Legislature(2015 - 2016)SENATE FINANCE 532
04/15/2015 01:30 PM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB26 | |
| HB116 | |
| HB178 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 26 | TELECONFERENCED | |
| + | HB 116 | TELECONFERENCED | |
| + | HB 176 | TELECONFERENCED | |
| + | HB 178 | TELECONFERENCED | |
| += | SB 50 | TELECONFERENCED | |
| += | HB 106 | TELECONFERENCED | |
HOUSE BILL NO. 116
"An Act extending the termination date of the
Alcoholic Beverage Control Board; and providing for an
effective date."
2:29:15 PM
LAURA STIDOLPH, STAFF, REPRESENTATIVE KURT OLSON, testified
that HB 116 would extend the termination date of the
Alcoholic Beverage Control Board to June 30, 2018. She
shared that each year the Division of Legislative Audit
reviewed state boards and commissions to determine whether
they should be reestablished per AS 24.44. The division of
Legislative Audit reviewed the activity of the board and
determined that there was a demonstrated public need for
the board's continued existence and that it had been
operating in an effective manner. She furthered that the
board had addressed all issues found in prior audits, with
two being resolved and one being partially resolved. She
noted the five findings and recommendations from the most
recent legislative audit (copy on file):
Recommendation No. 1
The board's director should ensure that all board
meetings are properly published on the State's Online
Public Notice System.
Prior Finding
From FY 07 through FY 09, 11 of 16 board meetings were
not adequately publicly noticed per statute or board
policy requirements. Four meetings were not advertised
on the State's Online Public Notice System; the venues
for seven board meetings were not advertised in the
local newspaper; and seven meetings were not
advertised timely.
Current Status
From FY 09 through February 2014, three of 25 board
meetings were not published on the State's Online
Public Notice System. Although the board has
procedures for public noticing, Department of
Commerce, Community, and Economic Development staff
did not adhere to procedures due to general oversight.
Alaska Statute 44.62.310(e) requires reasonable public
notice be given for meetings. Failure to publicly
notice board meetings may limit public input in the
regulatory process. Lack of public input may reduce
the board's effectiveness in addressing public
concerns.
We recommend the board's director ensure all board
meetings are properly published on the State's Online
Public Notice System.
Recommendation No. 2
The board should notify local governing bodies of
applications for new and transfer licenses within 10
days of receipt.
Prior Finding
The board did not consistently adhere to the statutory
requirement of notifying the local governing body
within 10 days of receiving an application as required
by AS 04.11.520. This requirement allows time for
local governments to review and possibly protest a
license being issued, renewed, relocated, or
transferred.
Local governing bodies were not consistently notified
because board members and the director did not provide
appropriate guidance and oversight to staff to ensure
compliance with state laws, and with its decisions.
Current Status
For two of 10 new or transfer licenses tested, the
board did not inform the local governing body within
10 days of receiving the application. Both
notifications were sent between 11 and 20 days after
the board received the application. The errors
resulted from prior board staff not adhering to the
board's policies and procedures which require local
governing bodies be notified in a timely manner.
Alaska Statutes specify a timeline for the board to
review applications, notify local governing bodies,
and receive protests. Alaska Statute 04.11.510
requires the board to review applications within 90
days of receipt. Alaska Statute 04.11.520 requires the
board to notify local governing bodies within 10 days
of receiving an application. A local governing body
may protest within 60 days as provided by AS
04.11.480. Delays in notifying local governing bodies
may result in inappropriately limiting the time the
local governing body and/or the board has to review
applications.
We recommend the board notify local governing bodies
of applications for new and transfer licenses within
10 days of receipt.
Recommendation No. 3
The board should issue catering permits in accordance
with statutory requirements.
Catering permits may be issued to beverage dispensary
licensees (BDL) to sell alcoholic beverages at
conventions, picnics, social gatherings, sporting
events, or similar affairs. The permits expire after
seven days and can only be used for events hosted off
licensed premises.
Alaska Statutes 04.11.230(a) states:
A caterer's permit authorizes the holder of a
beverage dispensary license to sell or dispense
alcoholic beverages at conventions, picnics,
social gatherings, sporting events, or similar
affairs held off the holder's licensed premises.
The permit may only be issued for designated
premises for a specific occasion and for a
limited period of time.
A review of four licensees that received more than six
consecutive catering permits during the audit period
yielded three instances of noncompliance. Two were
related to catering permits issued to serve alcohol in
another room of the same premises. The permits were
issued for six to 14 consecutive weeks while the board
processed the licensee's application for a duplicate
BDL. A duplicate BDL allows a licensee to serve
alcohol in another room of an establishment.
