Legislature(2017 - 2018)SENATE FINANCE 532

02/28/2018 09:00 AM Senate FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
<Pending Referral>
<Bill Hearing Canceled>
<Bill Hearing Canceled>
+ Bills Previously Heard/Scheduled: TELECONFERENCED
Moved HB 120 Out of Committee
Moved SB 165 Out of Committee
Moved CSSB 15(FIN) Out of Committee
SENATE BILL NO. 15                                                                                                            
     "An  Act  relating  to   possession  of  an  electronic                                                                    
     smoking product  or a product containing  nicotine by a                                                                    
     minor and  to selling  or giving an  electronic smoking                                                                    
     product  to  a  minor;  relating  to  business  license                                                                    
     endorsements  to  sell   cigarettes,  cigars,  tobacco,                                                                    
     products   containing   tobacco,   electronic   smoking                                                                    
     products,   or   products  containing   nicotine;   and                                                                    
     relating to  citations for certain  offenses concerning                                                                    
     tobacco or nicotine products."                                                                                             
9:22:07 AM                                                                                                                    
Co-Chair MacKinnon  reviewed the  bill title and  noted that                                                                    
Senator Stevens  was the bill  sponsor. She asked if  he had                                                                    
comments for the committee.                                                                                                     
SENATOR  GARY  STEVENS, SPONSOR  stated  that  the bill  was                                                                    
about protecting  Alaska's youth  from becoming  addicted to                                                                    
nicotine and  adopting unhealthy habits.  He noted it  was a                                                                    
concern nationwide and  a major problem in  Alaska. The bill                                                                    
was  about  restricting  sales  to  and  possession  of  the                                                                    
products by  youth. Additionally, the bill  would give state                                                                    
agencies the authority to enforce  restrictions. He spoke to                                                                    
the importance  of acting quickly  to face the  new industry                                                                    
and  to help  protect the  state's children  who were  being                                                                    
Co-Chair  MacKinnon reviewed  that the  committee had  heard                                                                    
the bill on February 16  and had heard public testimony. She                                                                    
announced she would reopen the public hearing.                                                                                  
Co-Chair MacKinnon OPENED and CLOSED public testimony.                                                                          
Senator Stevens  MOVED to  ADOPT Amendment  1, 30-LS0170\N.3                                                                    
(Bruce/Martin, 2/26/18) (copy on file):                                                                                         
     Page 12, line 28:                                                                                                          
     Delete "11.76.109(a)(3)"                                                                                                   
     Insert "11.76.109(a)(4)"                                                                                                   
     Page 13, line 6:                                                                                                           
     Delete "AS 11.76.900"                                                                                                      
     Insert "AS 11.8l.900(b)"                                                                                                   
Co-Chair MacKinnon OBJECTED for discussion.                                                                                     
9:24:22 AM                                                                                                                    
TIM  LAMKIN, STAFF,  SENATOR  GARY  STEVENS, explained  that                                                                    
Amendment  1 was  a simple  technical  amendment. There  had                                                                    
been  several drafting  errors  in the  bill  that had  been                                                                    
overlooked as  it had gone through  the committee substitute                                                                    
process (CS). He referenced the  first part of the amendment                                                                    
and explained that AS 11.76.109(a)(3)  and (a)(4) pointed to                                                                    
the wrong  section. The amendment was  conforming. Likewise,                                                                    
the statute in  the second portion of the  amendment did not                                                                    
exist.  The amendment  would insert  the correct  section of                                                                    
law that addressed the definition of e-cigarettes.                                                                              
Co-Chair MacKinnon  WITHDREW her  OBJECTION. There  being NO                                                                    
further OBJECTION, Amendment 1 was ADOPTED.                                                                                     
Senator Stevens MOVED to ADOPT Amendment 2, 30-LS0170\N.2                                                                       
(Martin, 2/23/18) (copy on file):                                                                                               
     Page 2, following line 20:                                                                                                 
     Insert a new bill section to read:                                                                                         
     "* Sec. 3. AS 1l.76.106(a) is amended to read:                                                                             
     (a)  Except as  provided under (b)  of this  section, a                                                                    
     person  may  not   sell  cigarettes,  cigars,  tobacco,                                                                    
     products [OR A  PRODUCT] containing tobacco, electronic                                                                    
     smoking  products,  or   products  containing  nicotine                                                                    
     unless the  sale occurs  in a  manner that  allows only                                                                    
     the sales  clerk to control  access to  the cigarettes,                                                                    
     cigars,  tobacco,  products   [OR  PRODUCT]  containing                                                                    
     tobacco,  electronic  smoking   products,  or  products                                                                    
     containing nicotine.                                                                                                       
     Renumber the following bill sections accordingly.                                                                          
     Page 2, line 27:                                                                                                           
     Delete "or"                                                                                                                
     Insert "[OR]"                                                                                                              
     Page 2, line 31, following "older":                                                                                        
     Insert "; or                                                                                                               
