Legislature(2007 - 2008)BARNES 124

03/04/2008 08:00 AM House COMMUNITY & REGIONAL AFFAIRS


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08:04:17 AM Start
08:04:43 AM HB327
09:42:58 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 327 ALCOHOL: LOCAL OPTION/LICENSING/MINORS TELECONFERENCED
Heard & Held
Working Group
+ Bills Previously Heard/Scheduled TELECONFERENCED
HB 327-ALCOHOL: LOCAL OPTION/LICENSING/MINORS                                                                                 
                                                                                                                                
8:04:43 AM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX announced  that the only order  of business would                                                               
be HOUSE  BILL NO.  327, "An Act  relating to  shipping, sending,                                                               
transporting,  or bringing  alcohol to  a local  option area  and                                                               
providing alcohol to  others in the local  option area, including                                                               
penalties  for violations;  relating to  furnishing alcohol  to a                                                               
minor  and  to civil  penalties  for  licensees whose  agents  or                                                               
employees furnish  alcohol to a  minor; relating  to manslaughter                                                               
as a  direct result of  ingestion of alcoholic  beverages brought                                                               
in violation of  a local option prohibition;  relating to reports                                                               
of  the court  concerning certain  alcohol violations  by minors;                                                               
making  conforming amendments;  and  providing  for an  effective                                                               
date."                                                                                                                          
                                                                                                                                
CO-CHAIR  LEDOUX announced  that HB  327 wouldn't  be moved  from                                                               
committee today,  but rather that  today's meeting is  to develop                                                               
legislation   that's  satisfactory   to   the  various   involved                                                               
entities.                                                                                                                       
                                                                                                                                
8:10:09 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  FAIRCLOUGH  reviewed the  issues  raised  at the  prior                                                               
hearing,   including  the   abuse  of   alcohol  by   minors  and                                                               
bootlegging  in rural  communities.   She noted  she has  a draft                                                               
amendment  that   proposes  using   fines  versus   closures  for                                                               
violations.   She  then  turned  to the  proposal  in  HB 327  to                                                               
prohibit shipping  alcohol in plastic  bottles to a  local option                                                               
community.    She  recalled  discussion that  the  use  of  glass                                                               
bottles would cause  additional costs in rural  communities.  She                                                               
also recalled hearing about due process  for the owner as well as                                                               
a  tracking  system for  minor  consumption.   She  informed  the                                                               
committee  that  she  has  an amendment  that  would  require  an                                                               
employee to  have a techniques  in alcohol management  (TAM) card                                                               
prior to  starting work.   Although the aforementioned  should be                                                               
functional for  urban areas, it  may be more difficult  for rural                                                               
areas to  comply to such  because of  the lack of  electronic TAM                                                               
card processing.                                                                                                                
                                                                                                                                
8:13:33 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MARY NELSON,  Alaska  State Legislature,  related                                                               
that there  is so  much damage  from alcoholism  in the  area she                                                               
represents.  She  remarked that she appreciates  the Alaska Rural                                                               
Justice and  Law Enforcement Commission's proposals  and those on                                                               
the ground  [dealing with  it] every  day.   Drawing on  her time                                                               
growing up  in various  villages and then  moving to  Bethel, she                                                               
informed  the committee  of the  difference  in sentiment  toward                                                               
alcohol  between the  villages and  areas  such as  Bethel.   For                                                               
instance, the alcohol database legislation  of last year resulted                                                               
in a large outcry from those  in Bethel who held the opinion that                                                               
the  aforementioned infringed  on their  rights whereas  those in                                                               
the  villages were  supportive of  it.   The  outcry from  Bethel                                                               
seemed to ignore  that Alaska has had local option  laws for over                                                               
20 years.   Furthermore, in  the U.S. there is  no constitutional                                                               
right to  possess alcohol.   When it  comes to alcohol  abuse and                                                               
illegal importation, Representative  Nelson characterized herself                                                               
as a  "hang'em high"  type of  person.   Therefore, she  said she                                                               
doesn't  have  a problem  with  the  punishment proposed  in  the                                                               
legislation.   However, Representative Nelson did  take exception                                                               
with  the  prohibition  against the  importation  of  alcohol  in                                                               
plastic  bottles  to  damp communities,  which  would  create  an                                                               
economic hardship on those in rural areas.                                                                                      
                                                                                                                                
8:18:36 AM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX  surmised that the  notion is that  glass bottles                                                               
being  transported  into a  local  option  area would  likely  be                                                               
heard.                                                                                                                          
                                                                                                                                
