Legislature(2019 - 2020)BELTZ 105 (TSBldg)
02/05/2019 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB16 | |
| Confirmation Hearing(s) | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 16 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
SB 16-ALCOHOL LIC:FAIRS,THEATRES,CONCERTS;BONDS
1:34:34 PM
CHAIR REINBOLD announced that the first order of business would
be SENATE BILL NO. 16, "An Act relating to certain alcoholic
beverage licenses and permits; and relating to the bond
requirement for certain alcoholic beverage license holders."
1:36:23 PM
SENATOR COSTELLO made a clarifying motion to bring the original
version of the bill before the committee.
SENATOR BISHOP objected for the purpose of discussion.
1:36:44 PM
SENATOR PETER MICCICHE, Alaska State Legislature, sponsor of SB
16, referred to the bill as the "Save the Alaska State Fair
Act." He said his priority is to pass the portion of the bill
related to fairs so the Alaska State Fair (ASF) can operate this
fall.
SENATOR MICCICHE said SB 16 is part of his ongoing effort to
rewrite Title 4, related to alcoholic beverages; however, he
found some areas of the law were more pressing. He briefly
explained that Section 1 would add two new license types related
to fairs and performing arts centers and one permit type related
to concerts.
SENATOR MICCICHE stated that members may have recently heard in
the news or from constituents that the Alcohol & Marijuana
Control Office {AMCO) office recommended denying the ASF a
recreational site license because the office no longer considers
that AFS meets the definition for this license type per recent
legislative audits. Section 2 would add a new license type to
remedy the situation. Secondly, SB 16 would add a new license
type for performing arts theatres, previously in regulation. It
would increase biennial fees from $800 to $1,250 and allow the
sale of alcohol in multiple and non-contiguous locations at a
specific performing arts theatre site, including in the audience
viewing areas. It would also extend the hours allowed to serve
alcoholic beverages to two hours before and one hour after the
event. Third, the bill would add a concert permit to allow the
recreational site licensees to sell beer and wine on the
licensed premises during a period from one hour before the
concert until the end of the concert or similar event. Finally,
SB 16 would add a new fair license to the population limitations
under AS 04.11.400 and provide an exemption from the bonding
requirements under AS 43 to reward taxpayers who file and pay
their taxes timely for three consecutive years. Although the
fiscal note from Department of Commerce, Community and Economic
Development (DCCED) is for $2,500, he is currently holding
discussions with the department since notices can now be printed
online.
1:39:30 PM
EDRA MORLEDGE, Staff, Senator Peter Micciche, Alaska State
Legislature, on behalf of the sponsor, reviewed the bill
sectional analysis of the bill, which read as follows, [original
punctuation provided]:
Section 1: Amends AS 04.11.080 Types of Licenses and
Permits to add 'performing arts theater license,'
'fair license,' and 'concert permit.'
Section 2: Adds a new section (AS 04.11.205)
Performing arts theater license. This section defines
this type of license, the biennial fee for the
license, and the circumstances for issuance and
compliance.
Section 3: Adds a new section (AS 04.11.215) Fair
license. This section defines this type of license,
the biennial fee for the license, and the
circumstances for issuance and compliance.
Section 4: Adds a new section (AS 04.11.235) Concert
permit. This section defines this type of license, the
biennial fee for the license, and the circumstances
for issuance and compliance.
Section 5: Amends AS 04.11.400(a) to specify that a
new license may not be issued and the board may
prohibit relocation of an existing license in
accordance with population limits.
1:40:52 PM
Section 6: Establishes under AS 04.11.0400(o) that
only one fair license may be issued per borough.
Section 7: Adds the new licenses/permit to the list of
those required post notice on the designated premise.
Section 8: Adds language section (i) to AS 43.60.040
Administration and Enforcement of Tax
Section 9: Adds language regarding section (i) to AS
43.60.040 Administration and Enforcement of Tax
Section 10: Adds a new section (i) to AS 43.60.040
Administration and Enforcement of Tax. This section
states that the department may not require a bond from
an entity that has filed timely monthly tax returns
and paid necessary taxes over the most recent three
years, if that entity remains in compliance. In the
case of noncompliance, the department must notify the
entity within 30 days that they are required to file a
bond.
MS. MORLEDGE clarified that Section 10 rewards timely
filing and payment of taxes for the most recent three years
and removes the bonding requirement if the entity has met
that threshold.
1:42:12 PM
SENATOR MICCICHE said that fairs are important to Alaskans for
cultural and recreational aspects and for the agricultural
industry of the state. He reported that alcoholic beverage sales
at the ASF make the other activities possible because the
proceeds help fund the remainder of the fair.
1:42:55 PM
CHAIR REINBOLD opened public testimony on SB 16.