     {4)  is   of  electronic  smoking  products   over  the                                                                    
     Internet to a person 19 years of age or older"                                                                             
     Page 13, line 19, following "Act,":                                                                                        
     Insert "AS 11.76.l06(a),  as amended by sec.  3 of this                                                                    
     Page 13, line 20:                                                                                                          
     Delete "sec. 3"                                                                                                            
     Insert "sec. 4"                                                                                                            
     Delete "sec. 4"                                                                                                            
     Insert "sec. 5"                                                                                                            
     Page 13, line 21:                                                                                                          
     Delete "sec. 5"                                                                                                            
     Insert "sec. 6"                                                                                                            
     Delete "sec. 6"                                                                                                            
     Insert "sec. 7" 13                                                                                                         
     Page 13, line 22:                                                                                                          
     Delete "sec. 7"                                                                                                            
     Insert "sec. 8" 17                                                                                                         
     Page 13, line 23:                                                                                                          
     Delete "sec. 8"                                                                                                            
     Insert "sec. 9"                                                                                                            
Co-Chair MacKinnon OBJECTED for discussion.                                                                                     
Mr.   Lamkin  explained   Amendment   2,   which  was   more                                                                    
substantive   than  Amendment   1.  He   detailed  that   AS                                                                    
1l.76.106(a) was commonly known  as the "behind the counter"                                                                    
law. He  elaborated that tobacco and  nicotine products were                                                                    
required to  be placed behind  the counter and sales  of the                                                                    
products had to  be under the direct supervision  of a sales                                                                    
clerk.  For example,  Fred Meyer  shoppers  had to  go to  a                                                                    
specific counter to purchase  cigarettes and tobacco related                                                                    
products and were required  to present their identification.                                                                    
The  law was  originally  targeted to  prevent vendors  from                                                                    
situating  the products  in locations  that could  be easily                                                                    
accessed  and  would attract  the  attention  of youth.  For                                                                    
example,  products could  be placed  in the  candy or  snack                                                                    
aisle  (or toy  section).  Additionally, the  law served  to                                                                    
prevent or eliminate the possibility of the products.                                                                           
Mr. Lamkin  relayed that in  the Senate  Judiciary Committee                                                                    
there had  been concern  the particular  section of  the law                                                                    
would prevent adult sales of  the products over the internet                                                                    
because there  was not a person  immediately supervising the                                                                    
sale  or transaction.  He elaborated  that due  to confusion                                                                    
and misunderstanding,  the sponsor  had removed  the section                                                                    
of the bill  at that time. He explained  that while removing                                                                    
the section  clarified adult sales  could be  conducted over                                                                    
the  internet,  it  would  also allow  stores  to  place  e-                                                                    
cigarettes  in aisles  where they  may not  be appropriately                                                                    
located. The amendment would restore the prior language.                                                                        
Mr. Lamkin detailed there were  exceptions to the particular                                                                    
law. He cited a bar vending  machine as an example where the                                                                    
transaction did not  have to be under  direct supervision or                                                                    
require a sales  clerk. The bottom of the  amendment made an                                                                    
exception for internet sales provided  the buyer was over 19                                                                    
years of age.                                                                                                                   
Co-Chair MacKinnon  WITHDREW her  OBJECTION. There  being NO                                                                    
further OBJECTION, Amendment 2 was ADOPTED.                                                                                     
9:28:18 AM                                                                                                                    
Senator Micciche  MOVED to ADOPT Amendment  3, 30-LSO170\N.1                                                                    
(Martin, 2/16/18) (copy on file):                                                                                               
     Page 7, line 10:                                                                                                           
     Delete "$1,000"                                                                                                            
     Insert "$500"                                                                                                              
     Page 7, line 25:                                                                                                           
     Delete "indefinitely [ONE YEAR]"                                                                                           
     Insert "one year"                                                                                                          
Co-Chair MacKinnon OBJECTED for discussion.                                                                                     
Senator Micciche  stated that he  had spoken to  the sponsor                                                                    
about  the  amendment  and   believed  Senator  Stevens  was                                                                    
supportive.  He thought  a  penalty of  $1,000  for a  first                                                                    
offense  was too  severe. He  believed a  $500 penalty  left                                                                    
room for a  person to make a mistake. He  noted the existing                                                                    
penalty was  $300. He explained  that sometimes a  new store                                                                    
employee  could make  the mistake  of  not getting  adequate                                                                    
