02/21/2008 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
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| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 327 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
February 21, 2008
8:05 a.m.
MEMBERS PRESENT
Representative Anna Fairclough, Co-Chair
Representative Gabrielle LeDoux, Co-Chair
Representative Nancy Dahlstrom
Representative Kurt Olson
Representative Sharon Cissna
Representative Woodie Salmon
MEMBERS ABSENT
Representative Mark Neuman
COMMITTEE CALENDAR
HOUSE BILL NO. 327
"An Act relating to shipping, sending, transporting, or bringing
alcohol to a local option area and providing alcohol to others
in the local option area, including penalties for violations;
relating to furnishing alcohol to a minor and to civil penalties
for licensees whose agents or employees furnish alcohol to a
minor; relating to manslaughter as a direct result of ingestion
of alcoholic beverages brought in violation of a local option
prohibition; relating to reports of the court concerning certain
alcohol violations by minors; making conforming amendments; and
providing for an effective date."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 327
SHORT TITLE: ALCOHOL: LOCAL OPTION/LICENSING/MINORS
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/17/08 (H) READ THE FIRST TIME - REFERRALS
01/17/08 (H) CRA, JUD, FIN
01/31/08 (H) CRA AT 8:00 AM BARNES 124
01/31/08 (H) <Bill Hearing Postponed to 02/05/08>
02/05/08 (H) CRA AT 8:00 AM BARNES 124
02/05/08 (H) Heard & Held
02/05/08 (H) MINUTE(CRA)
02/21/08 (H) CRA AT 8:00 AM BARNES 124
WITNESS REGISTER
GEORGE GATTER, Owner
Tony's Bar
Kodiak, Alaska
POSITION STATEMENT: During hearing of HB 327, suggested
strengthening the Village Public Safety Officer (VPSO) and
Alaska State Troopers' programs.
DALE FOX, President/CEO
Alaska Cabaret Hotel Restaurant & Retailer's Association (CHARR)
Anchorage, Alaska
POSITION STATEMENT: Expressed concerns with HB 327.
GARY SUPERMAN, President
Kenai Peninsula CHARR
Nikiski, Alaska
POSITION STATEMENT: Testified in opposition to HB 327.
DORAN POWELL, General Manger
Chilkoot Charlie's;
Anchorage CHARR
Anchorage, Alaska
POSITION STATEMENT: Characterized HB 327 as Draconian.
ANDY LUNDQUIST
Kodiak CHARR
Kodiak, Alaska
POSITION STATEMENT: Testified that HB 327 should be returned to
the governor's office.
ANNE CARPENETI, Assistant Attorney General
Department of Law
Juneau, Alaska
POSITION STATEMENT: During hearing of HB 327, provided
clarification.
ACTION NARRATIVE
CO-CHAIR GABRIELLE LEDOUX called the House Community and
Regional Affairs Standing Committee meeting to order at 8:05:28
AM. Representatives Fairclough, LeDoux, Dahlstrom, and Salmon
were present at the call to order. Representatives Olson and
Salmon arrived as the meeting was in progress.
HB 327-ALCOHOL: LOCAL OPTION/LICENSING/MINORS
8:05:52 AM
CO-CHAIR LEDOUX announced that the only order of business would
be HOUSE BILL NO. 327, "An Act relating to shipping, sending,
transporting, or bringing alcohol to a local option area and
providing alcohol to others in the local option area, including
penalties for violations; relating to furnishing alcohol to a
minor and to civil penalties for licensees whose agents or
employees furnish alcohol to a minor; relating to manslaughter
as a direct result of ingestion of alcoholic beverages brought
in violation of a local option prohibition; relating to reports
of the court concerning certain alcohol violations by minors;
making conforming amendments; and providing for an effective
date."
8:05:59 AM
CO-CHAIR LEDOUX announced that public testimony would be
reopened.
8:06:23 AM
GEORGE GATTER, Owner, Tony's Bar, opined that rather than
imposing stiffer fines and criminalizing those in the
hospitality industry, more good could be achieved by
strengthening rural law enforcement, such as with the Village
Public Safety Officer (VPSO) program. He pointed out that the
community he lives in hasn't had a VPSO for four months. Mr.
