Legislature(2007 - 2008)
05/14/2007 01:26 PM Senate FIN
| Audio | Topic |
|---|---|
| Start | |
| HB113 | |
| HB155 | |
| SB128 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
1:45:18 PM CS FOR SENATE BILL NO. 128(JUD) "An Act relating to the sale, distribution, and purchase of alcoholic beverages; relating to a state database for records of certain purchases of alcoholic beverages; relating to the relocation of a license to sell alcoholic beverages; relating to procedures for local option elections for control of alcoholic beverages; and providing for an effective date." This was the first hearing for this bill in the Senate Finance Committee. 1:45:25 PM Co-Chair Stedman expressed intent to move this bill from Committee unless issues arose that could not be addressed during this meeting. 1:45:35 PM Senator Olson offered a motion to adopt CS SB 128, 25-LS0742\K, as a working document. Without objection the committee substitute Version "K" was ADOPTED. 1:46:09 PM Senator Olson, sponsor of the bill, emphasized the issue of alcoholism in Alaska, especially in rural areas. This legislation was created in cooperation with the affected departments to ensure that the databases it would establish would not interfere with normal commercial transactions of alcohol and distribution to communities in which alcohol had not been banned or restricted. 1:47:00 PM GINNY AUSTERMAN, Staff to Senator Olson, read testimony into the record as follows. SB 128 came about at the urging of the Rural Justice Commission. This legislation is an integral part of the effort to regulate the sale, distribution, purchase and shipment of alcoholic beverages into damp local option communities within the state of Alaska. It puts in place a requirement for the Alcoholic Beverage Control [ABC] Board to create and maintain a database that contains up to date information related to written orders for alcohol shipped to the writer of the order. The package store licensee must consult the database prior to filling each order. Currently AS 04.11.150(g) regulates the amounts of alcoholic beverages to residents of local option areas. SB 128 requires that the package store licensee, agent or employee access the database to determine the amounts of alcoholic beverages already ordered by an individual. It also requires that the date and amount of the new order will be immediately added to the database. This database will adversely impact the importation and sale of alcoholic beverages into rural Alaskan communities by bootleggers. The information in the database will be accessible only to package stores and law enforcement. None of the information would be available to the public. SB 128 also contains a provision to correct an omission in State law relative to the transfer of liquor licenses between an organized borough and communities in that borough. Many communities across the state have used their allotment of liquor licenses while their borough has not. Boroughs may now transfer alcoholic beverage licenses to those communities. 1:48:48 PM Ms. Austerman then read a sectional analysis into the record as follows. Sections 1 and 2 speak to the requirements of the ABC Board to create and maintain a database to keep track of written orders for alcohol from persons residing in damp local option communities. It clearly states to whom the information in the database is available. They describe in detail the steps for licensees to record and review information in the database and make failure to comply with the requirements a class B misdemeanor. Section 3 limits the shipping of alcohol in response to a written order to the address of the person ordering the alcohol unless that person lives in an area where there is a community delivery site. Sections 4 and 5 allow for the relocation of existing liquor licenses within a borough. Such relocation of licenses is limited to not more than three in each decade. "Decade" means each ten year period beginning April 1 in the year ending in "0". Sections 6, 7, 11, 12 and 13 prohibits reselling of alcohol in violation of the local option and changes such an offense from a class C felony to a class A misdemeanor and makes purchase of alcohol in violation of the local option a class A misdemeanor. These sections also include conforming amendments for the new provisions in Sections 7 and 12. Section 8 extends the period after a local option has been adopted from 12 to 24 months before an election may be held to remove the option or change the option to a less restrictive alternative. It also provides for an election to remove or make the option less restrictive once in a 36 month period. Currently that period is 18 months. Section 9 prohibits a person from purchasing alcohol by written order on behalf of another person who resides in a local option community and makes the violation a class A misdemeanor. Section 10 prohibits a person in a dry local option area from possessing ingredients or equipment with the intention of making home brew. This violation would also be a class A misdemeanor. Sections 14 and 15 amend forfeiture provisions for violations of AS 04.11.499 to include the alcohol purchase from a bootlegger in violation of the community's local option. Forfeiture of an airplane or other vehicle is not allowed. Section 16 allows the ABC Board to establish pilot alcohol delivery sites in Bethel and Kotzebue. Once opened, these sites would operate for a period of three years. Sections 17 through 22 include instructions to the Revisor of statutes and effective dates. 1:51:48 PM TALIS COLBERG, Attorney General, Department of Law, testified that for the past three years the Alaska Rural Justice Commission had been undertaking efforts cumulating in this legislation. The Commission was established by the federal Department of Justice and involved many people and various groups and organizations. This legislation has the support of affected communities. 1:52:42 PM Co-Chair Stedman asked if the Department of Law supports this legislation. 