Legislature(1993 - 1994)
04/23/1994 09:00 AM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATOR TAYLOR introduced SB 372 (ALCOHOLIC BEVERAGES: LOCAL OPTION & MISCELLANEOUS) sponsored by the Senate Judiciary Committee by Request and began taking testimony on the bill. DIANE LAUBER explained the Anheiser Bush Companies, whom she represents, is proud of their leadership role in promoting responsible use of its products, and she described their " know when to say when" educational advertising campaign as being effective. She said the company has been strong supporters of the designated driver campaign and were the first major brewer to produce a non-alcoholic malt beverage. She also described programs in schools and colleges to discourage underage consumption of all alcohol and to provide alternatives to the use of intoxicating beverages. MS. LAUBER said their company opposes a tax increase on beer, and she claimed beer in Alaska is already taxed at a rate nearly 50% higher than the national average. She outlined the increases that have been made previously, and she warned a 20% increase in taxes would not translate into an increase of 20% in taxes collected if federal experience is any indication. She cited studies to show that higher taxes is not a deterrent to the abuse of alcohol by alcoholics. She claimed the vast majority of beer is consumed by responsible users, and she reviewed the health benefits of daily consumption of moderate amounts of alcoholic beverages. She explained the company did not object to paying their fair share of taxes, but the continued increase in federal and state taxes was more than an adequate tax on the beer drinkers in the state. RESA JERREL introduced herself as the state director for the National Federation of Independent Business/Alaska and expressed the opposition of the business group to SB 372, especially the section on page 30, section 58 of the work draft of the proposed committee substitute which would raise the taxes on alcoholic beverages. She quoted the last survey of her membership that by 92%, they wanted to reduce government spending before increasing present taxes. SENATOR JACKO asked if her survey referred to alcohol or taxes in general, and she said it mentioned taxes in general. MS. JERREL said she did ask a question: "If the legislature believes it has to increase taxes, which one do you think is the fairest?" She said they listed, first sales taxes, second personal income tax, with alcohol and tobacco tax as third. Next, SENATOR TAYLOR called on PATRICK SHARROCK, Director of the Alcoholic Beverage Control Board, to testify. Number 162 MR. SHARROCK began by thanking the committee for introducing the bill, and he reviewed elements of the law that have been discussed. He said the primary issue involved in this legislation is the rewriting of the local option provisions that allow incorporated communities and unincorporated villages around the state to implement one of the five local option provisions to restrict alcoholic beverages in the communities. MR. SHARROCK said there were currently 112 cities and villages that have exercised their local option, with one village, ST. MARYS, that tried to change their option. He said the residents thought they were voting on one result, but their vote resulted in another. MR. SHARROCK read from an article in the Anchorage paper, April 18, 1993 which reported in order for a city to adopt a less strict law, the city manager explained the city must first repeal their ban entirely, and hold a second election to select what level of restriction they wanted. He said this was a difficult procedure for many of the voters in these villages, many of whom, he said, can't speak English. MR. SHARROCK claimed the main ingredient of this legislation retains the same options that are under current law, but puts them into three categories in terms of what the city can do, and he referred to Section 1, page 1, for an explanation of the options. SENATOR TAYLOR clarified there would be no need for a vote to repeal an option before voting for a different standard. MR. SHARROCK thought this legislation was particularly important for the rural areas which deals with the issue on a day to day basis. He referred to page 1, Section 1 which would prohibit a package store from soliciting or receiving orders from an agent in a local option area, and he explained examples. MR. SHARROCK discussed with SENATOR TAYLOR a number of complaints about sending unsolicited alcoholic beverage information, which keeps the package stores from direct mailing to people. Number 203 MR. SHARROCK said the next provision relates to HB 504, which lists the limitation of military personnel going into veteran or other clubs where the current law says they have to be military uniform. He said this would be changed in this legislation. MR. SHARROCK said the legislation would restrict package stores to shipping only to the purchaser, and he explained examples of abuses. SENATOR JACKO asked how this was a problem, and MR. SHARROCK said the problem is the package store, which under current regulations must have full identification of the person to whom the alcohol will be sent. A file must be maintained showing what has been submitted from the purchaser in the form of identification. SENATOR TAYLOR and MR. SHARROCK discussed various scenarios where this would be illegal. MR. SHARROCK noted another board complaint is sending "high octane" alcohol to the Bush, and he said this legislation would prohibit the shipment of 150 proof rum and everclear, which he said has no business in the Bush. MR. SHARROCK explained in Sections 7 and 8, the director would be required to give renewal notice to licensees whose licenses are expiring, requires the licensee to file a renewal application by January 1, and increases the penalty for late applications to $500. MR. SHARROCK complained the board has never been able to provide consistent and equal enforcement around the state for persons who don't file their applications in a timely manner. MR. SHARROCK said Section 8 addresses