Legislature(2017 - 2018)ADAMS ROOM 519
04/06/2018 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB217 | |
| HB231 | |
| HB299 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 231 | TELECONFERENCED | |
| += | HB 299 | TELECONFERENCED | |
| += | HB 217 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HOUSE BILL NO. 299
"An Act extending the termination date of the
Alcoholic Beverage Control Board; and providing for an
effective date."
2:11:12 PM
REPRESENTATIVE ADAM WOOL, SPONSOR, had no further remarks
on the bill. He was prepared for the amendment process.
Co-Chair Foster listed individuals available for questions.
2:12:29 PM
AT EASE
2:13:08 PM
RECONVENED
Co-Chair Foster stated that the amendment would expand
Department of Commerce, Community and Economic
Development's (DCCED) role as a regulatory and quasi-
judicial agency over the Alcoholic Beverage Control (ABC)
Board's decisions. He asked if the change would add
additional costs to the department.
MIKE NAVARRE, COMMISSIONER, DEPARTMENT OF COMMERCE,
COMMUNITY, AND ECONOMIC DEVELOPMENT, answered it would
depend on the number [of ABC Board cases] that ended up
being appealed. He believed it would be limited based on
the way the amendment was written to apply to an appeal
based on the decision of the board. The intent was to
review whether it was consistent with law.
Co-Chair Foster MOVED to ADOPT Amendment 1, 30-LS1281\J.2
(Bruce, 4/3/18) (copy on file):
Page 1, line 2, following the second occurrence of
"Board;":
Insert "relating to the application of precedent to
decisions of the Alcoholic Beverage Control Board;"
Page 1, following line 10:
Insert a new bill section to read:
"* Sec. 3. AS 04.11.537 is repealed."
Renumber the following bill sections accordingly.
Representative Wilson OBJECTED for discussion.
Representative Wool explained that Amendment 1 would
provide an appeal provision to the DCCED commissioner. He
detailed that in the past the ABC Board had resided under
the Department of Revenue (DOR) and the Department of
Public Safety (DPS). The move from DPS to DCCED had been an
effort to make the ABC Board more receptive to business and
commerce and less like a law enforcement division. The
amendment would give DCCED a connection to the board;
currently the board was in the department for
administrative purposes only. The amendment would enable a
person or entity to appeal a board decision. Existing law
required a person or entity to take a board decision to the
state superior court. The amendment would provide an option
that did not involve courts, attorneys, and accompanying
complications.
2:16:24 PM
Representative Guttenberg asked who the board's decision
would be appealed to. He asked if the decision was appealed
back to the board. He provided a scenario where a decision
was appealed and went back to the board and the result was
still adversarial for one party. He asked about the steps
that would follow.
Representative Wool answered that currently it was possible
to appeal to the board, but if a person got to a point they
felt another appeal was needed, the amendment would mean
DCCED would be the next adjudicating body before state
court.
LAURA STIDOLPH, STAFF, REPRESENTATIVE ADAM WOOL, added that
the process under discussion was considered a
reconsideration process instead of an appeals process. The
party the board made the decision against would have 30
days to make a motion for reconsideration to the [DCCED]
commissioner. The commissioner would then make a decision
based on his/her review of any evidence that had been
presented to the board. Subsequent to the commissioner's
decision, a party could choose to appeal the decision to
the superior court.
Representative Guttenberg reviewed the process explained by
Ms. Stidolph. He asked about the portion of the process
under the DCCED commissioner's purview. He asked if it
involved an administrative law judge or a review.
2:18:46 PM
Ms. Stidolph answered that the process would be similar to
several other statutes including AS 14.11.016, pertaining
to when school districts could request decisions of a
department that the department had made. Additionally, AS
19.20.015 allowed a municipality to request reconsideration
to the Department of Transportation and Public Facilities
(DOT) commissioner regarding local control of state
transportation corridors. She clarified the process under
Amendment 1 applied after the [ABC] board had made a
decision and would allow a party to ask the commissioner
for reconsideration. Under the reconsideration process the
commissioner would receive all of the information that had
been previously used by the board to make its decision. She
characterized the reconsideration process as an informal
appeals process.
Representative Guttenberg asked Commissioner Navarre about
the review criteria the commissioner would use. He wondered
if the commissioner would give the information to an
administrative law judge and ask for an opinion. He asked
if there would be a hearing held.
Commissioner Navarre answered the appeal process was based
on the record of decision before the board and whether it
was consistent with law. He explained the commissioner
would be another set of eyes on the final decision before a
party could opt to take the decision to the superior court.
The commissioner review would happen more quickly than the
superior court process. The commissioner would review the
record of decision in consistency with law and would have
assistance from the Department of Law (DOL).
Representative Wool referenced a letter from Alaska
Airlines in members' packets as an example of entities that
may appeal a decision (copy on file). He noted that many
entities that may choose to appeal a decision would be
small businesses. He detailed that a small business
adversely impacted by an ABC Board decision may not have
ample time to drag the issue out in court. He expounded
that small businesses needed to keep their doors open, keep
their lights on, and keep their employees employed. He
intended that DCCED would be cognizant of those things
while following the law. He believed providing an
opportunity for the commissioner to act as another set of
eyes was important.
