ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
February 2, 2004
3:25 p.m.
MEMBERS PRESENT
Representative Tom Anderson, Chair
Representative Carl Gatto, Vice Chair
Representative Nancy Dahlstrom
Representative Bob Lynn
Representative Norman Rokeberg
Representative Harry Crawford
Representative David Guttenberg
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 282
"An Act relating to contracts between the University of Alaska
and its employees involving research or other development of
intellectual property and to the authority of the president of
the University of Alaska regarding employee contracts for
development of intellectual property."
- MOVED HB 282 OUT OF COMMITTEE
HOUSE BILL NO. 339
"An Act relating to negative option plans for sales, to charges
for goods or services after a trial period, and to acts that are
unlawful as unfair trade practices."
- MOVED CSHB 339(L&C) OUT OF COMMITTEE
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."
- MOVED CSHB 367(L&C) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 282
SHORT TITLE: UNIVERSITY EMPLOYEE RESEARCH CONTRACTS
SPONSOR(S): REPRESENTATIVE(S) FATE
04/23/03 (H) READ THE FIRST TIME - REFERRALS
04/23/03 (H) HES, L&C
05/15/03 (H) HES AT 3:00 PM CAPITOL 106
05/15/03 (H) Scheduled But Not Heard
01/22/04 (H) HES AT 3:00 PM CAPITOL 106
01/22/04 (H) Moved Out of Committee
01/22/04 (H) MINUTE(HES)
01/23/04 (H) HES RPT 3DP 1NR
01/23/04 (H) DP: CISSNA, SEATON, WILSON; NR: GATTO
02/02/04 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 339
SHORT TITLE: TRADE PRACTICES
SPONSOR(S): REPRESENTATIVE(S) MEYER
01/12/04 (H) PREFILE RELEASED 1/2/04
01/12/04 (H) READ THE FIRST TIME - REFERRALS
01/12/04 (H) L&C, JUD
02/02/04 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 367
SHORT TITLE: LICENSING SEX-ORIENTED BUSINESSES
SPONSOR(S): REPRESENTATIVE(S) MCGUIRE, GARA
01/12/04 (H) PREFILE RELEASED 1/9/04
01/12/04 (H) READ THE FIRST TIME - REFERRALS
01/12/04 (H) L&C, JUD, FIN
01/30/04 (H) L&C AT 3:15 PM CAPITOL 17
01/30/04 (H) Heard & Held
01/30/04 (H) MINUTE(L&C)
02/02/04 (H) L&C AT 3:15 PM CAPITOL 17
WITNESS REGISTER
JIM POUND, Staff
to Representative Hugh Fate
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the sponsor statement for HB 282
on behalf of Representative Fate.
REPRESENTATIVE KEVIN MEYER
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as the sponsor of HB 339 and
addressed changes in Version I.
SUZANNE CUNNINGHAM, Staff
to Representative Kevin Meyer
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: During hearing on HB 339, answered question
about Version I.
CLYDE (ED) SNIFFEN, JR., Assistant Attorney General
Commercial/Fair Business Section
Civil Division (Anchorage)
Department of Law
POSITION STATEMENT: Testified in support of HB 339 and answered
questions.
ANDREE McLEOD
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to HB 367.
REPRESENTATIVE LESIL McGUIRE
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as one of the sponsors of HB 367.
KATHY HARTMAN, Co-Owner
Fantasies
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to HB 367.
CAROL HARTMAN, Co-Owner
Fantasies
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to HB 367.
REX BUTLER
Anchorage, Alaska
POSITION STATEMENT: Testified as a representative of Crazy
Horse and Teasers clubs in opposition to HB 367.
SHERMAN JONES
Anchorage, Alaska
POSITION STATEMENT: As an employee at Fantasies, testified in
opposition to HB 367.
JEANETTE JOHNSON, Owner
Teasers and Crazy Horse
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to HB 367.
DOUG HARTMANN
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to HB 367 and
offered his experience as a dancer and bouncer.
ACTION NARRATIVE
TAPE 04-7, SIDE A
Number 0001
CHAIR TOM ANDERSON called the House Labor and Commerce Standing
Committee meeting to order at 3:25 p.m. Representatives
Anderson, Dahlstrom, Lynn, Rokeberg, Crawford, and Guttenberg
were present at the call to order. Representative Gatto arrived
as the meeting was in progress.
HB 282-UNIVERSITY EMPLOYEE RESEARCH CONTRACTS
Number 0050
CHAIR ANDERSON announced that the first order of business would
be HOUSE BILL NO. 282, "An Act relating to contracts between the
University of Alaska and its employees involving research or
other development of intellectual property and to the authority
of the president of the University of Alaska regarding employee
contracts for development of intellectual property."
Number 0100
JIM POUND, Staff to Representative Hugh Fate, Alaska State
Legislature, presented HB 282 on behalf of Representative Fate,
sponsor. He said HB 282 allows the university to compete in
research and development. Across the nation, many universities
have moved towards a research role as a way of supplementing the
high cost of education.
MR. POUND said this valuable research has been responsible for
inventions, innovations, and supplementing the high cost of that
education. It has also produced a profit by coordinating
through the private sector. Because of lack of financial
incentives, however, based on the Alaska Executive Branch Ethics
Act [AS 39.52], Alaska isn't allowed to participate. He
paraphrased a portion of AS 39.52.010, which states in part:
Declaration of policy, (A) to discourage those
officers from acting upon personal or financial
interest in the performance of their public
responsibilities;
He then paraphrased a portion of AS 39.52.170, which states in
part:
Outside employment restricted. (a) A public employee
may not render services to benefit a personal or
financial interest or engage in or accept employment
outside the agency which the employee serves, if the
outside employment or service is incompatible or in
conflict with the proper discharge of official duties.
MR. POUND explained that HB 282 will give the president of the
university a recruiting tool. He or she will be able to
negotiate intellectual property contracts and agreements with a
researcher, who could then develop a project or commercially
viable product. Based on negotiation, the researcher and the
university could both benefit from that commercial enterprise
through sale, entrepreneurial activities, or the development of
an industry within the state. He said:
The agreement would allow the researcher to continue
advancing work, which would help maintain staff at the
university. And with passage of HB 282, we open the
door to a new form of quality staff at the university,
quality researchers, and, potentially, quality faculty
who would be able to earn additional money that would
not be coming out of the general fund.
Number 0285
REPRESENTATIVE GUTTENBERG asked Mr. Pound what he saw as the
ultimate, long-term benefit of HB 282.
MR. POUND replied that there are many research projects
currently taking place, such as nanotechnology research, at the
University of Fairbanks. He said there have been advances
having to do with mining, geothermal, and geophysical research.
He saw the ultimate benefit occurring when a researcher develops
a valuable product and then works with the university in an
entrepreneurial status. Both the researcher and the university
would benefit financially from this process.
REPRESENTATIVE GUTTENBERG noted that he'd signed on to HB 282 as
a cosponsor because he saw the benefit of research facilities
affiliated with the university exploring nanotechnology or cold-
weather research, for example.
MR. POUND said a researcher presently has the advantage of using
university research facilities and the efforts of undergraduate
students. An individual would not be able to duplicate these
resources.
REPRESENTATIVE GUTTENBERG asked if the president [of the
university] had expressed having problems with recruiting
scientists.
MR. POUND offered his belief that this bill will improve the
ability to recruit. Referring to a survey in the packet that
indicated a retention problem in the university system, he said
researchers have no incentive to stay "once they've gotten to a
certain level."
Number 0460
REPRESENTATIVE DAHLSTROM asked Mr. Pound to clarify the section
of bill information relating to inventions and patents.
Relating her understanding that [patents] would be assigned to
the university, she inquired about equitable compensation for
the researcher who worked on the patent for 20 years, and what
happens when that person retires and leaves the university
system.
