Legislature(2005 - 2006)HOUSE FINANCE 519

02/07/2005 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSHB 15(L&C) Out of Committee
Heard & Held
Bills Previously Heard/Scheduled
HOUSE BILL NO. 15                                                                                                             
     An Act relating to seasonal alcoholic beverage                                                                             
     licenses; and providing for an effective date.                                                                             
MIKE PAWLOWSKI,  STAFF, REPRESENTATIVE KEVIN  MEYER, provided                                                                   
an overview of  HB 15.  He noted that there  are two distinct                                                                   
sections to the bill.                                                                                                           
The primary  purpose of  the bill is  to create an  alcoholic                                                                   
beverage  license for  outdoor recreation  lodges.   He noted                                                                   
that  at  present   time,  lodge  owners   provide  alcoholic                                                                   
beverages to their guests by either:                                                                                            
     · Encouraging guests to bring their own, or                                                                                
     · Providing alcoholic beverages free of charge during                                                                      
        meals, or                                                                                                               
     · Selling alcoholic beverages illegally.                                                                                   
That creates a  difficult situation for lodge  owners and the                                                                   
wholesale or package store seller to that lodge.                                                                                
Mr. Pawlowski  continued, under  the current system,  a lodge                                                                   
wishing  to sell  and provide  alcoholic  beverages to  their                                                                   
guests must obtain  both an alcohol dispensary  license and a                                                                   
package store  license, since  licenses are limited  based on                                                                   
population, many  lodge owners  cannot obtain a  license even                                                                   
if  they wanted  to.   HB  15 would  create  a new  alcoholic                                                                   
beverage license for outdoor recreation lodges.                                                                                 
He continued, HB 15 would limit the license by:                                                                                 
     · Allowing a licensee to serve only their overnight                                                                        
        guests and off-duty-staff, or                                                                                           
     · Expressly stating that the license may not be                                                                            
Licenses would cost  $1,250 for two years, as  opposed to the                                                                   
current  $4,000 cost.   Under  AS 04.11.680,  a licensee  may                                                                   
obtain a "seasonal" half-price  license.  He pointed out that                                                                   
the fiscal  note is positive,  assuming very few  lodges will                                                                   
actually get the license.                                                                                                       
Mr.  Pawlowski added  that the  second  part of  the bill  is                                                                   
found in  Section 3, an  amendment offered by  Representative                                                                   
Rokeberg  in the House  Labor and  Commerce Committee,  which                                                                   
exempt  licenses  issued  under the  old  public  convenience                                                                   
statute  from  the current  prohibition  on transfers.    The                                                                   
action  would allow the  last existing  license issued  under                                                                   
the  former   statute  to  be   transferred  with   the  same                                                                   
limitations on a transfer found in the current statute.                                                                         
The Alcohol  Beverage  Control (ABC) Board  testified  in the                                                                   
House Labor  and Commerce Committee  that they  supported the                                                                   
amendment and it passed without objection.                                                                                      
Mr. Pawlowski  summarized that HB 15 provides  an opportunity                                                                   
for lodge owners to develop another  revenue stream for their                                                                   
business, while providing a legal service to the guests.                                                                        
2:19:50 PM                                                                                                                    
Representative  Joule referenced  Section  4.   He asked  how                                                                   
that language  would impact  a community  that has  the local                                                                   
option.   Mr. Pawlowski advised  that the local  option under                                                                   
Chapter 4 always supercedes the licensing in the statutes.                                                                      
DOUG  GRIFFIN,  (TESTIFIED  VIA   TELECONFERENCE),  DIRECTOR,                                                                   
ALCOHOL BEVERAGE  CONTROL (ABC)  BOARD, ANCHORAGE,  explained                                                                   
that the  ABC Board has known  that some lodges  operating in                                                                   
the State  have been doing it  illegally, noting that  it has                                                                   
been difficult  to police.  Licensing  the entity will  be an                                                                   
improvement and the Board looks  forward to working with that                                                                   
new  type  of  license.   There  are  more  and  more  lodges                                                                   
springing  up  every  year  and  there  needs  to  be  proper                                                                   
training for  staff.  He offered  to answer questions  of the                                                                   
Mr.  Griffin   acknowledged  that   the  fiscal   impact  was                                                                   
difficult to determine, as the  Board had to make assumptions                                                                   
regarding how many  lodges there are and how  many would want                                                                   
to participate  in the program.   The ABC Board  continues to                                                                   
believe that  the legislation  would generate income  for the                                                                   
Vice-Chair Stoltze commented that  liquor licenses go through                                                                   
a local review  process and assumed that would  happen in the                                                                   
unorganized areas also.  Mr. Griffin  explained that would be                                                                   
difficult to determine.  There  are some lodges in Vice Chair                                                                   
Stoltze's area that  are remote that could qualify.   The ABC                                                                   
Board  continues  to see  licenses  going through  the  local                                                                   
review  process  as  part  of  their  renewal  package.    He                                                                   
suspected that most would be in the unorganized boroughs.                                                                       
Vice-Chair Stoltze  asked if a  second-class borough  had the                                                                   
authority  to   regulate  alcohol  licenses.     Mr.  Griffin                                                                   
responded  that there  is  a role  for  local governments  to                                                                   
place.   In the  Mat-Su Borough,  the Assembly  has chosen  a                                                                   
unique force of action for delegating  that responsibility to                                                                   
their planning department.   In most cases,  every two years,                                                                   
every license comes before the local Assembly.                                                                                  
Vice-Chair Stoltze commented that  he was not suggesting that                                                                   