The third noncompliant permit resulted from the board
issuing a catering permit to one licensee to serve
alcohol for another business with an expired BDL. In
this case, the permits were issued for eight
consecutive weeks while the board processed the
licensee's renewal application.
Each of the three variances represent a statutory
violation because the permits were issued with the
intention to serve alcohol on a licensed premises and
to maintain daily operation of a business rather than
for a short term social gathering or similar event.
Circumventing licensing laws weakens the board's role
as regulator and may result in inequitable treatment
of applicants. Inquiries with board members revealed
that the board considered the issuance of the noted
catering permits a convenience to both licensees and
the public. At the time, the board believed that
issuing the license or permit was appropriate to
ensure the businesses could continue to operate.
We recommend that the board issue catering permits in
accordance with statutory requirements.
Recommendation No. 4
The board should issue recreational site licenses in
accordance with statutory requirements.
Recreational site licenses may be issued to businesses
that host non-school-related recreational events held
during a season.
Of the 32 recreational licensee's active during the
audit period, the audit found 15 businesses
(47 percent) did not meet the criteria for a
recreational license. Ineligible businesses include
bowling alleys, a sports center and pub, an exercise
gym, a gift shop, theatres, and pool halls. These
business types did not meet the definition of a
recreational site nor were operations limited to a
season. The issuance of these licenses expanded the
number of establishments licensed to sell alcohol over
the number allowed by statute.
According to AS 04.11.210(a), the holder of a
recreational site license may sell beer and wine at a
recreational event during and one hour before and
after recreational events. AS 04.11.210(c) defines
recreational events as baseball games, car races,
hockey games, or curling matches regularly held during
a season.
Inquiries with board members revealed that the
improper issuance of recreational site licenses was
caused by an historic misunderstanding of what
qualifies as a recreational event.
We recommend that the board issue recreational site
licenses in accordance with statutory requirements.
Recommendation No. 5
The board should implement a process to monitor and
track all complaints to ensure they are resolved in a
timely manner.
The board has not established a process to monitor and
track all complaints to ensure they are resolved in a
timely manner. The board does have a process to
receive complaints from licensees or law enforcement
agencies through their website, telephone, or emails.
However, complaints are only tracked if they result in
an inspection or investigation. If the complaint is
deemed invalid, it is not documented. Furthermore, the
basis for a decision not to investigate is not
documented and maintained.
The efficiency with which complaints are investigated
is one of the sunset evaluation criteria used in the
legislative oversight process. Alaska Statute
44.66.050(c)(6) specifies the sunset review must
evaluate:
The efficiency with which public inquiries or
complaints regarding the activities of the board,
commission, or agency filed with it, with the
department to which a board or commission is
administratively assigned, or with the office of
victims' rights or the office of the ombudsman
have been processed and resolved.
By not tracking complaints, there is an increased risk
that board staff may not investigate complaints
received and/or not investigate complaints in a timely
manner. Such instances could reduce the board's
ability to effectively enforce alcoholic beverage
laws. Additionally, complaints received directly by
board staff via telephone or email may never be
resolved in the event of staff turnover. Because there
was no statutory mandate, the board director did not
consider tracking all complaints as necessary.
We recommend that the board establish a process to
monitor and track all complaints to ensure that they
are resolved in a timely manner.
She relayed that it was the opinion of the Division of
Legislative Audit that the board be extended three years to
June 30, 2018. She said that had the marijuana initiative
not passed, the board would have been extended for five
years. She noted that the regulation of the marijuana
control board established in HB 123, would fall under the
ABC board, which was why the fiscal note reflected the
expenditures for the regulation of marijuana. She added
that the money had not been appropriated and would be
removed if HB 123 passed. She concluded that the ABC board
served an important role in guarding the health and safety
of Alaskans by protecting the general public through the
issuance, renewal, revocation, and suspension of alcoholic
beverage licenses.
