HB 187 - TOBACCO SALES VIOLATIONS 1:11:16 PM CHAIR RAMRAS announced that the first order of business would be HOUSE BILL NO. 187, "An Act relating to holders of business license endorsements for sales of tobacco products." [In members' packets were two proposed committee substitutes for HB 187: Version 25-LS0719\M, Luckhaupt, 4/23/07; and Version 773- 07-0086 bil.doc, Drinkwater, 4/2/2007, (3:34 PM).] REPRESENTATIVE DAHLSTROM moved to adopt the proposed committee substitute (CS) for HB 187, Version 25-LS0719\M, Luckhaupt, 4/23/07, as work draft. There being no objection, Version M was before the committee. CHAIR RAMRAS offered a recap of the progress made on HB 187 thus far and the issues it has raised. 1:14:17 PM DAVID SCOTT, Staff to Representative Kyle Johansen, Alaska State Legislature, sponsor, relayed on behalf of Representative Johansen that Section 1 of Version M [still] stipulates that a hearing must be held before a business license endorsement can be suspended, and that Section 2 makes a hearing "meaningful" by expanding the evidence that the administrative law judge shall consider. He noted that in using the term "meaningful," he is referring to the Alaska Superior Court case, Holiday Alaska, Inc. v. State of Alaska, wherein the court indicated that in order for an administrative hearing to be meaningful, the accused must be granted the opportunity to fully contest issues of central importance. MR. SCOTT indicated that Section 3 of Version M establishes new subsections (t), (u), and (v) to AS 43.70.075. Proposed subsection (t)(1)-(5), he offered, "basically creates policy for license holders ... to comply with if they want [an administrative law judge] to even consider a reduction in sentence." Specifically, proposed paragraph (1) stipulates that a license holder must adopt and enforce a written policy against selling tobacco products to persons under the age of 19; proposed paragraph (2) stipulates that a license holder must have informed his/her employees of applicable laws; proposed paragraph (3) stipulates that the license holder must require his/her employees to sign a form acknowledging that they have been informed of and understand the aforementioned written policy; proposed paragraph (4) stipulates that the license holder requires his/her employees to verify, via photographic identification, the age of those purchasing tobacco products; and proposed paragraph (5) stipulates that a license holder must establish and enforce disciplinary sanctions [against employees] for noncompliance. MR. SCOTT, in response to a comment, observed that there is a proposed amendment which would stipulate that a period of suspension may not be reduced to a period of less than 10 days. He added that the administrative law judge will have the discretion, but is not required, to reduce the suspension period. He then relayed that proposed subsection (v) of Section 3 allows the license holder and the department to agree to an informal disposition of suspension, and allows the department to reduce the period of suspension but only for a first time offense. REPRESENTATIVE HOLMES pointed out, though, that proposed subsection (u) stipulates that a reduction in the period of suspension may not be granted more than twice in a 12-month period for any one location. CHAIR RAMRAS offered his understanding that there is a proposed amendment addressing that point. 1:19:23 PM CHAIR RAMRAS made a motion to adopt Amendment 1, labeled 25- LS0719\M.1, Luckhaupt, 4/24/07, which read: Page 4, following line 14: Insert a new subsection to read: "(w) A period of suspension may not be reduced under (t) or (v) of this section to a period of less than 10 days." REPRESENTATIVE HOLMES objected for the purpose of discussion. CHAIR RAMRAS offered his understanding that Version M allows for the possibility of having the period of suspension reduced if the license holder is able to bring forth information proving that he/she complied with proposed AS 43.70.075(t)(1)-(5), and Amendment 1 merely stipulates that a period of suspension may not be reduced to a period of less than 10 days. He posited that Version M addresses the issue of due process for license holders, while Amendment 1 addresses his concern that any suspension period not be reduced to less than 10 days. He added, "When this bill goes to the [House Finance Committee] I hope that those members do not go below the 10-day minimum, because I think that stiff penalties have contributed to curbing minors consuming and purchasing tobacco." CHAIR RAMRAS, in response to a question, pointed out that the language on page 1, line 11, of Version M provides for a 20-day suspension period [for a first offense]. REPRESENTATIVE SAMUELS opined that endorsement holders who have done nothing wrong and do everything stipulated in proposed subsection (t)(1)-(5) but still have an employee who chooses to sell tobacco to a minor are being treated the same as those endorsement holders that choose not to train their employees. CHAIR RAMRAS pointed out that all employers are culpable for the actions of the employees they hire, and offered some examples. "At some point we have to draw the line, and in this case, ... I would like to draw it around ... being firm on making it a significant penalty [to] conducting commerce if you're not careful in the people that you hire and the way that they are going to engage in tobacco sales," he added. REPRESENTATIVE SAMUELS again expressed disfavor with the concept of treating all endorsement holders the same. REPRESENTATIVE HOLMES removed her objection. CHAIR RAMRAS announced that Amendment 1 was adopted. 