Legislature(1995 - 1996)
03/20/1996 03:17 PM House L&C
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 20, 1996
3:17 p.m.
MEMBERS PRESENT
Representative Pete Kott, Chairman
Representative Norman Rokeberg, Vice Chairman
Representative Kim Elton
Representative Jerry Sanders
Representative Beverly Masek
Representative Brian Porter
Representative Gene Kubina
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 372
"An Act relating to liquor licenses issued to a restaurant or
eating place; and providing for an effective date."
- PASSED OUT OF COMMITTEE
HOUSE BILL NO. 482
"An Act relating to state procurement practices and procedures; and
providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 533
"An Act relating to the board of directors of the Alaska Aerospace
Development Corporation."
- SCHEDULED BUT NOT HEARD
SENATE BILL NO. 197
"An Act prohibiting increases in health insurance premiums if the
insured is a victim of domestic violence."
- SCHEDULED BUT NOT HEARD
*HOUSE BILL NO. 497
"An Act relating to chiropractic peer review; and providing for an
effective date."
- SCHEDULED BUT NOT HEARD
*HOUSE BILL NO. 278
"An Act relating to the enhanced 911 emergency reporting systems."
- BILL CANCELLED
(* FIRST PUBLIC HEARING)
PREVIOUS ACTION
BILL: HB 372
SHORT TITLE: RESTAURANT LIQUOR LICENSES
SPONSOR(S): REPRESENTATIVE(S) ROKEBERG, B.Davis, Brown
JRN-DATE JRN-PG ACTION
12/29/95 2363 (H) PREFILE RELEASED
01/08/96 2363 (H) READ THE FIRST TIME - REFERRAL(S)
01/08/96 2363 (H) STATE AFFAIRS, LABOR & COMMERCE
01/10/96 2405 (H) COSPONSOR(S): BROWN
03/07/96 (H) STA AT 8:00 AM CAPITOL 102
03/07/96 (H) MINUTE(STA)
03/09/96 (H) STA AT 10:00 AM CAPITOL 102
03/09/96 (H) MINUTE(STA)
03/11/96 3056 (H) STA RPT 1DP 2NR 2AM
03/11/96 3057 (H) DP: GREEN
03/11/96 3057 (H) NR: JAMES, IVAN
03/11/96 3057 (H) AM: PORTER, ROBINSON
03/11/96 3057 (H) ZERO FISCAL NOTE (REV)
03/20/96 (H) L&C AT 3:00 PM CAPITOL 17
BILL: HB 482
SHORT TITLE: STATE PROCUREMENT PRACTICES & PROCEDURES
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
JRN-DATE JRN-PG ACTION
02/09/96 2686 (H) READ THE FIRST TIME - REFERRAL(S)
02/09/96 2686 (H) L&C, STATE AFFAIRS, FINANCE
02/09/96 2687 (H) 2 FISCAL NOTES (ADM, DOT)
02/09/96 2687 (H) 5 ZERO FNS (2-ADM, DCED, DCRA, CORR)
02/09/96 2687 (H) 5 ZERO FNS (DOE, DEC, F&G, GOV, DHSS)
02/09/96 2687 (H) 5 ZERO FNS (LABOR, LAW, DMVA, DNR, DPS)
02/09/96 2687 (H) 2 ZERO FNS (REV, UA)
02/09/96 2687 (H) GOVERNOR'S TRANSMITTAL LETTER
03/18/96 (H) L&C AT 3:00 PM CAPITOL 17
03/18/96 (H) MINUTES(L&C)
03/20/96 (H) L&C AT 3:00 PM CAPITOL 17
WITNESS LIST
DON DAPCEVICH, Executive Director
Governor's Advisory Board on Alcoholism and Drug Abuse
P.O. Box 110608
Juneau, Alaska 99801-0608
Telephone: (907)465-8920
POSITION STATEMENT: Testified in support of HB 372
DON SKEWIS, Owner
Crossroads Restaurant and Bar
1402 Gambell
Anchorage, Alaska 99501
Telephone: (907)276-9017
POSITION STATEMENT: Testified in support of HB 372
DOUG GRIFFIN, Chairman
Alcoholic Beverage Control Board
550 West 7th Avenue, Suite 350
Anchorage, Alaska 99501
Telephone: (907)277-8638
POSITION STATEMENT: Testified in support of HB 372, with
concerns
MAURICE MCDONALD, Vice President
Cabaret Hotel and Restaurant Retailers Association
341 East 56th Avenue
Anchorage, Alaska 99501
Telephone: (907)563-8133
POSITION STATEMENT: Testified in support of HB 372
JACK LEWIS, President
Anchorage Restaurant and Beverage Association
1347 East 2nd Avenue
Anchorage, Alaska 99501
Telephone: (907)563-8133
POSITION STATEMENT Testified in support of HB 372
PAT FULLERTON, President
Spenard Community Council
301 East Fireweed Lane, Suite 101
Anchorage, Alaska
Telephone:(907)563-1156
POSITION STATEMENT: Testified in support of HB 372
DUGAN PETTY, Director
Division of General Services
Department of Administration
State of Alaska
P.O. Box 110210
Juneau, Alaska 99811-0210
Telephone: (907)465-225-
POSITION STATEMENT: Provided information with regard to
HB 482
ACTION NARRATIVE
Tape 96-25, SIDE A
Number 0008
The House Labor and Commerce Standing Committee was called to order
by Chairman Pete Kott at 3:17 p.m. Members present at the call to
order were Representatives Kott, Rokeberg, Elton, Sanders, Masek,
and Kubina. Representative Porter joined the meeting at 3:20 p.m.
