Legislature(2011 - 2012)CAPITOL 120

04/13/2011 01:00 PM JUDICIARY


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 15 SEX OFFENDER/UNDERAGE ALCOHOL OFFENSE TELECONFERENCED
Heard & Held
+ SB 78 LIABILITY RELATED TO ALCOHOL TELECONFERENCED
Moved Out of Committee
+ HB 224 SALES OF NICOTINE PRODUCTS TO MINOR TELECONFERENCED
Moved CSHB 224(JUD) Out of Committee
<Bill Held Over from 4/11/11>
+ Bills Previously Heard/Scheduled TELECONFERENCED
              SB 78 - LIABILITY RELATED TO ALCOHOL                                                                          
                                                                                                                                
2:10:29 PM                                                                                                                    
                                                                                                                                
CHAIR GATTO announced  that the final order of  business would be                                                               
CS FOR SENATE BILL NO. 78(JUD),  "An Act relating to liability of                                                               
certain limited liability  organizations holding liquor licenses;                                                               
and  relating to  accidents  involving the  vehicle  of a  person                                                               
under the influence of alcoholic beverages."                                                                                    
                                                                                                                                
2:11:40 PM                                                                                                                    
                                                                                                                                
ESTHER  TEMPEL,  Staff,  Senator   Lesil  McGuire,  Alaska  State                                                               
Legislature,  on  behalf  of  Senator  McGuire,  the  sponsor  by                                                               
request,  explained that  in order  to provide  the same  limited                                                               
liability  to  limited liability  companies  (LLCs)  that hold  a                                                               
liquor  license [as  is currently  provided to  corporations that                                                               
hold  a  liquor  license],  Section  1 of  SB  78  would  add  to                                                               
AS 04.21.035   specific    references   to    limited   liability                                                               
partnerships (LLPs) and foreign LLPs  and to the partners of such                                                               
LLPs,  and  would  delete  the   reference  to  AS  10.50,  which                                                               
addresses LLCs specifically.  Section 2  of the bill, by adding a                                                               
new  section  315 to  AS  09.65,  would  limit the  liability  of                                                               
taxi/limousine drivers  who get in  an accident while  driving an                                                               
intoxicated person's vehicle from a licensed premise.                                                                           
                                                                                                                                
MS.  TEMPEL indicated  that these  days, LLCs  are often  used as                                                               
alternatives  to  corporations,  but   the  statutes  related  to                                                               
alcoholic  beverages don't  currently provide  the members  of an                                                               
LLC with the same protection  against liability as is provided to                                                               
the  owners  of a  corporation.    With  regard to  limiting  the                                                               
liability  of taxi/limousine  drivers  who  drive an  intoxicated                                                               
person's   vehicle  from   a   licensed   premise,  the   initial                                                               
legislation authorizing this  liability-limitation passed in 2004                                                               
and  included  a sunset  date  of  2007, which  was  subsequently                                                               
overlooked.  Section  2 of the bill contains  language similar to                                                               
that of the initial, authorizing  legislation, which was intended                                                               
to provide a deterrent to  driving under the influence (DUI), and                                                               
would  give taxi/limousine  companies  - except  in  the case  of                                                               
recklessness, gross negligence, or  intentional misconduct - some                                                               
legal immunity  in the  event that an  accident occurs  while the                                                               
taxi/limousine driver is driving the inebriated person's car.                                                                   
                                                                                                                                
2:15:14 PM                                                                                                                    
                                                                                                                                
MS. TEMPEL indicated that without passage  of SB 78, a lot of the                                                               
transportation  companies  [that  had  been  participating  in  a                                                               
program  established after  passage  of  the initial  legislation                                                               
aren't  going  to  participate anymore]  due  to  concerns  about                                                               
liability.    In  response  to a  question,  she  mentioned  that                                                               
Section 2's  proposed AS 09.65.315(d) specifies  what constitutes                                                               
consent by a motor vehicle  owner.  She surmised, therefore, that                                                               
if a  person has his/her car  keys taken away because  he/she has                                                               
had  too much  to drink,  that  that in  itself would  constitute                                                               
consent under the bill.                                                                                                         
                                                                                                                                
