Legislature(1995 - 1996)
03/22/1995 01:37 PM Senate JUD
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE JUDICIARY COMMITTEE
March 22, 1995
1:37 p.m.
MEMBERS PRESENT
Senator Robin Taylor, Chairman
Senator Lyda Green, Vice-Chairman
Senator Mike Miller
Senator Al Adams
Senator Johnny Ellis
MEMBERS ABSENT
None
COMMITTEE CALENDAR
CS FOR SENATE BILL NO. 87(CRA)
"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. 122
"An Act excluding certain direct sellers of consumer products from
coverage under the state unemployment compensation laws."
CS FOR HOUSE BILL NO. 9(FIN)
"An Act relating to recovery of damages from a person having legal
custody of a minor when property is destroyed by the minor, and to
recovery from a minor's permanent fund dividend for injury or
damage caused by the minor."
CS FOR SENATE BILL NO. 85(STA)
"An Act making corrective amendments to the Alaska Statutes as
recommended by the revisor of statutes; and providing for an
effective date."
SENATE JOINT RESOLUTION NO. 14
Proposing an amendment to the Constitution of the State of Alaska
relating to certain public corporations.
PREVIOUS SENATE COMMITTEE ACTION
SB 87 - See Community & Regional Affairs minutes dated
3/8/95 & 3/17/95.
SB 122 - No previous Senate action.
SB 85 - See State Affairs minutes dated 3/7/95.
See Judiciary minutes dated 3/17/95.
SJR 14 - See State Affairs minutes dated 2/21/95.
HB 9 - See Judiciary minutes dated 3/20/95.
WITNESS REGISTER
Joe Ambrose
Legislative Aide
Alaska State Capitol
Juneau, Alaska 99801-1182
POSITION STATEMENT: Testified on CSSB 87 (CRA)
Michael Ford
Legislative Legal Services
Legislative Affairs Agency
130 Seward St., Suite 409
Juneau, AK 99801-2105
POSITION STATEMENT: Testified on CSSB 87 (CRA)
Rick Urion
Alaska Wine & Spirits Wholesalers Assn.
P.O. Box 20868
Juneau, Alaska 99802
POSITION STATEMENT: Supports CSSB 87 (CRA)
Patrick L. Sharrock
Alaska Beverage Control Board
550 W 7th Ave.
Anchorage, AK 99501
POSITION STATEMENT: Answered questions on CSSB 87 (CRA)
Sherman Ernouf
Senate Labor & Commerce Committee Aide
Alaska State Capitol
Juneau, Alaska 99801-1182
POSITION STATEMENT: Testified on SB 122
Pam Finley
Legislative Legal Services
Legislative Affairs Agency
130 Seward St. Suite 409
Juneau, AK 99801-2109
POSITION STATEMENT: Testified on CSSB 85(JUD)
Dwight Perkins
Department of Labor
P.O. Box 21149
Juneau, AK 99802-1149
POSITION STATEMENT: Supports CSSB 122(JUD)
Wilda Whittaker
Legislative Aide
Alaska State Capitol
Juneau, Alaska 99801-1182
POSITION STATEMENT: Testified for sponsor of HB 9
Senator Rick Halford
Alaska State Legislature
Juneau, Alaska 99801-1182
POSITION STATEMENT: Testified on SJR 14
ACTION NARRATIVE
TAPE 95-14, SIDE A
Number 001
SJUD - 3/22/95
SB 87 ALCOHOLIC BEVERAGES: LOCAL OPTION & MISC.
CHAIRMAN ROBIN TAYLOR called the Judiciary Committee meeting to
order at 1:37 p.m. The first order of business was CSSB 87(CRA).
JOE AMBROSE, legislative aide to Senator Taylor, gave the following
testimony. Last year the Alcoholic Beverage Control Board (ABC
Board), prompted by concerns over a lack of clarity about how local
option elections are to be conducted, requested legislation to
simplify the process. The ABC Board also asked the same vehicle be
used to address technical amendments to Title 4. The result last
year was SB 372, which passed the Senate but died in the House
Rules Committee in the final days of the session. SB 87 is
essentially the same as last year's legislation.
