01/31/2018 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB301 | |
| HB265 | |
| HB299 | |
| HB301 | |
| HB265 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 299 | TELECONFERENCED | |
| *+ | HB 301 | TELECONFERENCED | |
| *+ | HB 265 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
January 31, 2018
3:53 p.m.
MEMBERS PRESENT
Representative Sam Kito, Chair
Representative Adam Wool, Vice Chair
Representative Andy Josephson
Representative Louise Stutes
Representative Chris Birch
Representative Gary Knopp
Representative Colleen Sullivan-Leonard
MEMBERS ABSENT
Representative Mike Chenault (alternate)
Representative Bryce Edgmon (alternate)
COMMITTEE CALENDAR
HOUSE BILL NO. 301
"An Act relating to the renewal and transfer of ownership of a
beverage dispensary license or restaurant or eating place
license."
- HEARD & HELD
SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 265
"An Act relating to the renewal of a license involving alcoholic
beverages; and relating to the issuance, renewal, or transfer of
ownership of a beverage dispensary license or a restaurant or
eating place license."
- HEARD & HELD
HOUSE BILL NO. 299
"An Act extending the termination date of the Alcoholic Beverage
Control Board; and providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 301
SHORT TITLE: ALCOHOL LIC.: BEV DISPENSARY/RESTAURANT
SPONSOR(s): REPRESENTATIVE(s) WOOL
01/24/18 (H) READ THE FIRST TIME - REFERRALS
01/24/18 (H) L&C, FIN
01/31/18 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 265
SHORT TITLE: LIQUOR LICENSES; RESTAURANTS/MOTELS
SPONSOR(s): REPRESENTATIVE(s) RAUSCHER
01/08/18 (H) PREFILE RELEASED 1/8/18
01/16/18 (H) READ THE FIRST TIME - REFERRALS
01/16/18 (H) L&C, FIN
01/24/18 (H) SPONSOR SUBSTITUTE INTRODUCED
01/24/18 (H) READ THE FIRST TIME - REFERRALS
01/24/18 (H) L&C, FIN
01/31/18 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 299
SHORT TITLE: EXTEND: ALCOHOLIC BEVERAGE CONTROL BOARD
SPONSOR(s): REPRESENTATIVE(s) WOOL
01/24/18 (H) READ THE FIRST TIME - REFERRALS
01/24/18 (H) L&C, FIN
01/31/18 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
REPRESENTATIVE ADAM WOOL
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced HB 301 as prime sponsor.
LAURA STIDOLPH, Staff
Representative Adam Wool
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions in the hearing on HB 301
on behalf of Representative Wool, prime sponsor.
REPRESENTATIVE GEORGE RAUSCHER
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced HB 265 as prime sponsor.
DARRELL BREESE, Staff
Representative George Rauscher
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
265, on behalf of Representative Rauscher, prime sponsor.
LAURA STIDOLPH, Staff
Representative Adam Wool
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced HB 299 on behalf of
Representative Wool, prime sponsor.
KRIS CURTIS, Legislative Auditor
Legislative Audit and Budget
Legislative Agencies and Offices
Juneau, Alaska
POSITION STATEMENT: Presented the audit findings related to HB
299.
CHRISTINE LUMBA, Legislative Auditor
Legislative Audit and Budget
Legislative Agencies and Offices
Anchorage, Alaska
POSITION STATEMENT: Answered questions in the hearing on HB
299.
ERIKA MCCONNELL, Director
Alcohol and Marijuana Control Office
Department of Commerce, Community, and Economic Development
(DCCED)
Anchorage, Alaska
POSITION STATEMENT: Answered questions in the hearing on HB
299.
ROBERT KLEIN, Chair
Alcohol and Beverage Control Board
Alcohol & Marijuana Control Office
Department of Commerce, Community, and Economic Development
(DCCED)
Anchorage, Alaska
POSITION STATEMENT: Testified in the hearing on HB 299.
WILLIAM HARRINGTON
Anchorage, Alaska
POSITION STATEMENT: Spoke in the hearing on HB 299.
ERIKA MCCONNELL, Director
Alcohol and Marijuana Control Office
Department of Commerce, Community, and Economic Development
(DCCED)
Anchorage, Alaska
POSITION STATEMENT: Answered questions in the hearing on HB
301.
ALLAN CHOY, Owner
Al's Alaskan Inn
Anchorage, Alaska
POSITION STATEMENT: Spoke in support of HB 301.