Gatter further opined that the bootlegger problem could be
solved by strengthening the VPSO and Alaska State Troopers'
programs.
8:08:42 AM
DALE FOX, President/CEO, Alaska Cabaret Hotel Restaurant &
Retailer's Association (CHARR), provided the following
testimony:
On page 2 of the bill, the bill suggests that plastic
containers can no longer be used to ship to rural
Alaska. Bootleggers, who are already breaking the
law, will not pay attention to this new rule. So, the
comments that this will stop bootlegging don't ring
true. Law-abiding consumers in damp communities will
have to pay more because glass is heavier. Therefore,
this is just an additional tax on rural Alaskans who
want to buy alcohol and have it shipped. The
provisions of the bill get worse every couple of
pages. On page 3 the bill suggests that if any member
of an establishment's staff makes a mistake that the
establishment must be closed. We believe this is
unreasonable. Imagine if you owned a restaurant and
bar with 50 employees. And if one person makes a
mistake, everybody loses their job for 45 days. As an
owner, your profits for the year are gone, your
employees who don't have the cash to wait for the
suspension have to find new jobs, and your customers
leave. It's virtually the death penalty for the
business. Let's look at page 5; it makes it a felony
to make two mistakes within 10 years, shipping
alcohol. This parallels an existing rule that makes
it a felony for a bartender to make two mistakes
reading IDs and serving minors, in their life. It
doesn't seem reasonable to me to turn clerical errors
into a felony.
Let's take an example. If you work at a liquor store
and somebody orders six liters of spirit alcohol. If
you do the process right, you check the state database
and find out if he's ordered alcohol from another
establishment. Assume for a moment he's ordered five
liters from another establishment. If you make the
mistake of sending him that six liter order, you're on
your way to being a felon -- a clerical mistake. If
that's your job and you process thousands of orders,
making two mistakes in a ten-year period is possible.
So, like the waiters and waitresses who are getting
threatened with a [felony] for their second mistake,
people are leaving the industry. No other profession
is singled out for such harsh penalties. Recently at
my office we learned of a 20-year old who got an ID
from the [Division of Motor Vehicles] DMV using
somebody else's passport that showed that they were
21. They actually came and took a [techniques in
alcohol management] TAM class using that ...
legitimate state ID. And the trooper called to let us
know to erase that. You know we don't punish the
state worker who works at the DMV and make them a
felon and nor should we. And nor should we make
people felons for making clerical mistakes in the
hospitality industry.
Turning to page 7 of the same bill, the authors want
to charge the shipping clerk who makes the mistake of
sending six liters of alcohol, in my example earlier,
with manslaughter if a death results. Now, the
authors will tell you this is a bootlegging bill, but
... if you read the ... section, it includes shipping.
And so, the clerk that makes the mistake that I
suggested of shipping six bottles when you should have
shipped five could be charged with manslaughter. We
understand that some of our opponents believe that any
mistake should result in penalties where businesses
close, employees are forced on welfare, profits are
lost, and when all else fails our opponents would like
to see people leave the industry. That's why we're
hear to appeal to you, our citizen legislators, for
reasonable rules. Imagine your adult child working as
a waiter or waitress where they make a math error and
serve an underage sting agent. Should there be
penalties? Yes, there should. But should they be
made a felon? Most parents would suggest to their
adult child that they change careers if they made one
mistake for fear of making a second mistake and being
a felon. Imagine your constituent who has made an
honest living by working very hard to provide good
food and beverage. Do you really think that closing
his business and taking away his profits for the year
is the right thing to do for one of his staff making a
mistake? Imagine your adult child, or nephew, or
niece working in the shipping department of a liquor
store going to jail for manslaughter because they made
a clerical error.
This bill needs major revisions to meet the needs of
all Alaskans, and we trust that your good judgment
will be used to improve the bill. CHARR is willing to
work with you and your staff as you develop a
reasonable alternatives. We don't believe that this
bill is reasonable, as written.
