Legislature(2007 - 2008)
05/14/2007 01:26 PM Senate FIN
| Audio | Topic |
|---|---|
| Start | |
| HB113 | |
| HB155 | |
| SB128 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
May 14, 2007
1:26 p.m.
CALL TO ORDER
Co-Chair Bert Stedman convened the meeting at approximately
1:26:21 PM.
PRESENT
Senator Bert Stedman, Co-Chair
Senator Lyman Hoffman, Co-Chair
Senator Charlie Huggins, Vice Chair
Senator Kim Elton
Senator Donny Olson
Senator Joe Thomas
Senator Fred Dyson
Also Attending: REPRESENTATIVE RALPH SAMUELS; ELEANOR WOLFE,
Staff to Representative Kurt Olson; PAT DAVIDSON, Director,
Division of Legislative Audit; GINNY AUSTERMAN, Staff to Senator
Olson; TALIS COLBERG, Attorney General, Department of Law;
Attending via Teleconference: From offnet locations: CASEY
REYNOLDS, Economic Development Planner, City of Wasilla;
SUMMARY INFORMATION
HB 113-OPTOMETRISTS' USE OF PHARMACEUTICALS
The Committee heard from the sponsor. The bill was reported from
Committee.
HB 155-EXTEND ALCOHOLIC BEVERAGE CONTROL BOARD
The Committee heard from the sponsor and the Division of
Legislative Audit. The bill was reported from Committee.
SB 128-ALCOHOL LOCAL OPTION PROVISIONS
The Committee heard from the sponsor, the Department of Law, the
Alcohol Beverage Control Board and the City of Wasilla. A
committee substitute was adopted and the bill was reported from
Committee.
1:27:20 PM
SENATE CS FOR CS FOR HOUSE BILL NO. 113(L&C)
"An Act relating to the prescription and use of
pharmaceutical agents, including controlled substances, by
optometrists; and providing for an effective date."
This was the second hearing for this bill in the Senate Finance
Committee.
Co-Chair Stedman announced intent to report this bill from
Committee. He noted the zero fiscal note.
1:28:03 PM
Senator Olson compared the small number of board certified
ophthalmologists to the approximately 110 board certified
optometrists. He asked the financial consequences to the
ophthalmologists resulting from the ability of optometrists to
provide some of the medical care previously limited to
ophthalmologists. He expressed concern that fewer
ophthalmologists would be attracted to practice in Alaska.
1:29:34 PM
REPRESENTATIVE RALPH SAMUELS, Sponsor of the bill, measured the
issue of commercial interest versus health care. Under the
provisions of this legislation, patients could receive care from
one doctor rather than two. This would save patients money
especially those in rural areas who travel to larger communities
for medical treatment. Ophthalmologists would continue to
perform many procedures, including surgery. Patient care and
affordability of treatment was of higher priority than any
earnings reduction. The "revenue shift" would not be so
significant as to deter ophthalmologists from practicing in the
state.
1:31:04 PM
Senator Olson asked the sponsor to comment on the possibility of
including lapse date in which the provisions of the bill would
be reviewed and possibly reconsidered.
1:31:09 PM
Representative Samuels informed that this bill represents his
second attempt to implement these changes. Former Governor Frank
Murkowski vetoed similar legislation passed unanimously by the
Twenty Forth Legislature.
Representative Samuels asserted that a lapse date should not be
imposed on the provisions of the current bill for no other
reason than "commercial interests".
1:31:56 PM
Senator Huggins offered a motion to report the bill, 25-
LS0411\T, from Committee with individual recommendations and
accompanying fiscal note.
1:32:12 PM
Senator Elton objected to note for the record the receipt of
written testimony from Bob Loescher. Senator Elton removed his
objection.
1:32:35 PM
Co-Chair Stedman objected for discussion purposes.
1:32:40 PM
Senator Dyson shared that the optometrist that he was a patient
of has supported this proposal for several years.
1:32:55 PM
Senator Olson asked if testimony would be taken at this hearing.
1:32:58 PM
Co-Chair Stedman reminded that testimony had been received at
the previous hearing on this bill.
1:33:01 PM
Senator Olson commented on the "devastating effect", including
blindness, of certain diseases that were not diagnosed early.
1:33:51 PM
Co-Chair Stedman removed his objection to the motion to report
the bill from Committee.
Without further objection SCS CS HB 113(L&C) was REPORTED FROM
COMMITTEE with zero fiscal note #1 from the Department of
Commerce, Community and Economic Development.
1:34:28 PM
CS FOR HOUSE BILL NO. 155(FIN)
"An Act extending the termination date of the Alcoholic
Beverage Control Board; and providing for an effective
date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Stedman announced intent to report this bill from
Committee unless issues were raised that could not be
immediately resolved.