HB 372 - RESTAURANT LIQUOR LICENSES
Number 0043
CHAIRMAN KOTT announced that the first order of business to come
before the committee was HOUSE BILL NO. 372, "An Act relating to
liquor licenses issued to a restaurant or eating place; and
providing for an effective date."
REPRESENTATIVE NORMAN ROKEBERG spoke as the sponsor of HB 372. He
stated that he had introduced the legislation at the request of the
Spenard Community Council, which is part of his district in the
Anchorage area. The community council had passed a resolution
asking for the repeal of taverns. The council is concerned because
the Spenard area has 27 percent of all the liquor licenses in
Anchorage, and 6 percent of the population. The council has an
ongoing concern about the spread of liquor dispensing in the
community. They believe that alcohol contributes to the high level
of crime in the area. Secondly, Representative Rokeberg stated
that he wanted the opportunity to right a wrong vote. Last year,
SB 87, which passed the House by a vote of 39 - 0, authorized the
establishment of taverns. He explained that the House members were
told the pertinent section was put into the law because of
Alcoholic Beverage Control (ABC) Board concerns about Cyrano's
bookstore in Anchorage. The business was unable to operate under
the existing statutory scheme, so remedial legislation was needed.
However, Representative Rokeberg asserted that the House members
were misinformed. In fact, SB 87 created a whole new class of
taverns. His third reason for introducing the bill was the
economic impact of SB 87. In the Anchorage area, a beverage
dispensary license sold for as much as $400,000, during the 1980's.
Now, those licenses are valued from $100,000 to $150,000. A
restaurant license, which only permits the sale of beer and wine,
at the peak was valued at about $25,000. Now they have no
secondary value. It is also interesting to note that the bi-annual
renewal fee for a beverage dispensary license is $2,500. By
passing SB 87, the legislature allowed 10 percent of all restaurant
licenses in a particular geographic jurisdiction to be converted to
exempt licenses. Basically, this created a special interest
exemption in the statute, which should be removed. The bill passed
last year expands the availability of alcohol without substantial
food sales. It allows 10 percent of restaurant licenses to be
exempt from the 50 percent food provision which is presently in the
regulations. In these exempt establishments, beer and wine can be
sold with a menu approved by the ABC board, and entertainment is
allowed past 9 p.m. These are the primary elements of an exempt
license. Under SB 87, local approval is required for an exempt
establishment. Under the regular statutory scheme, a liquor
license is subject only to an advisory vote by a municipal
government.
Number 0478
REPRESENTATIVE ROKEBERG further noted that the Anchorage Municipal
Assembly recently passed a resolution in support of HB 372. Then,
on reconsideration, they repealed the resolution by a vote of 6 -
5. He stated that he believes there is a member who has a vested
interest in a pending license application. His understanding is
that the assembly will reconsider the matter. They have formally
instituted a moratorium on granting any exempt licenses, pending
the outcome of HB 372. Representative Rokeberg noted that he would
offer a small amendment, which would add "physical dance floor," to
the provisions of CSHB 372(STA).
Number 0780
CHAIRMAN KOTT stated that the committee members did not have the CS
in their packets.
REPRESENTATIVE ROKEBERG corrected himself. He stated that the CS
he had was version CSHB 372(G).
CHAIRMAN KOTT responded that the members did not have that version,
either. Copies of CSHB 372(G) were then distributed to the
committee members.
REPRESENTATIVE ROKEBERG indicated that the testimony before the
State Affairs Committee was such that he had provided a CS, to deal
with some of their concerns. The CS contains a provision to
"grandfather in" three existing exempt licenses. The three
establishments would have to demonstrate to the ABC board that they
serve a sufficient menu to meet the provisions of the law. Also,
live performances could only be conducted between the hours of 6
p.m. and 9 p.m. He apologized that the committee had not had the
opportunity to review version G. Representative Rokeberg also
noted that the provisions on page 2, lines 8 and 10, should
probably read "200 feet" rather than "1,000."
Number 0789
REPRESENTATIVE BRIAN PORTER made a motion that the committee adopt
CSHB 372(G).
REPRESENTATIVE SANDERS asked if his understanding was correct.
Last year, the legislature passed a bill, SB 87, that created
taverns. Three people have opened taverns under the provisions of
the bill. Now, the committee wants to pass a bill so that no one
else can open such an establishment, except the three who have
already done so.
