Bill refunding covid fines to businesses clears state panel

An Arkansas Senate committee on Wednesday advanced a bill that would require the state Alcoholic Beverage Control Division and Department of Health to return fines to businesses that were sanctioned during the state's public health emergency starting March 11, 2020, and ending on Sunday and any subsequent extensions for failing to comply with a rule, order or directive to mitigate or prevent the spread of covid-19.

In a voice vote with only its chairwoman, Sen. Cecile Bledsoe, R-Rogers, dissenting, the eight-member Senate Public Health, Welfare and Labor Committee recommended Senate approval of Senate Bill 301 by Sen. Dan Sullivan, R-Jonesboro.

The action came over the objections of officials representing the alcohol-enforcement agency and Health Department.

Sen. Bart Hester, R-Cave Springs, said he believes the Health Department and alcohol agency have probably treated people very fair and done their job.

"The frustration is not at you. The frustration is the executive branch gave us zero input on what was happening to our constituents," he said.

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The bill would require the agencies to return the fines by June 30 of this year for the period from March 11, 2020 through Sunday. For any extensions of the public health emergency, the state would be required to return the fine within 60 days of the fine's collection.

The bill wouldn't require a state agency to return fines for a failure to comply with a rule, order or directive to mitigate or prevent the spread of covid-19 to long-term care facilities, including nursing homes; residential care facilities; assisted living facilities; hospitals; hospice facilities, human development centers or any other residential entity that houses 25 or more people. The bill also wouldn't apply to any other fines collected that are not directly related to a rule, order or directive to mitigate or prevent the spread of covid-19.

The Alcoholic Beverage Control Division received $37,950 in fines between July 1, 2020, and Feb. 2. The division receives fines weekly so the amount has increased, the state Department of Finance and Administration said in its legislative impact statement on the bill.

Sullivan told the Senate committee, "This bill is really about the separation of powers, that one branch has the authority to make the law and one branch has the power to execute the law.

"If our state government is going to punish, or fine or otherwise infringe on those principles of life, liberty and pursuit of happiness as our declaration says governments were instituted to do, then it should by the consent of the governed through their representative form of government," he said.

[RELATED: See complete Democrat-Gazette coverage of the Arkansas Legislature at arkansasonline.com/legislature]

Sullivan suggested that small businesses and restaurants have been targeted for fines.

He said his bill would hinder the executive branch's ability to enforce the law "without legislative participation. This is our chance to say we want to be part of what goes on."

Doralee Chandler, the division director, said the division's sole intent is to the protect the health and safety of employees, patrons and others at permitted locations from the potential spread of covid-19 and keep the state functioning without a complete closure.

The covid-19 inspections became more systematic for the Alcoholic Beverage Control's Enforcement Division since about July 1, and agents have reported more than 6,000 checks and 250 of them have been reported to the administration "for us to adjudicate in some form," she said.

Since March 2020, 257 reports have been forwarded in total, the administration issued 33 written warnings to permit holders and "there is 224 potential monetary penalties remaining consisting of 191 different locations," Chandler said.

So far, "68 have paid fines to date" and "69 are still pending review by my staff attorneys," she said. "Seventy-two offers have been issued with no response to date and 15 are set for hearings."

Chandler asked the Senate committee to consider not requiring the refunding of the fines "because of the message that is being sent," and "refunding [the fines] rewards the noncompliance behavior.

"The vast majority of your constituents comply with the guidances and the criteria from the Department of Health," she said. "Less than 5% were referred to administration to review."

Laura Shue, general legal counsel for the Health Department, said the agency has received thousands of complaints about the lack of compliance with health directives throughout the public health emergency and continues to receive complaints. The department provides due process prior to issuing any civil penalties.

The department has made multiple attempts to encourage voluntary compliance with thousands of permitted facilities and retail facilities with success for most of its efforts, she said.

Only after complaints of multiple violations have six food establishments been sent an order and only five have consented to one violation for a $250 civil penalty, Shue said. After a warning, the department also issued 67 $50 civil penalties to cosmetology establishments for noncompliance out of 4,310 licensed salons, she said.

"This bill, if enacted, subjects the state to future litigation in the Claims Commission and federal court for various entities for enforcement of legitimate health directives," she said. "More importantly, it diminishes the ability to use established procedures to protect others in a public health emergency."

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