Legislature(1993 - 1994)
05/10/1994 08:00 AM House STA
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE
May 10, 1994
8:00 a.m.
MEMBERS PRESENT
Representative Al Vezey, Chairman
Representative Pete Kott, Vice-Chairman
Representative Bettye Davis
Representative Gary Davis
Representative Harley Olberg
Representative Jerry Sanders
Representative Fran Ulmer
MEMBERS ABSENT
None
COMMITTEE CALENDAR
SB 372: "An Act relating to community local options
for control of alcoholic beverages; relating
to the control of alcoholic beverages;
relating to the definition of 'alcoholic
beverage'; relating to purchase and sale of
alcoholic beverages; relating to alcohol
server education courses; and providing for
an effective date."
MOVED FROM COMMITTEE WITH NO RECOMMENDATIONS
WITNESS REGISTER
PATRICK SHARROCK, Director
Alcohol Beverage Control Board
550 West 7th
Anchorage, AK 99501
Phone: 277-8638
POSITION STATEMENT: Addressed CSSB 372(FIN)am
PREVIOUS ACTION
BILL: SB 372
SHORT TITLE: ALCOHOLIC BEVERAGES: LOCAL OPTION & MISC.
SPONSOR(S): JUDICIARY BY REQUEST
JRN-DATE JRN-PG ACTION
03/30/94 3409 (S) READ THE FIRST TIME/REFERRAL(S)
03/30/94 3409 (S) CRA, JUD, FIN
04/12/94 3585 (S) CRA RPT 4DP 1NR
04/12/94 3585 (S) FISCAL NOTE PUBLISHED (GOV)
04/12/94 3585 (S) ZERO FN PUBLISHED (REV)
04/12/94 (S) CRA AT 9:00 AM BUTROVICH RM 205
04/13/94 (S) JUD AT 01:30 PM BELTZ ROOM 211
04/23/94 (S) MINUTE(JUD)
04/25/94 3968 (S) JUD RPT CS 3DP 1NR NEW TITLE
04/25/94 3969 (S) ZERO FN TO CS PUBLISHED (REV)
04/25/94 3969 (S) PREVIOUS FN APPLIES TO CS (GOV)
05/05/94 (S) FIN AT 09:00 AM SENATE FIN 518
05/05/94 4346 (S) FIN RPT CS 5DP 1DNP NEW TITLE
05/05/94 4347 (S) ZERO FN TO CS PUBLISHED (DPS)
05/05/94 4347 (S) PREVIOUS FN APPLIES (GOV)
05/05/94 4347 (S) PREVIOUS ZERO FN APPLIES (REV)
05/07/94 4463 (S) RLS RPT 2CAL 2NR 5/7/94
05/07/94 4470 (S) READ THE SECOND TIME
05/07/94 4471 (S) FIN CS ADOPTED UNAN CONSENT
05/07/94 4471 (S) MOTION TO ADVANCE TO THIRD
WITHDRAWN
05/07/94 4471 (S) AM NO 1 MOVED BY JACKO
05/07/94 4472 (S) AM TO AM 1 MOVED BY PEARCE
05/07/94 4472 (S) AM TO AM 1 ADOPTED Y16 N4
05/07/94 4473 (S) AM NO 1 ADOPTED Y16 N4
05/07/94 4473 (S) AM NO 2 MOVED BY LINCOLN
05/07/94 4473 (S) AM NO 2 ADOPTED Y14 N6
05/07/94 4474 (S) AM NO 3 MOVED BY TAYLOR
05/07/94 4474 (S) AM NO 3 ADOPTED Y15 N5
05/07/94 4474 (S) ADVANCED TO THIRD READING UNAN
CONSENT
05/07/94 4474 (S) READ THE THIRD TIME
CSSB 372(FIN) AM
05/07/94 4475 (S) PASSED Y19 N1
05/07/94 4475 (S) EFFECTIVE DATE SAME AS PASSAGE
05/07/94 4475 (S) Kelly NOTICE OF RECONSIDERATION
05/07/94 4485 (S) RECON TAKEN UP SAME DAY
UNAN CONSENT
05/07/94 4486 (S) RETURN TO SECOND FOR AM 4
UNAN CONSENT
05/07/94 4486 (S) AM NO 4 MOVED BY KELLY
05/07/94 4486 (S) AM NO 4 ADOPTED UNAN CONSENT
05/07/94 4486 (S) AUTOMATICALLY IN THIRD READING
05/07/94 4487 (S) PASSED ON RECONSIDERATION
Y20 N-
05/07/94 4487 (S) EFFECTIVE DATE SAME AS PASSAGE
05/07/94 4502 (S) TRANSMITTED TO (H)
05/08/94 4170 (H) READ THE FIRST TIME/REFERRAL(S)
05/08/94 4170 (H) STATE AFFAIRS
05/10/94 (H) STA AT 10:00 AM CAPITOL 102
ACTION NARRATIVE
TAPE 94-59, SIDE A
Number 000
CHAIRMAN AL VEZEY called the meeting to order at 10:03 a.m.
