Legislature(2011 - 2012)HOUSE FINANCE 519
02/20/2012 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB279 | |
| HB125 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 125 | TELECONFERENCED | |
| + | HB 279 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 125
"An Act moving the Alcoholic Beverage Control
Board to the Department of Commerce, Community,
and Economic Development and relating to duties
of that department; and providing for an
effective date."
2:50:47 PM
Representative Mike Hawker presented HB 125. He explained
the concerns of the ABC board and the manner in which it
had been operating. The Legislative Audit and Budget
Committee had a sub-committee review the administration of
the ABC Board. The committee recommended, for
administrative purposes only, the ABC Board would be better
housed in the Department of Commerce, Community and
Economic Development (DEC) rather than the Department of
Public Safety. Co-Chair Stoltze commented on the lengthy
public testimony regarding this proposed public policy
change.
2:55:08 PM
JEFF JESSEE, CHIEF EXECUTIVE OFFICER, ALASKA MENTAL HEALTH
TRUST, DEPARTMENT OF REVENUE, referred to the Mental Health
Trust backup material provided. He understood why it might
make sense to move the ABC Board to the DEC and recounted
some of the deficiencies and behaviors found with the
board, but he wanted to relate additional information. The
ABC Board is a regulatory and quasi-judicial agency for the
control of the manufacture, barter, possession and sale of
alcoholic beverages in the state. He questioned if
licensees of a legal product were being given the degree of
respect and consideration expected of professional
enforcement of these very important public safety rules and
regulations. Data was researched on how the ABC employees
were treating the licensees. He referred to two charts
(copies on file) showing the results of a survey passed out
by Director Giffords. The survey indicates that the
satisfaction with the Licensing Process and staff as well
as the enforcement process and staff. He referenced two
opinion pieces (copies on file) published in the Anchorage
Daily News. The article's 'opinion indicated that the
police were not as qualified as the Teaching Alcohol
Professionals (TAP) in observing or determining if a person
was drunk on a liquor licensed property. The allegations
that the police force was only interested in making arrests
without regard to whether it was a good arrest that would
hold up in court. Mr. Jesse disputed this opinion and
believed police officers are faced with assessing
intoxication on a regular basis. He believed comments such
as those were at the heart of the dispute on how much
enforcement is appropriate in this area. He referenced
article, "Effort to reduce drunken driving deaths is
succeeding" Mike Mew, copy on file) that he considered a
very measured carefully constructed response. Police Chief
Mews stated that the police department does not want people
over served liquor in order to bring down the epidemic of
domestic violence and sexual assault. Excessive
intoxication in bars often leads to additional DUIs and
other criminal behavior outside of the bar. He emphasized
the public safety interests in enforcing these laws. If the
mission of the ABC Board was to treat licensees with
respect, dignity, and efficiency in a knowledgeable
professional way, the board meets that standard.
3:02:06 PM
Mr. Jesse referenced paper, "Alaska Alcohol vs. Tobacco
Sales to Minors" (copy on file) showing that alcohol
monitoring is done by the ABC Board and tobacco monitoring
is performed by the Department of Health and Social
Services. Co-Chair Stoltze stated for the record that the
referenced handouts were prepared by the Mental Health
Trust. Mr. Jessee continued that although statistics
reflect improvements in the rate of illegal sales to
minors; it is still at twice the rate of illegal tobacco
sales to minors. He questioned the disparity and found two
relevant points. In the area of alcohol compliance, unlike
tobacco, the current practice is that the ABC Board brings
prospective underage buyers into the board room and the
board votes if they can determine who is 21 years or older.
Co-Chair Stoltze noted that this was more ABC Board
testimony.
Mr. Jesse responded that the issue of underage drinking,
stopping the consequences of underage drinking, and
excessive adult drinking is a core-prevention issue. He
noted that unlike in tobacco, when an illegal alcohol sale
is made to a minor, in first offense case, there is no
certain consequence to the licensee but the penalty falls
exclusively on the employee who made the sale. With tobacco
sales to a minor, there is an automatic twenty day
suspension of the tobacco license. He cited the paper,
"Analysis of strategies designed to reduce sales of alcohol
and tobacco to underage persons: A preliminary report"
Alaska Alcoholic Beverage Control Board, Marny Rivera,
Khristy Parker, January 19, 2012" (copy on file.) He
referenced page 28-29, with Recommendations and
Conclusions: Enforcement Efforts. He believed if the laws
were not going to be changed, there was no difference in
moving the board out of the Department of Public Safety and
into the Department of Commerce, Community and Economic
Development. He stressed the issue was a law enforcement
issue.
