Legislature(2005 - 2006)CAPITOL 17

01/24/2005 03:15 PM LABOR & COMMERCE

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Audio Topic
03:24:11 PM Start
03:25:04 PM HB15
04:10:22 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Bills Previously Heard/Scheduled
HB  15-SEASONAL HUNT/FISH LODGE LIQUOR LICENSE                                                                                
CHAIR  TOM ANDERSON  announced that  the only  order of  business                                                               
would  be  HOUSE  BILL  NO.  15, "An  Act  relating  to  seasonal                                                               
alcoholic  beverage  licenses;  and providing  for  an  effective                                                               
3:25:04 PM                                                                                                                    
REPRESENTATIVE KEVIN MEYER, Alaska  State Legislature, sponsor of                                                               
HB 15, presented a brief overview  of the bill, which pertains to                                                               
the sale  of alcohol  in remote  lodges.   He stated  that remote                                                               
lodges  can either  give free  alcohol  to the  guests, have  the                                                               
guests  bring their  own alcohol,  or charge  the guests  for the                                                               
alcohol,  which is  currently illegal.   He  said that  the lodge                                                               
owners are  in a difficult  situation because they are  trying to                                                               
provide  alcohol  to their  guests,  but  at  the same  time  the                                                               
wholesalers  want to  make  sure that  these  owners are  legally                                                               
distributing the beverages.                                                                                                     
REPRESENTATIVE MEYER explained that  under the current system the                                                               
lodge owners  would have  to purchase  a full  dispensary license                                                               
costing $2,500.   Lodge owners  would be required to  pay another                                                               
$1,500  to  sell  off  sale  alcoholic  beverages.    He  further                                                               
explained that  HB 15 will  create a seasonal  alcoholic beverage                                                               
license  for  lodges by  combining  the  two licenses  into  one,                                                               
allowing the  lodge to serve  the beverages to  overnight guests.                                                               
The  license would  be  only be  good  for six  months  out of  a                                                               
calendar year.   The new  license would  be much cheaper  for the                                                               
lodges, and  would provide the  lodge owners with  the additional                                                               
revenue raised from charging the guests for beverages.                                                                          
REPRESENTATIVE MEYER defined a seasonal  hunting or fishing lodge                                                               
as: "A resort  facility that provides lodging,  food, and outdoor                                                               
hunting or  fishing guiding services to  its registered overnight                                                               
guests that is  not directly accessible by automobile."   He said                                                               
that [his staff] has been  in contact with the Alcoholic Beverage                                                               
Control Board  (ABC), which  has suggested  some changes  to this                                                               
3:29:51 PM                                                                                                                    
DOUG   GRIFFIN,  Director,   Alcoholic  Beverage   Control  Board                                                               
remarked  that the  board  welcomes  the bill.    He opined  that                                                               
lodges have  fallen between the  cracks in the  present licensing                                                               
scheme  in Alaska  and  that the  current  licensing process  for                                                               
lodges  is   very  expensive.     He  said  that   one  critical,                                                               
nonnegotiable  part  of  the  bill is  the  limitation  that  the                                                               
alcohol be served only to overnight  guests; if the lodge is near                                                               
a village or community, the lodge  should not be allowed to serve                                                               
liquor  to  the residents.    He  explained that  by  regulation,                                                               
liquor and liquor licenses in Alaska are limited by population.                                                                 
3:33:07 PM                                                                                                                    
Mr. GRIFFIN continued:                                                                                                          
     What you may have ...  are good fishing areas where you                                                                    
     have   a  small   village  which   by  our   population                                                                    
     requirement should only have  one liquor license ... of                                                                    
     each type.   That doesn't really work  for lodges where                                                                    
     you may have several lodges  and maybe the first one in                                                                    
     the door gets the only  license that's allowed for that                                                                    
     [area]  based on  the population  limitations under  AS                                                                    
     04.11.400.    So there  are  some  provisions under  AS                                                                    
     [04.11.400]  that  relax population  [limitations]  for                                                                    
     tourism  licenses   and  ...  for   public  convenience                                                                    
     licenses for  restaurants that serve beer  and wine....                                                                    
     We  think a  similar  exception needs  to  be made  for                                                                    
     lodges.   But  again,  the reason  we feel  comfortable                                                                    
     making  that exception  for  population  is that  we're                                                                    
     focusing  on  a  business  that   is  not  serving  the                                                                    
