Legislature(2015 - 2016)BELTZ 105 (TSBldg)
04/14/2015 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB26 | |
| HB116 | |
| HB178 | |
| HB46 | |
| HB41 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 107 | TELECONFERENCED | |
| + | HB 26 | TELECONFERENCED | |
| + | HB 41 | TELECONFERENCED | |
| + | HB 46 | TELECONFERENCED | |
| + | HB 116 | TELECONFERENCED | |
| + | HB 178 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 116-EXTEND ALCOHOLIC BEVERAGE CONTROL BOARD
1:59:51 PM
CHAIR COSTELLO reconvened the meeting and announced the
consideration of HB 116. "An Act extending the termination date
of the Alcoholic Beverage Control Board; and providing for an
effective date."
2:00:06 PM
LAURA STIDOLPH, Staff, Representative Kurt Olson, introduced HB
116 on behalf of the sponsor. She stated that the bill would
extend the sunset date for the Alcoholic Beverage Control (ABC)
Board to June 30, 2018. The Division of Legislative Audit
reviewed the activities of the ABC Board to determine whether
there is a demonstrated public need for the ABC Board's
continued existence and whether it has been operating in an
effective manner as per AS 24.44.
MS. STIDOLPH reported that the board has resolved all issues
found in prior audits with two being resolved and one being
partially resolved. She directed attention to the five findings
and recommendations in the most recent audit. First, the
legislative auditors recommended the board director ensure that
all board meetings are properly published on the state's online
public notice system. Second, the legislative auditors
recommended that the board notify local governing bodies of
applications for new and transfer licenses within 10 days of
receipt. Third, the legislative auditors recommended that the
board issue catering permits in accordance with statutory
requirements. Fourth, the legislative auditors recommended that
the board issue recreational site licenses in accordance with
statutes; and finally, the legislative auditors recommended that
the board implement a process to monitor and track all
complaints to ensure they are resolved in a timely manner.
MS. STIDOLPH reported that the Division of Legislative Audit
recommended that the ABC Board be extended three years to June
30, 2018. The opinion of the legislative auditors is that the
board serves the public's interest by effectively licensing and
regulating the manufacture, barter, possession and sale of
alcoholic beverages in Alaska.
She pointed out that until HB 123 establishing a marijuana
control board is passed, regulation for marijuana falls under
the ABC Board per the initiative passed last fall. That is why
the fiscal note reflects expenditures for the regulation of
marijuana. However, this money was not allocated and can be
removed if HB 123 passes.
2:02:36 PM
CYNTHIA FRANKLIN, Director, Alcoholic Beverage Control (ABC)
Board, Department of Commerce, Community and Economic
Development (DCCED), reported that she joined the agency in
September 2014 and was able to oversee the final responses to
the legislative audit team. She opined that many of the issues
in the audit have been addressed. She stated support for HB 116
and posited that the audit recommended a shorter three-year
sunset to accommodate marijuana potentially being added to the
board's duties if Ballot Measure 2 passed.
CHAIR COSTELLO asked her to review the fiscal note.
MS. FRANKLIN explained that the fiscal note relating to the
marijuana regulation is a match to the fiscal note attached to
HB 123 creating the marijuana control board. The $1.78 million
for the alcohol duties of the board is contained in the
governor's budget. The budget originally contained the $1.54
million for the marijuana regulation. That was separated and the
legislature requested that those monies be included in the
fiscal note process as marijuana bills made their way through
the legislative process. The $1.54 million for the marijuana
regulation reflects a $50,000 cost for the marijuana control
board. The remainder is for personnel and services relating to
the new substance. The fairly significant expenditure in the
services section is for a software tracking system that will
enable the regulating agency to tag marijuana plants to ensure
that marijuana sold in licensed establishments has been grown by
licensed cultivators. This is to prevent black market marijuana
from being sold in licensed premises and ensure that the
marijuana has been tested according to the regulations written
by the board. There is also some funding in the marijuana
portion of the fiscal note for a database so the board can
report to the legislature and public.