8:19:27 AM                                                                                                                    
                                                                                                                                
JOHN  GLICK, Major,  Deputy Director,  Division  of Alaska  State                                                               
Troopers,  Department   of  Public  Safety  (DPS),   related  his                                                               
agreement.   However, he  pointed out that  HB 327  addresses the                                                               
vendor shipping  the alcohol rather  than an  individual shipping                                                               
it.   If the  vendor ships  alcohol, he/she won't  ship to  a dry                                                               
village but rather to a community  that is damp, wet, or provides                                                               
the importation  or possession of  alcohol.  Therefore,  from the                                                               
shipper's perspective,  whether the  alcohol is glass  or plastic                                                               
isn't of concern.  From  an investigative aspect, people shipping                                                               
to dry  communities are  personally purchasing  the alcohol  in a                                                               
municipality  and  packaging  it   themselves.    Often  such  an                                                               
individual  will  change  the  vessel in  which  the  alcohol  is                                                               
shipped in order  to avoid detection.  Moreover, even  if a glass                                                               
container is used  and the postmaster hears  clinking, that alone                                                               
isn't enough information to obtain  a search warrant.  Therefore,                                                               
Mr. Glick  said he didn't  believe the prohibition  against glass                                                               
containers had much  impact on law enforcement's  ability to curb                                                               
alcohol in rural Alaska.                                                                                                        
                                                                                                                                
8:21:40 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SALMON   opined  that  the   prohibition  against                                                               
plastic containers  is a moot  issue because if someone  wants to                                                               
transport alcohol to  a local option community,  they'll devise a                                                               
way to do so.                                                                                                                   
                                                                                                                                
8:22:44 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DAHLSTROM  commented  that it  appears  that  the                                                               
legislation  addressed  the two  separate  issues  of alcohol  in                                                               
rural Alaska and  establishments in Alaska serving  alcohol.  She                                                               
opined  that  it  seems  that  there  should  be  two  pieces  of                                                               
legislation.   She then  inquired as to  why couldn't  an alcohol                                                               
product be  removed from an establishment  that serves/sales more                                                               
than just alcohol.                                                                                                              
                                                                                                                                
8:25:18 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JAY RAMRAS, Alaska  State Legislature, related his                                                               
support  of  Senator Olson's  legislation  last  year.   He  then                                                               
expressed  concern   with  regard  to  the   prohibition  against                                                               
shipping  alcohol   in  plastic  containers.     He  related  his                                                               
understanding that air carriers  are frustrated with muling drugs                                                               
and alcohol to rural Alaska  because the oversight is inadequate.                                                               
Representative Ramras said  that if this legislation  moves on to                                                               
the  House Judiciary  Standing Committee,  he will  defer to  the                                                               
thoughts  of  rural  Alaska  representatives  and  balance  those                                                               
against the Department of Law (DOL) and DPS.                                                                                    
                                                                                                                                
REPRESENTATIVE RAMRAS  related his belief  that HB 327  is really                                                               
two  pieces   of  legislation:    rural   legislation  and  urban                                                               
legislation.    Representative  Ramras  then  related  the  track                                                               
record he  has had with  four liquor licenses, which  is included                                                               
in  the  committee packet,  and  asked  the committee  to  ponder                                                               
whether he is a good operator or not.                                                                                           
                                                                                                                                
8:29:54 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NELSON  said  that  she  is  sympathetic  to  the                                                               
distributors,  which  she  assumed experience  high  turnover  of                                                               
employees who are fairly young and  making the minimum wage.  She                                                               
inquired as to why  Representative Ramras's establishments failed                                                               
the few times they did.                                                                                                         
                                                                                                                                
REPRESENTATIVE RAMRAS  related the difficulty in  determining the                                                               
age  of a  patron in  a darkened,  loud establishment.   He  then                                                               
highlighted the broad  spectrum of the labor pool  with regard to                                                               
education.   The penalties seem  to be modeled after  the Holiday                                                             
case  regarding  tobacco,  he remarked.    He  characterized  the                                                               
penalties  proposed  in HB  327  as  Draconian and  the  proposed                                                               
monetary penalties  as a poor substitute.   Representative Ramras                                                               
informed the committee that in  the summers he has 300 employees,                                                               
all of  which hold TAM cards.   Every time those  employees serve                                                               
someone, they  are at  risk.   He then  related an  instance last                                                               
year in which  two 23-year olds were carded and  they didn't have                                                               
adult driver's  licenses.   The two said  they didn't  have adult                                                               
driver's licenses  because the line  is too long at  the Division                                                               
of Motor Vehicles (DMV).   Representative Ramras related that the                                                               
deputy commissioner of  DPS shared the frustration  with the time                                                               
it takes at the DMV.   Representative Ramras then emphasized that                                                               
as an operator  he doesn't make money by trying  to serve minors.                                                               
Therefore, he characterized [the  violations] of a good operator,                                                               
like himself and the vast  amount of operators, as bycatch during                                                               
the  stings.     Furthermore,   monetary  penalties   will  place                                                               
employees at risk.                                                                                                              
                                                                                                                                
8:33:35 AM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX inquired  as to any suggestion  for the penalties                                                               
if the monetary penalties and closures are too Draconian.                                                                       
                                                                                                                                
