Legislature(2011 - 2012)HOUSE FINANCE 519
02/23/2012 01:30 PM FINANCE
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|Presentation: Domestic Violence & Sexual Assault Programs Update.|
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
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." CRYSTAL SCHOENROCK, BUSINESS OWNER, NIKISKI (via teleconference), testified in support of the legislation. She thought the Alcohol Beverage Control (ABC) Board was putting the onus on the state troopers and police to monitor local bars in her area. She expressed frustration that two troopers had come to her bar recently and had notified the bartender to close because she was without a Techniques of Alcohol Management (TAM) card; the troopers had not known that employees were allowed 30 days to obtain the card. She believed the Department of Commerce, Community and Economic Development (DCCED) would handle licensing better than Department of Public Safety (DPS). She stressed that the board needed to educate law enforcement about their responsibilities related to the issue. Representative Gara asked for detail on rules related to obtaining a TAM card. Ms. Schoenrock replied that bartenders had 30 days from their date of hire to obtain the card. Representative Gara wondered why the trooper's mistake was the fault of the ABC Board. Ms. Schoenrock did not believe the mistake had been the board's fault, but that the board needed to educate troopers on ABC Board regulations. ANNA SAPPAH, EXECUTIVE DIRECTOR, ALASKA ADDICTION PROFESSIONALS ASSOCIATION (via teleconference), vocalized opposition to the legislation; the association did not believe that the move would benefit the public or state. She relayed that the board's focus on public safety and enforcement had reduced youth alcohol consumption since 1995. She noted the negative repercussions of underage drinking. She stressed that enforcement programs had the power to save lives. She believed moving the board from DPS to DCCED would interrupt or reduce current enforcement efforts. 1:50:07 PM KATE BURKHART, EXECUTIVE DIRECTOR, ADVISORY BOARD ON ALCOHOLISM AND DRUG ABUSE (ABADA), DEPARTMENT OF HEALTH AND SOCIAL SERVICES, spoke against the legislation. She emphasized that the 88 percent compliance rate was due to the effectiveness of the ABC Board and the industry. The continued decrease in underage drinking reports was currently lower than the national average and was due to the hard work of the prevention partners, communities, ABC Board, and industry. She discussed less positive outcomes in other states. The ABADA was concerned that gains towards reducing underage drinking could be lost if the ABC Board was moved to DCCED. The advisory board was concerned that a transition plan had not been made public including, where the ABC Board would reside and how the licensing support would be provided. States that did not have the ABC Board under a law enforcement agency had less positive outcomes related to underage drinking and alcohol related fatalities. She emphasized the ABADA's concern about potential unintended consequences. 1:52:26 PM SHIRLEY GIFFORD, DIRECTOR, ALCOHOL BEVERAGE CONTROL BOARD, DEPARTMENT OF PUBLIC SAFETY, vocalized opposition to the bill. The ABC Board had been working hard to adhere to its audit recommendations. She invited the committee members to ride along with board investigators on their compliance checks. She believed much of the industry testimony had been based on anecdotal information and noted that stories always had two sides. Compliance checks had been going and had increased from 700 to 804 in FY 10 to FY 11. Industry had also increased its compliance from an 85 percent success rate in FY 10 to an 88 percent success rate in FY 11. She stressed that compliance checks resulted in compliance. Ms. Gifford relayed that Jeff Jessee with the Alaska Mental Health Trust Authority, Diane Casto from Department of Health and Social Services, Dr. Rivera from the University of Alaska, and board members would meet to address recommendations on underage drinking included in a University of Alaska Anchorage report. She communicated that the board worked with licensees on a daily basis to help them succeed. She discussed that the ABC Board trained law enforcement and licensees and their employees. She pointed to reports that underage drinking in Alaska was lower than the national average and believed that the board had been doing a good job. She opined that the increased compliance checks had added to the success rate. 1:56:55 PM Vice-chair Fairclough asked whether there were two enforcement officers. Ms. Gifford replied that there were four state investigators: one in Juneau, one in Fairbanks, and two in Anchorage. One of the investigators was a full- time compliance officer and was funded by an underage drinking enforcement grant through the Department of Health and Social Services. Vice-chair Fairclough referred to a complaint related to aggressive compliance enforcement in business establishments. She wondered how many complaints there had been and whether there was a staffing issue that caused some of the issues. Ms. Gifford replied that she had received the first formal complaint two days earlier. There had been instances in which the Cabaret, Hotel, Restaurant and Retailers Association (CHARR) had asked questions about specific occurrences that she had followed up on. She explained that the group had been satisfied with the information she provided. Vice-chair Fairclough believed the formal complaint related to the Eagle River area. Ms. Gifford responded in the affirmative. Representative Neuman asked how the move to DCCED would change the ABC Board's enabling language. Ms. Gifford did not believe a change would occur. She added that she had not received any direction from the department on what would change. Representative Neuman wondered whether the board's enforcement authority would change under DCCED. Ms. Gifford believed the board's enforcement authority would not change, but could not be certain. Representative Neuman wondered what oversight DPS currently had over the ABC Board. Ms. Gifford replied that the board was housed under DPS for administrative purposes only; the department provided computer support, personnel, and resources, but her position answered to the ABC board of directors. She did not expect the oversight would change under DCCED. Co-Chair Thomas referred to prior testimony from an individual who had acted on a decision made by the ABC Board related to a brewery license. He wondered what the final outcome had been. Ms. Gifford replied that the issue had been discussed at the recent board of directors meeting; she believed the board was on the road to rectifying the issue. The business had not been shut down and the board was continuing work to come up with a solution. 