Legislature(2007 - 2008)BELTZ 211
03/14/2008 01:30 PM Senate JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| SB273 | |
| SB235 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 235 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | SB 273 | ||
SB 235-ALCOHOL: LOCAL OPTION/LICENSING/MINORS
1:52:03 PM
CHAIR FRENCH announced the consideration of SB 235.
RICK SVOBODNY, Deputy Attorney General, Criminal Division,
Department of Law said that the Senate Community and Regional
Affairs Committee (CRA) deleted from the governor's bill, the
civil provisions for sanctioning licensees whose employees
distributed alcohol unlawfully.
1:53:30 PM
CHAIR FRENCH summarized that the issue is whether or not to
reinsert the penalty provisions that were removed by the
previous committee. He noted two proposed amendments for members
to review and consider. For recordkeeping purposes, he named
himself as sponsor of the amendments.
SENATOR THERRIAULT asked if the amendments were drafted by
legislative legal.
MR. SVOBODNY advised that they were drafted by Ms. Carpeneti
from the Department of Law.
CHAIR FRENCH labeled the 2 page amendment, 25G-2, as Amendment
1.
SENATOR THERRIAULT moved Amendment 1 and Chair French objected
for discussion purposes.
Amendment 1
OFFERED IN THE Senate JUDICIARY BY Senator French
COMMITTEE
TO: CSSB 235(CRA)
Page 1, line 4, following "licenses;":
Insert "relating to furnishing alcohol to a minor and to
civil penalties for licensees whose agents or employees
furnish alcohol to a minor;"
Page 2, line 11, following "In":
Insert "(b) of"
Page 2, following line 19:
Insert new bill sections to read:
"*Sec.3.AS04.16.180(d) is amended to read:
(d) The provisions of (e) of this section do not
affect the authority of the board to suspend or revoke a
license under (b) of this section. This section does not
affect the authority of the board to suspend or revoke a
license when the board determines that continuance of
activities under a license would not be in the best
interests of the public.
"*Sec.4.AS04.16.180 is amended by adding new subsections to
read:
(e) If an agent of employee of a licensee is
convicted of a violation of AS04.16.051 occurring on the
licensed premises of the licensee, the board shall
(1) impose a civil fine of $2,500 on the
licensee for a first conviction of an agent or employee;
(2) impose a civil fine of $5,000 on the
licensee if an agent or employee of the licensee has been
previously convicted once;
(3) impose a civil fine of $10,000 on the
licensee if an agent or employee of the licensee has been
previously convicted two or more times.
(f) In (e) of this section, a previous conviction
of an agent or employee includes a conviction that occurs
within five years of the date of the new offense.
Previous convictions include the cumulative number of
convictions of all agents or employees of a licensee that
are committed on the premises of the licensee. A
conviction occurs on the date that sentence is imposed
for the offense. A hearing under AS44.62.330-44.62.630 to
impose a civil fine under (e) of this section shall be
limited to the following questions:
(1) was an agent or employee of the licensee
convicted by plea or judicial finding of a violation of
AS04.16.051;
(2) did the violation of AS04.16.051 by the
agent or employee of the licensee occur on the licensed
premises of the licensee;
(3) did the violation of AS04.16.051 occur
within the time required for the applicable civil fine."
Renumber the following bill sections accordingly.
Page 5, line 24:
Delete "Sections 1, 5, and 6"
Insert "Sections 1, 7, and 8"
Page 5, line 28:
Delete "(d) Sections 3 and 4"
Insert "(c) Sections 3-6"
Page 6, line 31:
Delete "Sections 7 and 8"
Insert "Sections 9 and 10"
CHAIR FRENCH asked Mr. Svobodny for an explanation.
1:55:34 PM
MR. SVOBODNY explained that Amendment 1 adds civil monetary
sanction for a licensee whose employee or agent illegally
distributed alcohol. He added that the second amendment includes
both monetary and suspension of license sanctions. He refreshed
the committee's recollection that for a first offense there
would be a $500 civil fine.
CHAIR FRENCH asked him to clarify that the offense is having
served a minor on the licensee's premises, and Mr. Svobodny
agreed. Noting that the bill is by and large about selling
alcohol to the Bush, he asked if there are other things that
would make this applicable.
MR. SVOBODNY agreed that it's about furnishing alcohol to a
minor by a licensee.
CHAIR FRENCH asked if it could be either a bar or a liquor
store.
MR. SVOBODNY said that's correct.
CHAIR FRENCH asked for clarification that it's not about
shipping alcohol to a minor in the Bush.