MR. POUND answered, depending on how the contract would be
negotiated, that it would be part of the negotiation process
between the researcher and the university with regard to "who
gets what and when" ....
REPRESENTATIVE DAHLSTROM suggested it would depend on the
negotiation skills of the professor involved, then.
MR. POUND replied in the affirmative.
REPRESENTATIVE DAHLSTROM requested information about other
universities in the country that may handle intellectual
property rights in this manner, and whether these efforts are
successful.
MR. POUND said he didn't have total numbers, but had provided
information in the packet from two other states. He noted that
Duke University Medical Center, a prime research facility in the
medical profession, had developed new techniques that are
considered intellectual property. He said both the professor or
researcher and the university benefit from that greatly.
Number 0580
REPRESENTATIVE DAHLSTROM asked Mr. Pound:
Do you ... foresee any problem with ... professors
doing research and getting to a certain point and
thinking, "Oh, I've really hit on something." And, at
that point, changing the focus of their research and
maybe even, then, leaving the university, and so the
students actually don't, then, have the benefit ... of
their education and knowledge, because they're looking
at it from just the financial aspect of the patent?
MR. POUND said he thinks that is the problem now. He indicated
HB 282 would put in place a negotiated contract whereby a
researcher would know up front what was expected of him or her.
He added:
There is a potential reward for them remaining and
continuing their research where it's already been
started, and not taking it with them. And then, ...
depending, again, how the contract is written, there
is at least an implied right for the university to
say, "Well, that's our property; ... whether you take
it to Iowa or not, ... 50 percent of it ... is our
property."
Number 0668
REPRESENTATIVE ROKEBERG asked about the university's current
policy with regard to ownership of intellectual property.
MR. POUND referred to a handout, noting that currently for an
invention, the inventor gets 100 percent of the first $10,000
and the university gets zero; if the invention is worth more
than $10,000, the split is 50-50.
REPRESENTATIVE ROKEBERG asked, "Fundamentally, the university
can set its own policy currently on these issues, ... but
they're restricted from actually entering into business
enterprises; that's the nature of the bill?" He also asked for
specific instances at the University of Alaska when this
legislation would have been helpful.
MR. POUND replied that Representative Rokeberg was correct with
regard to current university policy. However, he wasn't aware
of specifics that he could discuss due to personnel policies.
He said it's a general policy issue. He referred to the
instructors' survey in the bill packet and said there is a
fairly large concern about the "outflux" of professors and
faculty from the University of Alaska. He remarked, "We believe
that this is an incentive to keep some of them there."
Number 0832
REPRESENTATIVE ROKEBERG said he believes this is positive, but
declared a potential conflict of interest because he has a seat
on the University of Alaska's EPSCoR [Experimental Program to
Stimulate Competitive Research] board. He explained, "It has to
do with experimental research with both the federal government
and the University of Alaska, with the aim of endeavoring to get
additional grants or research, and to facilitate the
university's role in research, and to increase their funding."
CHAIR ANDERSON responded, "We'll object so that you vote on
this." He went on to say he'd spoken with [Mark Hamilton,
president of the University of Alaska] and had offered to
sponsor this bill. Saying he supports the university and
strengthening business and entrepreneurialship, he added:
This ... enforces that and says to researchers, ...
that if you have an idea, you can partner with the
university, and we will keep you here, and you can
instruct our students and ... keep the talent in the
school, rather than depart.
REPRESENTATIVE ROKEBERG noted that this bill invests the
president of the university with the right to grant, or not
grant, a business application. He asked what the role of the
regents would be.
MR. POUND said he wasn't sure, but understood that most of the
hiring and firing is done by the president.
Number 0947
REPRESENTATIVE DAHLSTROM moved to report HB 282 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 282 was reported from the
House Labor and Commerce Standing Committee.
HB 339-TRADE PRACTICES
CHAIR ANDERSON announced that the next order of business would
be HOUSE BILL NO. 339, "An Act relating to negative option plans
for sales, to charges for goods or services after a trial
period, and to acts that are unlawful as unfair trade
practices."
Number 0985
REPRESENTATIVE KEVIN MEYER, Alaska State Legislature, sponsor,
explained that HB 339 does two things. He said:
First of all, it's going to make it clear and concise
when a business uses either free trial practices or
negative option marketing practices. It's going to
require that the seller make it clear and disclose all
the material items and conditions of a free trial
period. ...
Any consumer obligations that are required will be
clear and will be known by the consumer. The seller
is going to have to describe, in detail, all the
charges that are going to be made after the ... free
trial period, and how these charges are calculated,
and how they are going to be paid.
Bottom line: the seller may not charge a consumer for
a good or service that was provided under a free trial
period unless the requirements ... have been made
[and] satisfactorily are met by the business. And
there's a list of all those requirements ... in the
bill itself for this free-trial-period plan.
Number 1200
REPRESENTATIVE MEYER continued:
The second part ... of this bill has to do with
negative option plans. And they're defined as a type
of arrangement where a seller provides goods or
services to someone who doesn't necessarily want them
or order them, but you just receive them. And then it
requires you to take a proactive position to ... say,
"I don't want these," or to stop the payment.
Some businesses have used this; they see this as a
successful method to get their product out there to
various consumers because, frankly, we're all busy. A
lot of us have two, three jobs, kids, and we get
something in the mail, we go, "OK, I don't really want
this, but it's only 24 bucks; I'm going to keep it."
And that's what they're ... hoping for, is that you
don't send it back.
REPRESENTATIVE MEYER highlighted the unfairness of putting the
burden on consumers to take action to get rid of something that
they don't necessarily want or order. And it can be very
costly, he noted, citing an example when he was charged $8 a
month and was unable to recover the money from a travel agency.
He continued:
This bill prohibits the use of a negative option plan
unless certain disclosures, again, are made to the
consumer, ... and those disclosures are listed in this
bill too. And what this bill does is, it aligns
Alaska Statutes more closely to the federal statutes
and the federal rules dealing with negative-option
marketing. And it removes any uncertainty in our
statute of what role and responsibility business has
in protecting a consumer, so when people are doing
business up here, it will be clear as to what they can
and can't do.
Number 1217
REPRESENTATIVE MEYER indicated the Department of Law had worked
closely with him on this, and noted that Mr. Sniffen would
testify via teleconference. Referring to the proposed committee
substitute (CS), he said the changes are fairly minor.
Number 1239
REPRESENTATIVE GATTO moved to adopt the proposed CS, Version 23-
LS1265\I, Bannister, 1/29/04, for discussion purposes.
CHAIR ANDERSON announced that [Version I] was before the
committee for discussion purposes. In response to members'
requests, he said [the committee aide] would distribute copies.
[Chair Anderson called on Mr. Sniffen, but there was no
response.]
Number 1319
REPRESENTATIVE DAHLSTROM said she thinks this is important,
especially for people who don't understand the system or
vulnerable, older Alaskans. She noted that when she'd had to
deal with this kind of a situation personally, the burden of
proof was always on her to make phone calls, write letters, and
so forth.
REPRESENTATIVE MEYER agreed that the elderly are probably the
most vulnerable to these marketing techniques. He said he
believes this bill will clarify what is required for the State
of Alaska. He added that [the Department of Law] can go after
in-state offenders, and for out-of-state ones, federal statute
could be used as well.
REPRESENTATIVE ROKEBERG referred to Section 1 of the original
bill and said there seems to be a significant change in Version
I with regard to prohibiting free trial periods. He expressed
concern as a small-business owner, and asked whether reaching
into one's pocket and giving someone a free pass to a gymnasium
would be subject to this, for example.
Number 1429
SUZANNE CUNNINGHAM, Staff to Representative Kevin Meyer, Alaska
State Legislature, responded, "No." She paraphrased [Version I]
subsection (e), page 2, beginning at line 13, which read:
This section does not apply to a seller who offers,
promotes, advertises, or otherwise gives a consumer
goods or services for free if the seller does not
impose any obligations on a consumer who accepts the
free goods or services.
