Legislature(2007 - 2008)BELTZ 211
03/27/2007 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS
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| Start | |
| SB128 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 128 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
March 27, 2007
3:46 p.m.
MEMBERS PRESENT
Senator Donny Olson, Chair
Senator Albert Kookesh, Vice Chair
Senator Joe Thomas
MEMBERS ABSENT
Senator Gary Stevens
Senator Thomas Wagoner
COMMITTEE CALENDAR
SENATE BILL NO. 128
"An Act relating to the sale, distribution, and purchase of
alcoholic beverages; relating to a state database for records of
certain alcoholic purchases of alcoholic beverages; relating to
procedures for local option elections for control of alcoholic
beverages; and providing for an effective date."
MOVED CSSB 128(CRA) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: SB 128
SHORT TITLE: ALCOHOL LOCAL OPTION PROVISIONS
SPONSOR(S): SENATOR(S) OLSON
03/19/07 (S) READ THE FIRST TIME - REFERRALS
03/19/07 (S) CRA, JUD, FIN
03/27/07 (S) CRA AT 3:30 PM BELTZ 211
WITNESS REGISTER
TALIS COLBERG, Attorney General
Co-Chair, Alaska Rural Justice and Law Enforcement Commission
Anchorage, Alaska
POSITION STATEMENT: Spoke in favor of SB 128.
ANNE CARPENETI, Attorney
Criminal Division
Department of Law
Juneau, Alaska
POSITION STATEMENT: Provided a sectional analysis of SB 128.
DARWIN PETERSON, Staff
to Senator Lyda Green
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Spoke in favor of SB 128.
KEITH MALLARD, Commander
Alaska Bureau of Alcohol and Drug Enforcement
Alaska State Troopers
Anchorage, Alaska
POSITION STATEMENT: Answered questions regarding SB 128.
BILL ROCHE, Chief Enforcement Officer
Alcohol Beverage Control Board
Anchorage, Alaska
POSITION STATEMENT: Answered questions regarding SB 128.
KAREN BITZER, Executive Director
Alaska Rural Justice and Law Enforcement Commission
Anchorage, Alaska
POSITION STATEMENT: Spoke in favor of SB 128.
LORETTA BULLARD, President
Kawerak, Inc.
Nome, Alaska
POSITION STATEMENT: Spoke in favor of SB 128.
DIANE KELLER, Mayor
Wasilla, Alaska
POSITION STATEMENT: Spoke in favor of SB 128.
JIM WOOD, Senior Vice President
Meritage Development Group
Wasilla, Alaska
POSITION STATEMENT: Spoke in favor of SB 128.
JIM STEVENS, Leasing Manager
Browman Development
Wasilla, Alaska
POSITION STATEMENT: Spoke in favor of SB 128.
ACTION NARRATIVE
CHAIR DONNY OLSON called the Senate Community and Regional
Affairs Standing Committee meeting to order at 3:46:40 PM.
Senators Kookesh and Olson were present at the call to order.
Senator Thomas arrived shortly thereafter.
SB 128-ALCOHOL LOCAL OPTION PROVISIONS
SENATOR KOOKESH moved to adopt the committee substitute (CS) for
SB 128, labeled 25-LS0742\C, Bullard. Hearing no objections,
Version C was before the committee.
3:48:13 PM
GINNY AUSTERMAN, Staff to Senator Olson, presented SB 128 on
behalf of Senator Olson:
Alaska, along with many other states, finds itself in the
position of needing to protect residents of rural communities
from bootleggers of alcohol. Various alcohol abuse educational
programs have been in place in rural Alaska for a number of
years, but they have not served to halt the illegal importation
and sale of alcohol to Alaska's rural communities. SB 128 curbs
bootlegging by allowing the Alcoholic Beverage Control (ABC)
Board, at the request of the communities of Bethel and Kotzebue,
to establish pilot alcohol delivery sites. If opened, these
sites would operate for a period of three years.
