Legislature(2007 - 2008)BELTZ 211
04/03/2007 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB116 | |
| SB124 | |
| SB115 | |
| HB34 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 124 | TELECONFERENCED | |
| + | SB 115 | TELECONFERENCED | |
| + | HB 34 | TELECONFERENCED | |
| += | SB 116 | TELECONFERENCED | |
HB 34-SALES BY WINERY LICENSEE
CHAIR ELLIS announced HB 34 to be up for consideration.
REPRESENTATIVE LEDOUX, sponsor of HB 34, explained that it
allows wine to be shipped from a place in Alaska to another
place in Alaska. Currently, Alaskans can only receive shipped
wine from out of state. She said that Kodiak has two wineries
and visiting Alaskans are not able to order its product.
2:18:22 PM
CHAIR ELLIS asked why this is needed.
CHRISTINE MARASIGAN, staff to Representative LeDoux, explained
that people never thought that Alaska would be a hub of wine
production and the language in the law was an unintended
mistake. Specialty wines have become a niche industry with value
added products in Kodiak.
2:21:45 PM
SENATOR HOFFMAN noticed the legislation wouldn't allow shipments
to dry villages and asked how that would be enforced.
MS. MARASIGAN replied that she wasn't totally sure, but as with
people who ship liquor, there is a list of communities that
don't allow it. You simply don't ship to them.
SENATOR HOFFMAN asked again how that is enforced if someone
wants to make profit more than follow a community's wishes.
2:23:18 PM
DOUG GRIFFIN, Director, Alcoholic Beverage Control Board (ABC),
said that in terms of enforcement, the Board would share its
list of dry communities with wineries on the ABC website. They
do provide some oversight over wineries. The biggest penalty
would be taking away the shipping part of their business, which
would be a death knell. He thought the wineries would be
conscientious, because rural villages are not their market.
Also, he remarked that specialty wines are a national trend.
2:25:48 PM
SENATOR HOFFMAN said he understands rural villages aren't their
targeted market, but even if they are talking about specialty
wine, they would be considerably cheaper than bootlegged
products. He asked how that is being handled for wineries
outside the state of Alaska.
2:28:51 PM
MR. GRIFFIN replied that the ABC Board doesn't regulate outside
wineries right now, although the legislature could choose to
give it that power. Some states prohibit shipments from out of
state wineries, but allowed instate wineries to ship instate.
That practice was struck down by a Supreme Court decision in
2005.
He said the Board works with the state troopers to do the best
job they can with policing the bootlegging problem - with mixed
results. He said the Kodiak winery wants to operate under the
law and that could theoretically be a problem, but they would
police it the best they could.
SENATOR BUNDE said under the current system if the wineries sold
to an alcohol retailer, then the wine could be shipped to a
community and the same kind of enforcement would be in
existence.
2:29:25 PM
MR. GRIFFIN replied that is correct if the retailer is one of
the 19 package stores that have permission to ship by written
order. The shipping quantities are limited, however, just as
package stores have quotas on how much they can ship on a
monthly basis by written order.
SENATOR BUNDE asked if there are 19 package stores that can ship
would this bill would add another 8 wineries.
MR. GRIFFIN replied that is correct.
SENATOR HOFFMAN asked if package liquor stores use common
carriers like Northern Air Cargo and Alaska Airlines, but the
wineries would ship through a completely different means of
transport like UPS and others that are harder to monitor.
MR. GRIFFIN replied the wineries could use UPS or any of the
others, but they can't legally use the U.S. Mail. So, they would
have to form some type of a relationship with a delivery
company, which could be a common carrier.
SENATOR HOFFMAN asked if the common carriers normally have a
minimum weight limit of 100 lbs. and it doesn't make financial
sense to ship that way. UPS can ship smaller parcels.
MR. GRIFFIN said he was correct.
SENATOR STEVENS said he likes the fact that this bill attempts
to level the playing field in that out-of-state wineries can now
ship in, but it doesn't truly level it because outside wineries
don't have to comply with our laws. A local one would. This
local winery is putting itself on the line if it makes the
mistake of shipping to a community that is dry. So, the state is
still asking more of in-state wineries.
2:33:23 PM
CHAIR ELLIS asked Mr. Griffin if he anticipated the ABC Board
providing the do-not-ship list or was it up to each winery to
get it.
MR. GRIFFIN replied the Board is pro-active. Every time there is
a change, it sends that list to the 19 package stores that sell
by written order. These wineries would be added to the list; but
it would take a few days.
2:34:35 PM
CHAIR ELLIS asked if under existing state statute the ABC Board
has the authority to punish wineries that ship to the do-not-
ship list.
MR. GRIFFIN replied that a regulation is already in place that
allows them punitive authority, but they would probably have to
add these wineries to the category, which could be done by
regulation. The Board would also want to provide adequate due
process by having at least one fair hearing before taking away
someone's rights to ship by written order.
CHAIR ELLIS asked him to find out for sure that he has the
authority now.
2:36:40 PM
SENATOR BUNDE asked if there is a state law that an out of state
winery would be subject to in terms of shipping to a dry
village.
MR. GRIFFIN replied that out of state wineries aren't totally
immune from the long arm of the law. Some provisions in federal
law allow states to go after wineries that violate the state's
laws. He never uses them, but they are there. The State of
Florida, for instance, prosecuted someone in another state for
shipping wine to a customer in Florida (a felony) working with
the U.S. Attorney General.
CHAIR ELLIS said if there is a fear among a lot of people that
under-aged folks would order alcoholic beverages through the
Internet and there would be no checking of ages. He asked Mr.
Griffin to remind them of requirements for proof of age when the
orders are placed.
MR. GRIFFIN replied that hadn't been addressed other than very
generally under Title 4 that deals with providing alcohol to
someone who is not 21 years of age. This issue is a nationwide
controversy. He thought that DHL, UPS and others since they are
in the delivery business, have safeguards in place to make sure
that it is accepted and signed for by someone over 21 years of
age. He didn't know if that was impeccably enforced, but he
hadn't received any complaints about it in Alaska.
SENATOR STEVENS pointed out that they are talking about high
quality wines from niche market wineries. There are only nine of
them in the state and their wines are very expensive - maybe $40
a bottle. An under-aged kid would probably not have the palette
or the money to order it. They need to keep perspective on this.
2:43:47 PM
SENATOR BUNDE said he was afraid the economic argument wouldn't
work, because there is proof that some people in some parts of
Alaska will pay $200 - $300 for very cheap spirits.
2:44:32 PM
REPRESENTATIVE LEDOUX wrapped up by reading a quote from a
Supreme Court case on minors drinking. The staff of the FTC
found that of the 26 states currently allowing direct shipments,
none of them reported increased access to wine by minors.
CHAIR ELLIS said he would keep the public hearing open and that
he would hold HB 34 for a further hearing. There being no
further business to come before the committee, he adjourned the
meeting at 2:46:20 PM.
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