She said that accommodating anticipated requests for data will
requires staff research time, which translates to time and
money. The marijuana fiscal note includes the services related
to personnel, to vehicles for investigators, for legal services
related to the writing of the regulations in addition to the
technology expenditures.
CHAIR COSTELLO asked how many staff are anticipated.
MS. FRANKLIN explained that the ABC Board currently has a staff
of 10, not including herself; five are enforcement officers,
three are licensing specialists, and two are administrative
personnel. The FY15 supplemental adds two positions to
accommodate the time that has been spent since November 4
working on marijuana issues. That is one licensing specialist
and one administrative personnel. The FY16 budget asks for four
additional personnel; one additional licensing specialist and
three additional enforcement officers. That brings the agency
staff to 16 plus the director for both substances statewide.
This is adequate to start but will likely need to be increased
going forward.
MS. FRANKLIN noted that questions have been raised about adding
enforcement in the first year when there aren't any licenses in
effect until May, 2016. She explained that the board has already
spent quite a bit of enforcement personnel time answering
questions about what can and cannot be done legally with
marijuana, and at least three businesses are engaging in
commercial marijuana activities without licenses or being
subject to regulations. The board is relying on local law
enforcement to shut those businesses down which has resulted in
spotty enforcement. For this reason, the board believes it is
imperative to fund enforcement officers early to ensure that
everyone waits until the rules are in place and personnel is
available to address the businesses open for business before it
is legal.
2:09:45 PM
CHAIR COSTELLO opened and closed public testimony.
SENATOR MEYER asked what the issues were that the sunset audit
identified and how they were corrected.
MS. FRANKLIN said the first issue was whether or not the board
was publicly noticing its meetings in the correct place. That
matter was resolved with staff training. The audit also
identified two issues related to licenses and permits. Catering
permits were being issued to businesses that were in ownership
transition and they were using the catering permit process to
cover the gap. That process has been halted by the board. The
recreational site license issue was that they were being issued
outside of what the statute clearly contemplated. That issue was
resolved through discussions with the board about the
limitations of the statute and the director and staff making
sure that the board understands they must stay within the
statutory limits on those license. Another issue was that the
previous licensing supervisor was saving applications in batches
and then sending them to the municipalities, which caused her to
miss the ten-day deadline. That was solved with the new staff
person who strictly complies with the 10-day notice requirement.
The final issue related to tracking complaints. This was
addressed by instituting excel spreadsheets to track the
complaints.
SENATOR MEYER recalled that in years past when the Anchorage
Assembly protested the renewal of a license, the ABC Board
reviewed the decision and either upheld it or made a
determination that the decision was arbitrary or capricious.
MS. FRANKLIN said the protest process for local government says
the board shall uphold the protest unless it is found to be
arbitrary, capricious and unreasonable. She opined that some of
the previous issues have been resolved on their own with a new
iteration of the board combined with the audit, the stakeholder
process and changes in staff.
SENATOR MEYER described determinations of arbitrary, capricious
and unreasonable as subjective.
MS. FRANKLIN said the new boards and agencies attorney for the
Department of Commerce, Community and Economic Development
(DCCED) has provided excellent advice to the board about the
legal meaning of those terms and the board has made it clear to
local governments that that is a very high standard for the
board to overcome.
SENATOR STEVENS asked if the sunset could be extended to the
regular six years if marijuana doesn't fall under the ABC Board
in order to save time and money.
MS. FRANKLIN said she believes that the first time around it's a
good idea to have a three-year sunset, although she agrees in
theory that the earlier audit does represent a cost to the
agency.
2:20:04 PM
SENATOR GIESSEL moved to report HB 116, labeled 29-LS0596\A from
committee with individual recommendations and attached fiscal
note(s).
CHAIR COSTELLO announced that without objection HB 116 is
reported from the Senate Labor and Commerce Standing Committee.