REPRESENTATIVE ROKEBERG responded that the entire category could
not be repealed, because businesses have already made investments
based on this new exempt license. That is why he agreed to include
a grandfather clause.
REPRESENTATIVE SANDERS then asked, "You want to grandfather in
three new people, and grandfather out everybody else?"
REPRESENTATIVE ROKEBERG reiterated that he would have preferred to
repeal the entire section, but because of testimony that people
could be injured, he inserted the grandfather provision.
Number 0906
REPRESENTATIVE GENE KUBINA asked for an explanation of the unfair
advantage.
REPRESENTATIVE ROKEBERG responded that the entire structure of the
alcohol laws in the state of Alaska is predicated on only two types
of licenses: a beverage dispensary license, which has a
significant secondary value and limited access, and a restaurant
license. Anyone wishing to set up a cabaret or bistro type
establishment has to purchase a beverage dispensary license. In
the major urban areas, populations would have to be expanded before
additional licenses could be granted. Therefore, the only way to
get into the business is to purchase an already existing license.
Because there are restrictions on restaurant licenses, these do not
compete with beverage dispensary licenses. The beverage dispensary
industry is very concerned about the impact of this new class of
exempt licenses.
REPRESENTATIVE ROKEBERG further noted that he has been accused of
having a vested interest in HB 372, and asserted that he has no
interest in any bar or other establishment of that nature. In his
youth, he was the owner of a beverage dispensary license, but that
was sold in 1968. The proposed legislation is an issue of
economics and fairness.
Number 1139
REPRESENTATIVE PORTER asked if the original bill included a
limitation on the number of exempt licenses.
REPRESENTATIVE ROKEBERG responded that the limit is 10 percent of
all licenses in a geographic area. In Anchorage, for instance,
there could be 14 or 15 exempt licenses.
Number 1159
REPRESENTATIVE KIM ELTON noted that section 2 of the proposed bill
contains several prohibitions. He asked if, for example, live
entertainment can only take place between the hours of 6 p.m. and
9 p.m. That would preclude entertainment at an afternoon fund
raiser.
REPRESENTATIVE ROKEBERG responded that his proposed Amendment 1
would take care of that problem.
REPRESENTATIVE ELTON replied that he was not sure if it did. If an
establishment had to apply to the chairman of the ABC board for an
exemption from this provision, would it really be worth the
trouble?
REPRESENTATIVE ROKEBERG stated that the existing regulations
contain this requirement.
REPRESENTATIVE ELTON then asked, if that is the existing
regulation, why is the proposed language needed?
Number 1335
REPRESENTATIVE ROKEBERG responded that this language remains in for
the grandfathered, exempt licensees.
REPRESENTATIVE ELTON said he still didn't understand why the
section was needed.
REPRESENTATIVE ROKEBERG stated that the existing regulations were
written for restaurant licenses, but this section refers to exempt
licenses.
CHAIRMAN KOTT noted that the beer and wine licenses presently
existing would have to go to the director to receive this permit.
The section being amended refers only to the new class of taverns
that was created by SB 87.
REPRESENTATIVE ROKEBERG stated that he would be happy to circulate
the existing restaurant regulations.
REPRESENTATIVE ELTON responded that that would be helpful.
REPRESENTATIVE ROKEBERG reiterated that the current regulations
apply to existing restaurant licenses. They specifically require
that a restaurant wishing to have live entertainment on its
premises before 6 p.m. must have the permission of the ABC board.
Number 1432
REPRESENTATIVE BEVERLY MASEK stated that she had sent a memo to
Representative Rokeberg regarding his proposed HB 372, outlining
her concerns. She referred to the fact that Anchorage currently
has 108 package liquor license, 147 dispensary licenses, 24 club
licenses, and 146 restaurant or eating places, with six licenses
applied for. Under the provisions of SB 87, Anchorage is limited
to a maximum of 15 exempt establishments. One reason for creating
the exemption was so that restaurants could have entertainment past
9 p.m. Representative Masek asked why Representative Rokeberg
considered entertainment past 9 p.m. to be a problem.
REPRESENTATIVE ROKEBERG responded that it would be an unfair
competitive advantage. The exempt licensee does not have to make
the monetary investment required of a beverage dispensary licensee.
He reiterated that some establishments in Anchorage have paid over
$400,000 for a beverage dispensary license. Yet, an exempt license
can now be obtained for free. The liquor laws of the state were
not designed to allow this situation. It is very much an economic
issue.
Number 1576
REPRESENTATIVE MASEK then noted that the exempt establishments can
only serve beer and wine, as opposed to a full liquor license. So,
there is a difference. Also, they are not competing with
restaurants, since they do not have full kitchens.
REPRESENTATIVE ROKEBERG responded that in order to have a full
kitchen menu, a restaurant must make a substantial investment. If
an establishment only serves a token menu, no such investment is
required. He stated that he had recently spoken with the ABC board
members, and that the standards for approving a menu under the
provisions of SB 87 are minimal. In subsequent conversations, ABC
board members stated their concern that the standards for
grandfathered establishments were not high enough.
