Legislature(2017 - 2018)SENATE FINANCE 532

05/01/2018 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to 2:00 p.m. --
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 56 COMMERCIAL FISHING LOANS TELECONFERENCED
Moved HB 56 Out of Committee
+= HB 150 PAY, ALLOWANCES, BENEFITS FOR MILITIA MEM TELECONFERENCED
Moved HB 150 Out of Committee
+= HB 217 LOCAL FOOD GOV PROCUREMENT; FARM TOURS TELECONFERENCED
Moved CSHB 217(FIN) Out of Committee
+= HB 219 CRIM HIST CHECK: ST EMPLOYEES/CONTRACTORS TELECONFERENCED
Moved CSHB 219(JUD) Out of Committee
+= HB 299 ABC BOARD: EXTEND; DIRECTOR; DECISIONS TELECONFERENCED
Moved SCS CSHB 299(FIN) Out of Committee
+= HB 151 DHSS;CINA; FOSTER CARE; CHILD PROTECTION TELECONFERENCED
Moved SCS CSHB 151(FIN) Out of Committee
CS FOR HOUSE BILL NO. 299(FIN)                                                                                                
                                                                                                                                
     "An Act  relating to the  authority of the  director of                                                                    
     the  Alcoholic Beverage  Control  Board; extending  the                                                                    
     termination  date  of  the Alcoholic  Beverage  Control                                                                    
     Board;  relating to  the  application  of precedent  to                                                                    
     decisions of the Alcoholic  Beverage Control Board; and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
2:22:30 PM                                                                                                                    
                                                                                                                                
LAURA STIDOLPH,  STAFF, REPRESENTATIVE ADAM  WOOL, explained                                                                    
the  bill. She  indicated that  HB 299  extended the  sunset                                                                    
date for the Alcoholic Beverage  Control (ABC) Board to June                                                                    
30, 2022.  Legislative Audit reviewed the  activities of the                                                                    
ABC Board  and determined the board  was effectively serving                                                                    
the   public  by   controlling   the  manufacture,   barter,                                                                    
possession, and  sale of alcoholic  beverages in  the state.                                                                    
She noted  that two changes  were made to the  original bill                                                                    
in  previous  committees.  She elucidated  that  one  change                                                                    
related to  the authority of  the director of  the Alcoholic                                                                    
Control Board, which prohibited  the director from voting on                                                                    
a matter  before the  board. The  other change  repealed the                                                                    
statute  related   to  the  application  of   precedent  for                                                                    
decisions made by the ABC Board.                                                                                                
                                                                                                                                
2:23:32 PM                                                                                                                    
                                                                                                                                
Senator Stevens  MOVED to ADOPT Amendment  1, 30-LS1281\U.4,                                                                    
Bruce, 4/14/18, (copy on file):                                                                                                 
                                                                                                                                
     Page 1, line 1, following "Act":                                                                                           
                                                                                                                                
          Insert "relating to terms of office for members                                                                       
         of the Alcoholic Beverage Control Board;"                                                                              
                                                                                                                                
     Page 1, following line 5:                                                                                                  
                                                                                                                                
          Insert a new bill section to read:                                                                                    
                                                                                                                                
          "*Section. 1. AS 04.06.030 is amended by adding a                                                                     
          new subsection to read:                                                                                               
                                                                                                                                
          (d) A member  who has served all or  part of three                                                                    
          successive  terms   on  the   board  may   not  be                                                                    
          reappointed to  the board unless three  years have                                                                    
          elapsed since  the person has  last served  on the                                                                    
          board."                                                                                                               
                                                                                                                                
     Page 1, line 6:                                                                                                            
                                                                                                                                
          Delete "Section 1"                                                                                                    
          Insert "Sec. 2"                                                                                                       
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 1, line 14:                                                                                                           
                                                                                                                                
          Delete "Section 2"                                                                                                    
          Insert "Section 3"                                                                                                    
                                                                                                                                
Co-Chair MacKinnon OBJECTED for discussion.                                                                                     
                                                                                                                                
Senator Stevens  explained the amendment. He  stated that it                                                                    
changed  the  terms  of office  on  the  Alcoholic  Beverage                                                                    
Control Board.  He pointed  to subsection  (d) and  read the                                                                    
following:                                                                                                                      
                                                                                                                                
     (d)  A member  who  has  served all  or  part of  three                                                                    
     successive terms  on the board  may not  be reappointed                                                                    
     to the board unless three  years have elapsed since the                                                                    
     person has last served on the board.                                                                                       
                                                                                                                                
Senator Stevens indicated that  the provision "mirrored" the                                                                    
regulation  for   the  Marijuana   Control  Board   and  the                                                                    
Regulatory Commission of Alaska  (RCA), which operated under                                                                    
a  similar  limit.  He  believed that  term  limits  were  a                                                                    
"heathier" situation  for boards  and the amendment  was not                                                                    
directed toward any specific board member.                                                                                      
                                                                                                                                
