HOUSE BILL NO. 159 "An Act relating to sale, possession, and purchase of tobacco and tobacco products; amending Rules 603 and 611(d), Alaska Rules of Appellate Procedure; and providing for an effective date." GEORGE DOZIER, STAFF, REPRESENTATIVE KOTT testified in support of HB 159. He explained that HB 159 would "up the ante" on violations relating to the sale of tobacco products 2 to minors or the use of tobacco products by minors. The current penalty for selling tobacco to a minor is a fine of up to $300 hundred dollars. Under HB 159, the penalty would be a fine of not less than; $250 hundred dollars for a first offense, $500 hundred dollars for a second offense and $1000 thousand dollars for a third offense. Mr. Dozier provided members with Amendment 1 (copy on file). He explained that Amendment 1 would modify the bill to an earlier version. Under the amendment, violations of AS 11.76.100, sale of tobacco to a minor; AS 11.76.105, minor possession; and AS 11.76.107, merchant requirements, would each carry a penalty of $250 hundred dollars for a first offense, $500 hundred dollars for a second offense and $1000 thousand dollars for a third offense. The amendment would place a ceiling on potential fines. He noted that the amendment also addresses concerns that the legislation would overlap into criminal law, necessitating jury trials. Mr. Dozier discussed other provisions of HB 159. He noted that the legislation establishes requirements for vending machine, mail order, or wholesale sales; outlaws the sale of tobacco in units of less than one package; and requires employers to notify employees regarding the provisions. Employees are required to sign a statement that they have received notification and that they understand the provisions for the sell of tobacco. In addition, section 5 requires the court to separately account for fines collected under AS 11.76.100, AS 11.76.105 and AS 11.76.107. These fines can be used to support municipal law enforcement. Representative Martin pointed out that children under 19 years of age could not purchase or use tobacco products. He expressed concern that out-of-state residents would not be aware of potential violations. Mr. Dozier thought that merchants would be required to post the legal age. He observed that the age limit is not being changed. Representative Davis pointed out that employees will receive notification of age requirements for the purchase of tobacco products. In response to a question by Representative Davies, Mr. Dozier explained that provisions of AS 11.76.100(a) have been placed in AS 11.76.107. In response to comments by Representative Grussendorf, Mr. Dozier clarified that federal law requires that clerks view identification of anyone who appears to be under the age of 27. Representative Davies expressed concern that the language, "contained in a cigarette carton or box," on page 4, line 4 3 would imply that cartons could not be broken down for sale. Discussion ensued regarding the use of "carton". Members clarified that the intent is that single cigarettes not be sold. Packs of cigarettes could be sold. Representative Davies observed that promotional boxes contain 4 cigarettes. Mr. Dozier reiterated that the concern is with the sale of single cigarettes. Representative Davies maintained that "carton" implies a container of boxes. Co-Chair Therriault observed that further clarification is needed regarding the drafter's use of "carton". Representative Davies questioned if minor consumption would be reduced by the legislation. He stressed that availability needs to be reduced before consumption will be effected. He maintained that the legislation without a fiscal note is a "hollow promise". Mr. Dozier asserted that section 5 will provide an inducement for enforcement. He stressed that HB 159 is not an appropriation bill. Representative Davies asked if the sponsor intends to pursue appropriations that would help to enhance enforcement. Mr. Dozier could not comment. Representative Grussendorf noted that the legislation would raise program receipts. Representative Kohring spoke in support of HB 159. He stated that the legislation is an alternative to taxes. He acknowledged the need for enforcement. Co-Chair Therriault pointed out that licenses can be revoked under the legislation. Representative Davies pointed out that unless the revocation of the license is connected to the purpose of the license that the revocation provision may be unconstitutional. He maintained that the legislation will not be adequately enforced. He asserted that a tobacco tax is the "most realistic way to really begin to solve the problem." He stressed that law enforcement efforts will be used to respond to homicides and domestic violence cases before cases involving minor consumption of tobacco. Representative Martin expressed concern that police can use the legislation to raise revenues. He compared penalties for the consumption of marijuana and the possession of tobacco products. Representative Mulder noted that there is a philosophical difference between proponents of the tobacco tax and those that prefer to effect change through rules and penalties that limit access. Representative Davies emphasized that access needs to be 4 restricted to 95 percent or more before it is effective. He stated that studies show that 35 - 40 percent of stores selling tobacco, in Fairbanks, still provide cigarettes to minors. He stressed that consumption will not be affected until 5 percent or less of the stores allow minors access to tobacco. He maintained that increased taxes work to reduce consumption. Co-Chair Therriault referred to language on page 2, line 1, "attempt to purchase". He observed that minors would not be able to work with law enforcement officers under this language. Mr. Dozier stated that the sponsor did not think children should be used in law enforcement activities. In response to a question by Co-Chair Therriault, Mr. Dozier explained that the fine is currently not less; than $250 hundred dollars for a first offense, $500 hundred dollars for a second offense and $1000 thousand dollars for a third offense. There is no upper limit on the fine. Amendment 1 would delete "not less than" as relating to the fine schedules. Representative Mulder MOVED to adopt Amendment 1. There being NO OBJECTION, it was so ordered. Co-Chair Therriault MOVED to delete "or attempt to purchase" on page 2, line 1. He stressed that the department should not be precluded from doing compliance checks. There being NO OBJECTION, it was so ordered. Representative Mulder MOVED to report CSHB 159 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. Representative Foster OBJECTED for purposes of discussion. He asked what would happen if a person was unable to pay their fine. DEAN GUANELI, CHIEF ASSISTANT ATTORNEY, DEPARTMENT OF LAW clarified that the fine would have to be satisfied. He thought that it would be unconstitutional to send a person to jail for failure to pay the fine. He noted that a person's permanent fund dividend could be garnished. Representative Foster questioned if the parents could be held responsible. Representative Grussendorf observed that village public safety officers are under-funded. Representative Foster noted that village public safety officers can be influenced by factors that could lead to selective enforcement. Mr. Guaneli clarified that parents would not be held responsible for their child's failure to pay a fine unless the law specifically provides that parents can be held liable. He noted that fines are referred to the collection section in the Department of Law. Fines can be 5 collected through permanent fund dividends. People can attempt to obtain a set aside or exemption. Representative Martin expressed concern that the children's actions will result in the loss of their permanent fund dividends without an awareness of the consequences. Mr. Guaneli observed that there would be some court process. Representative Davies emphasized that families would feel morally obligated to pay the fine. In response to a question by Representative Foster, Mr. Guaneli noted that the penalty for minor consumption is a $300 dollar fine. He observed that there is legislation pending that would increase the fine. Representative Martin expressed concern that the legislation could be used to raise revenues. He stated that "if you are a good cop, stay around, if you need money for the village patrol or municipal patrol, just watch that kid for a day or two and you got him for another fine." He maintained that it is not going to be easy to stop the child from smoking. A roll call vote was taken on the MOTION to move CSHB 159 (FIN). IN FAVOR: Martin, Mulder, Davis, Kohring, Therriault OPPOSED: Moses, Davies, Grussendorf, Foster Co-Chair Hanley and Representative Kelly were absent for the vote. The MOTION FAILED (5-4). HB 159 failed to move from Committee.