REPRESENTATIVE MASEK then commented that the exempt licenses must
be approved by the local governing body.
REPRESENTATIVE ROKEBERG replied that most people in the alcoholic
beverage industry were unaware of what happened when SB 87 passed
last year. There has been a late recognition of what occurred. He
asserted that the Anchorage Municipal Assembly approved licenses
without realizing the full impact of the legislation, which is why
they have now put a moratorium on the issuance of any more exempt
licenses in Anchorage.
Number 1744
REPRESENTATIVE MASEK stated that she had received a written
response from the ABC board regarding the type of menu required.
The requirement goes well beyond chips and dip.
REPRESENTATIVE ROKEBERG responded that he had inserted the menu
provisions because of the five exempt applications still pending,
and reiterated that he would be happy to strengthen the provision.
Number 1809
REPRESENTATIVE SANDERS again asked about SB 87. Was it the same
bill that allowed restaurants which serve wine and liquor to play
music in the evening for private parties?
REPRESENTATIVE ROKEBERG responded that SB 87 was a major, omnibus
liquor bill. It created the category of exempt licenses.
REPRESENTATIVE SANDERS reiterated that he had not understood the
full impact of the bill when he voted for it.
REPRESENTATIVE ROKEBERG stated that the House "got sold a bill of
goods" by their colleagues across the way.
REPRESENTATIVE SANDERS reiterated that he had thought SB 87 applied
only to private parties.
REPRESENTATIVE ROKEBERG responded that it did not.
Number 1903
CHAIRMAN KOTT called on the first witness, Don Dapcevich.
DON DAPCEVICH, Executive Director of the Governor's Advisory Board
on Alcoholism and Drug Abuse, stated that the board supports HB
372. He noted that he is less concerned about the economic impact
of SB 87 than he is about the creation of a new industry, which has
the potential to raise Alaska's already high consumption rate of
alcohol, with all the attendant problems and costs. He noted that
SB 87 actually creates an industry where none existed before. This
flies in the face of the state plan for alcoholism and drug abuse
prevention.
Number 2030
REPRESENTATIVE SANDERS asked about the three existing businesses
which would be grandfathered in.
MR. DAPCEVICH said that he assumed the reason for allowing those
three to continue would be to prevent litigation.
REPRESENTATIVE SANDERS then asked if the other 15 applicants had
not also started business.
MR. DAPCEVICH responded that he did not believe they had. They
have applied, with the intent to start a business in the future.
REPRESENTATIVE SANDERS then asked who the three businesses are.
MR. DAPCEVICH responded that he did not have that information.
Number 2120
CHAIRMAN KOTT called on the next witness, Don Skewis.
MR. DON SKEWIS, owner of the Crossroads Restaurant and Bar in
Anchorage, stated that he has been a beverage dispensary license
holder in the state for 20 years. He reiterated that restaurant
licenses were never intended to compete with dispensary licenses.
He also stated that the new exempt licenses do not compete with his
business, but that he feels they are unfair. Most of the new
establishments intend to seat over 300 people, which would hurt
downtown bars in Anchorage. He also noted that the city of
Anchorage is trying to shut down bars on Fourth and Fifth Avenues,
yet they are about to put three large, new, establishments
downtown. Many people in the alcohol industry are only marginally
making it, and liquor licenses are available for sale. Yet, the
exemptions allow free licenses.
Number 2214
REPRESENTATIVE PORTER asked if it was fair to say that the tavern
industry in Washington state is really the cocktail lounge industry
in Alaska. He then described the license system in that state.
MR. SKEWIS responded in the affirmative.
REPRESENTATIVE PORTER noted that the number of licenses allowed in
Washington state is limited. He described the license system in
Washington and Oregon.
MR. SKEWIS commented that he had only learned about the new type of
license two days ago.
Number 2284
REPRESENTATIVE ELTON asked for how long an alcohol dispensing
license is issued.
MR. SKEWIS replied that the licenses are issued for an indefinite
term, but must be renewed each year. He stressed that keeping the
license is a privilege, which must be earned.
REPRESENTATIVE ELTON asked if the renewal requirements are the same
for the new, exempt establishments.
MR. SKEWIS said that the renewal requirements are the same.
However, the "tavern" licenses have a $500 annual fee, while
alcohol dispensing licenses cost $1,300 annually.
REPRESENTATIVE ELTON noted that the statute says a license will not
be renewed if more than 50 percent of a restaurant's sales are
liquor.
MR. SKEWIS replied that the new, exempt establishments do not have
to meet that standard.
Number 2381
REPRESENTATIVE KUBINA commented that the root of the problem seems
to be entertainment. An establishment pays extra for its license
because it provides entertainment.
MR. SKEWIS pointed out that 93 percent of his business is beer and
wine, which means that he is definitely paying extra for the
privilege of selling alcohol.
