Legislature(1993 - 1994)
05/10/1994 08:00 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CSSB 372(FIN)am - ALCOHOLIC BEVERAGES: LOCAL OPTION & MISCELLANEOUS CHAIRMAN VEZEY opened CSSB 372(FIN)am for discussion. He considered this bill to be an omnibus bill in the alcoholic beverage control statutes. Number 027 PAT SHARROCK, DIRECTOR, ALCOHOL BEVERAGE CONTROL BOARD (ABC), addressed CSSB 372(FIN)am. He stated SB 372 was originally introduced on behalf of the ABC by the Senate Judiciary Committee. He noted the length was because all of the statutory numbers and references have changed, primarily due to the rewrite of the local option provision. He said the bill does two things: There are technical areas that the board has been looking to have amended for several years; and a major rewrite of the local option provisions that allow villages and communities around the state to restrict importation or prohibit alcoholic beverages. He explained the rewrite of those provisions, except for one, does not change what the options are. The options were changed in this one provision, he stated, because of interest expressed by the city of Saxman. Saxman is presently a dry community that allows importation, but organizations wishing to use the community building would like to serve alcohol. For this to happen, they need an option provision which allows them to have a vote to allow an already licensed beverage dispensary licensee, or a bar owner, to cater an event in that community building for special events. He termed this option as a minor inclusion. CHAIRMAN VEZEY asked which section MR. SHARROCK was referring to. MR. SHARROCK answered he believed section 491, page 14, line 11 of CSSB 372(FIN)am. CHAIRMAN VEZEY recognized there was a work draft of HCSCSSB 372(STA) before the committee. Number 096 MR. SHARROCK noted in HCSCSSB 372(STA) section 491 would be on page 13, line 16, and page 14, line 4. MR. SHARROCK said the need for rewriting the local option provisions is the confusion and inability for people in smaller communities to look to these provisions to vote on. Immediately following the provisions original insertion in 1980, many small communities, villages and incorporated cities, voted to opt one of the four local option provisions. Later there was a fifth local option to prohibit possession that was enacted. MR. SHARROCK explained lately, some communities desire to change or remove those options. He noted the city of St. Mary's as an example. For St. Mary's to change their provisions, to prohibit sale and allow importation, they had to have two local option elections. The city council, however, overturned one election. Thereby, the other election had three of the options on the ballot. The statute states, however, that only one option can be put on the ballot at a time. He stated the established village council of St. Mary's litigated with the city of St. Mary's and just recently those elections were overturned by a judge in Bethel, because of the process. MR. SHARROCK commented CSSB 372(FIN)am intends to make it easier and more understandable for those people to petition local governments or the Division of Elections to proceed with a local option election. CSSB 372(FIN)am allows them to vote to adopt a local option, change a local option, or remove a local option. He emphasized if they vote to prohibit the sale of alcohol the dispensing licenses are revoked, however, if at some time they reopen the sale of alcohol those people that had licenses have grandfather rights in being able to apply again. He said the number of licenses that could be issued would probably also be restricted to the population provisions under the law. MR. SHARROCK explained the amendments within CSSB 372(FIN)am. He began page 1, Section 1, states package store licensees can ship alcohol into communities in response to a written order; however, they cannot solicit orders for alcohol. Page 2, Section 3, addresses the sale of alcohol to military personnel, which under current law they must be in uniform. He noted, however, the House just passed HB 504 related to that provision. He asked if this provision had been addressed in the HCSCSSB 372(STA) draft. REPRESENTATIVE BETTYE DAVIS pointed out Section 3 of HCSCSSB 372(STA). CHAIRMAN VEZEY clarified that provision had been addressed in the HCSCSSB 372(STA) draft. Number 226 MR. SHARROCK continued his explanation of the amendments. Page 2, Section 5, states a package store licensee may not ship alcohol to anyone other than the purchaser. He noted in some very large volume alcohol shipments it has been noticed that some shipments are going to a someone other than the person who wrote the order. Age and location of the recipient in these cases are of concern. Page 3, Section 7, relates to primary source legislation. He explained the wholesalers will file with the ABC and pay a $50 fee per brand to certify that brand came from a primary source. Page 4, Section 8, related to the source, reads persons who are licensed as a bar owner, package store, a restaurant or eating place, or a club license, may only purchase their alcoholic beverages from a wholesale licensee, or a brewer. Page 4, Section 9, addresses the change in law which happened this year, whereby the renewal of licenses has become biennial rather than annual. Section 9 also addresses those who do not timely file. He explained under current law, if a licensee does not file a renewal application by December 31st they must close down operations, and they have until February 28th to file a renewal application. A December 31st deadline is difficult to enforce, however, because it is New Years Eve, and police do not usually focus their efforts to this. The amendment states that if there is not a renewal application filed by December 31st the premise may stay open, but the penalty is increased from $200 to $500. The section retains that if the renewal application is still not filed by February 28th, the license terminates. Page 11, Section 15, a new technical amendment, gives the ABC Board the capability to impose conditions or stipulations on licenses if those conditions will satisfy public objections or local governing body objections. Page 13, Section 17, is an effect of the legislative change from annual to biennial renewal. He noted in the past ABC received renewal applications every year, and by law, ABC has to send copies of those applications to the local governing body. They have the ability to protest the renewal of that application. Section 17 opens a 30 day window in the off year during which a