Legislature(2001 - 2002)

01/22/2002 01:32 PM Senate TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
              SB 215-COMMON CARRIER LIQUOR LICENSE                                                                            
                                                                                                                                
WILLIAM  MacKAY,  Vice  President-Public  and  Government  Affairs                                                              
Alaska Airlines, read a statement  giving two reasons that current                                                              
licensing requirements for common carriers be modified.                                                                         
                                                                                                                                
   · First, to simplify the requirements so adding additional                                                                   
     aircraft  will  not  require   an  entirely  new  application                                                              
     process that involves filling  out the application, supplying                                                              
     supporting   exhibits,  and   posting   and  publishing   the                                                              
     application  for   a  license.    Alaska  Airlines   and  the                                                              
     Alcoholic  Beverage  Control  Board (ABC  Board)  agree  that                                                              
     modifying  the  statute  to   simplify  obtaining  additional                                                              
     common  carrier   licenses  will  reduce  the   clerical  and                                                              
     administrative  work for both  Alaska Airlines and  the Board                                                              
     and is therefore in the public interest.                                                                                   
                                                                                                                                
   · Secondly, Alaska Airlines would like the fees reduced.                                                                     
     Alaska Airlines  operates all of its 102  aircraft in Alaska.                                                              
     None of  the other  major airlines  serving Alaska,  with the                                                              
     possible  exception of Delta,  obtain Alaska liquor  licenses                                                              
     since  they  do  not operate  intrastate.    Alaska  Airlines                                                              
     believes that  it pays substantially more for  common carrier                                                              
     licenses than any other licensee  in Alaska.  If the proposed                                                              
     bill  becomes law,  Alaska Airlines  will still  pay more  in                                                              
     fees to Alaska than it pays in any other state.                                                                            
                                                                                                                                
The statement included the current system-wide license fees.                                                                    
License Fees                                                                                                                    
Fleet of 102_____________________________________________________                                                             
                                                                                                                                
                    Master          Per AC         Total                                                                  
Alaska                              450.00         45,900.00*                                                                   
Phoenix, Arizona    275.00          n/a                                                                                         
Tucson, Arizona     275.00          n/a            550.00                                                                       
California          400.00          12.00          1612.00                                                                      
Illinois            n/a             60.00          1260.00**                                                                    
Oregon              202.60          n/a            202.60                                                                       
Virginia            1870.00         n/a            1870.00                                                                      
Washington          750.00          5.00           1255.00                                                                      
                                                                                                                                
*Annual Cost;  however required to  file Biannually @  $900.00 per                                                              
aircraft                                                                                                                        
**700 & 900's only                                                                                                              
                                                                                                                                
CHAIRMAN COWDERY,  understanding that eventually the  entire fleet                                                              
would touch  in Alaska, asked  what their anticipated  fleet would                                                              
be.                                                                                                                             
                                                                                                                                
MR. MacKAY said  they currently operate 102 aircraft  and would be                                                              
adding 1 aircraft in 2002 and at least 3 more in 2003.                                                                          
                                                                                                                                
CHAIRMAN  COWDERY  asked  if  this  bill  will  impact  the  other                                                              
carriers.                                                                                                                       
                                                                                                                                
MR. MacKAY answered no because they don't serve alcohol.                                                                        
                                                                                                                                
SENATOR ELTON asked about the statement  that Mr. MacKay had made,                                                              
that even  with this bill Alaska  Airlines will still pay  more in                                                              
Alaska than  any other  state.   Was that  because they  have more                                                              
intrastate  flights in  Alaska or  was that  because other  states                                                              
charge less for the license.                                                                                                    
                                                                                                                                
MR. MacKAY  thought that it was  because they are charged  more in                                                              
Alaska.   He  didn't  know if  other states  based  their fees  on                                                              
intrastate flying.                                                                                                              
                                                                                                                                
CHAIRMAN COWDERY asked if there were any other questions.                                                                       
                                                                                                                                
SENATOR WARD moved that Amendment A be adopted.                                                                                 
                                                                                                                                
     Page 2, line 1, following "licenses."                                                                                      
          Insert "Upon request of the common carrier and                                                                        
     payment  of the proportionate  prorated applicable  fee,                                                                   
     the board shall  change the license period  of a license                                                                   
     for a  vehicle, boat, aircraft,  or railroad  buffet car                                                                   
     in monthly increments to allow  biennial registration to                                                                   
     occur in the month of the licensee's choice."                                                                              
                                                                                                                                
SENATOR ELTON  asked if the intent  of the amendment was  to allow                                                              
the common carrier to change the period of the license.                                                                         
                                                                                                                                
CHAIRMAN COWDERY said the Board would change the license period.                                                                
                                                                                                                                
KIM HUTCHINSON,  lobbyist for Alaska Airlines, explained  that the                                                              
ABC  Board offered  the amendment,  the  intent being  to put  the                                                              
licenses all  in the same time  period so they don't  license half                                                              
the aircraft  one year and half  the aircraft another year.   That                                                              
would make the paperwork easier.                                                                                                
                                                                                                                                
