03/07/2014 01:30 PM Senate JUDICIARY

             SB  66-IMITATION CONTROLLED SUBSTANCE                                                                          
                                                                                                                                
2:18:57 PM                                                                                                                    
CHAIR   COGHILL  reconvened   the   meeting   and  announced   the                                                              
consideration of  SB 66. "An Act relating to  imitation controlled                                                              
substances; and  providing for an  effective date." He  noted this                                                              
was the  second meeting and there  was a new  committee substitute                                                              
(CS).                                                                                                                           
                                                                                                                                
2:19:39 PM                                                                                                                    
SENATOR DYSON  moved to adopt CS  for SB 66,  labeled LS-280427\U,                                                              
as the working document.                                                                                                        
                                                                                                                                
CHAIR COGHILL objected for purposes of an explanation.                                                                          
                                                                                                                                
2:20:09 PM                                                                                                                    
SENATOR EGAN  stated that the CS  reflects the comments  that were                                                              
voiced  during  the  initial  hearing.   Under  the  current  law,                                                              
possession of oregano  with intent to sell as a drug  is a class C                                                              
felony, whereas  the possession of  marijuana with intent  to sell                                                              
is class  A misdemeanor.  The CS reduces  the penalties  for first                                                              
time offenders for  all violations under the  imitation controlled                                                              
substance  law, AS  11.73.  The penalty  for  repeat offenders  is                                                              
much stricter.                                                                                                                  
                                                                                                                                
ALIDA BUS,  Staff, Senator  Dennis Egan,  was available  to answer                                                              
questions.                                                                                                                      
                                                                                                                                
SENATOR  DYSON disagreed  that the  sale  of sheetrock  dust as  a                                                              
controlled  substance should  be a  class C  felony and  suggested                                                              
that  it should  carry  a fraud  charge.  He  indicated he  didn't                                                              
support the bill in its present form.                                                                                           
                                                                                                                                
CHAIR COGHILL opened public testimony.                                                                                          
                                                                                                                                
2:24:40 PM                                                                                                                    
TRACY  WOLLENBERG,  Deputy Director,  Appellate  Division,  Public                                                              
Defender  Agency, Anchorage,  Alaska, said  she was  happy to  see                                                              
some  reduction  in  the  level  of offense  in  response  to  the                                                              
concerns voiced  about SB 66 at  the 2/21/14 hearing.  A remaining                                                              
concern is that  the bill is too broad and may  capture conduct it                                                              
is not  intended to capture.  A specific  example is a  person who                                                              
doesn't intend to  deceive someone into thinking  the substance is                                                              
a  controlled   substance.   The  memo   from  Legislative   Legal                                                              
discusses  Morrow v. State  and the  hypothetical situation  where                                                              
someone,  without  any  intent to  deceive,  gives  caffeine  diet                                                              
pills  to  someone  indicating  that they  are  as  effective  for                                                              
weight loss  as any  prescription medicine.  In Morrow,  the court                                                              
of appeals  recognized that  the statute  would conceivably  cover                                                              
that  hypothetical.  The  statutory   definition  has  changed  in                                                              
recent years,  but the  concern remains  that activity  that isn't                                                              
intended  to  deceive would  still  be  captured under  the  broad                                                              
language of  the statute.  That's because  the statute  is written                                                              
in a way that  captures situations where the  recipient reasonably                                                              
believes  that  the  substance  is  controlled,  even  though  the                                                              
distributor did  not intend  for the recipient  to think  that. In                                                              
part, the  reason is that  the definition of "representations"  is                                                              
so broad and inclusive.                                                                                                         
                                                                                                                                
MS. WOLLENBERG  suggested that  a potential fix  is to  narrow the                                                              
statute by  building an intent to  deceive mens rea  directly into                                                              
the crimes  that are written under  AS 11.73.010, .030,  and .040.                                                              
It should  include that the crime  is complete only if  the person                                                              
intends  to deceive  when they  manufacture,  deliver, or  possess                                                              
with intent  to deliver  an imitation  controlled substance.  That                                                              
change wouldn't make  the seller's motivation part  of the offense                                                              
but it  would make  the seller's intent  to deceive  the recipient                                                              
an element  of the  offense. This would  still capture  the person                                                              
who  sells  imitation  drugs  to   an  undercover  police  officer                                                              
because  in that  instance  it's clearly  the  person's intent  to                                                              
deceive another into thinking the substance is controlled.                                                                      
                                                                                                                                
