Legislature(1993 - 1994)

04/23/1994 09:00 AM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 & 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                
 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                  
 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           
 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           
 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.                  
 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           
 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            
 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                  

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