REPRESENTATIVE KUBINA noted that Section B of HB 372 creates an
exemption "if the board has determined it is a bona fide
restaurant." Does this mean that at least 50 percent of the
profits have to come from food?
MR. SKEWIS responded in the affirmative.
REPRESENTATIVE KUBINA then asked if there would be some way to keep
the 50 percent requirement, and allow entertainment all night.
Number 2408
MR. SKEWIS replied that food has to be available as long as alcohol
is being served. If live entertainment were to be added, the 50
percent standard could not be met, because very little food gets
sold after the dinner hour.
REPRESENTATIVE ROKEBERG noted that the proposed CS leaves the 50
percent exemption for the grandfathered establishments, but
reinserts a portion of the entertainment regulations.
TAPE 96-25, SIDE B
Number 2481
REPRESENTATIVE ROKEBERG further noted that the 200-foot regulation
for restaurants is in the existing law.
MR. SKEWIS concurred, but added that the requirement for a beverage
dispensary license is 1,000 feet. In other words, a beverage
dispensary outlet cannot be located within 1,000 feet of a church
or school. However, the exempt establishments fall under the 200
feet category. This could result in a beer hall being located
within 200 feet of a church or school.
CHAIRMAN KOTT announced that the committee would now take testimony
by teleconference.
Number 2390
DOUG GRIFFIN, Director of the state Alcoholic Beverage Control
(ABC) Board, testified via teleconference from Anchorage. He
stated there was no question, in hindsight, that the passage of SB
87 had created some headaches. However, he noted that Section 2 of
the proposed CSHB 372 appears to be unnecessary. The minimum food
content required will be set by the board, and will actually be a
higher standard than set forth in the proposed legislation. To
date, establishments applying for the exempt status have been
focused more on entertainment than food. He noted that the
grandfathering, under the requirements of Section 2, would actually
make the establishments worse off. He commented perhaps that was
Representative Rokeberg's intent. Mr. Griffin concluded by stating
that the ABC board supports HB 372, with some concerns, as noted.
Number 2278
REPRESENTATIVE ROKEBERG stated that at his meeting with the ABC
board several weeks ago, the menu requirement appeared to be
minimal.
MR. GRIFFIN replied that the board would hold establishments to a
high standard, and would in fact be looking for the 50 percent of
gross sales requirement. He commented that he thought the ABC
board would make good decisions, and that they should be given some
discretion. He reiterated that a beer and wine license should be
issued only in conjunction with a bona fide restaurant.
Number 2183
MAURICE MCDONALD, owner of Burgers and Brew and Vice President of
the Cabaret Hotel and Restaurant Retailers Association (CHARR),
testified that when SB 87 was passed, no one in the industry
understood its full implications. What they understand now in
Anchorage is, exempt equals tavern. As Representative Rokeberg has
pointed out, this has created an unfair advantage. Basically, the
exempt permit applicants are looking for the right to provide
entertainment. Currently, under Alaska statutes, if you want to
have entertainment in the bar business, you must have an alcoholic
beverage dispensary license.
MR. MCDONALD further testified that Anchorage is currently
experiencing a growth of "brew pubs." In order to be a brew pub,
you must have a beverage dispensary license. Now, some individuals
have built a brewery and attached a restaurant. They are not
required to have a beverage dispensary license; yet by law, they
can give out free samples. On top of that, they can take the beer
that they have brewed and sell it to a wholesaler, or a retail
outlet. Now, by law, they can also sell their beer at retail
across the counter. With an exempt license, establishments can be
both wholesalers and retailers. This has totally skewed what was
previously a level playing field. Mr. McDonald also noted that
this type of establishment could be opened in any Alaskan city
having a population of 5,000 or more.
Number 2021
CHAIRMAN KOTT asked Mr. McDonald if he was testifying on behalf of
CHARR, or as a restaurant and bar owner.
MR. MCDONALD responded that he was testifying on behalf of CHARR.
He stated that he had met with the CHARR board members, and that
CHARR has drafted a letter stating it is opposed to exempt
licenses. Their only concern earlier was with the title of the
bill.
CHAIRMAN KOTT asked if it was CHARR's position that they do not
support grandfathering in the three existing establishments.
MR. MCDONALD stated it was his understanding that the three exempt
establishments must be approved by both the assembly and the ABC
board. He also noted, as Mr. Griffin pointed out, that the
grandfather clause in HB 372 actually makes those establishments
worth less. The only thing they are really exempt from is the
50/50 split.
Number 1944
REPRESENTATIVE KUBINA asked if CHARR was a statewide organization.
MR. MCDONALD replied that it is. He noted that Jack Lewis, the
president of the Anchorage Restaurant and Beverage Association
(ARBA), was also available to testify.