Commissioner Navarre stated there had been some
frustrations because the board was a division within his
department that he had no authority to administer. The
department had been undergoing discussions with the
division director to determine how to include some input
into the administration by the department. There was a
decision by the board that also had the administrative
authority over the division regulating and enforcing the
alcohol laws. The amendment would allow the commissioner's
office to take a second look at the specifics of a board
decision before getting to the more expensive litigation
process. He added that he did not believe the amendments
would have fiscal impact as currently written. He noted
that if there was a significant number of appeals, which
would not be known for some time, the issue would be
addressed in future budget deliberations before the
legislature.
2:23:53 PM
Representative Guttenberg appreciated the response. He
recognized there were boards and commissions in departments
that acted independently, which sometimes caused people to
wonder where the adult supervision was. He believed it was
an appropriate step for the department. He supported the
amendment.
Representative Kawasaki asked if Amendments 1, 2, and 3
were connected as a packet.
Representative Wool agreed that the amendments were
connected. He noted Amendment 3 was a result of Amendment
1.
Representative Kawasaki had a question pertaining to
Amendment 2. He summarized his understanding that after
reconsideration was given by the commissioner, the
commissioner would have some sort of veto power and could
affirm, modify, or reverse the board's decision. He asked
if his understanding was accurate.
Representative Wool replied in the affirmative. He believed
the reconsideration process would be futile if the
commissioner did not have the ability to overturn the
board's decision. The point was to obtain another
perspective on a case and to have the ability to come to a
different decision.
Representative Kawasaki pointed to Amendment 2, lines 19
through 21 laid out the decision point where the
commissioner would have some sort of ability to exercise
veto over the board's decision. He asked if it was the
power the commissioner would have.
2:27:30 PM
AT EASE
2:29:29 PM
RECONVENED
Co-Chair Foster returned the topic to Amendment 1 and held
the question by Representative Kawasaki.
Co-Chair Seaton stated that Amendment 1 pertained to the
application of precedent to decisions of the ABC Board. The
amendment would repeal AS 04.11.537. Amendment 1 had a
Legislative Legal Services opinion attached (copy on file),
which specified that no other board had the same criteria.
He asked what the effect would be if AS 04.11.537 was
repealed.
Representative Wool answered that the amendment would
require the board to apply precedent. He stated that no
other board had the removal of precedent clause including
the Marijuana Control Board. He stated the clause was
unique to the ABC Board. He clarified that precedent could
be considered in a decision, but the board was not required
to adhere to the precise way it had acted in the past. He
referenced the letter from Alaska Airlines (copy on file)
explaining that for many years their license had been
renewed by submitting the finger prints of its president,
treasurer, secretary, and about four corporate officers. In
the current year, the ABC Board had told Alaska Airlines it
wanted finger prints from all 22 of the company's vice
presidents. The company had told the board that its vice
presidents changed frequently, the request was cumbersome,
and in the past the process had been done a certain way.
The board had countered that according to law the licensing
required the additional finger prints. He clarified that he
was not taking a position on the board's decision, but he
believed precedent had some bearing on decisions. He
reasoned that in the case of Alaska Airlines, if the
process had been available, perhaps the company could have
taken the issue to the commissioner for an additional
opinion. He reiterated he was not taking a position on a
board decision. He believed precedent should be considered,
not eliminated. He believed it was consistent since no
other board had the power, including the Marijuana Control
Board. The opinion provided by Legislative Legal Services
indicated the issue could be a problem in due process as
well. He believed it was prudent to repeal the provision.
2:33:24 PM
Co-Chair Seaton surmised that Legislative Legal Services
had specified the current statute could be a due process
problem and that repealing AS 04.11.537 would be beneficial
in two ways. First, the courts would have the documentation
considered by the ABC Board in the past in addition to
documents on a case it was reviewing. Second, the repeal
would eliminate potential due process problems.
Representative Wool replied in the affirmative.
Additionally, repealing the statute would be consistent
with all other state boards.
Representative Pruitt remarked that he did not have the
letter from Alaska Airlines in his packet. He asked if
there were other examples where there had been concern that
the board had not considered precedent. He believed
Legislative Legal Services was highlighting the statute was
opening the state up to potential litigation.
Representative Wool referenced a bill that he believed had
been considered by the House Finance Committee. The bill
had addressed beverage tourism BDLs [beverage dispensary
licenses] that had been renewed consistently for 25 years.
The law had been further scrutinized and it had been
determined the law required an establishment to have a
certain number of rooms (e.g. 40 to 50). License owners had
countered that they had been doing things a certain way for
25 years, which he believed should be taken into
consideration. He did not have other examples on hand. He
compared the situation to a scenario where two license
holders were treated differently in one community - one
licensee was allowed to do something, while the other was
not. He believed something allowed in one circumstance
should be taken into account when considering other
licenses. He did not believe something should be
automatically waived because precedent was not taken into
consideration.
Representative Wilson noted the current discussion to
repeal AS 04.11.537. She asked if the following language
currently in AS 04.11.537 would be addressed in a different
amendment:
In determining whether issuance, renewal, transfer,
relocation, suspension, or revocation of a license is
in the best interests of the public...