2:01:20 PM Co-Chair Thomas wondered whether there was an employee responsible for reappropriation of liquor licenses from one location to another. He referred to a Skagway case in which a license had not been done in accordance with the ABC Board's policies. Ms. Gifford was not familiar with the case. Co-Chair Thomas explained that issue related to a pizzeria that wanted to move a license closer to a cruise ship location in the downtown area. The business owner had fought ABC board decisions. Ms. Gifford replied that the licensee had requested a duplicate license for her establishment, but she had not received one. Co-Chair Thomas asked whether there was an ABC agent assigned to oversee the process. Ms. Gifford responded that there was a licensing unit that included one supervisor and two business registration examiners. Applicants were assigned to one of the two examiners when they applied for a license. She clarified that the license in question had gone through the proper process and had not been approved by the board. 2:04:15 PM Representative Gara asked why ABC boards housed in non- public safety departments were not as successful at reducing underage drinking. Ms. Gifford did not have the statistical information. She believed the majority of ABC boards throughout the country were housed under public safety or revenue departments and several were stand-alone agencies. DAVID LAMBERT, SELF, FAIRBANKS (via teleconference), supported the bill. He opined that the legislation was not anti-alcohol and was a bill designed to put the ABC Board under the appropriate department. He explained that end- users needed education, which would help with enforcement. He stressed that the bill did not change the board's enforcement power. He emphasized that the bill would provide training and industry support and would help people. Co-Chair Stoltze CLOSED public testimony. He discussed the sunset fiscal note that reflected the costs of the department. Co-Chair Thomas MOVED to report CSHB 125(L&C) out of committee with individual recommendations and the accompanying fiscal notes. Representative Gara OBJECTED for discussion. He noted that substance abuse agencies had a legitimate perspective, which aimed at the reduction of alcohol abuse in the state. He discussed the need to weigh how the bill would impact the board and to determine what would maximize the board's ability to enforce the laws to reduce underage drinking and to increase compliance. He hoped DCCED would not divert money towards the promotion of the state's alcohol industry if the bill passed. Co-Chair Stoltze discussed that the fiscal notes reflected that the board would be funded the same under DCCED as it had been under DPS. 2:10:39 PM AT EASE 2:12:58 PM RECONVENED Representative Gara WITHDREW his OBJECTION. Co-Chair Stoltze MAINTAINED the OBJECTION for further discussion. Representative Doogan believed that the conversation represented "one of the more baffling discussions" that he had heard in committee. The bill, which was about moving a board from one agency to another, seemed more innocuous than it had been perceived. The legislature was involved only because the law required it; he was not present to judge the competency of the ABC Board. He did not believe anyone had made a compelling case for or against the transfer of the board. Co-Chair Thomas referred to earlier discussion about a business owner who had been given advice by the ABC Board that it had later changed; the owner had been challenged by the board only after investing between $2 million and $3 million in a business. He hoped the board would reimburse the owner's legal fees related to the issue. Co-Chair Stoltze believed there were merits on both sides of the issue. He explained that the bill had not been rushed through and there had been a significant amount of public debate. He stated that the issue came down to a policy call. REPRESENTATIVE MIKE HAWKER spoke from his standpoint chairman of the House Legislative Budget and Audit Committee and explained that the HB 125 was not his personal legislation. There had been a significant number of public hearings on the debate and the committee had issued a letter stating its opinion that the board should be moved to DCCED. 2:18:17 PM Vice-chair Fairclough explained that the appropriate fiscal notes included: one zero fiscal note from DCCED and; one fiscal impact note from DCCED containing an FY 13 $247,000 request and a total of $1,538.2 million in the governor's FY 13 budget. Co-Chair Stoltze relayed that the public safety fiscal note would not be adopted. Representative Doogan agreed with Representative Hawker's characterization of the Legislative Budget and Audit Committee process. Representative Hawker clarified that the bill represented the lateral movement of an existing agency, which would only be funded under one department. Representative Guttenberg agreed with previous comments regarding weighing the interests of both sides of the issue. He believed it was important to "watch out what you wish for," and a move to DCCED may not be as advantageous as people thought. There being NO further OBJECTION, CSHB 125(L&C) was REPORTED out of committee with a "no recommendation" and with one fiscal impact note and one zero fiscal note from the Department of Commerce, Community and Economic Development.