Number 1924
JACK LEWIS, President of ARBA, stated that his organization is in
100 percent support of HB 372. He further noted that he could not
understand how SB 87 had slipped by, but that it appeared to be
aimed at accommodating establishments that weren't meeting the
food/beverage ratio. Mr. Lewis said he did not believe the
legislature had actually intended to create a whole new class of
exempt licenses. As the owner of the Sourdough Mining Company
restaurant and the Peanut Farm, he believes that SB 87 puts him at
an incredible disadvantage. Part of the value of his license is
the ability to provide entertainment, yet exempt establishments can
also do this, and do not have to purchase their licenses. In
conclusion, Mr. Lewis noted that his phone is ringing off the hook
in Anchorage, with calls from people in the industry who can't
believe what has happened, or from people who want to find out how
they can get one of the new, free licenses. He reiterated that
ARBA fully supports HB 372.
Number 1792
REPRESENTATIVE SANDERS emphasized that if he had understood the
implications of SB 87, he would not have voted for it.
PAT FULLERTON, President of the Spenard Community Council, stated
that SB 87 had been brought to the council's attention last year.
From what they understand, it was an attempt by the ABC board to
allow Cyrano's Bookstore to let its customers sip wine while they
browsed through the books. However, Cyrano's was able to correct
its problem without the need for an exempt license. Last year, a
"dubious operator" applied to open a sports pub in Spenard, using
an exempt license. He would not provide live entertainment, but
would instead have televised sporting events. Spenard has
approximately 6 percent of Anchorage's population, and
approximately 25 percent of its liquor licenses. The council is
trying to reduce the availability of alcohol in the community. Mr.
Fullerton noted that, last September, a man in Spenard shot and
killed his estranged wife. His excuse was that he was drunk on
beer. Exempt licenses make alcohol more readily available, without
more stringent requirements. The council believes that exempt
licenses would create more problems in Spenard.
Number 1599
REPRESENTATIVE KOTT asked if any additional members of the public
wished to testify on HB 372. There being no further witnesses, he
announced that public testimony on HB 372 was closed.
REPRESENTATIVE ROKEBERG stated that his proposed Amendment 1 to
CSHB 372(G) would add the provision regarding entertainment, " ...,
unless approved by the Director after a written request by the
Licensee for a specific occasion." This would overcome the problem
raised by Representative Elton, and puts the exempt license on the
same basis as other restaurant licenses. Therefore, the value of
a grandfathered exempt license would not be as great, although they
still would not have to meet the requirements of the 50 percent
rule. Representative Rokeberg also noted that on page 2, line 27,
he would insert a new subsection (3) under Section (3), stating
that the premises may not have a physical dance floor. This is to
avoid disco type entertainment, as opposed to live entertainment.
If there is no dance floor, then disco cannot be offered, which
would further restrict the scope of entertainment allowed under the
grandfathered exemption.
REPRESENTATIVE ROKEBERG moved that the House Labor and Commerce
Committee adopt Amendment 1 to CSHB 372(G).
Number 1452
CHAIRMAN KOTT stated that he would object, for purposes of
discussion. He asked Representative Rokeberg to define the phrase
"physical dance floor."
REPRESENTATIVE ROKEBERG responded that it was an area physically
delineated as an area for dancing. He noted that if someone wanted
to get up and do the polka between tables, nobody would complain.
But a delineated dance floor would be prohibited.
CHAIRMAN KOTT asked if an establishment had a karaoke machine and
some pool tables, a person could then get up and dance on the pool
table.
REPRESENTATIVE ROKEBERG responded that natural spontaneity could
never be legislated out of existence. The proposed amendment would
simply prohibit disco type entertainment being offered at exempt
establishments.
Number 1349
CHAIRMAN KOTT reiterated that he still didn't understand the
meaning of "physical dance floor."
REPRESENTATIVE ROKEBERG responded that perhaps "designated" would
be a better word.
CHAIRMAN KOTT concurred.
REPRESENTATIVE ROKEBERG noted that he would be happy to entertain
any amendments to the amendment.
CHAIRMAN KOTT offered a friendly amendment to the proposed
amendment, removing the word "physical," and inserting
"designated."
Number 1315
REPRESENTATIVE ELTON raised two points. First, he guaranteed the
sponsor that if he and his wife got up and did the polka between
the tables, someone would certainly object. Second, he offered a
friendly amendment, to insert a semicolon rather than a period,
after the phrase "specific occasion".
REPRESENTATIVE ROKEBERG concurred.
CHAIRMAN KOTT then noted that the phrase "the premises" should be
deleted from paragraph 3, under Section 2.
REPRESENTATIVE ROKEBERG agreed. The change was offered as a
friendly amendment.
Number 1228
CHAIRMAN KOTT stated that he withdrew his objection to
REPRESENTATIVE ROKEBERG's proposed amendment.
REPRESENTATIVE KUBINA asked if Section 2 was being discussed. He
noted that the ABC board felt the section was unnecessary.
CHAIRMAN KOTT asked Mr. Griffin to address the question.
MR. GRIFFIN responded that he would support the amendment, but was
concerned that live entertainment and dancing would be permitted
between the hours of 6 p.m. and 9 p.m.
