Legislature(2023 - 2024)BARNES 124
03/22/2024 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB378 | |
| SB147 | |
| HB55 | |
| HB150 | |
| HB189 | |
| HB233 | |
| HB189 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 378 | TELECONFERENCED | |
| += | HB 189 | TELECONFERENCED | |
| += | HB 233 | TELECONFERENCED | |
| += | HB 204 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | SB 147 | TELECONFERENCED | |
| + | HB 55 | TELECONFERENCED | |
| += | HB 150 | TELECONFERENCED | |
HB 378-ORG. RETAIL THEFT/FUND;MKTPLACE SALES TAX
3:16:04 PM
CHAIR SUMNER announced that the first order of business would be
HOUSE BILL NO. 378, "An Act relating to theft; relating to
organized retail theft; establishing a statewide marketplace
facilitator sales tax; establishing the organized retail theft
fund in the general fund; and providing for an effective date."
3:16:21 PM
REPRESENTATIVE FIELDS, as prime sponsor, presented HB 378. He
directed attention to a PowerPoint presentation, entitled "HB
378: Organized Retail Crime" [hardcopy included in committee
packet], and began on slide 2, "Organized Retail Crime," which
read as follows [original punctuation provided]:
• Homeland Security Investigations (HSI) defines
ORC as "the association of two or more persons
engaged in illegally obtaining items of value
from retail establishments, through theft and/or
fraud, as part of a criminal enterprise."
• According to the 2021 joint report released by
the Retail Industry Leaders Association (RILA)
and the Buy Safe America Coalition, in 2019,
nearly $70 billion in goods were stolen from
retailers."
• ORC is not simply shoplifting, and these crimes
are not victimless. A growing number of thefts
turn violent, and consumers, local communities
and businesses bear the costs of rising prices.
These thefts are detrimental to both businesses,
small and large alike, and the overall economy as
they pose both societal and health risks to the
community.
3:18:52 PM
REPRESENTATIVE FIELDS summarized slides 3, 4, and 5, which
shared national statistics on items targeted in retail crime.
He turned to slide 6, "Economic Impact of Organized Retail
Crime," which read as follows [original punctuation provided]:
• The economic impact of retail crime is profound.
Retailers face increased costs for lost product,
security, and labor, which lead to higher prices
for consumers and ultimately, lower sales. Lower
sales translate to fewer jobs throughout the
economy. The result is $125.7 billion in lost
economic activity and 658,375 fewer jobs, paying
almost $39.3 billion in wages and benefits to
workers.
• National estimates reveal ORC costs federal and
state governments nearly $15 billion in lost tax
revenue, not including lost sales taxes.
• It is estimated that the average American family
will pay more than $500 annually in additional
costs due to the impact of ORC.
• ORC is a low-risk, high-reward income stream for
domestic and transnational criminal organizations
that greatly impacts inter-state and
international commerce and the overall economic
security of Alaska and the United States.
REPRESENTATIVE FIELDS explained that most of the items stolen
fall below meaningful criminal penalty thresholds in Alaska, so
the theft may not rise to a level that is addressed or
prosecuted. Nonetheless, many small crimes have massive
aggregate impact on small businesses.
3:20:50 PM
REPRESENTATIVE FIELDS advanced to slide 7, which analyzed the
correlation between the growth in online shopping and
shoplifting. He said retail crime is growing due to several key
factors: firstly, the ease at which items are stolen and resold
in high volume on sites like Facebook Marketplace; secondly, the
rise in opioid addiction makes people desperate and easily
incentivized to steal. Slide 8 showed growing losses at Lowe's
in recent years.
3:21:22 PM
REPRESENTATIVE FIELDS moved to Slide 9 and emphasized that ORC
is being orchestrated by national and transnational criminal
networks that have created a lucrative and low-risk revenue
stream. slide 10 illustrated the organizational structure of
organized theft groups (OTGs). Slide 11 detailed the organized
retail crime cycle and slide 12 shared an example of the Central
America labor trafficking threat.
3:23:00 PM
REPRESENTATIVE FIELDS proceeded to slide 13, which featured data
on the impact of theft on small businesses. Slide 14 showed
pictures illustrating examples of ORT in Alaska. He continued
to slide 15 and reported that retailers in Alaska lost $202
million in revenue to theft in 2022. Slide 16 highlighted the
action that other states are taking to address ORT. Slide 17
took best practices from other states and presented the
following recommendations [original punctuation provided]:
• Update the definition of organized retail crime
and increase criminal penalties: States should
act to define the crime of "organized retail
theft" in criminal law to specify those thefts
involving two or more participants and an
intention of resale and include increased
penalties for those specific violations.
• The law and prosecutors must hold those who
engage in organized and significant retail theft
accountable: Since 2000, at least 40 states have
raised the thresholds for the value of stolen
goods to trigger a felony charge. In some
instances, criminals are taking advantage of
these increased higher thresholds to engage in
repeated thefts and avoid prosecution. States
should reconsider these thresholds and
prosecutors should avoid adopting broad non-
prosecution policies.
REPRESENTATIVE FIELDS summarized slide 18, which detailed how HB
378 defines ORT and lowers the threshold for felony offenses.
He concluded on slide 19, which explains the 2 percent sales tax
on marketplace facilitators, as proposed in HB 378. Slide 19
read as follows [original punctuation provided]:
Upsilon1 Marketplace facilitator means a person who contracts
with a third-party seller to facilitate the sale of
the thirdparty seller's property, product, or services
through a physical retail location or online
marketplace operated by the person.
Upsilon1 The bill sets a minimum sales threshold for
marketplace facilitators who must remit the tax
at $100,000 or 200 separate transactions.
Upsilon1 HB 378 establishes an organized retail theft fund in
the general fund, intended to be appropriated to local
law enforcement agencies to investigate and prosecute
organized retail theft and related fraud and property
crimes
3:26:40 PM
CHAIR SUMNER shared his understanding that Facebook Marketplace
facilitated in person meetups for cash transactions. He asked
how the bill sponsor envisioned the sales tax as it relates to
Facebook Marketplace.
REPRESENTATIVE FIELDS said the user fee would be a new provision
that other states have not implemented. He added that the user
fee would differ by platform.
3:27:39 PM
JOHN STASER, Owner, Mountain View Sports, said retail theft has
been a drain on businesses since he entered the industry. He
outlined the measures that businesses have taken to improve
security, such as unbreakable windows, alarm systems, and in
some cases, security teams. Despite best efforts, retail theft
is estimated to cost businesses $125 billion each year
nationwide. Furthermore, he opined that reducing theft would
"cut down the life blood" of drug dealers and in the process,
help reduce homelessness. He shared a personal anecdote about a
serial thief. He emphasized the damage that can be inflicted by
individual thieves who steal items from numerous stores and
suggested that aggregating those thefts and creating a felony
charge would encourage law enforcement to go after them. He
said HB 378 would take a step towards punishing this behavior
and thereby decreasing retail theft.
3:34:38 PM
CHAIR SUMNER announced that HB 378 was held over.