MR. SVOBODNY suggested Mr. Griffin answer. The idea was to
address the distribution of alcohol in a bar or package store to
a minor.
CHAIR FRENCH asked Mr. Griffin if he concurs with Mr. Svobodny
that the behavior that the amendment aims to penalize is selling
alcohol to a minor in a bar or package store.
MR. GRIFFIN said it aims to penalize an employee or agent of the
licensee, who sells alcohol to a minor in a bar or package
store.
CHAIR FRENCH asked if the bill addresses the situation of an
underage person who lives in the Bush and orders alcohol from a
package store that does that sort of business.
MR. GRIFFIN replied that isn't the intent of this civil penalty.
CHAIR FRENCH asked Mr. Svobodny to continue to describe the
civil penalties.
1:58:00 PM
MR. SVOBODNY, after some reminding, agreed with the Chair that
for a first conviction the civil fine imposed on the licensee is
$2,500, for a second conviction it is $5,000, and for a third
conviction it is $10,000. He recalled that it tracks what
happened in the House version of the bill; the penalties are
increased.
CHAIR FRENCH added that the House removed the license revocation
and increased the financial consequences.
MR. SVOBODNY noted that the chart in the packets is incorrect.
CHAIR FRENCH acknowledged the point. He asked if the look-back
is five years.
MR. SVOBODNY said it's five years and that is the most limited
look-back period there is for offenses.
CHAIR FRENCH asked him to explain page 2, lines 6-8, which says,
"Previous convictions include the cumulative number of
convictions of all agents or employees of a licensee that are
committed on the premises of the licensee."
MR. SVOBODNY explained that if a licensee had three bartenders
and each one sold to a minor, the licensee would be faced with a
third offense.
CHAIR FRENCH observed that it would be a first offense for each
bartender, but it would be a third strike for the licensee.
CHAIR FRENCH opened public testimony on proposed Amendment 1.
2:01:18 PM
PAUL THOMAS, Owner, Alaska Cache Liquor, Inc., relayed that his
concern is that the regulations on the industry continue to get
tighter. It's documented that just 7 percent of the alcohol that
minors obtain comes from a licensed premises, but 100 percent of
the enforcement is put on that 7 percent. Under this bill if he
sells .5 liter too much into the Bush and someone gets injured
or killed, his clerk could be charged with manslaughter. But the
other 49 states can sell alcohol into the Bush over the Internet
and it's totally unregulated. This hurts the little guy and
isn't fighting the problem. Most independent operators go out of
the way to train employees. The Techniques of Alcohol Management
(TAM) that CHARR (Cabaret Hotel Restaurant & Retailers
Association) developed are now part of the state program.
MR. THOMAS said sometimes he hires and trains 12 clerks in a
year. The training includes TAM training, independent training,
and independent sting operations. "We do everything we can but
the penalties just keep stacking up on us," he said.
CHAIR FRENCH asked if he's running stings on his own business.
MR. THOMAS said basically, yes.
CHAIR FRENCH asked how many licensees are convicted each year of
selling to a minor.
MR. THOMAS said he doesn't have hard facts, but a year ago he
was caught in a sting. A new employee was interviewing someone
who appeared to be on the line for intoxication and shouldn't be
served. A well-dressed young male sting operative came in during
that time, and the employee made a mistake. "That's the first
one I've had in 15 years or more," he said.
CHAIR FRENCH commented that under this bill he would have been
fined $2,500.
MR. THOMAS said absolutely; the fines could put some people out
of business.
SENATOR THERRIAULT asked if there's a report that talks about
the 7 percent figure.
MR. THOMAS said that number came from some CHARR documentation;
agreed to forward information on the source.
2:06:41 PM
GLENN BRADY, President, Silver Gulch Brewing and Chair, Alaska
CHARR, urged the committee to set proposed Amendment 1 aside.
His business hires about 75 employees and during each summer
month he processes about 20,000 alcohol-related transactions. He
takes exception to the idea that he could become a felon if his
employees make a mistake on a small fraction of one percent of
those sales. Internal stings are done and to date there have
been no failures. He opined that the ABC Board has the tools in
the current enforcement and penalty structure to address problem
licensees. "We don't, as an industry, feel that the industry is
a problem. So I feel that this bill and this amendment…is trying
to solve a problem that really doesn't exist," he said.
2:09:11 PM
BOB KLINE, Operations Manager, Brown Jug Inc., said the business
has 18 stores. Internal stings are conducted to determine how
well the stores are performing; there have been no failures.