1:35:03 PM
ELEANOR WOLFE, Staff to Representative Kurt Olson, testified
that this legislation was introduced at the request of the
Alcoholic Beverage Control (ABC) Board. The recent report
conducted by the Division of Legislative Audit identified some
problems in the operation of the Board; however she was assured
that they would be addressed in separate legislation. This had
not yet occurred but the Committee would be notified as to the
status of the effort.
Ms. Wolfe noted that the original version of this bill would
extend the Board for six years. The House Finance Committee
considered the bill and recommended the extension be three
years. The intent is to provide an opportunity to address any
issues similar to those identified in the audit report.
1:36:17 PM
Senator Huggins recommended reducing the extension from 36
months, as contained in the current version of the bill, to 24
months with the expectation that the issues would be addressed
during the interim and reviews by the legislature near the
conclusion of the two-year period.
1:36:49 PM
Co-Chair Stedman repeated Senator Huggins's comments.
1:36:57 PM
Ms. Wolfe suggested conferring with the Division of Legislative
Audit, as the audit process requires one year and would
therefore begin in one year.
1:37:24 PM
Senator Dyson cautioned that because the legislation originated
in the House of Representatives any changes made by the Senate
would require concurrence and could jeopardize the passage of
the bill and subsequent extension of the Board.
1:37:39 PM
Co-Chair Stedman assured that "ample time" remained in the
process to receive concurrence from the House of
Representatives.
Senator Dyson did not understand the dynamics between the two
legislative bodies and expressed concern that the bill would not
pass.
1:38:37 PM
Co-Chair Stedman reassured this would not occur.
1:39:01 PM
PAT DAVIDSON, Director, Division of Legislative Audit, testified
that the Division is statutorily required to make an audit
available to the Legislature when it convenes in the year that a
board or commission is scheduled to expire. If the termination
date of the ABC Board was scheduled for 24 months, the Division
would be required to begin the audit process in June 2008.
Interim reporting was another option. Many of the issues
highlighted in the recent audit only involve Board action to
rectify.
1:40:26 PM
Co-Chair Stedman identified two options, one to shorten the
timeframe to re-extend the Board, and the other to request the
Board report its progress in implementing the changes. The
intent was to ensure that the Board would take action.
1:41:04 PM
Ms. Wolfe did not oppose a provision requiring the Board to
prepare an interim report to the Legislature.
1:41:15 PM
Senator Huggins changed his recommendation, instead supporting
the existing proposed termination date of the Board and
requesting a report from the Board.
AT EASE 1:41:43 PM / 1:41:52 PM
1:41:54 PM
Co-Chair Stedman asked if the record of this discussion would be
sufficient in requesting the report. He preferred the least
cumbersome method of ensuring that the Board implements the
recommendations identified by the Division of Legislative Audit.
1:42:47 PM
Senator Elton suggested the Department of Commerce, Community
and Economic Development, Division of Corporations, Business and
Occupational Licensing could prepare the report. He pointed out
that the recent audit was completed during the Murkowski
Administration and that a new commissioner had since been
appointed who may encourage different practices.
1:44:07 PM
Co-Chair Stedman asked if intent language would be necessary to
request this report or whether the spoken intent would suffice.
1:44:39 PM
Co-Chair Hoffman offered a motion to report the bill from
Committee with individual recommendations and accompanying
fiscal note.
There was no objection and CS HB 155(FIN) was REPORTED FROM
COMMITTEE with zero fiscal note #2 from the Department of Public
Safety.
1:45:18 PM
CS FOR SENATE BILL NO. 128(JUD)
"An Act relating to the sale, distribution, and purchase of
alcoholic beverages; relating to a state database for
records of certain purchases of alcoholic beverages;
relating to the relocation of a license to sell alcoholic
beverages; relating to procedures for local option
elections for control of alcoholic beverages; and providing
for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
1:45:25 PM
Co-Chair Stedman expressed intent to move this bill from
Committee unless issues arose that could not be addressed during
this meeting.
1:45:35 PM
Senator Olson offered a motion to adopt CS SB 128, 25-LS0742\K,
as a working document.
Without objection the committee substitute Version "K" was
ADOPTED.
1:46:09 PM
Senator Olson, sponsor of the bill, emphasized the issue of
alcoholism in Alaska, especially in rural areas. This
legislation was created in cooperation with the affected
departments to ensure that the databases it would establish
would not interfere with normal commercial transactions of
alcohol and distribution to communities in which alcohol had not
been banned or restricted.
1:47:00 PM
GINNY AUSTERMAN, Staff to Senator Olson, read testimony into the
record as follows.
SB 128 came about at the urging of the Rural Justice
Commission. This legislation is an integral part of the
effort to regulate the sale, distribution, purchase and
shipment of alcoholic beverages into damp local option
communities within the state of Alaska.