REPRESENTATIVE ROKEBERG responded that the amendment would read
"may only provide live performances or music on the licensed
premises between 6 and 9 p.m., unless approved by the Director at
the written request . . ."
MR. GRIFFIN stated that live entertainment, including dancing,
would still be allowed for those three hours. Therefore, the dance
floor provision is somewhat contradictory.
Number 1052
REPRESENTATIVE KUBINA again asked if the board would prefer to see
the entire section deleted.
MR. GRIFFIN responded that the entire issue could be resolved by
referring to the regulation, 15 AAC 104.305, which regulates
entertainment on licensed premises.
REPRESENTATIVE KUBINA noted that the amendment would only affect
the three establishments already approved, and any that might be
approved before the effective date of the bill.
REPRESENTATIVE ROKEBERG responded that a large number of
applications are pending.
REPRESENTATIVE KUBINA noted that the number of exempt licenses
allowed is limited by population size. In his community, for
instance, there could only be one. In Juneau, there couldn't be
more than two. He again suggested deleting Section 2 in its
entirety.
Number 0925
REPRESENTATIVE ROKEBERG responded that he would be happy to adopt
the regulations by reference, and insert them in the bill. He
reiterated that he wanted to keep entertainment restrictions on the
exempt licenses. He also noted that he had another proposed
amendment, which would delete the reference to menu requirements,
and leave those standards up to the discretion of the board. He
stated that he was willing to give the exemption from the 50
percent rule.
Number 0868
REPRESENTATIVE ELTON noted that the committee appeared to be
spiraling downward, in its attempts to amend the bill. He
suggested that perhaps the sponsor could continue working on the
bill, and bring a comprehensive amendment to the next meeting.
REPRESENTATIVE ROKEBERG stated that he knew exactly what he wanted
to do, and that he would like to get on with the decision.
Number 0795
REPRESENTATIVE PORTER asked Mr. Griffin, if the proposed exemptions
were included, would the board approve exemptions for single event
activities only?
MR. GRIFFIN responded that his interpretation of the intent of the
regulations was that exemptions be limited to single event
occasions.
Number 0655
REPRESENTATIVE KUBINA noted that Chairman Kott had stated earlier
he would not move the bill today. That being the case, he agreed
with Representative Elton that the sponsor should continue to work
on the bill.
REPRESENTATIVE ROKEBERG stated that these were policy calls. He
agreed with Representative Porter, that the regulations should be
inserted in the bill by reference.
REPRESENTATIVE ELTON reiterated that he felt the committee was
spiraling downward. The testimony from the director was that the
dance floor provision created "cognitive dissonance." He
emphasized that questions of this type should be resolved before
the bill is brought before the committee. Representative Elton
further stated that he understood the sponsor's request for speed,
but that he did not want to see the committee pass out a bad bill,
like SB 87, which would then have to be dealt with next year.
Number 0532
REPRESENTATIVE ROKEBERG responded that HB 372 had already received
a major hearing in another committee, in addition to the testimony
today. He offered to remove the provision referring to a dance
floor. He stated that he would move an amendment to the amendment
to the amendment, to delete subsection 3, relating to the
designated dance floor.
REPRESENTATIVE ELTON offered a friendly amendment to reinsert the
period, in place of the semicolon.
REPRESENTATIVE ROKEBERG accepted the amendment.
Number 0486
CHAIRMAN KOTT noted that the amendment to the amendment to the
amendment to the amendment, which was a friendly amendment,
inserted a period in place of a semicolon.
REPRESENTATIVE PORTER announced that he was experiencing cognitive
dissonance.
REPRESENTATIVE ELTON responded that that was his phrase.
REPRESENTATIVE KUBINA commented that the substantive hearing in the
last committee had obviously not dealt with all the bill's
problems.
CHAIRMAN KOTT asked if there was any objection to the
aforementioned amendment. Hearing none, the amendment was passed.
Several of the members appeared confused about which amendment had
passed.
Number 0375
REPRESENTATIVE ROKEBERG then withdrew his amendments, due to
confusion, and asked if the committee could start from scratch.
There being no objection, he made a motion that the committee pass
his original Amendment 1.
CHAIRMAN KOTT noted that the amendment added language after "9
p.m." on line 27. Hearing no objection, Amendment 1 was adopted.
Number 0325
REPRESENTATIVE ROKEBERG made a motion that the committee pass
Amendment 2, deleting everything from "that includes at least two
hot dinner entrees . . ." through the word "salad." This would
allow the board to use its own discretion.
Number 0254
CHAIRMAN KOTT noted that the amendment would change the requirement
to " . . . a full service menu approved by the board." Hearing no
objection, Amendment 2 was passed.
Number 0236
REPRESENTATIVE ELTON asked if the committee needed to discuss the
1,000 versus 200 foot provision.
REPRESENTATIVE ROKEBERG responded that the 200 foot provision was
actually contained in the existing statute.
REPRESENTATIVE ELTON responded that he was not comfortable with
allowing a grandfathered tavern within 200 feet of a school.