a problem which repeals provisions regarding denial of a new license in a municipality that has prohibited sale except by a municipal owned liquor store. It prohibits issuance of a new license or permit in certain cities or in an established village when certain local options are approved, and he used the example of working with a restaurant in Government Hill in Anchorage for specific approval of a time when beer and wine could be sold after school children had gone home. MR. SHARROCK mentioned several other "glitches" that would be fixed by the legislation. Up until biennial renewal, local governments could protest, statutorily using the words "under law," and he explained the ramifications of this. It took away municipalities right to protest for unpaid sales taxes on an annual basis, and this would be corrected. They discussed triggering sanctions within the ABC Board. Number 269 Kenai protests every year. MR. SHARROCK mentioned another glitch which was to take away reference to half-year licenses, which has affected about 190 half- year licenses. Also, another technical matter deals with notices, which must be given to package stores where there has been a local option imposed by the community. Under current law the Board is suppose to notify every package store in the state by registered mail, and he explained why this has been modified. Lastly, he explained a modification to the definition of "alcoholic beverage," because it was brought to MR. SHARROCK'S attention by legal professionals across the state who had written to Long's Drug in Anchorage asking that a list of about 30 products not be shipped to certain people in various communities. MR. SHARROCK explained that alcohol can be extracted from some of these products such as hairspray for consumption. He further explained this change in the definition of alcohol is not to bring those types of products under Title 4, as alcoholic beverages, but, if there is possession by those persons or an intent to consume, search warrants can be granted and the products seized. SENATOR LITTLE questioned his reference to "those persons." MR. SHARROCK said he was referring to residents of a community. She asked if he meant communities where alcohol has been prohibited. MR. SHARROCK answered it was not necessarily, but explained it would depend on whether the alcohol was being extracted from the product. Then it could be seized. SENATOR LITTLE asked if he was making a delineation between hair- spray and a refined product that would be manufactured by an individual. He said she was correct and there was some discussion among committee members. SENATOR TAYLOR related an incident of abuse in his community of a well known cold preparation, which contains alcohol. MR. SHARROCK said this type of abuse of a product would fall into play in an area that had local option if the product was intended as an alcoholic beverage. SENATOR LITTLE asked how it would be known if these products were ordered for illicit purposes. MR. SHARROCK said he had been told it was easy to make that determination if there are large quantities of those products going into communities where it would seem that large quantities would not be consumed. SENATOR JACKO expressed some concerns in regards to local options since he owns a grocery store. He asked what would happened if a high school student working in the store inadvertently sold one of these products. MR. SHARROCK clarified the legislation would only provide for enforcement when there was a problem. Number 341 SENATOR LITTLE expressed a problem with the provision that alcohol over 100 proof not be allowed to be shipped to dry communities, and thought it would be up to the specific community rather than having the state impose the restriction. SENATOR JACKO agreed with SENATOR LITTLE'S concern, and asked about his statement that it had no business in the Bush. MR. SHARROCK quoted remarks about the dangers of everclear since it is 90% alcohol and quick consumption is catastrophic. SENATOR TAYLOR asked if some communities specifically asked not to have everclear in their community, and MR. SHARROCK said he was correct. SENATOR TAYLOR understood some communities restrict package stores from shipping to people, but SENATOR LITTLE thought there should be a better way. She thought communities should be given the ability to prohibit entirely over 100 proof alcohol if they choose to do so. MR. SHARROCK clarified it was for 150 proof, and only applies to those communities that have adopted a local option election. SENATOR TAYLOR clarified a package store could ship those products to a person in another community where it was not prohibited. MR. SHARROCK said this was covered on page 3, Section 6, and he reviewed the provisions in the subsections. SENATOR TAYLOR wanted it be sure it was clear the restrictions only applied to those areas where a vote has occurred. SENATOR LITTLE asked MR. SHARROCK if he had a sense of the communities that have restrictions about whether or not this is acceptable to the community, and MR. SHARROCK said he had not. SENATOR LITTLE referred to Section 6(H)(1) and asked it was current law. MR. SHARROCK said it was. SENATOR TAYLOR clarified the new law had to do with the an alcoholic beverage containing more than 75% by volume. Number 402 SENATOR JACKO ask for clarification on MR. SHARROCK'S remark that everclear had "no business in the Bush." He wondered if he implied it had more business in urban Alaska than it does in rural Alaska. MR. SHARROCK said he only tried to relate the kinds of stories the ABC Board has heard in terms of abuse of alcohol in rural areas, and he admitted alcohol abuse occurred other places as well. He reiterated his remarks about local option in relation to high proof product. SENATOR LITTLE repeated her feeling it should be an option of the local government, and there was a discussion of outlawing everclear in the whole state. SENATOR TAYLOR explained only two states in the United States allowed the sale of everclear - Georgia and Alaska. SENATOR LITTLE continued to feel that it was an