     community at large or ... any residents.                                                                                   
3:35:27 PM                                                                                                                    
MR. GRIFFIN expressed  his belief that the bill  should provide a                                                               
broader  definition of  a  lodge  and that  the  duration of  the                                                               
licenses should  not be limited to  a six-month season.   He gave                                                               
some examples  of lodges  that may  expand operations  beyond the                                                               
peak summer months.   He said, "We suggest that  that be expanded                                                               
and still provide an option  for the seasonal lodge operation ...                                                               
which is provided  for under AS 04.11.680, where  someone can ...                                                               
get just a  seasonal license good for six months  during a twelve                                                               
month  period  and basically  pay  a  half  price for  the  lodge                                                               
MR. GRIFFIN suggested that the best  way to address [the issue of                                                               
lodge alcohol licenses] is to base  the license fee on the number                                                               
of rooms in the lodge; he suggested  a fee of $250 per room for a                                                               
full year license and half of that for a seasonal operation.                                                                    
MR. GRIFFIN, referring to  Representative Meyer's definition that                                                               
a lodge be inaccessible by  automobile, noted that there are some                                                               
remote lodges that  people can drive to; for  example, lodges off                                                               
of the  Denali Highway or  Parks Highway  or lodges on  the Kenai                                                               
that are remote, but  accessible by road.  He said  that it is up                                                               
to the legislature to decide how to define that.                                                                                
3:40:14 PM                                                                                                                    
CHAIR ANDERSON concurred with Mr. Griffin and said:                                                                             
     At first  blush this bill  appears ... to  be consumer-                                                                    
     protective  [in] nature.   The  caution  though is  the                                                                    
     notes  that you  made regarding  definition if  a lodge                                                                    
     and how detailed  we want to be.  ...  It would be nice                                                                    
     to know  if there  is a  devaluation of  current liquor                                                                    
     licenses. For  instance, I can  think of places  that I                                                                    
     have been  to ... in  rural Alaska ... where  there are                                                                    
     quote   'lodges'  already   existing   who  have   full                                                                    
     dispensary  licenses  which  are  worth  between  $100,                                                                    
     $150,000 where  someone can come  in and secure  one of                                                                    
     these type  permits to distribute and  sell alcohol and                                                                    
     then  maybe cause  a problem  or ...  a devaluation  of                                                                    
     those  other  liquor  licenses   at  nearby  lodges  or                                                                    
     hotels.    And so  that  definition  being secured  and                                                                    
     tightened is  important, I think, in  this legislation,                                                                    
     finding out  the effect on  other lodges in  the state.                                                                    
CHAIR ANDERSON  said that he  would like  to hear what  the state                                                               
Cabaret Hotel  Restaurant and  Retailers Association  (CHARR) and                                                               
the Anchorage  Restaurant and  Beverage Association  (ARBA) think                                                               
of the proposed bill.                                                                                                           
3:42:40 PM                                                                                                                    
REPRESENTATIVE LEDOUX asked for  the definition of "road system".                                                               
She  said that  the  entire  island of  Kodiak  is  off the  road                                                               
system,  though there  are state  roads. She  also asked  if this                                                               
bill expanded  the number  of people  who are  able to  get lodge                                                               
licenses, or if  it merely meant that the people  who are already                                                               
able to get those licenses can get them on a biannual basis.                                                                    
REPRESENTATIVE MEYER  replied that one of  the planned amendments                                                               
would eliminate  the mention of a  road system.  He  deferred the                                                               
second question to Mr. Griffin.                                                                                                 
MR. GRIFFIN answered  that all licenses are  currently renewed on                                                               
a biannual basis.                                                                                                               
REPRESENTATIVE MEYER then clarified  that the only difference the                                                               
bill would  make is  to require  the lodge  to have  one seasonal                                                               
lodge  license instead  the currently  required  two licenses  (a                                                               
dispensary license and a package license).                                                                                      
REPRESENTATIVE LEDOUX  asked if this  bill would allow  lodges to                                                               
have a license  even if they did not qualify  for a license under                                                               
state law in the past.                                                                                                          