The meeting had been postponed from 8 a.m. to 10 a.m. due
the late the night before. Members present were
REPRESENTATIVES KOTT, SANDERS, G. DAVIS, OLBERG, B. DAVIS
and ULMER. A quorum was present.
CSSB 372(FIN)am - ALCOHOLIC BEVERAGES: LOCAL OPTION &
MISCELLANEOUS
CHAIRMAN VEZEY opened CSSB 372(FIN)am for discussion. He
considered this bill to be an omnibus bill in the alcoholic
beverage control statutes.
Number 027
PAT SHARROCK, DIRECTOR, ALCOHOL BEVERAGE CONTROL BOARD
(ABC), addressed CSSB 372(FIN)am. He stated SB 372 was
originally introduced on behalf of the ABC by the Senate
Judiciary Committee. He noted the length was because all of
the statutory numbers and references have changed, primarily
due to the rewrite of the local option provision. He said
the bill does two things: There are technical areas that
the board has been looking to have amended for several
years; and a major rewrite of the local option provisions
that allow villages and communities around the state to
restrict importation or prohibit alcoholic beverages. He
explained the rewrite of those provisions, except for one,
does not change what the options are. The options were
changed in this one provision, he stated, because of
interest expressed by the city of Saxman. Saxman is
presently a dry community that allows importation, but
organizations wishing to use the community building would
like to serve alcohol. For this to happen, they need an
option provision which allows them to have a vote to allow
an already licensed beverage dispensary licensee, or a bar
owner, to cater an event in that community building for
special events. He termed this option as a minor inclusion.
CHAIRMAN VEZEY asked which section MR. SHARROCK was
referring to.
MR. SHARROCK answered he believed section 491, page 14, line
11 of CSSB 372(FIN)am.
CHAIRMAN VEZEY recognized there was a work draft of HCSCSSB
372(STA) before the committee.
Number 096
MR. SHARROCK noted in HCSCSSB 372(STA) section 491 would be
on page 13, line 16, and page 14, line 4.
MR. SHARROCK said the need for rewriting the local option
provisions is the confusion and inability for people in
smaller communities to look to these provisions to vote on.
Immediately following the provisions original insertion in
1980, many small communities, villages and incorporated
cities, voted to opt one of the four local option
provisions. Later there was a fifth local option to
prohibit possession that was enacted.
MR. SHARROCK explained lately, some communities desire to
change or remove those options. He noted the city of St.
Mary's as an example. For St. Mary's to change their
provisions, to prohibit sale and allow importation, they had
to have two local option elections. The city council,
however, overturned one election. Thereby, the other
election had three of the options on the ballot. The
statute states, however, that only one option can be put on
the ballot at a time. He stated the established village
council of St. Mary's litigated with the city of St. Mary's
and just recently those elections were overturned by a judge
in Bethel, because of the process.
MR. SHARROCK commented CSSB 372(FIN)am intends to make it
easier and more understandable for those people to petition
local governments or the Division of Elections to proceed
with a local option election. CSSB 372(FIN)am allows them
to vote to adopt a local option, change a local option, or
remove a local option. He emphasized if they vote to
prohibit the sale of alcohol the dispensing licenses are
revoked, however, if at some time they reopen the sale of
alcohol those people that had licenses have grandfather
rights in being able to apply again. He said the number of
licenses that could be issued would probably also be
restricted to the population provisions under the law.
