Legislature(2011 - 2012)CAPITOL 120
04/13/2011 01:00 PM House JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| HB224 | |
| SB15 | |
| SB78 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 15 | TELECONFERENCED | |
| + | SB 78 | TELECONFERENCED | |
| + | HB 224 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 78 - LIABILITY RELATED TO ALCOHOL
2:10:29 PM
CHAIR GATTO announced that the final order of business would be
CS FOR SENATE BILL NO. 78(JUD), "An Act relating to liability of
certain limited liability organizations holding liquor licenses;
and relating to accidents involving the vehicle of a person
under the influence of alcoholic beverages."
2:11:40 PM
ESTHER TEMPEL, Staff, Senator Lesil McGuire, Alaska State
Legislature, on behalf of Senator McGuire, the sponsor by
request, explained that in order to provide the same limited
liability to limited liability companies (LLCs) that hold a
liquor license [as is currently provided to corporations that
hold a liquor license], Section 1 of SB 78 would add to
AS 04.21.035 specific references to limited liability
partnerships (LLPs) and foreign LLPs and to the partners of such
LLPs, and would delete the reference to AS 10.50, which
addresses LLCs specifically. Section 2 of the bill, by adding a
new section 315 to AS 09.65, would limit the liability of
taxi/limousine drivers who get in an accident while driving an
intoxicated person's vehicle from a licensed premise.
MS. TEMPEL indicated that these days, LLCs are often used as
alternatives to corporations, but the statutes related to
alcoholic beverages don't currently provide the members of an
LLC with the same protection against liability as is provided to
the owners of a corporation. With regard to limiting the
liability of taxi/limousine drivers who drive an intoxicated
person's vehicle from a licensed premise, the initial
legislation authorizing this liability-limitation passed in 2004
and included a sunset date of 2007, which was subsequently
overlooked. Section 2 of the bill contains language similar to
that of the initial, authorizing legislation, which was intended
to provide a deterrent to driving under the influence (DUI), and
would give taxi/limousine companies - except in the case of
recklessness, gross negligence, or intentional misconduct - some
legal immunity in the event that an accident occurs while the
taxi/limousine driver is driving the inebriated person's car.
2:15:14 PM
MS. TEMPEL indicated that without passage of SB 78, a lot of the
transportation companies [that had been participating in a
program established after passage of the initial legislation
aren't going to participate anymore] due to concerns about
liability. In response to a question, she mentioned that
Section 2's proposed AS 09.65.315(d) specifies what constitutes
consent by a motor vehicle owner. She surmised, therefore, that
if a person has his/her car keys taken away because he/she has
had too much to drink, that that in itself would constitute
consent under the bill.
REPRESENTATIVE GRUENBERG questioned whether Section 1's proposed
changes are necessary.
MS. TEMPEL offered her understanding that liquor licenses aren't
generally held by LLPs, and that without passage of Section 1,
in order to ensure that there is a limitation on its liability,
an LLC that wishes to hold a liquor license must first create a
shell corporation for that specific purpose.
2:22:53 PM
RICHARD M. ROSSTON, Attorney at Law, Dorsey & Whitney LLP,
concurred that LLPs aren't generally formed for the purpose of
holding a liquor license; ventured that the proposed changes to
AS 04.21.035 are necessary in order to provide LLCs that hold a
liquor license with the same limited liability as is currently
provided to corporations that hold a liquor license; and
surmised that back when the aforementioned initial legislation
was enacted, it wasn't widely known that in the business world,
LLCs are treated more like corporations than partnerships, and
so Section 1 of SB 78 is merely proposing to correct the initial
legislation's error in not also providing similar limited
liability for LLCs. Under current law, LLCs that wish to hold a
liquor license and still have limited liability must form a
separate corporation, and this has proven to be inefficient and
cumbersome.
2:26:39 PM
SILVIA VILLAMIDES, Director, Anchorage Cabaret, Hotel,
Restaurant & Retailers Association (Anchorage CHARR), mentioned
that she would be addressing Section 2 of SB 78, the proposed
limit on liability for taxi/limousine drivers who get in an
accident while driving an intoxicated person's vehicle from a
licensed premise. She then referred to and provided information
about a program started after passage of the initial legislation
- the "Off the Road" program, in which an inebriated person at a
participating establishment can request a free ride home and
have his/her vehicle driven home as well - and indicated favor
with having the limitation on liability for taxi/limousine
drivers reinstated in statute. In conclusion, she mentioned
that a survey conducted in 2002-2003 indicated that for a
variety of reasons, the majority of patrons were very reluctant
to leave their vehicles at a licensed premise overnight, thereby
illustrating the need for legislation such as SB 78, passage of
which would encourage participation by liquor-license holders in
the aforementioned program.
2:28:30 PM
BOB KLEIN, Chairman, Alcoholic Beverage Control Board ("ABC
Board"), Department of Public Safety (DPS); Member, Board of
Directors, Alaska Cabaret, Hotel, Restaurant and Retailer's
Association, Inc. (Alaska CHARR); Director, Sales and Marketing
(ph), Brown Jug, ventured that SB 78 is intended to fix the
problem that resulted from the initial, authorizing legislation
having contained a sunset provision that was subsequently
overlooked. He characterized the aforementioned "Off the Road"
program as a wonderful program, noting that it's nationally
recognized and has done well in the cities that have used it.
In response to a question, he clarified that because no one
realized at the time that the initial, authorizing legislation
had sunset, many participating establishments simply kept using
the program, and so now entities have been scrambling to find
adequate insurance, which is very expensive. On the issue of
LLCs and AS 04.21.35, Mr. Klein relayed that he concurs with Mr.
Rosston's summation, adding his belief that with the initial,
authorizing legislation, it was no one's intention to remove
"corporate-type protections" [from LLCs that hold a liquor
license]. In conclusion, he encouraged passage of SB 78.
2:31:45 PM
J. RANDALL CALL, General Counsel, Alyeska Resort; President,
Alyeska Resort Development L.L.C., offering some of Alyeska
Resort's acquisition history - as it related to LLCs,
corporations, and liability - as an example of the problem
warranting the changes proposed by Section 1, indicated that
passage of SB 78 is important for encouraging out-of-state
investors to participate in Alaska's business opportunities.
CHAIR GATTO, after ascertaining that no one else wished to
testify, closed public testimony on SB 78.
REPRESENTATIVE THOMPSON observed: "The language in Senate
Bill 78 does not prohibit or limit an injured driver or
passenger ... from pursuing damages from any other automobile
policy which may be available to them under the uninsured or
underinsured policy coverage under normal procedures of stacking
automobile insurance under AS 28.22.221."
MS. TEMPLE and REPRESENTATIVE GRUENBERG concurred.
2:35:38 PM
REPRESENTATIVE THOMPSON moved to report CSSB 78(JUD) out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, CSSB 78(JUD) was
reported from the House Judiciary Standing Committee.