HB 77-MAIL THEFT HB 97-ORG. RETAIL THEFT/FUND;MKTPLACE SALES TAX HB 106-THEFT: ORGANIZED; MED. RECORDS; MAIL 1:20:21 PM CHAIR GRAY announced that the next order of business would be HOUSE BILL NO. 77, "An Act making the theft of mail or an article within mail theft in the second degree" and HOUSE BILL NO. 97, "An Act relating to theft; relating to organized retail theft; relating to property crimes; relating to aggravating factors at sentencing; establishing a statewide marketplace facilitator sales tax; and establishing the organized retail theft fund in the general fund" and HOUSE BILL NO. 106, "An Act relating to organized theft; relating to theft of medical records and medical information; relating to mail theft; and providing for an effective date." [Before the committee, adopted as the working document on 2/21/25, was the proposed committee substitute (CS) for HB 77, Version 34-LS0144\H, C. Radford, 2/20/25 ("Version H").] 1:20:53 PM JOHN SKIDMORE, Deputy Attorney General, Criminal Division, Department of Law (DOL), offered a comparison of HB 77 and HB 106 from a document, titled "HB 77 HB 97 HB 106 Comparisons" [included in the committee packet], which read as follows [original punctuation provided]: Comparison of HB 77 and HB 106 •Mail Theft: O HB 77 expands theft in the second degree to include all types of mail, making it a class C felony regardless of value. O HB 106 includes mail theft under theft in the third degree, making it a class A misdemeanor. •Medical Records: O HB 106 establishes that theft in the second degree includes the theft of medical records or other medical information, making it a class C felony. O HB 77 does not address medical records. •Organized Theft: O HB 106 establishes the crime of organized theft, where a person commits theft in coordination with three or more individuals who have committed or attempted multiple violations of AS 11.46.120 or 11.46.130. Organized theft is classified as a class A felony. O HB 77 does not include provisions for organized theft. •Clarifications & Exemptions: O HB 77 defines mail to include private mail delivery services and exempts agencies acting in their official duties. O HB 106 does not provide similar exemptions. No specific definition but common meaning of "mail" likely excludes FedEx/UPS. 1:25:41 PM REPRESENTATIVE MINA observed that private mail delivery services like FedEx and United Parcel Service (UPS) aren't included in HB 106 and asked whether the decision not to define "mail" was an oversight by the department. MR. SKIDMORE responded that it was not an intentional omission. He reminded the committee that under current law, the severity of mail theft is determined by the contents of the stolen package and its dollar value. He added that the decision to define "mail" would be a policy call for the committee to make. 1:27:22 PM REPRESENTATIVE COSTELLO referenced her personal experience with mail theft and suggested that the committee may want to consider that criminals are using people's homes as a delivery point for merchandise that they stole using the homeowner's identity or credit card. 1:28:23 PM REPRESENTATIVE VANCE asked about deed fraud or home title theft, which is the illegal transfer of property. She asked whether this issue could be included in the bill. MR. SKIDMORE said the fraudulent conveyance of a deed is in a different section of statute, AS 11.46.505, and considered forgery in the second degree. He added that the transfer of a deed is a separate issue. 1:32:38 PM The committee took a brief at-ease 1:32 p.m. 1:33:33 PM CHAIR GRAY explained that the purpose of today's hearing is to offer a side-by-side comparison of HB 106, HB 97, and HB 77 to give a clear understanding of three similar bills. He asked Mr. Sheldon to explain why HB 77 would raise the penalty for mail theft to a class C felony. 1:35:11 PM RYAN SHELDON, Staff, Representative Julie Coulombe, said the goal is to give Alaskans a "steppingstone tool" and differentiate the designation between possession, mail theft, and identity theft with an escalation in penalty from a class A misdemeanor to a class C felony to a class B felony. 1:37:19 PM REPRESENTATIVE UNDERWOOD asked how the bill compares to federal penalties. MR. SHELDON said federally, [mail theft] is a class C felony without the escalation, which includes a $250,000 fine and up to 5 years in prison. In contrast, Alaska levies a fine of $50,000 and up to 5 years in prison. CHAIR GRAY asked whether stealing Door Dash would be considered a felony under HB 77. MR. SHELDON answered no, a food order would not constitute a mail delivery. CHAIR GRAY sought to confirm that federal statutes contain the definition of mail that's used in HB 106, which does not include UPS and FedEx. MR. SHELDON responded yes. 1:40:41 PM MR. SKIDMORE offered a comparison of HB 97 and HB 106 from a document, titled "HB 77 HB 97 HB 106 Comparisons" [included in the committee packet], which read as follows [original punctuation provided]: Comparison of HB 97 and HB 106 •Organized Theft: O HB 97 establishes "organized retail theft," which applies to retail theft conducted as part of a coordinated plan over two or more occasions. O HB 106 establishes "organized theft," where a person commits felony level theft in coordination with three or more people. •Number of People Required in "organized theft": O HB 97 requires two or more people to coordinate for organized retail theft. O HB 106 requires three or more people for organized theft. •Scope: O HB 97 focuses specifically on retail theft, including acts such as concealing merchandise, altering price tags, or transferring merchandise between containers. O HB 106 applies more broadly to felony theft committed for the benefit of or in association with a group, beyond just retail settings. •Theft in the First Degree: O HB 97 lowers the threshold for theft in the first degree from $25,000 to $20,000. O HB 106 does not change the monetary thresholds for theft in the first degree. •Theft in the Second Degree: O HB 97 lowers the threshold for theft in the second degree from $750 to $500 on the low end and from $25,000 to $20,000 on the high end. O HB 106 expands theft in the second degree to include medical records but does not change the monetary thresholds. •Theft in the Third Degree: O HB 97 lowers the threshold from $250 to $200 on the low end and from $750 to $500 on the high end. O HB 106 includes mail theft under theft in the third degree but does not change monetary thresholds. •Theft in the Fourth Degree: O HB 97 lowers the threshold for theft in the fourth degree from under $250 to under $200. O HB 106 does not change theft in the fourth degree. •Other Changes in HB 97: O HB 97 changes the threshold for the crime of concealment of merchandise in various degrees. O HB 97 modifies the threshold for criminal simulation. O HB 97 establishes a marketplace facilitator tax. O HB 106 does not address these issues. 