Legislature(1995 - 1996)

04/19/1996 01:35 PM Senate STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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          SB 314 RESTAURANT LIQUOR LICENSE OWNERSHIP                         
                                                                               
 Number 130                                                                    
                                                                               
 CHAIRMAN SHARP brought up SB 314 as the next order of business                
 before the Senate State Affairs Committee.  He asked the bill                 
 drafter to review SB 314, "G" version.                                        
                                                                               
 Number 314                                                                    
                                                                               
 MIKE FORD, Attorney, Legislative Legal Services, reviewed the bill            
 by section.                                                                   
                                                                               
 Section 1: applies to brewery licenses; would reduce the amount               
 that a brewery could sell to a person present on the premises from            
 5 to 2.5 gallons.  It would make a corresponding change on line 8             
 to be consistent with line 6.                                                 
                                                                               
 Section 2: makes corresponding changes so that a brew-pub licensee            
 would have the same benefits that the brewery has, as far as sale             
 of beer manufactured on the premises and sampling.                            
                                                                               
 Sections 3 & 4: deal with the original purpose of the bill.                   
 Section 3: places a restriction on combination of licenses.                   
 Section 4: creates an exception to Section 3 for existing                     
 licensees.  It also allows for transfer of licenses.                          
                                                                               
 Number 205                                                                    
                                                                               
 CHAIRMAN SHARP asked if subsection (i) in Section 4 would not allow           
 people with brewery licenses to get a restaurant beer and wine                
 license and open an establishment in Fairbanks.                               
                                                                               
 MR. FORD replied the idea is that if you have a rule saying you               
 cannot have this combination, with an exception for those who                 
 already are licensed, then what happens as far as additional                  
 brewery or restaurant licenses, beyond those that already exist?              
 Can they be obtained, or not?  This simply specifies that they                
 cannot.  This addresses whether those with existing licenses could            
 obtain a second license.  It's up to the committee to decide                  
 whether they like that or not.  It sets a finite limit on the                 
 number of these types of licenses.                                            
                                                                               
 MR. FORD continued the sectional analysis.                                    
                                                                               
 Section 5: provision to recapture an increase in value of                     
 grandfathered combination licenses.  The state will get a                     
 percentage of the increased value of the sale of those licenses.              
                                                                               
 Section 6: applicability.                                                     
                                                                               
 Number 240                                                                    
                                                                               
 MR. FORD stated the committee has an amendment that would allow a             
 person to get an additional license.  The committee can decide                
 whether or not they want a licensee to be able to get an additional           
 license.  There is another amendment which would raise the amount             
 allowed to be sold for off premises consumption to 5 gallons.                 
                                                                               
 Number 255                                                                    
 CHAIRMAN SHARP commented that if they stay at 2.5 gallons, the only           
 containers available for transport would be in gallon or half                 
 gallon bottles, which have screw-caps and can be drunk out of as              
 soon as the purchaser gets in the car.  He would like to leave the            
 amount at 5 gallons, because that is a keg, and would not usually             
 be tapped in a car.                                                           
                                                                               
 SENATOR RANDY PHILLIPS made a motion to adopt the amendment raising           
 that amount from 2.5 gallons to 5 gallons.                                    
                                                                               
 CHAIRMAN SHARP, hearing no objection, stated the amendment was                
 adopted.                                                                      
                                                                               
 CHAIRMAN SHARP asked Mr. Ford to explain amendment G.1                        
                                                                               
 MR. FORD responded amendment G.1 would take the opposite approach             
 of the draft.  Instead of restricting a person to their existing              
 licenses, they would be able to get more licenses.                            
                                                                               
 SENATOR RANDY PHILLIPS asked if the amendment would take away from            
 the original intent of the legislation.                                       
                                                                               
 MR. FORD replied it would seem to do so, if the intent is to limit            
 these kinds of combinations.                                                  
                                                                               
 SENATOR DUNCAN asked if someone new could get into the business, if           
 they don't currently have one of these license combinations.                  
                                                                               
 MR. FORD responded they could not.                                            
                                                                               
 SENATOR DUNCAN stated, then SB 314 would just grandfather in                  
 existing licenses, and wouldn't allow any new ones, not even in               
 other parts of the state outside Anchorage.                                   
                                                                               
