, to the extent they do 13 not conflict with regulations adopted under AS 44.64.060, conduct the hearing in the 14 manner provided by regulations of the department. A hearing under this subsection is 15 limited to the following questions: 16 (1) was the person holding the business license endorsement, or an 17 agent or employee of the person while acting within the scope of the agency or 18 employment of the person, convicted by plea or judicial finding of violating 19 AS 11.76.100, 11.76.106, [OR] 11.76.107, or 11.76.109; 20 (2) if the department does not allege a conviction of AS 11.76.100, 21 11.76.106, [OR] 11.76.107, or 11.76.109, did the person, or an agent or employee of 22 the person while acting within the scope of the agency or employment of the person, 23 violate a provision of (a) or (g) of this section; 24 (3) within the 24 months before the date of the department's notice 25 under this subsection, was the person, or an agent or employee of the person while 26 acting within the scope of the agency or employment of the person, convicted of 27 violating AS 11.76.100, 11.76.106, [OR] 11.76.107, or 11.76.109 or adjudicated for 28 violating a provision of (a) or (g) of this section; 29 (4) did the person holding the business license endorsement establish 30 that the person holding the business license endorsement had adopted and enforced an 31 education, a compliance, and a disciplinary program for agents and employees of the 01 person as provided in (t) of this section; 02 (5) did the person holding the business license endorsement overcome 03 the rebuttable presumption established in (w) of this section; 04 (6) within five years before the date of the violation that is the subject 05 of the hearing, did the department establish that the person holding the business 06 license endorsement 07 (A) previously violated (a) or (g) of this section; 08 (B) previously violated AS 11.76.100, 11.76.106, [OR] 09 11.76.107, or 11.76.109 at a location or outlet in a location for which the 10 person holds a business license endorsement, or had an agent or employee 11 previously violate AS 11.76.100, 11.76.106, [OR] 11.76.107, or 11.76.109; 12 this subparagraph does not apply to a prior conviction that served to enhance a 13 suspension period under (d)(2) - (4) of this section; or 14 (C) engaged at a location owned by the person in other conduct 15 that was or is likely to result in the sale of tobacco, electronic smoking  16 products, or products containing nicotine to a person under 19 years of age 17 in violation of AS 11.76.100, 11.76.106, [OR] 11.76.107, or 11.76.109. 18  * Sec. 14. AS 43.70.075(r) is amended to read: 19 (r) For purposes of this section, the sale of a product containing tobacco,  20 electronic smoking product, or product containing nicotine by an agent or 21 employee of a person who holds or is required to hold a business license endorsement 22 under this section at the location or outlet in a location for which the endorsement was 23 or was required to be issued is rebuttably presumed to have been a sale within the 24 person's scope of agency or employment. 25  * Sec. 15. AS 43.70.075(t) is amended to read: 26 (t) Based on evidence provided at the hearing under (m)(4) - (6) of this 27 section, the department may reduce the license suspension period under (d) of this 28 section if the person holding the business license endorsement establishes that, before 29 the date of the violation, the person had 30 (1) adopted and enforced a written policy against selling cigarettes, 31 cigars, tobacco, [OR] products containing tobacco, electronic smoking products, or  01 products containing nicotine to a person under 19 years of age in violation of 02 AS 11.76.100, 11.76.106, [OR] 11.76.107, or 11.76.109; 03 (2) informed the person's agents and employees of the applicable laws 04 and their requirements and conducted training on complying with the laws and 05 requirements; 06 (3) required each agent and employee of the person to sign a form 07 stating that the agent and employee has been informed of and understands the written 08 policy and the requirements of AS 11.76.100, 11.76.106, [AND] 11.76.107, and  09 11.76.109; 10 (4) determined that the agents and employees of the person had 11 sufficient experience and ability to comply with the written policy and requirements of 12 AS 11.76.100, 11.76.106, [AND] 11.76.107, and 11.76.109; 13 (5) required the agents and employees of the person to verify the age 14 of purchasers of cigarettes, cigars, tobacco, [OR] other products containing tobacco,  15 electronic smoking products, or products containing nicotine by means of a valid 16 government issued photographic identification; 17 (6) established and enforced disciplinary sanctions for noncompliance 18 with the written policy or the requirements of AS 11.76.100, 11.76.106, [AND] 19 11.76.107, and 11.76.109; and 20 (7) monitored the compliance of the agents and employees of the 21 person with the written policy and the requirements of AS 11.76.100, 11.76.106, 22 [AND] 11.76.107, and 11.76.109. 