1:43:34 PM
BOB KLEIN, Chair, Alcoholic Beverage Control Board (ABC Board),
said he is a licensee and serves as Treasurer for the Alaska
Center for the Performing Arts. He has worked with the sponsor
on revisions to AS 04, including provisions for recreational
site licenses. He characterized SB 16 as "a breath of fresh
air." He said the bill would clarify three license types that
were "shoehorned" into a definition geared more for events such
as hockey or baseball games. He said that SB 16 will give the
board the latitude and ability to control future activities for
fairs and concerts. As the sponsor mentioned, the Anchorage
Performing Arts Center's (PAC) activities are currently covered
by regulation. This bill would put provisions in statute to
allow performing arts centers to serve alcoholic beverages at
events, similar to the way most performing arts centers in the
U.S. serve alcoholic beverages at their theatres.
1:45:41 PM
LARA MCGINNIS, Member, Alaska State Fair Board, stated that she
previously served as manager for the Kenai Peninsula Fair (KPF)
in Ninilchik. She emphasized the importance of providing the ASF
with a liquor license, not just for clarification, but for
control. She related her experience with the KPF, which offered
alcoholic beverages and then tried to operate the fair without
alcoholic beverages. When the fair tried to go "dry" it only
encouraged patrons to sneak alcoholic beverages into the fair
and fair operators had no control over alcoholic beverages. She
offered her belief that it would be horrendous for the Alaska
State Fair to monitor this type of issue due to its large size.
She said fairs should be able to offer alcoholic beverages
legally and responsibly, served by people who are trained to
sell it. Servers who do not sell alcoholic beverages properly
suffer consequences. She offered her belief that SB 16 as an
important bill and the sooner this issue can be resolved, the
better. She said that under the current law the ASF will need to
make up lost revenue that should be spent in other ways.
1:47:34 PM
JIM VARSOS said he is also known as Hobo Jim [a folksinger
songwriter]. He has performed at the ASF for over 37 years and
at the Kenai Peninsula Fair when it was "dry" and when it was
"wet." He said he hopes people realize how critical alcoholic
beverage sales are to major events at fairs because they cannot
afford to bring in big name entertainment acts without proceeds
from alcoholic beverages. He has observed a high-level of
professionalism by alcoholic beverage servers. He said he was
not aware of any fair or annual event in the U.S. that has been
denied a liquor license. He said he strongly supports SB 16.
1:49:29 PM
JEROME HENTEL, Manager, Alaska State Fair, stated his support
for SB 16, which would add ASF as a recreational site so it will
not be subject to misinterpretation or inconsistencies in
enforcement. The bill will better define the business model of
the fair. The ASF has been serving Alaska for the last 80 years
through activities, including, youth development, 4-H and Future
Farmers of America activities. The ASF spends over $200,000 in
educational opportunities. The ASF is a non-profit fundraiser
for Rotary Clubs, the Lions Club [International], and the
[American] Farmland Trust. For example, over $22,000 was
generated for 4-H auction last year. He said the ASF boosts
Alaska's economy by over $23 million and creates over 2,000 jobs
during the 12-day ASF. The ASF generates over $100,000 in taxes
from beverage sales alone and revenues from alcohol sales offset
those costs. This bill will solve an issue that arose when the
Alcohol & Marijuana Control Office (AMCO) interpreted that the
ASF does not meet the recreational site license qualifications.
He said that for the past 37 years it did qualify and the ASF
has responsibly served alcohol during that time. This bill will
allow the fair to continue to sell alcoholic beverages. Although
revenue from alcoholic beverage sales does not represent the
main fair revenue source, it does provide revenue for
operational and planning costs, especially in off-years. He
urged support for SB 16. He said, in part, SB 16 would create a
new "fair license," so the ASF can serve up to 45,000 people per
day at the fair.
1:53:23 PM
SENATOR COSTELLO related her understanding that ticket prices
will be affected if this bill does not pass.
Mr. HENTEL said that historically ticket prices for the ASF have
ranged from $10-$15, depending on the day and specific
promotion. He said he was unsure if the entrance fees would
increase. He reported that alcohol sales equate to about 20
percent of the budget. He related the ASF Board's goal is to
keep prices as low as possible to allow everyone to attend. He
emphasized that lost revenue from alcoholic beverage sales would
have a devastating effect on fair revenues, especially if
numbers were down due to inclement weather during the fair or if
the economy suffers a downturn. The organization hosts 70 or
more events besides the fair that helps offset expenditures, but
a 20 percent loss would have a dramatic effect on total
revenues.
1:55:54 PM
CHAIR REINBOLD asked him if he has any questions for the
Legislative Budget and Audit Division or other staff as to the
genesis of this bill.
MR. HENTEL said he was curious why the ABC Board singled out
Alaska State Fair, even though he applauded the agency for
bringing the issue before the legislature.