REPRESENTATIVE RAMRAS opined that  the Alcoholic Beverage Control                                                               
Board ("ABC Board") already has  enough latitude and authority to                                                               
address this without  [this legislation].  He  reiterated that he                                                               
doesn't  make  money,  at any  level,  by  intentionally  serving                                                               
alcohol to minors  and yet he questioned where he  would be if he                                                               
were to receive a third violation at Pike's Landing.                                                                            
                                                                                                                                
8:35:29 AM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX  then inquired  as to what  the ABC  Board should                                                               
do.                                                                                                                             
                                                                                                                                
REPRESENTATIVE  RAMRAS said  he has  a lot  of confidence  in Mr.                                                               
Griffin, ABC  Board.  The ABC  Board is doing its  job very well.                                                               
To  address  minors  consuming, Representative  Ramras  suggested                                                               
passing HB  75, which  offers a  proactive approach  that doesn't                                                               
decimate the  hospitality industry.   He  related an  incident in                                                               
which  he  defended  one  of   his  bartenders  who  had  been  a                                                               
professional for 20  years and [who received a  violation].  That                                                               
bartender needed  glasses.  The bartender's  attorney advised the                                                               
bartender to  find another vocation because  another charge would                                                               
be a class C felony.                                                                                                            
                                                                                                                                
8:37:05 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NELSON commented  that  there's  no link  between                                                               
Representative Ramras' establishment and rural Alaska.                                                                          
                                                                                                                                
REPRESENTATIVE RAMRAS echoed earlier  comments that HB 327 should                                                               
be two separate pieces of legislation.                                                                                          
                                                                                                                                
8:37:30 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CISSNA  characterized  alcohol  as  legal  poison                                                               
because  it's  extraordinarily  dangerous and  can  kill  people.                                                               
Furthermore, much  of the  negative behavior  in Alaska  is often                                                               
related to alcohol and state  government pays "astounding amounts                                                               
related to alcohol."  She then  expressed the need to review good                                                               
business practices  and for  those serving alcohol  to see  it as                                                               
something  that can  really hurt  individuals.   Furthermore, the                                                               
social perspective needs to be changed with regard to alcohol.                                                                  
                                                                                                                                
8:40:27 AM                                                                                                                    
                                                                                                                                
DOUGLAS  GRIFFIN,  Director,  Alcoholic  Beverage  Control  Board                                                               
("ABC  Board"),   Department  of  Public  Safety,   informed  the                                                               
committee that he  was part of a working group  on alcohol issues                                                               
that  assisted  the  Alaska Rural  Justice  and  Law  Enforcement                                                               
Commission.   The  notion of  the  plastic bottles  was that  the                                                               
alcohol would  be in  glass so  that when  it was  repackaged and                                                               
shipped  it could  be  more easily  detected  through the  noise,                                                               
breakage,  and inability  to burp  the bottle.   He  informed the                                                               
committee that those  who purchase alcohol in a  wet community to                                                               
package  themselves  would  purchase plastic  because  it's  more                                                               
difficult to detect  and because of the  lighter shipping weight.                                                               
He  indicated  his agreement  with  Mr.  Glick that  there  isn't                                                               
really  concern  with regard  to  the  package stores  that  sell                                                               
alcohol by  written order.   Mr. Griffin then told  the committee                                                               
that he was also part of  the group that developed the draft plan                                                               
to prevent and  reduce underage youth.  That  group developed the                                                               
notion  of  levying some  penalty  to  those licenses  that  sell                                                               
alcohol  to  underage  individuals.   He  acknowledged  that  the                                                               
degree  to which  a business  owner is  held responsible  for the                                                               
actions of  its employees is a  tough call.  The  notion of fines                                                               
versus closures  seems to be  a step  in the right  direction, he                                                               
remarked.   From his personal perspective,  Mr. Griffin suggested                                                               
that it  would be appropriate  to impose a relatively  small fine                                                               
as a  wake up  call to  the licensee  that he/she  needs to  do a                                                               
better  job   training  or  retraining  or   emphasizing  certain                                                               
practices.       With    regard   to    Representative   Ramras's                                                               
establishments, Mr. Griffin said he  didn't believe that [the ABC                                                               
Board] performed  the number of compliance  checks Representative                                                               
Ramras related, although the number  of failures is correct.  Mr.                                                               
Griffin  pointed   out  that  the   ABC  Board   regulates  small                                                               
establishments that, on  a good day, may have 50  customers up to                                                               
the large establishments that serve  100s of customers in a given                                                               
day.  Therefore, the more  transactions an establishment has, the                                                               
more likely mistakes will be made.   Mr. Griffin then related his                                                               
own opinion  that the  penalties against  the clerks  and servers                                                               
are a bit severe.                                                                                                               
                                                                                                                                
8:46:29 AM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX  inquired as to  the tools the ABC  Board already                                                               
has to address this problem.                                                                                                    
                                                                                                                                
