Legislature(1995 - 1996)
03/08/1995 01:55 PM Senate CRA
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE
March 8, 1995
1:55 p.m.
MEMBERS PRESENT
Senator John Torgerson, Chairman
Senator Randy Phillips, Vice Chairman
Senator Fred Zharoff
Senator Lyman Hoffman
MEMBERS ABSENT
Senator Tim Kelly
COMMITTEE CALENDAR
SENATE BILL NO. 87
"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."
SENATE BILL NO. 96
"An Act relating to municipal activities or services mandated by
state statute."
PREVIOUS SENATE COMMITTEE ACTION
SB 87 - No previous action to record.
SB 96 - No previous action to record.
WITNESS REGISTER
Joe Ambrose, Staff to Senator Robin Taylor
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Presented sponsor statement on
SB 87
Patrick L. Sharrock, Director
Alcoholic Beverage Control Board
550 W. 7th Ave., Suite 350
Anchorage, AK 99501-3510
POSITION STATEMENT: Offered information on CSSB 87(CRA)
Mayor Don Long
City of Barrow
P.O. Box 629
Barrow, AK 99723
POSITION STATEMENT: Testified in support of CSSB 87(CRA)
Karen Hegyi
City of Barrow
P.O. Box 629
Barrow, AK 99723
POSITION STATEMENT: Supports CSSB 87(CRA)
David Koivuniemi, Acting Director
Division of Elections
P.O. Box 110017
Juneau, AK 99811-0017
POSITION STATEMENT: Offered information on ballots
ACTION NARRATIVE
TAPE 95-6, SIDE A
Number 001
SCRA - 3/8/95
CHAIRMAN TORGERSON called the Senate Community & Regional Affairs
Committee meeting to order at 1:55 p.m. He announced that at the
sponsor's request, SB 96 (UNFUNDED MANDATES ON MUNICIPALITIES)
would not be taken up because a proposed committee substitute had
just been received by the committee right before the start of the
meeting.
SCRA - 03/08/95
SB 87 ALCOHOLIC BEVERAGES: LOCAL OPTION & MISC.
SENATOR TORGERSON brought SB 87 , sponsored by Senator Robin Taylor,
before the committee, and asked Joe Ambrose to present an overview
on the legislation.
JOE AMBROSE, staff to Senator Taylor, read the following sponsor's
statement into the record:
"Last year the Alcoholic Beverage Control Board, prompted by
concerns over a lack of clarity in how local option elections are
to be conducted, asked for legislation to simplify the process.
The board also asked that the same vehicle be used to address long
needed technical and common sense amendments to Title 4."
"The result was SB 372, which passed the Senate last year and moved
through the committee process in the House, only to die in the
Rules Committee in the hectic final days of the 18th State
Legislature. SB 87 is substantially the same as last year's
legislation."
"The bill addresses the shortcoming in the current statute dealing
with local option elections, for which no provision is made for
moving from one type of option to another. Under current law, a
community must first vote to remove all restrictions on the sale
and importation of alcoholic beverages and then conduct another
election on a new option. This burdensome process can cause
confusion for municipalities and unincorporated villages alike."
"The complete intent of this lengthy bill is better explained by
those who will be charged with its enforcement. However, it should
be pointed out that it is mainly a housekeeping measure with little
potential for controversy."
Mr. Ambrose noted that the sponsor has recommended a committee
substitute and that the witnesses testifying are prepared to
address that document.
Number 055
PAT SHARROCK, Director, Alcoholic Beverage Control Board, agreed
that the bill is lengthy and more of a housekeeping measure. The
reason it is lengthy is because the section references to the local
option provisions were changed. The amendments and clarifications
to the local option provisions do not change the actual options
themselves, except for one.
Mr. Sharrock said the necessity for some amendments to Title 4 came
to light a year or ago with the City of St. Mary's and the
confusion as to how they were to proceed. Currently, there is a
great deal of confusion in the City of Barrow as to where they are
and how frequently they can hold an election to overturn an
election that they had.
Mr. Sharrock then went through the technical amendments recommended
by the board and contained in the proposed committee substitute:
Section 1: It is a clarification to say that a package store may
not solicit in or receive orders from an agent in a local option
area.
Section 4: The amendment proposes, without creating a new class of
license, to allow a current restaurant or eating place licensee to
convert his license to what would be referred to as an exempt
license where the primary activity would not have to be dining.
Number 150
SENATOR R. PHILLIPS moved that CSSB 87(CRA) be adopted for
discussion purposes. Hearing no objection, it was so ordered.
Mr. Sharrock then continued with outlining the technical amendments
in the committee substitute:
Section 5: It increases the gallonage that could be produced by a
brew-pub licensee from 16,000 gallons to 75,000 gallons per year.
The board has had complaints that 16,000 gallons isn't enough,
because the popular area in terms of an annual production falls
into the 70,000 to 75,000 gallon area.
