Legislature(2011 - 2012)HOUSE FINANCE 519

02/23/2012 01:30 PM FINANCE

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01:41:07 PM Start
01:50:07 PM HB125
02:22:23 PM SB23
02:33:38 PM Presentation: Domestic Violence & Sexual Assault Programs Update.
04:29:58 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Update: Domestic Violence & Sexual Assault TELECONFERENCED
Scheduled But Not Heard
Heard & Held; Assigned to Subcommittee
- Bring up adoption of HCS(L&C) & hold for
future public testimony & hearings
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved CSHB 125(L&C) Out of Committee
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                                                                    
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                                                                    
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                                                                    
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                                                                    
Vice-chair Fairclough believed  the formal complaint related                                                                    
to  the  Eagle River  area.  Ms.  Gifford responded  in  the                                                                    
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                                                                    
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                                                                    
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                                                                    
Co-Chair Stoltze  CLOSED public testimony. He  discussed the                                                                    
sunset  fiscal   note  that  reflected  the   costs  of  the                                                                    
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                                                                                                                    
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                                                                    

Document Name Date/Time Subjects
CSSB_30_(2dJUD)_Sponsor_Statement.pdf HFIN 2/23/2012 1:30:00 PM
SB 30
CSSB_30_(2dJUD)_Sectional.pdf HFIN 2/23/2012 1:30:00 PM
SB 30
CSSB_30_(2dJUD)_Notes.pdf HFIN 2/23/2012 1:30:00 PM
SB 30
CSSB_30_(2dJUD)_Explanation_of_Changes.pdf HFIN 2/23/2012 1:30:00 PM
SB 30
CSSB30_(2dJUD) _Support_Denali Drilling.pdf HFIN 2/23/2012 1:30:00 PM
SB 30
CSSB_30_(2dJUD)_Support_OVR.pdf HFIN 2/23/2012 1:30:00 PM
SB 30
CSSB_30_(2dJUD)_Support_NFIB.pdf HFIN 2/23/2012 1:30:00 PM
SB 30
CSSB_30_(2dJUD)_Support_Homebuilders.pdf HFIN 2/23/2012 1:30:00 PM
SB 30
HB 224 Sponsor Statment version D.pdf HFIN 2/23/2012 1:30:00 PM
HB 224
HB 224 Research and Articles.pdf HFIN 2/23/2012 1:30:00 PM
HB 224
HB 224 changes between original and CS.pdf HFIN 2/23/2012 1:30:00 PM
HB 224
Letter from Albert Berke reagrding closed captioning.docx HFIN 2/23/2012 1:30:00 PM
SB 23
SB 23 Support Aticles Recent.pdf HFIN 2/23/2012 1:30:00 PM
SB 23
HFIN-2.23.12.Choose Respect FY 2013 Budget Document.pdf HFIN 2/23/2012 1:30:00 PM
HFIN2.23.12Choose Respect Power Point.pdf HFIN 2/23/2012 1:30:00 PM
HFIN2.23.12DVSA_Dashboard_2012.pdf HFIN 2/23/2012 1:30:00 PM
CS WORKDRAFT HB 224 27-LS0466-X.pdf HFIN 2/23/2012 1:30:00 PM
HB 224
SB23 Back up.pdf HFIN 2/23/2012 1:30:00 PM
SB 23