2:37:13 PM
AT EASE
2:38:40 PM
RECONVENED
Commissioner Navarre answered that the language referenced
by Representative Wilson was specific to the application of
precedent. The protection of the public was already
included in several sections of Title 4 related to issuing
licenses and the action taken by the board and division.
Representative Wilson replied that Amendment 1 would insert
the language "relating to the application of precedent..."
She wondered if the wording no longer needed to be part of
the precedent section.
Representative Wool answered that the amendment would mean
the removal of the application of precedent and specified
what the application of precedent applied to. The language
[referenced by Representative Wilson] was included in other
sections of statute.
Representative Wilson asked if precedent would not be set
any longer. She wondered if the other amendments would
address why the language would be inserted by Amendment 1.
Representative Wool replied that the amendments were
related. He read language from AS 04.11.537 that the "board
need not conform to or distinguish its decision from any
action it has taken in the past." He believed the language
was unique to the ABC Board and for numerous reasons he
believed it should be removed. He cited the Alaska Airlines
letter as an example. He reported Amendment 3 was more of a
technicality based on the appeal process.
Representative Wilson agreed on the repeal portion of the
amendment because the second half specified the board did
not have to consider what it had done in the past when
considering new cases. She wanted to ensure the
applications were in the public's best interest. She
requested follow up on the protection of the public in
other areas of statute.
Representative Wool answered that he or Legislative Legal
Services would follow up.
2:42:02 PM
Vice-Chair Gara stated that the statutory chapter on
alcohol included a number of rules of enforcement and cost
when a license was issued, revoked, suspended. He stressed
that all of the rules still applied. The rules were applied
based on the facts of a case. Even though the amendment
would repeal the part of statute specifying the board did
not have to follow precedent, the facts of the case should
be followed. He stated the language existed in other
statutes - other statutes specifying rules implicitly
stated they were based on the facts of the case. He thought
the special rule on precedent for the ABC Board was wrong
and should be removed. He explained that if a person lost
their license under various rules, the facts of the case
were considered to make the determination. He was not
concerned and reiterated the rules were in other areas of
statute.
Representative Guttenberg referred to the last sentence of
the Legislative Legal Services opinion attached to
Amendment 1:
It is my opinion that this language could present due
process and equal protection problems by treating
similarly situated licensees differently and
potentially giving different punishments for similar
violations.
Representative Guttenberg asked if the opinion referred to
the existing AS 04.11.537 or the repeal of the statute. He
was looking for clarity and the simplest way to avoid
conflict.
Representative Wool replied that the legal opinion sentence
was addressing what the author believed could occur if the
language was not repealed.
Representative Kawasaki noted that licensing in the same
section talked about board imposed conditions and
restrictions. He noted that AS [04.11].395 specified that
"The board may, in the best interests of the public, impose
conditions or restrictions on a license..." He believed it
was imbedded within the licensing and zoning. He stated the
only thing the amendment pertained to was precedent, which
he was comfortable with.
Representative Wool responded to Representative Wilson's
earlier request and read an excerpt from AS 04.11.330:
Denial of License or Permit Renewal.
(a) An application requesting renewal of a license
shall be denied if
(1) the board finds, after review of all relevant
information, that renewal of the license would not be
in the best interests of the public;
Representative Wilson WITHDREW her OBJECTION. There being
NO further OBJECTION, Amendment 1 was ADOPTED.
2:45:57 PM
Co-Chair Foster MOVED to ADOPT Amendment 2, 30-LS1281\J.1
(Bruce, 3/9/18) (copy on file):
Page 1, line 2, following the first occurrence of
"Board;":
Insert "relating to the authority of the commissioner
of commerce, community, and economic development to
reconsider decisions of the Alcoholic Beverage Control
Board;"
Page 1, following line 7:
Insert new bill sections to read:
"* Sec. 2. AS 04.11.070 is amended to read:
Sec. 04.11.070. Power limited to the board. Except as
provided in AS 04.11.560(c), only {ONLY] the board may
issue, renew, transfer, relocate, suspend, or revoke a
license under this title.
* Sec. 3. AS 04.11.560 is amended by adding new
subsections to read:
(c) An aggrieved party may request that the
commissioner reconsider a decision by the board
relating to the issuance, renewal, transfer,
relocation, suspension, or revocation of a license
under this title. A request for reconsideration must
be filed within 30 days after the date the board
issues its decision. The commissioner shall determine,
based on the record before the board, whether the
board's decision is supported by substantial evidence
and whether the decision is contrary to law. The
commissioner shall issue a written decision affirming.
modifying, or reversing the board's decision within 30
days after receiving the request for reconsideration.
(d) Reconsideration under (c) of this section is not a
precondition of an appeal to the superior court under
(b) of this section. If reconsideration is requested
under (c) of this section. the decision by the
commissioner to affirm, modify. or reverse the board's
decision is the final agency action for purposes of an
appeal to the superior court under AS 44.62.560.
(e) The commissioner may stay all or part of an order
pending administrative review or reconsideration or
judicial review. The aggrieved party may not appeal a
stay separately from an appeal of the substantive
decision.