Section 7: Relates to package store licensees who sell in response
to written orders and provides that the package store licensee can
only ship to the purchaser. There has been some concern that
licensees have been shipping in response to a written order to
someone other than the purchaser, which doesn't provide any control
or good record keeping in terms of who the alcohol is going to,
particularly in those areas that have prohibited the sale.
Number 180
SENATOR ZHAROFF referred back to Section 5 and asked what the
effect was of going from 16,000 gallons to 75,000 gallons. PAT
SHARROCK responded that it is more economic than anything else. It
provides sufficient production so that the bar owner who has a
brew-pub license can viably produce enough to make it reasonable.
He also noted there are only two of those licenses out, one in
Wasilla and one in Anchorage, but he wasn't sure if they are in
production yet.
Section 9: Is basically a wholesale licensee provision that more
or less solidifies what has been referred to for many years as the
three-tier system of the sale and distribution of alcohol by
wholesalers. It provides registering with the board certain kinds
of brands or product lines of alcohol that are sold by wholesalers
and establishes a fee for that.
Section 10: It specifies that club, package store, restaurant and
beverage dispensary licensees must purchase their alcoholic
beverage from a wholesale licensee.
Section 11: It is new but technical at the same time. Under
current law, all licensees whose biennial license must be renewed
must file an application for renewal by December 31. Under the
current law, if the application isn't filed, the premises must
cease operation and there is a $200 penalty for late filing. Over
the years it has been found that this law has been enforced very
inequitably, because neither the board nor the State Troopers have
adequate staff to enforce it on New Years Eve. The board felt that
to make it a little bit more equitable to let everyone stay open,
but increase the late penalty to $500. The renewal applications
may be filed from January 1 until to February 28. If the
application isn't filed by that time, then the license expires and
the business must cease operation.
Section 17: It is new but also technical. There are times when
the board has applications before it where there may be questions
about a licensee or the kind of operation that they intend to have.
The board felt that it would be appropriate for the board to impose
restrictions on the operation or on the person involved, and this
impedes the ability to do so in statute.
Number 250
SENATOR TORGERSON asked what kind of restrictions could be imposed
on a license. PAT SHARROCK said some municipalities, such as the
Municipality of Anchorage, will sometimes review an application for
a transfer of a license or renewal of a license and will say they
will approve the application if the licensee doesn't begin to sell
alcohol until after 4:00 p.m., that they cease selling alcohol
after a certain time, etc. If they come to the board with those
conditions, the board isn't empowered to enforce the local
conditions. He said it exemplifies the fact that there are those
times that even the board itself would want to impose restrictions
and those would be noted on the license.
SENATOR TORGERSON asked who was responsible for the enforcement of
this. PAT SHARROCK answered that those conditions that the board
puts on would be his responsibility, but the board has no
responsibility for those conditions put on by the municipalities.
He said the law provides that municipalities can put conditions on
the control and sale of alcoholic beverages within their boundaries
by ordinance. Of late, though, some municipalities come back with
resolutions to the board imposing conditions. He added that
therein lies a problem that the board has in terms of that
relationship between the state and the municipality.
SENATOR TORGERSON asked if a second class borough could come
forward with certain restrictions for a liquor license in their
borough. PAT SHARROCK answered that he thought they could make a
recommendation if those conditions weren't codified by ordinance.
SENATOR TORGERSON said his understanding was that the only avenue
a municipality has in appealing the renewal of a license was if the
licensee wasn't current on taxes. PAT SHARROCK answered that the
Kenai Borough does have an ordinance that specifically says that,
and the board has protests from the Kenai Borough all the time.
SENATOR TORGERSON pointed out he was a member of that organization
for awhile, and his understanding was that, basically, most of
their protests were ignored and the licenses were issued anyway.
He added that these restrictions seem to be something that the
system just talks about and the local government hasn't really had
any control over them.
SENATOR TORGERSON asked what happens if the municipality requests
a restriction, the board puts it on the license, and then the
licensee is in clear violation of that restriction. PAT SHARROCK
answered that he thought the assembly would then have grounds to
protest that application for renewal. He added that the Supreme
Court has told the board that they cannot replace their judgment
for that of the local governing body.
Number 347
SENATOR ZHAROFF asked how much weight against the renewal of a
license a municipality carries if a licensee is in violation of a
local ordinance, but meets all of the state's requirements. PAT
SHARROCK referred to a board regulation entitled "Local Governing
Body Protests" which are the guidelines that the board has given to
local governing bodies in terms of what the board would look to for
reasons for a protest so that the board would not have to end up
finding a local governing body arbitrary, capricious or
unreasonable. He said if the ordinances are violated and the city
council or the assembly protests an application based on the
violations, the board would be hard pressed to find that those
reasons weren't suitable, so the local government has a lot of say
in the renewal of that license.