1:47:00 PM CHAIR GRAY asked when the price thresholds in HB 97 were last modified. MR. SKIDMORE estimated 6 years ago. REPRESENTATIVE KOPP shared his understanding that HB 97 would establish a Retail Theft Fund, similar to the Restorative Justice Fund, that would fund law enforcement. 1:48:08 PM REPRESENTATIVE VANCE asked how changes to the price threshold would impact the legal system. MR. SKIDMORE said the change in dollar values would only affect the classification or level of punishment. 1:50:11 PM [Due to technical difficulties, sound was lost briefly.] 1:54:27 PM REPRESENTATIVE VANCE questioned the purpose behind HB 97. 1:54:31 PM REPRESENTATIVE ZACK FIELDS, Alaska State Legislature, as prime sponsor, explained that the rise in retail crime coincides with the rise in high volume digital marketplaces, like Facebook Marketplace and Amazon. He said the user fee proposed in HB 97 is designed to ensure that there are resources in local law enforcement to combat theft driven by the shift to online marketplaces. He added that understaffed police departments only have the capacity to react to crime and lack the ability to break up criminal networks. REPRESENTATIVE VANCE asked who would collect the tax and how it would be returned to municipal public safety. REPRESENTATIVE FIELDS reiterated that the bill would implement be a user fee to address public safety issues, not a broad-based tax. From the designated fund, the money would be appropriated proportional to the respective jurisdictions. 1:57:19 PM REPRESENTATIVE COSTELLO asked why HB 97 was introduced. REPRESENTATIVE FIELDS said he had been disturbed by the closing of small or medium sized businesses in Anchorage and the inability for them to prevent excessive levels of theft, even with a more robust law enforcement presence. Overall, he said the bill was primarily driven by observations in the Anchorage business community. 1:59:29 PM REPRESENTATIVE MINA in trying to better understand the scope of retail theft and how it impacts closure of small businesses, asked whether local businesses had been surveyed on their reasons for closing. REPRESENTATIVE FIELDS stated that Nordstrom's midtown branch in Anchorage reported a loss to theft that's 10 times higher than the national average. He shared further anecdotal examples from local businesses that have experienced organized retail theft (ORT) and deferred to his staff, Evan Anderson, to elaborate. 2:01:07 PM EVAN ANDERSON, Staff, Representative Zack Fields, Alaska State Legislature, on behalf of Representative Fields, prime sponsor, th spoke to the issue at the Anchorage 5 Avenue Mall where Nordstrom had closed and reported that JCPenney experienced a 50 percent shrink rate until they decided to permanently close the th public entrance on 5 Avenue. 2:02:50 PM CHAIR GRAY opened public testimony on HB 77. 2:03:42 PM ROBERT MACKEY, representing self, testified in support of HB 77. Shared a personal anecdote involving a stolen paycheck. He said society is just learning the value of their digital self, and that "taking the next step" would help defend citizens who are not fully prepared and look to the legislature to provide guardrails. He opined that the bill would be a step towards helping law enforcement protect citizens from these types of crimes. CHAIR GRAY closed public testimony on HB 77 and opened public testimony on HB 97. 2:05:56 PM MARIAH MENDOZA, retail Security Director, Anchorage 5th Avenue Mall, testified in support of HB 97. She said theft groups are far more experienced compared to past years and are emboldened with the knowledge of the crime's threshold limits. Because they know what they can get away with and that they will be cited and released, thieves are coming in multiple times per day to steal targeted items like designer sunglasses. She stated her belief that the bill would be beneficial because it would make criminals aware that there would be consequences for their actions. 2:09:44 PM ROSE FELICIANO, Executive Director of Washington/Northwest, TechNet, testified in opposition to HB 97. She opined that the tax proposed in the bill would be discriminatory to the online marketplaces that she represents. In addition, she expressed concern that the fund would not be dedicated to ORT. Instead, she suggested that a task force on organized retail crime would be an effective tool that a number of other states had implemented. She reiterated her belief that a tax on marketplace dollars would be discriminatory and urged the committee to oppose the bill. 2:11:46 PM NATHAN WERNER, Captain, Fairbanks Police Department, testified in support of HB 97. Overall he had observed an inability to hold people accountable for these crimes and assumed that by reducing the thresholds, the bill intends to increase accountability. He shared statistics on the increasing theft levels and shared his experience combatting ORT. He opined that if passed, the bill would be impactful. 2:15:57 PM DAVE CAVITT, Owner, Furniture Enterprises of Alaska, testified in support of HB 97. He shared his personal experience with an employee that stole $250,000 in inventory for a resale furniture store and was not charged with a crime. He expressed his hope that the bill would help prevent something similar from happening to another Alaska business. 2:19:03 PM CHAIR GRAY closed public testimony on HB 97. He opened public testimony on HB 106. After ascertaining that no one wished to testify, he closed public testimony. [HB 77, HB 97, and HB 106 were held over.]