Legislature(2001 - 2002)
04/18/2001 03:15 PM House L&C
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
April 18, 2001
3:15 p.m.
MEMBERS PRESENT
Representative Lisa Murkowski, Chair
Representative Andrew Halcro, Vice Chair
Representative Kevin Meyer
Representative Pete Kott
Representative Norman Rokeberg
Representative Harry Crawford
Representative Joe Hayes
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 225
"An Act relating to municipal taxation of alcoholic beverages
and increasing the alcoholic beverage tax rates."
- MOVED CSHB 225(L&C) OUT OF COMMITTEE
HOUSE BILL NO. 228
"An Act relating to the offense of selling or giving tobacco to
a minor, to the accounting of fees from business license
endorsements for tobacco products, to the disclosure of certain
confidential cigarette and tobacco product information, to
notification regarding a cigarette manufacturer's noncompliance
with the tobacco product Master Settlement Agreement, to
business license endorsements for sale of tobacco products, to
citations and penalties for illegal sales of tobacco products;
and providing for an effective date."
- MOVED CSHB 228(L&C) OUT OF COMMITTEE
HOUSE BILL NO. 157
"An Act relating to trust companies and providers of fiduciary
services; amending Rules 6 and 12, Alaska Rules of Civil
Procedure, Rule 40, Alaska Rules of Criminal Procedure, and
Rules 204, 403, 502, 602, and 611, Alaska Rules of Appellate
Procedure; and providing for an effective date."
- BILL HEARING POSTPONED TO 4/19/01
PREVIOUS ACTION
BILL: HB 225
SHORT TITLE:ALCOHOLIC BEVERAGE TAX
SPONSOR(S): REPRESENTATIVE(S)MURKOWSKI
Jrn-Date Jrn-Page Action
03/30/01 0789 (H) READ THE FIRST TIME -
REFERRALS
03/30/01 0789 (H) L&C, FIN
04/03/01 0830 (H) COSPONSOR(S): HUDSON
04/09/01 (H) L&C AT 3:15 PM CAPITOL 17
04/09/01 (H) Heard & Held
MINUTE(L&C)
04/10/01 (H) L&C AT 3:00 PM CAPITOL 120
04/10/01 (H) Heard & Held
MINUTE(L&C)
04/11/01 (H) L&C AT 3:15 PM CAPITOL 17
04/11/01 (H) Heard & Held
04/11/01 (H) MINUTE(L&C)
04/18/01 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 228
SHORT TITLE:SALE OF TOBACCO PRODUCTS
SPONSOR(S): REPRESENTATIVE(S)HARRIS
Jrn-Date Jrn-Page Action
04/02/01 0809 (H) READ THE FIRST TIME -
REFERRALS
04/02/01 0809 (H) L&C, JUD, FIN
04/03/01 0831 (H) COSPONSOR(S): HUDSON,
MURKOWSKI
04/17/01 1021 (H) COSPONSOR(S): KERTTULA
04/18/01 1053 (H) COSPONSOR(S): CRAWFORD
04/18/01 (H) L&C AT 3:15 PM CAPITOL 17
WITNESS REGISTER
JOHN MANLY, Staff
to Representative John Harris
Alaska State Legislature
Capitol Building, Room 513
Juneau, Alaska 99801
POSITION STATEMENT: Testified on behalf of the sponsor of HB
228.
ELMER LINDSTROM, Special Assistant
Office of the Commissioner
Department of Health & Social Services
PO Box 110601
Juneau, Alaska 99811
POSITION STATEMENT: Testified on HB 228.
EDWIN SASSER, Project Coordinator
Division of Public Health
Department of Health & Social Services
PO Box 110630
Juneau, Alaska 99811
POSITION STATEMENT: Answered questions on HB 228.
MICHAEL LIVINGSTON, Detective
Anchorage Police Department
4501 South Bragaw
Anchorage, Alaska 99507
POSITION STATEMENT: Testified on HB 228.
DAN BRANCH, Assistant Attorney General
Commercial Section
Civil Division (Juneau)
Department of Law
PO Box 110300
Juneau, Alaska 99811
POSITION STATEMENT: Answered questions on HB 228.
JOHANNA BALES, Revenue Auditor
Tax Division
Department of Revenue
550 west 7th Street
Anchorage, Alaska 99501
POSITION STATEMENT: Answered questions on HB 228.
JENNIFER STRICKLER, Administrative Officer
Division of Occupational Licensing
Department of Community & Economic Development
PO Box 110806
Juneau, Alaska 99811
POSITION STATEMENT: Answered questions on HB 228.
ACTION NARRATIVE
TAPE 01-59, SIDE A
Number 0001
CHAIR LISA MURKOWSKI called the House Labor and Commerce
Standing Committee meeting to order at 3:15 p.m. Members
present at the call to order were Representatives Murkowski,
Halcro, Crawford, and Hayes. Representatives Meyer, Kott, and
Rokeberg joined the meeting as it was in progress.
HB 225-ALCOHOLIC BEVERAGE TAX
CHAIR MURKOWSKI announced that the first order of business would
be HOUSE BILL NO. 225, "An Act relating to municipal taxation of
alcoholic beverages and increasing the alcoholic beverage tax
rates."
CHAIR MURKOWSKI reminded members that during the last hearing
[April 11] there was a motion to reconsider after a successful
vote to move the bill out of committee. That reconsideration
motion, she said, was out of order. The only thing [the
committee] had failed to do was [sign the committee report].
Number 0166
CHAIR MURKOWSKI announced that CSHB 225(L&C) moved from the
House Labor and Commerce Standing Committee.
HB 228-SALE OF TOBACCO PRODUCTS
CHAIR MURKOWSKI announced that the final order of business would
be HOUSE BILL NO. 228, "An Act relating to the offense of
selling or giving tobacco to a minor, to the accounting of fees
from business license endorsements for tobacco products, to the
disclosure of certain confidential cigarette and tobacco product
information, to notification regarding a cigarette
manufacturer's noncompliance with the tobacco product Master
Settlement Agreement, to business license endorsements for sale
of tobacco products, to citations and penalties for illegal
sales of tobacco products; and providing for an effective date."
Number 0286
JOHN MANLY, Staff to Representative John Harris, Alaska State
Legislature, came forth on behalf of the sponsor of HB 228. He
stated that this came to Representative Harris's attention as he
was doing the Department of Health & Social Services budget.
[The state], he said, is being thwacked by the federal
government for $1.5 million in the drug-and-alcohol block grants
because the tobacco-sales-to-minors [rate] is too high. The
federal government sets a target of about 20 percent of sales to
minors; however, Alaska is running about 61 percent in the Bush,
and about one third in the urban areas.
MR. MANLY explained that, essentially, HB 228 increases the
penalties that would be paid by the owner of the business who
holds the endorsement on the business license to sell tobacco
products. Representative Harris has asked for relatively hefty
fines in that regard; therefore, they are set between $1,000 and
$5,000. In addition, the department currently has the option to
suspend the endorsement so the business can't sell tobacco
products for a certain amount of time - up to 45 days. Those
suspensions, [with this bill] would be set at 20 days for the
first offense, 45 days for the second, and 90 days for the
third.
MR. MANLY informed the committee that the bill makes a number of
other changes. The most significant one concerns the cost of
the tobacco endorsement for a business license. Currently, it
is $25 for a two-year endorsement, whether it is for a mom-and-
pop shop or a big chain store. This bill proposes to change
that to $100 for a two-year endorsement per outlet. He stated
that this makes it easier to enforce a suspension of an
endorsement, and to keep track of violations. He added that
there are other minor parts of the bill, such as in Sections 3
and 4, that have to do with the Department of Revenue's tracking
of the compliance with the tobacco settlement that all the
states have entered into.
Number 0657
CHAIR MURKOWSKI asked whether [the legislature] is currently
being penalized for not being in compliance.