2:29:07 PM                                                                                                                    
SENATOR  DYSON  questioned  how  knowingly selling  a  phony  drug                                                              
would rise  to the level of a  drug crime when the  person clearly                                                              
has  intent  to defraud  the  other  person and  misadvertise.  He                                                              
asked for help understanding  how the mens rea on  fraud should be                                                              
in the drug code.                                                                                                               
                                                                                                                                
MS. WOLLENBERG  explained that  to capture  the concept  of fraud,                                                              
it ought to be  spelled out explicitly in the crime  as one of the                                                              
elements  that the state  needs to  prove. If  it isn't  built in,                                                              
the  statute will  default  to the  knowingly  mens  rea and  that                                                              
might  not capture  the  fraud  aspect. Somebody  could  knowingly                                                              
deliver  substances and  have no  intent for  the other person  to                                                              
think that those substances are controlled.                                                                                     
                                                                                                                                
SENATOR  DYSON said  he  would be  more  supportive  if the  phony                                                              
substance was actually dangerous.                                                                                               
                                                                                                                                
2:32:42 PM                                                                                                                    
MS. BUS respectfully  reminded that the  target of the  bill is to                                                              
get  to  drug dealers  who  are  suspicious  of  a sting  and  are                                                              
trading  phony drugs  to law  enforcement officers.  Theoretically                                                              
these  people are  involved in  drug  dealing and  they deal  salt                                                              
rather than meth, for example.                                                                                                  
                                                                                                                                
SENATOR  DYSON  questioned  how  the legislation  makes  it  clear                                                              
about evidence tampering.                                                                                                       
                                                                                                                                
MS. BUS  addressed the question  of intentional  misrepresentation                                                              
pointing  to Morrow  v. State.  The  state said,  "We believe  the                                                              
statute  can be interpreted  by  us to apply  to those  situations                                                              
involving  an  intentional  misrepresentation  that  an  imitation                                                              
controlled  drug is  a controlled  drug." The  opinion goes  on to                                                              
say  that  the  language  of  the   ordinance  is  so  vague  that                                                              
arbitrary   enforcement   is   likely.    She   deferred   further                                                              
explanation to the Department of Law.                                                                                           
                                                                                                                                
2:35:07 PM                                                                                                                    
ANNE  CARPENETI, Assistant  Attorney  General, Criminal  Division,                                                              
Legal Services Section,  Department of Law, said that  Ms. Bus was                                                              
referring to  the fact that,  in addition to  the mens rea  in the                                                              
substantive  chapter, there  is also  a culpable  mental state  in                                                              
the  definition.  In Morrow,  the  only appellate  decision  under                                                              
these    statutes,   the    court   limited    the   meaning    of                                                              
"representation"  to the  "intentional  misrepresentation that  an                                                              
imitation drug is  a controlled substance." That  imports the mens                                                              
rea  of a  person  trying  to cheat  or  defraud someone  and  the                                                              
concern is  that that would be another  mens rea for the  state to                                                              
prosecute. She  offered to redraft  the provision so  the culpable                                                              
mental state isn't in the definition section.                                                                                   
                                                                                                                                
SENATOR  DYSON said  that still  misses his point,  which  is that                                                              
the mens  rea is  fraud. It is  not to  sell somebody  drugs. It's                                                              
too  large a  leap  to  think that  the  seller had  the  culpable                                                              
mental  state to  sell  drugs just  because  the customer  thought                                                              
he/she was buying drugs, he said.                                                                                               
                                                                                                                                
MS. CARPENETI  relayed  that the  supervisor of  the drug  unit in                                                              
Anchorage has said  that when they can prove that  the seller knew                                                              
that it  was an imitation  drug, they  charge and prosecute  under                                                              
the theft statutes.                                                                                                             
                                                                                                                                
