SB 173-SYNTHETIC DRUGS  2:37:11 PM CHAIR KELLER announced that the next order of business would be the CS FOR SENATE BILL NO. 173(JUD), "An Act relating to a prohibition on the possession, offer, display, marketing, advertising for sale, or sale of illicit synthetic drugs." REPRESENTATIVE LYNN moved to adopt CSSB 173(JUD) as the working document. 2:37:30 PM EDRA MORLEDGE, Staff, to Senator Kevin Meyer, Alaska State Legislature, noted that SB 173 was a companion bill to Representative Millet's HB 362, which was heard on March 26, 2014. The bills are identical, and she conferred with the legal department in order to address the questions that were raised at that hearing. She pointed out a memo from the bill drafter, Kathleen Strasbaugh. CHAIR KELLER listed the witnesses who were available. He asked Ms. Strasbaugh to explain the new version of SB 173. MS. MORLEDGE said there has only been one version before the committee, and that was HB 362, which is identical to SB 173, which is now before the committee. 2:40:25 PM CHAIR KELLER said he was satisfied with the legislation at that time. REPRESENTATIVE GRUENBERG asked if the memo Ms. Morledge referred to is dated February 10, 2014. MS. MORLEDGE said there is a more recent version. 2:41:17 PM The committee took an at-ease from 2:41 p.m. to 2:46 p.m. 2:46:23 PM REPRESENTATIVE GRUENBERG, [referring to the March 28, 2014, memo from Kathleen Strasbaugh to Senator Meyer containing nine questions with answers/recommendations regarding SB 173], said he would be interested in knowing the sponsor's views "as we take up each one, because there are some that Kathleen specifically recommends we adopt, and some that she doesn't seem to recommend, and I don't know if there's anything that falls in-between." REPRESENTATIVE PRUITT said, "There are three of these [question/answers in Ms. Strasbaugh's memo] that caught my eye." With regard to number 6, he asked if the bill contains a loophole. 2:48:16 PM KATHLEEN STRASBAUGH, Attorney, Legislative Legal and Research Services, Legislative Affairs Agency, said she would not call it a loophole. The law is designed to address a particular type of product and transaction, which is characterized by the lack of disclosure of the contents and misleading packaging. It does not address the chemical composition of the substance, she explained. If a purveyor of one of these products did correctly label it, it would not be in violation of this law, but a few other things might occur. If there is no disclosure, the product cannot be imported, she stated. Additionally, the product may not be found safe for human consumption, so the disclosure of the contents may make the product run afoul of federal regulations. Misrepresentation, with or without disclosure of contents, is something that the FDA (Food and Drug Administration) enforces, but it tends to go after larger purveyors, she said. The basis of the statute is directed toward mislabeling, she added. 2:50:28 PM REPRESENTATIVE PRUITT related that he is not very familiar with the FDA, which he finds to be confusing. He spoke of misleading claims on supplement packaging, which may state that a product was not reviewed by the FDA, so he asked if the maker of the [synthetic drugs] could do the same. MS. STRASBAUGH said the FDA will go after a supplement product if its claims are inaccurate, but not necessarily every supplement. The FDA website has a list of enforcement items addressing supplements, she added. "There are some circumstances under which misleading claims can be prosecuted under federal law," she said. 2:53:14 PM REPRESENTATIVE LEDOUX said if something is packaged with a list of all of the ingredients with a notice that the product is not safe for human consumption, will that be a violation of anything? MS. STRASBAUGH answered that an accurate portrayal of the product and the terms of effect might well not be pursuable under this law. In order to be in violation of SB 173, it would have to violate the misrepresentation provisions. 2:55:19 PM CYNTHIA FRANKLIN, Prosecutor, Municipality of Anchorage, said Anchorage passed an ordinance similar to SB 173 in January, 2014, and there has been some enforcement. The ordinance addresses the packaging, which is designed to address the lack of laws, so the idea of manufacturers just listing all ingredients is not realistic, she stated. The purveyors of these products are drug dealers, she explained, and that is why the packages do not contain the contents. The dealers often do not know what the chemicals are. She said this is not a legitimate consumer product-it is drug dealers packaging up drugs and selling them as IPod cleaners, potpourri, and aromatic substances, for example. She understands why the committee is trying to imagine what could come about and how the drug dealers might respond, but it is difficult for her to imagine the dealers saying "let's just list all of these substances that we're coming up with to create these crazy synthetic drugs" to get around this law. She explained that the law is to address the retailing of the product in Alaska's communities, because the retailers have insisted that because they cannot keep up with the chemical combinations that the drug dealers are coming up with, that the products are therefore legal and they can sell them over the counter. 