MR. GRIFFIN said  that Title 4 includes  provisions [that address                                                               
the  problem] while  offering some  protections to  the licensee.                                                               
For  instance AS  04.16.150 specifies:  "A  licensee may  neither                                                               
knowingly allow agents  or employees to violate  this title ...."                                                               
Furthermore, AS  04.21.030 specifies:   "The licensee has  a duty                                                               
to exercise  that degree of  care that a reasonable  person would                                                               
observe to ensure  that a business under the  person's control is                                                               
lawfully  conducted."   With the  aforementioned provisions,  the                                                               
ABC Board doesn't feel that  it can take immediate action against                                                               
a licensee that has had  an employee fail because reasonable care                                                               
is generally taken to  mean the server is 21 years  of age at the                                                               
time of hire and has taken  TAM training.  However, the ABC Board                                                               
does  levy  penalties  when  the  licensee  is  convicted  of  an                                                               
infraction of Title 4.  Although  the license of the licensee can                                                               
be suspended  for up to 45  days, such a penalty  isn't generally                                                               
exercised.   Generally, the  penalty is  a seven-day  closure per                                                               
offense and  perhaps a $1,000  fine.  Mr. Griffin  explained that                                                               
if  the  ABC  Board  sees  a pattern  of  compliance  checks,  an                                                               
accusation against  the licensee  can be  written and  brought to                                                               
the ABC  Board.   Such an accusation  can go all  the way  to the                                                               
administrative hearing level.                                                                                                   
                                                                                                                                
8:49:40 AM                                                                                                                    
                                                                                                                                
GLENN  BRADY,   Chairman,  Board  of  Directors,   Cabaret  Hotel                                                               
Restaurant & Retailer's Association  (CHARR); Owner, Silver Gulch                                                               
Brewing Company,  said that he takes  exception to Representative                                                               
Cissna's comments that alcohol is  poison as there are documented                                                               
and proven health  benefits of the use of  alcohol in moderation.                                                               
He said that he has serious  concerns about the intent of HB 327.                                                               
As an  owner of a brewery  and as the proprietor  of a restaurant                                                               
with a dispensary license, Mr.  Brady informed the committee that                                                               
approximately 65,000 patrons will  come through his establishment                                                               
this year.   Currently, he employs 46, but that  will increase to                                                               
about 80 [in  the summer].  Mr. Brady related  his agreement with                                                               
Mr. Griffin that the tools are  in place to ensure due diligence.                                                               
Furthermore, all licensees have an investment to protect.                                                                       
                                                                                                                                
MR.  BRADY, referring  to bootlegging,  said it's  a concern  and                                                               
noted  his  agreement  that  HB  327  is  really  two  pieces  of                                                               
legislation.   He then said  that he  has heard some  great ideas                                                               
that aren't  reflected in the  legislation, such as  the creation                                                               
of more local control to regulate  the flow of alcohol into rural                                                               
areas.   Mr. Brady then  recalled the information that  7 percent                                                               
of the alcohol going into the  hands of minors is from licensees,                                                               
yet all the enforcement and  regulatory effort is focused on that                                                               
7 percent.   He offered  that the other  93 percent is  where the                                                               
focus should be.   He pointed out that there  are direct shipping                                                               
issues that  aren't being  addressed and  the U.S.  Supreme Court                                                               
struck down  a case  in which  Maine tried  to force  carriers to                                                               
check identification (ID).  "So, we've  got some holes in ... the                                                               
opportunities for  underage folks  to receive alcohol  via direct                                                               
shipment  that  ...  are  much more  difficult  to  regulate  and                                                               
arguably a  much more  substantial part of  the problem  than the                                                               
licensed beverage industry that  have investments to protect." he                                                               
remarked.                                                                                                                       
                                                                                                                                
8:52:59 AM                                                                                                                    
                                                                                                                                
CO-CHAIR   FAIRCLOUGH,  drawing   from  testimony,   related  her                                                               
understanding that  there is a  difference between small  mom and                                                               
pop  establishments and  small mom  and  pop establishments  that                                                               
perpetually  serve alcohol  to  minors  and large  establishments                                                               
that follow business  practices.  She acknowledged  that one size                                                               
doesn't fit  all for any  issue.   Therefore, she inquired  as to                                                               
why  the  penalties are  the  same  no  matter  the size  of  the                                                               
establishment and the  volume it serves.  She asked  if there has                                                               
been any discussion with regard  to tailoring the penalties based                                                               
on the volume the establishment serves.                                                                                         
                                                                                                                                
MR. GRIFFIN suggested that perhaps  a range of penalties could be                                                               
specified and allow  the licensee to attend an  ABC Board meeting                                                               
to   discuss  the   fact   pattern  of   the   violation.     The                                                               
aforementioned would  place on  the record  issues of  volume and                                                               
additional steps  the licensee  might take.   Mr.  Griffin opined                                                               
that some type of penalty against  a licensee is good and perhaps                                                               
it should be graduated and  progressive.  The statute, he opined,                                                               
isn't  set up  to  allow  the board  to  exercise discretion  and                                                               
tailor  the decisions,  although  he expressed  the  need not  to                                                               
appear arbitrary.   He  suggested that the  ABC Board  would like                                                               
some parameters  for failures, such  that reductions  could occur                                                               
for certain  behavior or  penalties could  be increased  if there                                                               
are aggravating factors.                                                                                                        
                                                                                                                                