2:24:24 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:24:33 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
2:24:55 PM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon requested  feedback from  the ABC  board                                                                    
regarding the amendment.                                                                                                        
                                                                                                                                
2:25:06 PM                                                                                                                    
                                                                                                                                
ROBERT  KLEIN,   CHAIR,  ALCOHOL  BEVERAGE   CONTROL  BOARD,                                                                    
ANCHORAGE  (via teleconference),  voiced  that he  supported                                                                    
all  the provisions  in HB  299  with the  exception of  the                                                                    
Section 3  repeal of  AS.4.11.537. regarding  Application of                                                                    
Precedent. He explained that the  board was required to meet                                                                    
in each  judicial district once  per year. He  believed that                                                                    
the  geographic differences  in the  state were  significant                                                                    
and that by  not allowing the board to apply  Title 4 to the                                                                    
unique situations in various communities  and only adhere to                                                                    
precedent  was not  serving the  public's interest  well. He                                                                    
noted the problems related to  alcohol sales and consumption                                                                    
in  Bethel as  an example  of a  unique situation  the board                                                                    
would need to address soon.                                                                                                     
Co-Chair  MacKinnon   asked  Mr.  Klein  to   speak  to  the                                                                    
amendment.  Mr.   Klein  disagreed   with  the   term  limit                                                                    
amendment and commented that he  had served on the ABC board                                                                    
under 5  or 6 governors  and felt  that he offered  a unique                                                                    
historical  perspective.  He   wondered  how  the  amendment                                                                    
served  the public's  interest. Co-Chair  MacKinnon remarked                                                                    
that she valued his perspective and service on the board.                                                                       
                                                                                                                                
2:28:33 PM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon  asked  Ms. Stidolph  whether  the  bill                                                                    
sponsor supported the amendment.  Ms. Stidolph  replied that                                                                    
Representative Wool supported the amendment.                                                                                    
                                                                                                                                
Co-Chair MacKinnon  WITHDREW the  OBJECTION. There  being NO                                                                    
OBJECTION, Amendment 1 was ADOPTED.                                                                                             
                                                                                                                                
2:29:41 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon  offered that  she had  heard legislators                                                                    
relate concerns  over how the Alcohol  and Marijuana Control                                                                    
Office  (AMCO)  was  interacting  with  individual  business                                                                    
establishments  and that  the application  of rules  shifted                                                                    
and  changed  with every  change  in  board leadership.  She                                                                    
advised Mr.  Klein of the "consternation"  among legislators                                                                    
about  the ABC  board  especially related  to  the issue  of                                                                    
precedent.  She informed  Mr. Klein  about  a legal  opinion                                                                    
related  to  the Application  of  Precedent  and noted  that                                                                    
three areas of concern  were identified. She elaborated that                                                                    
one related  to equal  protection and due  process concerns.                                                                    
The  second  item  addressed  the  effect  of  repealing  AS                                                                    
04.11.537. She read from the  Memorandum from Legal Services                                                                    
dated April 30, 2018 (copy on file):                                                                                            
                                                                                                                                
     Equal protection  and due  process concerns.  You asked                                                                    
     whether AS  04.11.537 is  unique to  the ABC  Board and                                                                    
     whether   AS   04.11.537  raises   any   constitutional                                                                    
     problems. It  appears that no similar  provision exists                                                                    
     in  the statutes  for any  other  board, including  the                                                                    
     Marijuana  Control  Board  under  AS 17.38.  It  is  my                                                                    
     opinion that  this language  could present  due process                                                                    
     and  equal  protection  problems by  allowing  the  ABC                                                                    
     Board   to    treat   similarly    situated   licensees                                                                    
     differently and potentially  give different punishments                                                                    
     for similar violations.                                                                                                    
                                                                                                                                
     Effect of  repealing AS 04.11.537.  You also  asked, if                                                                    
     AS 04.11.537  were repealed, would  the ABC  Board have                                                                    
     the  flexibility to  consider  differences in  location                                                                    
     and changes  in a  community over  time when  issuing a                                                                    
     decision  on   a  license.   In  short,   repealing  AS                                                                    
     04.11.537 would not require the  ABC Board to conform a                                                                    
     current  decision  to  a   past  action  that  presents                                                                    
     different  facts,  such  as  factual  differences  that                                                                    
     result  from   long  periods  of  time   or  geographic                                                                    
     location. However, if AS   04.11.537 were repealed, the                                                                    
     ABC Board would need  to distinguish a current decision                                                                    
     from  a past  action that  presents similar  facts. You                                                                    
     may wish to  inquire with other boards in  the state to                                                                    
     determine  what  types   of  information  these  boards                                                                    
     consider  when   conforming  to  or   distinguishing  a                                                                    
     current decision from a past action.                                                                                       
                                                                                                                                