 MR. FORD replied that is correct.  They couldn't do it as a                   
 combination.  The Alaska Brewing Company couldn't get a restaurant            
 beer and wine license under this bill.                                        
                                                                               
 SENATOR DUNCAN asked what they could do.                                      
                                                                               
 MR. FORD responded they will only be able to operate as a brewery.            
 They couldn't get a beverage dispensary license or a package store            
 license either.                                                               
                                                                               
 SENATOR DUNCAN asked, then the Alaska Brewing Company couldn't come           
 downtown and set up a little brewery operation and serve food also.           
                                                                               
                                                                               
 MR. FORD replied, no.                                                         
                                                                               
 CHAIRMAN SHARP asked if the amendment, if passed, would allow them,           
 or anyone else with a brewery and restaurant license to open one up           
 in Fairbanks.                                                                 
                                                                               
 MR. FORD responded, if that person already had a brewery and                  
 restaurant license, the amendment would allow them to get another             
 license.  It would allow them to get four, five, ten more, or                 
 whatever.                                                                     
                                                                               
 CHAIRMAN SHARP asked if under current law licensees are prohibited            
 from owning multiple licenses.                                                
                                                                               
 MR. FORD responded it is only prohibited for certain types of                 
 licenses, but not for restaurant or eating place licenses.  Under             
 this bill, that would be illegal though.                                      
                                                                               
 CHAIRMAN SHARP stated SB 314 would restrict brew-pubs to Anchorage,           
 and no where else.                                                            
                                                                               
 MR. FORD responded that is correct.  You could have a brew-pub, but           
 not a restaurant and a brewery.  You would have to have a beverage            
 dispensary license.                                                           
                                                                               
 SENATOR DUNCAN stated the ones in Anchorage brew, sell beer, and              
 food, and that wouldn't be able to occur any where else in the                
 state under SB 314.                                                           
                                                                               
 MR. FORD replied that is correct.                                             
                                                                               
 Number 330                                                                    
                                                                               
 SENATOR DUNCAN asked why they would want to shut down this type of            
 business.                                                                     
                                                                               
 SENATOR RANDY PHILLIPS responded because George Malekos thinks it             
 is an unfair level of competition against his business.  Mr.                  
 Malekos has spent several hundred thousand dollars for his                    
 licenses, while these types of businesses have only spent $1,600.00           
 for their licenses.  The entry fee is not level for basically the             
 same type of business.  That's where the argument is.                         
                                                                               
 SENATOR DUNCAN asked if they were really doing the same thing                 
 though, because Mr. Malekos has a liquor license.                             
                                                                               
 CHAIRMAN SHARP stated that Mr. Malekos got involved in it before              
 the ABC Board allowed the waiver on the 50% food - 50% booze                  
 requirement.  That's what opened the window on the brew-pub without           
 a liquor license.                                                             
                                                                               
 SENATOR RANDY PHILLIPS stated there are a few other businesses in             
 his district that feel the same way as Mr. Malekos.                           
                                                                               
 CHAIRMAN SHARP stated that during testimony at the last hearing,              
 two people supported SB 314 while twelve people opposed it.  He has           
 a problem with no one else being able to start one of these types             
 of establishments.  Not even the people being grandfathered in can            
 start one in Fairbanks.  That's one of the reasons he had amendment           
 G.1 drawn up: it would at least allow some expansion to other                 
 towns.                                                                        
                                                                               
 SENATOR DUNCAN stated amendment G.1 would allow expansion to other            
 towns, but it would also allow expansion in Anchorage.                        
                                                                               
 SENATOR RANDY PHILLIPS stated that would defeat the original intent           
 of the bill.                                                                  
                                                                               
 CHAIRMAN SHARP asked if the amendment would open it up.                       
                                                                               
 MR. FORD replied it opens it up for those people who are                      
 grandfathered in.                                                             
                                                                               
 SENATOR DUNCAN stated that bothered him.  Why shouldn't they allow            
 the Alaskan Brewery to open a brew-pub in Juneau, if they so                  
 desire?  He asked if there was some way to put a limit on it,                 
 perhaps by population?                                                        
                                                                               
 MR. FORD stated there are a number of restrictions in law based               
 upon population.  You could certainly use that as a limiting                  
 factor.                                                                       
                                                                               
