CSHB 367(FIN)am-LICENSING ADULT-ORIENTED BUSINESSES  MR. HEATH HILYARD, staff to Representative Lesil McGuire, sponsor, told members that HB 367 has undergone numerous iterations with regard to the provisions included. When Representative McGuire began to work on this bill, she was looking at the concept of both business and occupational licensing: business licensing for the clubs and occupational licensing for entertainers. However, due to fiscal considerations and numerous objections raised, the bill focuses only on business licenses. That focus is the most fiscally responsible and the element most agreed upon. MR. HILYARD said the version that passed the House also specifies the types of sexual contact prohibited. Some Title 4 provisions, which pertain to regulating alcohol establishments and prohibit such specified sexual contact, were incorporated into CSHB 367(FIN)am and apply to establishments that do and do not serve alcohol. In addition, the House Labor and Commerce Committee raised the age of patron and entertainer to 21. However, after discussions in the House Judiciary Committee and on the House floor about an ongoing case in Missouri, the House dropped the age down to 18 to alleviate any constitutional concerns. The bill also provides for particular restrictions so that applicants for business licenses cannot have been convicted of certain sex and drug offenses. It also requires notification to community councils or other non-profit community organizations. He offered to answer questions. SENATOR OGAN noted the bill talks about sharing a residential unit inhabited by minors and asked if that has been discussed. MR. HILYARD said as a result of interim deliberations when this bill was being drafted, several people expressed concern about massage parlors and escort services in residential areas that might share entryways with places that minors enter and exit so that was added as a precaution. He said he is not aware of any existing problem with strip clubs. SENATOR OGAN asked if this bill addresses a situation where a mother works as a prostitute at home. MR. HILYARD said it does not, to his knowledge, only because prostitution is illegal on its face at this time. Representative McGuire's interest was to regulate activities that are not currently illegal or that the law is silent on. SENATOR OGAN asked if all activities in adult oriented businesses will have to take place in the open so that a business cannot have private rooms for viewing pornography. MR. HILYARD said he believes that is correct. CSHB 367(FIN)am addresses the interior layout of these establishments so that all areas are visible from the entrance. SENATOR OGAN asked Mr. Hilyard if he anticipates any First Amendment issues arising from that requirement. He said that technically, an adult oriented business does not differ from a hotel that offers sexually explicit materials on a pay-per-view basis. MR. HILYARD acknowledged that Senator Ogan's concern about the First Amendment is a good point and is one of the reasons the House backed away from requiring participants to be 21. The State of Missouri enacted a provision to raise the age of dancers from 18 to 19 last year and that is currently in federal court. He explained that the First Amendment does not provide a guaranteed constitutional right to be entertained. However, the courts have said, particularly in Barn v. Glen Theater, that the act of erotic dancing is covered but that right is not as important as other core rights such as political speech. Representative McGuire believes that the House has gone to the extent possible in this particular version to alleviate any First Amendment concerns. SENATOR OGAN asked if the bill addresses private rooms in adult oriented businesses that do not have entertainers. MR. HILYARD said this version does not. Representative McGuire backed away from trying to regulate bookstores or other such businesses because there are very few in the state and because Assemblyman Dan Sullivan sponsored a zoning regulation in November that addressed those types of establishments in Anchorage. SENATOR OGAN asked if requiring a partition in adult book or video stores would cause a First Amendment problem. MR. HILYARD said he did not believe so because the issue has to do with the expressive act of dancing and whether the right to be entertained falls under the First Amendment. He deferred to Senator French for more information. SENATOR FRENCH said this is an unclear area and one would not know until the U.S. Supreme Court decided the issue. SENATOR FRENCH then asked the minimum age at which one can legally buy tobacco products. MR. HILYARD replied 19. SENATOR FRENCH said he asked that because this bill is the result of some community activists who were concerned that minors were frequenting or working at these establishments. He participated in a community council discussion the previous evening. That council was very unhappy that the minimum age in the bill was raised to 21 and then dropped back down to 18. He said he appreciates the huge amount of work Representative McGuire has done on this bill and then suggested that the committee raise the age to 19 as that would alleviate the problem of 18-year-old high school students going to or working in strip clubs. He said he believes that would withstand a constitutional challenge and that it would be worth challenging. SENATOR FRENCH then moved to raise the age of participation or employment in an adult oriented business to 19 [Amendment 1]. CHAIR SEEKINS objected for the purpose of discussion. MR. HILYARD said Senator French is absolutely correct with regard to the community council's concern: that high school students are both working in and visiting these establishments. However, with regard to raising the age to 19, Representatives McGuire and