3:07:09 PM
Co-Chair Thomas responded that his observation showed that
city law enforcement handled most drinking related issues
and the legislature has no jurisdiction over local
authorities. He cited that if the local police officers are
not properly trained there is nothing the legislature can
do. The legislature only has authority over state troopers.
3:09:47 PM
Representative Neuman remarked that is was not just an
enforcement issue, but many policy issues, including
commerce.
3:11:12 PM
ELLEN GANLEY, VICE CHAIR, ALCOHOL BEVERAGE CONTROL BOARD,
DEPARTMENT OF PUBLIC SAFETY, contended that the earlier
move of the ABC Board from the Department of Revenue to the
Department of Public Safety was very positive. She noted a
level of cooperation and sharing of resources that had not
been there before. Moving the board to the Department of
Commerce will be counterproductive. The liquor industry is
not like other industries in Alaska; it is about alcohol
and the problems it causes throughout the state. She
stressed the best way to deal with the problem was through
enforcement. The University of Alaska study and their
recommendations were based on best practices that work. She
reported that in the last couple of years the curve of
alcohol abuse in Alaska is rising. Co-Chair Stoltze asked
if Ms. Ganley was a public member of the board. Ms. Ganley
replied she was.
3:15:39 PM
Vice-chair Fairclough requested the number of complaints on
enforcement officers that had been received by the ABC
Board in the past few months. Ms. Ganley responded that the
board had not received any complaints.
3:16:26 PM
DALE FOX, PRESIDENT AND CEO OF ALASKA CABARET, HOTEL,
RESTAURANT, AND RETAILERS ASSOCIATION (CHARR), thanked the
committee and the Legislative, Budget and Audit Committee
for hearing many hours of testimony. After thorough
consideration, the Legislative Budget and Audit Committee
concluded that the ABC Board should be located in the
commerce department and that the move does not change or
restrict the important enforcement responsibilities or
abilities. He was proud of a survey conducted by the
Substance Abuse and Mental Health Service Administration
that rated Alaska retailers as the best in nation in
refusing service to underage drinkers. Alaska is one of
only six states that provide alcohol training for all
people involved with serving alcohol. Whenever a problem is
seen in educating the 25,000 in the industry, a new tool is
developed to do a better job. He stressed the importance of
people serving alcohol to know and follow the rules. The
Department of Public Safety has a dominant tool of arrest
and citations. Surveys show that underage drinking is a
significant state problem.
3:20:57 PM
Mr. Fox listed sources where underage individuals can
obtain alcohol: home, relatives, older friends, internet,
etc. The industry takes responsibility of their part in
educating. He believed enforcement was logical and needed
to keep licensees on their toes. The difficulty is making
sure 25,000 people are educated and aware at all times. He
believed education combined with reasonable enforcement is
the best solution. He saw nothing in the move to the DEC
that would diminish the enforcement effort.
3:24:46 PM
Representative Joule asked how the people in the industry
determine who to ask for identification. Mr. Fox responded
that the law clearly states that anyone who looks under 30
should be checked. Representative Joule noted that when
purchasing tobacco, he is asked for identification every
time. He suggested that those who serve alcohol might
consider such an action.
3:26:27 PM
Representative Neuman introduced a constituent from
Talkeetna who had some issues with the board. His situation
involves forty-five employees and several million dollars
in investment.
SASSAN MOSSANEN, GENERAL MANAGER, DENALI BREWING COMPANY
TALKEETNA, AK, AND PRESIDENT OF THE GOVERNMENTAL AFFAIRS
COMMITTEE FOR THE BREWERS ASSOCIATION OF ALASKA related a
meeting of the Brewers Association discussing HB 125 and
all members voted unanimously in support of HB 125. It is
important to recognize that the Ms. Gifford's 18 percent
survey return speaks for itself. He stressed that the
brewing industry works vigilantly not to encourage the
abuse of alcohol. He noted his issue revolved around the
board's lack of understanding licensing rules. There needs
to be collaboration between industry and enforcement. When
the agency responsible for licensing is not familiar with
the rules, it creates a difficult operating environment.
The brewing industry seeks the help of the community and
takes their role in serving alcohol very seriously.
Representative Neuman gave some background about Mr.
Mossanen's issues with the ABC Board on the regulatory, not
enforcement side. Mr. Mossanen asked to expand his business
opportunities to have a restaurant with his brewery. He
applied to the ABC Board and received a temporary permit,
obtained over a million dollars in private industry
investment, and built a new facility. The day before the
final license was due; Mr. Mossanen was informed by Ms.