Senate Bill 128 is aimed at preventing bootleggers from ordering
alcohol from numerous package stores in violation of the local
option. Alcohol Local Option Provisions require that the ABC
Board, in conjunction with package store licensees, create and
maintain a database documenting the sale, distribution, and
purchase of alcoholic beverages, ordered in writing, from
persons residing in damp local option communities. The bill
requires that a package store consult the database before
filling a written order from a person residing in the local
option area. The database will be available to package store
licensees and their agents and employees, law enforcement
officers, probation and parole officers, and the ABC Board.
Information in the database will not be available to the public.
The bill also corrects an inadequacy in state liquor law that
hampers the ability of large hub communities to attract
investment in family-oriented restaurants. There are [no]
allowances for the transfer of a borough license to a city
within the borough's borders in order to meet public demand and
promote economic development.
3:50:44 PM
CHAIR OLSON noted a letter from the Tanana Chiefs Conference in
support of SB 128.
TALIS COLBERG, Attorney General Designee and Co-Chair of the
Alaska Rural Justice Commission, said the commission has focused
on four areas of concern in the past two years, with alcohol
interdiction as one. It formed working groups across the state
and came up with about 100 action options including the
provisions in SB 128. The bill seeks to interdict alcohol in
rural Alaska with: a statewide database for tracking alcohol
shipments; modifications to forfeiture; and restricted shipments
to damp communities. He added that the bill prohibits package
stores from shipping alcohol in response to written orders from
a person residing in a local option area. It allows the transfer
of liquor licenses in large hub communities. SB 128 also
prohibits persons from purchasing alcoholic beverages from a
person who is selling alcohol in violation of the local option,
and it addresses "other provisions in the law to try to enhance
the ability of local communities to better serve the local
population." The bill is a final work product from the
commission, he said. The commission is out of money and the
executive director, Ms. Bitzer, has been working without
compensation for two months. She has offered to see this work
through. He expressed the need for supplemental funding.
3:53:41 PM
ANNE CARPENETI, Attorney, Criminal Division, Department of Law,
said Sections 1 and 2 of SB 128 require the ABC board to
establish a database to record written orders from damp
communities. Licensees would be required to check the database
prior to filling orders for alcohol shipments "to ensure that a
person has not made several orders from several different
licensees in excess of the amount that is the presumption for
possession with intent to sell." Section 3 prohibits shipping
alcohol to any address other than the address of the person
ordering the alcohol, unless there is a community delivery site,
"in which case, under current law, they would be required to
send the alcohol to the community delivery site." Sections 4 and
5 were added by request of Senator Green. Places with a city
government within a borough will be able to transfer a liquor
license from the surrounding borough to the city if approved by
the local governing bodies. This language is to encourage
economic development and vibrant downtown areas, she stated.
3:56:36 PM
SENATOR THOMAS said the bill restricts the sale of alcohol but
Sections 4 and 5 expand it. He surmised it loosened the
transferability of liquor licenses between a borough and a city
inside the borough and did not expand the number of licenses.
MS. CARPENETI agreed. The city and borough government must both
approve the transfer. She said there were family-type
restaurants in downtown Wasilla that would like to add alcohol
to their menus. There are licenses available in the surrounding
borough but none for downtown, she explained.
3:58:38 PM
MS. CARPENETI said Sections 6, 7, 11, and 12 prohibit a person
from purchasing alcohol from a bootlegger in violation of a
local option. It is now illegal to sell alcohol but not illegal
to purchase alcohol from a bootlegger. It would become a Class A
misdemeanor for the buyer, and the bootlegger would be subject
to a Class C felony. Section 8 extends the time after a local
option election before another one could be held to remove or
reduce the level of the local option. It also provides that an
election removing or reducing a local option may be held only
once in every 36-month period. Section 9 prohibits a person from
buying alcohol on behalf of a person who lives in a dry
community. Section 10 prohibits a person living in a dry
community from possessing ingredients or equipment with the
intent to create homebrew. Sections 13 and 14 amend the
forfeiture provisions to allow forfeiture of the alcohol that
was purchased in violation. Section 15 allows the ABC board to
establish pilot delivery sites in Kotzebue and Bethel if
requested by the local government.