SENATOR TORGERSON expressed his concern that protests made by the
citizens are listened to and that they have some sort of avenue to
transmit that on to the board when they make their decisions. He
added that that section of the bill would be flagged and revisited.
Number 400
PAT SHARROCK continued with his overview on the committee
substitute:
Section 19: The amendment is a carryover to correct a glitch that
was neglected when the statute were changed to provide for biennial
renewal. It allows a 30-day window for municipalities even in the
off-year of renewal, to still protest an application under the same
grounds as if they were looking at an application.
Section 27: Relates to the local option election and clarifies
that once a community has adopted a local option, they may not vote
to remove a local option or to change to a less restrictive option
during the first 12 months after the local option was adopted. It
also provides that the notice of elections to package stores be
sent by certified mail, which is cheaper, rather than registered
mail.
Section 30: It prohibits the sale of an alcoholic beverage that
contains more than 76 percent alcohol by volume.
Section 45: It provides that a municipality may limit importation
amount by ordinance under certain options. It is giving the
municipality, by ordinance, the ability to regulate the kind of
alcohol that is coming in.
Number 475
SENATOR HOFFMAN commented that the City of Bethel was considering
such an option, but the problem is the record keeping on the amount
because there are so many different suppliers.
Number 532
After brief discussion on the percent of alcohol by volume that an
alcoholic beverage may contain, JOE AMBROSE clarified that the
intent of Section 45 is to give the local municipality, after they
have adopted an option, some flexibility in enforcing the option
that the community has adopted. In other words, what the state law
would be saying is that the local ordinance would not be
inconsistent with state law if there was a restriction on the
amount of alcohol a person could import in a month, if there was a
restriction on the percentage of alcohol to be imported within
certain limits.
Number 572
PAT SHARROCK continued his overview on the committee substitute:
Section 50: The server education training requirement became law
last year and it was felt the criteria was somewhat overburdensome
for common carriers. This simplifies the criteria for the training
of their employees by common carriers.
Section 52: Expands the definition of alcohol to include anything
containing alcohol intended for human consumption.
TAPE 95-6, SIDE B
Number 010
Section 53: Clarifies the definition of "established village."
Under current law there is no provision to determine what the
perimeter or boundary of an established village is, and the intent
of this section is to provide some means of structuring a boundary
in which the law would be upheld. It is not intended to determine
or give another definition of the boundary of an established
village.
Section 33: Repeals the requirement for the beverage dispensary
bond that is required upon renewal of those kinds of licenses. It
has been in the law for years and has required a lot of paper work
for staff. Under current law, it provides the bond shall be $2,500
and surrendered to the state upon the third conviction in a five-
year period of a licensee, which has never happened.
Sections 65-71: These are transition provisions on sections
implementing local option provisions, etc.
Number 040
SENATOR TORGERSON referred to page 30, Section 51, and asked why
"community liquor license" was being deleted. PAT SHARROCK
explained that under current law "community liquor license" allows
a community to opt to have certain kinds of licenses. He referred
back to line 13 of page 15, which is a provision for municipalities
to obtain a liquor license, so the "community liquor license" was
an unnecessary classification.
SENATOR HOFFMAN raised a concern about the ability of VFW members
being able to bring their own alcohol into their club, and he said
he thinks that's where many of the damp communities have had run-
ins with the law. After brief discussion, SENATOR TORGERSON said
that section of the bill would be flagged and revisited.
Number 125
SENATOR TORGERSON announced the committee would take testimony over
the teleconference network.
MAYOR DON LONG, City of Barrow, read the following statement into
the record:
"I would like to direct my comments to those sections of SB 87
which affect local option elections and the importation of
alcoholic beverages into communities such as Barrow, and I will not
mention specific language changes."
"First, I would like to thank Pat Sharrock from the ABC Board and
Teresa Williams from the Attorney General's office for all the work
they have done on this bill and for their recent comments."
"I understand that much of this bill was before the Legislature
during the last session and, unfortunately, it failed to pass. I
say unfortunately, because all of the problems that the community
of Barrow has encountered with the local option process in the last
six months were all addressed and would have cleared up by the
predecessor to SB 87."
"For example, before the October 4, 1994 municipal election,
petition sponsors wanted to place before the voters the question of
prohibiting the importation and possession of alcoholic beverages.
Instead of one question, the petitioners had to circulate two
petitions and voters had to vote on two questions because that is
how the options are presently set up."
"Immediately after a majority of voters approved banning the
importation and possession of alcoholic beverages, opponents to the
ban began the process to hold an election to repeal the alcohol
ban. Myself and the City Clerk are named as defendants in a
lawsuit that is in Superior Court right now over when the City of
Barrow had to hold an election on a vote to repeal the bank which
was just approved on October 4, 1994."
