SB 66-IMITATION CONTROLLED SUBSTANCE  2:18:57 PM CHAIR COGHILL reconvened the meeting and announced the consideration of SB 66. "An Act relating to imitation controlled substances; and providing for an effective date." He noted this was the second meeting and there was a new committee substitute (CS). 2:19:39 PM SENATOR DYSON moved to adopt CS for SB 66, labeled LS-280427\U, as the working document. CHAIR COGHILL objected for purposes of an explanation. 2:20:09 PM SENATOR EGAN stated that the CS reflects the comments that were voiced during the initial hearing. Under the current law, possession of oregano with intent to sell as a drug is a class C felony, whereas the possession of marijuana with intent to sell is class A misdemeanor. The CS reduces the penalties for first time offenders for all violations under the imitation controlled substance law, AS 11.73. The penalty for repeat offenders is much stricter. ALIDA BUS, Staff, Senator Dennis Egan, was available to answer questions. SENATOR DYSON disagreed that the sale of sheetrock dust as a controlled substance should be a class C felony and suggested that it should carry a fraud charge. He indicated he didn't support the bill in its present form. CHAIR COGHILL opened public testimony. 2:24:40 PM TRACY WOLLENBERG, Deputy Director, Appellate Division, Public Defender Agency, Anchorage, Alaska, said she was happy to see some reduction in the level of offense in response to the concerns voiced about SB 66 at the 2/21/14 hearing. A remaining concern is that the bill is too broad and may capture conduct it is not intended to capture. A specific example is a person who doesn't intend to deceive someone into thinking the substance is a controlled substance. The memo from Legislative Legal discusses Morrow v. State and the hypothetical situation where someone, without any intent to deceive, gives caffeine diet pills to someone indicating that they are as effective for weight loss as any prescription medicine. In Morrow, the court of appeals recognized that the statute would conceivably cover that hypothetical. The statutory definition has changed in recent years, but the concern remains that activity that isn't intended to deceive would still be captured under the broad language of the statute. That's because the statute is written in a way that captures situations where the recipient reasonably believes that the substance is controlled, even though the distributor did not intend for the recipient to think that. In part, the reason is that the definition of "representations" is so broad and inclusive. MS. WOLLENBERG suggested that a potential fix is to narrow the statute by building an intent to deceive mens rea directly into the crimes that are written under AS 11.73.010, .030, and .040. It should include that the crime is complete only if the person intends to deceive when they manufacture, deliver, or possess with intent to deliver an imitation controlled substance. That change wouldn't make the seller's motivation part of the offense but it would make the seller's intent to deceive the recipient an element of the offense. This would still capture the person who sells imitation drugs to an undercover police officer because in that instance it's clearly the person's intent to deceive another into thinking the substance is controlled. 2:29:07 PM SENATOR DYSON questioned how knowingly selling a phony drug would rise to the level of a drug crime when the person clearly has intent to defraud the other person and misadvertise. He asked for help understanding how the mens rea on fraud should be in the drug code. MS. WOLLENBERG explained that to capture the concept of fraud, it ought to be spelled out explicitly in the crime as one of the elements that the state needs to prove. If it isn't built in, the statute will default to the knowingly mens rea and that might not capture the fraud aspect. Somebody could knowingly deliver substances and have no intent for the other person to think that those substances are controlled. SENATOR DYSON said he would be more supportive if the phony substance was actually dangerous. 2:32:42 PM MS. BUS respectfully reminded that the target of the bill is to get to drug dealers who are suspicious of a sting and are trading phony drugs to law enforcement officers. Theoretically these people are involved in drug dealing and they deal salt rather than meth, for example. SENATOR DYSON questioned how the legislation makes it clear about evidence tampering. MS. BUS addressed the question of intentional misrepresentation pointing to Morrow v. State. The state said, "We believe the statute can be interpreted by us to apply to those situations involving an intentional misrepresentation that an imitation controlled drug is a controlled drug." The opinion goes on to say that the language of the ordinance is so vague that arbitrary enforcement is likely. She deferred further explanation to the Department of Law. 2:35:07 PM ANNE CARPENETI, Assistant Attorney General, Criminal Division, Legal Services Section, Department of Law, said that Ms. Bus was referring to the fact that, in addition to the mens rea in the substantive chapter, there is also a culpable mental state in the definition. In Morrow, the only appellate decision under these statutes, the court limited the meaning of "representation" to the "intentional misrepresentation that an imitation drug is a controlled substance." That imports the mens rea of a person trying to cheat or defraud someone and the concern is that that would be another mens rea for the state to prosecute. She offered to redraft the provision so the culpable mental state isn't in the definition section. SENATOR DYSON said that still misses his point, which is that the mens rea is fraud. It is not to sell somebody drugs. It's too large a leap to think that the seller had the culpable mental state to sell drugs just because the customer thought he/she was buying drugs, he said. MS. CARPENETI relayed that the supervisor of the drug unit in Anchorage has said that when they can prove that the seller knew that it was an imitation drug, they charge and prosecute under the theft statutes. 2:39:44 PM SENATOR DYSON voiced support for charging under the theft statute in that circumstance, and concern that it was discretionary. He restated that he didn't want selling a phony drug twice in ten years to be a class C felony. He maintained that it wasn't the same classification as running a house of prostitution or molesting kids. CHAIR COGHILL summarized his understanding of the repeat offense addressed in paragraph (2). 2:41:57 PM MS. BUS clarified that the repeat offense relates to offenses of the controlled substance law or imitation controlled substance law. To meet the class C felony threshold, a person could have been convicted of two misrepresentations or one actual drug offense and one misrepresentation. SENATOR DYSON drew an analogy with firearms and commented that he wasn't willing to make somebody a felon for fleecing fools. He further offered that somebody who is selling a bad product will see their market share go down and perhaps their physical comfort will decrease as well. 2:44:35 PM CHAIR COGHILL summarized his understanding of Ms. Wollenberg's concern. The public defender would like the bill to be more specific about the intent to deceive because the court case doesn't do that. MS. CARPENETI said she wasn't sure of her position on the Morrow decision and its interpretation of the term "representation." SENATOR DYSON said he wasn't willing to impose a class C felony on people that haven't harmed anyone. They've defrauded somebody of money. CHAIR COGHILL said it would be a significant event if the person has been convicted two or more times in the last 10 years of a crime under AS 11.71. He asked Ms. Carpeneti to add clarity. MS. CARPENETI said that according to the Morrow interpretation of these statutes, the person would have to intentionally misrepresent a non-controlled substance to the buyer as a controlled substance. She noted that marijuana related offenses are class A misdemeanors but most drug offenses are felonies. CHAIR COGHILL asked if a conviction under this bill would be in any of the range of drug offenses. MS. CARPENETI said that's correct. MS. BUS clarified that the CS reduces the current class C felony penalties for imitation controlled substance crimes to a class A misdemeanor for the first offense. SENATOR DYSON acknowledged the point. SENATOR DYSON commented that the bill was an improvement over current law. 2:50:31 PM At Ease 2:52:03 PM CHAIR COGHILL reconvened the meeting and moved to report CS for SB 66 from committee with individual recommendations and attached fiscal note(s). He asked for objections or comments. SENATOR DYSON said he wouldn't hold the bill up but his preference in AS 11.73.010(b) was a class B misdemeanor in paragraph (1), a class A misdemeanor in paragraph (2), and 5 years instead of 10 in paragraph (2). CHAIR COGHILL announced that without objection, CSSB 66(JUD) is reported from the Senate Judiciary Standing Committee.