MR. SHARROCK explained the amendments within CSSB
372(FIN)am. He began page 1, Section 1, states package
store licensees can ship alcohol into communities in
response to a written order; however, they cannot solicit
orders for alcohol. Page 2, Section 3, addresses the sale
of alcohol to military personnel, which under current law
they must be in uniform. He noted, however, the House just
passed HB 504 related to that provision. He asked if this
provision had been addressed in the HCSCSSB 372(STA) draft.
REPRESENTATIVE BETTYE DAVIS pointed out Section 3 of HCSCSSB
372(STA).
CHAIRMAN VEZEY clarified that provision had been addressed
in the HCSCSSB 372(STA) draft.
Number 226
MR. SHARROCK continued his explanation of the amendments.
Page 2, Section 5, states a package store licensee may not
ship alcohol to anyone other than the purchaser. He noted
in some very large volume alcohol shipments it has been
noticed that some shipments are going to a someone other
than the person who wrote the order. Age and location of
the recipient in these cases are of concern. Page 3,
Section 7, relates to primary source legislation. He
explained the wholesalers will file with the ABC and pay a
$50 fee per brand to certify that brand came from a primary
source. Page 4, Section 8, related to the source, reads
persons who are licensed as a bar owner, package store, a
restaurant or eating place, or a club license, may only
purchase their alcoholic beverages from a wholesale
licensee, or a brewer. Page 4, Section 9, addresses the
change in law which happened this year, whereby the renewal
of licenses has become biennial rather than annual. Section
9 also addresses those who do not timely file. He explained
under current law, if a licensee does not file a renewal
application by December 31st they must close down
operations, and they have until February 28th to file a
renewal application. A December 31st deadline is difficult
to enforce, however, because it is New Years Eve, and police
do not usually focus their efforts to this. The amendment
states that if there is not a renewal application filed by
December 31st the premise may stay open, but the penalty is
increased from $200 to $500. The section retains that if
the renewal application is still not filed by February 28th,
the license terminates. Page 11, Section 15, a new
technical amendment, gives the ABC Board the capability to
impose conditions or stipulations on licenses if those
conditions will satisfy public objections or local governing
body objections. Page 13, Section 17, is an effect of the
legislative change from annual to biennial renewal. He
noted in the past ABC received renewal applications every
year, and by law, ABC has to send copies of those
applications to the local governing body. They have the
ability to protest the renewal of that application. Section
17 opens a 30 day window in the off year during which a city
council or borough assembly can still protest the
continuation of particular license for a person who has not
yet filed for renewal. He emphasized the ABC Board may not
approve that application unless they find the reasons for
the protest to be arbitrary, capricious or unreasonable.
Governments around the state protest every year to assure
those licensed businesses are operating in the best interest
of the public, and assuring they are paying their sales tax
and property taxes.
Number 361
REPRESENTATIVE B. DAVIS referred to the 30 day open window
and inquired if people had to file just as they would for an
annual license.
MR. SHARROCK replied no. With a biennial renewal, a
licensee files a renewal application every two years.
Section 17 covers the middle year.
REPRESENTATIVE B. DAVIS questioned what acts as a trigger
for the municipality to know they have 30 days to protest.
Who lets them know the license is not up for renewal until
the next year. If they do protest, does the ABC Board
withdraw the license.
MR. SHARROCK responded the ABC Board has to allow due proces
for the appeal. He expressed when the ABC Board upholds a
protest, under statute, they cannot close the business down
right away. He stated he would be the person to notify
those municipalities of those licenses for which there will
not be renewal application, but for which they may protest.
MR. SHARROCK continued his sectional analysis of amendments.
Page 20, Section 27, addresses those licensees who renew for
half year periods. Under earlier law, the fee for six month
periods within the calendar year that licensees would
identify would be half. With the passage of biennial
renewal legislation, however, the half year licenses were
extracted from the biennial renewal provision. Section 27
intends to bring them under the biennial umbrella. ABC has
approximately 190 half year licenses and they should be
treated equally. Section 28 relates to a Senate Judiciary
amendment, which prohibits alcohol in the state containing
76 percent or more by volume of alcohol, beginning July 1,
1994 through June 30, 1995. He believed this related to
Everclear.
CHAIRMAN VEZEY asked what alternatives there were to alcohol
other than in a liquid state.