(f) In this section, "commissioner" means the
commissioner of commerce, community, and economic
development."
Renumber the following bill sections accordingly.
Page 1, line 12:
13 Delete "Section 2"
14 Insert "Section 4"
Representative Wilson OBJECTED for discussion.
Representative Wool explained the amendment addressed the
appeal and reconsideration process to DCCED after an ABC
Board decision and prior to going to state superior court.
Representative Kawasaki read lines 19 through 21 on page 1
of Amendment 2:
The commissioner shall issue a written decision
affirming. modifying, or reversing the board's
decision within 30 days after receiving the request
for reconsideration.
Representative Kawasaki asked if the provision ultimately
gave a commissioner veto power.
Commissioner Navarre saw the provision as a review of the
decision. He stated it was not a veto power because it had
to be based on the record before the board and whether the
board's decision was supported by substantial evidence and
whether or not it was contrary to law. He believed it was
only in specific purposes and was another set of eyes
before going to an appeal before the courts.
Representative Kawasaki spoke to an ABC Board decision on
distilleries and what constituted a mixed drink. He noted
there had recently been news that there had been an error
in the action taken by the board, meaning the issue had to
come before the board again in the future. He stated the
board had come to the decision in February and there had
been information not given to the board members for
consideration. He asked if the department would have any
capacity to get additional information "in between the time
in which that time happened and the board rendered their
decision."
Commissioner Navarre would have to get Legislative Legal
Services, but he believed it would be based on the record
of decision and information that had been considered by the
board and not based on any new information.
2:48:54 PM
LINDA BRUCE, LEGISLATIVE LEGAL SERVICES, JUNEAU (via
teleconference), asked Representative Kawasaki to repeat
his question.
Representative Kawasaki complied. He referenced a 2-2
decision by the ABC Board (one member recused themselves
from the vote) to disallow distilleries to mix drinks in
their facilities. He asked whether a commissioner would
have the ability to veto the board's decision or get
additional information in affirming, modifying, or
reversing the board's decision. He asked what kind of
information would be available to the commissioner when
considering the issue.
Ms. Bruce pointed to lines 14 and 15 of Amendment 2, which
only permitted the commissioner to reconsider a decision by
the board relating to the issuance, renewal, transfer,
relocation, suspension, or revocation of a license. The
provision did not give the commissioner the authority to
veto regulations adopted by the board. However, when a
commissioner was reviewing a decision of the board (e.g. to
issue or deny a license) they could only consider the
record that had been before the board.
2:50:44 PM
Representative Kawasaki wanted to understand the power of
the commissioner. He surmised that affirming a decision by
the board would be rubber stamping that decision. He asked
how modifying and reversing a board recommendation would
work.
Ms. Bruce explained her understanding that modifying would
come into play when there may be multiple facets of the
board's decision. The commissioner could decide to affirm,
deny, and make changes to parts of a decision.
Representative Kawasaki referenced the language "based on
the record before the board," and asked how much latitude a
commissioner would have, in the absence of presented
information, to make a decision to modify the board's
decision.
Ms. Bruce replied that it would depend on the facts before
the board and the factual circumstances.
Representative Wilson referenced the board's past decision
on distilleries and surmised the amendment would not help
businesses impacted by the decision because it had not been
attached to anyone renewing [a license]. She reasoned the
decision had been about activity businesses were allowed to
conduct under their license.
Representative Wool answered in the affirmative. The
amendment was limited and did not cover any decision the
board may make about cocktails or other. The amendment
specified what could be appealed.
Representative Wilson asked about cases where someone had
been fined. She wondered if the amendment would allow them
to take the issue to the commissioner. Alternatively, she
wondered if the amendment only pertained to the issuance,
renewal, transfer, relocation [suspension, or revocation of
a license]. She provided an example of someone doing a
renewal who claimed they had submitted all of their
paperwork, but the board had not received it all and had
fined the individual $1,000. She asked if the issue could
be taken to the commissioner.
Representative Wool answered that technically the issue
could be [taken to the commissioner] when pertaining to a
renewal. He thought Representative Wilson's example may be
a question for Legislative Legal Services. He listed items
the commissioner could reconsider under the amendment
including the issuance, renewal, transfer, relocation,
suspension, or revocation of a license. He reasoned that if
a fine fell under one of the categories, perhaps it was
applicable.
2:54:03 PM
Representative Wilson understood the amendment pertained to
the issuance, renewal, and transfer of a license. She asked
the board would have to decide against renewing a license
for the issue to go to the commissioner. Alternatively, she
wondered if someone could appeal to the commissioner if the
board imposed fines or penalties on the license holder. She
was trying to determine how broad the amendment was.
Ms. Bruce responded that it may be open to interpretation;
however, the term "relating to" in the amendment language
"decision by the board relating to the issuance, renewal,
transfer, relocation, suspension, or revocation of a
license," made the amendment a bit broader than merely the
renewal or issuance of a license. The provision applied to
something relating to the issuance or renewal of a license.
Representative Wilson asked how many times in the past two
years someone had taken a board decision to court. She
understood that court was expensive and cost someone more
than fines imposed by the board. She wondered about the
added burden that would be placed on the commissioner.