1:57:08 PM
ERIKA MCCONNELL, Director, Anchorage Office, Alcohol and
Marijuana Control Office (AMCO), Department of Commerce,
Community and Economic Development (DCCED), referred to the 2014
and 2017 legislative audits. During the audits, auditors found
the ABC Board was improperly issuing recreational site licenses
to establishments that did not meet the statutory requirements
for such a license. She reported that many sites did not meet
the requirements. However, the state fair should not feel
singled out since the auditors identified numerous sites who did
not appear to meet the requirements and referred them to the ABC
Board for action. During her tenure she has brought issues
raised by audits to the board's attention to address. She said
the ASF's license was problematic with respect to the
recreational site license statutes. She said she has worked with
Senator Micciche's office on remedies. She emphasized that it
was not AMCO's desire to see the Alaska State Fair lose its
ability to serve alcoholic beverages, but she must ensure the
statutes are accurately and appropriately implemented.
1:58:51 PM
MR. HENTEL pointed out that the 2014 and 2017 Legislative Budget
and Audit sunset audits for the ABC Board never specifically
identified the ASF as one of the entities not meeting the
requirements of the recreational site license.
1:59:44 PM
KRIS CURTIS, Legislative Auditor, Legislative Audit Division,
Legislative Agencies and Offices, agreed. She said the 2014 and
2017 audits referred to the statute that specifies what entities
qualify as a recreational site. She read [AS 04.11.210 (c)]," ?
baseball games, car races, hockey games, dog sled racing events,
or curling matches ?." The legislative auditors tested 10 of 29
active recreational site licenses and determined that all were
non-compliant. She said that the non-compliant entities included
travel tour companies, bowling alleys, an art council, a pool
hall, a movie theatre, and a spa. This bill does not address any
of these entities, she said. The ASF and ski resorts were not
part of the audit sample, although she has subsequently read
newspaper articles that identified them as recreational site
licenses in non-compliance. She remarked that it is unusual to
specifically list entities in statute who meet the
qualifications for a license.
2:01:17 PM
MATT GILL, Manager, Ginger Restaurant, said that he and his
partner, Tony Bain, are available to answer questions. He stated
that their restaurant is a caterer for the Alaska PAC. They are
interested in the theater license provisions of the bill.
2:02:10 PM
JASON ORTIZ, Secretary, Alaska State Fair, said the ASF is a
non-profit corporation. This past year, the ASF was in a
quandary with its alcoholic beverage licensing, he said. He
stressed that the ASF has a $23 million positive fiscal impact
on the state and local communities. He offered his belief that
the ASF is the only fair in the U.S. that operates solely as a
non-profit that does not receive any state funding. The fair has
dozens of year-round staff working on events that run throughout
the year. He said that the fair has been a responsible license
holder. He thanked the legislature for its support on SB 16.
2:03:26 PM
SUZY CROSBY, representing herself, said she is an events and
entertainment coordinator for the ASF and also a musician. She
offered her belief that the Alaska State Fair Sluice Box is the
best bar in Alaska. The bar is a traditional venue where people
gather to listen to fabulous music and the bar provides revenue.
She has researched other major U.S. fairs and all of them serve
alcoholic beverages. She expressed concern that the ASF could
eventually close without the revenue from alcoholic beverage
sales, especially if patrons decide it is no longer worth going
to the fair for entertainment. She urged members to pass SB 16,
so that fairs are clearly defined as recreational sites.
2:06:57 PM
CODIE COSTELLO, Vice-President; Director of Development, Alaska
Center for the Performing Arts, said she is with other Alaska
PAC members, Nancy Harbour, President and Chief Executive
Officer, and Cindy Hamilton, Vice-President, Operations, to
speak in support of SB 16 and answer any questions.
2:08:14 PM
CHAIR REINBOLD stated that public testimony would be held open.
She asked members for comments.
2:08:38 PM
SENATOR MICCICHE remarked that Ms. McConnell, AMCO, and the ABC
Board have worked with his office on SB 16. He offered his
belief that the bill would clarify the statutes in terms of
alcoholic beverage sales at fairs.
SENATOR COSTELLO said she sees this as an important economic
driver to the state. She said everyone looks forward to taking
their families to the ASF in the fall. She asked whether any
other entities should be added to the list in statute.
SENATOR MICCICHE responded that his priority was to address the
Alaska State Fair, but if other entities have licensing issues
to contact his office. He said he understands some discussions
are being held related to ski resorts and other potential
licenses. He hoped they would expedite any requests.
2:10:40 PM
SENATOR GRAY-JACKSON offered her belief that this bill is an
important one. She thanked Senator Micciche for bringing it
forward. She said she was pleased to see that performing arts
centers and concert permits were added to the bill.
2:11:01 PM
CHAIR REINBOLD held SB 16 in committee.