4:01:07 PM
SENATOR KOOKESH asked for the definition of an established
village.
MS. CARPENETI said it is a term used in the local option law,
which is found in AS04.11.491. It has been used by courts and
law enforcement.
DARWIN PETERSON, Staff to Senator Lyda Green, said Sections 4
and 5 were added to accommodate Fairbanks and the Mat-Su, which
have the need to transfer existing licenses from the borough to
within the city. There is no expansion, just more flexibility to
manage liquor licenses, he stated.
CHAIR OLSON asked if there has been any opposition.
MR. PETERSON said he has not heard from anyone.
CHAIR OLSON asked if the sections have any broader effects.
MR. PETERSON said it just affects organized boroughs, and both
governing bodies and the ABC would have to approve the transfer.
CHAIR OLSON asked the reason for the initial prohibition.
MR. PETERSON said the City of Wasilla brought the limitation to
the attention of Senator Green when it was trying to expand
development. Chili's and Applebee's weren't able to set up shop,
he said. He didn't know the history of the original law.
4:04:31 PM
SENATOR THOMAS asked if the licenses could be transferred the
other direction-from the city to the borough.
MR. PETERSON said yes, as long as both bodies approve it.
CHAIR OLSON asked how individual civil rights are protected.
MS. CARPENETI said that issue has been litigated and the local
options laws have been upheld by the courts.
CHAIR OLSON asked if she expects any litigation on
constitutional grounds for SB 128.
MS. CARPENETI said anybody can file a lawsuit, "but I believe
that since we have prevailed in other areas of local option
litigation, I believe we would also prevail here."
SENATOR THOMAS asked about the limits of no more than 10.5
liters of distilled spirits, 24 liters of wine and 12 gallons of
malt beverages, and he surmised it is based on alcohol content.
4:07:03 PM
MS. CARPENETI said that is existing law, and she believes the
senator is correct.
KEITH MALLARD, Captain, Alaska State Troopers, said he has been
with the troopers for 11 years and he has worked in Aniak. He
currently supervises the Western Alcohol Enforcement and
Narcotics team.
CHAIR OLSON asked why he would think the distribution center
would work in Bethel and Kotzebue, "especially since you've been
up in Aniak."
CAPTAIN MALLARD said it provides a place where there will be
local knowledge of who actually lives in those communities
versus in the outlying or local option communities.
CHAIR OLSON said there have been attempts to break into the
distribution center in Barrow. They are so visible, he said, and
he asked how those problems can be worked out.
4:08:51 PM
CAPTAIN MALLARD said he would handle it like any other burglary.
CHAIR OLSON asked if he anticipated the same success rate as
Barrow.
CAPTAIN MALLARD said he can't speak to the success rates in the
North Slope Borough.
WILLIAM ROCHE, Chief Enforcement Officer, Alcohol Beverage
Control (ABC) Board, said moving licenses between cities and
boroughs was supported by the ABC board in February.
SENATOR THOMAS asked about any comments from "the cabaret,
hotel, restaurant folks."
MR. ROCHE said he believes they were informed and haven't given
any comments.
4:10:52 PM
CHAIR OLSON asked about alcoholic beverages on a ship in port.
MR. ROCHE said cruise ships have Alaska liquor licenses, and
they obtain the beverages from Alaska licensed wholesalers. It
is a very sophisticated business, he stated.
CHAIR OLSON asked about an icebreaker heading out for the
Northwest Passage but gets stuck between Kotzebue and Barrow and
needs to purchase more alcohol for the trip.
