04/22/2003 10:06 AM Senate FIN

                                                                                                                                
     SENATE BILL NO. 128                                                                                                        
     "An Act relating to licensing common carriers to dispense                                                                  
     alcoholic beverages; and providing for an effective date."                                                                 
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Wilken informed  that this bill would increase the biennial                                                            
common carrier  liquor dispensary  license  fee from $700 to  $1,000                                                            
for their first  ten licenses and provide for a reduced  fee of $100                                                            
per each additional  license. He noted  that this legislation  would                                                            
specifically affect Alaska Airlines.                                                                                            
                                                                                                                                
Senator Taylor moved to  adopt CS SB 128, Version 23-LS0757\H as the                                                            
working document.                                                                                                               
                                                                                                                                
                                                                                                                                
SFC 03 # 61, Side A 11:43 AM                                                                                                    
                                                                                                                                
                                                                                                                                
Senator  Bunde objected for  explanation of  the difference  between                                                            
Version H and  the previously adopted/proposed  Version D  committee                                                            
substitute.                                                                                                                     
                                                                                                                                
Co-chair  Wilken requested  that the sponsor  be allowed to  present                                                            
testimony before discussion ensues on the bill.                                                                                 
                                                                                                                                
RICHARD SCHMITZ, Staff  to Senator John Cowdery, the bill's sponsor,                                                            
explained  that Version  "H"  specifies an  biennial  fee of  $2,000                                                            
rather than  the $1,000 biennial  fee presented  in Version  "D", as                                                            
indicated in  Section 1, subsection  (d) on page two, line  eight of                                                            
the bill.                                                                                                                       
                                                                                                                                
Mr. Schmitz  stated that currently  each aircraft flying  intrastate                                                            
routes  and  dispensing  alcoholic   beverages  is  required  to  be                                                            
licensed.  He  stated  that  this  bill  proposes  to  license  each                                                            
community  being served rather  than licensing  each aircraft  as he                                                            
stated that  the licensing  of individual  aircraft is a  cumbersome                                                            
process. He  stated that aircraft  making one stop in the  State and                                                            
small aircraft  that do not serve  alcoholic beverages would  not be                                                            
affected   by  this  Legislation.   Specifically   he  stated   this                                                            
legislation  would  affect   Alaska  Airlines.  He  noted  that  the                                                            
Alcoholic   Beverage  Control  Board   (ABC  Board)  supports   this                                                            
legislation.                                                                                                                    
                                                                                                                                
Co-Chair Wilken  summarized; therefore, that the bill  would license                                                            
nineteen communities  at a biennial fee of $2,000  and is relatively                                                            
revenue neutral.                                                                                                                
                                                                                                                                
Mr. Schmitz clarified that  the bill would incur minimal expense for                                                            
the State.                                                                                                                      
                                                                                                                                
Co-chair Wilken  stated, therefore, that the cost  incurred would be                                                            
approximately $38,000.                                                                                                          
                                                                                                                                
DOUG   GRIFFIN,  Director,   Alcoholic   Beverage   Control   Board,                                                            
Department of  Revenue testified via teleconference  from Anchorage,                                                            
and explained  that the Board requested  this regulation  change. He                                                            
characterized   the  existing  regulations  as  "overkill,"   as  it                                                            
requires  hundreds  of  Alaska Airlines'  aircraft  to  be  licensed                                                            
because it is  unknown which of their aircraft would  be used within                                                            
the State. He stated that  this legislation would also benefit other                                                            
national  or international  airlines that  might consider  providing                                                            
service within the State.                                                                                                       
                                                                                                                                
Mr. Griffin furthered that  the biennial community fee of $2,000 and                                                            
the biennial common  carrier dispensary license fee  of $1,000 would                                                            
incur an annual expense  of approximately $10,000. He furthered that                                                            
currently,  Alaska Airlines pays for  a full year license;  however,                                                            
he noted that  service to some communities  is seasonal.  Therefore,                                                            
he noted, provisions are  included in the Legislation to provide for                                                            
seasonal licenses  in six-month increments at approximately  half of                                                            
the full year fee.                                                                                                              
                                                                                                                                
Co-chair Wilken  asked whether the  ABC Board supports Version  "H".                                                            
                                                                                                                                
Mr. Griffin affirmed.                                                                                                           
                                                                                                                                
Senator  Taylor   moved  to  report  SB  128  from  Committee   with                                                            
individual recommendations and accompanying fiscal note.                                                                        
                                                                                                                                
There being no objection,  SB 128 was REPORTED from Committee with a                                                            
new zero fiscal  note, dated April  22, 2003 from the Department  of                                                            
Revenue.                                                                                                                        
                                                                                                                                
[Note:  The  Committee  did  not  adopt   the  Version  H  committee                                                            
substitute and  the matter was revisited at the meeting  dated April                                                            
23, 2003.]