Legislature(2003 - 2004)
05/19/2003 08:46 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE CS FOR CS FOR HOUSE BILL NO. 234(L&C)
"An Act relocating the Alcoholic Beverage Control Board from
the Department of Revenue to the Department of Public Safety;
extending the termination date of the Alcoholic Beverage
Control Board; relating to the sale of beer manufactured at a
brewpub; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken informed that Representative Lesil McGuire sponsors
this legislation. He noted that the Committee would be entertaining
a committee substitute that would allow brewpubs to brew their beer
off-site and to sell their beer in quantities of not more than five
gallons a day. In addition, he specified that the forthcoming
committee substitute would extend the Alcoholic Beverage Control
(ABC) Board for one year, and would address other issues raised in
the "Department of Revenue Alcoholic Beverage Control Board Sunset
Review" audit (copy on file), dated November 29, 2002 that was
conducted by the Division of Legislative Audit.
Co-Chair Green moved to adopt the committee substitute for HB 234,
Version 23-LS0862\E as the working document.
Senator Taylor objected for explanation.
HEATH HILYARD, Staff to Representative Lesil McGuire, the bill's
sponsor, explained that the Version "E" committee substitute would
transfer the ABC Board from the Department of Revenue to the
Department of Public Safety.
SFC 03 # 105, Side A 10:23 AM
Mr. Hiyard furthered that, in addition to shifting the ABC Board to
the Department of Public Safety, Version "E" also eliminates
accompanying language beginning on line eight of Section 1. The
revised language in Version "E" reads as follows.
Section 1. AS04.06.010 is amended to read:
Sec. 04.06.010. Establishment of board. There is established
in the Department of Public Safety the [THE] Alcoholic
Beverage Control Board [IS ESTABLISHED] as a regulatory and
quasi-judicial agency. The Board is in the Department of
Public Safety [REVENUE, BUT FOR ADMINISTRATIVW PURPOSES ONLY].
New Text Underlined [DELETED TEXT BRACKETED]
Mr. Hiyard stated that "but for Administrative purposes only."
would be deleted in order to provide the Commissioner and the
Department with expanded discretionary ability regarding the
oversight of the activities and investigations of the ABC Board. He
noted that [unspecified] changes in Section 2 of the bill have been
discussed in other committee hearings and are acceptable to the
sponsor. He expressed that Representative McGuire would defer to
the judgment of the Committee, her position on the committee
substitute and any proposed amendments. He stated that the sponsor
supports the reauthorization of the ABC Board and correcting the
disparities between brewpubs.
Co-Chair Wilken understood that, with the exception of one item in
the bill that "is not important at this time," the Version "E"
committee substitute would return the bill's language regarding the
ABC Board to that as originally proposed by Governor Frank
Murkowski.
WILLIAM TANDESKE, Commissioner, Department of Public Safety, stated
that this is correct. He noted that the Commissioner of the
Department of Revenue initiated the proposal by inquiring as to
whether the Department of Public Safety could assume responsibility
of the ABC Board as part of the new Administration's endeavor to
realign functions within State departments. He stated that he had
responded affirmatively to the request as, he stated, in his 26-
years of experience as an Alaska State Trooper, he understood the
Department of Public Safety's involvement in alcohol and Title IV
issues. He stated that during discussions regarding how to make the
transfer of the ABC Board to his Department as productive as
possible, concerns arose regarding language in Title IV.
Mr. Tandeske referenced concerns and recommendations of the Alaska
Criminal Justice Assessment Commission in a May 2000 report [not
provided] are identified on page 22 of the Audit. The Commission,
he noted, recommended that the criminal investigation function of
the Board be transferred to the Department of Public Safety and, in
addition, suggested that the Board membership be increased from
five members to seven as a result of the Commission's concern that
"historically …. at least one other member of the board has created
a majority for alcohol dispenser interest because of past
experience in the industry" as the result of two industry members
sitting on the Board as required by the AS 04.06.020 mandate that
two board members must be actively engaged in the alcoholic
beverage industry. He stated that the Commission suggested that the
two new members be non-industry members: one of which should
represent the public health or medical community and the other to
represent the law enforcement community in order to "better protect
the public interest."