Representative Wool replied that he did not know the number
of cases that had gone to state superior court. He guessed
it was not that many. He deferred the question to the ABC
Board director.
2:56:18 PM
ERICA MCCONNELL, DIRECTOR, ALCOHOL and MARIJUANA CONTROL
OFFICE (AMCO), DEPARTMENT OF COMMERCE, COMMUNITY AND
ECONOMIC DEVELOPMENT (via teleconference), believed one
licensee had appealed to court in the past year. She made
clarifying remarks about the appeal process. She explained
there was a very clear appeal process in statute. She
detailed if a licensee was unhappy with a decision by the
AMCO director, they were authorized to appeal the decision
to the ABC Board. She elaborated that if a licensee was
unhappy with a board decision they appealed to the Office
of Administrative Hearings and received a hearing before an
administrative law judge. The administrative law judge
established the record, held a hearing, and made a proposed
decision. The proposed decision went back to the ABC Board
for a final decision and the board was authorized to agree,
disagree, or modify the administrative law judge's
decision. At that point the decision was final and could be
appealed to superior court.
Representative Guttenberg addressed Ms. Bruce and relayed
the committee had adopted Amendment 1. He stated the
committee was taking out the precedent process from the
decisions of the board. He reviewed his understanding that
the board could make a change to the license process after
businesses had been renewing licenses the same way for many
years. He wondered if there was time given to businesses to
adjust business practices inside of the process.
2:59:22 PM
Ms. Bruce stated her understanding of the question. She
believed Representative Guttenberg was asking whether there
was an alternative avenue for a licensee if the board found
a licensee had been doing something unlawfully.
Representative Guttenberg clarified he was speaking to a
scenario where the way a business had operated in the past
was no longer allowed [based on changes made by the board].
Ms. Bruce deferred to the Ms. McConnell. She speculated
that the board may have the ability to temporarily suspend
a license and give the licensee time to conform to the new
interpretation.
Ms. McConnell responded it was always the board's goal to
consistently apply statute and regulation. When the
division encountered a situation where it appeared the
statute had not been correctly applied in the past, the
division did its best to work with the licensee or
applicant to bring them into compliance with the law. She
believed there was court ruling that related to the amount
of time something that did not comply with statute had been
allowed to go on. The less time it had been allowed to go
on, the easier it was to correct, while the longer
something had gone on improperly, the more difficult it was
to correct. She did not believe there was a rigid
timeframe, but the board did its best to work within the
means it was allowed to bring applicants and licensees in
compliance with statute. The division's goal was not to
revoke licenses, but to ensure statute was applied as
written.
Vice-Chair Gara supported the amendment. He stated it was
common for an agency to have a double layer of an appeals.
He thought the ABC Board should have the double layer. The
amendment did not address regulations like a rule imposed
in distilleries requiring consumers to mix their own
drinks, which many members had questions about. The same
board members were making the decisions on individual
cases. He was comfortable having the board's decisions be
subject to appeal to the commissioner. He referenced a
question from Representative Kawasaki about the basis for
the commissioner's decision. He stated the commissioner's
decision had to be supported by substantial evidence, which
was the common standard. He remarked it was not uncommon
within an agency to have a second appeal layer higher up.
He had enough questions throughout time about decisions
made by the ABC Board that he did not mind the review of a
decision based on substantial evidence.
Representative Wilson WITHDREW her OBJECTION. There being
NO further OBJECTION, Amendment 2 was ADOPTED.
3:03:38 PM
Co-Chair Foster MOVED to ADOPT Amendment 3, 30-LS1281\J.3
(Bruce, 4/5/18) (copy on file):
Page 1, line J, following "Act":
Insert "relating to the Department of Commerce,
Community, and Economic Development;"
Page 1, following line 4:
Insert a new bill section to read:
"* Section 1. AS 04.06.0 IO is amended to read:
Sec. 04.06.010. Establishment of board. There is
established in the Department of Commerce, Community,
and Economic Development the Alcoholic Beverage
Control Board as a regulatory and quasi-judicial
agency. [THE BOARD IS IN THE DEPARTMENT OF COMMERCE,
COMMUNITY, AND ECONOMIC DEVELOPMENT, BUT FOR
ADMINISTRATIVE PURPOSES ONLY.]"
Page 1,line 5:
Delete "Section 1"
Insert "Sec. 2"
Renumber the following bill sections accordingly.
Page 1, line 12:
Delete "Section 2"
Insert "Section 3"
Representative Wilson OBJECTED for discussion.
Representative Wool explained that the amendment removed
the language specifying the board was in the department for
"for administrative purposes only." He believed it was
important to remove the language because a previous
amendment had added the appeal process; therefore, the
board was no longer within the department for
administrative purposes only. Amendment 1 had established
more of a connection between the board and department.
Representative Wilson asked whether removing the language
"for administrative purposes only" would give the board any
other powers aside from what had been shown in the
amendments.
Representative Wool answered in the negative. He elaborated
that the ABC Board had resided in DOR, DPS, and was
currently under DCCED. He reasoned that if the board was
under DCCED for administrative purposes only, it could be
under DOT and it would not make a difference. He was trying
to create some connection between the board and DCCED,
which he believed was the reason for moving the board from
DPS because the licensees were businesses. He believed
whatever thin filament of connection could be sustained was
a positive thing.