3:46:35 PM                                                                                                                    
MR. GRIFFIN answered:                                                                                                           
     It  depends, ...  depending on  the  circumstances.   I                                                                    
     don't see  this allowing  someone to be  able to  get a                                                                    
     license  if they're  within the  jurisdiction of  a dry                                                                    
     village or a  damp community that's ...  banned sale by                                                                    
     local option.   So those  people are just still  out of                                                                    
     luck ...  If there  is a population  limitation because                                                                    
     there is,  say, a  community nearby  that's not  dry or                                                                    
     damp, then  with the amendment  that I  suggested where                                                                    
     they be  some type of  a population exception  made for                                                                    
     ... these businesses, then yes,  it would allow someone                                                                    
     perhaps under that  scenario to get a  ... license that                                                                    
     they ...  might not be  able to  get any other  type of                                                                    
     liquor license  that might be  available. ... If  we do                                                                    
     some type of  a population relief segment  then that is                                                                    
     a possibility.   ... It  sort of depends,  depending on                                                                    
     the exact  scenario.  It  might allow someone to  get a                                                                    
     license who wouldn't  be able to get one now.   I think                                                                    
     again  the  bigger  issue  is  that  we've  got  lodges                                                                    
     operating,  dispensing alcohol,  either  selling it  or                                                                    
     putting  into a  package, giving  it away  or whatever,                                                                    
     that should ... come under the regulatory framework.                                                                       
CHAIR ANDERSON asked if non-guests  could purchase alcohol at the                                                               
lodges under this licensing scheme.                                                                                             
REPRESENTATIVE  MEYER  reiterated  that   only  guests  who  stay                                                               
overnight  at  the  lodge  can drink  alcoholic  beverages.    He                                                               
compared this license  to a full dispensary  license, which would                                                               
allow the facility to operate like a bar.                                                                                       
CHAIR ANDERSON asked if this would  be like a full liquor license                                                               
and include all alcoholic beverages.                                                                                            
REPRESENTATIVE MEYER answered affirmatively.                                                                                    
REPRESENTATIVE LEDOUX asked if this  type of license is available                                                               
now on  an annual basis,  or if this  doesn't exist at  all right                                                               
REPRESENTATIVE  MEYER  stated  that  it does  not  exist  at  the                                                               
current time.                                                                                                                   
CHAIR  ANDERSON remarked  that  should the  bill  pass, it  would                                                               
ensure that lodges have been  licensed, had a background check by                                                               
the ABC board, are in full  compliance, and are paying a biannual                                                               
fee, and those that are not will  either be denied or if they are                                                               
selling without the license, would be violating the law.                                                                        
MR.  GRIFFIN agreed  and said  that  under this  bill, the  lodge                                                               
owners who apply  for a license would have  a criminal background                                                               
check, attend  alcohol-server training, and "all  of those things                                                               
which we think  is a public safety, welfare benefit  to the State                                                               
of Alaska."                                                                                                                     
CHAIR  ANDERSON  commented  that  since the  ABC  has  a  limited                                                               
budget, the most likely way for  a lodge owner to be caught would                                                               
be if someone else turned him/her in to the authorities.                                                                        
MR. GRIFFIN  remarked that ABC  doesn't have to budget  to travel                                                               
to a  lodge to investigate a  complaint; however ABC is  now part                                                               
of  the  Department of  Public  Safety  and ABC  personnel  train                                                               
troopers  and wildlife  protection  officers, who  could in  turn                                                               
investigate such complaints.                                                                                                    
CHAIR ANDERSON asked what happens if  a lodge is located in a dry                                                               
or damp city that  later decides to be wet.   He asked, "Does the                                                               
community,  borough, city,  whatever class  city it  is, do  they                                                               
have to  adopt a provision to  allow this or would  the statutory                                                               
authority preempt that?"                                                                                                        
MR. GRIFFIN replied, "We would  not see this as countermanding or                                                               
overriding  any kind  of local  option.... If  they voted  to ban                                                               
sale ... but maybe allow  importation, which is the definition of                                                               