MS. CUNNINGHAM remarked, "So, if you were to give myself a free
pass to your gym, and if there's no obligation that I join the
gym or pay $15 when I walk in the door, then this does not apply
to it."
Number 1500
CHAIR ANDERSON asked about AOL [America Online, Inc., an
Internet service provider], which costs perhaps $30 a month and
yet stores give away [compact disks that provide] the first 500
hours free. He said he doesn't use 500 hours a month, and noted
that AOL didn't give him free hours when he signed up. He asked
whether this bill would affect that, or whether it's more of a
federal issue, since [AOL] transcends all states.
MS. CUNNINGHAM said she believes it would be more of a federal
issue, but deferred to Mr. Sniffen to answer that.
REPRESENTATIVE GATTO expressed a negative opinion of businesses
that say they're giving a free month of a good or service, but
not until the third month, after the consumer has paid for the
first two months.
REPRESENTATIVE MEYER noted that he'd been relying on Mr. Sniffen
[who wasn't available on teleconference yet] to answer some of
these questions. He added that as long as it's disclosed and in
writing, and the consumer is fully aware of what he or she is
signing up for, the foregoing situation would be fine.
Number 1638
REPRESENTATIVE GATTO asked whether this will absolutely prevent
having a company provide something like a phone service without
the consumer's positive assent.
REPRESENTATIVE MEYER said yes.
REPRESENTATIVE DAHLSTROM noted with regard to communications,
there was a specific ruling related to that. She added that the
Regulatory Commission of Alaska (RCA) determines those issues
with that industry.
REPRESENTATIVE GUTTENBERG asked if undisclosed balloon payments
are covered under HB 339, such as when a person buys a
television and the interest is deferred.
REPRESENTATIVE MEYER responded that the consumer would have to
sign a written consent and clearly accept terms; the onus would
then be on the business to prove it had disclosed the terms to
the customer, and have this proof in writing.
Number 1728
CHAIR ANDERSON, in the absence of testimony from Mr. Sniffen,
directed the committee to pages 1-2 to discuss whether there was
discomfort with the [disclosures]. He said he was comfortable
with paragraphs (1) through (4), which read:
(1) any obligation by the consumer to
purchase a minimum quantity of goods or services after
the free trial period ends;
(2) a description of all charges that will
be made after the free trial period ends and how those
charges will be calculated;
(3) whether any charges for goods or
services will include postage;
(4) any other obligations the consumer
assumes by accepting or using the goods or services
within the free trial period.
Number 1756
REPRESENTATIVE ROKEBERG asked for verification that Section 1
relates only to consumer goods or services, rather than, for
example, free rent for an apartment rental.
REPRESENTATIVE MEYER said that was his understanding.
[Representative Rokeberg deferred an additional question until
after Mr. Sniffen testified.]
Number 1785
CLYDE (ED) SNIFFEN, JR., Assistant Attorney General,
Commercial/Fair Business Section, Civil Division (Anchorage),
Department of Law, informed members that in spite of technical
problems, he'd listened to the previous discussion. He said the
department has been working closely with Representative Meyer's
office to come up with the language in the bill, and it's
intended to address a lot of the issues being discussed by the
committee. He continued:
We did have some problems last year with one of the
utility companies trying to get consumers to agree to
pay for services that they had no idea they were
paying for, through a negative option plan. And it
was our position that, essentially, consumers should
never have to pay for anything that they don't ask
for. You shouldn't just have luggage show up on your
doorstep and you get to keep it, if you want it; if
you don't want it, send it back. And that's what this
bill does: it prevents that exact kind of thing.
Some of these other issues I heard the committee
discuss relating to ... "buy three months, get one
month free," other types of offers, might be a little
outside the scope ... of this bill. This bill really
targets two specific types of conduct: the free trial
period, which is, ... "Have this merchandise for 30
days and if you like it, keep it and we'll bill you."
Or another sort of twist on that is, "Try our cable
for 30 days, and if you decide to watch a movie on
this premium channel, then you're automatically signed
up for that unless you call us and tell us you don't
want it." That's sort of a mix of a free trial period
along with a negative option plan. ...
The target of this kind of legislation is really ...
the bigger utility companies and national chain stores
who might already have your business. You already
have cable, you already have phone service, and they
want to get you to sign up for additional services
that they offer that you may or may not actually want.
And a lot of these are small-dollar things that
consumers just won't blink an eye about. ... It's $2 a
month; it's $4 a month. ... You get a notice with your
billing: "Oh, by the way, we've decided to sign you
up for this extra ... voice calling plan, and if you
don't want it, you have to tell us." And we think
federal legislation prohibits that.
Number 1877
MR. SNIFFEN continued:
We have some consumer protection language in our
current consumer protection Act that probably
prohibits that, but it's not nearly as clear ... as
this bill. So we certainly support this, and see a
need for it in Anchorage. And I don't think it
imposes an incredible burden on businesses at the same
time.
MR. SNIFFEN concluded by saying it's simply a disclosure type of
legislation, with the need to get the consumer's consent
beforehand.
Number 1908
REPRESENTATIVE GUTTENBERG referred to page 1 [lines 10-11],
"shall clearly and conspicuously disclose all material". He
also referred to page 2 [lines 7-8], "The form for the written
consent must be prepared by the seller". He asked if there is
any standard for the form in terms of format and clarity.
MR. SNIFFEN said that's an excellent question. The language in
the bill just requires it to be "clear and conspicuous", which
he surmised would be on a case-by-case basis. He noted that
there aren't any definitive standards as to the size of the
type, for example, but said "clear and conspicuous" gives a
little more room to look at the circumstances. He cited auto
dealers as an example, and suggested that most people know what
"clear and conspicuous" is.
Number 2010
REPRESENTATIVE ROKEBERG paraphrased the first sentence of
Section 1, subsection (c), which read:
Before offering, promoting, advertising, or otherwise
giving a consumer goods or services for a free trial
period, a seller shall obtain express written consent
from the consumer to the free trial period.
REPRESENTATIVE ROKEBERG asked how that would be done in a
general advertising campaign. He inquired, "Are you making the
assumption that the consumer would send for, or consent to, the
free trial period concurrent with the offers to accept the free
trial period?"
MR. SNIFFEN said it's an excellent question. Noting that he was
reading it as Representative Rokeberg was, he suggested
rewording would be possible. He added:
I think what you're suggesting is a business should be
able to run an advertisement that said, "Come on into
our store and sign up for a free 30-day trial period."
And you shouldn't have to get written permission from
a consumer to run that ad. I understand that concern,
and there may be a way we can rework that language a
little bit to clarify that.
MR. SNIFFEN suggested a possible solution for subsection (c)
purposes only, to say "before offering or giving a consumer" and
then delete the "promoting or advertising" language.
REPRESENTATIVE ROKEBERG referred to advertising, subsection (b),
and the "for disclosure" language. He asked about fine print.
MR. SNIFFEN responded, "It would just need to be clear and
conspicuous, and if we saw something in ultrafine print that
required a magnifying glass to read or understand, we would
consider that to be a violation."
Number 2130
REPRESENTATIVE ROKEBERG said he thought it important that this
be clear. He said the committee doesn't want to remove
legitimate, free opportunities for the consumer.
Number 2150
MR. SNIFFEN, in response to Chair Anderson, offered conceptual
language to be substituted in subsection (c), page 2, line 5,
along with an explanation:
Remove the terms "promoting and advertising" from that
line, so the ... section would read "before offering
or otherwise giving a consumer goods or services", and
then continue with that paragraph. That would at
least allow advertising for a free trial period, in a
certain manner, before the consumer would have to
enter into a written agreement.
Number 2183
REPRESENTATIVE ROKEBERG moved that the foregoing be adopted as
Amendment 1.