MR. AMBROSE continued. CSSB 87(CRA) addresses the shortcomings in
current statute governing local option, for which no provision is
made for going from one type of option to another. Under current
law, a community must first vote to remove all restrictions on the
sale and/or importation of alcoholic beverages, then conduct a
second election on new options. This burdensome process can cause
confusion for municipalities and unincorporated villages. The
Community and Regional Affairs committee substitute addresses
specific concerns raised by local option communities. Those
amendments were supported by the ABC Board, and the chairman of the
sponsoring committee.
MR. AMBROSE discussed proposed amendments to CSSB 87(CRA) that are
supported by the Division of Elections, liquor industry and chair
of the sponsoring committee. CSSB 87 (CRA) is primarily a
housekeeping measure to clarify existing law to make local option
a more understandable process.
MR. AMBROSE explained Amendment #1 to page 22, lines 26-29. Line
27 should read, "under AS 04.11.491(a)(1) and the premises is a
nonprofit club, corporation, or association that was..." and line
29 should cite "AS 04.11.491(a)(1)."
Number 115
SENATOR GREEN asked if the nonprofit status would apply to
corporations and associations. MIKE FORD, Legislative Legal
Services, clarified the word "nonprofit" refers to "club,"
"corporation," and "association." SENATOR ADAMS noted to prevent
future problems with interpretation, the word "nonprofit" should be
inserted before all three words to clarify the intent.
SENATOR TAYLOR made a motion to amend Amendment #1 to insert the
word "nonprofit" in front of the words "club," "corporation," and
"association" and to move Amendment #1. SENATOR ADAMS objected.
MIKE FORD suggested an additional change to Amendment #1. He noted
the word "place" was used on line 27 because it also appears on
line 22. He suggested replacing the word "place" on line 22 with
the word "premise" and changing line 27 to read, "premises are
occupied by a nonprofit club...."
SENATOR GREEN asked if line 24 needed to be amended to include the
word "nonprofit." MR. FORD did not believe so.
There being to objection to adopt Amendment #1, as amended, the
motion carried.
Number 173
SENATOR GREEN moved the adoption of Amendment #2 which was labeled
"9-LS0673\F.1." SENATOR ADAMS objected.
MR. AMBROSE addressed lines 19-22 on page 1 of Amendment #2 and
line 1 on page 2. In revisions made to the Community and Regional
Affairs Committee substitute, the effective date of Section 70 of
the bill was inadvertently deleted. Section 73 would reinstate the
immediate effective date.
SENATOR ADAMS asked what Section 70 pertains to. MIKE FORD stated
Section 70 allows the ABC Board to adopt regulations.
RICK URION, Alaska Wine and Spirits Wholesale Association,
explained the remainder of Amendment #2. He stated the 21st
amendment to the U.S. Constitution allows states to control the
importation of alcoholic beverages into their borders. All but six
states have chosen to do so with a primary source law. Amendment
register their suppliers and brands of liquor with the department,
along with a statement from the manufacturer of the product that
the wholesaler is the primary source. This procedure would protect
the state and its revenue source by allowing products to be traced
and ensuring the payment of excise taxes by wholesalers. It also
protects the state, wholesalers and the jobs created within the
industry. This language would prevent gray market goods (products
manufactured in foreign countries intended for consumption or use
in a foreign country) from entering the state of Alaska.
SENATOR ADAMS questioned how Amendment #2 would affect a typical
COSTCO member and how COSTCO distributes liquor from its warehouse.
MR. URION clarified retailers would not be affected at all, unless
they bought gray market goods. The bill is directed to
wholesalers. He noted the industry will be self-policing.
PATRICK SHARROCK, Director of the ABC Board, commented Amendment #2
does not address Senator Adams' question; Section 10 on page 5
does. Section 10 restricts purchases of alcoholic beverages for
resale.