Gara have discussed the issue at length and felt that would be difficult to get through the legislature and the courts. He did not believe Representative McGuire would oppose raising the age but she is concerned about the case underway in Missouri. He said she also looked at the Alaska Constitution and was concerned that if the bill would not meet federal constitutional scrutiny, it would have more difficulty meeting state constitutional scrutiny. SENATOR FRENCH asked if Representative McGuire considered including a severability clause to moot that one provision and make the default age 18 if the court decision is adverse. MR. HILYARD said the House Judiciary Committee adopted a version that included a severability clause but it was pulled out when the House dropped the age back to 18. SENATOR FRENCH moved to amend Amendment 1 to add a severability clause. SENATOR OGAN spoke in support of the amendment. CHAIR SEEKINS announced that without objection, the amendment to Amendment 1 was adopted. MR. HILYARD asked Senator French if he intended to raise the age to 19 for both patrons and entertainers. SENATOR FRENCH said he intended the age of 19 to apply to both. CHAIR SEEKINS said that was his understanding. He then noted that without further discussion or objection, Amendment 1 as amended was adopted as a conceptual amendment. CHAIR SEEKINS then announced he would take public testimony but placed a two-minute time limit on each participant's testimony. MS. CARA NYQUIST, an Alaska attorney, stated support for HB 367 and informed members she submitted written testimony. Regarding the First Amendment, she believes the age for patronage and employment could be 19 or 21. She reviewed the constitutional issues and found the case law to be clear that states have a duty to regulate these types of businesses. She said she believes the committees have heard a lot of testimony about the local effects of these unregulated businesses. She believes this legislation is distinguishable from similar laws in other jurisdictions that are being challenged. In those jurisdictions, the legislatures did not make an extensive record of testimony on the local effects. She said she does not believe this bill is about a moral agenda, it originated as the result of stories told by young people about some shocking things that are going on in these establishments. MS. ANDREE MCCLEOD stated opposition to CSHB 367(FIN)am because it was poorly researched and presented and doomed from the start. She said one thing she has learned while researching this bill is that women are not the people being exploited. The impetus for this bill was information compiled by unknown individuals at secret meetings held during the interim. That information cannot be substantiated. She is aware that the director of the Covenant House and some of her clients were involved. She learned that during the intake process at the Covenant House, the more perverse the story told by the client, the more services are provided. This correlation is ripe for abuse. When the clubs got involved, a true examination of CSHB 367(FIN)am began. MR. DALE FOX, Executive Director of the Cabaret, Hotel and Restaurant Retailers' Association (CHARR), said CHARR is opposed to CSHB 367(FIN)am in its current form as it believes the legislation is a solution looking for a problem. He referred to the purpose and findings of the bill and said the authors of the bill have borrowed from other states where such problems exist. The findings refer to law-abiding people being accosted and harassed on the street, which does not happen in Alaska. The findings also refer to the proliferation of pornographic litter, which does not happen in Alaska. He noted that prostitution is also suggested as one of the reasons for this bill, however prostitution is already illegal. Regarding the issue of age, he said the legislature could establish a minimum age based on the age it believes people are mature enough to be tried as adults. SENATOR OGAN countered that he has spent time patrolling with Anchorage Police Department officers in Anchorage at night and a lot is going on. MS. CAROL HARTMAN, co-owner of Fantasies, an adult-oriented business, said the adult-oriented club industry is being singled out because of one circumstance. She said if the legislature is going to take action, the same restrictions should apply to all 18 year olds seeking employment. [Most of Ms. Hartman's testimony was inaudible.] MS. KATHY HARTMAN, co-owner of Fantasies, told members that Fantasies is an 18 and over gentlemen's club. Its clientele is made up of people of all ages and all walks of life. She said this bill is the result of [complaints made by] a woman who danced in the 1980s, when all clubs were regulated by the ABC Board. The problems she discussed have already been taken care of. Clubs are licensed and required to have annual inspections. All dancers must be employees, not contractors. Laws are on the books to deal with drug use, prostitution, sales, sexual assault, wage and hour issues, and employment of minors. She maintained that high school students are not hired in her club and that if that is a problem, parents, teachers and counselors should be addressing that problem, not the legislature. The Alaska Supreme Court has already determined that erotic dancing is constitutionally protected under the federal and state constitutions. SENATOR OGAN said he wants to know whether Bethany Carrera's murderer, when found, ever attended adult-oriented clubs. CHAIR SEEKINS closed public testimony, due to no further participants. SENATOR FRENCH commented that he is impressed by the work done by the House on this bill. SENATOR OGAN moved SCS CSHB 367(JUD) from committee with individual recommendations. CHAIR SEEKINS announced that without objection, the motion carried.