Legislature(2011 - 2012)HOUSE FINANCE 519
04/06/2011 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB125 | |
| HB146 | |
| HB164 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 146 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 164 | TELECONFERENCED | |
| += | HB 125 | TELECONFERENCED | |
HOUSE BILL NO. 125
"An Act moving the Alcoholic Beverage Control Board to
the Department of Commerce, Community, and Economic
Development and relating to duties of that department;
and providing for an effective date."
1:42:44 PM
Vice-chair Fairclough continued with public testimony
related to HB 125.
DALE FOX, PRESIDENT & CEO, ALASKA CABARET, HOTEL,
RESTAURANT AND RETAILERS ASSOCIATION (ALASKA CHARR),
ANCHORAGE (via teleconference), continued his testimony. He
commented that for many years significant cooperation
existed between local police, State Troopers and the
Alcoholic Beverage Control (ABC) Board. He believed that
cooperation between agencies was necessary to enforce Title
4 statutes appropriately. A board relocation would not
substantially affect enforcement. He referred to the
document, "ABC Board Audit Review Subcommittee of the
Legislative Budget and Audit Committee" (copy on file). The
subcommittee concluded that the legislation would not
significantly restrict or change the enforcement
responsibilities of the ABC or the Department of Public
Safety (DPS).
Mr. Fox concurred with the audit review. He informed the
committee that the board's enforcement positions required a
background in enforcement. Currently, two former police
chiefs and a former state trooper held seats. Grant money
for compliance checks must solely be used for that purpose.
He expected enforcement efforts to remain robust. He opined
that the Department of Commerce, Community and Economic
Development (DCCED) was better suited to help businesses
with the licensing process through education, training and
support. He admitted that there were underage drinking
problems. He asserted that youth did not obtain alcohol
from licensees. Alaska was the best in the nation at
refusing service to minors at licensed premises.
1:46:35 PM
Mr. Fox did not expect any adverse effects from the
legislation.
BELEN COOK, MEMBER, ABC BOARD OF DIRECTORS, CORDOVA (via
teleconference), testified in opposition to HB 125. She
shared positive experiences related to the board. During a
board meeting in Nome a restaurant owner thanked the board
for providing compliance checks and took pride in passing
her establishment's inspection. She relayed further
positive experiences. Community members in Kotzebu voiced
that the ABC was very accessible and supportive regarding
local licensing and enforcement issues. Community members
in Cordova and other parts of the state shared concerns
about moving the board out of DPS. The residents feared
underage drinking would increase.
1:51:14 PM
Ms. Cook declared that board inspections are not "sting
operations." She urged the use of "compliance checks" in
discussions.
Representative Gara stated concerns about the effective
placement of the ABC. He queried the practical problems of
a move to DCCED. Ms. Cook worried that moving the board to
DCCED could result in slower and less efficient board
operations. Representative Gara asked for specifics. Ms.
Cook could not provide anything more concrete.
ELIZABETH RIPLEY, EXECUTIVE DIRECTOR, MAT-SU HEALTH
FOUNDATION, AND CHAIR, MAT-SU SUBSTANCE ABUSE PREVENTION
COALITION (via teleconference), testified against HB 125.
She spoke in support of strong ABC enforcement. She
announced that the coalition's mission was the prevention
and reduction of youth substance abuse. She explained the
three objectives of the coalition:
· Data driven strategies and decision making
· Coordinating community response to alcohol abuse
· Strive to be a leader in the state on the issue
Ms. Ripley relayed that the coalition sought to address
substance abuse at the local level through changing
community culture to support healthy families via sound
public policy. She related "alarmingly" high statistics of
teen alcohol use in the Mat-Su attributed to a coalition
survey; 68 percent of eleventh grade students had used
alcohol. Youth risk behavior survey data for Alaska
determined that 77 percent of seniors had used alcohol. She
opined that alcohol use had become a rite of passage for
teens. Mat-Su teens reported that alcohol was readily
available to them.
1:56:35 PM
Ms. Ripley furthered that the most prevalent access to
alcohol for youth took place in the home. She offered that
7 percent of teen access came from licensed establishments
that did not check identification. According to the ABC
website, 15 percent of establishment compliance checks
failed. The non-compliant establishments became portals to
access. She alleged that the legislation was developed to
curtail enforcement. Compliance checks were a proven
strategy to reduce youth access and consumption.