SENATOR ADAMS asked what the ABC Board's position is on Amendment
either amendment. He added the intent of the measure is to
solidify, in law, what has been implied or perceived for many
years.
Number 265
SENATOR ELLIS asked Mr. Sharrock's personal opinion of the proposed
amendment. MR. SHARROCK answered it solidifies a 3 tiered system
of the distribution of alcoholic beverages throughout the country,
which is probably beneficial.
SENATOR ELLIS asked how the fees that would be established in
statute compare to other states. MR. URION replied CSSB 87(CRA)
differs from other state laws so it is difficult to compare. He
developed the fee structure by determining the cost to the
department to cover filing costs. SENATOR ELLIS asked if other
states have a similar fee structure. MR. URION explained other
states have fees but they are calculated in many different ways.
SENATOR ELLIS questioned whether the fees in Amendment #2 are
comparable in any way. MR. URION stated the industry believes the
fees to be reasonable. SENATOR ELLIS requested, on behalf of the
committee, that Mr. Urion and the ABC Board provide the committee
with statistics on similar fees charged in other states.
Number 300
SENATOR TAYLOR asked if the bill would generate new revenue. MR.
URION replied affirmatively.
SENATOR ADAMS asked for the ABC Board's position on Section 10,
specifically in regard to a COSTCO member. MR. SHARROCK commented
it would prohibit a licensed retailer from purchasing alcohol at
that location for resale.
SENATOR TAYLOR asked if liquor stores in the state were allowed to
sell products at wholesale cost. MR. SHARROCK replied negatively,
and explained a wholesale licensee cannot have an interest in a
liquor store. SENATOR TAYLOR commented COSTCO has a retail
license, but a COSTCO member could buy a large quantity of liquor
at a discount price without paying sales tax.
MR.SHARROCK noted that could be perceived as a wholesale purchase
if the quantity was very large. SENATOR TAYLOR commented if the
member bought the liquor for resale, he/she would be violating the
law. MR. SHARROCK stated the problem lies in the fact that COSTCO
is not required to ask the customer whether the purchase is for
resale. SENATOR TAYLOR stated a retailer is prohibited from
selling at wholesale prices. MR. SHARROCK added the sales tax has
already been paid in the form of an excise tax.
SENATOR MILLER asked where COSTCO purchases the liquor. MR. URION
replied from a licensed wholesaler which must be Alaska based.
SENATOR MILLER asked where the concern lies. MR. URION explained
the bill does not change the way anything is currently done, and
that there is not a problem with gray market goods; the bill merely
closes up a loophole that exists. He reiterated a retailer cannot
be a wholesaler, therefore the COSTCO situation is not a problem.
SENATOR MILLER questioned the need for additional restrictions. He
compared the situation to other retail businesses who resell
products purchased from retailers. MR. URION clarified excise tax
must be paid on alcoholic beverages and is paid by wholesalers. He
explained the excise tax is only paid once, and not by retailers
like COSTCO.
SENATOR TAYLOR noted the non-Alaskan distributor who ships liquor
into the state without paying the excise tax cannot be policed.
The retailer who purchases that liquor will do so at a much cheaper
price because the cost of the tax does not have to be taken into
consideration.
Number 390
SENATOR ADAMS suggested the deletion of Section 10 on page 5.
Number 400
SENATOR GREEN asked for clarification of how gray market goods
create market problems in other states. MR. URION replied in the
contiguous states a wholesaler can transport goods from state to
state easily. The problem is not as prevalent in Alaska, however
there have been times when gray market goods have been transported
into the state. He discussed quality control problems with such
goods and the inability to remove those products from circulation
when they are unsafe. SENATOR GREEN asked how CSSB 87(CRA) would
prevent those problems. MR. URION explained it requires primary
source distributors to register the names of the producers of
goods.
SENATOR TAYLOR commented the Washington State ABC Board determines
which brands can be sold in the state, and the liquor stores are
controlled by the state.
SENATOR ADAMS questioned the fee structure in Amendment #2. MR.