ARDEN RANKINS, Owner
Sunrise Inn
Cooper Landing, Alaska
POSITION STATEMENT: Spoke in support of HB 301.
DALE FOX
Alaska Cabaret, Hotel, Restaurant and Retailers Association
(CHARR)
Juneau, Alaska
POSITION STATEMENT: Spoke in support of HB 301.
SASSAN MOSSANEN
Denali Brewing Company
Talkeetna, Alaska
POSITION STATEMENT: Spoke in support of HB 301.
DARRELL BREESE, Staff
Representative George Rauscher
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 265 on behalf of
Representative Rauscher, prime sponsor.
ACTION NARRATIVE
3:53:03 PM
CHAIR SAM KITO called the House Labor and Commerce Standing
Committee meeting to order at 3:53 p.m. Representatives Knopp,
Sullivan-Leonard, Josephson, Wool, Birch, and Kito present at
the call to order. Representative Stutes arrived as the meeting
was in progress.
HB 301-ALCOHOL LIC.: BEV DISPENSARY/RESTAURANT
3:54:19 PM
CHAIR KITO announced that the first order of business would be
HOUSE BILL NO. 301, "An Act relating to the renewal and transfer
of ownership of a beverage dispensary license or restaurant or
eating place license."
3:54:39 PM
REPRESENTATIVE ADAM WOOL, Alaska State Legislature, introduced
HB 301 as prime sponsor. He stated historically in Alaska
roadhouses or hotels with 10 rooms or more could obtain beverage
licenses. In 1985, there was a statute change. More recently,
there was a new interpretation of the statute and renewals were
denied. The proposed bill would ensure that those businesses
which had licenses awarded before 1985 would be grandfathered in
to continue operating.
3:56:34 PM
LAURA STIDOLPH, Staff, Representative Adam Wool, Alaska State
Legislature, answered questions on HB 301, on behalf of
Representative Wool, prime sponsor. She confirmed that 34
businesses had been denied renewal of their beverage licenses.
3:56:53 PM
CHAIR KITO held over HB 301.
HB 265-LIQUOR LICENSES; RESTAURANTS/MOTELS
3:57:05 PM
CHAIR KITO announced that the next order of business would be
HOUSE BILL NO. 265, "An Act relating to the renewal of a license
involving alcoholic beverages; and relating to the transfer or
issuance of a beverage dispensary license or a restaurant or
eating place license."
3:57:31 PM
REPRESENTATIVE GEORGE RAUSCHER, Alaska State Legislature,
introduced HB 265 as prime sponsor. He explained the proposed
bill would make three strategic changes to alcoholic beverage
licensing to improve the Alcohol Beverage Control (ABC) Board.
First, it would modify the opening hours requirements for club
licenses. It would create a level playing field for businesses
that serve tourists on the road systems. The proposed bill
would establish a grandfather clause for the holder of a tourism
license to improve the ownership transfer procedures. He
continued that club licenses affect Lions Clubs, Elks Clubs, and
non-profits. He explained the current statute requires them to
be open 30 days each calendar year for a full eight hours each
day. The proposed bill would require a total of 240 hours in
the year. He specified that HB 265 would limit roadhouses to 25
miles outside an incorporated city or unified borough.
4:00:05 PM
REPRESENTATIVE STUTES asked for a sectional analysis of HB 265.
4:00:20 PM
DARRELL BREESE, Staff, Representative George Rauscher, Alaska
State Legislature, on behalf of Representative Rauscher, prime
sponsor, answered that there was an explanation of changes in
the proposed bill, but there was no sectional analysis at
present.
4:00:50 PM
CHAIR KITO held over HB 265 to receive additional information
from staff. [The bill was taken up again later in the meeting.]
HB 299-EXTEND: ALCOHOLIC BEVERAGE CONTROL BOARD
4:01:08 PM
CHAIR KITO announced that the next order of business would be
HOUSE BILL NO. 299, "An Act extending the termination date of
the Alcoholic Beverage Control Board; and providing for an
effective date."