8:15:37 AM
REPRESENTATIVE DAHLSTROM asked if he has had any conversations
or working meetings with the administration.
MR. FOX related that CHARR has requested that those who sponsor
legislation impacting the [hospitality] industry inform CHARR
and obtain comment from it as a courtesy. He related his belief
that no legislator or administration would develop a new
electrical code, for instance, without speaking with an
electrician. However, the first CHARR heard of HB 327 was when
it was filed.
REPRESENTATIVE DAHLSTROM asked whether Mr. Fox has spoken with
the Department of Public Safety (DPS) or is attempting to speak
with the administration while CHARR is in town.
MR. FOX replied no.
8:17:02 AM
CO-CHAIR FAIRCLOUGH pointed out that she has provided the
committee with an amendment that would delete the provision that
would close an establishment [after a certain number of
violations]. She related that after discussions with the
administration she came to understand that the closure was
proposed as a deterrent to underage drinking, which parallels
provisions related to tobacco that were successful in deterring
tobacco use among youth. However, with tobacco only an
individual product was removed from the store versus closing the
entire store. She noted that the administration wasn't
agreeable to as harsh a penalty as she desired, and thus it
resulted in the amendment in the committee packet. She
emphasized that closure could severely harm and eliminate a
business and it would be too difficult to eliminate a product.
Therefore, the increased fines offer an alternative.
8:20:31 AM
MR. FOX remarked that the challenge, particularly in relation to
underage individuals, is that about 95 percent of the
enforcement effort is placed on 7 percent of the problem.
Everyone knows that very little alcohol involved in minors
consuming comes from retail establishments. In fact, national
surveys show that 65 percent of alcohol consumed by minors comes
from parents' own products, shoulder taps, and Internet sales.
This national survey determined that about 7 percent of the
alcohol sales to minors occur when the minor fools the bartender
or the clerk. Therefore, the industry is frustrated with any
increase in fines or penalties because they feel as if they are
a minor part of the problem and they are working on solving the
problem. Furthermore, when all the focus is on retailers,
inevitably a mistake will be made and caught.
8:22:33 AM
CO-CHAIR FAIRCLOUGH asked if Mr. Fox favors closure or fines.
MR. FOX stated his preference for fines.
CO-CHAIR FAIRCLOUGH related that she has other amendments,
including one that would require that a server have a techniques
in alcohol management (TAM) card prior to being able to serve.
She then related her understanding that currently servers of
alcohol are allowed to consume alcohol on premises when serving.
Therefore, she noted that she has an amendment to prohibit the
aforementioned.
8:24:00 AM
CO-CHAIR LEDOUX asked if that's correct that servers are allowed
to consume alcohol on the premises while serving.
MR. FOX said that different organizations have different
policies. He indicated agreement that there's no statute that
prohibits such by nodding.
8:24:32 AM
GARY SUPERMAN, President, Kenai Peninsula CHARR, related that a
45-day closure would result in the closure of his business
because the margins are slim. He further related that his
margins have been about 7 percent of his gross. Even that 7
percent has decreased in the last year due to the rise in
utilities, taxes, and insurance rates. He opined that even some
of the fines would make it extremely difficult.
MR. SUPERMAN informed the committee that over the past 15 years,
his establishment has received one citation for selling alcohol
to a minor during a sting operation. The offender was a new
bartender who had to pay the $500 fine. Mr. Superman emphasized
that everyone makes mistakes. The [proposed] punitive actions
aimed at legitimate businesses are excessive punishment, he
opined. This legislation, he further opined, is a reflection of
the changed in philosophy that has occurred since the transfer
of the Alcoholic Beverage Control Board ("ABC Board") to the
Department of Public Safety (DPS). He characterized the
philosophy now as very Draconian. He related that the frequency
of stings is "at times, unbelievable and the methodology of the
stings is very untenable at times." Mr. Superman viewed the
legislation as a move toward enforcement and seems to forward
the notion that the [alcohol industry] is part of the criminal
element. In conclusion, Mr. Superman related his adamant
opposition to the movement of HB 327.