2:58:11 PM MS. FRANKLIN said the response of the Anchorage ordinance has been retailers taking the products off of the shelves. Whether or not the retailer would accept a product that looked, in every way, like these illegal substances except that they have the ingredients listed out, would be a two- fold question: Would the retailer sell it, and, if officers seized it, would it be prosecuted? It can be a sliding scale, she stated. If the label says it is potpourri and is not for human consumption, and the ingredients are listed, "would I, as the prosecutor, be able to prosecute that case successfully?" She said it would likely depend on the other things on the package that are encompassed by the statute. As a career prosecutor, she does not see that happening, because [it is a false] assumption that these are legitimate products with a person on the other end who is trying to sell a legitimate product. These are drugs coming into our communities, she said, and the reason they are not properly labeled is because they are labeled and sold by drug dealers who do not even know what is in them. 2:59:33 PM REPRESENTATIVE LEDOUX asked if the state or municipality can prosecute on a product listed with a half million different things that says it is not safe for human consumption. "Does the municipal prosecutor take these things and test them out to make sure that everything that they say is listed is listed and that there isn't anything else in them?" The items may now be off the shelves, but just like the drug dealers have figured out that they need to change the ingredients in order to circumvent the law, "why wouldn't they figure out that they need to change the packaging in order to circumvent the law?" 3:00:38 PM MS. FRANKLIN said she thinks the officers would look at a package and make a determination, and they might seize the package and not issue a citation until prosecutors looked at it. She said if the item met the ordinance guidelines, the prosecutor would file a citation. The municipality is not testing the substances; the idea is to address them without requiring the traditional forensic analysis that the manufacturers have kept ahead of, she explained. She said to keep in mind that that these products are shipped nationally, and listing the ingredients will make it difficult to stay ahead of all state and federal laws. She said that listing the actual ingredients on the product is not the response she foresees to this legislation. 3:04:31 PM REPRESENTATIVE GRUENBERG said he would like to hear from someone on the defense bar, because there are a number of very significant legal issues. Prosecutors are charged with enforcing the laws and making sure that anything they draft can survive challenges. He said he wants someone to go through SB 173 to highlight the problems and the challenges, "so we can deal realistically with whether this bill is going to be enforced." CHAIR KELLER said he will get someone. REPRESENTATIVE LEDOUX said she suspects this bill might survive a constitutional challenge-or there will be no challenges-because it has a civil penalty, where providing a public defender is not required and there is no right to a trial by jury. 3:06:40 PM REPRESENTATIVE GRUENBERG said whether SB 173 survives a challenge is not the question. It will ultimately be a business decision by the government on whether it is worth prosecuting somebody for a little bottle, he stated. He noted page 3, line 8, regarding compliance with state or federal law, and asked if the product were manufactured in Idaho but sent to Alaska to be sold, would it be the law of Idaho that sets the standard, the law of Alaska, or a violation of interstate commerce? 3:08:15 PM MS. MORLEDGE said the sponsor's intent is that the activity would fall under Alaska law. REPRESENTATIVE GRUENBERG said someone should testify on the issue of interstate commerce under federal law. CHAIR KELLER said Mr. Steiner is on the phone. REPRESENTATIVE GRUENBERG asked if there are any practical or constitutional issues with SB 173. 3:10:38 PM QUINLAN STEINER, Public Defender, Public Defender Agency, Alaska Department of Administration, noted that he worked on SB 173 when it had a criminal penalty, and he had concerns at that time. The bill sponsor clarified that the penalty is now a violation, so his concerns were satisfied and he did not see any problems. "It wouldn't implicate the public defender at all," but it is broadly written and that would have caused him concern when attaching a criminal penalty, but as a civil penalty it is not as dramatic, he explained. REPRESENTATIVE GRUENBERG asked Mr. Steiner to look at SB 173 as a lawyer defending a person from civil penalties. He asked if there things that may cause points of litigation or problems. MS. STEINER said he is reluctant to answer that. He does not get involved with civil matters, and although it is structured like a criminal penalty, SB 173 involves commerce, and he is not comfortable assessing its impacts. "These types of restrictions on food items and other things you might eat or ingest is not something I'm familiar with," he declared. 