4:01:23 PM
LAURA STIDOLPH, Staff, Representative Adam Wool, Alaska State
Legislature, introduced HB 299 on behalf of Representative Wool,
prime sponsor. She explained that the proposed bill would
extend the Alcoholic Beverage Control (ABC) Board by four years
to June 30, 2022. She paraphrased the Legislative Budget and
Audit (LB&A) conclusions, which read as follows:
The Alcoholic Beverage Control Board (board) is a
regulatory and quasi-judicial board consisting of five
members appointed by the governor, created for the
purpose of controlling the manufacture, barter,
possession, and sale of alcoholic beverages in the
state. The board consists of one member actively
engaged in the public safety sector, one from the
general public, one who has resided in a rural area
within the last five years, and two actively engaged
in the alcoholic beverage industry. The audit
concluded the board should improve its procedures for
issuing renewals, recreational site licenses, and
beverage dispensary licenses that encourage tourism.
Testing found these licenses were not consistently
issued in accordance with statutes. Additionally,
operational improvements are needed in enforcing laws,
monitoring board-related local law enforcement
activity, and processing refunds to municipalities.
4:02:52 PM
KRIS CURTIS, Legislative Auditor, Legislative Audit and Budget,
Legislative Agencies and Offices, presented the sunset audit
findings for the ABC Board. The audit found the board had
operated in the public interest in all areas except licensing.
There was a need to improve the board's procedures for issuing
renewals, recreational site licenses, and beverage dispensary
licenses for the purposes of encouraging tourism.
Additionally, operational improvements are needed in enforcement
of laws, monitoring local law enforcement activity, and
processing refunds to municipalities. She read from the
November 2017 audit [included in committee packets] as follows:
AMCO [Alcohol and Marijuana Control Board}
investigators have stopped conducting compliance
checks as of April 2015. The board, through AMCO
investigators, has historically conducted compliance
checks where investigators employ underage individuals
who attempt to purchase alcoholic beverages.
Licensees who fail a compliance check receive criminal
summons or citations. According to management, the
federal grant funding for this program was terminated
at the end of 2012, and the board received
supplemental funds to keep the program going through
June 2014. AMCO's enforcement section continued to
conduct compliance checks funded by program receipts
until April 2015. Although there is no statutory or
regulatory requirement to conduct compliance checks,
AMCO management reported it is an integral part of the
enforcement of alcoholic beverage laws and is
evaluating alternative means for providing the
enforcement through shared services with other
agencies. The audit noted the board and AMCO
management have not established a written enforcement
plan to direct its limited enforcement resources. For
example, the board has not formally established how
often licensed premises should be inspected.
Furthermore, the control office does not monitor and
track all complaints to ensure complaints are assessed
for follow up action and investigated in a timely
manner.
4:05:26 PM
MS. CURTIS added that the board and AMCO staff had not
maintained a list of restricted purchasers within the statewide
database in accordance with statute, potentially allowing
individuals who have been convicted of illegally selling alcohol
to continue to purchase alcohol via written order.
MS. CURTIS listed the eight recommendations in the audit. The
audit recommended the authority to renew licenses be limited to
the board to comply with statutes. The audit again recommended
that the board issue recreational site licenses in accordance
with statutory requirements. This was the second such
recommendation and had been given in the prior sunset audit.
Ten of the 29 recreational site licenses had been tested, and it
was found that all 10 did not meet the definition of a
recreational site. She gave the list of recreational sites,
including baseball games, car races, hockey games, dog sled
racing events and curling matches held during the season. The
non-compliant licensees the audit had found included travel
companies, bowling alleys, an arts council, a pool hall, a movie
theater, and a spa. Board members were aware that they were
issuing those licenses not in accordance with statute, but
believed it was in the public's best interest to continue to do
so. The board thought the issue would be addressed in a future
re-write of the statute.
MS. CURTIS spoke to the recommendation that the board issue
beverage dispensary licenses in accordance with statutory
requirements. The audit sampled 16 of the 126 beverage
dispensary licenses that encourage tourism and found that 5 were
transferred and 6 were renewed despite not meeting the statutory
requirements. She explained statutes give the board authority
to issue a beverage dispensary license without regard to
population limits if it appears that the issuance will encourage
tourism. She added that statutes also provide for a minimum
rental room rate, and, in the areas examined, the entities did
not meet the minimum rate. The board believed it was
appropriate to continue to issue those licenses as the original
licenses had been issued prior to 1985. However, there is no
statutory provision to grandfather licenses.
4:08:54 PM
MS. CURTIS continued to list the LB&A recommendations. The
audit recommended the board, the AMCO director, and the
enforcement supervisor work together to formally establish an
enforcement plan to direct AMCO's limited enforcement resources.