1:26:29 PM REPRESENTATIVE GRUENBERG made a motion to adopt Amendment 2, which read [original punctuation provided]: 1. P. 2 - L. 25 delete: "a hearing office" and add: "an administrative law judge" REPRESENTATIVE GRUENBERG explained that the language to be deleted should instead read, "a hearing officer", and that Amendment 2 is a technical amendment acknowledging that those working in the office of administrative hearings are called administrative law judges, not hearing officers. CHAIR RAMRAS, noting that there were no objections, announced that Amendment 2 was adopted. 1:27:14 PM REPRESENTATIVE GRUENBERG referred to Amendment 3, which read [original punctuation provided]: 1. P. 4 - L. 5 delete: granted more than "twice" and add: granted more than "once" REPRESENTATIVE DAHLSTROM made a motion to adopt Amendment 3. CHAIR RAMRAS objected for the purpose of discussion, and offered his understanding that Amendment 3 would stipulate that a reduction in suspension may be granted only once within a 12- month period. He then removed his objection. REPRESENTATIVE COGHILL objected and asked whether a reduction may only be granted once. REPRESENTATIVE GRUENBERG said no, and concurred that a reduction may only be granted once in a 12-month period. He opined that a license holder shouldn't be able to break the law and then seek mitigation of the penalty more than once during a 12-month period for any one location. CHAIR RAMRAS concurred. REPRESENTATIVE COGHILL removed his objection. REPRESENTATIVE HOLMES pointed out that current law doesn't provide endorsement holders with any opportunity to seek a reduction in the suspension period, and added, "We are loosening the tobacco laws. CHAIR RAMRAS, noting that there were no further objections, announced that Amendment 3 was adopted. 1:29:30 PM REPRESENTATIVE GRUENBERG made a motion to adopt Conceptual Amendment 4, which, along with a handwritten change, read [original punctuation provided]: Page 4, line 14 Add a new subsection to read: (w) conviction for a violation of AS 11.76.100, 11.76.106, or 11.76.107 by the agent or employee of the person who holds the business license endorsement is rebuttably presumed to constitute proof of the fact that the agent or employee negligently sold a cigarette, a cigar, or tobacco, or a product containing tobacco to a person under 19 years of age. The person who holds the business license endorsement may overcome the presumption by establishing by clear and convincing evidence that the agent or employee did not negligently sell a cigarette, a cigar, or tobacco, or a product containing tobacco to a person under 19 years of age in violation of AS 11.76.100, 11.76.106, or 11.76.107 as alleged in the citation issued to the agent or employee. The presentation of evidence authorized by this subsection does not constitute a collateral attack on the conviction described in this subsection. REPRESENTATIVE SAMUELS objected. REPRESENTATIVE GRUENBERG explained that Conceptual Amendment 4 would add a new subsection (w) to proposed AS 43.70.075, and offered that in the Holiday case, the court said: In order to satisfy due process requirements, the litigant must be given more than just a hearing. That hearing must be "meaningful." In determining "whether a hearing is a meaningful one, [the court is] guided by 'considerations of fundamental fairness.'" Thus at an administrative hearing concerning the suspension of a driver's license "the accused must be granted the opportunity to fully contest issues of 'central importance' to the revocation decision." REPRESENTATIVE GRUENBERG opined that the same principle applies with regard to [suspensions of tobacco endorsements]. Conceptual Amendment 4 will clarify that the employer can also rebut the presumption of the conviction that the employee sold the tobacco product to someone under the age of 19. MR. SCOTT relayed that the sponsor is primarily concerned with correcting the lack of due process in existing law, and offered his understanding that the sponsor would not object to Conceptual Amendment 4. CHAIR RAMRAS remarked that Conceptual Amendment 4 seems to favor the employer. REPRESENTATIVE GRUENBERG concurred, adding that it favors the employer's due process rights. REPRESENTATIVE SAMUELS removed his objection. CHAIR RAMRAS announced that Conceptual Amendment 4 was adopted. 1:33:00 PM REPRESENTATIVE GRUENBERG made a motion to adopt Amendment 5, which read [original punctuation provided]: 1. P. 3 - L. 26 add: ", 11.76-106, and 11.76-107" 2. P. 3 - L. 31 add: ", 11.76-106, and 11.76-107" REPRESENTATIVE DAHLSTROM objected. REPRESENTATIVE GRUENBERG, after reviewing the language in Section 3 of the original version of the bill, withdrew Amendment 5. CHAIR RAMRAS recapped the changes that were made to the bill. 1:34:52 PM REPRESENTATIVE COGHILL moved to report the proposed CS for HB 187, Version 25-LS0719\M, Luckhaupt, 4/23/07, as amended, out of committee with individual recommendations and the accompanying fiscal note. There being no objection, CSHB 187(JUD) was reported from the House Judiciary Standing Committee.