Legislature(1999 - 2000)

03/30/2000 02:40 PM Senate L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
            SB 260-DENIAL OF ALCOHOLIC BEVERAGE LICENSE                                                                     
                                                                                                                                
CHAIRMAN MACKIE announced SB 260 to be up for consideration.                                                                    
                                                                                                                                
SENATOR TAYLOR, sponsor,  said a friend wrote to him about a problem                                                            
at a lodge he  has been to on Prince of Wales Island.   The lodge is                                                            
near Whale  Pass, a  very small  rural community.   Whale Pass  fits                                                            
within the definition of  a village.  A liquor license was issued to                                                            
this lodge  by the Alcoholic Beverage  Control (ABC) Board  in 1991.                                                            
In 1998,  the ABC  Board did  not issue  a license  but instead,  in                                                            
1999, the ABC  Board denied the license saying that  an election had                                                            
not been held in the Whale Pass area.                                                                                           
                                                                                                                                
SENATOR TAYLOR  explained that this  lodge costs $850 per  night and                                                            
the owners  are  only asking  for the  right to  serve beverages  to                                                            
their registered  guests and employees.   The ABC Board did  not say                                                            
why the  license was originally  issued without  a vote. To  hold an                                                            
election in  Whale Pass to decide  whether or not it is going  to be                                                            
wet or dry  will open the door in  an unacceptable fashion.   Should                                                            
that vote  pass, the  lodge would  be restricted  to selling  on the                                                            
premises and  only to guests, which  is what the lodge owners  want.                                                            
But,  it would  also  mean  that anyone  could  apply  for a  liquor                                                            
license in the Whale Pass  area and, because an election had already                                                            
been held,  a license  would  have to be  issued.   It's a  catch-22                                                            
situation.   The bill is not an attempt  to expand licensure  to the                                                            
general public; it just  tries to take care of this very limited and                                                            
narrow situation.  The bill is very constrained in  its application.                                                            
The lodge cannot  be accessible by automobile, it  can only serve to                                                            
guests,  and that  there  are not  more  than 75  registered  voters                                                            
within  a five  mile radius  of the  premise.   Although the  bill's                                                            
application is small, this  situation might be replicated in several                                                            
other  areas across  the state.   He  questioned why  the people  of                                                            
Whale Pass would vote for  this if they cannot participate.  He said                                                            
a legislative  change  is the only  solution he  could find  to this                                                            
problem.                                                                                                                        
                                                                                                                                
Number 1100                                                                                                                     
                                                                                                                                
CHAIRMAN  MACKIE noted  that a person  could drive  and walk  down a                                                            
trail to that  lodge.  He asked what Senator Taylor's  definition is                                                            
of "accessible by automobile"  and whether there is any objection to                                                            
inserting "directly"  before "accessible by automobile"  on line 25.                                                            
                                                                                                                                
SENATOR  LEMAN said  he would  like  to limit  the bill  as much  as                                                            
possible to  this unique situation  in which the lodge was  issued a                                                            
license that was not renewed.                                                                                                   
                                                                                                                                
SENATOR KELLY agreed and  asked if the lodge is serving alcohol now.                                                            
                                                                                                                                
SENATOR TAYLOR  replied if so, the lodge owners are  giving it away.                                                            
                                                                                                                                
SENATOR KELLY asked if  the license would be a renewal as opposed to                                                            
a new issue.                                                                                                                    
                                                                                                                                
SENATOR TAYLOR  answered it would be a new issuance  because the ABC                                                            
Board can't renew  something it shouldn't have granted  in the first                                                            
place.                                                                                                                          
                                                                                                                                
SENATOR KELLY  noted that  the statute says  if the village  is dry,                                                            
the ABC Board cannot issue a new license.                                                                                       
                                                                                                                                
SENATOR  TAYLOR indicated  that is  correct so if  Whale Pass  votes                                                            
itself dry, no license could be issued.                                                                                         
                                                                                                                                
CHAIRMAN MACKIE  asked, regarding the accessibility  issue, if there                                                            
was consensus to add the word "directly."                                                                                       
                                                                                                                                
SENATOR  LEMAN  moved  that  amendment   conceptually  to  give  the                                                            
drafters leeway. There were no objections and it was so ordered.                                                                
                                                                                                                                
CHAIRMAN MACKIE noted the  guests arrive by plane and road access is                                                            
not used.                                                                                                                       
                                                                                                                                