Gifford that according to Alaska Statutes an individual who
owns a brewery license cannot own a restaurant license. Mr.
Mossanen acted in good faith when they received permission
to go ahead with their business plan. Now they are waiting
to see if ABC Board approves the license so they may
continue business. If the license is not approved, the
business will lose everything. Representative Newman
stressed that this should be a commerce issue, not
enforcement.
3:34:03 PM
Co-Chair Stoltze appreciated framing the issue with the
example.
3:34:56 PM
ROBIN JEFFERY, OWNER, ROBIN'S LANDING, BIG LAKE, AK, feared
that when the ABC board first moved to the Department of
Public Safety, that law enforcement would be on the
bartenders and servers who make the judgment calls. She
believed that the industry does not need help, but it is
the people who frequent bars that need educating. She
believed it would be a step backward if the board was moved
to the Department of Commerce. She believed the board
should be moved to the Department of Health and Social
Services. She believed the Department of Health and Social
Services could reach more people who suffer from addiction
problems.
3:41:05 PM
Co-Chair Stoltze reiterated that Ms. Jeffery wanted the
board moved to the Department of Health and Social
Services. Ms. Jeffery agreed it was important to move the
board from the Department of Public Safety to the
Department of Health and Social Services.
3:41:59 PM
PATRICK HAYES, CHAIRMAN, MEETING THE CHALLENGE, indicated
that if the board moved to the Department of Commerce there
could be a reduction of oversight and enforcement which
could lead to an increase in underage drinking. Meeting the
Challenge opposed the bill. Representative Doogan requested
information on the Meeting the Challenge organization. Mr.
Hayes explained that the Meeting the Challenge campaign was
an organization of individuals who are in recovery from
alcoholism and drug addiction and received their treatment
from state funded substance abuse treatment facilities.
Representative Wilson noted that even if the board was
moved into commerce, public safety would still have the
responsibility to uphold the statues on underage drinking.
Mr. Hayes did not know who would be in charge of enforcing
the laws, but assumed the ABC Board was responsible for the
oversight. Representative Wilson pointed out if the
Department of Public Safety does not do their job, it would
not make any difference into which department the board is
moved.
MATT FELIX, DIRECTOR, NATIONAL COUNCIL ON ALCOHOLISM,
reviewed why the ABC Board was in the Department of Public
Safety. The board originally was in the Department of
Revenue in order to produce tax revenue after statehood.
Taxation of alcohol was a significant revenue stream for
Alaska. It presented a problem that allowed a ratio of
licenses per population that was double most states. A
federally funded commission recommended that the ABC Board
take a more enforcement stance to deal with the surge of
alcohol and drug abuse problems. He acknowledged the value
of enforcement to deal with the problem. He voiced his lack
of support for the bill. He recognized the struggle to get
the ABC Board to enforce Title IV properly and part of this
was achieved by moving it into the Department of Public
Safety.
3:51:02 PM
JAN WRENTMORE, OWNER, RED ONION SALOON, SKAGWAY (via
teleconference), supported the bill. Hotels, bars and
restaurants governed by the liquor license law make up the
state's hospitality industry and are one of the state's
strongest sectors of the economy. Public safety is a
component of the hospitality industry. In small rural
communities there are no state troopers and the enforcement
of Title IV is handled well by local police. She did not
believe it would make a difference whether enforcement was
under Department of Public Safety or the Department of
Commerce, Community and Economic Development. Under the
Department of Public Safety (DPS) she has seen the
Anchorage staff struggle to give adequate support to the
licensing component of the industry. She believed the DPS
should not be the agency in charge of the issue. The
licensing component of the industry should be put into an
agency experienced with these issues. Co-Chair Stoltze
agreed that the liquor industry is one of the most
convoluted bodies of laws in the state. He appreciated the
testimony related to the complexity of the licensing aspect
on the commerce side.
3:56:03 PM
BRAD JOHNSON, MEMBER, ALASKA ASSOCIATION OF CHIEFS OF
POLICE, FAIRBANKS (via teleconference), spoke in opposition
to the legislation. The association felt that the ABC Board
was currently in the best position under the Department of
Public Safety. Alcohol is a major public safety issue
contributing to the majority of crimes in the state,
including domestic violence. The ABC Board has inherent law
enforcement responsibilities that could not be readily
accomplished outside of the law enforcement arena and
within an administrative division of state government. The
ABC Board relies on local law enforcement to implement the
enforcement of Title IV. He urged the committee to consider
not passing the legislation. Vice-chair Fairclough wondered
how the role of public safety would change if the
administrative structure was changed to the DEC. Mr.