Number 2185
REPRESENTATIVE DAHLSTROM objected for purposes of discussion and
asked the sponsor to comment.
REPRESENTATIVE MEYER agreed with Amendment 1, but noted that it
might also apply to page 1, line 9.
MR. SNIFFEN said he didn't believe it would harm the legislation
to make that change as well.
REPRESENTATIVE ROKEBERG said he wasn't certain about doing the
same amendment there, however, because of the desire to make
sure that the promotion and advertisements still have some
sideboards. He suggested a need to look at it.
Number 2223
REPRESENTATIVE CRAWFORD began discussion of what later became
Amendment 2. He proposed that changing "before" to "when" would
make more sense. He asked how those things would be provided
before advertising.
MR. SNIFFEN responded:
I don't know that there's really a semantic difference
between "before" and "when" offering. The intent, I
think, of the legislation here is to say, "Before you
engage in this kind of activity, we want to give these
kinds of disclosures to the consumer." ... If you say,
"Before you advertise, for example, you have to do
these things," I think Representative Crawford is
correct: it would happen at the same time as the
advertisement, or the advertising would include these
kinds of disclosures. And I read this to mean that,
but I can see how a different reading could mean
something different.
REPRESENTATIVE MEYER said he thought that if the recommendations
that Representative Rokeberg had proposed were made,
Representative Crawford's concerns would be rectified. He asked
whether Amendment 1 needed to be made in both subsection (b),
page l, and subsection (c), page 2.
MR. SNIFFEN referred to the proposed changes in subsection (b),
page 1, line 9, and remarked that removing "promoting and
advertising" would allow a seller to advertise or offer, even
though [the consumer] would be required to go into the store to
find out more details. He added:
But when you actually went into the store and actually
signed up for the deal, before you signed on the
dotted line, [the business] would have to make the
disclosures, as required, under this statute.
It really is a policy call on whether you want the
advertisements to include the conditions of the offer,
or are you going to let the advertisement bait the
consumers into the store, and then - when they
actually sign on the dotted line - have that document
disclose the terms of the offer.
MR. SNIFFEN recommended that the advertisement at least contain
some elements of the offer so people aren't being lured into the
store when they wouldn't have gone if they'd known the details.
He said that's the main difference he sees in having that
language in subsection (b), as opposed to having the "promoting
and advertising" language on page 2, line 5, subsection (c).
Number 2370
CHAIR ANDERSON asked if there was any objection to adopting
Amendment 1, deleting "promoting and advertising" from page 2,
line 5. There being no objection, it was so ordered.
REPRESENTATIVE ROKEBERG agreed with Representative Crawford on
the use of "before" in subsections (b) and (c).
TAPE 04-7, SIDE B
Number 2385
REPRESENTATIVE ROKEBERG commented, "You couldn't have 'before'
and 'concurrent' or 'concurrently'. ... Maybe 'when' would be
better."
CHAIR ANDERSON asked Mr. Sniffen whether that makes sense to
have "when offering" on page 1, line 9, and on page 2, line 5.
MR. SNIFFEN said he didn't see any problems with it.
Number 2357
REPRESENTATIVE GATTO proposed perhaps substituting "after
offering".
MR. SNIFFEN countered that it might allow too much leeway to the
prospective sellers to make a pitch and trap the consumer. He
restated the bill's purpose: to bring disclosures out before a
consumer is obligated to do anything.
REPRESENTATIVE GATTO asked about "upon offering".
MR. SNIFFEN agreed this would work, or "when offering" would
also work.
Number 2311
CHAIR ANDERSON interpreted Amendment 2 from Representative
Crawford's previous suggestion: On page 1, line 9, and on page
2, line 5, delete "before" and insert "when".
CHAIR ANDERSON asked whether there was any objection to adopting
Amendment 2. There being no objection, it was so ordered.
Number 2291
REPRESENTATIVE ROKEBERG referred to [Section 1] subsection (b),
paragraphs (1) to (4). He asked whether it's correct that when
[a business] is advertising, these terms must be in the
advertisement.
MR. SNIFFEN emphasized the need to address the four [paragraphs]
of subsection (b). Although there are no specific terms, he
said the material terms need to be included in some clear and
conspicuous way in the offer. In further response, he said, for
example, that if the charges for the goods or services required
paying for postage to receive them, there could be some
disclosure that the offer doesn't include free postage, or that
the consumer is responsible for those charges.
REPRESENTATIVE ROKEBERG noted that [paragraph (3)] says "whether
any charges will be included", not "if".
MR. SNIFFEN agreed, suggesting either could be used. In further
response, he said this language comes straight from the federal
statute that is very similar to HB 339. He added:
However the seller wants to address that postage - if
there isn't any, sometimes silence can be confusing.
But to say that the offer includes all postage and
handling charges, for example, here in Alaska, that
could be important because that could consume a large
part of the cost of the goods or service. ...
Of course, it's up to the committee if you want to
only have to disclose that if there is an obligation
on the consumer, or ... you can let it be silent if
there is not an obligation on the consumer. That
would be the effect of changing ... the word "whether"
to "if".
Number 2202
REPRESENTATIVE GATTO began discussion of Conceptual Amendment 3.
He asked Mr. Sniffen whether "postage" is too focused, since
there are different ways of transporting goods.
MR. SNIFFEN said that's an excellent point and that he'd not
object to amending that to just say "includes shipping charges".
REPRESENTATIVE ROKEBERG suggested "shipping and handling".
Number 2165
REPRESENTATIVE GATTO moved to adopt Conceptual Amendment 3: On
page 2, line 2 [paragraph (3], delete "postage" and insert
"shipping" or "shipping and handling".
CHAIR ANDERSON announced that it would be "shipping and
handling". He asked whether Representative Meyer objected.
REPRESENTATIVE MEYER said he had no objection.
CHAIR ANDERSON asked whether there was any objection to adopting
Conceptual Amendment 3. There being no objection, it was so
ordered.
Number 2146
REPRESENTATIVE ROKEBERG reiterated Representative Guttenberg's
issue with small print, and asked Mr. Sniffen if there are
regulations on this issue.
MR. SNIFFEN said there are no regulations on the size of print,
although the [department] could certainly adopt some. The
requirement under this language is simply that it must be clear
and conspicuous, which could be dealt with on a case-by-case
basis. He added that "clear" and "conspicuous" have been
judicially defined in a variety of circumstances, and suggested
the department could probably "make a run" at violations dealing
with small print.
Number 2111
REPRESENTATIVE GUTTENBERG asked if there were any issues
concerning interstate commerce.
MR. SNIFFEN responded that he didn't believe so and remarked,
"We don't have a problem here with a lot of outside companies
engaged in this practice." As an example, he cited Borders
Bookstore in Anchorage and explained:
Well, Borders is a national chain, and they're subject
to a lot of federal regulation. And to the extent ...
they are complying with the federal regulation,
nothing in our statute here ... would change that. So
I don't think there's a burden on interstate commerce
through this language, that doesn't already exist
through other federal statutes.
CHAIR ANDERSON asked whether anyone else wished to testify. He
then closed public testimony.
Number 2049
REPRESENTATIVE DAHLSTROM recalled stating an objection [to
adopting Version I] and removed it.
Number 2038
REPRESENTATIVE ROKEBERG moved to report CSHB 339, Version 23-
LS1265\I, Bannister, 1/29/04, as amended, out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, CSHB 339(L&C) was reported from the
House Labor and Commerce Standing Committee.
The committee took an at-ease from 4:20 p.m. to 4:23 p.m.
HB 367-LICENSING SEX-ORIENTED BUSINESSES
Number 2016
CHAIR ANDERSON announced that the final order of business would
be 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." [Before the committee, adopted as a work draft on
1/30/04, was a proposed committee substitute (CS), Version H.]