imposition of a restriction on one segment of our state, but she also thought everclear was a terrible substance. Number 447 SENATOR TAYLOR pointed to page 3 lines 14 and 14 of the committee substitute and explained it pertained to those areas that have restricted the sale of alcoholic beverages. Both SENATOR HALFORD and SENATOR LITTLE were concerned about equal protection, and SENATOR TAYLOR was not sure, but said it provides for some restriction to comply with the local option of the areas. SENATOR HALFORD suggested getting rid of everclear in the state, and followed his remark with a proposed amendment to do so. There was some discussion about making it a conceptual amendment and whether to ban possession or sale. SENATOR TAYLOR asked for the adoption of CS FOR SENATE BILL NO. 372(JUD). Without objections, so ordered. SENATOR HALFORD proposed an amendment to ban from sale in Alaska any alcoholic beverage above 76% by volume. Without objections, so ordered. SENATOR LITTLE proposed an amendment to delete lines 14 and 15 on page 3, including or and placing a . after month. Without objections, so ordered. Number 578 SENATOR LITTLE asked if the taxes included in the legislation were part of the budget or considered as revenues. SENATOR TAYLOR said no they would have been included in the budget package yesterday. In reference to the taxes proposed in the legislation, SENATOR LITTLE felt she could support them if there was a provision in the bill that the revenues gained by the new tax would be used for some purpose such as alcohol prevention programs, but she has a concern there is no specific purpose for the new funds. SENATOR TAYLOR described the use of the funds for treatment programs, and there was a discussion of including an intent the money go to alcohol treatment programs. SENATOR HALFORD explained there would be no dedication unless there was a constitutional amendment. TAPE 94-39, SIDE A Number 001 SENATOR HALFORD moved to pass CS FOR SENATE BILL NO. 372(JUD) (ALCOHOLIC BEVERAGES: LOCAL OPTION & MISC.) from committee with individual recommendations. Without objections, so ordered. SENATOR TAYLOR introduced SB 367 (HEALTH CARE REFORM COMMITTEES) and suggested the committee members look at the bill carefully, since he said it has within it the "bad baby statute," which provides for a statute of limitations for the pediatricians of the state that have been complaining for years about a twenty year plus statute of limitations. This reduces it to eight and fixes it. He said it had two committees within it and has to go to the Finance Committee to get to the floor. SENATOR LITTLE said she didn't like it, but SENATOR TAYLOR said they stripped most of the bad stuff out of it. He said there were just two advisory committees left. SENATOR HALFORD posed a hypothetical of a child being born following the mother taking a drug that was questionable like DES, and 20 years later finding something is wrong. He asked if the bill prevented recourse by the child. SENATOR TAYLOR said it didn't, because in those instances that's a product the mother took, and he explained this is a statute having to do with the child itself - whether the child can sue the doctor who delivered. He said the bill would also cover pediatricians and midwives. Number 048 SENATOR LITTLE asked for clarification that the child had a ten year limitation, and SENATOR TAYLOR said he had not changed that one. He said SENATOR RIEGER had fixed that one at eight years. SENATOR LITTLE posed a hypothetical of a nine year old child, and asked if the parents could bring a suit against the physician for anything occurred during birth. She asked if that was correct? SENATOR TAYLOR said the committee looked at the number of suits that had been brought by anyone over eight years old. He said a "bad baby" is usually noticed before eight years have passed. SENATOR HALFORD continued to ask about the things that don't come out for 20 years, a provision as to when the effect is discovered, and the use of a prescription drug. SENATOR TAYLOR explained the provisions in the bill, when the discovery occurs, and the order of the normal statutes of limitations. SENATOR HALFORD used the example of a mother given DES, and the child growing to young womanhood finds she has substantial reproductive problems and will never be able to have children. He asked if she could sue. Number 093 SENATOR TAYLOR said it would depend whether or not there was any fraud or collusion by the parent, guardian, or health provider. SENATOR HALFORD declared it was simple negligence by a doctor who should have known not to prescribe DES. SENATOR TAYLOR said there would have to be intentional concealment, fraud, or conclusion. There was a discussion of intentional or gross negligence for anything not compensated, and SENATOR HALFORD had harsh comments about the liability system that discriminates against good samaritans who are getting no compensation. SENATOR TAYLOR thought there should be some limitation short of 21 years, and he reviewed the limitations of the legislation. SENATOR HALFORD concluded the best tort reform was eliminating lawyers, but SENATOR TAYLOR said it wouldn't change the injury. Number 134 SENATOR HALFORD moved to adopt CS FOR SENATE BILL NO. 367(JUD). Without objections, so ordered. SENATOR HALFORD explained the bill gives a committee member a compensation of $400 per day plus expenses for serving on the committee on page 3, line 25 and page 6, line 17. SENATOR HALFORD said it was excessive and increases the fiscal note. He moved to reduce the $400 to $200 in both cases. SENATOR TAYLOR thought this was overly generous, and SENATOR JACKO moved the compensation be reduced to $100. The motion was moved from committee without objections, so ordered. SENATOR TAYLOR called for a vote on SENATOR HALFORD'S move to pass CS FOR SENATE BILL NO. 367(JUD) (HEALTH CARE REFORM COMMITTEES) from committee. The roll was taken with the following results: SENATORS TAYLOR, HALFORD, and JACKO voted "yea," and SENATOR LITTLE voted "nay." SENATOR TAYLOR stated the bill was passed from committee.