"SB 87 makes it clear that no election to repeal an option may be
held within 12 months of the option's adoption."
"Additionally, in order to go back to the damp status that existed
in Barrow prior to October 4, 1994, under the present statutes,
voters must first vote to go completely wet and then a new petition
must be circulated and another election held on prohibiting the
sale of alcoholic beverages in Barrow. SB 87 would make this
option a one step, one election process instead of requiring two
separate petitions and elections."
"SB 87 also clarifies what the intent of the petition is. I heard
from numerous people in Barrow who signed the most recent petitions
which seek to repeal the alcohol ban. They told me that while they
wouldn't mind having a new election on going back to being damp
they did not want to have Barrow go wet. They were very upset whe
they learned that the petitions they had signed would make Barrow
go wet. They told me that they signed the petitions because they
were told by the sponsor that it was for having Barrow go "damp"
and that no one had mentioned "wet." The language in SB 87 will
clear up the confusion that now exists."
"I have two questions that do not seem to be addressed in the
present SB 87:"
"First: What happens when competing petitions are submitted, one
to impose a restriction and one to repeal a restriction. My
understanding is that the first petition submitted is voted on
first. If the vote is in favor of imposing a restriction, what
happens to the petition to repeal a restriction that was submitted
before the election? Does this petition become void since no
election to repeal may be held for 12 months, or is it simply
deferred for twelve months?"
"Second: What happens to petitions that are out there right now
with the questions under the present statutes? My hope is that
this committee will add a transition section that clearly states
that a new petition with the new language must be submitted for any
election that will be conducted after the effective date of this
statute. I also hope that the effective date will be set as soon
as possible to avoid confusion during the October municipal
elections."
"Finally, I would like to ask this committee to extend the waiting
period before an election to repeal a prohibition may be held. I
would like to see a two-year waiting period instead of a twelve-
month wait - at least when it comes to the possession of alcoholic
beverages. AS 29.26.190(a) prohibits the repeal of an ordinance
created through the initiative process. Since the prohibition on
possession of alcoholic beverages creates an ordinance of the
municipality it should be clear that AS 29.26.190(a) applies to the
ordinance prohibiting the possession of alcoholic beverages."
"Again, thanks to Pat Sharrock and Teresa Williams for all their
work and to this committee and the Legislature for their continued
recognition of the harmful effects alcohol can have on a community
and their support of local communities having the power to deal
with their problems in their own way."
SENATOR TORGERSON thanked Mayor Long for his testimony and asked
him to forward a copy of it to the committee.
Number 205
DAVID KOIVUNIEMI, Acting Director, Division of Elections, directed
attention to material showing what the ballots would look like
under the provisions of Section 20 of the bill. He pointed out
that on the ballot question relating to the package store license,
most of the authority will appear on the front ballot card; another
portion of the authority will be on the back; and the question
itself will appear on the back. On the other ballot questions, the
question and the authority were fitted on the front of the ballot.
Number 240
There was discussion on the situation of two opposing petitions for
elections. SENATOR HOFFMAN said he thought the "in favor of"
petition would take precedence, because if that is defeated, then
it is the status quo and you wouldn't need the second question of
whether or not you wanted to keep the status quo. He suggested
that perhaps a preference could be put in statute saying that if
there is a ballot for "in favor of" or in a change, that the one
for change will take precedence.
SENATOR TORGERSON asked if the 12-month period starts at the time
the election is certified or at the time a local ordinance is
adopted certifying the election. He also asked if it takes a local
option after the election to adopt the provision of the petition
that was passed. PAT SHARROCK answered that the adoption of the
option is the final result.
Number 350
KAREN HEGYI, representing the City of Barrow and testifying from
Barrow, said if they got a petition to go dry and another petition
to have a liquor store in town, they've got two petitions with very
different results, and the question is what is the priority on
holding the election. She said SB 87 makes it clear that there
can't be an election to go to a lesser status in 12 months, and she
asked if that completely voids the second petition, or does that
mean that they must wait for 12 months. PAT SHARROCK said if they
held an election to adopt a prohibition against importation that's
very restrictive, he thinks the statute would prohibit them holding
another election the next week. Concerning Mayor Long's question on
the status of a petition that is existing when the legislation
passes, Mr. Sharrock thought there would have to be some
transitional provision in the bill.
Number 450
There was extensive discussion on Section 53 and the definition of
"established village" and the determination of the perimeters of an
established village. JOE AMBROSE related that the definition was
added in last year's legislation at the instigation of some of the
villages in order to define an enforcement area. Because of a gray
area, there was concern about their ability to enforce their local
option in that gray area.
Number 570
SENATOR TORGERSON stated CSSB 87(CRA) would be held over until the
committee's next meeting for additional work.
There being no further business to come before the committee, the
meeting was adjourned at 3:20 p.m.
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