     Application of  AS 08.01.075(f). You asked  whether the                                                                    
     provision in AS 04.11.537  is contrary to the directive                                                                    
     in  AS 08.01.075(f),  which requires  a board  to "seek                                                                    
     consistency" in  imposing a disciplinary  sanction. The                                                                    
     ABC  Board is  not subject  to the  requirements of  AS                                                                    
     08.01.075(f), which  only applies to the  boards listed                                                                    
     under AS 08.01.010. However, requiring  a board to seek                                                                    
     consistency under AS  08.01.075(f) reflects due process                                                                    
     and  equal protection  principles and  is ultimately  a                                                                    
     different  policy from  AS  04.11.537,  which does  not                                                                    
     require consistency.                                                                                                       
                                                                                                                                
     If I may be of further assistance, please advise.                                                                          
                                                                                                                                
2:33:20 PM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon  determined  that  the  legislature  was                                                                    
asking for the consistent application  of rules on behalf of                                                                    
those being  regulated. She requested  a final  comment from                                                                    
Mr.  Klein.  Mr.  Klein understood  the  legal  opinion  and                                                                    
comments  made by  Co-Chair MacKinnon.  He replied  that the                                                                    
board  endeavored   to  devise  the  best   solution  for  a                                                                    
particular community.  He related  that when the  board held                                                                    
the forthcoming meeting in Bethel  it wanted to hear how the                                                                    
issue  affected  the  city   and  villages  that  surrounded                                                                    
Bethel. The board would hear  testimony from village elders.                                                                    
He  maintained  that  restricting  the  board  to  precedent                                                                    
encumbered  the  actions  of  the   board  and  he  was  not                                                                    
supportive of the repeal.                                                                                                       
                                                                                                                                
Co-Chair MacKinnon related that  she asked legislative legal                                                                    
whether  AS  04.11.537. was  unique  to  the ABC  Board  and                                                                    
whether the statute raised  any constitutional problems. She                                                                    
read the response from memo previously cited:                                                                                   
                                                                                                                                
     You requested an opinion  regarding AS 04.11.537, which                                                                    
     provides  that  the  Alcoholic Beverage  Control  Board                                                                    
     (ABC  Board)   is  not  required   to  conform   to  or                                                                    
     distinguish  a decision  of the  board from  any action                                                                    
     taken in  the past on  similar facts. Below is  a brief                                                                    
     response to your questions.                                                                                                
                                                                                                                                
     Equal protection  and due  process concerns.  You asked                                                                    
     whether AS  04.11.537 is  unique to  the ABC  Board and                                                                    
     whether   AS   04.11.537  raises   any   constitutional                                                                    
     problems. It  appears that no similar  provision exists                                                                    
     in  the statutes  for any  other  board, including  the                                                                    
     Marijuana  Control  Board  under  AS 17.38.  It  is  my                                                                    
     opinion that  this language  could present  due process                                                                    
     and  equal  protection  problems by  allowing  the  ABC                                                                    
     Board   to    treat   similarly    situated   licensees                                                                    
     differently and potentially  give different punishments                                                                    
     for similar violations.                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon   offered  that  meting   out  different                                                                    
penalties  for similar  violations  was the  reason for  the                                                                    
provision in  Section 3. She  asked for final  comments. Mr.                                                                    
Klein responded  that every  action the  ABC Board  took was                                                                    
subject  to  judicial  review.  He  thought  the  "test  [of                                                                    
judicial review] would  be applied if the  board was causing                                                                    
harm."  He  reiterated  that the  provision  prohibited  the                                                                    
board from  making situationally appropriate  and beneficial                                                                    
decisions.  He  was  certain the  board  would  continue  to                                                                    
experience   situations   that    were   never   encountered                                                                    
previously, and  it was the  board's duty to craft  a proper                                                                    
solution.                                                                                                                       
                                                                                                                                
Vice-Chair Bishop MOVED  to REPORT SCS CSHB  299(FIN) out of                                                                    
committee with  individual recommendations  and accompanying                                                                    
fiscal note. There being NO OBJECTION, it was so ordered.                                                                       
                                                                                                                                
SCS CSHB 299(FIN)  was REPORTED out of committee  with a "do                                                                    
pass"  recommendation  and  with  one  previously  published                                                                    
fiscal impact note: FN 2(CED).                                                                                                  
                                                                                                                                

Document Name Date/Time Subjects
HB219 CSSD Letter to S FIN.pdf SFIN 5/1/2018 1:30:00 PM
HB 219
HB 299 Additional Backup - Legal Services.pdf SFIN 5/1/2018 1:30:00 PM
HB 299
HB151 SCS FIN work draft version P.pdf SFIN 5/1/2018 1:30:00 PM
HB 151
HB151 SCS FIN v. P Explanation.pdf SFIN 5/1/2018 1:30:00 PM
HB 151
HB 299 Amendment 1 Stevens.pdf SFIN 5/1/2018 1:30:00 PM
HB 299
HB 151 Legal Services Memo HB 151 v.P.pdf SFIN 5/1/2018 1:30:00 PM
HB 151