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Alaska Statutes.

Title 43. Revenue and Taxation

Chapter 70. Alaska Business License Act

Section 75. License Endorsement.

previous: Section 70. Security. [Repealed, Sec. 4 Ch 94 SLA 1976; Sec. 5 Ch 144 Sla 1978].
next: Section 80. Disposal of Money.

AS 43.70.075. License Endorsement.

(a) Unless a person has a business license endorsement issued under this section for each location or outlet in a location where the person offers tobacco products for sale, a person may not sell or allow a vending machine to sell in its location or outlet cigarettes, cigars, tobacco, or other products containing tobacco as a retailer at that location or outlet. Each endorsement required under this section is in addition to any other license or endorsement required by law. A person may not apply for an endorsement under this section for a location or outlet if an endorsement issued for the same location or outlet is currently suspended or revoked. An endorsement issued for a location or outlet to a person in violation of this subsection is void.

(b) The department, upon payment of a fee of $100, shall issue a business license endorsement to a person who applies for a business license under this chapter, and may renew the endorsement issued under this subsection for a fee of $100. The endorsement expires at the same time as the license to which it attaches. Upon issuance of an endorsement, the department shall also issue to the person receiving the endorsement notice of the penalties that may be imposed under this section.

(c) The department may refuse to issue an endorsement under this section if there is reasonable cause to believe that the information submitted in the application is false or misleading and is not made in good faith.

(d) If a person who holds an endorsement issued under this section, or an agent or an employee of a person who holds an endorsement issued under this section acting within the scope of the agency or employment, has been convicted of violating AS 11.76.100 , 11.76.106, or 11.76.107, the department shall impose a civil penalty as set out in this subsection. However, following a hearing under (m) of this section, and based on evidence admitted at that hearing concerning questions specified in (m)(4) and (6) of this section, the department may reduce by not more than 10 days a suspension under (1) of this subsection, or by not more than 20 days a suspension under (2) of this subsection, or increase by not more than 10 days a suspension under (1) of this subsection, or by not more than 20 days a suspension under (2) of this subsection. If a hearing is not requested, or if a hearing is requested and the department determines that the evidence admitted does not support increasing or decreasing the suspension, the department shall suspend the endorsement for a period of

(1) 20 days and impose a civil penalty of $300 if the person has not been previously convicted of violating AS 11.76.100 , 11.76.106, or 11.76.107 and is not otherwise subject to the sanctions described in (2) - (4) of this subsection;

(2) 45 days and impose a civil penalty of $500 if, within the 24 months before the date of the department's notice under (m) of this section, the person, or an agent or employee of the person while acting within the scope of the agency or employment of the person, was convicted once of violating AS 11.76.100 , 11.76.106, or 11.76.107;

(3) 90 days and impose a civil penalty of $1,000 if, within the 24 months before the date of the department's notice under (m) of this section, the person, or an agent or employee of the person while acting within the scope of the agency or employment of the person, was convicted twice of violating AS 11.76.100 , 11.76.106, or 11.76.107, or a provision of this section or a regulation implementing this section adopted under AS 43.70.090 ; or

(4) one year and impose a civil penalty of $2,500 if, within the 24 months before the date of the department's notice under (m) of this section, the person, or an agent or employee of the person while acting within the scope of the agency or employment of the person, was convicted more than twice of violating AS 11.76.100 , 11.76.106, or 11.76.107.

(e) If a person who receives an endorsement under this section has multiple retail locations or outlets in a location, a suspension or revocation imposed under this section applies only to the retail outlet in the location in which the violation occurs.

(f) A person who holds a license endorsement issued under this section shall post on the licensed premises a warning sign as described in this subsection. A warning sign required by this subsection must be at least 6 inches by 18 inches and must read, in lettering at least 1.25 inches high: "The sale of tobacco products to persons under age 19 is illegal." A person holding an endorsement issued under this section shall display the sign in a manner conspicuous to a person purchasing or consuming tobacco products on the licensed premises. The department shall, without charge, furnish warning signs required under this section to a person who holds an endorsement issued under this section or a person who requests the sign with the intention of displaying it.

(g) A person who is required to hold a business license endorsement under this section, or who is required to be licensed or agrees to be licensed under AS 43.50.010 , or an agent or employee of the person, may not

(1) sell cigarettes to another person unless the cigarettes are sold in groups of at least 20 and the cigarettes are in the manufacturer's original cigarette pack or contained in a cigarette carton or box; or

(2) sell or possess cigarettes if the cigarette package

(A) differs in any respect from the requirements of 15 U.S.C. 1331 - 1341 (Federal Cigarette Labeling and Advertising Act) for the placement of warnings or of any other information upon a package of cigarettes that is sold within the United States;

(B) is labeled "For Export Only," "U.S. Tax Exempt," "For Use Outside U.S.," or with similar wording indicating that the manufacturer did not intend that the product be sold in the United States; this subparagraph does not apply to cigarettes sold or intended to be sold as duty-free merchandise by a duty-free sales enterprise under 19 U.S.C. 1555(b); however, this subparagraph does apply to duty-free cigarettes that are brought back into the state for resale in the state;

(C) has been altered by adding, masking, or deleting wording described in (B) of this paragraph.

