Legislature(2005 - 2006)HOUSE FINANCE 519
02/07/2005 01:30 PM FINANCE
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* first hearing in first committee of referral
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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 transferred. 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 Committee. 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 State. 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 paid. 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 license. 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.