"Like Mr. Thomas, we scratch our heads over why industry figures
say that only 7 percent of the alcohol reaching minors is coming
from licensed premises, yet all the resources of the state are
directed to that aspect." He agrees with Mr. Brady that the
proposed fines aim to solve the wrong problem. A better way to
solve the problem would be to put money into education and teach
parents where the alcohol is coming from.
MR. KLINE commented that he came prepared to comment on alcohol
sales to the Bush and was somewhat surprised at the detour. At
some point during this legislative session he'd like an
opportunity to comment on that aspect of SB 235.
CHAIR FRENCH asked how many licenses Brown Jug owns.
MR. KLINE replied he owns and operates a separate license for
each of the 18 stores.
CHAIR FRENCH said his understanding is that if the amendment
were to pass, the ABC Board would keep a running tally of the
infractions at each store. Penalties would be imposed on each
store depending on the individual record. He asked Mr. Kline if
he agreed.
MR. KLINE suggested he direct that question to the drafter of
the amendment.
2:13:14 PM
ROBERT McCORMICK, representing Glacier Brewhouse and Orso said
he is also a CHARR board member and he's concern with the fines
listed in the proposed amendment. Glacier Brewhouse and Orso
serve some 350,000 people each year, employ 225 at any one time,
and issue more than 400 W-2s each year. The training is
extensive. Each server has a TAM card and undergoes initial and
ongoing quarterly training on alcohol service. Thus far every
sting has been passed, but considering the volume of business
it's difficult to believe that a perfect record can be
maintained. "The standard is so high and to hit us with the
fines like those listed in this amendment, should we finally
make a mistake, seems unreasonable," he said.
CHAIR FRENCH asked if he understood him to say that neither the
Glacier Brewhouse nor Orso has ever been tagged for a violation
for serving an underage person.
MR. McCORMICK said not for serving underage persons. In 12 years
Glacier Brewhouse has had one notice of violation. That involved
an airline pilot who joined his friends and fell asleep at the
table. He was deemed over-served.
CHAIR FRENCH commended him for an astonishingly good record at
an incredibly busy business.
2:15:25 PM
DALE FOX, President and CEO, Alaska CHARR said he came prepared
to testify on the entire bill rather than the proposed amendment
so he would hold his comments.
CHAIR FRENCH asked Mr. Griffin his reaction to industry saying
that it is being picked on because it is only 7 percent of the
problem.
DOUG GRIFFIN, Director, Alcohol Beverage Control (ABC) Board,
said, the 7 percent came from a survey that was done by the
Century Council that is associated with the Distilled Spirits
Council of the United States (DISCUS). That is disputed by other
surveys. When the question is posed he says that the ABC Board
doesn't regulate parents who may give their kids alcohol or make
alcohol readily available to kids in their home. Things are
being done to try to address strangers that buy alcohol for
underage people, but his focus is on those that are licensed to
sell this drug that's legal in the state that causes such great
damage. The ABC Board is doing its job, he said.
MR. GRIFFIN explained that one state trooper assigned to do
compliance checks throughout the state so there really is no
huge law enforcement effort targeting this problem. That trooper
a very hard-working individual, but the resources that are
brought to bear are not as great as sometimes described.
MR. GRIFFIN said the continued 20 percent failure rate is
frustrating; ideally that figure would be closer to 10 percent.
States that have introduced some level of penalties against the
licensee have had some success in terms of bring down the
failure rate down. That's why we're looking at that, he said.
2:19:41 PM
SENATOR McGUIRE mentioned the program that provides a $1,000
reward to employees who identify kids with fake IDs, and asked
if any other efforts have been successful.
MR. GRIFFIN relayed that the $1,000 civil penalty was designed
to make it a civil issue between the licensee and the underage
person. It takes the state out of the equation. He suggested
that Mr. Kline may be able address that since Brown Jug is the
preeminent licensee using that program. It's part of their
corporate culture to keep clerks vigilant in asking for IDs.
Also, the legislature passed legislation making adults at a
residence responsible for allowing underage people to consume
alcohol on their premises. Those are examples of the multi-
faceted approach that the legislature is trying to institute to
address the problem of underage drinking, he said.
2:22:09 PM
CHAIR FRENCH asked what the current penalty is for a package
store that sells to a minor.
MR. GRIFFIN explained that the ABC Board really doesn't go after
the licensee, but if it were to see a pattern of say three
compliance check failures within an 18 month period, an
accusation would be brought against that licensee. As part of
the procedure, the licensee would have full rights of an
administrative hearing, if desired. Typically, the parties would
try and settle things informally and a penalty in the form of a
fine, suspension or both is brought against the licensee. That
would be the recourse now assuming the licensee is exercising
reasonable care and is training employees, he said.