(h) A violation of (g) of this section is an unfair or deceptive act or practice under AS 45.50.471 .

(i) The commissioner or the commissioner of revenue may seize cigarettes that do not comply with this section. After notice and an opportunity for a hearing, the commissioner or the commissioner of revenue shall destroy cigarettes seized under this subsection.

(j) A person who violates (g) of this section is guilty of a class B misdemeanor.

(k) If a person, or an agent or employee of the person while acting within the scope of the agency or employment of the person, violates a provision of (a) or (g) of this section, the department may suspend the person's business license endorsement or right to obtain a business license endorsement for a period of not more than

(1) 45 days; or

(2) 90 days if, within the 24 months before the date of the department's notice under (m) of this section, the person, or an agent or employee of the person while acting within the scope of the agency or employment of the person, violates a provision of (a) or (g) of this section.

(l) Notwithstanding (a) of this section, a person owning vending machines that offer tobacco products for sale need obtain only one business license endorsement under this section even if the person has vending machines in more than one outlet or location in the state. The person who owns a vending machine that offers tobacco products for sale and the person who owns the premises where the vending machine is located are both required to obtain a business license endorsement issued under this section. If the endorsement of the person owning the vending machine is suspended or revoked, the person may not sell cigarettes, cigars, or other products containing tobacco during the period of suspension or revocation through the use of vending machines at the location or outlet where the violation occurred. During the period of suspension or revocation, the person owning that vending machine may not use that machine to sell tobacco products at another location or outlet.

(m) The department may initiate suspension of a business license endorsement or the right to obtain a business license endorsement under this section by sending the person subject to the suspension a notice by certified mail, return receipt requested, or by delivering the notice to the person. The notice must contain information that informs the person of the grounds for suspension, the length of any suspension sought, and the person's right to administrative review. A suspension begins 30 days after receipt of notice described in this subsection unless the person delivers a timely written request for a hearing to the department in the manner provided by regulations of the department. If a hearing is requested under this subsection, an administrative law judge of the office of administrative hearings (AS 44.64.010 ) shall determine the issues by using the preponderance of the evidence test and shall, to the extent they do not conflict with regulations adopted under AS 44.64.060, conduct the hearing in the manner provided by regulations of the department. A hearing under this subsection is limited to the following questions:

(1) was the person holding the business license endorsement, or an agent or employee of the person while acting within the scope of the agency or employment of the person, convicted by plea or judicial finding of violating AS 11.76.100 , 11.76.106, or 11.76.107;

(2) if the department does not allege a conviction of AS 11.76.100 , 11.76.106, or 11.76.107, did the person, or an agent or employee of the person while acting within the scope of the agency or employment of the person, violate a provision of (a) or (g) of this section;

(3) within the 24 months before the date of the department's notice under this subsection, was the person, or an agent or employee of the person while acting within the scope of the agency or employment of the person, convicted of violating AS 11.76.100 , 11.76.106, or 11.76.107 or adjudicated for violating a provision of (a) or (g) of this section.

(4) did the person holding the business license endorsement establish that the person holding the business license endorsement had adopted and enforced an education, a compliance, and a disciplinary program for agents and employees of the person as provided in (t) of this section;

(5) did the person holding the business license endorsement overcome the rebuttable presumption established in (w) of this section;

(6) within five years before the date of the violation that is the subject of the hearing, did the department establish that the person holding the business license endorsement

(A) previously violated (a) or (g) of this section;

(B) previously violated AS 11.76.100 , 11.76.106, or 11.76.107 at a location or outlet in a location for which the person holds a business license endorsement, or had an agent or employee previously violate AS 11.76.100, 11.76.106, or 11.76.107; this subparagraph does not apply to a prior conviction that served to enhance a suspension period under (d)(2) - (4) of this section; or

(C) engaged at a location owned by the person in other conduct that was or is likely to result in the sale of tobacco to a person under 19 years of age in violation of AS 11.76.100, 11.76.106, or 11.76.107.

(n) The commissioner may

(1) adopt the proposed decision of a hearing officer under this section;

(2) remand the matter for further proceedings; or

(3) reject the proposed decision, review the record, and issue a decision based on the record.