2:39:44 PM                                                                                                                    
SENATOR  DYSON  voiced  support   for  charging  under  the  theft                                                              
statute   in  that   circumstance,   and  concern   that  it   was                                                              
discretionary.  He restated that  he didn't  want selling  a phony                                                              
drug twice  in ten  years to be  a class  C felony. He  maintained                                                              
that  it wasn't  the same  classification  as running  a house  of                                                              
prostitution or molesting kids.                                                                                                 
                                                                                                                                
CHAIR COGHILL summarized  his understanding of the  repeat offense                                                              
addressed in paragraph (2).                                                                                                     
                                                                                                                                
2:41:57 PM                                                                                                                    
MS. BUS clarified  that the repeat offense relates  to offenses of                                                              
the  controlled substance  law or  imitation controlled  substance                                                              
law. To  meet the class  C felony threshold,  a person  could have                                                              
been  convicted  of  two misrepresentations  or  one  actual  drug                                                              
offense and one misrepresentation.                                                                                              
                                                                                                                                
SENATOR DYSON  drew an  analogy with  firearms and commented  that                                                              
he wasn't  willing to  make somebody a  felon for fleecing  fools.                                                              
He further  offered  that somebody  who is selling  a bad  product                                                              
will see  their market  share go down  and perhaps their  physical                                                              
comfort will decrease as well.                                                                                                  
                                                                                                                                
2:44:35 PM                                                                                                                    
CHAIR  COGHILL summarized  his understanding  of Ms.  Wollenberg's                                                              
concern.  The public  defender  would  like the  bill  to be  more                                                              
specific  about  the intent  to  deceive  because the  court  case                                                              
doesn't do that.                                                                                                                
                                                                                                                                
MS. CARPENETI said  she wasn't sure of her position  on the Morrow                                                              
decision and its interpretation of the term "representation."                                                                   
                                                                                                                                
SENATOR DYSON  said he wasn't willing  to impose a class  C felony                                                              
on people that  haven't harmed anyone. They've  defrauded somebody                                                              
of money.                                                                                                                       
                                                                                                                                
CHAIR COGHILL said  it would be a significant event  if the person                                                              
has been  convicted two or  more times in  the last 10 years  of a                                                              
crime under AS 11.71. He asked Ms. Carpeneti to add clarity.                                                                    
                                                                                                                                
MS. CARPENETI  said that  according to  the Morrow  interpretation                                                              
of  these  statutes,  the  person   would  have  to  intentionally                                                              
misrepresent  a  non-controlled   substance  to  the  buyer  as  a                                                              
controlled substance.  She noted  that marijuana related  offenses                                                              
are class A misdemeanors but most drug offenses are felonies.                                                                   
                                                                                                                                
CHAIR COGHILL  asked if a conviction  under this bill would  be in                                                              
any of the range of drug offenses.                                                                                              
                                                                                                                                
MS. CARPENETI said that's correct.                                                                                              
                                                                                                                                
MS. BUS clarified  that the CS reduces the current  class C felony                                                              
penalties for imitation  controlled substance crimes to  a class A                                                              
misdemeanor for the first offense.                                                                                              
                                                                                                                                
SENATOR DYSON acknowledged the point.                                                                                           
                                                                                                                                
SENATOR  DYSON commented  that the  bill was  an improvement  over                                                              
current law.                                                                                                                    
                                                                                                                                
2:50:31 PM                                                                                                                    
At Ease                                                                                                                         
                                                                                                                                
2:52:03 PM                                                                                                                    
CHAIR COGHILL  reconvened the meeting  and moved to report  CS for                                                              
SB  66   from  committee   with  individual  recommendations   and                                                              
attached fiscal note(s). He asked for objections or comments.                                                                   
                                                                                                                                
SENATOR  DYSON  said  he  wouldn't   hold  the  bill  up  but  his                                                              
preference  in  AS  11.73.010(b)  was a  class  B  misdemeanor  in                                                              
paragraph  (1), a  class A  misdemeanor  in paragraph  (2), and  5                                                              
years instead of 10 in paragraph (2).                                                                                           
                                                                                                                                
CHAIR COGHILL  announced that without  objection, CSSB  66(JUD) is                                                              
reported from the Senate Judiciary Standing Committee.