MR. ROCHE said he has been with the ABC board since 1979, and
such a situation has never occurred.
4:12:57 PM
LORETTA BULLARD, President, Kawerak, a regional services
consortium for the Bering Straits, said she serves on the Alaska
Rural Justice and Law Enforcement Commission. Alcohol and
substance abuse is the nucleus of suicides, homicides, neglect,
domestic violence, accidental deaths and injuries, and child
sexual abuse in rural Alaska. It is the sole cause of fetal
alcohol syndrome. She estimates that 90 percent of the inmates
in the Anvil Mountain Correctional Center are serving time for
offenses conducted under the influence of alcohol, for consuming
alcohol while on probation, or for importing or brewing alcohol
in violation of local option laws. The increase in correctional
expenditures is huge, she said. She supports SB 128, which
includes practical solutions developed as part of the Rural
Justice and Law Enforcement work group process.
4:14:58 PM
MS. BULLARD described the provisions in SB 128. In the Bering
Straits region alcohol is shipped into wet communities and
individuals from dry communities come by boat or snow machine to
get it. She noted that Barrow set up an alcohol delivery site,
which has been a huge success in controlling the delivery of
alcohol. She said the bill focuses on the supply issue, and she
encouraged the legislature to make funds available to address
the demand for and treatment for alcohol and substance abuse.
She sent in a list of other options developed by the work group,
and she wants the committee to know there are many more ideas,
including early intervention.
MS. BULLARD noted that the commission is out of money because of
the federal "no earmarks" policy. She asked for stop-gap funding
to allow the commission to do their work.
CHAIR OLSON said bootlegging has been around since before
statehood, and he asked what makes her think this legislation
will help "with some of the problems that are out there."
4:18:23 PM
MS. BULLARD said there is currently no control in the amounts of
liquor that people can import into damp communities. There are
plane loads, she stated, and there are alcohol runs between
communities. The bill is a step in the right direction.
DIANE KELLER, Mayor, City of Wasilla, said Wasilla is growing
rapidly and expecting 1.2 million square feet of new retail
development by 2009. The city has been approached by chain and
local restaurants for help in getting liquor licenses. Wasilla
has only three beverage dispensary licenses for purchase. The
city would have to grow to 24,000 people before getting another
one. The value of the licenses are in the mid-six figures and
too costly for restaurants. She said the transferred licenses
wouldn't be used for bars but to "make for a pleasant
environment for a family to have dinner."
4:21:58 PM
CHAIR OLSON asked if more licenses could be issued.
MAYOR KELLER said Wasilla doesn't need more licenses; it just
needs to use the ones that are out there.
CHAIR OLSON said the market is driving the licenses up.
MAYOR KELLER said there are licenses, but they can't come into
the city because it is a population-based program.
4:23:01 PM
MAYOR KELLER said she knows two business owners who now hold
licenses are not opposed to the language. The other hasn't
decided, but there is no active opposition that she is aware of.
JIM WOOD, Senior Vice President, Meritage Development Group,
said he is putting in two developments in Wasilla worth $160
million. He is working with Applebee's restaurant contingent
upon getting a liquor license. His type of development hasn't
been done in Alaska; it is more of a lifestyle center, he said.
He can't get the restaurant without the liquor license.
JIM STEVENS, Leasing Manager, Browman Development, said he is
working on a shopping mall and would like to have a sit-down
restaurant there, but he can't attract them until this is
resolved. Restaurants have tremendous costs and to add an
exorbitant cost of a liquor license is prohibitive. The trade
area of Wasilla is 80,000 people, but liquor licenses are based
on the population of 8,000 people, he explained.
4:26:41 PM
SENATOR KOOKESH moved CSSB 128(CRA), labeled 25-LS0742\C, from
committee with individual recommendations and attached the
fiscal note(s). There were no objections and it was so ordered.
The meeting was adjourned at 4:27:47 PM.
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