MR. MANLY responded that the budget for this coming fiscal year
has $1.5 million deducted from the drug and alcohol abuse grant.
He said this is based on compliance checks that were done in
1999. He remarked that presuming the legislature will approve
the attached fiscal notes and put $481,000 into tobacco
enforcement, the federal government will relieve the legislature
of the penalty for this year.
CHAIR MURKOWSKI asked whether the $481,000 is over and above
what [the legislature] has currently put in the operating budget
for tobacco prevention or cessation programs.
MR. MANLY answered that it is in addition to what the
legislature had spent in the last fiscal year.
Number 0749
REPRESENTATIVE HALCRO said he is only concerned that the bill
will not solve the problem unless there is a substantial
investment in enforcement. He asked Mr. Manly whether he has
had discussions with any of the departments about how to apply
the money to enforcement, and about increasing ABC [Alcohol
Beverage Control] enforcement.
MR. MANLY responded that to his knowledge that has not been
discussed. He stated that the bulk of this money would be used
to contract with local law enforcement to increase the checks.
Number 0861
ELMER LINDSTROM, Special Assistant, Office of the Commissioner,
Department of Health & Social Services [DHSS], came forth and
stated that this legislation is an important issue facing the
department. He referred to a PowerPoint presentation [hard copy
provided in the committee packets] and stated that this provides
a good deal of introductory information on the impact of tobacco
on [Alaska and Alaskans]. The latter sections, he said, go into
specific discussion of the enforcement issues.
CHAIR MURKOWSKI referred on page 7 [of the presentation] to the
statistic, "Between 1988 and 1996, the percentage of teenagers
taking up the habit jumped 73 percent." She asked Mr. Lindstrom
whether the [department's] statistical evaluation only goes
through 1996, and whether there have been efforts that have
decreased the incidence of teenage smoking.
MR. LINDSTROM responded that these numbers are from the Center
for Disease Control [and Prevention] (CDC). He said he is
guessing that they probably came from the youth risk-behavior
surveys that are done by most states.
Number 0994
EDWIN SASSER, Project Coordinator, Division of Public Health,
Department of Health & Social Services [DHSS], came forth and
stated that the bulk of the numbers in the [PowerPoint
presentation] are CDC numbers, with a couple of exceptions.
CHAIR MURKOWSKI asked whether it's not that there isn't
information after 1996, but that was just the period of time the
survey was taking things into account.
MR. SASSER responded that it was the period of time that there
were solid numbers the department felt were recordable.
MR. LINDSTROM referred to a description of what a comprehensive
tobacco control program ought to look like [the bottom of page
10, continuing to page 12]. He noted that it includes a number
of components such as community tobacco-prevention programs,
chronic-disease programs, school prevention programs, an
enforcement component, counter-marketing, statewide programs,
smoking cessation programs, surveillance and evaluation systems,
and an administrative system to make it all work.
Unfortunately, he said, the department does not have sufficient
resources in its comprehensive tobacco control program to do the
job that needs to be done on each one of these elements. He
explained that the enforcement component is part of the
comprehensive program. It is unique, he said, because it is the
one element by its very nature that relies on the state to
perform. The advice from everyone working in tobacco control
in the absence of fully funding the tobacco control program has
been that enforcement is not regarding as the highest priority.
That is backed up by the CDC.
MR. LINDSTROM referred to page 13 [of the presentation] and
explained that the federal Synar [amendment requires]
"enforcement of state-level minors' access laws" to decrease
sales to persons under the age of 18 to less than 20 percent.
This is done by annual statewide inspection surveys that
accurately measure the effectiveness of enforcement efforts.
The department then reports annually to the U.S. Secretary of
Health and Human Services. The penalty for noncompliance is the
reduction of the substance abuse block grant - treatment dollars
for people who are alcohol abusers or who abuse other controlled
substances.
Number 1190
MR. LINDSTROM remarked that he has been frustrated over the last
year. On the one hand, the federal government, which controls
tobacco, says, "You need a comprehensive program, but if you
don't have enough money, enforcement isn't really the top
priority." On the other hand, another federal agency "holds a
gun" and says, "Unless you make enforcement a priority, we are
going to hold hostage your alcohol treatment dollars." He
expressed that the people who are responsible for administering
the substance abuse programs don't wake up in the morning
feeling that tobacco control is their first priority. Likewise,
people in public health really aren't tied to the desires and
needs of the substance abuse community and the federal law that
governs them.
CHAIR MURKOWSKI surmised that [the legislature] is in compliance
in that [the department] conducts the annual survey, but is not
in compliance with getting the numbers to the level the U.S.
Secretary of Health and Human Services wants.
MR. LINDSTROM responded in the affirmative, but noted that over
the last four or five years the methodology that [the
department] has used has changed from year to year. For
example, one year [the department] had access to some federal
Food and Drug Administration dollars, which thought it was in
the business of regulating tobacco until the U.S. Supreme Court
ruled that it really didn't have jurisdiction.
Number 1317
MR. LINDSTROM referred to slide 35, which gives a picture of
what the enforcement program looks like. If a clerk in a retail
outlet sells tobacco to a minor and is found guilty of that
offense, the finding of guilt is supposed to go from the court
system to the Division of Occupational Licensing. The end point
is the suspension of that retailer's ability to sell tobacco to
anyone for up to 45 days for a first offense and up to 90 days
for a second offense. The problem, he said, is that there are
many agencies and people that need to be involved in different
parts of the process to get from point A to point B. He
explained that the Division of Alcoholism and Drug Abuse is
responsible for generating the sample of outlets to be
inspected. The Division of Public Health has been responsible
for contracting with local law enforcement. If a tobacco sale
is made, a citation will be issued, and it will then go into the
court system. The court system has to be counted on to send the
material on to the Division of Occupational Licensing, and the
division has to be counted on to pursue the suspension.
Number 1434
MR. LINDSTROM remarked that with the exception of the tobacco
prevention and control people within the Division of Public
Health, none of these other agencies "wake up every morning
going, 'I know that one of my top priorities, one of my missions
in life, is to enforce the state tobacco control ordinance.'"
He added that it doesn't surprise him that the "tobacco sales to
minors" law does not rise to the top as something that local law
enforcement would do. Likewise, he said, the Division of
Occupational Licensing is primarily a revenue-generator and was
never conceived as a regulatory mechanism.
CHAIR MURKOWSKI asked how the Division of Occupational Licensing
became involved in the first place.
MR. LINDSTROM responded that he has not researched how that came
about. However, the underlying law has been on the books for
many years, and has only sporadically been used. The first
significant efforts, he said, were during the negotiations for
the tobacco settlement when the Department of Law made a
conscious decision to pursue a number of these citations. The
[department's] task today, he said, is to put in place a real
system that will keep working over time without special care and
attention on the part of a particular commissioner.
MR. LINDSTROM remarked that there was a reference to the fiscal
penalties and said [the state] was found in noncompliance for
federal fiscal year 2000; the basis of that noncompliance is on
[page] 15. Of the outlets surveyed last fall in the more remote
areas - communities with fewer than 9 outlets - 61 percent of
the time the youths were successful in buying tobacco; in
communities with 9 to 49 outlets, it was 40 percent of the time;
and in the major cities - Anchorage, Juneau, Fairbanks, and
Ketchikan - it was 26 percent of the time. The bottom line is
that [minors] are buying tobacco at an unacceptably high rate.
MR. LINDSTROM reported that [Alaska] was found in noncompliance
for federal fiscal year 1999 and appealed. Before the appeal
could run its course, Congress, several months ago, passed an
alternative penalty. The federal government said, "We will not
take $1.5 million of your substance abuse treatment money if,
effective July of 2001, you demonstrate that you can put new
resources into the tobacco enforcement program [of]
approximately $481,000." He noted that those are the funds
reflected in the fiscal note.