8:57:52 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  FAIRCLOUGH restated  her  earlier question.   She  then                                                               
related  the desire  to impose  meaningful fines  because a  $500                                                               
fine to  the owner  of Chilkoot  Charlie's doesn't  mean anything                                                               
whereas  it  would   to  the  owner  of  a  small   mom  and  pop                                                               
establishment.                                                                                                                  
                                                                                                                                
8:59:41 AM                                                                                                                    
                                                                                                                                
ANNE  CARPENETI,  Assistant   Attorney  General,  Legal  Services                                                               
Section, Criminal  Division, Department of Law,  pointed out that                                                               
in   sentencing   the   legislature  has   adopted   ranges   for                                                               
imprisonment and fines.  The  person who imposes the imprisonment                                                               
and  fine  is relied  upon  to  use  his/her discretion  in  each                                                               
particular case.   Ms. Carpeneti  said that it's difficult  to do                                                               
more than  set guidelines.   Drawing from  the several  years she                                                               
has worked  with the ABC  Board, she opined  that it does  a good                                                               
job with the  discretion it has.  It would  be difficult to write                                                               
into  statute  more  than ranges  and  some  direction  regarding                                                               
exercising that discretion.  She  suggested that there would have                                                               
to be  a range  that would  apply to everyone  and the  ABC Board                                                               
could  make   the  call  considering   volume.     Ms.  Carpeneti                                                               
reiterated  that the  ABC  Board  does a  good  job  in terms  of                                                               
applying the discretion it currently has.                                                                                       
                                                                                                                                
9:01:21 AM                                                                                                                    
                                                                                                                                
CO-CHAIR FAIRCLOUGH  reiterated the issue of  the varying volumes                                                               
establishments have.  If there  is a violation of serving alcohol                                                               
to an  individual under the  age of 21, Co-Chair  Fairclough said                                                               
she didn't believe  the ABC Board has much  discretion [no matter                                                               
the volume of the establishment].                                                                                               
                                                                                                                                
MS.  CARPENETI  reminded  the   committee  that  the  legislature                                                               
provides prosecutors much discretion  with regard to choosing the                                                               
charge.   She opined  that laws  have to  be drafted  with ranges                                                               
that consider the character of the  activity that is trying to be                                                               
prevented  and  provide  the enforcers  the  discretion  to  make                                                               
choices.  "I  know that the ABC  Board can do that.   In terms of                                                               
criminal law, I  know our prosecutors do that all  the time," she                                                               
related.                                                                                                                        
                                                                                                                                
9:04:06 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA clarified that  she isn't a prohibitionist,                                                               
but rather  she focuses  on health and  the outcomes  [of alcohol                                                               
use].   She  indicated that  she doesn't  have any  problems with                                                               
responsible   proprietors who  are doing what  they can,  but she                                                               
recalled that there was testimony that indicated otherwise.                                                                     
                                                                                                                                
9:05:12 AM                                                                                                                    
                                                                                                                                
MR.  BRADY related  that  [CHARR]  has always  been  in favor  of                                                               
regulation.   In fact,  almost a  year ago  he addressed  the ABC                                                               
Board   to  forward   the  partnership   concept  in   which  the                                                               
[hospitality]  industry  wants to  work  with  the ABC  Board  to                                                               
address  these substantial  and significant  issues.   He related                                                               
that [CHARR]  is strongly in favor  of the control of  abuse, the                                                               
prevention of drunk driving, and  penalizing those behaviors in a                                                               
uniform and reasonable manner.   However, since the ABC Board has                                                               
moved to DPS there has been  a mentality change such that it's no                                                               
longer a partnership  between the regulators and  the industry to                                                               
improve  the  state.    He opined  that  under  this  legislation                                                               
there's a direct  comparison between a package store  owner and a                                                               
drug  dealer.   Mr. Brady  related his  agreement that  there are                                                               
substantial costs  to the abuse  of alcohol and  [the hospitality                                                               
industry] wants  to be a part  of the solution.   He then related                                                               
agreement with  earlier testimony  that the  ABC Board  does have                                                               
the latitude to  weed out the very small  percentage of operators                                                               
who aren't  responsible.  He  further related that  [CHARR] would                                                               
like  the  ABC  Board  to  be  returned  to  a  more  like-minded                                                               
department such  as the Department  of Revenue or  the Department                                                               
of  Commerce,  Community,  & Economic  Development  because  it's                                                               
regulation of a business enterprise.                                                                                            
                                                                                                                                