2:23:51 PM
CHAIR FRENCH asked if he's saying that it may be a crime for the
person at the cash register to sell alcohol to an underage
person, but there's no penalty against the licensee.
MR. GRIFFIN said that's correct; they're charged under statute
the same as the furnishing-to-an-underage-person statute. Under
that statute a first offense is a class A misdemeanor, a second
offense within five years is a class C felony. The action
against the clerk is fairly strong; it's not nearly so strong
against the licensee. "What we're really looking at is trying to
do some rebalancing," he said. Introducing penalties on the
licensee is the first step.
CHAIR FRENCH asked how many package store clerks or bartenders
were prosecuted last year for furnishing alcohol to an underage
person.
MR. GRIFFIN estimated that 100 were prosecuted last year.
CHAIR FRENCH asked how many licensure actions were pursued
against a licensee for repeat violations.
MR. GRIFFIN said that accusations against two licensees are
currently being finalizing.
CHAIR FRENCH asked the number of licensees statewide.
MR. GRIFFIN estimated there are about 1,200 licensees.
2:26:16 PM
SENATOR THERRIAULT asked if any consideration is or should be
given with respect to penalties to differentiate between a
business that serves a million people in five years and one that
serves 500 people in the same timeframe.
MR. GRIFFIN said it's difficult to reconcile, but as Senator
French noted, the Glacier Brewhouse and Orso are exemplary
licensees. They appear to have a winning formula to be able to
do a brisk business and still comply with the law.
CHAIR FRENCH asked if anyone met with the industry to discuss
this proposal before the hearing today.
MR. GRIFFIN said he talked to the Anchorage CHARR and the Alaska
CHARR and it was fairly clear that there wouldn't be any
agreement on the issue. Reasonable people can disagree, he said.
2:30:04 PM
CHAIR FRENCH said his sense is that this isn't the center of the
problem of underage people obtaining alcohol. For that reason he
has qualms about the strength of the suggested penalties. What's
your sense, he asked.
MR. GRIFFIN stated the view that it is important to concentrate
on the licensees being exemplary, but a lot of things should be
done to better educate kids and parents about the consequences
of underage drinking. The Department of Law is suggesting these
penalties, but the legislature could consider less severe
penalties and a shorter look-back. However, there does need to
be something that gets the attention of licensees when they have
failures. As long as the employee takes the brunt of the
prosecution for failed compliance checks, the failure rate will
probably stay at about 20 percent. To get it closer to 10
percent, it's necessary to impose some type of fine on the
licensee, he said.
2:33:55 PM
CHAIR FRENCH asked Mr. Fox what CHARR would agree to in terms of
a reasonable fine for a licensee whose agent of employee sells
alcohol to underage persons.
MR. FOX explained that CHARR has a number of boards and
committees that need to meet and talk about reasonable fines
before any sort of recommendation could be made. He added that
the sting operations are fairly aggressive, and he contends that
the failures would be significantly lower if there wasn't such
zeal to bust people. The licensees are doing a good job and the
evidence of that is the number of minors that have been found on
premises that weren't sting agents, he said.
2:36:35 PM
CHAIR FRENCH withdrew his objection and withdrew Amendment 1. He
opened public testimony on the full bill.
BOB KLINE, Operations Manager, Brown Jug Inc., said he doesn't
understand not allowing alcohol to be shipped in plastic
bottles. In a previous hearing a trooper stated that the
clinking of glass bottles is not probable cause so he isn't sure
what the provision seeks to accomplish. An unintended
consequence is that people will pay more to ship alcohol into
rural areas since glass weighs more than plastic. Plastic is the
package of choice simply because of the difference in weight, he
said. Another problem is that some of the penalties are
draconian. The clerks are working hard to make sure that every
order complies with respect to the geography to which it's
going, the quantities to which customers are limited, and the
validity of the person who is placing the order. The clerks
operate under a great number of checks and balances, yet
inadvertent errors will turn these clerks into felons. Under one
of the provisions, a mistake can bring a charge of manslaughter,
which goes way too far.