MR. DAN COFFEY said this  situation exists throughout Alaska in many                                                            
remote  locations  and  this  bill  is  very  appropriate.    It  is                                                            
basically  impossible  for these  very  expensive remote  lodges  to                                                            
obtain  liquor licenses  under current  provisions.  He thought  the                                                            
limitations  in the  bill  will reflect  the business  practices  of                                                            
those  remote lodges  and  strictly limit  beverages  to guests.  He                                                            
suggested one  further change.  Title  4 contains an on premise  and                                                            
off premise  sales licensing  scheme.  The  practice of most  remote                                                            
lodges  is  a combination   of the  two.    They  provide  alcoholic                                                            
beverages  to their  guests at  the lodge  and then  sell liquor  to                                                            
guests to take while out  on the river.  If the lodge owner does not                                                            
have a license  to do that, the owner  is in violation.   He guessed                                                            
there are dozens and dozens  of lodges that are in violation because                                                            
they cannot get  a license.  He thought this bill  should be amended                                                            
to solve that problem.                                                                                                          
                                                                                                                                
Number 1500                                                                                                                     
                                                                                                                                
SENATOR  LEMAN said the  bill has  a revision  to AS 04.11.320,  but                                                            
also AS  04.11.330 (7) says  "Renewal of  the license is  prohibited                                                            
under  this title  as a result  of an  election  conducted under  AS                                                            
04.11.507.  He asked if  the license renewal can be subject to local                                                            
option elections  and whether they need to put a parallel  amendment                                                            
in .330.                                                                                                                        
                                                                                                                                
MR. COFFEY  said they need  to do that because  they divide  renewal                                                            
and new issuance into two  separate sections.  You would not want to                                                            
have two conflicting provisions.                                                                                                
                                                                                                                                
SENATOR LEMAN asked why the drafters didn't pick that up.                                                                       
                                                                                                                                
SENATOR TAYLOR  responded that, "Primarily I believe  because we had                                                            
instructed  the drafter  that if one  of these  lodges was within  a                                                            
community  where  an election  could or  had  to be  held, and  that                                                            
community chose to vote  dry, that we would not want to be operating                                                            
a lodge  selling out  there if they  voted dry.   In other words,  I                                                            
didn't want  to take  on that war  because I  think that's a  bigger                                                            
issue.  If you never had  an election or, if they have elected to go                                                            
dry, then I wouldn't grant a license in that area if it was me.                                                                 
                                                                                                                                
CHAIRMAN MACKIE  asked if this bill  only deals with new  issuances.                                                            
                                                                                                                                
SENATOR TAYLOR said yes.                                                                                                        
                                                                                                                                
MR. COFFEY  said the  question comes  up what  happens in two  years                                                            
when the lodge owner applies for renewal.                                                                                       
                                                                                                                                
SENATOR TAYLOR  answered that he applies for renewal  under the same                                                            
section and since no election has been held, he's still fine.                                                                   
                                                                                                                                
SENATOR LEMAN  asked if an election  is held in Whale Pass  and they                                                            
vote to  be a dry  community, that  would change  the way the  lodge                                                            
would operate.                                                                                                                  
                                                                                                                                
SENATOR TAYLOR said that would stop the license.                                                                                
                                                                                                                                
CHAIRMAN MACKIE pointed out the bill provides for local control.                                                                
                                                                                                                                
SENATOR TAYLOR  said he is not trying to take away  anyone's ability                                                            
to vote on this subject.                                                                                                        
                                                                                                                                
CHAIRMAN MACKIE  said from his experience  as a lodge owner,  lodges                                                            
don't make money on the  sale of alcohol.  It's strictly provided as                                                            
a convenience  for their  guests.   If anything,  he loses money  on                                                            
alcohol.   He  thought the  bill was  very  tight.   He stated  that                                                            
although Mr. Coffey's point  was a good one, he is not interested in                                                            
entertaining  any amendments  on packaged liquor  at this time.   He                                                            
noted that  to serve wine with dinner  is a huge convenience  but to                                                            
sell beer to take out on a boat is a huge liability.                                                                            
                                                                                                                                
MR. COFFEY said the lodge  owners don't sell it, it comes as part of                                                            
the package but  they will continue to do it and since  there is not                                                            
enforcement,  the state will  not get the  revenue and the  practice                                                            
will continue.   He  thought the bill  at least  solves some  of the                                                            
problems.                                                                                                                       
                                                                                                                                
SENATOR KELLY moved to pass CSSB 260(L&C) from committee with                                                                   
individual recommendations.  There were no objections and it was so                                                             
ordered.                                                                                                                        

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