HOUSE BILL NO. 367 An Act relating to the licensing and regulation of sex- oriented businesses and sex-oriented business entertainers; relating to protection of the safety and health of and to education of young persons who perform in adult entertainment establishments; and providing for an effective date. REPRESENTATIVE LESIL MCGUIRE, SPONSOR, noted that the statewide Parent-Teacher-Student Association (PTSA) passed a resolution asking the Legislature to pass a law to protect under 21-year-old employees and minors from some of the ill effects caused by strip clubs, massage parlors and other nude entertainment businesses. Accordingly, they worked to help craft HB 367. Among the findings in the statewide PTSA resolution, from a review of studies and court findings, is a showing that the operation of sexually oriented businesses (SOB) leads to higher rates of crime, including sexual assaults, prostitution, drug sales and drug use. Representative McGuire stated that the primary goals of HB 367 are to permit the legal operation of these businesses while protecting young Alaskans who work at them, to protect minors, and to protect the public from operations by those adult establishments that do not follow the law. Representative McGuire highlighted the provisions of the bill, which would protect the public and young adults in the following ways: · Prohibits nude entertainment from sharing a common entrance, restroom or hallway with businesses or residences used by minors. · Prohibits the use of closed private booths where illegal sexual activities may occur. · Prohibits the operation of sexually oriented businesses by those with felony records, or records involving sexually related, drug-related, or violence-related crimes. · Prohibits the employment of nude or semi nude entertainers under the age of 19. · Requires entertainers to obtain a license, and prove they have attended a State approved course teaching the entertainer how to protect her/himself from sexual assault; and a course teaching entertainers of wage and working condition violations that occur in that area of business. · Requires entertainers under 21 years old to show they have attended a State-approved counseling session that is aimed at letting young adults know of career and educational alternatives, financial aid and vocational training available to them as viable options to entering or remaining in a career in adult entertainment. While it is likely unconstitutional to ban all 21 year olds from these jobs, it is important that young adults at least know about other life options. Many young adults who enter into these careers come from backgrounds where those options are not generally discussed. · Entertainers under age 21 shall also be required to show they have taken a state-approved course on sexually transmitted diseases. · Businesses and entertainers are required to obtain licenses to show these requirements have been followed. The State, as it does in other areas, will set the license fees at a level to cover the State's costs of administration and enforcement. · Communities shall be apprised of adult business license applications through reasonable public notice rules. · Allows suspension of an adult entertainment business license if provisions of the law are knowingly violated. Representative McGuire pointed out the faxed testimony from Shawn Ruggley, who spent many years dancing in teen strip clubs. Ms. Ruggley mentions that the selling and buying of drugs is intermingled within that scene; it is almost as if the two were one in the same. (Copy on File). Representative Hawker MOVED to ADOPT Amendment #1, #23- LS1394\X.2, Craver, 4/15/04. (Copy on File). Co-Chair Williams OBJECTED for the purpose of discussion. Representative McGuire explained that the amendment was a collection of all the changes made to the bill in an effort to garner support. It eliminates references to age restrictions. Some of the changes come as a reflection on Supreme Court rulings that would cause legal expense and be challenged. She pointed out that most of the changes were to the age requirement. Representative Hawker MOVED to add a "friendly" amendment to Amendment #1, Page 11, Line 6, deleting "public" and inserting "pubic". There being NO OBJECTION, the amendment was amended. TAPE HFC 04 - 84, Side B  OFFICER PABLO PAIZ, (TESTIFIED VIA TELECONFERENCE), ANCHORAGE POLICE DEPARTMENT, ANCHORAGE, spoke in favor of the legislation. He was disappointed with the language of the amendment as he thought it would "water down" the bill. He commented that he has witnessed the plight of many young dancers who are victims to their employment. In addition to the employing, many employers house them. Having the businesses being licensed and regulated would keep them on the up and up. DON HUDSON, (TESTIFIED VIA TELECONFERENCE), PHYSICIAN, ALASKA REGIONAL HOSPITAL, ANCHORAGE, voiced his support for the bill, voicing concern that it had been watered down. He