URION answered he determined the fee structure. SENATOR TAYLOR
responded the committee had requested comparable fee calculations
from other states.
SENATOR ELLIS commented he supports the effective date change in
Amendment #2 but preferred to wait for the fee structure
information before taking action on that portion of the amendment.
MR. SHARROCK noted Mr. Urion calculated the fee amounts to cover
minimum administrative costs.
SENATOR ELLIS stated he would like the fee comparisons to determine
whether the fees are justifiable recompensation to the state. He
asked that the comparisons include the total administrative costs
to the ABC Board.
SENATOR TAYLOR announced he would table Amendment #2. There being
no objection, Amendment #2 was tabled.
The committee discussed Amendment #3 (9-LS0673\F.2). SENATOR GREEN
moved the adoption of Amendment #3. For purposes of discussion,
SENATOR ELLIS objected.
MR. AMBROSE noted Amendment #3 was submitted at the request of the
Division of Elections.
Number 478
MR. FORD discussed the intent of Amendment #3. It clarifies that
local option language on a ballot contains a summary of the
authority in question. This would define what option is being
voted on. SENATOR TAYLOR asked if it clarifies the election
process. MR. FORD responded it clarifies the ballot itself.
SENATOR ELLIS removed his objection. SENATOR ADAMS objected for
the purpose of discussion. He asked what happens when there are
two competing petitions, one to impose a restriction, and the
second to repeal that petition. MR. FORD stated CSSB 87(CRA)
specifies that the first petition filed that is certified as
meeting statutory requirements takes precedence (page 21, lines 11-
14). That petition must be voted on before a second petition can
be filed.
Number 515
SENATOR TAYLOR asked who the entity would be that determines
certification. MR. FORD replied it would depend; if the election
was municipal, it would be certified by the municipal clerk.
SENATOR ADAMS questioned how a "dry" community would go "damp." He
asked if a community would have to go from "dry" to "wet" before
going "damp." MR. FORD explained it would be a one-step process.
SENATOR ADAMS asked how often a petition can be filed. MR. FORD
noted page 21 (subsection f) contains language which addresses time
limitations.
SENATOR ADAMS removed his objection, but stated he will look at
subsection (f) on page 21 for possible amendment. There being no
objection to the adoption of Amendment #3, the motion carried.
Number 532
SENATOR ADAMS announced he was given a list of proposed amendments
from the Department of Public Safety that he would present to the
committee on Monday.
SJUD - 3/22/95
SB 122 NO UNEMPLOYMENT COMP FOR DIRECT SELLERS
SENATOR MILLER moved the adoption of CSSB 122(JUD) in lieu of the
original bill. There being no objection, the Judiciary committee
substitute was adopted.
SHERMAN ERNOUF, legislative aide to Senator Kelly, testified on SB
122, which was introduced by the Senate Labor and Commerce
Committee at the request of several groups of direct sellers. The
purpose of SB 122 is to direct exempt sellers of consumer products
from coverage under Alaska's unemployment compensation laws. SB
122 would resolve a long standing issue of contention between the
Department of Labor and direct sellers.
MR. ERNOUF discussed the two criteria required for exemption: the
direct seller must be physically present in a prospective
customer's home to sell or solicit a consumer product; and the
direct seller must be compensated by sales, commissions, or by
profit represented by the difference between the wholesale cost of
the product and the final sale price. The committee substitute
adds the word "remuneration" to cover other situations that
develop. He added wholesalers who sell merchandise are not forced
to pay unemployment compensation payments. He concluded by saying
SB 122 is a narrowly tailored consensus approach to resolve a long
standing problem.
Number 571
SENATOR ADAMS asked if CSSB 122 (JUD) would have any impact,
negative or positive, on the unemployment insurance (UI) trust
fund. MR. ERNOUF replied the bill would affect such a small number
of people, it would have no effect on the UI fund.