8:29:47 AM
MR. SUPERMAN, in response to Representative Dahlstrom, stated
that he and his wife own the Hunger Hut Bar, Motel, and Liquor
Store. The bar seats 50 people.
8:30:11 AM
REPRESENTATIVE OLSON requested that Mr. Superman relate to the
committee a few of the recent stings.
MR. SUPERMAN related that he has a walkup window at his
establishment and the troopers send an underage individual to
the walkup window. The bartenders have relayed that the sting
usually occurs during a shift change, when quite a bit is
occurring. The aforementioned was the case when the new
bartender received a violation. He remarked that often the
underage individual doesn't look like a kid. After the last
violation, he said he established a policy in which the violator
loses his/her job.
8:32:00 AM
DORAN POWELL, General Manger, Chilkoot Charlie's; Anchorage
CHARR, said that the structured closures impact Chilkoot
Charlie's the most. Chilkoot Charlie's runs a high volume
operation. Last year, Chilkoot Charlie's arrested 98 minors and
turned them over to the Anchorage Police Department. However,
the establishment doesn't get credits for those arrests. Mr.
Powell pointed out that he employs about 110 humans and
performed about 1 million transactions last year. He related
that Chilkoot Charlie's is serious about enforcement and will
and has fired those who knew an underage individual was in the
establishment. Furthermore, Chilkoot Charlie's bans patrons
from the bar for a year when that patron, who has been in the
bar prior, comes in to celebrate his/her 21st birthday. Still,
sooner or later someone will fail and make a mistake. Mr.
Powell said that if Chilkoot Charlie's received one to two of
these citations and faced a two-week closure, the business would
be in financial distress to the point of jeopardizing the entire
operation. He, too, characterized the legislation as Draconian.
8:35:05 AM
CO-CHAIR FAIRCLOUGH requested that Mr. Powell comment on the
need to have TAM cards in place prior to an individual serving.
MR. POWELL related that the aforementioned is already practiced
by Chilkoot Charlie's. He related his understanding that it's
not part of the statewide policy because of the inability in
rural Alaska to obtain a TAM card in an expedited manner. In
further response to Co-Chair Fairclough, Mr. Powell specified
that Chilkoot Charlie's doesn't allow its servers to drink
[while working].
8:36:45 AM
ANDY LUNDQUIST, Kodiak CHARR, related his agreement with Mr.
Fox's comments that HB 327 is Draconian and needlessly
criminalizes employees. The penalties are excessive. He echoed
Mr. Powell's point that many in the industry have proactively
worked to stop underage drinking and the problem of bootleggers
is a statewide problem that everyone wants to solve. He
highlighted Mr. Gatter's earlier testimony that increased VPSO
and state trooper presence would go farther than this
legislation. Mr. Lundquist related his frustration that even if
HB 327 is passed, underage drinking and bootlegging will
continue. He expressed further frustration with placing all of
the enforcement on 7 percent of the problem. Mr. Lundquist
informed the committee that he recently sold his business
because of legislation such as this. He opined that the
atmosphere in the state should support small business.
MR. LUNDQUIST turned to Co-Chair Fairclough's amendment
regarding TAM cards, and noted his agreement with Mr. Powell's
understanding. He related that in Kodiak they have difficulty
obtaining someone to teach the TAM class once a month.
Furthermore, it's difficult to get good help, particularly in a
short time and with a TAM card. With regard to drinking on the
job, most businesses prohibit it for their bartenders and
cocktail waitresses. However, he questioned whether the owner
could have a drink in his/her own bar. Mr. Lundquist said he
would like to see HB 327 returned to the governor's office and
[the industry] would like to have input. If the desire is to
stop bootlegging, then let's do that, he stressed.
8:43:09 AM
CO-CHAIR FAIRCLOUGH related her understanding that HB 327 is not
moving today, and asked if it would be valuable to have a work
session on this matter.
CO-CHAIR LEDOUX said it's a great idea and she would like to
schedule such, if the committee agrees.
CO-CHAIR FAIRCLOUGH expressed interest in the
availability/possibility of an online TAM course.
REPRESENTATIVE DAHLSTROM informed the committee that she has had
ongoing conversations with the ABC Board, DPS, and bar owners
regarding concerns with electronic TAM testing.