CHAIR ANDERSON informed members that public testimony would
continue, and requested that testimony be limited to three
minutes apiece. He noted that Representative McGuire, one of
the two sponsors, was present to answer questions. He also
noted that he would propose an amendment.
Number 1989
ANDREE McLEOD expressed appreciation for efforts to protect
minors under age 18 from predators and so forth, but voiced
concern that HB 367 has far-reaching effects on people 18 and
older in terms of freedom of expression and free speech. Noting
that this is called a "sex-oriented business" bill, she
suggested it might be prudent to change it to "adult-oriented
business" because sex isn't necessarily occurring. She said:
I believe this is a local issue that's just come up,
in front of our community council. I am the vice
president of Tudor Community Council. We dealt with
it; I voted against the resolution, although our
community council passed it. This is local because
local governments can establish and limit what will be
allowed and tolerated in their communities, but I
don't believe the state has any business in it. ...
What really concerns me is that government is telling
women, 18 years old and older, what they can and
cannot do with their bodies; ... I caution this body
to be mindful of that. There are already laws
addressing illegal activities, especially when they
deal with minors under the age of 18, and
prostitution. And the onus is on ... the police
departments to enforce those [laws] and go after the
adults and the predators.
But, again, in this country we value our rights of
dealing with freedoms of expression, and I would,
again, caution you to not behave as censors because
you don't find them to your liking, based on your
morals and beliefs.
In the second paragraph of the sponsors' statement
it's mentioned that it's likely unconstitutional to
ban 21-year-olds from these jobs. So you already
understand that there might be an unconstitutional
issue here. We are talking about performance art, and
it's a century of performance art.
Number 1876
REPRESENTATIVE GATTO asked if Ms. McLeod was saying state
protection isn't needed for minors, and it can be done locally.
MS. McLEOD replied no, reiterating that she appreciates efforts
to protect minors under the age of 18. She referred to the
second paragraph of the sponsor statement and noted that it
mentions that it is likely unconstitutional to ban [those under]
21 years from these jobs. She said this is a censoring of
performance art.
Number 1836
REPRESENTATIVE LYNN offered his understanding that this bill
doesn't ban this type of activity, but licenses it.
Number 1825
REPRESENTATIVE LESIL McGUIRE, Alaska State Legislature, one of
the sponsors of HB 367, responded:
Suffice it to say, I think what we're doing here is
constitutional. We are walking a fine line, and we
realize that, but we have good news to report, that in
Barnes v. Glenn Theater, Inc., which was reported out
of the United States Supreme Court in 1991 - very
recent - what we're seeing is a trend in the Supreme
Court that goes toward saying that in the past,
conduct has been considered a form of expression, and
yes, that's true. But that said, we want to give a
greater role to states and local governments in
countering that by saying if you have a substantial
state interest in curbing the secondary effects of
something that, in fact, may involve speech and may
involve conduct that comes out of that, that the state
does have a role and, in fact, an obligation. That's
one.
And number two: the Supreme Court in that case ...
made it very, very clear that you have to be careful
when you talk about conduct as being equated with free
speech, and that all types of conduct - including
walking down the street, chanting a song that maybe
you learned in Girl Scouts, or going to meet your
friends for lunch, or so on - there are all kinds of
things that we engage in as humans that are conduct
that can be described as "expression."
And so what you are seeing, Andree [McLeod] is
absolutely right. This is an area that has had
constitutional challenges and controversy. But it is
my belief, and Representative Gara's, that you are
allowed to license. In fact, ... I would state that
100 percent. ... Within the license, I believe - and
we believe from our case law - that you can make an
age-based restriction on that license.
Number 1720
REPRESENTATIVE McGUIRE continued:
So we are not banning nude and semi-nude dancing in
the state of Alaska under any stretch of the
imagination. We are not even going as far as other
states have. For example, in the case that I just
mentioned by the Supreme Court, Indiana went so far as
to say, "You have to have pasties, and G-strings, no
matter what age you are." ...
What we are saying is, you can do that in the state of
Alaska, but you have an age-related restriction that's
associated with it, so that when you apply for a
license, you have to demonstrate that you're of a
certain age. And we're also requiring that the
establishment itself be licensed.
The final thing, [Ms. McLeod]: I appreciate what you
say about local governments, but the fact is, local
governments aren't regulating this industry. What we
know from testimony from the state troopers, the APD
[Anchorage Police Department] and the [Alcoholic]
Control Beverage Board is that these clubs have gone
unregulated. ...
Number 1707
REPRESENTATIVE McGUIRE continued:
And so you have no oversight that's going on. And the
police, in their testimony, if you recall, said, "We
would love to have some kind of a legal framework that
gives us an excuse, that gives us an opportunity,
whether it's just a mere fact of checking licenses.
Right now, ... the standard is much higher. So ...
that's where we're at. We believe that we're on
comfortable ground. ... We don't maintain that it
won't be challenged, but we think it would be
challenged whether or not we were merely licensing at
18 or 19. We think that the folks that you're going
to hear from online are going to absolutely oppose
anything that requires regulating of their industry or
asking them to pay for that regulation. ... And I
think [that] is logical: you would expect they would
oppose that.
CHAIR ANDERSON called on Ms. Kathy Hartman.
Number 1635
KATHY HARTMAN, Co-Owner, Fantasies, asked whether Ms. McLeod was
allowed to respond.
CHAIR ANDERSON replied that the question was posed to the
sponsor, who'd answered it.
MS. KATHY HARTMAN said she and her sister, who also owns the
business, have been in business for 15 years and don't have many
regulations on their business. However, they've tried to self-
regulate. Indicating she hadn't had an opportunity to review
the new proposed CS, she noted the need for more time to
research it. She agreed with Ms. McLeod that [she and her
sister] don't consider their business to be sexually oriented,
but more adult-oriented, dealing in performance art rather than
sex. She explained:
We are not a participation sport so much as a
spectator sport, if you will. People come in to
watch; they don't come in to participate. We have
various and sundry laws already on the books that
regulate most of the issues that are in this bill. If
the city police and the people that are supposed to be
regulating this can't regulate it at this point, [what
makes] anybody think that somebody else is going to
come in and regulate it more, with more laws,
particularly when a lot of the laws are just
redundant. They just [do] things that are already on
the books that are not being enforced, if that is the
problem.
At the last public safety meeting that I attended,
Chief Monegan [of the Anchorage Police Department]
told us that the police had better things to do than
deal with legal businesses that are already regulated.
Number 1551
CAROL HARTMAN, Co-Owner, Fantasies, voiced concern about
dancers' having to take classes about STDs [sexually transmitted
diseases] and self-defense, for example; objected strongly to
having her business called a sexually oriented business [SOB],
saying it's an adult-oriented business, which is how it's been
referred to in other codes; objected to having all these
regulations; and said there is no sex involved and thus the STD
[education requirement] is a moot point.
MS. CAROL HARTMAN said people who are 18 years old are adults,
and should have every right and be able to work wherever they
want. To work in another industry, she said, they don't have to
follow these rules and regulations, take classes, or learn about
other jobs. So why should they have to for this industry?
Citing a 10-year study done in Las Vegas on dancers and their
customers, she said it showed that STDs occur on average 20
percent of the time among typical same-age females; with
dancers, it was only 9.6 percent. She concluded:
There was a lot of other things covered in there, too,
but at three minutes, I'm not going to be able to
cover it. I've got a lot of Supreme Court rulings
here, too, that I'd like to get into, but obviously we
don't have time. And I just would think that we
should be given a little bit more time to go over this
and study it, and come up with some more answers and
questions for you.
Number 1439
CHAIR ANDERSON asked that Ms. Carol Hartman send any written
ideas regarding those cases or her thoughts to the committee.
He pointed out that the bill had further committees of referral.
REPRESENTATIVE ROKEBERG asked Ms. Carol Hartman if the dancers
in her business are hired under the wage-and-hour Act or are
independent contractors.