REPRESENTATIVE ROKEBERG concurred, but noted that the 200 foot rule
already applied to restaurants.
Number 1069
REPRESENTATIVE PORTER noted that the exemption only related to the
three grandfathered establishments, one of which was already
located with 200 feet of a church. To change the provision would
then negate that grandfathered establishment.
REPRESENTATIVE ROKEBERG stated he believed that was true.
Number 0042
CHAIRMAN KOTT asked if there were any further amendments.
REPRESENTATIVE SANDERS made a motion that the committee pass CSHB
372(L&C), as amended, with attached zero fiscal notes and
individual recommendations.
REPRESENTATIVE KUBINA objected. He noted that the chairman had
previously stated he would hold the bill.
REPRESENTATIVE ELTON also objected. He stated that the committee
was acting too quickly, and that they needed further input from the
director of the ABC board.
REPRESENTATIVE ROKEBERG emphasized that the director had already
stated he was okay with the bill.
TAPE 96-26, SIDE A
Number 0042
MR. GRIFFIN stated that he was satisfied with the bill.
REPRESENTATIVE ROKEBERG then asked if, that being the case, the
members would withdraw their objections. All objections were
withdrawn.
CHAIRMAN KOTT announced that CSHB 372(L&C), as amended, was passed
out of the House Labor and Commerce Committee, with attached zero
fiscal notes and individual recommendations.
HB 482 - STATE PROCUREMENT PRACTICES & PROCEDURES
Number 0119
CHAIRMAN KOTT announced that the next order of business to come
before the House Labor and Commerce Committee was HOUSE BILL NO.
482
"An Act relating to state procurement practices and procedures; and
providing for an effective date." He asked if anyone from the
Department of Administration was present to testify. The Chairman
then announced that Dugan Petty would testify with regard to the
proposed amendment to HB 482.
DUGAN PETTY, Director, Division of General Services, Department of
Administration, stated that the proposed amendment to HB 482
attempts to address the committee's previous questions regarding
bidders who wished to bring a protest. He noted that the
underlined section in the committee members' packets would replace
the underlined section in the previous version of the bill. It
allows the procurement officer to establish a shorter period of
time in the bid, so that a protestor could bring a bid protest
forward in less than 10 days. It also, in the second sentence,
allows a protestor of a solicitation to bring a protest forward
just prior to bid opening, if the bid solicitation period has been
shortened from the full notice period. Finally, the proposed
amendment states that if a pre-bid conference is held within 12
days of bid opening, then a protest of a solicitation could be
brought right up to the time of bid opening or proposal submission.
Mr. Petty noted that the intent was to allow sufficient time for a
bidder to respond to any issues found at the bid opening.
Number 0253
REPRESENTATIVE ELTON asked for clarification that the proposed
amendment would replace only the underlined language.
MR. PETTY responded in the affirmative.
REPRESENTATIVE ELTON moved that the committee adopt the proposed
Amendment 1. There being no objections, Amendment 1 to HB 482 was
adopted.
Number 0404
REPRESENTATIVE ROKEBERG offered an amendment to delete Sections 4,
5, 6 and 7 in their entirety. These are related to leasing
procedures, which exempt lease purchase agreements up to $2 million
five hundred thousand or 5,000 square feet of office space, and
allow lease extensions of up to ten years or 10 percent. He stated
that these items need further review.
REPRESENTATIVE KOTT objected.
MR. PETTY stated the department believes that Sections 4 and 5
allow it to be more effective, and to save the state money through
a more streamlined process. He asserted that the department would
exercise judgment, and make good business decisions.
Number 0311
REPRESENTATIVE ROKEBERG asserted that Section 5 would grant the
state an automatic renewal option on any expiring lease, which
creates an unfair situation in the real estate market. He stated
that such leases should be put out for competitive bid. He
requested that the Chairman hold the bill, so that the committee
could look at it more closely. He also objected to Section 36,
which is related to adjustments to leases being made within 30
days.
MR. PETTY suggested that perhaps extending the period to 90 days
would alleviate the problem.
REPRESENTATIVE ROKEBERG responded that on certain contracts, 90
days might be too long.
MR. PETTY noted that there is currently no statute of limitations
on when claims can be brought against the state on expired
contracts. This language attempts to address that problem.
REPRESENTATIVE ROKEBERG stated that he agrees a time frame is
necessary, but that a provision relating to utility charges for
leasehold property should also be included. He noted that in some
cases, an adjustment clause allows a landlord to back-bill a tenant
for increased utility rates. This could take several months,
sometimes as long as six to eight months.
CHAIRMAN KOTT asked Mr. Petty to confer with Representative
Rokeberg, and stated that HB 482 would be held over until the next
meeting. He further noted that, since the committee no longer had
a quorum, all other bills scheduled would also be held over until
the next meeting.
ADJOURNMENT
Number 0695
There being no further business to come before the House Labor and
Commerce Committee, Chairman Kott adjourned the meeting at 5:15
p.m.
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