2:32:13 PM
Ms. Curtis spoke to the recommendations outlined in the
legislative audit. She noted that the first recommendation
was a repeat recommendation from the prior sunset. She said
that in 2014, 3 of 25 board meetings had not been noticed
during the audit period. She touched on the second
recommendation, stating that the division had tested 10
licenses, 2 of which were not communicated to the local
governing bodies within the 10 day time frame. She stated
that under the third recommendation the division had
reviewed 4 licensees, with 6 consecutive catering permits
issues during the period; 3 of the 4 were discovered to be
statutory violations because the permits were issued with
the intention to serve alcohol on a licensed premises that
would maintain daily operations of a business, rather than
for a short-term social gathering or similar event. She
said that the board issues the permits to ensure that those
businesses could continue to operate. She continued that
that of the 32 licensees that were active during the audit
period, 15 did not meet the criteria for a recreational
license. She detailed that ineligible business included:
bowling alleys, a sports center and pub, and exercise gym,
gift shops, theatres, and pool halls. She said that the
businesses did not meet the definition of a recreational
site, nor were operations limited to a season. She relayed
that the issuance of the licenses expanded the number of
establishments licensed to sell alcohol over the number
allowed for in statute. She furthered that inquiries with
board members had revealed that the improper issuance of
the recreational site licenses was caused by a historic
misunderstanding of what constituted a recreational event.
She shared that under the final recommendation the division
had found that the board had a process to receive
complaints; however, if complaints were not investigated or
inspected, they were not documented. She concluded that the
board and the department had concurred with all of the
recommendations.
2:35:39 PM
CYNTHIA FRANKLIN, DIRECTOR, ALCOHOLIC BEVERAGE CONTROL
BOARD, JUNEAU, testified that she had supervised the final
responses to the audit and had provided details to the
auditors regarding the fixes to the issues identified in
the audit. She discussed the first audit finding. She
explained that the director now reviewed all of the public
notices that were issued by the administrative personnel.
She spoke to the second recommendation. She said that in
many cases same day public notification of applications was
occurring, which was well within the 10 day notice
requirement. She continued to the third recommendation. She
shared that the catering permit had been an issue with both
the board and the agency. She assured the committee that
the board had instituted the practice if strictly adhering
to the statute regarding when catering permits were issued.
She moved to the fourth recommendation and shared that the
board had demonstrated understanding of the parameters of
the recreational site licenses. She spoke to the fifth
recommendation. She said that complaints for investigators
were charted on a spreadsheet, the agency was paper based
and the information was placed in a paper file. She
concluded that the agency had undergone several changes
over the past 4 years that had enhanced its performance:
the audit, the move from the Department of Public Safety to
the Department of Commerce, Community and Economic
Development, and the stakeholder review of statutes. She
felt that the board was taking strong and strict action
regarding violations of statute and regulation.
2:42:59 PM
Senator Bishop wondered how quickly complaints would be
resolved by the board.
Ms. Franklin relayed that her agency had a 24 hour rule;
complaints were directed to the Enforcement Supervisor upon
receipt and were investigated within 24 hours.
Senator Bishop asked how long an initiated investigation
would take to close out.
Ms. Franklin replied that it would depend on the activity.
She said that she generally checked in with investigators
after 3 days, but most were same day resolution.
2:45:07 PM
Co-Chair MacKinnon felt that the departmental move of the
board had led to more errors but less complaints.
Ms. Franklin said that the board was working on a community
policing approach to their licensees; 5 enforcement
officers were working on the issue. She believed that an
argument could be made for the appropriateness of either
department to house the board; however, being in DOC had
made the board itself more attuned to its public safety
obligations, and less reactive to the enforcement duties of
the board.
2:48:00 PM
Co-Chair MacKinnon OPENED public testimony.
2:48:34 PM
Co-Chair MacKinnon CLOSED public testimony.
HB 116 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB26 Sponsor Statement.pdf |
SFIN 4/15/2015 1:30:00 PM |
HB 26 |
| HB26 Supporting Documents-Legislative Audit 6-30-2014.pdf |
SFIN 4/15/2015 1:30:00 PM |
HB 26 |
| HB116 Sponsor Statement.pdf |
SFIN 4/15/2015 1:30:00 PM |
HB 116 |
| HB116 Supporting Document - Legislative Audit 05-30-14.pdf |
SFIN 4/15/2015 1:30:00 PM |
HB 116 |
| HB 176 Legal Opinion re Geo Diff.pdf |
SFIN 4/15/2015 1:30:00 PM |
HB 176 |
| HB 176 Sponsor Statement (2).pdf |
SFIN 4/15/2015 1:30:00 PM |
HB 176 |
| HB178 Sponsor Statement.pdf |
SFIN 4/15/2015 1:30:00 PM |
HB 178 |
| HB178 Supporting Documents-CSHB316(FIN) Sectional Analysis ver R.pdf |
SFIN 4/15/2015 1:30:00 PM |
HB 178 HB 316 |
| HB178 Supporting Documents-HB316 enacted in 2014.PDF |
SFIN 4/15/2015 1:30:00 PM |
HB 178 HB 316 |