8:49:07 AM
REPRESENTATIVE SALMON remarked that the committee of next
referral [will fully vet the issue] as the chair is in the
business. He suggested that the industry's concerns will be
reviewed and the legislation may be returned to the
administration.
8:49:42 AM
REPRESENTATIVE OLSON requested that Representative Joule be
invited to the work session.
8:50:00 AM
CO-CHAIR LEDOUX announced that the meeting would be held on
March 4, 2008.
8:50:56 AM
ANNE CARPENETI, Assistant Attorney General, Department of Law,
began by stating that she and the administration are open to
comments. She related that she also represents the ABC Board.
Ms. Carpeneti emphasized that those who sell alcohol are
licensed by the state to sell and make a profit from a
potentially lethal substance. Due to the problems the state has
with alcoholism, it makes sense for the state to address it in
every way it can. The survey quoted earlier was performed by
the industry and she said she wasn't sure that it's accurate.
However, she noted her agreement that there are other places
from which youth obtain alcohol and those must also be
addressed. Still, it makes sense to address it through bars and
other areas through which minors obtain alcohol. Ms. Carpeneti
said that the reason consequences are placed on the owner of the
bar is because he/she sets the tone regarding how his/her
employees and agents will deal with selling alcohol. The
tobacco enforcement experience clearly illustrates that when
there are consequences to the owner of the establishment,
violations "go way down." Therefore, she suggested that the
agents and employees are paying more attention to whom they are
selling tobacco. The aforementioned is the reason the
Department of Health and Social Services' study group suggested
that similar sanctions/consequences to the owner of the bar
selling [to underage minors] be implemented.
MS. CARPENETI clarified that HB 327 doesn't adopt felonies for
the hospitality industry, unless a bootlegger is considered to
be part of the hospitality industry. The legislation adopts a
felony for a third time conviction for a bootlegger. With
regard to the prohibition of sending alcohol in plastic to local
option communities, law enforcement has said that will help them
enforce bootlegging laws. In terms of the manslaughter
provision in HB 327, Ms. Carpeneti clarified that it doesn't
subject a clerk who makes a mistake subject to prosecution by
manslaughter. The provision refers to selling without a license
in a local option area and the alcohol must be the direct cause
of the death of another person. She then suggested that the
committee may want to hear from those who perform the stings.
She related her understanding that stings aren't performed
during shift changes and juveniles who look like juveniles are
used. The photographs of the juveniles bear that out, she said.
The intent isn't to fool people, she remarked.
8:55:22 AM
CO-CHAIR LEDOUX asked if the ABC Board keeps photos of those
involved in sting operations.
MS. CARPENETI responded that photos of those involved in the
sting operations are part of the investigative folder that goes
to the court. She pointed out that these juveniles use their
own driver's license. In further response to Co-Chair LeDoux,
suggested that at least the trooper in charge of the stings
could come and describe his efforts to determine whether people
are following the law. Law enforcement finds out whether people
are enforcing the law by performing enforcement, which is what
occurred when the ABC Board moved to DPS. Ms. Carpeneti
reiterated that HB 327 "does not make it a felony for a clerk in
Anchorage to send alcohol in response to a written order, ... it
adopts a felony for a third time within a 10-year period,
bootlegger, to do so. She pointed out that it's already a
felony to bootleg certain amounts of alcohol into a local option
area.
The committee took a brief at-ease at 8:57 a.m.
8:57:55 AM
CO-CHAIR LEDOUX, upon determining no one else wished to testify,
closed public testimony. She announced that HB 327 wouldn't be
moved from committee today and that the committee would hold a
work session March 4th.
8:58:30 AM
CO-CHAIR FAIRCLOUGH announced that she wouldn't offer her
amendments due to comments today and the possibility of
massaging the amendments to better meet the industry needs while
holding people accountable.
[HB 327 was held over.]
8:59:25 AM
ADJOURNMENT
There being no further business before the committee, the House
Community and Regional Affairs Standing Committee meeting was
adjourned at 8:59:30 AM.
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