Ms. Ripley declared that moving the board to DCCED would
undermine enforcement. She emphasized that the coalition
advocated for increased and more uniform enforcement. The
coalition stood in strong opposition to HB 125.
Representative Hawker asked for evidence that HB 125 would
curtail enforcement. Ms. Ripley acknowledged her statement
was fear-based. She attributed her belief to testimony from
Legislative Budget and Audit Committee (BUD) hearings and
surmised that diminished enforcement was the motivation for
the bill.
Representative Hawker did not believe her statement or
conclusion was accurate. Ms. Ripley admitted that her
remarks were founded on industry pushing hard for the bill.
2:00:08 PM
Representative Joule wondered whether Ms. Ripley had heard
earlier testimony from industry member Bob Winn endorsing a
"three-legged stool" approach. He relayed that Mr. Winn
felt enforcement was at a minimum. He advocated increased
enforcement with the additional licensing and commerce
support. Ms. Ripley answered that she had heard the
testimony.
GLEN BRADY, PRESIDENT, SILVER GULCH BREWING, AND MEMBER,
CHARR (via teleconference), spoke in support of HB 125. He
referred to earlier testimony that spoke to the negative
consequences of ABC relocation in other states. He offered
that Alaska was more proactive than other states. Alaska
was only one of six states with mandatory alcohol server
training.
Mr. Brady characterized a productive relationship between
ABC and industry that addressed irresponsible retailers. He
desired a more collaborative relationship. He reiterated
that he did not support diminished enforcement efforts. The
licensing and economic development aspect of the industry
was adequately recognized. He thought the legislation would
help move the industry forward with education and
responsible business practices.
2:04:17 PM
Representative Wilson asked what the positive effects of
switching the ABC Board to DCCED were. Mr. Brady discerned
that board relocation would positively alter the nature of
the relationship with industry and allow for a
collaborative and open dialogue to address the issues.
JERRY MCCUTCHEON, ANCHORAGE (via teleconference), spoke
against the legislation. He opined that weakening
enforcement could lead to corruption and selective
enforcement. He likened the situation to the adage, "Don't
fix it if it isn't broke." He speculated that mandatory
identification checks were on the way and industry feared
that would mean less business. Industry could gain by not
having enforcement function properly.
2:08:35 PM
Mr. McCutcheon concluded that HB 125 was about non-
enforcement.
SHIRLEY GIFFORD, DIRECTOR, ALCOHOL BEVERAGE CONTROL BOARD,
DEPARTMENT OF PUBLIC SAFETY, addressed the audit
recommendations by the Division of Legislative Audit. She
reported that the board developed and wrote policies and
procedures. New fee, revenue, and reconciliation procedures
were implemented. New manuals for fee, revenue, and
reconciliation and licensing were distributed for key
positions in the agency. She informed the committee that
the board developed a strategic enforcement plan that
involved an inspection tracking form to ensure regular
inspections.
2:12:36 PM
Ms. Gifford expounded that the compliance check program was
a significant piece of the strategic enforcement plan.
Under the plan the state was divided into eight regions
with separate goals. She added that FY 11 was the first
year all of the goals were met. The board would perform
compliance checks once each year per establishment. She
furthered that the board implemented other improvements.
She created a check-list for board meetings. She improved
board meeting notification. Meeting notices and public
testimony were posted on the board's website. She enhanced
quality control measures. She established recording
compliance checks to ensure professional behavior by the
ABC investigator.
2:17:02 PM
Ms. Gifford referred to age assessment. The board
researched and wrote a compliance and procedure manual. She
studied procedures of 26 other states and incorporated the
best practices into Alaska's compliance check program. For
example, one particular state employed a panel of judges,
teachers, and citizens to approve the participants involved
in age assessment. She implemented a similar procedure and
believed the process was fair and objective to the
industry.
Vice-chair Fairclough noted that Ms. Gifford was speaking
to HB 206 [Extend Alcoholic Beverage Control Board] and HB
125. She asked for Ms. Gifford's position on HB 125. Ms.
Gifford felt her testimony was relevant. She wanted to
illustrate ABC's efforts to achieve an objective and fair
agency that cooperated with industry. The board was
committed to the same level of professionalism in any
department they resided.
Ms. Gifford addressed the issue of access to law
enforcement. She informed that the Board has two
investigators (Juneau and Fairbanks) housed with the Alaska
State Troopers. The investigators travel with the troopers
to remote areas. She worried that contact would be lost if
the agency was moved.
2:21:44 PM
Ms. Gifford stated concerns about private membership clubs.