commented on the dramatic increase of sexually transmitted diseases that many of the young girls are treated for at local hospitals. These girls are frequently pregnant, having multiple complications. He assessed that this is a sad commentary on the life of these young people, reiterating his support for the bill. CAROL HARTMAN, (TESTIFIED VIA TELECONFERENCE), CO-OWNER, FANTASIES, ANCHORAGE, spoke strongly against the legislation. She stated that she owns a business in the industry and thought that the bill should not have been brought forward. The industry was excluded from the discussions that formulated the bill. She believed that these issues should have been addressed at a local level. There are already municipal codes which grandfather in this industry including specific requirements. She mentioned that they would not be against regulating the industry if it was handled fairly, making a better business world for everyone. The concern is with over-regulation. Ms. Hartman added that many of the alleged referenced abuses took place years ago when current laws were not in place. She added that the situation in Anchorage is totally different than those in the large cities in the Lower forty- eight states and that mishandling in the Alaskan businesses is unproven. She emphasized that there are no secondary effects from this business. Ms. Hartman disliked being called a "sexually oriented business". She stressed that there is no "sex" in the industry. She asked for specific information that could be substantiated. She referred to the reference regarding the high rate of sexually transmitted diseases, pointing out that the North Slope area has the highest amount of Chlamydia in the nation. She asked if all those girls were dancers. She claimed that the legislation was harsh and asked that it be reconsidered. KARA NYQUIST, (TESTIFIED VIA TELECONFERENCE), ATTORNEY, DIRECTOR OF COVENANT HOUSE, ANCHORAGE, spoke in strong support of HB 367. She noted that she had worked with Representatives McGuire and Gara on the legislation. She offered a brief legal description of her experience on the issue. The Alaska Supreme Court and the U. S. Supreme Court have recognized that dancing is constitutionally protected, however, both courts recognize that those judgment restrictions and that local governments have the right and duty to regulate sexually oriented businesses. The Supreme Court uses the term SOB when describing those businesses. She mentioned the secondary effects of this type of local business with increased crime including drug traffic, prostitution and sexual assault and the increase of spreading sexually transmitted diseases and wage and hour violations. Several of the minors interviewed have spoken about the things that occurred to them when working in clubs in Anchorage. Some of the things reported were: · Required to pay $50 dollars a night to work at the clubs and if they did not make that amount they then owed the house; · Encouraged to do lap dances with no clothing on; · Encouraged to engage in prostitution; · Forced to work in unclean conditions; and · Concluded that 16-year-old girls are engaging in sex. Ms. Nyquist pointed out that these things are happening in Anchorage. The club owners in the State should not employ anyone under the age of 21. She urged that the bill be passed from Committee. TERRY DITTMAN, (TESTIFIED VIA TELECONFERENCE), PARENT- TEACHER-STUDENT ASSOCIATION (PTSA), ANCHORAGE, read the testimony from Nancy Fair, Parent-Teacher-Student Association, Service High School, Anchorage. (Copy on File). She noted that they had spent over a year researching the impacts of the SOB's, finding no benefits, only negative impacts from that type of business to the children of the State. She claimed that business licensing as proposed in HB 367 would be an important step in protecting the teens. It would help insure that underage teens are not involved and it would insure that the club owners are not criminals. The PTA strongly supports raising the minimum age for both customers and strippers to 21 years. Raising the minimum age would not be inconsistent with supporting the minimum voting and military age requirements. Ms. Dittman added that participation in SOB's is frequently a pathway to drug and alcohol addiction and prostitution. Use of drugs and alcohol contributes to an unsafe environment for teens. Many of the customers at the non- liquor strip clubs arrive intoxicated. Strip clubs without a liquor licenses have no designated closing times, so when the bars close a "rush" of intoxicated customers appear in the clubs and interact with the under-aged clients. Ms. Dittman added other benefits of the bill would be statewide jurisdiction, so that all communities are protected. She strongly encouraged review of the legislation, as the industry is detrimental to individuals and to the communities. ANDREE MCLEOD, (TESTIFIED VIA TELECONFERENCE), ANCHORAGE, testified in opposition