REPRESENTATIVE GRUENBERG questioned  whether Section 1's proposed                                                               
changes are necessary.                                                                                                          
                                                                                                                                
MS. TEMPEL offered her understanding  that liquor licenses aren't                                                               
generally held  by LLPs, and  that without passage of  Section 1,                                                               
in order to  ensure that there is a limitation  on its liability,                                                               
an LLC that  wishes to hold a liquor license  must first create a                                                               
shell corporation for that specific purpose.                                                                                    
                                                                                                                                
2:22:53 PM                                                                                                                    
                                                                                                                                
RICHARD  M.  ROSSTON, Attorney  at  Law,  Dorsey &  Whitney  LLP,                                                               
concurred that  LLPs aren't generally  formed for the  purpose of                                                               
holding a liquor  license; ventured that the  proposed changes to                                                               
AS 04.21.035 are  necessary in order to provide LLCs  that hold a                                                               
liquor license  with the same  limited liability as  is currently                                                               
provided  to  corporations  that   hold  a  liquor  license;  and                                                               
surmised that  back when  the aforementioned  initial legislation                                                               
was enacted, it  wasn't widely known that in  the business world,                                                               
LLCs are  treated more like  corporations than  partnerships, and                                                               
so Section 1 of SB 78  is merely proposing to correct the initial                                                               
legislation's  error  in  not   also  providing  similar  limited                                                               
liability for LLCs.  Under current  law, LLCs that wish to hold a                                                               
liquor  license and  still  have limited  liability  must form  a                                                               
separate corporation, and  this has proven to  be inefficient and                                                               
cumbersome.                                                                                                                     
                                                                                                                                
2:26:39 PM                                                                                                                    
                                                                                                                                
SILVIA   VILLAMIDES,   Director,    Anchorage   Cabaret,   Hotel,                                                               
Restaurant &  Retailers Association (Anchorage  CHARR), mentioned                                                               
that she  would be addressing  Section 2  of SB 78,  the proposed                                                               
limit  on liability  for  taxi/limousine drivers  who  get in  an                                                               
accident  while driving  an intoxicated  person's vehicle  from a                                                               
licensed premise.  She then  referred to and provided information                                                               
about a program started after  passage of the initial legislation                                                               
- the "Off the Road" program,  in which an inebriated person at a                                                               
participating  establishment can  request  a free  ride home  and                                                               
have his/her  vehicle driven home  as well - and  indicated favor                                                               
with  having  the  limitation  on  liability  for  taxi/limousine                                                               
drivers  reinstated in  statute.   In  conclusion, she  mentioned                                                               
that  a  survey  conducted  in 2002-2003  indicated  that  for  a                                                               
variety of reasons,  the majority of patrons  were very reluctant                                                               
to leave their vehicles at  a licensed premise overnight, thereby                                                               
illustrating the need  for legislation such as SB  78, passage of                                                               
which would encourage participation  by liquor-license holders in                                                               
the aforementioned program.                                                                                                     
                                                                                                                                
2:28:30 PM                                                                                                                    
                                                                                                                                
BOB  KLEIN,  Chairman,  Alcoholic Beverage  Control  Board  ("ABC                                                               
Board"),  Department of  Public  Safety (DPS);  Member, Board  of                                                               
Directors,  Alaska  Cabaret,  Hotel,  Restaurant  and  Retailer's                                                               
Association, Inc.  (Alaska CHARR); Director, Sales  and Marketing                                                               
(ph),  Brown Jug,  ventured that  SB 78  is intended  to fix  the                                                               
problem that  resulted from the initial,  authorizing legislation                                                               
having  contained  a  sunset   provision  that  was  subsequently                                                               
overlooked.   He characterized the aforementioned  "Off the Road"                                                               
program  as  a wonderful  program,  noting  that it's  nationally                                                               
recognized and  has done well  in the  cities that have  used it.                                                               
In  response to  a question,  he  clarified that  because no  one                                                               
realized at  the time that  the initial,  authorizing legislation                                                               
had sunset,  many participating establishments simply  kept using                                                               
the program,  and so  now entities have  been scrambling  to find                                                               
adequate insurance,  which is  very expensive.   On the  issue of                                                               
LLCs and AS 04.21.35, Mr. Klein  relayed that he concurs with Mr.                                                               
Rosston's  summation, adding  his belief  that with  the initial,                                                               
authorizing  legislation, it  was  no one's  intention to  remove                                                               
"corporate-type  protections"  [from  LLCs  that  hold  a  liquor                                                               
license].  In conclusion, he encouraged passage of SB 78.                                                                       
                                                                                                                                