(o) After notice and a hearing, the department may revoke a business license endorsement or increase a period of suspension if the department finds that, during a period of suspension, a person continues the conduct for which the endorsement or the right to obtain an endorsement was suspended. A person whose endorsement or right to obtain an endorsement is revoked or suspended under this subsection may not apply for or obtain an endorsement under this chapter. A period of revocation or suspension imposed under this subsection may not exceed two years.

(p) If a person who holds an endorsement issued under this section violates (f) of this section, the department may impose a civil penalty not to exceed $250 for each day of the violation, but the department may not suspend or revoke a business license endorsement. The total civil penalty imposed under this subsection for each violation may not exceed $5,000.

(q) The department may adopt regulations that do not conflict with regulations adopted under AS 44.64.010 to establish an administrative hearing process for actions taken under this section. AS 44.62 (Administrative Procedure Act) does not apply to a hearing under this section.

(r) For purposes of this section, the sale of a product containing tobacco by an agent or employee of a person who holds or is required to hold a business license endorsement under this section at the location or outlet in a location for which the endorsement was or was required to be issued is rebuttably presumed to have been a sale within the person's scope of agency or employment.

(s) If a person violates (a) of this section, the department may impose a civil penalty not to exceed $250 for each day of the violation. The total civil penalty imposed under this subsection for each violation may not exceed $5,000. The civil penalty described in this subsection may be imposed in addition to a suspension of a business license endorsement or the right to obtain a business license endorsement ordered by the department under (k) or (o) of this section.

(t) Based on evidence provided at the hearing under (m)(4) - (6) of this section, the department may reduce the license suspension period under (d) of this section if the person holding the business license endorsement establishes that, before the date of the violation, the person had

(1) adopted and enforced a written policy against selling cigarettes, cigars, tobacco, or products containing tobacco to a person under 19 years of age in violation of AS 11.76.100, 11.76.106, or 11.76.107;

(2) informed the person's agents and employees of the applicable laws and their requirements and conducted training on complying with the laws and requirements;

(3) required each agent and employee of the person to sign a form stating that the agent and employee has been informed of and understands the written policy and the requirements of AS 11.76.100, 11.76.106, and 11.76.107;

(4) determined that the agents and employees of the person had sufficient experience and ability to comply with the written policy and requirements of AS 11.76.100, 11.76.106, and 11.76.107;

(5) required the agents and employees of the person to verify the age of purchasers of cigarettes, cigars, tobacco, or other products containing tobacco by means of a valid government issued photographic identification;

(6) established and enforced disciplinary sanctions for noncompliance with the written policy or the requirements of AS 11.76.100, 11.76.106, and 11.76.107; and

(7) monitored the compliance of the agents and employees of the person with the written policy and the requirements of AS 11.76.100, 11.76.106, and 11.76.107.

(u) A reduction in the period of suspension under this section may not be granted more than once in a 12-month period for a location or outlet in a location for which the person holds a business license.

(v) Notwithstanding (d) of this section, in place of a hearing under (m) of this section, the department and the person holding the business license endorsement may enter into a memorandum of agreement regarding the imposition of a suspension and civil penalties based on a violation of AS 11.76.100, 11.76.106, or 11.76.107. The memorandum of agreement must contain a provision that the person holding the business license endorsement admits or does not contest that a violation of AS 11.76.100, 11.76.106, or 11.76.107 occurred and accepts the imposition of suspension and civil penalty under this section. Based on the memorandum of agreement, the department may reduce the period of suspension. For violations involving AS 11.76.100, 11.76.106, or 11.76.107, the department may not reduce the period of suspension by more than 10 days under (d)(1) of this section or by more than 20 days under (d)(2) of this section. The department may not agree to a reduction in the period of suspension more than once in a 12-month time period for a location or outlet in a location for which the person holds a business license endorsement.

(w) For purposes of (m)(5) of this section, a conviction for a violation of AS 11.76.100, 11.76.106, or 11.76.107 by the agent or employee of the person who holds the business license endorsement is rebuttably presumed to constitute proof of the fact that the agent or employee negligently sold a cigarette, a cigar, or tobacco, or a product containing tobacco to a person under 19 years of age. The person who holds the business license endorsement may overcome the presumption by establishing by clear and convincing evidence that the agent or employee did not negligently sell a cigarette, a cigar, or tobacco, or a product containing tobacco to a person under 19 years of age in violation of AS 11.76.100, 11.76.106, or 11.76.107 as alleged in the citation issued to the agent or employee. The presentation of evidence authorized by this subsection does not constitute a collateral attack on the conviction described in this subsection.

(x) Notwithstanding (d), (t), or (v) of this section, a period of suspension may not be reduced for a violation of AS 11.76.100 (a)(4).