1:52:45 PM Mr. Colberg reported that the Department participated in preparing this bill. 1:53:14 PM Senator Thomas noted that the language of Section 5, pertaining to relocation of a license for a "restaurant, eating place, or hotel, motel, resort or similar business that contains a restaurant or eating place", made no reference to bars. He presumed that this provision would apply to an established business that was seeking to obtain a beverage license. Mr. Colberg confirmed that a qualifying business would have an existing beverage dispensing license associated with it. 1:54:12 PM Senator Thomas next clarified that the definition of "decade" in Section 5, as "each 10-year period beginning April 1 in a year ending in zero", meant that the relocation of licenses could occur in a year only if zero transfers had occurred in the previous year. 1:54:46 PM Ms. Austerman corrected that the definition was of the years 2010, 2020, 2030, etc., and pertained to the year in which transfers would be allowed rather than the number of transfers allowed. Three transfers would be allowed each decade. Once this maximum had been reached, no more transfers would be allowed until the following decade began. 1:55:10 PM Co-Chair Hoffman asked the sponsor whether the proposed prohibition of ingredients or equipment utilized for the creation of alcoholic beverages, i.e. homebrew, by residents of a community that has banned alcohol was necessary. 1:55:44 PM Senator Olson described the sugar, artificial sugar, malt and yeast used to make homebrew. All these ingredients with the exception of malt could be utilized for purposes other than the creation of alcohol and therefore intent to create homebrew would be necessary to be in violation of the prohibition. However in his experience, many people who make homebrew have the intent to do so. 1:56:44 PM Ms. Austerman furthered that Co-Chair Hoffman's question was raised in a committee that previously considered this legislation. It was concluded that a person in possession of the aforementioned ingredients who did not intend to make homebrew would be less likely to also possess bottles and other equipment necessary to make the alcohol. 1:57:19 PM Mr. Colberg acknowledged that intent is difficult to determine. Many people possess the necessary ingredients. 1:57:51 PM Senator Elton cited the "fine line" dividing intent and action. He asked the substantive difference in this situation. 1:58:11 PM Mr. Colberg agreed the distinction was ambiguous, but stressed that the homebrew issues in these communities was serious and widespread. The primary problem was the absence of law enforcement. If a person or persons were not caught in the act of preparing homebrew, intent could possibly be identified and the proposed provision implemented. 1:59:13 PM Senator Huggins found irony in the Alaska Supreme Court ruling pertaining to the amount of marijuana a person was allowed to posses and that this provision would ban the possession of ingredients to allow a person to make blueberry wine. He supported and defended communities' right to chose to ban or restrict alcohol, but wanted his comments noted. 2:00:01 PM Senator Olson commented that homebrew could be made with only sugar, yeast, and raisins, and that all equipment associated with the production was not necessary. The issue was the need to provide law enforcement "teeth" to address blatant violations in communities that had voted to be "dry". The situation was "out of control" and worsening. 2:01:29 PM Senator Huggins agreed, but noted that the court could place a limit on the amount of sugar and other items a person could posses. 2:01:52 PM Senator Olson agreed and shared that he operates a store from his home and stocks sizable quantities of sugar and other homebrew ingredients. 2:02:46 PM CASEY REYNOLDS, Economic Development Planner, City of Wasilla, testified via teleconference from an offnet location, that the provision in this bill relating to the relocation of liquor licenses was proposed at the request of his and other communities. Current restrictions hamper the ability for communities to grow economically. Many communities serve not only its residents but also those residing outside its boundary. However the number of licenses a community is permitted is based only on the population within the boundary. Mr. Reynolds stressed that the relocation would only apply to restaurants and would not include bars or package stores. The flexibility is requested to allow for additional restaurants. The number of licenses would not increase 2:04:53 PM DOUG GRIFFIN, Director, Alcohol Beverage Control Board, testified via teleconference from an offnet location to the licensing issue. Mr. Reynolds was correct in saying that more licenses would not be issued, but instead the allocation of licenses would be adjusted. Mr. Griffin explained that the fiscal note reflected the best estimate of the cost to establish and administer a database for package stores to track sales of alcohol destined to dry or damp communities. The fiscal note does not include financial estimates to establish and administer the pilot projects described in Section 16 that would be located at Bethel and Kotzebue. If those communities elected to participate in the project, the cost would be significant and would include building space, security and staffing. Some of the costs could be recovered with user fees, but start-up expenses would be substantial. He was unsure if the municipalities would support having the ABC Board operate the facilities as a State entity. He preferred that the facilities be overseen by the municipalities. However, he understood that this option might not be possible due to "political reasons". 2:07:33 PM Co-Chair Stedman established that fiscal note #2 superseded a fiscal note dated March 2007. 2:07:48 PM Mr. Griffin affirmed and explained that the initial fiscal note listed the costs as indeterminate. An effort was then made to estimate the actual costs. 2:08:08 PM Co-Chair Stedman commented that the amount was larger than he had expected. 2:08:24 PM Co-Chair Hoffman spoke of separate legislation from a previous Legislature requiring the labeling of alcohol transported to "damp" communities with restricted alcohol allowances. A court ruling disallowed such labeling and he asked whether the statute must be changed to reflect this. 2:09:09 PM Mr. Griffin indicated he would consult with the Department of Law on this matter. He opined to the importance of retaining the statute. 2:09:42 PM Co-Chair Stedman established that no further testimony or questions were forthcoming. 2:10:05 PM Co-Chair Hoffman offered a motion to report CS SB 128, 25- LS0742\K, from Committee with individual recommendations and accompanying fiscal notes. There was no objection and CS SB 128 (FIN) was REPORTED FROM COMMITTEE with fiscal note #2 for $317,500 from the Department of Public Safety, and zero fiscal note #3 from the Department of Law. RECESS 2:10:52 PM / 6:20:06 PM
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