She explained that private clubs were licensees and had to
show compliance with state statute and regulations. She
recommended private clubs exemption from compliance checks;
industry protested. She related problems gaining entry into
private clubs for compliance checks and requested magnetic
key or identification cards for random entry. She noted
instances of cooperation with clubs that provided magnetic
cards to the ABC. The clubs were 76 percent compliant
compared to other establishments 85 percent compliance
rate. She wondered how provisions in CS HB 125(L&C) would
affect private club compliance checks.
Representative Hawker asked how the board would operate
differently if relocated to DCCED.
2:26:47 PM
Ms. Gifford did not anticipate a change. Representative
Hawker referred to concerns outlined in public testimony.
He asked whether relocation would curtail the board's
enforcement activities. Ms. Gifford responded that she
intended to carry out enforcement.
Representative Hawker asked if she felt coerced to curtail
enforcement. Ms. Gifford responded in the negative.
Representative Hawker cited the collaboration with state
troopers and asked whether change to DCCED would adversely
affect those relationships. Ms. Gifford worried that
physical removal from DPS could result in enforcement
delays. The move could jeopardize the board's ability to
communicate and share proprietary information with the
troopers on a daily basis.
2:29:20 PM
Representative Hawker offered that the legislation would
relocate the ABC Board to DCCED from an administrative
standpoint. He asked if she thought the legislation would
prohibit the ABC investigators from being housed with state
troopers. Ms. Gifford answered that she did not.
Representative Hawker suggested that the committee request
an affirmation from DPS that it would not abandon or
compromise its relationship with ABC's investigative and
enforcement personnel.
Representative Edgmon requested clarification of industry
compliance statistics. Ms. Gifford answered that the 85
percent success rate was based on compliance checks
conducted. She felt it was a fair representation of the
industry.
Representative Edgmon asked what relocation to DPS would
entail for the board. Ms. Gifford reported that she did not
discuss the logistics of the move with DPS. She noted that
the commissioner of DPS offered assurance that the board
could remain in its current office for the near future.
Representative Doogan asked for clarification on the
meanings of "age assessment," "compliance check," and
"sting." Ms. Gifford explained how age assessment was done.
The board chose candidates between the ages of 18 to 20.5
years of age to pose as underage buyers. The board
determines if the "buyer" looked their age. She defined
that a compliance check was the attempt of the underage
buyer to purchase alcohol in an establishment. Sting was
the slang terminology the industry liked to use for
compliance check.
2:34:28 PM
Representative Gara recapped that the board's physical
relocation could create inefficient, untimely communication
between the troopers and the board. Ms. Gifford agreed.
Vice-chair Fairclough clarified that Ms. Gifford stated
that the commissioner of DPS assured that ABC could remain
in its present office. She asked whether that was accurate.
Ms. Gifford answered in the affirmative. She added that
there was uncertainty about future relocation.
Representative Gara requested a commitment from DPS that
the board could stay in its present location and maintain a
close relationship with the troopers. He asked whether she
had other concerns. Ms. Gifford replied that physical
location was only one aspect of being a part of DPS. There
were additional benefits to the board's identification with
the agency.
Co-Chair Stoltze contended that the board considered itself
an enforcement agency rather than a regulatory agency. The
industry was mostly compliant and not a criminal class. He
did not want to diminish the state's enforcement of illegal
activities, but endorsed a focus on regulation.
2:38:43 PM
Co-Chair Stoltze continued to discuss compliance and club
licenses. He believed that an ABC industry board member
pressed for compliance checks for clubs because they are
competitors with business establishments. He related
concerns about the way industry directed the board's
treatment of military organizations, VFW Halls, Elks, and
other fraternal organizations. He expressed dissatisfaction
with the industry for its competitive treatment of clubs,
but he was also unhappy with the way DPS treated industry.
He divulged that he was torn on the issue. He advocated for
strong regulation, but felt the industry was policed and
not treated as a regulated form of commerce. Ms. Gifford
did not believe that the board's approach was to single out
and go after private clubs. The board reasoned that clubs
should be included if other licensees were subject to
compliance checks. Co-Chair Stoltze wondered whether the
board had been directed by an industry member of the board.
2:43:25 PM
Ms. Gifford refuted the claim that the board conspired
against private clubs. She reiterated that she initially
excluded clubs from compliance checks because of the
difficulty to gain entry by ABC investigators. She
reexamined the policy and included clubs for compliance
checks. Private clubs were licensees and subject to the
same laws and regulation.
