Legislature(1993 - 1994)

04/12/1994 09:02 AM CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 The Senate Community & Regional Affairs Committee was called to               
 order by Chairman Randy Phillips at 9:02 a.m.  He introduced  SB 372     2    
 (ALCOHOLIC BEVERAGES: LOCAL OPTION & MISC.) as the only order of              
 TERESA WILLIAMS, Assistant Attorney General, Department of Law,               
 testifying via the teleconference network from Anchorage, explained           
 that the current local option law is very complicated and sometimes           
 unworkable to achieve the outcome that a community wishes to                  
 achieve.  The Alcoholic Beverage Control Board and the Department             
 of Community & Regional Affairs have received numerous phone calls            
 requesting assistance, however, on some occasions no assistance can           
 be provided because the language of the statute is so rigid.  SB
 372 simplifies and reorganizes the current local option law making            
 it more understandable and workable.                                          
 Ms. Williams outlined some additions to the existing menu of local            
 options that are available.  The only material changes to existing            
 options are: (1) to allow for a municipal restaurant or eating                
 place license (beer and wine only); (2) to limit the types of                 
 licenses that could be available if a community opts to restrict              
 licenses; and (3) to allow communities to opt for sales under a               
 permit issued under AS 04.11.230 by a beverage dispensary licensee            
 who operates a premises outside of the area.  Additionally, if the            
 community has placed restrictions on sale, but allows importation,            
 it may designate a delivery site under this section.  She explained           
 that communities would be able to allow a beverage dispensary                 
 license from outside of the area to use a permit to come within the           
 area.  This is something that has been requested by some                      
 communities that don't want a bar within the community, but for a             
 special function they would like an operation by permit within                
 their community.                                                              
 There has also been much more flexibility given in drafting the               
 wording of the ballot question, which has been a problem in the               
 past because of the rigid language in the current statute, and a              
 new provision has been added that establishes a procedure that                
 makes it much easier for a community to change from one local                 
 option to another.                                                            
 Number 175                                                                    
 PAT SHARROCK, Director, Alcoholic Beverage Control Board, said the            
 board has been trying to propose this legislation for a number of             
 years.  Several years ago a bill was introduced in the Senate to              
 try to address the problem, but it did not get out of the House               
 Rules Committee.  He complimented Ms. Williams for her hard work in           
 drafting SB 372, which, he said, is an outstanding piece of                   
 Mr. Sharrock said the primary impact of SB 372 is to change the               
 local option provisions to allow communities to more easily select            
 from a menu of options that exist in current law.  He noted that              
 over the approximately 14-year period since Title 4 was rewritten,            
 there have been 112 communities that have voted to opt for one of             
 the current option provisions under the law.  What has been                   
 occurring is that they are trying to make some changes into other             
 areas of local options, and they are finding it very difficult                
 because of the way the question has to be worded under current law            
 and what happens if they do adopt that election.  He spoke to a               
 problem the City of St. Mary's has encountered with applying                  
 existing statutes to local option election procedures.                        
 Mr. Sharrock pointed out that, with one exception, all of the local           
 option provisions in current law are retained in SB 372. The only             
 exception is that it allows a city to adopt a local option to allow           
 for the sale of alcoholic beverages only through a caterer's permit           
 issued to a current bar owner.                                                
 Mr. Sharrock emphasized the importance of revising the local option           
 provisions in current law.  He said they have worked well over the            
 years they have been there, but communities are trying to change              
 those provisions now and they are running into great difficulties.            
 Mr. Sharrock then outlined corrective and technical amendments that           
 appear in Sections 1-4, 6, 12, 15, 26, 42, 43 and 44 of SB 372.               
 Number 380                                                                    
 TERESA WILLIAMS, speaking to the definition of "alcoholic beverage"           
 contained in Section 4, said they are not making hair spray an                
 alcoholic beverage that is controlled under this law.  It would               
 only become an alcoholic beverage after it's converted to the                 
 beverage where it would be intended by the purchaser or the seller            
 for human consumption.                                                        
 Number 385                                                                    
 SENATOR ZHAROFF noted the bill prohibits a package store from                 
 advertising through individual fliers, mailings, etc., but he                 
 wondered about a local newspaper.  PAT SHARROCK answered that the             
 board doesn't have any regulation or control over that.                       
 Number 395                                                                    
 SENATOR RANDY PHILLIPS stated the committee would take testimony              
 from Ketchikan via the teleconference network.                                
 JACK PEARSON, City Manager of Ketchikan, stated the city's support            
 for SB 372.                                                                   
 Number 400                                                                    
 CHERI DAVIS, Ketchikan, said a creative idea that came out of                 
 discussions by the Ketchikan Chamber of Commerce and that might be            
 pursued somewhere down the road is the idea of potentially having             
 a municipality buy all of the liquor licenses in the community and            
 then lease some of them back depending on how many it was felt were           
 in necessary in the community.  She asked if that would be possible           
 under either the current law or the legislation being considered.             
 TERESA WILLIAMS answered that under current law a liquor licensed             
 cannot be leased, and she expressed concern with providing that               
 ability.  PAT SHARROCK added that Fairbanks formed a whole                    
 development corporation that went out and bought licenses and                 
 retransferred them to other persons, but he said he doesn't know              
 how successful the effort has been.  Also, Kodiak is discussing               
 doing the same thing.                                                         
 Number 425                                                                    
 SENATOR ZHAROFF asked if the Internal Revenue Service can seize a             
 liquor license.  TERESA WILLIAMS answered that the IRS did seize a            
 liquor license in Juneau, and the department has been in                      
 litigations with the IRS since 1990.  They are in front of the U.S.           
 Supreme Court right now on the matter, but she did not want to                
 comment any further on the issue.                                             
 Number 435                                                                    
 SENATOR TAYLOR asked if the legislation has any fiscal impact.  PAT           
 SHARROCK answered that there was a $1,000 fiscal note from the                
 Division of Elections to cover the costs of a by-mail local option            
 election in unincorporated areas.                                             
 There being no further testimony on SB 372, SENATOR RANDY PHILLIPS            
 asked for the pleasure of the committee.                                      
 SENATOR ADAMS moved that SB 372 be passed out of committee with               
 individual recommendations.  Hearing no objection, it was so                  
 There being no further business to come before the committee, the             
 meeting was adjourned at 9:35 a.m.                                            

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