2:31:45 PM                                                                                                                    
                                                                                                                                
J.  RANDALL CALL,  General  Counsel,  Alyeska Resort;  President,                                                               
Alyeska  Resort  Development  L.L.C., offering  some  of  Alyeska                                                               
Resort's   acquisition  history   -  as   it  related   to  LLCs,                                                               
corporations,  and  liability -  as  an  example of  the  problem                                                               
warranting  the changes  proposed  by Section  1, indicated  that                                                               
passage  of  SB  78  is important  for  encouraging  out-of-state                                                               
investors to participate in Alaska's business opportunities.                                                                    
                                                                                                                                
CHAIR  GATTO,  after ascertaining  that  no  one else  wished  to                                                               
testify, closed public testimony on SB 78.                                                                                      
                                                                                                                                
REPRESENTATIVE  THOMPSON  observed:    "The  language  in  Senate                                                               
Bill 78  does  not  prohibit  or   limit  an  injured  driver  or                                                               
passenger  ... from  pursuing damages  from any  other automobile                                                               
policy  which may  be available  to them  under the  uninsured or                                                               
underinsured policy coverage under  normal procedures of stacking                                                               
automobile insurance under AS 28.22.221."                                                                                       
                                                                                                                                
MS. TEMPLE and REPRESENTATIVE GRUENBERG concurred.                                                                              
                                                                                                                                
2:35:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  THOMPSON  moved to  report  CSSB  78(JUD) out  of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal  notes.    There  being no  objection,  CSSB  78(JUD)  was                                                               
reported from the House Judiciary Standing Committee.                                                                           

Document Name Date/Time Subjects
SB15 Sponsor Statement 03-31-11.pdf HJUD 4/13/2011 1:00:00 PM
SB 15
SB15 Version E 04-01-11.pdf HJUD 4/13/2011 1:00:00 PM
SB 15
SB15 Explanation of Changes (Senate).pdf HJUD 4/13/2011 1:00:00 PM
SB 15
SB15 Fiscal Note-DOC-OC 03-14-11.pdf HJUD 4/13/2011 1:00:00 PM
SB 15
SB15 Fiscal Note-LAW-CRIM 03-11-11.pdf HJUD 4/13/2011 1:00:00 PM
SB 15
SB15 Supporting Documents-Letter ABADA 03-29-11.pdf HJUD 4/13/2011 1:00:00 PM
SB 15
SB15 Supporting Documents-Letter APOA 02-14-11.pdf HJUD 4/13/2011 1:00:00 PM
SB 15
SB78 Sponsor Statement.pdf HJUD 4/13/2011 1:00:00 PM
SB 78
SB 78 Sectional Analysis.pdf HJUD 4/13/2011 1:00:00 PM
SB 78
SB78 Version I.pdf HJUD 4/13/2011 1:00:00 PM
SB 78
SB78 Fiscal Note-DPS-ABC 03-21-11.pdf HJUD 4/13/2011 1:00:00 PM
SB 78
SB78 Fiscal Note-LAW-CRIM 03-25-11.pdf HJUD 4/13/2011 1:00:00 PM
SB 78
SB78 Supporting Documents-Chart LLC vs LLP vs Corp.pdf HJUD 4/13/2011 1:00:00 PM
SB 78
SB78 Supporting Documents-Explanation of Proposed Amendments.pdf HJUD 4/13/2011 1:00:00 PM
SB 78
SB78 Supporting Documents-Letter Aleyska 02-14-11.pdf HJUD 4/13/2011 1:00:00 PM
SB 78
SB78 Supporting Documents-Letter CHARR.pdf HJUD 4/13/2011 1:00:00 PM
SB 78
HB224 CS Version I 04-11-11.pdf HJUD 4/13/2011 1:00:00 PM
HB 224
HB224 Sponsor Statment Version I 04-12-11.pdf HJUD 4/13/2011 1:00:00 PM
HB 224