the local  process is  not flawed and/or  political.   He did                                                                   
not believe  that most of the  lodges wanted to  get involved                                                                   
in  outside sales.    He asked  if there  was  some level  of                                                                   
public  interest.   Mr. Griffin  explained that  there are  a                                                                   
number of  different processes  that must be passed  through.                                                                   
In  an  unorganized  area,  Title  4,  there  is  a  petition                                                                   
requirement  to show  support for  the local  license in  the                                                                   
surrounding areas.   There are  requirements that  a petition                                                                   
process be followed before the license can be issued.                                                                           
Vice-Chair Stoltze  inquired if the structures  would have to                                                                   
be permanent  to qualify.  Mr.  Griffin replied that  had not                                                                   
been defined but there would be  discretion regarding each of                                                                   
the circumstances.   He  did not think  it was essential  and                                                                   
that each would have to meet certain criteria.                                                                                  
Vice-Chair  Stoltze  speculated  that  this would  not  be  a                                                                   
moneymaker  for the  State except  perhaps  through the  fees                                                                   
2:29:46 PM                                                                                                                    
Co-Chair  Meyer  explained  that  he  had  brought  the  bill                                                                   
forward  from  recommendations  received  by  the  Brown  Jug                                                                   
Warehouse.    They had  concerns  that  some of  lodges  were                                                                   
selling alcohol  without a license.  Co-Chair  Meyer believed                                                                   
that  if  a levy  were  charged  for  the alcohol,  it  would                                                                   
provide new  revenue for the State.   He understood  that the                                                                   
administration was  handled through the Department  of Public                                                                   
Safety, State Troopers.  Co-Chair  Meyer envisioned that they                                                                   
would handle the enforcement also.                                                                                              
Co-Chair Meyer pointed  out that there has been  concern that                                                                   
"bars" would be  set up in some remote areas.  In order to be                                                                   
served,  a guest  would be  required  to spend  at least  one                                                                   
night.   He inquired  if the ABC  Board was comfortable  with                                                                   
the language as currently written.   Mr. Griffin replied that                                                                   
they were comfortable with that language.                                                                                       
Co-Chair  Meyer  asked about  the  amendment  adopted by  the                                                                   
House Labor and Commerce Committee.   Mr. Griffin stated that                                                                   
it was  reviewed and that it  would not present  any problems                                                                   
for licensing.                                                                                                                  
In  response to  a  request by  Co-Chair  Meyer, Mr.  Griffin                                                                   
discussed the effect  of the Rokeberg amendment.   He advised                                                                   
that  there currently  exists a  public convenience  license;                                                                   
these licenses  are not transferable because  they are beyond                                                                   
the  quota.   He addressed  the anomaly  of the  law and  the                                                                   
history of transferring.                                                                                                        
Co-Chair Meyer questioned  if a lodge could  serve alcohol to                                                                   
guests  and then  add  the price  to their  room  rate.   Mr.                                                                   
Griffin  replied they  could  not; it  would  be contrary  to                                                                   
Title 4.                                                                                                                        
Vice-Chair Stoltze  asked if it  would be a  non-transferable                                                                   
license.   Mr.  Griffin replied  that there  is a  limitation                                                                   
making it non-transferable.   There was concern  expressed if                                                                   
a lodge were sold, the new owner  then has to apply for a new                                                                   
Representative  Hawker inquired  how the drafters  determined                                                                   
the $1,250  dollar amount.   Mr.  Pawlowski replied  that the                                                                   
detail in determining  that figure was arrived  at by looking                                                                   
at the  cost of a full  beverage-dispensing license  and then                                                                   
dividing it.   It's assumed that would be a  reasonable level                                                                   
a small business could afford.                                                                                                  
Representative  Hawker inquired  about  the drop  in fee  for                                                                   
seasonal  places.   Mr.  Pawlowski  discussed  that  seasonal                                                                   
licensing was addressed in AS 04.11.680.                                                                                        
2:40:21 PM                                                                                                                    
BOB  KLEIN,   (TESTIFIED  VIA   TELECONFERENCE),  BROWN   JUG                                                                   
WAREHOUSE, ANCHORAGE, explained  that he is currently wearing                                                                   
three hats as the Operations Manager  for Brown Jug, Chairman                                                                   
of   the  Alaska   Cabaret   Hotel  and   Restaurant   Retail                                                                   
Association (CHARR)  Government Affairs Committee  and alumni                                                                   
of the  ABC Board.   He  provided background  history of  the                                                                   
bill.  He explained how his business  deals with customers in                                                                   
Bush  Alaska  who  have  been  involved  in  illegal  alcohol                                                                   
activities.  Mr. Klein discussed  the benefits and privileges                                                                   
related  to the  legislation and  mentioned  that there  have                                                                   
been no objections regarding non-transferability.   He stated                                                                   
that  it is a  good bill  as it  closes the  gap and  answers                                                                   
statewide need for alcohol licensing.                                                                                           
Representative Foster  MOVED to report CS HB 15  (L&C) out of                                                                   
Committee  with  individual  recommendations   and  with  the                                                                   
accompanying fiscal notes.  There  being NO OBJECTION, it was                                                                   
so ordered.                                                                                                                     
CS  HB   15  (L&C)  was   reported  out  of   Committee  with                                                                   
"individual  recommendations and  with  zero note  #1 by  the                                                                   
Department  of  Fish  &  Game  and  fiscal  note  #2  by  the                                                                   
Department of Public Safety.                                                                                                    

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