Representative Wilson WITHDREW her OBJECTION. There being
NO further OBJECTION, Amendment 3 was ADOPTED.
3:05:31 PM
Representative Wilson had a question for the Division of
Legislative Audit (Legislative Audit). She noted there had
been numerous recommendations in the audit report. She did
not believe any of the items added by the amendments helped
any of the eight issues mentioned in the audit. She asked
if any of the amendments would cause additional issues or
help resolve any of the audit recommendations.
KRIS CURTIS, LEGISLATIVE AUDITOR, ALASKA DIVISION OF
LEGISLATIVE AUDIT, replied that the eight recommendations
were not related to the amendments. She answered that when
the division came back to review the board it would use the
eleven criteria identified in the audit appendix. Most of
the criteria were geared towards whether the board was
serving the interest of the public. She considered how the
position of the commissioner related to Legislative Audit's
review of the ABC Board. She explained that if the auditors
did not agree with a decision made by the commissioner, it
would not relate to the board. She did not believe the
actions by the commissioner would be subject to the
division's sunset review. She stated it was interesting
that the board was a quasi-judicial, independent agency.
Based on her understanding of the amendments, the
commissioner would be given the ability to veto the
decision of an independent body. She highlighted that the
commissioner was a political appointee. She did not believe
the legislative oversight would have any ability to review
the decisions by the commissioner.
3:08:19 PM
Representative Wilson assumed there was no way to add a
review [of decisions made by the commissioner] to something
Legislative Audit would look at. She reasoned it would be a
separate review the legislature would have to consider. She
assumed Ms. Curtis was still okay with the four-year
extension because the action taken by the committee in the
current meeting really did not have to do with boards.
Ms. Curtis answered she was comfortable with the
recommended extension that was half of the maximum
[allowable extension], which was in regards to the eight
audit recommendations. A special audit request would be
required in terms of looking at decisions and whether they
were supported by evidence. She elaborated the special
request would be added to the queue - the division operated
on a first-in-first-out basis - and it may take time to get
to a review.
Representative Pruitt thought the committee should have
asked to hear from Ms. Curtis earlier in the meeting. He
asked whether the sunset audit that would take place in
four years could include an analysis on whether the [DCCED]
commissioner was working alongside the stated goal of the
commission or whether there were actions being taken that
were contrary to the commission.
Ms. Curtis answered that in the past the legislature had
directed, via uncodified law, Legislative Audit to look at
something in a certain amount of time. She believed the
direction would prompt the division to review the issue as
part of the sunset process. She added that intent language
may also work. She explained that if she saw the intent
language she would most likely have the committee put it on
record to direct the division to look at something.
Representative Pruitt thought something should be included
in the bill to give Legislative Audit direction to ensure a
commissioner did not operate outside of what the
legislature believed the commission was tasked to do. He
thought perhaps an amendment could be offered on the House
floor.
3:11:53 PM
Representative Wilson stated she had not expected the
answers she had been given. She remarked the changes made
during the meeting had impacts outside the board and the
existing audit process that she had not been aware of. She
requested to hold the bill until the following day. She
thought the committee should include intent language. She
wanted to make sure someone was checking the issue.
Vice-Chair Gara hoped individuals with concerns could speak
to the sponsor and address any issue on the floor. He
supported moving the bill forward.
Commissioner Navarre relayed that he had not had an
opportunity to discuss the items with Ms. McConnell or DOL.
He intended to fully engage the parties, but he did not
believe that was possible by the following day. He
committed to speaking with the parties before the bill went
to the House floor.
Representative Wool remarked on Ms. Curtis's comment that
the commissioner was a political appointee. He noted that
director of the ABC Board was also a political appointee.
He stated that the director made numerous decisions that
impacted many people. He addressed that the first appeal
process went to an administrative law judge and did not
know whether it fell under the purview of Legislative
Audit. He referenced Ms. Curtis's testimony that audits did
not address anything at the commissioner level. He asked if
the audits to the board included the appeals to the
administrative law judge.
Ms. Curtis answered that when looking at a case,
Legislative Audit could and had, looked at administrative
law decisions, knowing it was an independent process.
Mainly the audit considered how the board reacted to an
independent decision. For instance, whether they reversed
it and what type of support they had.
3:15:54 PM
Representative Wool remarked that in the past audit,
Legislative Audit did not look into the decisions made by
the administrative law judge - whether they supported or
did not support the board's decision.
Ms. Curtis answered that Legislative Audit did not look
into the administrative law judge decision, but it looked
at the timeliness of investigative process, which was a
criterion the division was directed to consider. The
division's primary focus was whether the board was serving
the public's interest, which would be the main focus in the
sunset process.
Representative Guttenberg asked about the audit's second
recommendation:
Recommendation 2: The board should issue recreational
site licenses in accordance with statutory
requirements.
Representative Guttenberg elaborated that the audit
recommendations referenced noncompliant licenses including
travel tour companies, bowling allies, an art council, a
pool hall, a movie theater, and a spa. He referenced a
situation where the Fairbank Drama Association used a bar's
license to sell alcohol 30 minutes prior to a performance.