to the legislation because of the manner in which it was drafted. She stated that she is not in favor of allowing high school students to participate in stripping, but maintained that the process did not include the industry members when formulating the bill. The industry has offered to address the issues of employing high school students. Ms. McLeod emphasized that this is a local issue and observed that men and women over 18 years of age have the right to make their own decisions. Ms. McLeod recommended that the operations should be regulated around the State but that the young people in the 18-21 year old range are able to make their own decisions without the interference of State government. DIANA L. STRAUB, (TESTIFIED VIA TELECONFERENCE), PARENT- TEACHER ASSOCIATION, ASSEMBLY MEMBER, WASILLA, voiced strong support for the bill. Through the licensing process, the public will have the ability to comment. The public should have the right to comment during the renewal process and the community would be able to participate in the licensing process. It is valuable that the public can revoke these licenses. Ms. Straub recommended that the licensing process mirror the liquor licensing process and be regularly checked for compliance. Requests for application could be approved or rejected by the State for incompliance. Ms. Straub recommended that parole be added on Page 4, Line 7 & 8 and on Page 5, Line 10, also inserting cities and boroughs. REGINA MANTEUFEL, (TESTIFIED VIA TELECONFERENCE), FORMER STRIPPER, ANCHORAGE, voiced strong support for the legislation. She urged that the patrons be 21 years old. She noted that she first started dancing for the military. Those clients tend to be very rude and often would grab the dancers. She pointed out that many dancers have stage names to protect themselves from being followed. Ms. Manteufel discussed labor laws that a person cannot be paid a shift rate to work. Dancers cannot be paid their stage tips to work. Any stage tip is considered a tip and it is illegal that the owners of the club use that to suffice minimum wage. She claimed that is done everywhere and that it is illegal to have a shift-pay. Ms. Manteufel recommended that the Department of Labor & Workforce Development visit the clubs twice a year and go over the labor laws with the dancers, including information on making a wage claim. Ms. Manteufel did not support young girls table dancing naked. She stressed that there should be no naked table dancing at any age. The original bill contains one-hour assertiveness training, which she thought would be cost effective for all clubs. Ms. Manteufel referenced the domestic violence records for the State of Alaska, pointing out that the men abusing between the ages 18-21 years old are usually in the military. TAPE HFC 04 - 85, Side A  Ms. Manteufel concluded her testimony and reiterated her support for the bill. KATHY HARTMAN, (TESTIFIED VIA TELECONFERENCE), CO-OWNERS, FANTASIES, ANCHORAGE, spoke against the passage of the bill. She referenced the packet in member's files. (Copy on File). She noted that her business is in the Union and is audited every year for workmen's compensation. She stressed that much of the testimony is off base. Much of the information is being provided from very old surveys. She claimed that the "deep" research performed by Representative McGuire was not true. She responded to comments made in previous testimony. Ms. Hartman pointed out that there are only six of this type business in the Northern Alaskan area. The Municipality of Anchorage and Matsu have laws on the books regulating them. Currently, these businesses are required to do all the reporting that other businesses are required to provide. She strongly urged that the bill not be moved from Committee. Representative Hawker MOVED a conceptual to Amendment #1, Page 2, Line 15, inserting language: (4) Information on the State's wage and labor laws as it pertains to the entertainer's employment. There being NO OBJECTION, the conceptual amendment was adopted. Vice Chair Meyer inquired how performances in places like the Performing Arts Center and out-door theatres that from time to time offer presentations where clothing is removed, would be handled. Representative McGuire responded that the sponsor's were careful in drafting the legislation that those situations were not included. There is a definition on Page 10, outlining an adult oriented business and operating for compensation. She added that sexually oriented business is a legally tested term words used throughout the Supreme Court documentation. Co-Chair Harris MOVED to report CS HB 367 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CS HB 367 (FIN) was reported out of Committee with "no recommendation" and with a new fiscal note by the Department of Community & Economic Development, a new zero note by the Department of Public Safety and zero note #2 by the Department of Labor & Workforce Development.