Legislature(1993 - 1994)

05/10/1994 08:00 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
  CSSB 372(FIN)am - ALCOHOLIC BEVERAGES:  LOCAL OPTION &                       
  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                                                                   
  (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.                  
  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                     
  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                         
  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                 
  CHAIRMAN VEZEY commented a lot of legislation has come                       
  through where they are going from certified to first class                   
  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
  REPRESENTATIVE ULMER moved to pass HCSCSSB 372(STA) from                     
  committee asking unanimous consent.                                          
  CHAIRMAN VEZEY called for a roll call vote.                                  
                 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                     
  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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