 CHAIRMAN SHARP asked Mr. Ford to give them a conceptual amendment             
 using population as a limiting factor.                                        
                                                                               
 Number 390                                                                    
                                                                               
 MR. FORD thinks they don't want amendment G.1 or Sections 3 and 4             
 in that case.  You won't be dealing with grand-fathering, what you            
 will do is specify there can't be any more than a certain number of           
 these licenses per certain population.  Pick a number that allows             
 the people who would have been grandfathered to continue to                   
 operate, and also would allow these business to operate in other              
 areas of the state, if they so choose.                                        
                                                                               
 CHAIRMAN SHARP commented if they set the population number too                
 high, then the smaller communities wouldn't be able to have this              
 type of a business.                                                           
                                                                               
 SENATOR DUNCAN asked if they couldn't simply specify a population             
 of "x" or less?  You could specify that one license is allowed for            
 a community with a population of 50,000 or less.                              
                                                                               
 MR. FORD stated you could do it however you want.                             
                                                                               
 SENATOR RANDY PHILLIPS stated you wouldn't want to pick a number              
 that would exclude any of the businesses already in the process of            
 opening.                                                                      
 SENATOR DUNCAN stated he is willing to let the bill move from                 
 committee with a conceptual amendment on that.                                
                                                                               
 CHAIRMAN SHARP suggested specifying no more than one license per              
 30,000 of population or less.  Allow one license up to 30,000, then           
 after that, no more than one license for every additional 30,000 of           
 population or partial of.                                                     
                                                                               
 MR. FORD gave an example: if a community had a population of                  
 31,000, they could have two brew-pubs.                                        
                                                                               
 SENATOR DUNCAN added, if a community had a population of 28,000,              
 they could have one.                                                          
                                                                               
 MR. FORD responded that would be correct.                                     
                                                                               
 SENATOR RANDY PHILLIPS wanted the committee to understand what                
 triggered the problem in the first place.  He doesn't think it's              
 fair that some people had to pay so much for a similar type of                
 business.  That's where the problem started.                                  
                                                                               
 SENATOR DUNCAN asked if he understood: Mr. Malekos doesn't want any           
 more competition.                                                             
                                                                               
 CHAIRMAN SHARP responded Mr. Malekos had to buy a liquor dispensary           
 license for $200,000.00 to be in the same business as these other             
 guys.                                                                         
                                                                               
 SENATOR DUNCAN asked Senator Phillips if he wanted to close Snow              
 Goose down.                                                                   
                                                                               
 SENATOR RANDY PHILLIPS replied, no.  But Mr. Malekos wants the                
 playing field to be level in the future.  Senator Phillips stated             
 he agrees with Mr. Malekos.                                                   
                                                                               
 CHAIRMAN SHARP commented he would like to see at least one brew-pub           
 in his town.  He asked if the committee can approve the conceptual            
 amendment.                                                                    
                                                                               
 CHAIRMAN SHARP, hearing no objection, stated a conceptual amendment           
 that allows one combination license for up to 30,000 population,              
 and additional licenses for each 30,000 or less of additional                 
 population was adopted.                                                       
                                                                               
 SENATOR RANDY PHILLIPS asked a question that was indiscernible.               
                                                                               
 MR. FORD responded it would apply to either.                                  
                                                                               
 SENATOR DUNCAN asked if Sitka could have one of these types of                
 businesses under this amendment.                                              
                                                                               
 MR. FORD replied they could have a business with one of these                 
 combination licenses.                                                         
                                                                               
 CHAIRMAN SHARP stated the ABC Board will be reviewing the licensing           
 structures during the interim to come up with recommendations on              
 this, since they opened up this can of worms.                                 
                                                                               
 SENATOR RANDY PHILLIPS stated they helped by passing the law.                 
                                                                               
 CHAIRMAN SHARP asked if he could have a motion to move SB 314.                
                                                                               
 Number 450                                                                    
                                                                               
 SENATOR RANDY PHILLIPS made a motion to discharge SB 314, with the            
 conceptual amendment, from the Senate State Affairs Committee with            
 individual recommendations.                                                   
                                                                               
 CHAIRMAN SHARP, hearing no objection, stated SB 314 was discharged            
 from the Senate State Affairs Committee.                                      

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