9:08:50 AM                                                                                                                    
                                                                                                                                
DIANE CASTO,  Section Manager, Prevention and  Early Intervention                                                               
Section, Division of Behavioral  Health, Department of Health and                                                               
Social Services,  clarified that nationwide somewhere  between 7-                                                               
30 percent of youth obtain  alcohol through retailers.  She noted                                                               
her agreement that  [retailers] are only one piece  of the puzzle                                                               
and  thus the  state  has utilized  other  strategies in  various                                                               
pieces of legislation.   Ms. Casto opined that  it's necessary to                                                               
view  this problem  in a  broad, multi-branch  program as  HB 327                                                               
alone won't solve the underage  drinking problem.  Ms. Casto then                                                               
turned to  the number of  transactions that  are part of  a sting                                                               
operation.   The  ABC Board,  DPS, only  has one  investigator to                                                               
perform alcohol stings  for the entire state  whereas for tobacco                                                               
there  are three  investigators.   She estimated  that the  three                                                               
investigators for tobacco perform a  sting on .001 percent of all                                                               
tobacco sale  transactions.  Therefore, the  [department] doesn't                                                               
know   whether  the   majority  of   transactions  are   good  or                                                               
problematic.    Furthermore,  the  system only  catches  a  small                                                               
percentage of the transactions.                                                                                                 
                                                                                                                                
MS. CASTO  then addressed  the best  strategies to  prevent youth                                                               
access  to  alcohol  as related  in  the  "Regulatory  Strategies                                                               
Preventing Youth Access  to Alcohol:  Best  Practices," which was                                                               
prepared  for  the Office  of  Juvenile  Justice and  Delinquency                                                               
Prevention by the Pacific Institute  for Research and Evaluation.                                                               
As a  grantee of public  funds, all community agencies  are being                                                               
asked  to institute  best  practice programs.    If that's  being                                                               
requested of those to whom the  state gives funds, it's only fair                                                               
for the state  to also consider best practices, she  opined.  The                                                               
aforementioned  article  relates  two  best  practice  strategies                                                               
related  to  this  issue.     One  such  best  practice  strategy                                                               
specified in the aforementioned document is as follows:                                                                         
                                                                                                                                
     Institute comprehensive compliance  check programs that                                                                    
     are   ongoing  and   communitywide;  include   a  media                                                                    
     advocacy  component, and  follow  strict guidelines  to                                                                    
     ensure fairness.                                                                                                           
                                                                                                                                
MS.  CASTO explained  that the  media advocacy  component of  the                                                               
compliance  check  program ensures  that  the  norm that  alcohol                                                               
doesn't  mix with  other activities  is being  established.   The                                                               
other  best practice  discussed  in  the aforementioned  document                                                               
specifies the following:                                                                                                        
                                                                                                                                
     Impose  strict   administrative  penalties   on  retail                                                                    
     licensees  for  violations   of  sales-to-minors  laws,                                                                    
     which  increase with  severity  for repeated  offenses.                                                                    
     Complement  administrative penalties  in serious  cases                                                                    
     by   permitting   civil  liability   lawsuits   against                                                                    
     licensees  based on  common  law negligence  principles                                                                    
     and by imposing criminal sanctions.                                                                                        
                                                                                                                                
MS.   CASTO  related   that  the   document  titled   "Regulatory                                                               
Strategies Preventing  Youth Access to Alcohol:   Best Practices"                                                               
discusses  the  need to  ensure  consistent  and swift  penalties                                                               
along with some  level of a mandatory penalty.   With tobacco the                                                               
following two  issues were successful:   consistent and mandatory                                                               
penalties, ceiling and floor that  can be used per the situation.                                                               
Therefore,  although there  will always  be some  level of  fine,                                                               
there  can be  aggravating  factors that  increase  the fine  and                                                               
mitigating factors that decrease the  fine.  Having some level of                                                               
fine illustrates  the seriousness  of the  matter.   For tobacco,                                                               
another important factor is that  both the clerk and the licensee                                                               
receive   some  level   of   fine.     The   notion  behind   the                                                               
aforementioned  is that  if  the business  is  held liable,  it's                                                               
setting   the  standard   and  taking   responsibility  for   its                                                               
employees.   Ms. Casto then  pointed out that the  Best Practices                                                               
document specifies  that while  penalties should  be significant,                                                               
they  shouldn't be  too severe,  especially for  a first  offense                                                               
because law  enforcement officials  tend not to  impose penalties                                                               
if   the  punishment   is  perceived   to  be   too  severe   and                                                               
disproportionate to  the seriousness of the  offense.  Therefore,                                                               
a  middle  ground   needs  to  be  found  so   that  everyone  is                                                               
responsible and that a high standard  is set such that there's no                                                               
tolerance for  underage drinking  nor an attitude  that retailers                                                               
and servers can serve to minors without consequence.                                                                            
                                                                                                                                