identification. He did  not change the other  numbers in the                                                                    
Senator Micciche  also believed  the word  "indefinitely" on                                                                    
page  7,  line  25  would   mean  the  end  of  a  business,                                                                    
particularly a vape business. He  reasoned that one year was                                                                    
likely very difficult [for a  business] to survive from, but                                                                    
the amendment would mean the loss  of a license for one year                                                                    
for a fourth and future offense.  He stated that a fourth or                                                                    
fifth offense  would constitute  the loss  of a  license for                                                                    
another  year. He  believed a  person  could probably  argue                                                                    
that   vaping  was   better   for   someone's  health   than                                                                    
traditional  tobacco  simply  because  it  did  not  involve                                                                    
burning  plant matter.  He furthered  that  vape shops  were                                                                    
more  likely  to  be closed  indefinitely  with  a  one-year                                                                    
closure. He believed one year was an adequate penalty.                                                                          
Senator Stevens supported the amendment.                                                                                        
Co-Chair MacKinnon  WITHDREW her  OBJECTION. There  being NO                                                                    
further OBJECTION, Amendment 3 was ADOPTED.                                                                                     
JULI  LUCKY, STAFF,  SENATOR ANNA  MACKINNON, addressed  the                                                                    
committee's first  Statement of Zero Fiscal  Impact. She had                                                                    
been working  with the executive branch  and the Legislative                                                                    
Finance Division  (LFD) to develop  a more efficient  way to                                                                    
deal with  zero fiscal notes.  She explained that SB  15 had                                                                    
been accompanied by  four fiscal notes, three  of which were                                                                    
zero notes and  had been consolidated into  the Statement of                                                                    
Zero Fiscal Impact.  The hope was to make it  easier for the                                                                    
public  and  committee members  to  easily  see all  of  the                                                                    
departments impacted by  a bill, but that did  not incur any                                                                    
fiscal impact. She  highlighted that the one  piece of paper                                                                    
replaced six sheets of paper.                                                                                                   
Ms. Lucky  pointed out that  the bill had one  fiscal impact                                                                    
note  from   the  Department  of  Commerce,   Community  and                                                                    
Economic  Development  for  the  Division  of  Corporations,                                                                    
Business  and Professional  Licensing.  There  was a  fiscal                                                                    
impact of $5,600 in FY 19.  She directed attention to page 2                                                                    
of the analysis and read:                                                                                                       
     This  legislation requires  changes to  warning signage                                                                    
     and the department must make  available to a person who                                                                    
     holds a business license  endorsement. It also requires                                                                    
     a  change to  the CBPL  database warning  signs, forms,                                                                    
     online   filing,   websites,  investigations,   and   a                                                                    
     regulation  change.  The committee  substitute  changes                                                                    
     the  required notice  from two  separate  signs to  one                                                                    
     combined   sign  and   changes  the   required  minimum                                                                    
     dimensions  of  those signs.  If  the  bill passes  the                                                                    
     following expenses  will be incurred:  services, $3,000                                                                    
     in  legal costs  to  amend  regulations, printing,  and                                                                    
     postage in the  first year; $1,000 for  IT services for                                                                    
     the system change; and $1,600  for printing and postage                                                                    
     to mail new signage.                                                                                                       
Ms. Lucky continued  that the analysis included  a note that                                                                    
legal  and hearing  service expenses  would  be incurred  in                                                                    
outyears, but  the costs  were unknown.  The costs  would be                                                                    
covered by receipt  supported services (undesignated general                                                                    
fund code 1005).                                                                                                                
9:33:44 AM                                                                                                                    
Vice-Chair  Bishop  MOVED  to report  CSSB  15(FIN)  out  of                                                                    
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
CSSB 15(FIN) was REPORTED out  of committee with a "do pass"                                                                    
recommendation  and  with a  new  Statement  of Zero  Fiscal                                                                    
Impact by the  Office of the Governor for  the Department of                                                                    
Health  and  Social Services,  the  Department  of Law,  and                                                                    
Department of Public Safety; and a new fiscal impact note                                                                       
from Department of Commerce, Community and Economic                                                                             
9:34:38 AM                                                                                                                    
AT EASE                                                                                                                         
9:36:47 AM                                                                                                                    
Co-Chair MacKinnon  discussed the  agenda for  the following                                                                    
day. She noted that she  would reopen the public hearing for                                                                    
SB 104  the following day  in order  for the public  to have                                                                    
opportunity  to  comment  on a  forthcoming  amendment  from                                                                    
Senator von Imhof.                                                                                                              

Document Name Date/Time Subjects
SB 15 Amendment 3 Micchice.pdf SFIN 2/28/2018 9:00:00 AM
SB 15
SB 15 Amendment 1 Stevens.pdf SFIN 2/28/2018 9:00:00 AM
SB 15
SB 15 Amendment 2 Stevens.pdf SFIN 2/28/2018 9:00:00 AM
SB 15