It puts in place a requirement for the Alcoholic Beverage
Control [ABC] Board to create and maintain a database that
contains up to date information related to written orders
for alcohol shipped to the writer of the order. The package
store licensee must consult the database prior to filling
each order.
Currently AS 04.11.150(g) regulates the amounts of
alcoholic beverages to residents of local option areas. SB
128 requires that the package store licensee, agent or
employee access the database to determine the amounts of
alcoholic beverages already ordered by an individual. It
also requires that the date and amount of the new order
will be immediately added to the database.
This database will adversely impact the importation and
sale of alcoholic beverages into rural Alaskan communities
by bootleggers. The information in the database will be
accessible only to package stores and law enforcement. None
of the information would be available to the public.
SB 128 also contains a provision to correct an omission in
State law relative to the transfer of liquor licenses
between an organized borough and communities in that
borough. Many communities across the state have used their
allotment of liquor licenses while their borough has not.
Boroughs may now transfer alcoholic beverage licenses to
those communities.
1:48:48 PM
Ms. Austerman then read a sectional analysis into the record as
follows.
Sections 1 and 2 speak to the requirements of the ABC Board
to create and maintain a database to keep track of written
orders for alcohol from persons residing in damp local
option communities. It clearly states to whom the
information in the database is available. They describe in
detail the steps for licensees to record and review
information in the database and make failure to comply with
the requirements a class B misdemeanor.
Section 3 limits the shipping of alcohol in response to a
written order to the address of the person ordering the
alcohol unless that person lives in an area where there is
a community delivery site.
Sections 4 and 5 allow for the relocation of existing
liquor licenses within a borough. Such relocation of
licenses is limited to not more than three in each decade.
"Decade" means each ten year period beginning April 1 in
the year ending in "0".
Sections 6, 7, 11, 12 and 13 prohibits reselling of alcohol
in violation of the local option and changes such an
offense from a class C felony to a class A misdemeanor and
makes purchase of alcohol in violation of the local option
a class A misdemeanor.
These sections also include conforming amendments for the
new provisions in Sections 7 and 12.
Section 8 extends the period after a local option has been
adopted from 12 to 24 months before an election may be held
to remove the option or change the option to a less
restrictive alternative. It also provides for an election
to remove or make the option less restrictive once in a 36
month period. Currently that period is 18 months.
Section 9 prohibits a person from purchasing alcohol by
written order on behalf of another person who resides in a
local option community and makes the violation a class A
misdemeanor.
Section 10 prohibits a person in a dry local option area
from possessing ingredients or equipment with the intention
of making home brew. This violation would also be a class A
misdemeanor.
Sections 14 and 15 amend forfeiture provisions for
violations of AS 04.11.499 to include the alcohol purchase
from a bootlegger in violation of the community's local
option. Forfeiture of an airplane or other vehicle is not
allowed.
Section 16 allows the ABC Board to establish pilot alcohol
delivery sites in Bethel and Kotzebue. Once opened, these
sites would operate for a period of three years.
Sections 17 through 22 include instructions to the Revisor
of statutes and effective dates.
1:51:48 PM
TALIS COLBERG, Attorney General, Department of Law, testified
that for the past three years the Alaska Rural Justice
Commission had been undertaking efforts cumulating in this
legislation. The Commission was established by the federal
Department of Justice and involved many people and various
groups and organizations. This legislation has the support of
affected communities.
1:52:42 PM
Co-Chair Stedman asked if the Department of Law supports this
legislation.
1:52:45 PM
Mr. Colberg reported that the Department participated in
preparing this bill.
1:53:14 PM
Senator Thomas noted that the language of Section 5, pertaining
to relocation of a license for a "restaurant, eating place, or
hotel, motel, resort or similar business that contains a
restaurant or eating place", made no reference to bars. He
presumed that this provision would apply to an established
business that was seeking to obtain a beverage license.
Mr. Colberg confirmed that a qualifying business would have an
existing beverage dispensing license associated with it.
1:54:12 PM
Senator Thomas next clarified that the definition of "decade" in
Section 5, as "each 10-year period beginning April 1 in a year
ending in zero", meant that the relocation of licenses could
occur in a year only if zero transfers had occurred in the
previous year.
1:54:46 PM
Ms. Austerman corrected that the definition was of the years
2010, 2020, 2030, etc., and pertained to the year in which
transfers would be allowed rather than the number of transfers
allowed. Three transfers would be allowed each decade. Once this
maximum had been reached, no more transfers would be allowed
until the following decade began.
1:55:10 PM
Co-Chair Hoffman asked the sponsor whether the proposed
prohibition of ingredients or equipment utilized for the
creation of alcoholic beverages, i.e. homebrew, by residents of
a community that has banned alcohol was necessary.
1:55:44 PM
Senator Olson described the sugar, artificial sugar, malt and
yeast used to make homebrew. All these ingredients with the
exception of malt could be utilized for purposes other than the
creation of alcohol and therefore intent to create homebrew
would be necessary to be in violation of the prohibition.