9:17:36 AM                                                                                                                    
                                                                                                                                
DALE  FOX,  President,  Cabaret  Hotel  Restaurant  &  Retailer's                                                               
Association  (CHARR),  expressed  concern that  this  legislation                                                               
makes  waitresses and  shippers felons  after two  offenses.   He                                                               
questioned  whether an  employee with  no mistakes  for 20  years                                                               
should have  to change jobs  because he/she  would be a  felon if                                                               
he/she makes another mistake.   To equate those generally doing a                                                               
good  job who  make a  mistake  with bootleggers  and others  who                                                               
deliberately  furnish alcohol  to minors  isn't appropriate.   He                                                               
opined  that for  those instances  in which  someone deliberately                                                               
furnishes  alcohol to  a  minor, there  probably  should be  high                                                               
penalties.    He  noted  his   agreement  that  there  should  be                                                               
penalties because  this is a  serious matter.  However,  if major                                                               
closures or  fines are  implemented it  will cause  businesses to                                                               
close  and people  to lose  their jobs.   He,  too, characterized                                                               
[the penalties  in HB 327]  as Draconian.  He  then characterized                                                               
the rules  regarding shipping  to rural  Alaska as  paper Tigers,                                                               
and  opined that  they  do  nothing to  stop  the importation  of                                                               
alcohol into damp communities because  everyone has a relative to                                                               
whom the  alcohol over the limit  could be shipped.   With regard                                                               
to stings,  Mr. Fox said they  are important and there  should be                                                               
more because  compliance checks do  keep people alert.   However,                                                               
the penalty needs to be rational and not make people a felon.                                                                   
                                                                                                                                
9:23:45 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  LEDOUX asked  if those  who receive  more alcohol  than                                                               
allowed are  [charged with a felony]  as are those who  ship more                                                               
than the allowed amount of alcohol.                                                                                             
                                                                                                                                
9:24:18 AM                                                                                                                    
                                                                                                                                
MS.  CARPENETI responded  that it  depends upon  the facts.   Ms.                                                               
Carpeneti then asked  to provide remarks on some  of the comments                                                               
made today.   She said that many of the  comments today have been                                                               
complaints about  the current law.   With regard to  the concerns                                                               
about the  manslaughter provision,  Ms. Carpeneti  explained that                                                               
the  legislation  does adopt  a  manslaughter  provision, but  it                                                               
doesn't make a clerk subject to manslaughter.                                                                                   
                                                                                                                                
MR.  FOX interjected  that the  manslaughter provision  refers to                                                               
the shipper.                                                                                                                    
                                                                                                                                
MS. CARPENETI pointed  out that the provision  addresses a person                                                               
who sells  without a license, a  person who is bootlegging  not a                                                               
clerk who  is selling  under a liquor  license.   She highlighted                                                               
the language  on page  7, line  13, refers  to an  individual who                                                               
violates  AS  04.11.010,  which is  selling  without  a  license.                                                               
Therefore,  the  provision  doesn't  place  clerks  in  the  same                                                               
position  as drug  dealers.   Current law  makes the  second time                                                               
alcohol is  furnished to a  minor a  class C felony,  she pointed                                                               
out.   Furthermore, under  current law  bootlegging is  already a                                                               
class C felony if one  bootlegs over specified amounts in current                                                               
law.   Current  law also  specifies that  bootlegging of  smaller                                                               
amounts is  a class  A misdemeanor.   This  legislation specifies                                                               
that  it's  a  class  C  felony  only  if  one  is  convicted  of                                                               
bootlegging  a  third  time  in  a  period  of  10  years.    The                                                               
aforementioned is  similar to the [penalties]  for other offenses                                                               
such as drunk driving.   With regard to the characterization that                                                               
shipping alcohol to rural Alaska  is a paper Tiger, Ms. Carpeneti                                                               
pointed out that the [shipping  amounts] are specified in current                                                               
law.   In regard to stings,  [DPS] doesn't have enough  people to                                                               
perform stings.  Ms. Carpeneti said  that moving the ABC Board to                                                               
DPS has been a factor in causing the implementation of stings.                                                                  
                                                                                                                                
9:27:11 AM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX surmised then that  the portion of HB 327 related                                                               
to  importation/exportation of  alcohol to  rural Alaska  doesn't                                                               
effect the shipping clerks at all.                                                                                              
                                                                                                                                
MS. CARPENETI responded that the  provision speaks to bootlegging                                                               
alcohol in  violation of local  option laws.   "Manslaughter does                                                               
not apply  to clerks because  if you're a  clerk in ...  a liquor                                                               
store, you are operating under a license," she emphasized.                                                                      
                                                                                                                                
MR.  GRIFFIN reminded  the committee  that  the alcohol  database                                                               
will go into effect July 1st.   He acknowledged that although the                                                               
database won't solve the problem  of bootlegging in rural Alaska,                                                               
it  will do  a better  job in  preventing honest  mistakes.   The                                                               
database will work such that a  written order sale will be denied                                                               
if  the   purchaser  has  reached  the   specified  legal  limit.                                                               
Currently, there's no  violation when a shipper  sells alcohol in                                                               
an amount over  the legal limit to an  individual because there's                                                               
no knowledge  that an  individual will  exceed the  monthly limit                                                               
for  written  orders.    Furthermore,  there will  be  a  way  to                                                               
regulate the  written order process  in a fashion that  isn't too                                                               
Draconian.  The database also allows  the collection of data in a                                                               
more progressive manner for use by law enforcement.                                                                             
                                                                                                                                