Number 1664
CHAIR MURKOWSKI asked what could be done now in terms of
training clerks about the sale of tobacco products.
MR. LINDSTROM responded that historically very little has been
done by the state. That is a significant component of the
fiscal note, and some of the additional resources will be used
for vendor education and training. He remarked that he knows
there is a training program that Philip Morris or someone in the
industry has made available to retailers.
MR. SASSER remarked that the We Card program is a consortium of
tobacco company money. As part of a settlement in Juneau, a
curriculum was prepared whereby the Division of Public Health
worked out, as part of the settlement for vendors who had sold
tobacco products to youths, having their penalty reduced by
going through a vendor education program. He stated that it is
a pretty good curriculum, and it is adaptable to a statewide
application as part of tobacco enforcement now. He added that
he thinks businesses and clerks deserve knowing upfront how much
damage they can do to their boss, to their business, and to
themselves by inadvertently or volitionally selling tobacco to
youth.
CHAIR MURKOWSKI asked whether the state sends out a fact sheet
when a person renews his or her endorsement.
MR. SASSER responded that every vendor who had an endorsement
prior to the year 2000 in the state has received at least one
packet. The division has since passed out letters to those who
passed and failed the last Synar checks.
Number 1825
REPRESENTATIVE MEYER stated that this is a subject of interest
to him. He said it seems to him that the clerks should know
that what they are selling is different from a candy bar. He
remarked that he is wondering if 20 days for the first offense
is enough, because it is so hard to catch businesses that are
selling to minors. He added that it would seem to him that
there should be periodic "stings." In terms of a vending
machine, he said he thinks they should be in the vision of the
clerk or the owner. He asked whether [Alaska] still has federal
money coming to the local municipalities for the stings, and
whether the division would support a stiffer penalty for first
offenses.
MR. LINDSTROM responded that to his knowledge no funding goes
directly to municipalities from the federal government for this
effort. In the past, he said, there have been federal dollars
coming through [DHSS]. He remarked that under the current law,
the first penalty could be up to 45 days and the second offense
could be up to 90 days. He said he thinks from the department's
perspective, the certainty of the penalty is at least as
important as the duration. He added that he doesn't believe
[the department] would object if it were a mandatory 45 days on
the first offense, but it should be fixed. In addition, he
said, the bill also includes something that isn't in current
law, which is the fine to the retailer - $1,000 - for the first
offense.
CHAIR MURKOWSKI asked whether each vending machine would have to
have a separate endorsement.
Number 2135
MR. LINDSTROM responded that the entity that actually owns the
vending machines must have an endorsement, and there is an
endorsement required for the people who are responsible to see
that nobody accesses that particular machine. For example, if a
person owns a bowling alley and had a cigarette machine on the
premises, the bowling alley must have an endorsement and would
be held responsible if kids are accessing that machine. At the
same time, the person who owns the machine also has to have an
endorsement.
MR. SASSER added that in the bill, it is very difficult to have
a penalty assessed for a vending machine company, because
[someone from the company] would have to have placed the machine
either too close to a door or in a place where 17-year-olds or
18-year-olds can access it. While there is a provision in the
bill for a vending machine company to lose its endorsement, it
would be very rare that would be the case. The responsibility
for observing the sales made on a daily basis from that machine
falls to the place that contracted with the vendor, he
indicated.
CHAIR MURKOWSKI asked, if the bowling alley [clerk] consistently
looks the other way when kids purchase cigarettes from the
machine, whether this bill allows for the vending machine to be
pulled from the premise.
MR. SASSER responded that if the vending machine company has
negligently placed the machine, then its endorsement is at risk.
If the bowling alley negligently supervised the machine, then it
loses its endorsement; during the time the endorsement is
suspended, the machine is either locked up or removed.
CHAIR MURKOWSKI asked whether there are two endorsements in one
establishment: the endorsement on the vending machine that's
held by the vending machine owner, and the endorsement to the
premises to have the vending machine.
MR. SASSER answered that the vending machine company has only
one endorsement statewide, no matter how many machines [the
company] places.
Number 2246
REPRESENTATIVE HAYES asked how many incidents would have to
happen for a business [with a vending machine] to be
[considered] negligent.
MR. SASSER answered that the youth would have to be on the
premises where he or she is not supposed to be, in order to buy
from the vending machine. For example, the only time a bowling
alley could have a vending machine would be if there were a bar.
Incidental purchases, he said, are rare in those circumstances.
REPRESENTATIVE ROKEBERG asked what the financial impact would be
if the bill failed to pass.
MR. LINDSTROM responded that the impact on the tobacco program
is nil; the impact on the substance abuse alcohol treatment
program is $1.5 million.
Number 2333
MICHAEL LIVINGSTON, Detective, Anchorage Police Department,
testified via teleconference. He shared with the committee how
he became involved in this issue. He stated:
It started back in the 1980s when I would drive by
high schools [and] there would be a large number of
kids outside smoking. I'd ask them where they get
their cigarettes from, and they would tell me, "About
any store in Anchorage."
I wanted to begin doing tobacco stings, but my
department basically said, "No, the timing's not
right." Back in 1997 the State of Alaska was
considering suing the tobacco industry and the tobacco
industry filed a preemptive lawsuit saying, "You can't
sue us." It was about that time, the attorney
general's office got a hold of the chief of police,
and the chief of police got a hold of me and asked me
to start doing stings.
Since 1997, ... I have written probably more tickets
for sale of tobacco to minors than any other police
officer in the state of Alaska. I've testified in
more criminal cases with defense attorneys, probably
more than any other police officer in Alaska. I've
talked with many store clerks, I've talked with many
tobacco license owners. So when I talk about tobacco,
I feel that my information is based upon a great deal
of experience. ... Quite frankly, by now I was hoping
that the problem would be taken care of, but obviously
it is not.
DETECTIVE LIVINGSTON continued:
I am in support of almost all of the provisions,
except for any attempts to amend Title 11. Title 11
is not [broken]; Title 11 works very well right now.
The changes on the surface that are being proposed
appear to be good changes. I am in support of
progressive discipline; however, I can't help but
wonder whether or not the proposed changes are legal.
...
Number one, [AS] 11.76.100 is a violation. The
maximum fine under Title 11 for any violation is $300.
So, if you attempt to amend the law and increase the
fine to anything over $300, I can't help but wonder
whether or not that law will be challenged and
determined to be unconstitutional and improper.
Number two, is it necessary? Of all the citations
that I've issued or supervised the issuance [of] by
other police officers, there's been only one case out
of at least 100 citations where there were repeat
offenders. Typically, it's not the tobacco license
owner who actually does the sale. Typically, it's the
clerk and typically, from one time to the next, it's a
different clerk. In summary, I would request that you
leave Title 11 alone.
I would like to comment just briefly on the 20-day
suspension. On the surface, initially, I was in
opposition of that, because I do believe in harsh
punishment for repeat offenders. However, over the
years I've spoken with many owners of tobacco
licenses, and I think one thing we need to do is make
certain that we're being fair to them.
TAPE 01-59, SIDE B
Number 2459
DETECTIVE LIVINGSTON continued and stated that he thinks a 20-
day suspension is fairer than a 45-day suspension. He
commented:
Those of us who have been around in law enforcement
since the 1980s remember ... the situation with
alcohol vendors. We would try to get the people who
owned the liquor licenses to get their clerks to stop
selling alcohol to minors. And back then, the
response we got was, "There's such a high turnover
with alcohol clerks that we don't have the time to
train them." And it wasn't until a crisis occurred
that that situation was finally addressed. It took
the liquor store clerk here in Anchorage to sell
alcohol to a minor. That minor got drunk and got
behind the wheel of a car, and then went out and got
in an accident where people died. And the police
found that receipt in that car. And it was not until
then that TAM (Techniques of Alcohol Management) was
mandated in Alaska. ...