3:12:54 PM REPRESENTATIVE PRUITT asked about the sixth point in Ms. Strasbaugh's memo. Part of the problem [with these products] is that the content can be changed, and now the name can be changed, he said. He asked if this is the "best thing that we have going forward to try to address the issue where we're not having to try and come back every year and fill in loopholes or oversights or changes that these intelligent drug dealers or manufacturers are making?" He asked if something needs to be added. 3:14:45 PM MS. FRANKLIN said she sees this strategy as a tool to address a huge problem in Anchorage, which is the over-the- counter sale of such products and their representation as being safe. The products are primarily marketed to young people who believe that when they buy a product in a store, it must be safe. She said a person can just walk into a store and buy it, and the Anchorage ordinance was specifically written to address the concept that there are things sold in stores that are unregulated and, in this case, extremely unsafe. She told the committee that she has been prosecuting since 1989 and has lived through various designer drug waves, and her belief is that this type of legislation addressing the sale of these products makes the problem go away. 3:16:30 PM MS. FRANKLIN noted that that has happened in a short amount time in Anchorage, because stores do not want to sell illegal products, so once the Anchorage Assembly made the ordinance, the stores did not want any part of [the trade]. Decreasing availability does address the problem. She noted that the products can still be sold on the Internet, and that is why the Anchorage ordinance contains the possession element to allow officers to ticket individuals, which will turn a person's $35 high into a $535 high. 3:17:07 PM MS. FRANKLIN said, "We think of it as a tool; not the end- all be-all." She explained that the names of the products were included in the ordinance to make it easy for officers if they encounter that particular package. She said she realizes that it will be a challenge keeping up with product names, but the assembly can update the city code more easily than legislators can update state law. The city anticipates that it will update the list of product names, but it will be a challenge on the statewide level, she stated. She noted that the packages she has seen are homemade with misspelled words; they are manufactured in someone's basement. The Anchorage Assembly specifically designed the ordinance to negate the idea that something is safe if it can be purchased over the counter. She said that the minute that the retailers were convinced that the community condemned the sale of these products, they took them off the shelves. 3:19:27 PM REPRESENTATIVE PRUITT said since the legislature meets only once a year, he wants to be sure SB 173 is right. He said he would like to address the aspect of listing the names [of the products] and if there is nothing to stop [dealers] from changing names. What wording would cover a product with a different name so the legislature would not have to wait a year to [add a name to the list]? 3:20:26 PM MS. FRANKLIN said Anchorage Assembly members named the names they were aware of, and those names came from undercover purchases, confiscations from individuals in the drunk tank, and other sources. So they knew such products had a high likelihood of being [sold] in Alaska, but the rest of language is designed to address products without requiring a specific name, she explained. It is a two-fold approach: listing the known products and giving officers the tools to identify the products with different names. 3:21:39 PM REPRESENTATIVE PRUITT asked what the penalty is in Anchorage. MS. FRANKLIN said it is a $500 fine per packet. REPRESENTATIVE PRUITT said question 3 [in Ms. Strasbaugh's memo] indicates that it is not necessary to clarify that the $500 penalty is for each package. It might be appropriate to clarify that, he opined. Additionally, he said, before the committee is an article from the Alaska Dispatch with a 2013 photo of WTF brand synthetic marijuana, and that brand is not on the list in SB 173. 3:23:40 PM CHAIR KELLER said the committee will take that up for consideration. REPRESENTATIVE LEDOUX suggested leaving this law up to municipalities since they can update the list more easily. CHAIR KELLER said that is a new question. He wants to clarify the nine questions before the committee. REPRESENTATIVE GRUENBERG said he was going in that direction, and he has questions on the fiscal note. 3:25:01 PM The committee took an at-ease from 3:25 p.m. to 3:26 p.m. CHAIR KELLER noted that it is late in the day, and he will set SB 173 aside and bring it up on Monday. REPRESENTATIVE GRUENBERG said it will take time for him to digest this bill, and he asked the sponsor's staff to talk with committee members in their offices. He said there could be a lot of money spent without much return, since the municipalities are doing this anyway. [SB 173 was held over.]