MS. CAROL HARTMAN replied that they had never done independent
contracting, which she believes would be against the law. She
offered to show paperwork from her business that had to do with
employees.
Number 1364
REPRESENTATIVE ROKEBERG asked Ms. Carol Hartman if she allowed
people over the age of 21 into her under-21 club, and if many of
her clientele were military personnel.
MS. CAROL HARTMAN replied that most of the dancers, employees,
and patrons are over 21. On Fridays and Saturdays she sees some
who are 18, 19, or 20 years of age, but basically it is an older
clientele. She declared, "We have a lot of military."
Number 1356
REPRESENTATIVE DAHLSTROM asked that Ms. Carol Hartman include
information about the study from Las Vegas in the information
she would provide to the committee. She also inquired about the
licensing process there.
MS. CAROL HARTMAN said she didn't know. She clarified that she
had information from "Legal Economics, Incorporated," and
mentioned information about Supreme Court rulings on licensing
and licensing applications that were ruled unconstitutional, but
didn't have copies with her at the time.
REPRESENTATIVE McGUIRE, noting that her office had information
on Las Vegas, San Diego, and Los Angeles, added:
It is far more stringent. This [bill] barely
scratches the surface of the licensing requirements
that are in place in those communities, and many more
communities. Those were just the three that we looked
at. So ... I think it's important that people
understand, while Las Vegas will tout that as one of
their industries and attractions, they also step up to
the plate in terms of licensing and responsibility
that's [commensurate] with it.
Number 1235
CHAIR ANDERSON noted that he was formerly associated with the
Anchorage CHARR [Cabaret Hotel Restaurant & Retailers
Association]. He asked if any associations that are members of
CHARR or ARBA [Anchorage Restaurant and Beverage Association]
had written Ms. Hartman or taken a stance on this.
MS. CAROL HARTMAN indicated she'd ask them about it.
Number 1157
REX BUTLER, saying he represents Crazy Horse [club] and Teasers
[under-21 club] and noting that owner Jeanette Johnson was
present, asked what research had been done in Anchorage to
establish the need for this regulation. He expressed concern
about having an opportunity to look at it and comment on it. He
also expressed concern that isolated instances may have been
encountered and thus led to a request for this regulation. He
provided an Internet address, "legaleconomics@aol.com" - saying
Dr. Robert Schmidt (ph) and Dr. Alan Slotman (ph) apparently did
this, a 10-year study of 700 dancers and 400 patrons; he also
provided a phone number, (702) 579-4101.
MR. BUTLER emphasized the desire to review the research or
complaints in order to determine whether this additional
regulation is needed. Also noting that dancing is a transient
business, he explained:
Young ladies will come in, sometimes just for the
summer, and work. Some will just come in just to work
for winter. Now, you want the club owners to pay for
these people to have STD testing, when I'm not sure
that ... that's necessary - and certainly owners of
the businesses are concerned - and to have career
training, and self-defense classes where we're not
even sure ... that any dancer's ever been harmed by a
patron, or that ... any dancer has ever had STDs, or
needs career training.
But the fact of the matter is, ... most of the dancers
in town are over 21. But aside from that, there are
lots of them. ... You've got three or four clubs ...
in Anchorage that feature dancers - maybe five - to
put in enough money to pay for all of this. And, of
course, that's creating a burden ... on the clubs.
And, of course, if they don't comply, then they can
lose their license and what-have-you. So I'd also ask
the committee to please review ... that aspect of it.
And certainly, when it gets to [the House Finance
Committee], they need to take that into consideration.
Number 0985
CHAIR ANDERSON informed Mr. Butler that last week's testimony
included "a doctor from Duke University, on mental and emotional
brain formation, and how this actually does adversely affect, in
this case, young ladies who are dancing, under 21, in terms of
the potential for ... anything from language to touching,
assault, and other things, that certainly he believes and others
believe do occur in these establishments." He continued:
Secondly, we heard ... a lot of representation from
the Anchorage Police Department, in fact, so many that
we had to cut some of the officers off, and I think we
only heard from four, stating that, in actuality,
there are problems. And they're not stating one club
or another, and we were talking about under-21, not
Crazy Horse, ... but the establishments that afford
18-year-old women to dance.
And they talked about that sometimes there are high
school girls dancing and certainly high school
patrons. It was noted that they're 18-year-olds. ...
The state troopers came on and endorsed the bill
wholeheartedly, and said ... they agree with the
direction it's going. And then, finally, the other
person ... that testified was ... the PTA chair.
CHAIR ANDERSON concluded by saying he'd have his staff send Mr.
Butler and the Hartmans a packet.
REPRESENTATIVE DAHLSTROM disagreed that patrons don't "go after"
the dancers. She remarked:
We do have proof, and I would use as an example the
famous Alaska case of ... the baker, Mr. Robert
Hanson, who years ago specifically targeted nothing
but dancers and prostitutes. And that's a case that
terrorized our entire state for many years, and took
the lives of dozens ... of women of all ages.
MR. BUTLER said he understood that, but pointed out that it was
years ago and that Mr. Hanson was convicted of numerous crimes
that this bill doesn't even address. He reiterated that he
wondered whether some sporadic instances are now fueling this.
Number 0800
REPRESENTATIVE McGUIRE remarked:
When I talked earlier about the role of local
governments and state governments, what we know is
that we're allowed to place ... reasonable time,
place, and manner restrictions ... because we have a
substantial state interest and there are secondary
effects.
To establish a substantial government interest, ... a
city must show that in enacting particular
limitations, it did rely upon evidence permitting a
reasonable inference that absent such limitations, the
adult business would have harmful secondary effects.
... So that's important, and it goes to what
Mr. Butler was saying.
What is also important is, a city need not conduct new
studies or produce evidence independent of those that
have already been generated by other cities to
demonstrate the problem of secondary effects, and may
rely upon studies by other cities and legal opinions
on similar issues.
So that's what's really important in ... the testimony
that you heard. Some of it by the neuropsychologist
was direct; by the PTA president, it's direct. And it
stems, Mr. Butler, ... directly from the fact that
teachers and parents are reporting that there are
students in the classrooms ... in our schools in the
state of Alaska that are stripping. And some of them
are not 18. Some of them are 18. Some of them are
17. Some of them are 16.
And they are also reporting that in these classrooms
some of the young men are patronizing these places.
It's having a disrupting effect on education. There
are taunts that go on to these young women. They are
called all kinds of names. ... They are compromised,
in the opinion of teachers and parents, basically, for
life. ... They are put into a category of a person,
and are treated within the school setting ... in that
way.
And in the opinion of one teacher I talked to, she
believes ... it had a direct effect on one student
dropping out that she knows of. I don't know how many
more. So that is an impact on our state.
Number 0658
REPRESENTATIVE McGUIRE referred to a study done on strip clubs,
according to strippers, exposing workplace sexual violence; she
offered to provide it to Mr. Butler or anyone else, and noted
that it had been read by Representative Gara at the previous
bill hearing. It says 78 percent of women in these clubs report
being grabbed by their arm; 94 percent, grabbed by their waist;
56 percent, bitten; 78 percent, licked; 39 percent, slapped; 72
percent, punched; 72 percent, pinched; 61 percent, spit upon;
and 83 percent, having their costume actually pulled off. With
regard to the "legal part," she remarked:
It is relevant that we have local information, but it
is not the entire story. We are allowed to rely upon
studies that have been done Outside. We are allowed
to rely upon legal opinions of other communities. And
that's what we've been doing, is building ... that
record.
CHAIR ANDERSON assured listeners that the legal aspects would be
debated in a another committee.
Number 0571
SHERMAN JONES, currently an employee at Fantasies, explained
that he'd worked at eight clubs around the country and thus
brings a different perspective to his testimony. He said:
Basically, it is very easy to say ... what happens in
the clubs. And if you have never actually been into
one of the establishments, all the studies in the
world can be done, people can say this happened or
that happened, but if you have not been in the club,
you don't know what's going on. ...
