Legislature(2001 - 2002)
04/29/2002 03:20 PM House L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 215-COMMON CARRIER LIQUOR LICENSE VICE CHAIR HALCRO announced that the next order of business would be CS FOR SENATE BILL NO. 215(FIN), "An Act relating to licensing common carriers to dispense alcoholic beverages; and providing for an effective date." DON SMITH, Staff to Senator John Cowdery, Senate Transportation Standing Committee, Alaska State Legislature, informed the committee that Senator Cowdery introduced SB 215 primarily at the request of Alaska Airlines. The committee packet should include documents that outlines the current process. Mr. Smith related the belief that this legislation would reduce administrative and clerical burden to the common carriers and would lower the fees. The major user of this legislation has now up to 102 licensed aircraft, although the vast majority of those airplanes aren't flying in Alaska air space. Mr. Smith explained that CSSB 215(FIN) would change the procedure such that the first ten licenses would cost $1,000 each, after which each license would be $100 per license. He concluded by urging the committee's support of CSSB 215(FIN). Number 2205 BILL MACKAY, Vice President, Public and Government Affairs, Alaska Airlines - Seattle, testified via teleconference. Mr. MacKay provided the following testimony: Alaska Airlines has requested the current licensing requirements for common carrier beverage dispensary licenses be modified for two reasons. First, to simplify the requirement so that additional aircraft will not require an entirely new application process involving filing out the application, supplying supporting exhibits, posting and publishing the application for a license. Alaska [Airlines] and the [Alcohol Beverage Control] Board agree that modifying the statute to simplify obtaining additional common carry licenses will reduce the clerical and administrative work for both Alaska Airlines and the board and is therefore in the public interest. Secondly, Alaska Airlines would like the fees reduced. Alaska [Airlines] currently has 102 aircraft in its fleet and plans to add additional aircraft each year. The growth of the fleet substantially exceeds the growth of our interstate flying. The company does not have an effective means of limiting the aircraft that serve Alaska to a select few. And instead operates all of its aircraft in the state, often to enable us to provide us single plane service to [and] from cities in Alaska to cities south or east of Seattle. Recent examples are our new routes to Washington, D.C., Boston, and Denver. Since every aircraft must be separately licensed with the current law and every license costs Alaska Airlines $450 a year, that's a $700 biannual few plus $200 license fee. The license fees have become quite high and will continue to escalate at a faster rate than the company's interstate flying will escalate. Alaska only operates a small portion of our fleet on interstate routes on any given day. In addition, it should be noted that none of the other major airlines serving Alaska, with the possible exception of Delta, obtain Alaska liquor licenses since they do not operate interstate. Alaska [Airlines] believes that it pays substantially more for common carrier licenses than any other licensee in the state. And it seems fair to us to reduce the fees to more accurately reflect the cost to the board of issuing licenses and the interstate presence that Alaska [Airlines] actually has. If the proposed bill becomes law, Alaska [Airlines] will still pay fees far in excess of fees we pay in any other state, and rightfully so because of our interstate flying. Number 2099 DOUGLAS GRIFFIN, Director, Alcoholic Beverage Control Board (ABC), Department of Revenue, testified via teleconference. Mr. Griffin informed the committee that the board was initially approached by Alaska Airlines a few years ago. Alaska Airlines is in unique situation, and licensing all of its airlines seems like a bit of overkill. From an equity standpoint, this legislation does make sense. Therefore, the ABC Board does support it even though there is some cost. The way the legislation is currently structured it would take a few more years before any other company would be impacted. The administrative "fix" is found on page 2, line 1, which allows the licenses to move to the same biennial cycle. Mr. Griffin reiterated the ABC Board's support of the legislation, and he noted that the legislature and the state should be aware that this legislation will cost some revenue. Mr. Griffin concluded by urging the committee to pass the legislation. REPRESENTATIVE ROKEBERG referred to a document with the heading "SB 215 - License Renewal Breakdown". MR. GRIFFIN said that document was a way in which to determine which companies would be impacted by this legislation. He said he wasn't sure whether [that document] was part of the latest fiscal note reflecting the Senate version. Basically, no other company has enough rail cars, buses, or other vehicles that would fall under the common carrier category impacted by this bill. Mr. Griffin pointed out that another unique aspect of Alaska Airlines is that it pays for a full year of licenses because it operates year round. Therefore, those tourism companies only pay for half the year due to their seasonal operations; thus it will be quite some time before those entities are impacted. Number 1920 REPRESENTATIVE ROKEBERG asked if the current requirements require each vehicle, boat, aircraft, or railway buffet car to be licensed as a common carrier. MR. GRIFFIN replied yes. If any of the aforementioned operate between two Alaska ports, the entity has to obtain a common carrier license. This lead to the notion mentioned earlier of placing all of an entities rail cars, for example, on the same renewal cycle. He characterized that provision as a win-win provision. REPRESENTATIVE MEYER related his understanding that ERA is on contract with Alaska Airlines. Therefore, he asked whether ERA would have to obtain its own liquor license or would ERA fall under the umbrella of Alaska Airlines. MR. GRIFFIN answered that ERA is licensed separately. He said he wasn't sure that ERA still provided alcoholic beverage service, but when it did the company was licensed separately. REPRESENTATIVE MEYER acknowledged that this is a minor cost when compared to the cost of running an aircraft. However, he pondered whether giving a break to the planes that Alaska Airlines flies intrastate would be create an advantage over those carriers that only fly within the state. VICE CHAIR HALCRO related that he didn't believe any of the in- state carriers serve alcohol and those wouldn't need a common carrier license. MR. GRIFFIN pointed out that there has to be a flight attendant to serve the alcohol and many of the in-state carriers don't have flight attendants and thus, by extension, don't serve alcohol. Mr. Griffin remarked that Alaska Airlines is a different order of magnitude [when compared to in-state carriers]. VICE CHAIR HALCRO, upon determining that no one else wished to testify, closed public testimony and announced that CSSB 215(FIN) would be held until Chair Murkowski returned.
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