I advocate that the State of Alaska implement a system
in which tobacco vendors - all tobacco venders, not
just the license owner but the clerks - must also go
through some sort of training. And I know that it's
going to take a crisis before we finally take action,
but, quite frankly, we are in a crisis right now.
We've got more and more kids smoking, especially
Alaskan Native kids. Twenty percent of the general
population of kids smoke. ... We're getting whacked by
the federal government for $1.5 million. And if those
first two crises don't get our attention, there's a
third crises on the horizon that's looming, and that's
the suspension of more and more tobacco licenses.
Back in 1997 it was the mom-and-pop stores that were
selling tobacco to minors. Today it is no longer the
mom-and-pop stores; we suspended their licenses [and]
they're behaving today. It's no longer the grocery
stores; they're behaving. Who's taking their place?
It's the gas stations. ...
We're running a backward system in Alaska: we're
waiting until the violation occurs. We need to run a
forward system: we need to mandate that all clerks
[and] all tobacco license owners get training
beforehand. And I think that's going to be a big step
toward taking care of the problem.
We need to get those companies involved in the
process. For example, [since] back in 1997 when the
Fred Meyer store was cited, they have been very, very
progressive in taking care of the situation. They
police themselves. They do their own tobacco
compliance checks with secret shoppers out of
Portland, Oregon, and when a clerk sells tobacco to
one of their secret shoppers, they get an arrest.
They either train, retrain, or terminate that
employee. When a clerk does not sell the tobacco to
the secret shopper, they would award that person. ...
When I send my kids into Fred Meyer here in Anchorage,
they don't sell to us anymore. I would even support
mandating laws in Alaska to make it so that clerks and
tobacco license owners need to get that training
upfront, so it's no longer a backward system.
Number 2320
REPRESENTATIVE HAYES stated that it sounds as if Detective
Livingston is a "one-man gang" in Anchorage checking for people
who are selling [tobacco] to minors. He asked who is funded in
other areas of the state to do these types of checks.
DETECTIVE LIVINGSTON responded that there are more police
officers in Anchorage involved in the program. In general, he
said, it started out at the request of the Office of the
Attorney General; there was funding from the [federal] Food and
Drug Administration and the State of Alaska. He remarked that
he would like to see more involvement from the State of Alaska's
enforcement division. He said he is not aware of one state
trooper or one VPSO (village public safety officer) who is
involved in the program. In some of the tiny villages, 100
percent of the stores have sold to minors.
REPRESENTATIVE HAYES asked, if [the committee] passes the bill,
whether there would be enough folks out in the field to actually
make headway in regard to stopping minors from buying
cigarettes.
DETECTIVE LIVINGSTON replied that there are enough people; they
just need to understand why it's such an important issue. He
said he doesn't think people know there is a possible $1.5
million "fine."
Number 2226
REPRESENTATIVE ROKEBERG, in reference to Detective Livingston's
testimony regarding Title 11, stated that he is concerned about
how that is implemented currently under AS 11.76.100(d). He
asked, if an employee makes the sale, whether he or she could be
punished by a $300 fine.
DETECTIVE LIVINGSTON responded that he was correct.
REPRESENTATIVE ROKEBERG remarked that the bill reads that the
person making the sale also owns the business license and
endorsement. He asked Detective Livingston how he currently
handles the distinction between the violation by a business and
the violation by an employee.
DETECTIVE LIVINGSTON answered that currently, if the employee or
clerk sells tobacco to a minor, he or she is cited for a sale of
tobacco to a minor. He added that about 99.9 percent of the
past cases have involved a clerk and not the tobacco license
owner; therefore, he said he doesn't think the changes to Title
11 are necessary.
Number 2147
MR. LINDSTROM stated that he thinks an alternative would be to
delete [the fines] from AS 11.76.100 and integrate them into the
civil penalties under AS 43.70.075(d) [page 7, Section 7
continuing on to page 4].
REPRESENTATIVE ROKEBERG asked whether there are any other
federal requirements the [legislature] needs to be in
conformance with.
MR. LINDSTROM responded that he would have to defer to the
sponsor. He noted that this provision was not a suggestion from
the division.
MR. MANLY remarked that Representative Harris wanted to make the
fines fairly stiff. He said there was some discussion that came
up when going through this. For example, when commercial
fishing violations become too high, they are no longer just
fines but heavier criminal offenses. He said he doesn't think
Representative Harris would have a problem if they were moved
into AS 43.70; it would probably make more sense for them to be
there anyway.
REPRESENTATIVE ROKEBERG asked Mr. Lindstrom whether [DHSS] has
any administrative proceedings that assess fines under the APA
[Administrative Procedure Act].
MR. LINDSTROM responded that the administration of these civil
fines is not within his department; it is within the Division of
Occupational Licensing [Department of Community & Economic
Development]. He said he knows that [the Division of
Occupational Licensing's and DHSS'] desire, should [the
committee] move the bill, is for some certainty that it is a
$1,000 fine or a $5,000 fine, to minimize the potential of
endless administrative hearings, appeals, and all the costs that
go with that.
Number 1982
REPRESENTATIVE ROKEBERG asked Detective Livingston whether he
thinks those levels of fines would be fair, and if there should
be civil fines mandated.
DETECTIVE LIVINGSTON responded that he would urge a great deal
of caution, because when criminal sanctions mingle with civil
sanctions, it can get extremely complicated. Above all, he
would ask if it is necessary. Right now the clerk is cited
under Title 11, and if he or she is convicted, then the tobacco
license [owner] is looking at a suspension of the license, which
really gets the license owner's attention. He stated that there
needs to be more consistency; instead of checks every four
years, they need to be done more regularly. The long-term
solution, in his opinion, is writing laws that mandate that all
tobacco licensees and tobacco clerks be trained before they can
sell tobacco.
REPRESENTATIVE ROKEBERG asked Detective Livingston whether he
has ever cited the same clerk or the same business more than
once.
DETECTIVE LIVINGSTON answered that he has cited the same clerk
more than once. One happened to also be the tobacco license
owner; however, it was determined that the he could not legally
sell tobacco at all in his location. Typically, he said, it is
a different clerk.
REPRESENTATIVE ROKEBERG suggested creating a misdemeanor for a
multiple offender because of the $300 violation cap.
DETECTIVE LIVINGSTON responded that he knows there have been
laws that have been proposed in the past for a second [offense]
to be a misdemeanor and for a third offense to be a felony. He
said in general [those cases] are going to be very rare.
REPRESENTATIVE ROKEBERG suggested raising the violation cap to
$500.
Number 1811
DETECTIVE LIVINGSTON replied that typically store clerks who
actually get the $300 fine are not highly paid; therefore, the
fine does get their attention. He remarked that the enforcement
just needs to be consistent.
CHAIR MURKOWSKI referred to the noncompliance survey results and
stated that it is troubling that communities with less than nine
outlets have a 61 percent noncompliance rate. These are the
towns where everyone knows everyone. She remarked that she is
making the logical jump that people don't care what the rule is
and will sell cigarettes to anybody, regardless of whether they
know the person. She asked Detective Livingston for his opinion
on how to deal with the smaller communities.
DETECTIVE LIVINGSTON responded that it was disturbing for him,
too, when he went out to some of the tiny places. He said he
thinks part of the reason [the percentage] is better in
Anchorage is because citations have been issued and the word has
been getting out, whereas the chance of someone out in a remote
village actually getting a ticket seems to be pretty small. He
remarked that one of the best ways to get the numbers reduced in
Alaska is to work with the big gas stations.
Number 1611
DAN BRANCH, Assistant Attorney General, Commercial Section,
Civil Division (Juneau), Department of Law, testified via
teleconference. In regard to Section 1 of the bill, which would
amend AS 11.76.100(d), he stated that he is not prepared to
totally explore the constitutionality of the proposed changes.