Johnson noted a program that worked closely with the board
in Title IV enforcement in Fairbanks. He believed that was
possible because of the professional relationship with the
board. He did not believe this cooperation would be the
same if the board was under a different department. Co-
Chair Stoltze asked whether cooperation would be an
inadequacy in Mr. Johnson's department or an inadequacy in
other departments. Mr. Johnson did not believe it was an
inadequacy, but a change in how investigators are viewed as
members of law enforcement versus not members of law
enforcement. He stressed the difficulty in the working
relationship with representatives of other departments who
are attempting to perform a law enforcement mission that
are not actually tasked with a law enforcement mission.
4:00:50 PM
Vice-chair Fairclough remarked that the industry has
indicated that the Department of Public Safety tends to be
heavy-handed in their approach. The current system lacks
the educational arm to help businesses improve. Mr. Johnson
informed he could only speak from his own experience with
members of the board and their local employees. His own
perspective is that there might have been issues in the
past but he believed that Ms. Gifford has actively worked
toward changing that reputation and experiences.
4:02:27 PM
MARK MEW, CHIEF OF POLICE, ANCHORAGE POLICE DEPARTMENT (via
teleconference), pointed out that Title IV alcohol
enforcement is occasionally performed working with the ABC
Board on the details. Co-Chair Stoltze interjected that the
bill was scheduled since the beginning of session. Mr. Mew
continued that periodic enforcement is beneficial for
Anchorage, especially in preventing drunken driving, sexual
assault and domestic violence. He noted the department's
close work and training with the ABC Board and the
prosecutors who try the cases. He stressed the good working
relationship with the ABC Board and would like to see that
positive work continue. He does not want to see the
effectiveness of the ABC Board reduced.
4:07:19 PM
Representative Wilson wondered if Mr. Mew's department
would stop working with the ABC Board if it moved into
commerce. Mr. Mew indicated the department would still work
with the board.
4:07:49 PM
BOB WINN, OWNER, LA MEX RESTAURANT, ANCHORAGE (via
teleconference), supported the bill. He did not believe
that enforcement would be lowered by the movement. He
stressed that licensees need more counseling support and
believed the Department of Commerce would provide the
needed administrative support.
HB 125 was HEARD and HELD in Committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 279 Sponsor Statement.pdf |
HFIN 2/20/2012 1:30:00 PM |
HB 279 |
| HB 279 Sectional.pdf |
HFIN 2/20/2012 1:30:00 PM |
HB 279 |
| HB 279 Background.pdf |
HFIN 2/20/2012 1:30:00 PM |
HB 279 |
| HB279-NEW FN-DPS-ABC-02-13-12.pdf |
HFIN 2/20/2012 1:30:00 PM |
HB 279 |
| HB279-NEW FN-DCCED-CBPL-02-17-12.pdf |
HFIN 2/20/2012 1:30:00 PM |
HB 279 |
| HB125CS(L&C)-UpdatedFN-DPS-ABC-02-13-12.pdf |
HFIN 2/20/2012 1:30:00 PM |
HB 125 |
| HB125-DCCED-ABC-02-17-12-Updated fn.pdf |
HFIN 2/20/2012 1:30:00 PM |
HB 125 |
| HB279 ASHSC_Feb2012_annual_report.pdf |
HFIN 2/20/2012 1:30:00 PM |
HB 279 |
| HB 279 ASHSC brief DGGS.pdf |
HFIN 2/20/2012 1:30:00 PM |
HB 279 |
| HB279 CS WORKDRAFT 27-LS0944-I.pdf |
HFIN 2/20/2012 1:30:00 PM |
HB 279 |
| HB125-DCCED-ASD-02-20-12-UPDATED-NEW.pdf |
HFIN 2/20/2012 1:30:00 PM |
HB 125 |
| HB 125 AMHTA Opposition Documents 2-20-12 HFIN.pdf |
HFIN 2/20/2012 1:30:00 PM |
HB 125 |
| HB 125 National Council Handout Report-Opposition 2-20-12.pdf |
HFIN 2/20/2012 1:30:00 PM |
HB 125 |
| HB 279 Kito Testimony 2.20.12.pdf |
HFIN 2/20/2012 1:30:00 PM |
HB 279 |