However in his experience, many people who make homebrew have
the intent to do so.
1:56:44 PM
Ms. Austerman furthered that Co-Chair Hoffman's question was
raised in a committee that previously considered this
legislation. It was concluded that a person in possession of the
aforementioned ingredients who did not intend to make homebrew
would be less likely to also possess bottles and other equipment
necessary to make the alcohol.
1:57:19 PM
Mr. Colberg acknowledged that intent is difficult to determine.
Many people possess the necessary ingredients.
1:57:51 PM
Senator Elton cited the "fine line" dividing intent and action.
He asked the substantive difference in this situation.
1:58:11 PM
Mr. Colberg agreed the distinction was ambiguous, but stressed
that the homebrew issues in these communities was serious and
widespread. The primary problem was the absence of law
enforcement. If a person or persons were not caught in the act
of preparing homebrew, intent could possibly be identified and
the proposed provision implemented.
1:59:13 PM
Senator Huggins found irony in the Alaska Supreme Court ruling
pertaining to the amount of marijuana a person was allowed to
posses and that this provision would ban the possession of
ingredients to allow a person to make blueberry wine. He
supported and defended communities' right to chose to ban or
restrict alcohol, but wanted his comments noted.
2:00:01 PM
Senator Olson commented that homebrew could be made with only
sugar, yeast, and raisins, and that all equipment associated
with the production was not necessary. The issue was the need to
provide law enforcement "teeth" to address blatant violations in
communities that had voted to be "dry". The situation was "out
of control" and worsening.
2:01:29 PM
Senator Huggins agreed, but noted that the court could place a
limit on the amount of sugar and other items a person could
posses.
2:01:52 PM
Senator Olson agreed and shared that he operates a store from
his home and stocks sizable quantities of sugar and other
homebrew ingredients.
2:02:46 PM
CASEY REYNOLDS, Economic Development Planner, City of Wasilla,
testified via teleconference from an offnet location, that the
provision in this bill relating to the relocation of liquor
licenses was proposed at the request of his and other
communities. Current restrictions hamper the ability for
communities to grow economically. Many communities serve not
only its residents but also those residing outside its boundary.
However the number of licenses a community is permitted is based
only on the population within the boundary.
Mr. Reynolds stressed that the relocation would only apply to
restaurants and would not include bars or package stores. The
flexibility is requested to allow for additional restaurants.
The number of licenses would not increase
2:04:53 PM
DOUG GRIFFIN, Director, Alcohol Beverage Control Board,
testified via teleconference from an offnet location to the
licensing issue. Mr. Reynolds was correct in saying that more
licenses would not be issued, but instead the allocation of
licenses would be adjusted.
Mr. Griffin explained that the fiscal note reflected the best
estimate of the cost to establish and administer a database for
package stores to track sales of alcohol destined to dry or damp
communities. The fiscal note does not include financial
estimates to establish and administer the pilot projects
described in Section 16 that would be located at Bethel and
Kotzebue. If those communities elected to participate in the
project, the cost would be significant and would include
building space, security and staffing. Some of the costs could
be recovered with user fees, but start-up expenses would be
substantial. He was unsure if the municipalities would support
having the ABC Board operate the facilities as a State entity.
He preferred that the facilities be overseen by the
municipalities. However, he understood that this option might
not be possible due to "political reasons".
2:07:33 PM
Co-Chair Stedman established that fiscal note #2 superseded a
fiscal note dated March 2007.
2:07:48 PM
Mr. Griffin affirmed and explained that the initial fiscal note
listed the costs as indeterminate. An effort was then made to
estimate the actual costs.
2:08:08 PM
Co-Chair Stedman commented that the amount was larger than he
had expected.
2:08:24 PM
Co-Chair Hoffman spoke of separate legislation from a previous
Legislature requiring the labeling of alcohol transported to
"damp" communities with restricted alcohol allowances. A court
ruling disallowed such labeling and he asked whether the statute
must be changed to reflect this.
2:09:09 PM
Mr. Griffin indicated he would consult with the Department of
Law on this matter. He opined to the importance of retaining the
statute.
2:09:42 PM
Co-Chair Stedman established that no further testimony or
questions were forthcoming.
2:10:05 PM
Co-Chair Hoffman offered a motion to report CS SB 128, 25-
LS0742\K, from Committee with individual recommendations and
accompanying fiscal notes.
There was no objection and CS SB 128 (FIN) was REPORTED FROM
COMMITTEE with fiscal note #2 for $317,500 from the Department
of Public Safety, and zero fiscal note #3 from the Department of
Law.
RECESS 2:10:52 PM / 6:20:06 PM
ADJOURNMENT
Co-Chair Bert Stedman adjourned the meeting at 6:20:23 PM
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