He stated it was around $50 for every performance. He
believed the Alaska Center for the Performing Arts in
Anchorage used the same process. He asked if either of the
organizations would be able to have a recreational site
license to serve during performances if the audit
recommendation was followed.
Ms. Curtis replied that Representative Guttenberg's
description was of a bar with a license serving alcohol.
She deferred the question to Representative Wool.
Representative Wool answered that there were several things
occurring. There was a catering permit allowing a bar to
cater its license to the theater, which he believed was the
case with the Fairbanks Drama Association (organizations
paid per event). Additionally, there was a recreational
site license for certain sporting events and other related
situations. Recommendation 2 in the audit found that the
board had gone outside the definition of the intended use.
He believed the Alaska Center for the Performing Arts in
Anchorage had a theater license. He noted there were 22
types of licenses, which could be complicated. He explained
the many licenses caused confusion when licensees wondered
why they could not do something another business was doing.
He believed Title 4 was attempting to clean up some of the
issue, but there would still be 22 or 24 licenses. The
catering permit in Fairbanks was different than a
recreational site license, which was different than a
theater license. He reiterated that the performing arts
center used a theater license and had to get a catering
permit from an established beverage person. He explained
the permit was good for an entire season, but it meant the
center had to use it for every show.
3:19:13 PM
Representative Guttenberg noted that the Fairbanks Drama
Association had been in touch with AMCO because the
association had to get a permit for every individual show.
He wondered if he had the information wrong - he was trying
to gain resolution on the issue for the association.
Ms. McConnell replied that Representative Wool had been 99
percent correct on his response. She corrected that his
last statement about the performing arts center had been
incorrect. She detailed that AMCO had encouraged the
Fairbanks Drama Association to apply for a theater license,
which existed currently in regulation. The association
would have to partner with a beverage dispensary licensee
that would have consistent permission to serve at the
theater. She explained that was the situation with the
performing arts center in Anchorage.
Representative Kawasaki did not have a problem moving the
bill forward. He referenced Commissioner Navarre's
testimony that it would take him longer than one day to
provide additional information. He recognized it was a
board extension that was needed with eight days of session
remaining. He intended to recommend potentially amending
the bill at a later time in the legislative process. He
stated that members could connect directly with the
commissioner and AMCO director if they had further
questions.
3:21:09 PM
Representative Pruitt referenced that Commissioner Navarre
had stated that he would not have time to speak to
personnel by the following day. He did not know whether
that was needed if the issue was more about ensuring that
the audit analyzed some of the actions that could be taken
by the commissioner's office. He addressed the House floor
calendar and supported holding the bill until the following
day. He reasoned the committee could request language for a
potential amendment to consider the following day. The
committee was aware of the conversation, while colleagues
on the floor may not be.
Co-Chair Foster believed Representative Wool may be leaving
town.
Representative Wool supported moving the bill during the
current meeting. His second preference was to move the bill
the following day. He stated the bill was of a timely
nature and had to go through the other body as well. He
detailed the bill was a board extension and needed to be
done. He had wanted to amend the bill due to different
situations. He had used the Alaska Airlines situation as an
example - he believed the decision was still pending. He
clarified he was in no way picking on the board or Ms.
McConnell.
Representative Wool referenced the letter from Alaska
Airlines and explained the Alaska Airlines renewal form had
been sent before the end of the year because it referenced
a letter dated December 29. The company had been later
informed it needed the finger prints of its 20 or so vice
presidents. The company had responded that it did not need
to provide the detail because it had not been required to
do so in the past. The board had told Alaska Airlines that
statute specified the information needed to be provided.
Additionally, the board had told the company it would be
fined $10,500 because the application had not been
completed by the deadline. The company had been told there
was no way to waive the penalty. He explained that the
paperwork had been provided on time, but due to the
disagreement over what was required, the company was fined
for an incomplete application. As a business owner, he had
a problem with the process. He reasoned Alaska Airlines
could likely afford the fine, but it may be harder for a
small business, especially if they had to close because of
a suspended license. He stated that if he flew on Alaska
Airlines in the coming month and could not purchase a glass
of red wine, it would not be the end of the world. The
company would stay in business. However, the issue impacted
different people differently.
Representative Wool supported an appeal procedure to
expedite the process. He did not know how long the
aforementioned administrative law route took. He noted that
the board met every three months and reasoned if someone
had to wait a couple of board cycles for resolution it was
a substantial length of time. He apologized if he was
incorrect about the frequency of board meetings. He
reiterated that the process could take months, which could
mean closure for a small business. His desire was to ensure
the board was service the public's interest. He wanted to
see another set of eyes when needed that could provide a
different perspective than law enforcement or prosecutorial
point of view.
3:26:34 PM
Ms. McConnell reported that the process for an
administrative law judge to hold a hearing on a case took
several months.
Vice-Chair Gara spoke to a concern mentioned that a
commissioner's decision would not be reviewed by
Legislative Audit. He added that the division did not
review superior or supreme court decisions either. He did
not share the concern and did not have the interest in
expanding the role of Legislative Audit. He believed it was
beyond the purview of the bill. He supported moving the
bill forward and having any new questions addressed as the
bill moved along in the legislative process.