SENATOR  TAYLOR said  all of  the  people serving  alcohol in  the                                                              
state have  adopted a  program where  the bartenders and  barmaids                                                              
have to attend  a training program.   He asked if  Alaska Airlines                                                              
has that as part of the training for their servers.                                                                             
                                                                                                                                
MR.  HUTCHINSON  said that  Alaska  Airlines employees  who  serve                                                              
alcohol go through  the techniques in alcohol  management program,                                                              
(TAMS) Program used to train bartenders and waitresses.                                                                         
                                                                                                                                
SENATOR TAYLOR  wanted it on the  record that this  is voluntarily                                                              
done by the liquor industry and is  not required by law.  This has                                                              
had a major impact  on incidence on aircraft and  a salient effect                                                              
on  the liquor  industry across  the  state as  far as  DWIs.   He                                                              
applauded Alaska Airlines for doing it.                                                                                         
                                                                                                                                
HOWARD  SCAMAN,  Council  on  Alcohol   Abuse  and  Public  Safety                                                              
(CAAPS), said they have no objection  to the bill.  This is not an                                                              
alcohol bill but a revenue bill.                                                                                                
                                                                                                                                
SENATOR  ELTON  asked  about  the difference  in  the  numbers  in                                                              
CAAPS's correspondence from those submitted by Alaska Airlines.                                                                 
                                                                                                                                
MR. SCAMAN said that their numbers  differed from Alaska Airlines'                                                              
by two  licenses.  The  numbers came  from the ABC  Board, showing                                                              
104 licenses, resulting in a difference of about $600.                                                                          
                                                                                                                                
DOUG  GRIFFIN,   Director,  Alcoholic   Beverage  Control   Board,                                                              
testifying  via teleconference  from  Anchorage,  said the  fiscal                                                              
note is their best  estimate.  There will be some  loss of revenue                                                              
to the state  from this bill.   He explained that  Alaska Airlines                                                              
made a compelling case on how they  were being treated differently                                                              
in the  State of  Alaska and  how only  a small  portion of  their                                                              
planes ever  flew within locations  in Alaska.  Therefore  the ABC                                                              
Board, out  of a sense  of fairness,  supported the sense  of this                                                              
bill to try to provide fairness.   Westours is also affected, to a                                                              
lesser extent, with some of their rail cars.                                                                                    
                                                                                                                                
MR. GRIFFIN  said the ABC  Board does not  see this as  an alcohol                                                              
issue.    Alaska  Airlines  uses  great care  in  how  alcohol  is                                                              
provided.   This is  a revenue issue  and out  of a sense  of fair                                                              
disclosure they  wanted to  make sure the  committee was  aware it                                                              
has a fiscal note.                                                                                                              
                                                                                                                                
MR. GRIFFIN  explained that  it would  be beneficial for  clerical                                                              
ease, to provide  a mechanism to get all the licenses  on the same                                                              
biennial  cycle.  Alaska  Airlines  has about  70 aircraft  on one                                                              
cycle  and  the  remaining  aircraft  on the  other  cycle.    The                                                              
discrepancy  of two  licenses was  due to the  airplanes being  on                                                              
different cycles.   The amendment could be a mechanism  to get all                                                              
the aircraft on the same cycle making it easier to keep track.                                                                  
                                                                                                                                
He  said   the  amendment  language   went  more  in   depth  than                                                              
anticipated  so   he  had  faxed  possible  changes   to  Chairman                                                              
Cowdery's staff, Mr.  Smith.  They need a single  year license for                                                              
the purpose of getting all licenses on the same cycle.                                                                          
                                                                                                                                
He  said that  on line  4 he  struck "in  monthly increments"  and                                                              
"biennial" and then  added "the biennial period of  the balance of                                                              
the  licensee's  common  carrier  licenses." This  would  make  it                                                              
simpler and it would read starting on line 4:                                                                                   
                                                                                                                                
     "aircraft, or railroad buffet car to allow registration                                                                    
      to occur in the biennial period of the balance of the                                                                     
     licensee's common carrier licenses."                                                                                       
                                                                                                                                
                                                                                                                                
CHAIRMAN COWDERY said  he did not believe that  language change is                                                              
a problem with the industry.                                                                                                    
                                                                                                                                
MR. GRIFFIN believed the industry is supportive of this as well.                                                                
                                                                                                                                
SENATOR  TAYLOR moved  that they  amend amendment  A beginning  on                                                              
line four to read:                                                                                                              
     "aircraft, or railroad buffet car to allow registration                                                                    
      to occur in the biennial period of the balance of the                                                                     
     licensee's common carrier licenses."                                                                                       
                                                                                                                                
CHAIRMAN  COWDERY  asked  for  any objections.    There  being  no                                                              
objection to  amending the  amendment, the  motion passed.   Then,                                                              
there  being no  objection  to the  amendment,  the amendment  was                                                              
adopted.                                                                                                                        
                                                                                                                                
SENATOR TAYLOR moved  that CSSB 215 (TRA) be moved  from committee                                                              
with individual recommendations  and fiscal note.   There being no                                                              
objection the motion passed.                                                                                                    

Document Name Date/Time Subjects