He said it is true that a violation is generally a $300 fine;
however, he isn't sure that having a higher penalty for this one
particular statute would cause a conflict. The fact that the
fine for a person with two prior [convictions] who is also the
owner of the tobacco endorsement is $5,000 creates concerns,
because generally if punishment is mandated for an offense in
the form of a fine, it is high enough to be considered criminal
by the court system.
CHAIR MURKOWSKI stated that as the bill is drafted, a citation
is written up but the person receiving the citation is not
required to sign the notice. She asked Mr. Branch whether there
is any problem with adequate notice to the individual who
receives the citation. Essentially, she said, the citation is
issued to the person who sold [the tobacco] but the entity that
holds the endorsement is the one that is ultimately punished if
the endorsement is pulled. She asked whether there are noticing
problems.
MR. BRANCH responded that he doesn't believe so. He stated that
the citation provisions in Section 11 are designed to give the
folks at [DHSS] the authority to require the clerk to appear in
court. The notice that is provided through the citation form is
to the clerk or to the person who actually sold the tobacco.
The fact that they don't have to sign it is not significant,
because they will receive a copy of it. He added that it is
basically the same approach as when police officers summons
individuals to court for violations. The tobacco endorsement
holder will receive notice of intent to suspend the tobacco
endorsement.
Number 1286
REPRESENTATIVE ROKEBERG referred to page 6, line 27, which
states, "AS 44.62 (Administrative Procedure Act) does not apply
to a hearing under this section", and asked Mr. Branch whether
that is typical statutory construction - to exempt the hearing
officers from the APA and allow the department to draft its own
regulation.
MR. BRANCH responded that it is not uncommon to have such an
approach. The APA provides the standards for administrative
review. This particular bill, he said, provides quite a bit of
structure. It sets out provisions for how the administrative
hearing will be conducted and for how the commissioner will
consider adopting or rejecting the decision. There is then an
opportunity to appeal. The bill is designed to streamline the
administrative process, which makes the penalties mandatory as
opposed to discretionary. He added that he thinks it is
appropriate to have this particular bill provide that, instead
of having the APA structures apply. By law, any regulations
promulgated would have to be consistent with the statutes under
which they are implemented.
Number 1132
REPRESENTATIVE ROKEBERG asked Mr. Branch, if [the committee]
were to delete the $1,000 to $5,000 fines in the criminal
section of Section 1, whether the provisions found under the
hearing procedures [subsection (p) on page 6] allowing for a
fine of up to $250 a day in a civil penalty, not to exceed
$5,000, would give a hearing officer the ability to assess a
fine of any amount up to $5,000.
MR. BRANCH responded that that provision would give the hearing
officer the authority to impose a fine for violating paragraph
(2) of AS 43.70.075, which requires that there be a sign posted
on the premises. He remarked that if the [committee] wanted to
move the fine from Section 1 into a civil context, the more
appropriate way to do that would be to put it in subsection (d)
or AS 43.70.075, as Mr. Lindstrom suggested.
REPRESENTATIVE ROKEBERG stated that Mr. Lindstrom also indicated
that he'd prefer to see a stipulated nondiscretionary fine
level.
MR. BRANCH responded that he thinks that is reasonable, given
that the goal is to streamline the process. There needs to be a
streamlined process in order to punish violations of the fine.
REPRESENTATIVE ROKEBERG asked, if the fines are mandated, why
there would be a hearing.
MR. BRANCH answered that if the person who is fined doesn't
think there should be a fine, he or she is entitled to a
hearing. From the department's point of view, if the
endorsement holder doesn't ask for a hearing, then there won't
be one.
REPRESENTATIVE ROKEBERG stated that it seems to him that it's at
the discretion of the hearing officer to assess the fine. He
said, "It could be a distinction between Safeway and mom and pop
about what the amount of fine might be appropriate."
Number 0881
MR. MANLY commented that the fines [his office] has come up with
are not particularly arbitrary; Representative Harris wants to
have some fairly hefty fines. He said he agrees that a $1,000
fine might hit a mom and pop [store] a lot harder than it would
a Safeway; however, if the endorsements are separated out per
location, Safeway could lose the endorsement for a store and not
be able to sell tobacco for 20 days.
REPRESENTATIVE ROKEBERG stated that he agrees with Detective
Livingston about removing the penalties from Title 11 and
putting any civil penalty under AS 43. He suggested having
default minimum penalties with ranges and letting the hearing
officer hear the testimony.
MR. LINDSTROM responded that that could be a possibility;
however, he is concerned that the $481,000 in new resources will
be spent a whole lot more on hearing officers and attorneys than
on enforcement.
REPRESENTATIVE ROKEBERG stated that if he was facing a $5,000
fine, he would be more interested in litigating it than
defaulting on it.
Number 0722
CHAIR MURKOWSKI remarked that if she understands what
Representative Rokeberg is saying, he is going to choose to
litigate, yet he is suggesting that these penalties be set. She
remarked that perhaps it needs to be more difficult to appeal
these mandatory fines. She added that Representative Rokeberg
had made a point that there needs to be some flexibility when a
mom-and-pop shop that has fouled up a couple of times, since
when the gas station appears to be the big violator, the $2,000
fine is meaningless.
DETECTIVE LIVINGSTON stated, "On the other hand, I think that
the suspension of their endorsement might have a bigger impact
on them than it would on a mom and pop."
REPRESENTATIVE ROKEBERG remarked that there's nothing
discretionary with the way the bill is drafted; there is the
suspension and the fine. It certainly doesn't provide any
leeway in terms of meting out what presumably would be a fair
and equitable punishment, he added.
Number 0463
CHAIR MURKOWSKI referred to Section 4 and asked Ms. Bales from
the Department of Revenue whether the destruction of the
cigarettes or the return to the manufacturer is required by the
MSA [Master Settlement Agreement].
JOHANNA BALES, Revenue Auditor, Tax Division, Department of
Revenue, testified via teleconference that it is not required.
She explained that the Department of Revenue is charged with
tracking product into Alaska from manufacturers who are not
obligated to the Master Settlement Agreement. The majority of
those manufacturers are located out of the country. In 1999
only 3 of those 23 manufacturers could comply with the state law
under the Master Settlement Agreement. Because of the fact that
the manufacturers are out of the country, it causes a little bit
of a jurisdiction problem in trying to prohibit the sale of that
product. This section, she said, would prohibit the
distributors within the state to sell the product, until those
manufacturers come into compliance with state statutes.
CHAIR MURKOWSKI asked whether the licensee is currently free to
sell the product.
MS. BALES answered yes. She said under the statutes that were
part of the Master Settlement Agreement, the Department of Law
has to sue those noncomplying manufacturers, and would have to
win in a lawsuit two years in a row. At that point, sale of the
product can be prohibited in the state for two years.
CHAIR MURKOWSKI asked what happens to the licensee if, after the
31st day, he or she hasn't destroyed the cigarettes or returned
them to the manufacturer.
MS. BALES responded that [the department] would confiscate the
cigarettes. Of course, she said, [the licensee] would be out
whatever he or she paid for the cigarettes and paid in state
taxes.
CHAIR MURKOWSKI asked whether there is no penalty if [the
licensee] tried to sell those cigarettes.
MS. BALES responded that she was correct.
Number 0127
CHAIR MURKOWSKI asked whether, if she opened up a little grocery
store and decided to sell tobacco products, she would have to
apply for an endorsement through the Division of Occupational
Licensing.
JENNIFER STRICKLER, Administrative Officer, Division of
Occupational Licensing, Department of Community & Economic
Development, testified via teleconference that she was correct.
CHAIR MURKOWSKI asked, when her endorsement comes, whether she
would receive anything telling her what her obligations are as a
vendor of tobacco products.