Commissioner Tandeske communicated that it is the "Administration's
desire to instill two State cabinet members on the Board by
specifying that the Commissioners of the Department of Public
Safety and the Department of Revenue be members of the Board "as
well."
Commissioner Tandeske agreed with findings on pages nine and
nineteen of the Audit, that criminal investigations regarding such
things as prostitution and gambling, are best served by the law
enforcement agency rather than "a four-person team of alcohol law
investigators."
Commissioner Tandeske continued that the third issue addressed in
this legislation pertains to the nine State classified employees
who support the ABC Board. He stated that by clarifying that these
employees, who would be members of the Department of Public Safety
and thereby obligated to adhere to Department policy standards,
would enhance these employees' ability to properly function within
the Department and assure that they would be able to access such
things as important and pertinent Department case management and
tracking records.
Co-Chair Wilken asked regarding the omission of language in the
committee substitute specifying that the Commissioners of the
Department of Public Safety and the Department of Revenue could
appoint a designee to represent them on the ABC Board.
Commissioner Tandeske voiced that incorporating language regarding
the ability to appoint a designee would be "a good idea." He
informed that the Commissioner of the Department of Revenue
requested this language.
Co-Chair Wilken clarified however, that this language is not
included in Version E.
Amendment #1: This conceptual amendment inserts "or the
Commissioner's designee" into Section 2, line 13 of the Version "E"
committee substitute. The revised language would read as follows.
Sec. 2. AS 04.06.020 is amended to read:
Sec. 04.06.020. Appointment and qualifications. The board
consists of seven [FIVE] members. Five members shall be
appointed by the governor, one member shall be the
commissioner of public safety or commissioner's designee, and
one member shall be the commissioner of revenue or
commissioner's designee…
New Text Underlined [DELETED TEXT BRACKETED]
Co-Chair Wilken moved for the adoption of Amendment #1.
Senator Taylor objected. He voiced that while he supports the
concept of transferring the ABC Board to the Department of Public
Safety and addressing the issue of brewpubs, he disagreed with the
language specifying that the two members being added to the ABC
Board would be the Commissioners of the Department of Public Safety
and the Department of Revenue. He declared that this is not an
Audit recommendation and "appears to be just a takeover by the two
Commissioners or their designees of the five-member Board"…and then
shifting it to a four-member majority and "totaling changing policy
and regulation."
Co-Chair Wilken moved and asked unanimous consent to withdraw
Amendment #1 in order to further discuss the point raised by
Senator Taylor regarding the ABC Board. He noted that the proposed
changes to the Board are included in Sections 2 through 5 of the
Version "E" committee substitute.
There being no objection, Amendment #1 was WITHDRAWN.
Commissioner Tandeske declared that this is not an attempt by the
Commissioners to "take over the Board any more than having a
mandatory two-industry members self-regulating their industry is
any more of an option for a takeover of policy and industry." He
continued that rather it "could be characterized as a check and
balance" measure.
Senator Taylor asked whether this proposal has been discussed with
the industry or organizations that are being regulated.
DOUG GRIFFIN, Director, Alcoholic Beverage Control Board,
Department of Revenue, testified via teleconference from an offnet
site and informed the Committee that the addition of the
Commissioners of Department of Public Safety and Department of
Revenue has not been discussed with the Board.
Senator Taylor reiterated his concern. He argued that a bill of
this nature, being presented toward the end of this Legislative
session, is disconcerting.
Amendment #2: This amendment deletes Sections 2 through 5 of the
Version "E" committee substitute, beginning on page 1, line 10 and
continuing through page 2, line 27. This language reads as follows.