DWIGHT PERKINS, representing the Department of Labor, stated the
department does not believe CSSB 122 (JUD) will have a negative
effective on the UI fund. Very few individuals have filed claims
under this program. SENATOR ADAMS asked if it would affect
unemployment insurance coverage. MR. PERKINS replied it would have
no effect.
SENATOR ADAMS moved, and asked unanimous consent, that CSSB 122
(JUD) be moved out of committee with individual recommendations.
There being no objection, the motion carried.
TAPE 95-14, SIDE B
SJUD - 3/22/95
SB 85 1995 REVISOR BILL
SENATOR MILLER moved the adoption of CSSB 85 (JUD) (Finley,
3/21/95) for discussion. SENATOR ADAMS objected and asked if the
committee substitute removes Section 19.
PAMELA FINLEY, Legislative Legal Services, reviewed the changes
made to the Judiciary Committee substitute. The committee
substitute does not contain Section 19 and includes the amendments
labeled F1, F2, and F3. SENATOR ADAMS removed his objection.
SENATOR MILLER moved CSSB 85(JUD) out of committee with individual
recommendations. There being no objection, the motion carried.
SJUD - 3/22/95
HB 9 DAMAGE TO PROPERTY BY MINORS
SENATOR GREEN moved the adoption of SCSCSHB 9(JUD). Both Senators
Ellis and Adams objected.
WILDA WHITTAKER, legislative aide to Representative Therriault,
sponsor of HB 9, testified. She explained changes made in the
Senate Judiciary Committee substitute. The circumstances under
which an individual could qualify to recover costs of an infraction
committed by a minor is changed on line 22, page 2 through line 1,
page 3.
SENATOR TAYLOR asked if the only change from the original version
was to delete the parenthetical language from line 22 on page 2, to
page 3, line 1. MS. WHITTAKER answered affirmatively.
Number 554
SENATOR ELLIS questioned the rationale for the change. SENATOR
TAYLOR explained subsection (A) on page 2 is a limitation upon the
ability to execute against the judgement debtor's permanent fund
dividend and provides exceptions. It would allow a writ of
execution be issued against the minor in a civil action to recover
damages and limits that amount to $10,000. The deletion in the
Senate Judiciary Committee substitute removes certain hurdles
requiring the establishment that the state of Alaska had acted to
declare the juvenile a delinquent, or that the juvenile was
convicted of a criminal offense.
SENATOR ELLIS asked if the rationale is based on the fact that
obtaining the judgement is difficult to do. SENATOR TAYLOR
clarified there are significant exemptions provided by law that
exempt people from the enforcement of a writ of execution, i.e. the
Homestead exemption. He noted an individual must earn $30,000 per
year before his/her salary can be executed upon.
Number 526
SENATOR ELLIS asked if a judgement is made against a minor for
damages in civil court, a criminal judgement would not be required
to attach restitution. SENATOR TAYLOR replied affirmatively.
SENATOR GREEN questioned why the limit was placed at $10,000 and
what provisions would be made for damage over that amount. MS.
WHITTAKER replied the $10,000 figure was determined to be the 1994
equivalent of the $2,000 limit in the statute updated in 1967.
SENATOR GREEN questioned whether restitution should cover actual
costs.
SENATOR ELLIS stated the measure regarding the emancipation of
minors that passed last year might provide an incentive for a
parent to emancipate a minor if the restitution costs were
increased, to avoid taking responsibility. SENATOR GREEN felt the
amount to be arbitrary but not capricious.
SENATOR TAYLOR commented tort reform supporters would consider this
measure important because it caps liability.
SENATOR ADAMS questioned whether the language change on page 1,
line 11, would include foster parents as a liable party. MS.
WHITTAKER responded that foster parents would be exempt. SENATOR
ADAMS asked who would pay for the damages. Debate over whether the
state would be liable ensued.
SENATOR ADAMS asked if a child broke a window in a neighbor's home
while playing ball, whether the child's permanent fund dividend
would be garnished to pay for the damages. SENATOR TAYLOR noted
the act must be intentional or knowing.