The audit further recommended the board and AMCO director
implement a process to monitor and track complaints to ensure
they are assessed for follow-up action and investigated in a
timely manner. The sixth recommendation was that the board and
the AMCO director develop written procedures for updating the
statewide database with restricted purchasers. Procedures
should include working with the court system to receive reports
of violations in a timely manner. The audit recommended the
board and AMCO director improve procedures to ensure
municipalities report violations of alcoholic beverage laws.
Finally, the audit recommended the AMCO director develop and
implement procedures to ensure refunds to municipalities are
appropriately reviewed.
4:11:33 PM
MS. CURTIS stated LB&A was recommending a 4-year extension for
the board. The department concurred with all recommendations
except recommendation 1 regarding the authority to renew
licenses. The board believed there is an alternative
interpretation of statute. The board chair concurred with all
but recommendation 3 concerning beverage dispensary licenses
which encourage tourism. The board maintained it is appropriate
to continue to grandfather those licenses. Ms. Curtis explained
that when an auditee does not agree with any recommendation, she
responds in the audit findings. In this instance, the board
chair was unable to provide more information for her to
consider. She therefore reaffirmed the findings.
4:12:50 PM
REPRESENTATIVE JOSEPHSON asked whether the boards ever report to
the state about the lack of resources.
MS. CURTIS replied that the ABC Board was different from other
boards in not being an occupational licensing board. The
board's response acknowledges the need for an enforcement plan
and some sort of prioritization due to limited resources.
REPRESENTATIVE JOSEPHSON asked what the board needed to do to
fix the information gap with the court system.
MS. CURTIS answered she thought that it was as simple as asking
the court system to send in the information.
4:15:21 PM
REPRESENTATIVE BIRCH asked about efforts to receive feedback
from licensees regarding the board's operations.
MS. CURTIS answered that at times surveys were sent out to ABC
stakeholders. The audit also examined board meeting minutes to
determine whether the public was commenting and how those
comments were considered by the board. She deferred to the
board chair for more information.
4:17:37 PM
REPRESENTATIVE KNOPP remarked the audit had triggered a lot of
discussion, including the proposals of HB 301 and HB 265. He
asked whether it was not more appropriate to decide that the
statute "doesn't fit," and he said he thought that it made sense
to return to pre-1985.
MS. CURTIS replied it was outside of her role as auditor to
comment on the appropriate nature of statute.
CHAIR KITO added that he thought it made sense for the
legislators to examine legislation that may no longer "fit."
REPRESENTATIVE KNOPP spoke to the population base and said he
thought there were different distinctions for incorporated areas
of the boroughs. He asked why the population base was not taken
out of the incorporated areas.
MS. CURTIS said she did not know which areas were examined. She
specified that the analysis was applied to a sample group of the
126 licenses.
REPRESENTATIVE KNOPP asked whether, with separate sections for
incorporated areas, it made sense to exclude the population
base.
MS. CURTIS said she did not know if she could address that
issue. She stated the auditors had not had trouble interpreting
the criteria and asked whether he was questioning why the
statute was written the way it was.
REPRESENTATIVE KNOPP said, "if it was meant to be all inclusive
incorporated cities inside an organized borough, we would never
have put the exclusions for the incorporated cities in there, so
we should only be counting the unorganized areas of the
borough." He said he thought that was not what was done in the
audit.
4:23:03 PM
MS. CURTIS deferred to the auditor who carried out the testing.
4:23:19 PM
CHRISTINE LUMBA, Legislative Auditor, Legislative Audit and
Budget, stated she was not sure she has an answer for that.
4:23:47 PM
CHAIR KITO asked whether she was able to describe how the audit
was tested.
4:23:57 PM
MS. LUMBA answered that the division had generated random
samples and found that certain licenses were issued without
regard to population limits to encourage tourism. When the
renewal came up, they were evaluated under AS 04.11.400(d).
4:24:31 PM
REPRESENTATIVE KNOPP responded that he would contact the
division in person later.
4:24:48 PM
MS. CURTIS remarked that LB&A had vetted the findings with the
ABC and AMCO Boards and they had no issue with the criteria or
methodology.
4:24:59 PM
REPRESENTATIVE WOOL commented on an inconsistency in the number
of rooms required for licenses in different areas. He went on
to ask about qualifications for enforcement officers.
MS. CURTIS deferred to AMCO.
4:26:44 PM
ERIKA MCCONNELL, Director, Alcohol and Marijuana Control Office,
Department of Commerce, Community, and Economic Development
(DCCED), answered that the board's enforcement officers were
classified as special investigator I, requiring four years of
advanced level investigative work or four years of full-time law
enforcement experience. She specified that all the board's
current officers were previously law enforcement officers.