2:39:52 PM
DALE FOX, President and CEO, Alaska CHARR, pointed out that
bootleggers won't pay attention to the prohibition against
shipping alcohol in plastic containers, but law-abiding citizens
will pay more for every shipment because of the weight
differential. Also, the provisions that would make a shipping
clerk a felon or cause them to be charged with manslaughter are
overkill. It seems as though industry opponents are doing
everything possible to make it more difficult for the law-
abiding people in the industry, but it's not more difficult for
bootleggers to operate. "This bill needs major revisions
and…we're here today to appeal to our citizen legislators to
come up with reasonable rules," he said. This is overboard;
almost every provision needs a hard look.
2:45:23 PM
GLENN BRADY, President, Silver Gulch Brewing, Chair, Alaska
CHARR, stated opposition to the legislation because it targets
licensees who make clerical errors rather than the intended
bootleggers. "As Mr. Fox mentioned, we want to work with…our
citizen lawmakers to address the actual and real problems, not
the perceived problems." The proposed language has gone awry in
terms of the problem definition, he said.
2:47:05 PM
MR. SVOBODNY emphasized that the legislation is not directed at
responsible business people. It's directed at abuse of alcohol-
whether it's bootlegging, putting alcohol into a local option
area, or providing alcohol to a child. Using a visual aid he
showed what happened when the legislature made tobacco licensees
responsible for cigarette sales by their employees. The year was
2003 and there was a dramatic, 200 percent, decrease in the
amount of tobacco that was sold by employees of tobacco
licensees. It could be the same thing for alcohol. They're both
dangerous substances.
MR. SVOBODNY said these are responsible businessmen, but they
ought to be held to at least the standard that you'd hold your
mechanic to. If you take your car to a gas station to get the
oil filter changed and the person makes a mistake and doesn't
change the filter, you'll complain to the mechanic and probably
the owner of the station as well. You expect it to be done
properly. A number of people today have talked about clerical
mistakes , but driver's licenses for underage individuals are
vertical rather than horizontal, so it's not simply misreading
the license. Granted, some people don't change their license
immediately when they turn 21, but if someone says they're of
age and they're carrying a vertical license, then the clerk
ought to be extra careful in counting up those dates.
The people who've testified today show that it can be done, but
it's the people who are selling alcohol to one out of the five
kids who go into a liquor store that some of the provisions in
this bill are designed to deal with. The other provisions deal
with sending alcohol into communities where people have come
together and said this is such a problem that we want to
prohibit importing or distributing of alcohol into this
community.
2:53:37 PM
CHAIR FRENCH noted that Section 5 provides a manslaughter charge
for a person who violates AS04.11.010 and a person dies as a
direct result of ingesting the alcohol that was brought in in
violation of the local option. With that provision in statute,
he asked if there wouldn't be a manslaughter charge against the
seller of alcohol in every single alcohol-related death in local
option areas.
MR. SVOBODNY said no, because the language tracks the
methamphetamine law that changed the standard for manslaughter
for those offenses from proximate cause to direct cause.
Furnishing alcohol to someone who then drives and kills him or
herself because of diminished ability, is an act that is a
proximate cause of the person's death. Under this language, the
alcohol would need to be a direct cause of the death. Basically,
the person would need to die from alcohol poisoning.
CHAIR FRENCH asked if instances where an intoxicated person
falls out of a boat, or crashes a snow machine would be
excluded.
MR. SVOBODNY said those would be excluded. Citing a recent case,
he explained that a young girl brought alcohol into a village
and gave it to her boyfriend. After drinking the alcohol he
decided to swim the river, despite the fact that it was winter,
and he died. Her conduct was the proximate cause of his death;
it was not the direct cause.
CHAIR FRENCH said he takes comfort in the definition Mr.
Svobodny gave, but he wonders whether the language shouldn't be
tightened to make certain that it's interpreted the same way in
places like Barrow, Nome, and Kotzebue.
MR. SVOBODNY said, "We would be saying to people, just as we
said with methamphetamine, this is not a proximate cause issue;
this is a direct cause. The other part is where the court's
going to come down." Some defense lawyer is going to play this
recording to show the legislative history for direct result, he
said.
2:56:55 PM
MR. FOX pointed out that legislative legal services issued an
opposite opinion. It said that if one section of this law is
broken and there's a death, manslaughter charges could follow.
It's just like an attorney to say you could defend yourself
because there has to be intent, but the reality is that most
bartenders and liquor store clerks don't have the money to hire
an attorney. "Obviously, if they get charged with manslaughter
they've got to. They've got to wipe out their life savings to
defend themselves." That happens now under the current law that
makes felons of wait-staff who misread an ID, he said.
At ease from 2:59:00 PM to 2:59:44 PM.
CHAIR FRENCH announced he would hold SB 235 in committee.
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