Number 460
SENATOR ELLIS asked if SCSCSHB 9(JUD) contains an explicit
exemption for foster parents or juveniles in state custody. MS.
WHITTAKER replied Section B of the current statute exempts state
agencies or its agents from liability for the acts of unemancipated
minors in its custody.
SENATOR GREEN moved SCSCSHB 9(JUD) out of committee with individual
recommendations. SENATOR ADAMS objected. The motion failed with
Senators Green and Taylor voting "Yea," and Senators Ellis and
Adams voting "Nay."
Number 439
SJUD - 3/22/95
SJR 14 CONFIRMATION OF MEMBERS OF PUBLIC CORP
SENATOR RICK HALFORD, sponsor of SJR 14, gave the following
testimony. SJR 14 has been reviewed by the Senate Finance
Committee but was returned to the Senate Judiciary Committee to
create specific language to achieve the intent. Had the
corporations that control close to $20 billion in state assets been
envisioned at the time of statehood, a constitutional mechanism
would have been devised to prevent confirmation overlap problems.
He stated the question is how specific should constitutional
language be. The language needs to clearly cover the public
entities that control billions of dollars of state assets and
provide the voters an opportunity to amend the constitution so that
a check and balance system with regard to the boards and
commissions is established.
SENATOR TAYLOR discussed the need to keep the language sufficiently
generic so as to encompass the public entities that currently exist
and will be created in the future, and avoid the problem of
providing a specific list of names that will be intentionally
avoided by administrations in the future.
Number 420
SENATOR HALFORD stated one possibility is to change the words
"public corporation" to "entity" but it is not clear what agencies
would be considered "entities." He suggested scheduling a work
session with the Legislative Legal Services Division to refine the
language.
SENATOR ADAMS agreed with Senator Halford's statement about which
agencies should be covered, and felt CFAB should be included, but
he did not believe the list should include the smaller
corporations. SENATOR HALFORD stated one consideration was to only
include corporations that manage more than $50 million in state
assets but that would not include CFAB.
SENATOR HALFORD noted in an early draft, the addition of another
section was considered, however he felt a constitutional amendment
needs to be short, easily understood and self explanatory to gain
voter approval. The Administration raised the argument that
defining the assets as state assets might increase state liability
for default by the entity that controls those assets.
SENATOR TAYLOR suggested establishing a work session on record to
review the measure and develop new language. SENATOR HALFORD
suggested including Judge Stewart since he was a member of the
Constitutional Convention.
SENATOR HALFORD expressed concern that the Legislature approves all
members of the Board of Barbers and Hairdressers, yet has nothing
to do with the Permanent Fund Corporation Board, which has been
replaced by the past two administrations.
SENATOR TAYLOR announced he planned to set up a work session on SJR
14 within the next 10 days.
SENATOR GREEN asked if the intent of SJR 14 is to provide
legislative confirmation of members of public corporations and does
not set up a kind of audit system. SENATOR HALFORD responded SJR
14 allows for legislative confirmation. He recommended the
creation of overlapping terms, and the ability to discharge for
cause also be included in law. Because the Constitution provides
for legislative confirmation of heads of principle departments or
regulatory or quasi-judicial agencies only, board members of
agencies like the Alaska Railroad Corporation are not confirmed by
the Legislature. He stated the boards of public corporations are
usually comprised of commissioners as well as public members,
therefore the composition of the board changes significantly with
a change of administration. He noted the Permanent Fund
Corporation Board has only one member that was on the last Board,
although some members from the previous board were recently
reappointed after being removed by the previous governor.
SJUD - 3/22/95
HB 9 DAMAGE TO PROPERTY BY MINORS
SENATOR MILLER moved SCSCSHB 9(JUD) out of committee with
individual recommendations. There being objection a roll call vote
was taken. The motion carried with Senators Miller, Green, and
Taylor voting "Yea," and Senator Ellis voting "Nay."
SENATOR TAYLOR adjourned the meeting at 2:50 p.m.
| Document Name | Date/Time | Subjects |
|---|