REPRESENTATIVE WOOL said he felt that the ABC board and AMCO
office staff were overworked. He disclosed that he is a license
holder and has had trouble reaching the office via telephone.
He asked whether the addition of marijuana [control enforcement]
to the workload was something "they could do comfortably."
MS. MCCONNELL answered that there had been an adjustment period
as the office had taken on the marijuana program. It had grown
incrementally to accommodate the marijuana board and had also
seen a great deal of staff turnover. She remarked that the
office had heard other people complain that it can be difficult
to reach staff, and the office had developed policies to ensure
it was more responsive.
4:29:50 PM
REPRESENTATIVE WOOL asked how many enforcement officers were
currently employed by the board.
MS. MCCONNELL replied there is one special investigator II in
Anchorage and seven enforcement officers.
REPRESENTATIVE WOOL remarked that there were 1,885 alcohol
licenses requiring enforcement and a growing number of marijuana
licenses. He spoke to one of the recommendations that the board
carry out license renewals whereas currently the AMCO office was
doing that. He asked for her thoughts.
MS. MCCONNELL replied that as noted in the audit response, AMCO
felt that statutes can be interpreted differently, but it had
agreed to adjust its procedures based on the audit. She added
that AMCO had taken 350 renewals to the board. However, they
were not providing the board with all the paperwork. The
renewals provided to the board were those which had met the
requirements for renewal.
4:31:46 PM
REPRESENTATIVE WOOL said he felt renewing 900 licenses was a lot
of work for the board. He asked whether the director having a
tie-breaking vote was something that existed in other boards.
MS. CURTIS replied that she was not aware of the policy.
REPRESENTATIVE WOOL directed his question to Ms. McConnell.
MS. MCCONNELL answered that the Marijuana Board did not have
that policy.
REPRESENTATIVE WOOL mentioned that in discussions with staff in
the licensing areas, it was disclosed that the vote was in
statute which had been repealed but had remained in regulation.
He asked for confirmation from LB&A.
MS. CURTIS replied that it was not a topic in the audit.
4:34:05 PM
CHAIR KITO stated he thought it may have been a decision that
had come up post-audit.
4:34:49 PM
ROBERT KLEIN, Chair, Alcohol and Beverage Control Board, Alcohol
& Marijuana Control Office, Department of Commerce, Community,
and Economic Development (DCCED), testified in the hearing on HB
299. He complimented the LB&A for the thorough job on the
audit. He said he agreed with recommendations 4-8 and the board
had already implemented a number of them. Regarding renewals, he
stated the law said the board was the only group that could
grant renewals, so at the January 23 board meeting they had
staff bring around 300 renewals to them. He stated it was
onerous, but that staff had done a lot of homework.
MR. KLEIN spoke to recreational site licenses, specifying the
board does not grant any recreational site licenses that do not
follow the statute requirements very closely and only renews
practicing businesses. He mentioned that the board was waiting
for SB 76 to move through the legislature. If the proposed bill
passed, the board would comply, otherwise it would address how
to avoid renewing some of the licenses. He addressed the
recommendation regarding tourism, indicating that in the
application of Title 4, the board looked at licenses granted
before 1985 and applied common sense. The board did not want to
ask those holding tourism licenses to build more rooms because
the population increases and had not taken that action. In
closing, he stated that he supports the 4-year extension in the
proposed legislation.
4:38:56 PM
REPRESENTATIVE BIRCH extended his personal appreciation for the
services and support the ABC Board had provided to Alaskans. He
asked whether there was anything the legislature could do to
ensure that common sense prevails.
4:39:44 PM
MR. KLEIN remarked that the application of common sense was what
had enabled Title 4 to exist for almost 40 years.
4:40:00 PM
REPRESENTATIVE KNOPP spoke to the rejection of the reinstatement
of an alcoholic beverage license to a well-established Elks
Lodge. He said he felt the ABC Board had been following the
intent of the law but asked whether the board could not have
used discretion.
4:40:59 PM
MR. KLEIN answered that the people responsible for renewing the
license chose to ignore the requirements to apply for the
renewal and had missed all the deadlines. He underlined the
action taken by the board did not preclude the lodge from re-
applying for the license.
4:41:51 PM
REPRESENTATIVE STUTES asked how many members are on the ABC
Board.
MR. KLEIN replied there are five members on the board.