a damp  community, then  we would  not see  this as  ... trumping                                                               
that local decision."   He said that when a  license comes up for                                                               
renewal, the  local governments have  the opportunity  to protest                                                               
the license  if they feel that  the licensee is not  operation in                                                               
the public interest.                                                                                                            
REPRESENTATIVE GUTTENBERG  commented that it would  be awkward if                                                               
the guest  was allowed to  drink alcohol  but the guide  was not.                                                               
He  asked  for clarification  of  the  difference in  enforcement                                                               
expenses between  a full-time  facility that  operates year-round                                                               
and a seasonal facility.                                                                                                        
MR. GRIFFIN  answered that the  ABC personnel probably  won't get                                                               
out to  the lodges due  to high  expenses unless a  complaint was                                                               
filed.   He  said  that ABC  would probably  rely  on a  regional                                                               
trooper  or  perhaps  even  a  wildlife  protection  officer  for                                                               
enforcement.  He  commented that ABC's long-term goal  is to have                                                               
each licensed facility inspected once every two years.                                                                          
4:00:51 PM                                                                                                                    
MR. GRIFFIN,  in response  to Representative  Guttenberg, replied                                                               
that  license renewals  are rarely  protested by  local community                                                               
government.  He said:                                                                                                           
     When a license is protested  by a local government, ...                                                                    
     there's a  good chance that  we will at  least initiate                                                                    
     ...  proceedings  against   that  license,  perhaps  to                                                                    
     revoke it.   Sometimes  those things get  settled prior                                                                    
     to the  actual revocation; [the licensees]  correct the                                                                    
     problem that  is the reason  for the protest.   But the                                                                    
     standard  is,  if  a   local  governing  body  protests                                                                    
     renewal  of  a license,  the  board  has to  find  that                                                                    
     protest to be arbitrary, capricious, and unreasonable.                                                                     
MR.  GRIFFIN estimated  that, aside  from protests  stemming from                                                               
unpaid tax issues, the ABC  receives a protest of license renewal                                                               
from a local government once every five or six years.                                                                           
REPRESENTATIVE  MEYER,  in  response  to  Representative  LeDoux,                                                               
replied  that he  believed that  if this  bill is  passed, people                                                               
would still be  able to bring their own liquor  to the lodges and                                                               
the lodge owners would still be  able to offer the customers free                                                               
alcoholic beverages.                                                                                                            
MR.  GRIFFIN  stated  that  this  is  an  issue  that  should  be                                                               
addressed  because  presently people  are  not  allowed to  bring                                                               
alcohol onto  a licensed premise.   He said, "I would  leave that                                                               
to the  discretion of the  lodge owner, about whether  people are                                                               
allowed to  bring their  alcohol.   I don't  see any  big problem                                                               
with  it.... We  may  need to  make a  provision  similar to  the                                                               
corkage  language to  address that."   He  noted that  it can  be                                                               
challenging for  the clients to  bring their own  alcohol because                                                               
sometimes they  have to travel  through a  dry village to  get to                                                               
the lodge.                                                                                                                      
4:06:56 PM                                                                                                                    
CHAIR ANDERSON announced that public  testimony will remain open.                                                               
He  noted   that  Representative  Rokeberg's  staff   brought  an                                                               
amendment, which will be addressed at the next meeting.                                                                         
4:08:50 PM                                                                                                                    
REPRESENTATIVE  MEYER commented  that Bob  Kline from  Brown Jug,                                                               
Inc. was not able to testify today,  "and I know he wanted to. In                                                               
fact, this  bill is basically their  idea ... [Brown Jug  is] one                                                               
of the larger distributors or  wholesalers, and they're concerned                                                               
that they  may be sending  out the  alcohol to areas  that aren't                                                               
licensed to be  selling this.... They will also help  the ABC and                                                               
[the  Department of  Public Safety]  as far  as making  sure that                                                               
these places are [legitimate]."                                                                                                 
[HB 15 was held over.]                                                                                                          

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