9:30:22 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NELSON  related she  is  a  bit offended  at  the                                                               
assumption that these  [laws] are paper Tigers.   She pointed out                                                               
that having statutory  limits on the amount of  alcohol one could                                                               
order by written  order was a paper Tiger because  one could have                                                               
the legal  limit of  alcohol shipped  on five  different carriers                                                               
and  there was  no  way  to track  that  prior  to the  database.                                                               
Moreover, the  limit [of alcohol  for shipment by  written order]                                                               
is very high  for hard liquor while the limit  for wine is small.                                                               
Hard liquor is where the majority of the problem lies, she said.                                                                
                                                                                                                                
9:33:53 AM                                                                                                                    
                                                                                                                                
MR. FOX  said that he doesn't  mean to offend anyone,  but anyone                                                               
who  wants  to get  around  the  current law  can.    He said  he                                                               
disagreed  with Ms.  Carpeneti regarding  the provision  [page 7,                                                               
lines 13-16]  in HB 327 that  he believes makes a  clerk a felon.                                                               
He   directed  attention   to  AS   04.11.010  and   said  that's                                                               
specifically where  the limits  are listed.   Therefore,  a clerk                                                               
who  sends the  wrong amount  to a  local option  area becomes  a                                                               
felon  and  faces  a  possible   manslaughter  charge  under  the                                                               
proposed  provision in  HB 327.   With  regard to  the department                                                               
working  with the  [hospitality] industry,  Mr. Fox  informed the                                                               
committee  that although  the department  offered  to lessen  the                                                               
penalties on  clerks and waitresses  to misdemeanors,  that's not                                                               
what's included in the legislation.                                                                                             
                                                                                                                                
9:35:48 AM                                                                                                                    
                                                                                                                                
MR. BRADY  suggested that perhaps  shipment could be  required to                                                               
go  through  a  central  receiving point  for  pickup,  which  he                                                               
characterized as  a more  rational approach.   He  then expressed                                                               
concern with  the erosion of  personal responsibility,  but noted                                                               
that  recent addition  of civil  penalties for  licensees against                                                               
underage  people  trying  to  purchase  is  a  great  step.    He                                                               
indicated the need to place more  of the burden of the offense on                                                               
the  individual  who  is  actually trying  to  perpetrate  it  as                                                               
opposed  to the  "sometimes  innocent, hard  working person"  who                                                               
makes a mistake.  He said he  would be very willing to help craft                                                               
and work through the aforementioned  possibilities.  The industry                                                               
wants to be a  partner and doesn't want there to  be a problem in                                                               
the state due to the presence  of their businesses.  He expressed                                                               
the need  to develop [provisions]  that don't place  the criminal                                                               
and administrative burden on the clerk.                                                                                         
                                                                                                                                
9:38:05 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  LEDOUX  asked  if  the Alaska  Rural  Justice  and  Law                                                               
Enforcement  Commission gave  any  consideration to  making it  a                                                               
felony for those who have ordered too much alcohol.                                                                             
                                                                                                                                
MR.  GRIFFIN  responded that  he  didn't  believe the  commission                                                               
addressed  that  but  rather  focused on  the  database  and  the                                                               
shipping side.   Mr. Griffin  suggested that a  more preventative                                                               
approach is being taken to  ensure that the written order process                                                               
isn't being  abused.  Again,  the desire  was to ensure  that the                                                               
written  order  process and  the  shipment  of alcohol  to  rural                                                               
Alaska wasn't abused or being used to facilitate bootlegging.                                                                   
                                                                                                                                
9:40:01 AM                                                                                                                    
                                                                                                                                
MS. CARPENETI recalled that SB  128 adopted a class A misdemeanor                                                               
when one purchases alcohol knowing  it was illegally brought into                                                               
a community.                                                                                                                    
                                                                                                                                
9:40:30 AM                                                                                                                    
                                                                                                                                
MS. NELSON  commented that she  doesn't feel that  rural Alaskans                                                               
and the industry  are natural adversaries.  She  then related her                                                               
understanding  that the  committee  intends to  separate the  two                                                               
issues in HB 327.  She  noted agreement with Mr. Brady that there                                                               
should be  more culpability  to the  bootlegger making  the order                                                               
than to the, perhaps, innocent shipper who may not know better.                                                                 
                                                                                                                                
9:41:25 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DAHLSTROM  informed the committee that  her office                                                               
is in the  process of ordering a legal  opinion regarding whether                                                               
the clerk is made a felon under this proposed legislation.                                                                      
                                                                                                                                
9:41:59 AM                                                                                                                    
                                                                                                                                
CO-CHAIR LEDOUX  welcomed any legal  opinions on the  matter from                                                               
the various interested parties.   She then informed the committee                                                               
that she  intended to have  a committee substitute  prepared such                                                               
that the  rural issues  would be  considered separately  from the                                                               
other issues.                                                                                                                   
                                                                                                                                
[HB 327 was held over.]                                                                                                         

Document Name Date/Time Subjects