Representative Wilson remarked that there was no way the
committee would have known the amendments were coming until
the current day. She was not disagreeing with the changes
made by the amendments, but she pointed out that the board
had not received an overly positive audit. She reasoned
there were already existing issues. She continued the audit
had included eight recommendations and a four-year
extension. She noted there were numerous boards that
received eight-year extensions and had flawless audits. She
believed the legislature had punished the Board of Pharmacy
by giving a six-year extension and adding numerous duties
to its purview. She stated the current bill did the same
thing to the ABC Board; it changed how things had been
done. She was requesting to hold the bill until the
following day to include additional language. She
reiterated that the changes were new and at the end of the
four-year extension the legislature would learn whether the
changes worked. She understood that Alaska Airlines was
having an issue [with the board], but she wanted the public
to realize the issue was not about one entity. She pointed
out that the audit highlighted issues with compliance,
ensuring complaints were filled in, and other. She wanted
to get the bill right before it went to the floor. She
wanted to see the board extension go forward. She
reiterated her request to hold the bill until the following
day in order to ensure a good bill was moved forward.
3:30:22 PM
Co-Chair Foster asked who would work on the language.
Representative Wilson replied she was happy to work on the
new language.
Representative Pruitt emphasized that due to the
amendments, the bill was not merely a board extension.
Given policy changes related to the board operation the
bill would have more debate than a typical board extension.
He thought that waiting to address the issue on the House
floor could further delay the bill because the whole body
was not versed on its intricacies. He highlighted comment
by another member that Legislative Audit did not review
superior court cases. He agreed with that point, but under
existing law, the committee analyzed the board. He reasoned
the changes made by the amendments gave the powers to a
commissioner. He spoke to the inability for the auditors to
analyze whether the commissioner was acting within "what
everyone wants the board to fall under." He wanted the
decisions to fall within the realm of the board. He
believed the issue necessitated having the conversation
about whether the commissioner was also following with the
legislature's guidelines set for the board. He believed it
was worth holding the bill until the following day and
thought waiting would ultimately make the bill move faster.
Co-Chair Foster informed the committee that the bill had to
be to Senate Finance Committee by Wednesday. He reasoned
the House Finance Committee was constantly telling other
committees to do their work prior to sending bills forward.
He did not want to advance the bill forward without
considering the issue on the table. He supported hashing
out the language prior to sending the bill forward.
3:34:00 PM
Co-Chair Seaton stated that generally he thought of intent
language in a bill relating to the intent of the bill.
Whereas, the discussed intent would direct Legislative
Audit on what the legislature wanted to see considered in
the next audit. He asked whether it would be sufficient for
the committee to include a letter of intent with the bill
specifying what it wanted the auditor to look at versus
including direction in statute.
Ms. Curtis replied in the affirmative; she would bring it
to the letter of intent to the Legislative Budget and Audit
Committee for direction. She explained that if the
direction was included in uncodified law, she would not
need to take direction from the Legislative Budget and
Audit Committee. She believed in the past the Board of
Midwives had direction included in uncodified law, which
would be a useful example if the committee chose to put the
language in uncodified law. She reiterated that if she
received a letter she would take it to the Legislative
Budget and Audit Committee for direction.
Co-Chair Seaton reasoned that putting uncodified law that
did not relate to the law they were passing seemed more
likely to be stripped out by the other body. He stated the
other body tended to dislike including superfluous intent
language. He thought including a letter of intent with the
bill may be an appropriate way to handle the issue. He
stated putting language in statute had been disagreeable to
the other body in the past, particularly when the language
did not directly relate to the meaning of the adopted
amendments.
3:36:30 PM
Co-Chair Foster stated that regardless of the action the
issue could be considered overnight.
HB 299 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster relayed the meeting would be recessed until
1:00 p.m. the following day [see separate minutes dated
April 7, 2018 1:00 p.m. for detail].
^RECESSED
3:37:45 PM
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 231 AKSupremeCourtCasesJan2018 (003).pdf |
HFIN 4/6/2018 1:30:00 PM |
HB 231 |
| Hb 231 - Amendments 1, 2 & 3.pdf |
HFIN 4/6/2018 1:30:00 PM |
HB 231 |
| HB 231 DOA Response to HFIN 4.5.18.pdf |
HFIN 4/6/2018 1:30:00 PM |
HB 231 |
| HB 231 - Letter of Support.pdf |
HFIN 4/6/2018 1:30:00 PM |
HB 231 |
| HB 231 CFEC employees exempt reasons.pdf |
HFIN 4/6/2018 1:30:00 PM |
HB 231 |
| HB 268 - HFIN Amendments.pdf |
HFIN 4/6/2018 1:30:00 PM |
HB 268 |
| HB 316 Amendments.pdf |
HFIN 4/6/2018 1:30:00 PM |
HB 316 |
| HB 299 Amendment packet.doc.pdf |
HFIN 4/6/2018 1:30:00 PM |
HB 299 |
| HB 217 Amendment #1.pdf |
HFIN 4/6/2018 1:30:00 PM |
HB 217 |