Any perspective that you want to find, you can find.
You can find a person that fell down on a piece of
ice, or you can find a person that this happened or
that happened. I don't think, under any
circumstances, any type of licensing that you bring is
going to change any of that. ...
It was said that ... troopers, as well as APD, have
reported all these things that have happened. Where
are the people that are being arrested for breaking
the law? If a law has been broken, the people should
be arrested. If something happened or occurs in a
club and it's a crime, the people [who committed the
crime] should be arrested. And we would love to see
the blotter reports.
I work at Fantasies. We have a relationship with the
police officers. We have no problem with them coming
in. If we do something wrong, we expect the same
thing across the board. But all these things are
being said. We would love to see it, but I don't want
to see the study. I don't want to see Dr. Long (ph)
or whoever did the study on this, because anything
that you want to find, you can find. ...
If you start to teach young ladies, young adults, how
to so-called protect themselves, that's what I do. I
am ... police-certified trained. [I teach them] how
to protect themselves if someone does bump into them.
And it's going to happen. It happens at McDonald's
[restaurant]. So what are you going to do - are we
going to get a license for McDonald's and we're going
to say, "Hey, if you work at McDonald's, you can't do
this?"
This is a job; this is entertainment. And you have to
look at it like that. Just because someone [doesn't]
approve, that's their moral convictions; that's
something that they deal with. But ... this is still
the United States, when I woke up this morning, unless
it's changed. ... And now, are we going to start
passing all of our positions and moral beliefs on
everyone else? No. This is the United States.
Number 0343
JEANETTE JOHNSON, Owner, Teasers and Crazy Horse, testified that
she opened Teasers a year ago and has yet to get an 18-year-old.
She countered the idea that "all of these young ladies at 18 are
rushing to get in a strip bar." As for girls dancing at 14, 15,
or 16, she asked, "Where are their parents? ... I wonder if the
PTA went to their parents from schools, and told them they
[were] out in these places." She continued:
On the girls' getting a business license, I think if a
girl comes up from the Lower 48 and has to go to work,
knows that she has a job or can get a job here, and
had to wait 10 days for this business license to be
approved and to be posted and whatever, that young
lady's going to go to the streets or somewhere fast if
she needs to make hotel money or something like that.
I think 10 days is just too long a time for a business
license to be issued.
As far as diseases, you can go in any public restroom,
if it's not clean, and sit on the toilet. If
[there's] not tissues there or toilet seat covers, ...
you can contact a disease.
Number 0222
CHAIR ANDERSON surmised that amending the bill to change the age
to 21 wouldn't affect Crazy Horse, a full-dispensary, licensed
establishment with dancers and patrons over the age of 21; he
asked whether that's correct. He noted that it would affect
Fantasies.
MS. JOHNSON replied, "Except Teasers." She added:
If everybody is so worried about 18, we don't hire
girls that are still in high school. If they [are]
still in high school at 18, I don't know what the
system is like now, but what are they still doing in
high school at 18 and 19?
CHAIR ANDERSON estimated that perhaps 20 percent of high school
seniors are 18 years of age. He offered to send her a packet of
the input and letters.
Number 0108
DOUG HARTMANN, Anchorage, began by saying he has no relationship
to the two Hartmans who'd previously testified. He stated, "I
joined the military at age 18, and we ended up going to war, the
second half of the war that we're continuing on with now." As
for freedom of expression, he said he has been an artist almost
10 years and remarked:
At age 18, if a person can go to war and die for their
country or kill another human being for their country,
how come they can't participate [in] artistic
expression? I think that ... what the lady over here
was talking about, with the woman's right to choose
what she does with her own body, if she's an adult,
... that's a strong statement, and I stand behind that
also.
MR. HARTMANN referred to the suggestion that this gives local
law enforcement an excuse to come into the clubs and check the
licensing. He asked, "An excuse to do what?" He referred to
testimony by Rex [Butler] and said there are crimes committed
everywhere, including these establishments. He added, "We have
bouncers, we have people protected, and we try to do everything
we can to make sure these girls know about sexually transmitted
diseases."
TAPE 04-8, SIDE A
Number 0025
MR. HARTMANN emphasized the desire to make sure that "our
dancers come back to us safely." He questioned, however, why it
would be more difficult for people to get a license to work for
a club than to get a business license to start their own
business or a license to operate a vehicle. He also suggested
fingerprinting and so forth would make people "look and feel
like they are a criminal." With regard to crime and bad
behavior, he said:
I'm the guy who goes out there, and I watch the
dancers, and I watch the customers to make sure these
crimes are not committed. And when I see anything
that looks remotely ... disrespectful to one of my
ladies, then I stop it. And I stop it immediately.
I think if there's going to be regulations, ... we
need more help in stopping these from happening. If
somebody does try to do something, ... we need to be
able to call the police. We need to be able to say,
"Hey, this guy is stealing from her, this guy is doing
something," rather than, "Excuse me, sir, can you
please leave?" ... That's not right; that's not
respectful to the business; that's not respectful to
the ladies who work there.
MR. HARTMANN suggested that this doesn't show any concern for
people 21 years old or older. Reiterating that this issue isn't
with the dancers or clubs, but is with the people, he concluded:
We need more regulations on what we can do to help
keep these things - keep these bad people - away from
our dancers, and we can keep this a clean industry,
because, believe me, nobody in this room wants these
things to happen that you've described that happen all
the time - which, I can tell you, ... do not happen as
often ... as it is claimed to happen.
Number 0200
REPRESENTATIVE ROKEBERG, noting that the bill would require a
dancer to get a biennial license for $844, asked Mr. Hartmann
how this would affect his hiring practices.
MR. HARTMANN cited an example, pointing out that the cost of a
business license has been raised to $200, from $50. He asked
why it would be twice that [$844 every two years] for a dancer,
who isn't even a business owner.
REPRESENTATIVE ROKEBERG asked how it would affect the business
itself.
MR. BUTLER spoke up: "It would close it up. A lot of these
young ladies don't have that kind of money to start with, ...
and that kind of money, oh, that's astronomical." He added that
it doesn't cost that much to get a license to practice law.
CHAIR ANDERSON closed the public hearing.
Number 0322
CHAIR ANDERSON introduced Amendment 1, labeled [23-LS1394\D.3,
Craver, 1/30/04], which read:
Page 1, lines 2 and 3:
Delete "relating to protection of the safety and
health of and to education of young persons who
perform in adult entertainment establishments;"
Page 4, line 5:
Delete "19"
Insert "21"
Page 4, lines 16 - 23:
Delete all material.
Page 6, line 5:
Delete "(a)"
Page 6, lines 9 - 12:
Delete all material.
Page 9, line 9:
Delete "18"
Insert "21"
Page 9, line 11:
Delete "18"
Insert "21"
Page 9, line 16:
Delete "18"
Insert "21"
Page 9, line 22:
Delete "18"
Insert "21"
Page 10, line 2:
Delete "18"
Insert "21"
Page 11, lines 18 - 31:
Delete all material.
Renumber the following bill sections accordingly.
Page 12, line 6:
Delete "Sections 3 - 5 of this Act take"
Insert "Section 3 of this Act takes"
Page 12, line 12:
Delete "Sections 3 - 5 of this Act take"
Insert "Section 3 of this Act takes"
Page 12, line 13:
Delete "sec. 7(b)"
Insert "sec. 5(b)"
Page 12, line 19:
Delete "Sections 1, 2, 6, and 7"
Insert "Sections 1, 2, 4, and 5"
Number 0235
CHAIR ANDERSON referred to testimony the previous week and said
he believes the claim that any change of age would be violative
of the First Amendment isn't accurate in this case, because
there are secondary effects. He highlighted the need to make
policy with regard to what affects the public. He said
testimony from the PTA, APD, and state troopers led him to
believe that "we do think prostitution is increasing, and maybe
not at your club, but at others," and that 18-year-olds aren't
attending school. He continued:
A doctor from Duke University stated mental and
emotional abuse, and credible statistics to that; drug
use; there was a list of things and reasons why I'd
like to make an amendment to say that patronage should
be 21 and dancing should be 21. ...