MS. STRICKLER responded that if Chair Murkowski makes an
application for her initial business license, she would specify
on the application that she wishes to obtain a tobacco
endorsement as well. At the time [the division] issues the
license, the business license will specify "authorized for
tobacco sale." Following [issuance of] the license itself, the
division mails out a sign, currently required in statute, which
needs to be posted conspicuously at the place of sale.
TAPE 01-60, SIDE A
CHAIR MURKOWSKI surmised that if she were renewing her license,
she would only get the endorsement and wouldn't get any
information with regard to her obligations.
MS. STRICKLER responded that she was correct.
REPRESENTATIVE ROKEBERG asked Ms. Strickler whether she
envisions having an investigator to review compliance, and what
the compliance would relate to.
Number 0076
MS. STRICKLER answered that currently [the division] has funding
from DHSS for investigator services. The investigator acts upon
notices of convictions that [the division] gets from the courts.
So far, there are three businesses on the list. The
investigator does the legal footwork to put the suspensions into
place. In response to a further question, she said currently
[the division] has an investigator who is funded in part by DHSS
to do that.
REPRESENTATIVE ROKEBERG asked Ms. Strickler whether most of the
hearing officers in the Division of Occupational Licensing
follow APA procedure, or if they have separate procedures.
MS. STRICKLER answered that to her knowledge [the division's]
hearing officer follows the APA.
REPRESENTATIVE ROKEBERG asked whether those hearing officers
normally have a certain amount of discretion in assessing any
civil penalties.
MS. STRICKLER stated that she doesn't know.
CHAIR MURKOWSKI asked Ms. Strickler how long the tobacco
endorsement has been $25.
Ms. STRICKLER answered that it has been set at $25 since the
tobacco endorsement program went into effect around 1990 or
1992.
REPRESENTATIVE HAYES asked why [the committee] is changing the
price from $25 to $100.
MS. STRICKLER responded that it is her understanding that it is
an attempt to attain more revenues to support the enforcement
efforts.
Number 0315
MR. MANLY remarked that the main idea was to generate more
revenue and to make the endorsement be a little more
commensurate with the activity that it involves.
REPRESENTATIVE HAYES asked Mr. Manly whether he has talked to
other folks who would be affected by this.
MR. MANLY answered no.
MR. LINDSTROM added that [DHSS] wants to make the enforcement
program as self-supporting as it could be. He remarked that
many people get the tobacco endorsement on their business
license and don't even sell tobacco, which lead [DHSS] to
believe that the $25 is trivial.
REPRESENTATIVE HAYES suggested that under Mr. Lindstrom's logic,
if some of those folks aren't even selling tobacco and they
think $100 is too high, then [DHSS] would lose money. He asked
Mr. Manly whether he has thought of using tobacco settlement
money as an avenue.
MR. MANLY responded that he thinks Representative Harris would
like to put more tobacco settlement money into tobacco sales
enforcement; however, there have been higher priorities in the
[DHSS] budget.
CHAIR MURKOWSKI asked whether the sale of single cigarettes is
still allowed.
REPRESENTATIVE ROKEBERG responded that it was outlawed two years
ago.
Number 0625
REPRESENTATIVE ROKEBERG made a motion to adopt conceptual
Amendment 1, to delete Section 1, which leaves the penalty at
$300.
REPRESENTATIVE MEYER objected for discussion purposes. He asked
what the rationale is for wanting to remove it.
DETECTIVE LIVINGSTON responded that [Title 11] is not "broken."
CHAIR MURKOWSKI added that Detective Livingston had suggested
that if it was going to remain, it should be in the civil
section rather than the criminal section.
REPRESENTATIVE MEYER withdrew his objection.
CHAIR MURKOWSKI announced that there being no further objection,
conceptual Amendment 1 was adopted.
REPRESENTATIVE ROKEBERG remarked that [the goal was] "not to
exceed penalties for the endorsement holders who have repeated
violations, but give the hearing officer some discretion to mete
that out." On the other hand, he said, the department wants to
keep the [fiscal] note down by having more stipulated amounts.
He said he thinks that can be accomplished by having a not-less-
than-an-amount, and for the range to be up to $5,000.
CHAIR MURKOWSKI asked Representative Rokeberg whether he thinks,
with having this range be a minimum of $1,000 to a maximum of
$5,000, that a mom-and-pop shop would appeal it in order to stay
away from the $5,000 fine.
REPRESENTATIVE ROKEBERG responded that currently, if someone has
been convicted more than once in the past 24 months, it is a
mandated $5,000 fine.
Number 0843
MR. MANLY reiterated that the sponsor wanted to make the
penalties as stiff as the legislature would allow. He said the
sponsor got pretty [upset] with the fact that since the [state]
is so out of compliance, it is costing $1.5 million.
CHAIR MURKOWSKI asked, if the language from Section 1 was put
into Section 7, whether that would accomplish what
Representative Harris is seeking.
REPRESENTATIVE ROKEBERG asked whether the range could be cut.
He suggested having ranges of $500 to $1,000, $1,000 to $2,000,
and $2,500 to $5,000; thus the hearing officer could have some
discretion. He asked Mr. Lindstrom whether he thought that
would generate more hearings.
Number 0951
MR. LINDSTROM responded that one of the principal goals of this
legislation from [DHSS's] perspective is to minimize the
possibility of the limited enforcement dollars being "chewed up"
through endless appeals.
CHAIR MURKOWSKI said she likes that [the fine] is a known
amount.
REPRESENTATIVE ROKEBERG asked whether the fines could be cut in
half and put in the civil section.
REPRESENTATIVE KOTT pointed out that under Section 11 of the
bill, DHSS is given citation authority if there is probable
cause to believe that a person has violated AS 11.76.100, [AS
11.76.]106, and [AS 11.76.]107. He added that AS 11.76.107 is
failure to supervise the vending machines, and established in
that is a $300 fine. He suggested [the sections should
conform].
Number 1176
REPRESENTATIVE ROKEBERG made a motion to adopt conceptual
Amendment 2, to take the lines on page 1, line 13, through page
2, line 8, and insert them into the civil liability section,
Section 7 on page 3. He added that the $1,000 fine should be
cut to $500 if the person has not been previously convicted; the
$2,000 fine should be cut to $1,000; and the $2,500 fine should
be cut to $5,000 if [the person has been convicted] more than
once in the past 24 months.
CHAIR MURKOWSKI objected for the purposes of discussion. If the
range in [paragraph] (4) is $2,500 to $5,000, she said, there
won't be any certainty. She added that she would be hesitant to
give ranges.
REPRESENTATIVE ROKEBERG removed the ranges from conceptual
Amendment 2. He remarked, "We're back to mom and pop versus big
[corporation] again."
CHAIR MURKOWSKI responded that the answer to that is, "You can
still go after the endorsement."
REPRESENTATIVE ROKEBERG remarked that the reason he likes the
discretion is because the hearing officer could take the
circumstances into account.
CHAIR MURKOWSKI agreed, but said she thinks the point is to
avoid having to go to the hearing officer in the first place.
REPRESENTATIVE ROKEBERG remarked that that was one reason why he
was lowering the fines.
Number 1327
CHAIR MURKOWSKI said she would remove her objection if
conceptual Amendment 2 is to take the language in Section 1,
beginning on line 13, and reduce it from $1,000 to $500; from
$2,000 to $1,000; and from $5,000 to $2,500.
REPRESENTATIVE KOTT objected. He stated, "If you're going to
tinker with that, you've got to tinker with [AS 11.76.107]."
REPRESENTATIVE ROKEBERG remarked that he thinks the testimony
was that the endorsement holder is responsible for the vending
machine; therefore, it is the endorsement holder, not the
vending machine owner, who would be fined. He asked
Representative Kott why he objected.