city council or borough assembly can still protest the continuation of particular license for a person who has not yet filed for renewal. He emphasized the ABC Board may not approve that application unless they find the reasons for the protest to be arbitrary, capricious or unreasonable. Governments around the state protest every year to assure those licensed businesses are operating in the best interest of the public, and assuring they are paying their sales tax and property taxes. Number 361 REPRESENTATIVE B. DAVIS referred to the 30 day open window and inquired if people had to file just as they would for an annual license. MR. SHARROCK replied no. With a biennial renewal, a licensee files a renewal application every two years. Section 17 covers the middle year. REPRESENTATIVE B. DAVIS questioned what acts as a trigger for the municipality to know they have 30 days to protest. Who lets them know the license is not up for renewal until the next year. If they do protest, does the ABC Board withdraw the license. MR. SHARROCK responded the ABC Board has to allow due proces for the appeal. He expressed when the ABC Board upholds a protest, under statute, they cannot close the business down right away. He stated he would be the person to notify those municipalities of those licenses for which there will not be renewal application, but for which they may protest. MR. SHARROCK continued his sectional analysis of amendments. Page 20, Section 27, addresses those licensees who renew for half year periods. Under earlier law, the fee for six month periods within the calendar year that licensees would identify would be half. With the passage of biennial renewal legislation, however, the half year licenses were extracted from the biennial renewal provision. Section 27 intends to bring them under the biennial umbrella. ABC has approximately 190 half year licenses and they should be treated equally. Section 28 relates to a Senate Judiciary amendment, which prohibits alcohol in the state containing 76 percent or more by volume of alcohol, beginning July 1, 1994 through June 30, 1995. He believed this related to Everclear. CHAIRMAN VEZEY asked what alternatives there were to alcohol other than in a liquid state. MR. SHARROCK answered when that provision originally became law there was "quite a flurry" to import powdered alcohol. There was concern with kids having powdered alcohol. He believed when it was mixed with alcohol the granules dissolve and release alcohol. He noted the original title of the current bill was "Prohibition of the Powdered Alcohol." MR. SHARROCK referred to page 20, line 6, whereby notice to the appropriate parties of local option elections will be done by certified mail, rather than registered mail as in current statute. CHAIRMAN VEZEY clarified MR. SHARROCK was referring to page 20, line 4. MR. SHARROCK stated ABC has never notified the parties by registered mail because of the expense. They use certified mail. Notifying 450 licensees at $3.50 each, for registered mail, is too expensive. ABC will also now only notify those licensees who have given notice to the board that they are selling and shipping alcohol in response to written orders. Currently, there are about 35 package store licensees who do this. CHAIRMAN VEZEY commented a lot of legislation has come through where they are going from certified to first class mail. MR. SHARROCK responded ABC has to have the return receipts, however, to assure in the record that the licensee was notified of the results of a local option election. CHAIRMAN VEZEY stated he felt if this statute were to become law he would not interpret it to require a return receipt. MR. SHARROCK replied there must be proof of mailing. Number 467 MR. SHARROCK continued his analysis. Page 26, Section 43, gives certain local option communities the ability to adopt an ordinance that limits the monthly amount a person may import to the municipality. If they do adopt an ordinance, Section 43 states it is not inconsistent with the title. Page 27, Section 47, is an amendment requested by the ABC Board. ABC found some objection to their legislation passed last year, by common carrier licensees, which required certain licensees to provide server training to employees who serve and sell alcoholic beverages. Airlines and cruise ships objected because they are in transit. The classes ABC offered included information their employees did not have to know about, and ABC agreed. The common carrier class of license, number 5, is being deleted, and a separate section under (e), section 48, is added to identify only those statutory areas that common carriers must train their employees in. Page 28, Section 49, expands the definition of alcohol. He noted the underlined portions on lines 14 and 15, state the beverage for human consumption as a beverage by the person who possesses or attempts to possess it. This change is meant to include those products that are not alcoholic beverages, but are products from which alcohol can be extracted. He gave the example of hair spray. (REPRESENTATIVE OLBERG left the meeting at 10:40 a.m.) REPRESENTATIVE FRAN ULMER inquired what differences there were in the HCSCSSB 372(STA). CHAIRMAN VEZEY answered Section 3, dealing with uniforms on military personnel, from CSSB 372(FIN)am has been deleted. Section 45, granting communities the option to assess taxes on alcohol at a different level than other sales taxes, was removed. CHAIRMAN VEZEY said he would accept a motion to adopt HCSCSSB 372(STA) for purposes of discussion. REPRESENTATIVE B. DAVIS so moved. CHAIRMAN VEZEY, hearing no objection, adopted HCSCSSB 372(STA). REPRESENTATIVE ULMER moved to pass HCSCSSB 372(STA) from committee asking unanimous consent. CHAIRMAN VEZEY called for a roll call vote. IN FAVOR: REPRESENTATIVES VEZEY, KOTT, ULMER, B. DAVIS, G. DAVIS, SANDERS. ABSENT: REPRESENTATIVE OLBERG. REPRESENTATIVE B. DAVIS noted there are fiscal notes to go with HCSCSSB 372(STA). CHAIRMAN VEZEY noted there was one zero fiscal note from ABC, a zero fiscal note from Alaska State Troopers, and a $1,000 fiscal note from the Division of Elections. He inquired if there was a motion to adopt the three fiscal notes. REPRESENTATIVE G. DAVIS so moved. CHAIRMAN VEZEY, hearing no objection, adopted the three fiscal notes. CHAIRMAN VEZEY mentioned he had heard there was going to be a new proposed committee substitute for SB 377, however, he had not received it yet. Therefore, CHAIRMAN VEZEY recessed the meeting at 10:43 a.m. pending sine die.
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