MR. SHARROCK answered when that provision originally became
law there was "quite a flurry" to import powdered alcohol.
There was concern with kids having powdered alcohol. He
believed when it was mixed with alcohol the granules
dissolve and release alcohol. He noted the original title
of the current bill was "Prohibition of the Powdered
Alcohol."
MR. SHARROCK referred to page 20, line 6, whereby notice to
the appropriate parties of local option elections will be
done by certified mail, rather than registered mail as in
current statute.
CHAIRMAN VEZEY clarified MR. SHARROCK was referring to page
20, line 4.
MR. SHARROCK stated ABC has never notified the parties by
registered mail because of the expense. They use certified
mail. Notifying 450 licensees at $3.50 each, for registered
mail, is too expensive. ABC will also now only notify those
licensees who have given notice to the board that they are
selling and shipping alcohol in response to written orders.
Currently, there are about 35 package store licensees who do
this.
CHAIRMAN VEZEY commented a lot of legislation has come
through where they are going from certified to first class
mail.
MR. SHARROCK responded ABC has to have the return receipts,
however, to assure in the record that the licensee was
notified of the results of a local option election.
CHAIRMAN VEZEY stated he felt if this statute were to become
law he would not interpret it to require a return receipt.
MR. SHARROCK replied there must be proof of mailing.
Number 467
MR. SHARROCK continued his analysis. Page 26, Section 43,
gives certain local option communities the ability to adopt
an ordinance that limits the monthly amount a person may
import to the municipality. If they do adopt an ordinance,
Section 43 states it is not inconsistent with the title.
Page 27, Section 47, is an amendment requested by the ABC
Board. ABC found some objection to their legislation passed
last year, by common carrier licensees, which required
certain licensees to provide server training to employees
who serve and sell alcoholic beverages. Airlines and cruise
ships objected because they are in transit. The classes ABC
offered included information their employees did not have to
know about, and ABC agreed. The common carrier class of
license, number 5, is being deleted, and a separate section
under (e), section 48, is added to identify only those
statutory areas that common carriers must train their
employees in. Page 28, Section 49, expands the definition
of alcohol. He noted the underlined portions on lines 14
and 15, state the beverage for human consumption as a
beverage by the person who possesses or attempts to possess
it. This change is meant to include those products that are
not alcoholic beverages, but are products from which alcohol
can be extracted. He gave the example of hair spray.
(REPRESENTATIVE OLBERG left the meeting at 10:40 a.m.)
REPRESENTATIVE FRAN ULMER inquired what differences there
were in the HCSCSSB 372(STA).
CHAIRMAN VEZEY answered Section 3, dealing with uniforms on
military personnel, from CSSB 372(FIN)am has been deleted.
Section 45, granting communities the option to assess taxes
on alcohol at a different level than other sales taxes, was
removed. CHAIRMAN VEZEY said he would accept a motion to
adopt HCSCSSB 372(STA) for purposes of discussion.
REPRESENTATIVE B. DAVIS so moved.
CHAIRMAN VEZEY, hearing no objection, adopted HCSCSSB
372(STA).
REPRESENTATIVE ULMER moved to pass HCSCSSB 372(STA) from
committee asking unanimous consent.
CHAIRMAN VEZEY called for a roll call vote.
IN FAVOR: REPRESENTATIVES VEZEY, KOTT, ULMER, B. DAVIS,
G. DAVIS, SANDERS.
ABSENT: REPRESENTATIVE OLBERG.
REPRESENTATIVE B. DAVIS noted there are fiscal notes to go
with HCSCSSB 372(STA).
CHAIRMAN VEZEY noted there was one zero fiscal note from
ABC, a zero fiscal note from Alaska State Troopers, and a
$1,000 fiscal note from the Division of Elections. He
inquired if there was a motion to adopt the three fiscal
notes.
REPRESENTATIVE G. DAVIS so moved.
CHAIRMAN VEZEY, hearing no objection, adopted the three
fiscal notes.
CHAIRMAN VEZEY mentioned he had heard there was going to be
a new proposed committee substitute for SB 377, however, he
had not received it yet. Therefore, CHAIRMAN VEZEY recessed
the meeting at 10:43 a.m. pending sine die.
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