Vice-chair Fairclough referred to testimony from a police
officer in Fairbanks who believed private clubs should not
be subject to compliance checks.
Representative Wilson was alarmed to learn that the state
was employing underage adults to perform compliance checks.
Ms. Gifford replied that using older people would defeat
the purpose of the inspection, since no illegal act
occurred. The participants understood the purpose of the
program. The activity was covered by statute. The underage
employee was supervised by law enforcement or ABC
investigators.
2:47:47 PM
Representative Costello wondered about the mission of the
ABC Board. Ms. Gifford replied that the board's mission was
to protect the safety of communities through enforcement of
statute. Representative Costello referred to testimony by
Bob Winn, who had discussed the three legged stool concept
of regulation. She asked whether the board devoted time to
other areas besides enforcement. Ms. Gifford explained that
the ABC administered enforcement and licensing. Licensing
was a huge responsibility for the board. Two board
examiners and a licensing supervisor worked with licensees
on a daily basis. She added that licensing consumed more of
its time than enforcement.
Representative Edgmon wondered whether the board worked
with the Division of Occupational Licensing. Ms. Gifford
replied that ABC did their licensing in-house. The board
worked with the Department of Environmental Conservation
(DEC), the Department of Revenue (DOR), and local governing
bodies.
Representative Edgmon wondered whether information
technology services and ABC's statewide database were
provided by DPS. Ms. Gifford responded that the database
was provided by the agency.
2:50:57 PM
Vice-chair Fairclough CLOSED public testimony.
Vice-chair Fairclough requested that DPS address the issue
of housing the ABC Board if the legislation was adopted.
SUE STANCLIFF, SPECIAL ASSISTANT, OFFICE OF THE
COMMISSIONER, DEPARTMENT OF PUBLIC SAFETY, shared that
there was much discussion within the department but no
decision was made.
2:54:03 PM
Representative Gara remarked that the governor's office did
not have a position on the bill. He asked if ABC relocation
would affect enforcement. Ms. Stancliff stated that the
governor welcomed the public debate and did not endorse a
position. She reported that DPS shared the concerns related
to board relocation. The department was committed to do
whatever it took to make enforcement work if relocation
occurred. Alcohol issues were a serious problem in the
state. She referred to comments made by Commissioner
Masters that the department's single focus was "public
policy protecting the public's best interest…and safety."
The department's concern was that moving the agency would
be contrary to the express recommendations of two studies:
The Alaska Plan to Reduce and Prevent Underage Drinking and
the Alaska Strategic Safety Plan. Both plans were developed
with extensive public input.
Representative Joule asked whether DPS intended to reach
out to ABC in the event of physical relocation. Ms.
Stancliff responded that the department did not intend to
abandon the board. The department would include the board's
enforcement personnel in strategic planning. The department
would not include Ms. Gifford in the department's internal
directors meetings. She characterized the department's fear
as, "Out of sight, out of mind." She reiterated that
Commissioner Masters would do everything possible; his
overall goal was public safety.
2:59:01 PM
Representative Joule asked whether staying connected to ABC
included reaching across departmental lines for meetings to
continue. Ms. Stancliff answered in the affirmative.
HB 125 was HEARD and HELD in committee for further
consideration.
2:59:32 PM
AT EASE
3:07:29 PM
RECONVENED
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 146 Chronolgy Final.pdf |
HFIN 4/6/2011 1:30:00 PM |
HB 146 |
| CSHB146 Sponsor Statement.pdf |
HFIN 4/6/2011 1:30:00 PM |
HB 146 |
| Dec_17_RR_letter[1].pdf |
HFIN 4/6/2011 1:30:00 PM |
HB 146 |
| Corp_ARTA_2005_excerpt.pdf |
HFIN 4/6/2011 1:30:00 PM |
HB 146 |
| HB 164 CS WORKDRAFT 27-LS0444-I.pdf |
HFIN 4/6/2011 1:30:00 PM |
HB 164 |
| HB 125 Kate Burkhart AMHB Testimony and responses 040611.pdf |
HFIN 4/6/2011 1:30:00 PM |
HB 125 |
| HB 125 ABC Mission.pdf |
HFIN 4/6/2011 1:30:00 PM |
HB 125 |
| HB 146 CS WORKDRAFT 27-LS0505-I.pdf |
HFIN 4/6/2011 1:30:00 PM |
HB 146 |