To refute what the last gentleman said, right now you
can't gamble until you're 21 years of age, and you
can't drink until you're 21 years of age. And we have
to have parity; we have to have a uniformity if we're
going to ... have laws that affect ... these
establishments. And so it's purely on a public policy
basis and [a concern for] the safety for these 21-
year-old dancers.
Number 0430
CHAIR ANDERSON moved to adopt Amendment 1 [text provided
previously].
REPRESENTATIVE ROKEBERG objected for purposes of discussion.
CHAIR ANDERSON explained that Amendment 1 inserts [age] "21 for
19 and 18 where necessary." He suggested it's fairly self-
explanatory. In reply to Representative Guttenberg, he said it
amends the original bill [Version D, labeled 23-LS1394\D], and
that Barbara Craver [the drafter] had told him it applies
substantively to [Version H] as well, but that the [page and
line] numbering would change.
REPRESENTATIVE ROKEBERG asked if this simply changes the ages,
but the other provisions do nothing else.
CHAIR ANDERSON said that was correct, other than the title. He
explained that removed [from the title] would be "relating to
protection of the safety and health of and to education of young
persons who perform in adult entertainment establishments".
Number 0536
REPRESENTATIVE ROKEBERG asked whether the amendment includes
changes from DCED to the Department of Labor [& Workforce
Development], the Department of Law, or the Department of Public
Safety (DPS).
CHAIR ANDERSON said no.
REPRESENTATIVE ROKEBERG remarked that he'd "take any one of
those ... departments except that one," but wouldn't address it
now.
CHAIR ANDERSON suggested any recommendations could be analyzed
in the House Judiciary Standing Committee [which Representative
McGuire chairs and he is a member of].
Number 0536
REPRESENTATIVE ROKEBERG removed his objection.
REPRESENTATIVE McGUIRE commented:
Representative Rokeberg and I have already discussed
this. I'm amenable to any changes that would include
placing it within the appropriate department, the
department that has the most resources to handle it.
And then I also just wanted to make it clear on the
record that the licensing fee was not determined by
me. And I would not have it that high. The reason
that the license fee is apportioned out that way is on
account of a fiscal note that I received just Friday.
... So what I've been doing, for those online, is,
I've been working with the [Division of Occupational]
Licensing to reduce that.
The biggest part of that fiscal note is the education
and training that we want to give young people so that
they know there are other alternatives out there. The
testimony comes from former strippers that were young
when they got into it. And what they have been saying
to me, and to my staff and to us, is that they didn't
know that there were vocational opportunities,
scholarships, any other alternatives, and they needed
to make a buck.
And so, we just want them to have ... the education;
that's the high part of the fiscal note. We're trying
to find a model for that, and we're going to get the
fiscal note down. And I'd be amenable to anything ...
Representative Rokeberg has suggested.
CHAIR ANDERSON referred to testimony the previous week and asked
for confirmation that representatives from Covenant House
[Alaska], DPS, APD, and the PTA, as well as the professor from
Duke [University], had all said they'd prefer the age for both
patronage and dancers to be 21.
Number 0654
REPRESENTATIVE McGUIRE agreed. Saying she didn't have the case
before her, she added:
One of the things we know that's interesting is that
your constitutional rights are less as a patron; in
fact, they're almost nonexistent. Your right to be
entertained ... is not affected at all. So ... that's
not even something we need to deal with. But the
reason that they testified to that is that it's, in
fact, the exposure that young people have to drugs, to
the potential for prostitution, to abuse, and to other
things that they may not be prepared for.
The final thing I would say is, I really support this
move to change it to 21. What we heard from the
[Alcoholic Beverage Control Board], from the troopers,
and the APD is there are already institutions in place
for 21-and-older clubs, by virtue of serving alcohol.
So that's a license that's already required; that's a
big hammer that's over somebody's head. I guarantee
that if you ask Jeanette Johnson, she makes sure her
servers are 21 and older because the penalty is so
great: if they are not, they can get their alcohol
license pulled.
REPRESENTATIVE McGUIRE closed by saying she believes it is
important for patrons and dancers to be at least 21 years old.
Number 0733
REPRESENTATIVE GUTTENBERG stated concern, with this amendment,
about the severability clauses if it becomes a constitutional
issue. He also asked about the fallback position. Would people
ages 19 to 21 be allowed to dance and be covered by these
regulations?
REPRESENTATIVE McGUIRE responded:
What I have uncovered through my research, and others
have as well -- Kara Nyquist, the attorney from
Covenant House [Alaska] -- is that the constitutional
challenges ... exist whether you say 19, 20, or 21.
So the issue is the age of majority. We think we can
overcome that. We think that there [are] arguments
that ... you can't smoke until you're 19 now; you
can't drink until you're 21 now. We think we've
presented evidence on the secondary effects.
That said, the fallback position and what you'll see,
just to ... cut to the chase: ... the severability
clause, as everybody understands, if one part is
deemed unconstitutional, the guts of it remain. The
guts of it that would remain begin on page 11, and
they start at Section 3 and go down through Section 7.
So, essentially, what we're going to do is fall back
to saying, "OK, if you say it's unconstitutional to
have the age-related requirement in the license, that
part's out, but the license still exists." So we
still have a mechanism for regulating this industry.
Number 0942
REPRESENTATIVE CRAWFORD asked for clarification because
[Amendment 1] appears to delete the education requirements for
those between ages 19 and 21. Thus if the age is 21, the
education isn't needed.
CHAIR ANDERSON directed members to page 4, line 26.
REPRESENTATIVE CRAWFORD asked, if age 21 is thrown out, whether
the education and licensing requirements would come back again.
REPRESENTATIVE McGUIRE said she didn't have a copy of the
amendment, but stated:
So long as it doesn't affect, starting on page 11,
Sections 3 through ... 10, then the severability
clause is in. So you can amend whatever you want to
in the former part of the bill, but the latter part of
the bill that's important is the severability clause,
and then what happens, once it's severed. And that is
still a license requirement that says ... that you've
got to ... attend a course developed by the department
to inform applicants of career and educational
opportunities and so on, but only if you're under 21.
So, essentially, what [Sections] 3 through 8 do is ...
they reencapsulate the guts of the bill, but in a
smaller version.
CHAIR ANDERSON agreed. In reply to a request for further
clarification, he said:
If you're looking at the CS, ... on page 4, line 26,
Section 08.90.060 deals with additional provisions for
sex-oriented business entertainer licenses for,
basically, 19- and 20-year-olds. Because I've amended
it to 21 [through Amendment 1, not yet adopted],
that's stricken. And ... on page 11, that remains ...
where you're talking about for age 21 - [Sections] 3,
4, 5, 6, 7, all the way down. So the reference that
still remains, that you're in fear of, is on page 12,
Section 6. [Those] 21 years of age and older will
still have to have this education.
Number 1002
CHAIR ANDERSON asked if there was any objection to adopting
Amendment 1 [as conformed to Version H]. There being no
objection, it was so ordered.
REPRESENTATIVE ROKEBERG asked that the sponsors look at deleting
DCED [from the bill]. He said it should be a criminal statute,
or perhaps should be assigned to the Department of Labor [&
Workforce Development] or even the Department of Public Safety.
Number 1045
REPRESENTATIVE ROKEBERG moved to report CSHB 367 [Version 23-
LS1394\H, Craver, 1/30/04], as amended, out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, CSHB 367(L&C) was reported from the
House Labor and Commerce Standing Committee.
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
5:20 p.m.