REPRESENTATIVE KOTT stated, "If you've contracted with a vendor,
you have the endorsement [and] you've got an employee that's
supposed to be supervising or watching that vending machine all
the time. If he doesn't, then the fine kicks in. If there is
probable cause, then [DHSS] issues a citation,"
CHAIR MURKOWSKI asked whether that is the same thing as in
Section 1(d)(1), which is not being changed.
MR. MANLY remarked that he thinks Chair Murkowski is right. The
$300 fine applies to the clerk who sells [the tobacco], not to
the endorsement holder.
REPRESENTATIVE KOTT withdrew his objection.
Number 1517
CHAIR MURKOWSKI announced that there being no further objection,
conceptual Amendment 2 was adopted.
REPRESENTATIVE ROKEBERG stated that he is still troubled by why
the APA should not apply on page 6, lines 27 to 28.
MR. LINDSTROM answered that he believes it is the preceding
section [above line 27] that specifies how the hearing officer
may consider how a hearing is conducted for this particular
purpose.
MR. BRANCH agreed with Mr. Lindstrom and stated that subsection
(m) would set out a "series of burden of proofs" instructing the
hearing officer on what issues should be considered during the
hearing. The intent, he said, is not to deny a respondent the
opportunity to have a fair hearing, but to recognize that
there's a different structure because of the provisions that can
be considered during the hearing.
Number 1636
MR. LINDSTROM pointed out that the fiscal note submitted by DHSS
is basically all-inclusive. It includes the funds that will be
RSAed (reimbursement services agreement) to the Department of
Law in its fiscal note and to the Department of Community &
Economic Development in its fiscal note. Every dollar that is
additional to what [the department] currently anticipates for
the hearing proceedings is a dollar that comes out of the
program elsewhere in the [DHSS] fiscal note. That includes
vendor education and contracts with law enforcement [agencies].
REPRESENTATIVE KOTT remarked that what is being determined is
probable cause that the person did not reasonably monitor [the
machine]. He asked who is going to be doing these
investigations and issuing the citations.
MR. SASSER answered that the majority of the law enforcement
activity will still be by sworn police officers. He said he is
anticipating that the same groups of police officers that have
been used and trained over the years will be involved.
REPRESENTATIVE KOTT stated that the minority of those citations
would then be issued by the department. He asked who within the
department would be issuing those citations.
MR. SASSER responded that if the youth is successfully able to
buy out of a vending machine, which would represent either the
negligence or the state of mind that the statute is discussing,
there would be no way to establish probable cause or failure to
monitor. Mr. Sasser said he, as a retired law enforcement
officer, would have the statutory authority to do that within
the Division of Public Health.
REPRESENTATIVE KOTT asked, if a machine is in a bar, the
sprinkler system goes off, the bartender walks in another room,
and a kid under 19 comes in and purchases [tobacco], whether
[the bartender] would fall within that category.
Number 1852
MR. SASSER responded:
In the world of law enforcement, we make those
decisions every day about ... what's reasonable
community policing. ... In this world of sales of
tobacco to youth [there are] plenty of opportunities
to cite vendors. A small percentage of the vendors
who sold tobacco to youth last year received
citations; the rest received letters indicating that a
sale was made on a certain date and ... the
description of the clerk who did that. ...
It's our intent to be fair in every respect and to
resolve doubt in the vendor's favor when possible. In
a case where a youth buys from a vending machine -
which is extremely rare, by the way - it's not part of
the normal Synar survey checks. ... First of all, the
youth is buying an age-restricted product in an age-
restricted environment. So they are not even supposed
to be on the premises. They are supposed to be 21 to
be there and 19 to purchase the tobacco product. So
there are really two opportunities there. I could
cite or an ABC officer could cite for different
things.
REPRESENTATIVE KOTT asked whether a person under 19 could be in
a bar with a parent.
MR. SASSER responded that there could be a circumstance in which
a child could have access to a vending machine in an age-
restricted environment. He added that his hope [with the
Division of Public Health] having the authority is to work with
the VPSOs in the rural communities for both vendor education
issues and reduction of sale. Right now, he said, no matter how
many jurisdictions he contracts with, it is very difficult to
get into some of the communities [in Western Alaska].
REPRESENTATIVE HAYES asked how many incidents a year have to
occur in order to lose the federal monies.
MR. SASSER answered that he doesn't believe there is a specific
number. He stated that it is interesting because it is not
known how many outlets there are in the state. Hopefully, as a
result of this bill, [they will be known], because each one will
have an endorsement. [Until now the department] has found out
who is selling by looking at the 1,800 or so endorsements that
[the Division] of Occupational Licensing has; subtracting those
that have no intention of ever selling tobacco; subtracting
those that are out of state and whose home office is in
Nashville, for example, but with 30 outlets in Alaska; and
collecting data from all of the officers over the last four
years who have walked from door to door and know who is selling.
That comes out to be about 400 business. Of those, [the
department] wants fewer than 20 percent to sell [to minors].
Number 2063
REPRESENTATIVE HAYES asked whether there can only be 20 percent
illegal sales from the 400 businesses to get the federal
funding.
MR. SASSER responded that those are roughly the numbers being
discussed.
REPRESENTATIVE HAYES stated that if there are 70 communities
that have no law enforcement, where everybody knows everybody
and people are buying cigarettes, the numbers will bump up.
However, there won't be any money for police.
MR. SASSER replied that one tool this bill provides is
statutory authority for [DHSS] to write citations in those
villages where it traditionally does not have contract officers
available, or which are outside [the officer's] jurisdiction and
the officer does not feel comfortable writing citations. That
is one of the main reasons, he said, that statutory authority
for [the Division of Public Health] is so useful.
REPRESENTATIVE HAYES asked, if [DHSS] issues citations, who does
the follow-up. He said there are places in Alaska without law
enforcement, and he thinks that could present more of a problem
in the long run.
REPRESENTATIVE ROKEBERG pointed out that he thinks one of the
problems with enforcement in the state, particularly in the
smaller communities, is that everybody knows everybody else. He
said the case could be made that providing this authority is
positive, because the local people could be reluctant to
actually enforce the law.
Number 2213
REPRESENTATIVE MEYER made a motion to adopt conceptual Amendment
3, on page 4, line 1, to change the 20 days to 30 days.
REPRESENTATIVE ROKEBERG objected. He stated that according to
Detective Livingston, it used to be 45 days, and that he could
live with 20 days.
CHAIR MURKOWSKI asked Mr. Manly whether the current statute
doesn't address any suspension if a person has not been
convicted previously, but only if the person has.
MR. MANLY answered in the affirmative.
CHAIR MURKOWSKI clarified that this would mean the first time a
person gets caught, [the endorsement] is suspended.
MR. MANLY remarked that it is also discretionary on the part of
the department; it may suspend for not more than 45 days. This
would make it mandatory rather than discretionary.
REPRESENTATIVE ROKEBERG asked Mr. Manly whether, because of the
discretion, there was a typical amount of time meted out.
MR. Manly responded that he doesn't know.
MR. SASSER remarked that he has seen a memorandum of agreement
as low as 3 days and that 20 days is fairly common.
REPRESENTATIVE MEYER stated that currently it obviously is not
working, because businesses are still selling to minors. The
only way to get a business's attention is to withdraw the
license. He said he doesn't think "up to 20 days" is adequate.
Number 2430
REPRESENTATIVE ROKEBERG withdrew his objection.
REPRESENTATIVE HAYES objected for the purpose of discussion. He
said his problem with the amount of days is that it seems the
business is being punished for an employee's mistake.
TAPE 01-60, SIDE B
REPRESENTATIVE ROKEBERG said the person has to be the
endorsement holder for the fine but not necessarily for [the
suspension].
Number 2453
REPRESENTATIVE MEYER remarked that businesses are responsible
for their employees, and the business manager needs to make sure
the employees are adequately trained. He suggested it needs to
be stressed that this is a serious offense.