Sec. 2. AS 04.06.020 is amended to read:
Sec. 04.06.020. Appointment and qualifications. The board
consists of seven [FIVE] members. Five members shall be
appointed by the governor, one member shall be the
commissioner of public safety, and one member shall be the
commissioner of revenue. All members except for the
commissioner of public safety and the commissioner of revenue
shall be [AND] confirmed by a majority of the members of the
legislature in joint session. Except for the commissioner of
public safety and the commissioner of revenue, a [A] member of
the board may not hold any other state or federal office,
either elective or appointive. Two members of the board shall
be persons actively engaged in the alcoholic beverage
industry, except that no member may hold a wholesale license
or be an officer, agent, or employee of a wholesale alcoholic
beverage enterprise. No three members of the board may be
engaged in the same business, occupation, or profession. At
least three members of the board shall represent the general
public. A board member representing the general public or an
immediate family member of a board member representing the
general public may not have any financial interest in the
alcoholic beverage industry. In this section, "immediate
family member" means a spouse, child, or parent.
Sec. 3. AS 04.06.030(a) is amended to read:
(a) Except for the commissioners of public safety
and revenue, members [MEMBERS] of the board shall be appointed
for overlapping terms of three years.
Sec. 4. AS 04.06.040 is amended to read:
Sec. 04.06.040. Per diem and expenses. Members of the
board do not receive a salary, but are entitled to per diem
and travel expenses authorized by law for other boards and
commissions. This section does not apply to a member of the
board who is the commissioner of public safety or the
commissioner of revenue.
Sec. 5. AS 04.06.060 is amended to read:
Sec.04.06.060. Quorum and majority. Four [THREE] members
of the board constitute a quorum for the conduct of business,
except that a majority of the whole membership of the board
must approve all applications for new licenses, and all
renewals, transfers, suspensions, and revocations of existing
licenses. If a majority of the board is present, and voting,
the director, with the consent of the members present, may
cast a tie-breaking vote.
New Text Underlined [DELETED TEXT BRACKETED]
Senator Taylor moved Amendment #2. He objected to his motion for
purposes of discussion
Co-Chair Wilken also objected.
Senator Taylor avowed that the Version "E" committee substitute "is
a major policy change." He opined that increasing the Board from
five to seven members and changing the quorum requirements from
three members to four members would serve to "stack the Board." He
noted that the ABC Board has served the State well for 42-years. He
questioned whether this "major policy shift" was the intent of the
sponsor, as he asserted that, were it the intent, an "extensive"
discussion would have transpired. Continuing, he declared that were
the Commissioners appointed to the Board as non-voting members he
could accept the language; however, he continued that appointing
the Commissioners to the Board as voting members whose terms do not
expire as opposed to the three-year rotation required of other
members, is "a big policy call" to which, he continued, the
industry should be able to respond. He suggested that the bill be
held for further consideration during the following year's
Legislative session, rather than being addressed during this
Legislative session, "at the last minute."
Mr. Griffin commented that, in addition to the issues that have
been discussed, the bill would provide a one-year extension of the
Board. This, he noted, would allow the Board to "get back to work,"
and "address some of the issues raised in the Audit" as well as
providing "a short window" of time for the Board to adjust being
transitioned from the Department of Revenue to the Department of
Public Safety. He qualified that the Board would prefer a longer
extension period; however, he noted that the Board would abide by
the will of the Legislature and Governor Murkowski's
Administration.
Co-Chair Wilken noted that an Amendment is on the table, and he
ordered the bill SET ASIDE.
[Note: This bill was heard again later in the meeting.]
RECESS TO THE CALL OF THE CHAIR: 10:39 AM / 12:45 PM
SENATE CS FOR CS FOR HOUSE BILL NO. 234(L&C)
"An Act relocating the Alcoholic Beverage Control Board from
the Department of Revenue to the Department of Public Safety;
extending the termination date of the Alcoholic Beverage
Control Board; relating to the sale of beer manufactured at a
brewpub; and providing for an effective date."
The bill was again before the Committee.
Co-Chair Wilken moved to withdraw the motion to adopt the Version
"E" committee substitute.
There being no objection, the motion was withdrawn.
Senator Bunde moved to report the Senate Labor and Commerce
committee substitute for HB 234, Version 23-LS0862\C from Committee
with individual recommendations and accompanying fiscal notes.
There being no objection, SCS CS HB 234(L&C) was REPORTED from
Committee with zero fiscal note #1 from the Department of Revenue
and indeterminate fiscal note #2 from the Department of Public
Safety.
RECESS TO THE CALL OF THE CHAIR: 12:47 PM / 7:49 PM
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