23  * Sec. 16. AS 43.70.075(v) is amended to read: 24 (v) Notwithstanding (d) of this section, in place of a hearing under (m) of this 25 section, the department and the person holding the business license endorsement may 26 enter into a memorandum of agreement regarding the imposition of a suspension and 27 civil penalties based on a violation of AS 11.76.100, 11.76.106, [OR] 11.76.107, or  28 11.76.109. The memorandum of agreement must contain a provision that the person 29 holding the business license endorsement admits or does not contest that a violation of 30 AS 11.76.100, 11.76.106, [OR] 11.76.107, or 11.76.109 occurred and accepts the 31 imposition of suspension and civil penalty under this section. Based on the 01 memorandum of agreement, the department may reduce the period of suspension. For 02 violations involving AS 11.76.100, 11.76.106, [OR] 11.76.107, or 11.76.109, the 03 department may not reduce the period of suspension by more than 10 days under 04 (d)(1) of this section or by more than 20 days under (d)(2) of this section. The 05 department may not agree to a reduction in the period of suspension more than once in 06 a 12-month time period for a location or outlet in a location for which the person holds 07 a business license endorsement. 08  * Sec. 17. AS 43.70.075(w) is amended to read: 09 (w) For purposes of (m)(5) of this section, a conviction for a violation of 10 AS 11.76.100, 11.76.106, [OR] 11.76.107, or 11.76.109 by the agent or employee of 11 the person who holds the business license endorsement is rebuttably presumed to 12 constitute proof of the fact that the agent or employee negligently sold a cigarette, a 13 cigar, or tobacco, [OR] a product containing tobacco, electronic smoking product, or  14 product containing nicotine to a person under 19 years of age. The person who holds 15 the business license endorsement may overcome the presumption by establishing by 16 clear and convincing evidence that the agent or employee did not negligently sell a 17 cigarette, a cigar, or tobacco, [OR] a product containing tobacco, electronic smoking  18 product, or product containing nicotine to a person under 19 years of age in 19 violation of AS 11.76.100, 11.76.106, [OR] 11.76.107, or 11.76.109 as alleged in the 20 citation issued to the agent or employee. The presentation of evidence authorized by 21 this subsection does not constitute a collateral attack on the conviction described in 22 this subsection. 23  * Sec. 18. AS 43.70.075(x) is amended to read: 24 (x) Notwithstanding (d), (t), or (v) of this section, a period of suspension may 25 not be reduced for a violation of AS 11.76.100(a)(4) or 11.76.109(a)(3). 26  * Sec. 19. AS 43.70.075 is amended by adding a new subsection to read: 27 (y) In this section, 28 (1) "electronic smoking product" has the meaning given in 29 AS 11.76.900; 30 (2) "product containing nicotine" does not include a cigarette, a cigar, 31 tobacco, or a product containing tobacco. 01  * Sec. 20. AS 43.70.105(b) is amended to read: 02 (b) Notwithstanding an exemption provided by (a) of this section, a person 03 who sells cigarettes, cigars, tobacco, [OR OTHER] products containing tobacco,  04 electronic smoking products, or products containing nicotine as a retailer must 05 have a business license under AS 43.70.020 and a business license endorsement 06 required under AS 43.70.075. 07  * Sec. 21. AS 44.29.092 is amended to read: 08 Sec. 44.29.092. Citation for certain offenses concerning tobacco or nicotine  09 products. A peace officer or an agent or employee of the Department of Health and 10 Social Services who is authorized by the commissioner of health and social services to 11 enforce this section may issue a citation for a violation of AS 11.76.100, 11.76.106, 12 [OR] 11.76.107, or 11.76.109 if there is probable cause to believe a person has 13 violated AS 11.76.100, 11.76.106, [OR] 11.76.107, or 11.76.109. 14  * Sec. 22. The uncodified law of the State of Alaska is amended by adding a new section to 15 read: 16 APPLICABILITY. AS 11.76.105(a), as amended by sec. 1 of this Act, 17 AS 11.76.107(a), as amended by sec. 2 of this Act, AS 11.76.109(a), as amended by sec. 3 of 18 this Act, AS 11.76.109(b), as amended by sec. 4 of this Act, and AS 11.76.109(f), added by 19 sec. 5 of this Act, apply to offenses committed on or after the effective date of this Act.