REPRESENTATIVE ROKEBERG indicated he thinks the most slack
should be given "up front" regarding the employee. He said
there is an inconsistency with enforcement right now, and with
the change there will be a mandatory $500 fine and a suspension
of the endorsement.
REPRESENTATIVE MEYER stated that if employees are trained to
simply just check identifications, they have nothing to worry
about. He said the numbers he has read indicated that if a
person does not start [smoking] until after age 19, there is a
90 percent chance he or she never will start.
REPRESENTATIVE CRAWFORD shared that when he takes his kids to
school, he sees 40 to 50 kids down the hill, and a large
majority are smoking cigarettes. He said he would like to cut
off as many ways for them to get cigarettes as possible. He
believes this bill is a good first step, he said, and that a
three-day suspension with a $300 fine is not a sufficient
deterrent.
Number 2274
REPRESENTATIVE HAYES said while he supports the bill, he still
feels [the committee] is being awfully harsh on businesses.
REPRESENTATIVE CRAWFORD mentioned that he has listened to
previous testimony that many times [businesses] just receive a
letter. He remarked that he doesn't think [law enforcement]
tries to fine [businesses] on the first offense.
CHAIR MURKOWSKI noted that the sentence on page 4, line 1, goes
on to say "if the person has not been previously convicted of
violating AS 11.76.100, ll.76.106, or 11.76.107". She clarified
that [AS 11.76.]100 is selling or giving tobacco to a minor, [AS
11.76.]106 is selling tobacco outside controlled access, and [AS
11.76.]107 is failure to supervise a cigarette vending machine.
She asked whether a person who has never been previously
convicted would be subject to this.
MR. MANLY responded that she was correct.
CHAIR MURKOWSKI said her hesitancy with changing it to 30 days
is that right now there is no education. She offered her belief
that businesses don't even get anything from the Division of
Occupational Licensing. She said her attitude is, if a person
has been informed as to what the consequences are, he or she
shouldn't have a "free shot."
REPRESENTATIVE HALCRO noted that he thinks the Division of
Occupational Licensing does give something out.
CHAIR MURKOWSKI asked whether it is minimal.
Number 1967
MR. LINDSTROM remarked that it truly is minimal. He added that
part of [DHSS's] plan with the additional resources is to do a
lot more in the way of vendor education.
REPRESENTATIVE HALCRO asked what people receive currently when
they get their tobacco licenses.
MR. LINDSTROM answered that he understood from the testimony
from the Division of Occupational Licensing that [business
owners] get several copies of the sign that cites the statute
and says, "You may not sell to minors."
REPRESENTATIVE HALCRO stated that they are given notification of
the law, then.
CHAIR MURKOWSKI agreed, but stated:
I don't have a set of these in my home to refer to and
find out what AS 11.76.105 is. I think that we need
to do a better job of telling people, "You will lose
your right to sell a product for 20 days, first time
around, or 45 days if you fail to pay attention." I
think we need to be very clear in what the
consequences are."
Number 1955
A roll call vote was taken. Representative Meyer voted in favor
of adopting conceptual Amendment 3. Representatives Kott,
Rokeberg, Crawford, Hayes, and Murkowski voted against it.
[Representative Halcro was absent for the vote.] Therefore,
conceptual Amendment 3 failed by a vote of 1-5.
Number 1953
REPRESENTATIVE ROKEBERG made a motion to adopt conceptual
Amendment 4, that upon issuance of an endorsement, copies and
explanations of the penalties will be provided.
REPRESENTATIVE KOTT objected for the purposes of offering a
friendly amendment to reduce the $100 amount [in Section 6] to
$50. He said he thinks $100 is too much. According to Mr.
Lindstrom, many people aren't even using their endorsements.
REPRESENTATIVE HAYES objected to Representative Kott's [friendly
amendment].
CHAIR MURKOWSKI commented that she thinks [the two amendments]
should be separate.
REPRESENTATIVE ROKEBERG stated that he is not accepting
Representative Kott's friendly amendment.
Number 1831
CHAIR MURKOWSKI also objected to the amendment to conceptual
Amendment 4. She asked whether this is $100 every other year.
MR. MANLY answered that she was correct.
REPRESENTATIVE KOTT remarked that that's his point. He said it
is the same as a business license. He withdrew his amendment to
conceptual Amendment 4.
Number 1790
CHAIR MURKOWSKI announced that there being no further objection,
conceptual Amendment 4 was adopted.
REPRESENTATIVE KOTT made a motion to adopt conceptual Amendment
5, to reduce the amount [of the endorsement] from $100 to $50.
REPRESENTATIVE ROKEBERG objected.
CHAIR MURKOWSKI asked how much a business license costs.
REPRESENTATIVE KOTT responded that he thinks it is $50 every two
years.
REPRESENTATIVE ROKEBERG suggested changing the endorsement to
$75.
REPRESENTATIVE KOTT responded that the number of endorsements
has already been increased. He said he thinks if it is $75
people will start "falling off" who would otherwise continue
paying.
REPRESENTATIVE MEYER stated that the reason people are getting
[endorsements] now is because [the endorsements] are so cheap.
He said he thinks the people who will pay $100 will be the ones
who really intend to sell tobacco and tobacco products.
However, he does think the price should be different from that
for a regular business license, he added, because those people
are selling a very dangerous, controlled, addictive substance.
Number 1712
MR. LINDSTROM remarked that he believes a business license is
$25. This is qualitatively different from the business license
fee. One of the problems is that the Division of Occupational
Licensing has not regarded itself as being in the regulatory
business, and yet it is now being asked to do that by virtue of
the tobacco endorsement. The department thinks it will be fine
if those who don't currently sell tobacco no longer get the
tobacco endorsement, he said. It will make it easier to figure
out who does sell tobacco. He added that this is a substantial
program; it is only appropriate, given how frequently retailers
are selling tobacco to minors, that they pay for a significant
portion of the cost of regulating those folks.
CHAIR MURKOWSKI asked whether [the department] is estimating
that about 400 Alaska businesses sell tobacco.
MR. LINDSTROM responded that the 400 figure was roughly the
sample size under the Synar protocol. The number of people on
the registry at the Division of Occupational Licensing is about
1,800.
CHAIR MURKOWSKI asked, if this bill passes and every Williams
gas station has to have an endorsement for each outlet, how many
more endorsements there would be.
MR. LINDSTROM answered that he doesn't have the numbers. The
change in revenues is $100,000, but [the Division of
Occupational Licensing] is suspicious of how many additional
[endorsements] would be picked up because everyone has to have
an endorsement. [The division is] equally unsure of how many
people are going to "drop off" now that [the endorsements cost]
$100.
CHAIR MURKOWSKI surmised that if there are approximately 1,800
endorsements already, [the Division of Occupational Licensing]
is assuming that the endorsements purchased are at 1,000
locations.
MR. LINDSTROM remarked that he doesn't know the detailed
calculations that were made.
Number 1531
REPRESENTATIVE HAYES said he agrees with the amendment because
he fears the mom-and-pop [stores will ask] what they are getting
for this big increase.
CHAIR MURKOWSKI asked Mr. Lindstrom whether, essentially, [the
bill] is trying to cover the increased costs of enforcement.
MR. LINDSTROM responded that it [covers] about a quarter of it.
A roll call vote was taken. Representatives Hayes, Kott, and
Rokeberg voted in favor of adopting conceptual Amendment 5.
Representatives Crawford, Meyer, and Murkowski voted against it.
[Representative Halcro was absent for the vote.] Therefore,
conceptual Amendment 5 failed by a vote of 3-3.
Number 1421
REPRESENTATIVE ROKEBERG made a motion to move HB 228, as
amended, out of committee with individual recommendations and
the attached fiscal notes. There being no objection, CSHB
228(L&C) moved from the House Labor and Commerce Standing
Committee.
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
6:05 p.m.
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