4:42:07 PM
REPRESENTATIVE WOOL remarked that the five board members were
selected for different roles. He asked whether the director had
a tie-breaking vote and whether it was ever used.
MR. KLEIN answered that he was against applying the tie-breaking
vote of the director. He added that the board had dropped the
legislative aspect of the director having the tie-breaking vote.
He clarified that the board was quasi-judicial in nature and
that at times the director was the prosecutor in the cases that
come before the board. He said he thought the regulation was
left in the statute inadvertently.
REPRESENTATIVE WOOL asked whether the board can keep up with the
900 license renewals every year.
4:44:04 PM
MR. KLEIN answered there was an efficient way for the staff to
review renewals. There was a public process as well as a series
of checks and balances in the system. He added that by the time
the five members of the board review a renewal, the renewal has
gone through those hurdles.
4:44:53 PM
REPRESENTATIVE JOSEPHSON asked whether the director of AMCO cast
a tie-breaking vote relying on a regulation that was previously
connected to a statute. He added that the statute had been
repealed, and he said he thought it was a standalone regulation.
He asked whether people were questioning the legitimacy of the
vote.
MR. KLEIN answered that the tie-breaking vote has not been used
in his experience and has not been used in many years. It was
brought up in a meeting because the regulation had been found.
He added the assistant attorney general who supports the board
suggested it might be difficult to defend should any lawsuits be
brought forward.
4:46:11 PM
CHAIR KITO opened public testimony on HB 299.
4:46:29 PM
WILLIAM HARRINGTON testified that he does not think the
alcoholic beverage industry needs a control board.
4:48:15 PM
CHAIR KITO announced he would leave public testimony on HB 299
open.
CHAIR KITO held over HB 299.
HB 301-ALCOHOL LIC.: BEV DISPENSARY/RESTAURANT
4:49:05 PM
CHAIR KITO announced that the next order of business would be
HOUSE BILL NO. 301, "An Act relating to the renewal and transfer
of ownership of a beverage dispensary license or restaurant or
eating place license."
4:49:39 PM
CHAIR KITO asked Ms. McConnell whether she had been able to
review HB 301 and whether the department had any comments
regarding the proposed legislation.
4:49:59 PM
ERIKA MCCONNELL, Director, Alcohol and Marijuana Control Office,
Department of Commerce, Community, and Economic Development,
stated that there was a correction to be made regarding the
statement that 34 licenses had been denied renewal. She
clarified that no licenses had been denied renewal. The issue
was the transfer of ownership. She reiterated that some of the
licenses had been issued long ago, before the requirement for
number of rooms was changed. She added that people want to sell
their businesses, and, at time of transfer of ownership, the
number of rental rooms needs to be evaluated. She indicated the
board supported the legislative fix to allow the licenses to
continue to operate and to be transferred.
MS. MCCONNELL queried the intent for the legislation. She read
from page 2 line 23 of the proposed bill as followed:
On and after the effective date of this Act, the
holder of a beverage dispensary or restaurant or
eating place license issued under (g) of this section
as that subsection read on June 5, 1985, who has
continually held the license until the effective date
of this Act
MS. MCCONNELL asked specifically about the phrase, "who has
continually held the license."
4:52:59 PM
CHAIR KITO replied that he thought that was something to examine
as the committee considered the proposed legislation.
4:53:13 PM
REPRESENTATIVE JOSEPHSON asked whether the ambiguity was in the
implication that the license had to be held by a single
individual or that it could have been transferred but the
license had to be continually used.
MS. MCCONNELL answered that she would guess the intent was that
the license had to be continually operated, not that the same
owner had to hold the license.
4:53:58 PM
REPRESENTATIVE WOOL answered the intent was that the license be
continually operated. He stated he thought there was an issue
with renewal of the older licenses which needed to be addressed
either with a Title 4 rewrite or one of the current proposed
bills.
MS. MCCONNELL answered the concern in having the board look at
the renewals regarded ensuring the licenses had been transferred
in the past in accordance with statute. She added the board
hopes the legislature will solve the problem, so these licenses
can move forward in confidence.
4:56:14 PM
CHAIR KITO opened public testimony on HB 301.
4:56:29 PM
ALLAN CHOY, Owner, Al's Alaskan Inn, spoke in support of HB 301.
He gave historical background on the development of the hotel
industry in the Anchorage area. He stated he appreciates
legislative action on HB 301. He remarked that if hotels had to
build more rooms, then they would be empty, and he added if he
didn't have the bar, then the hotel would be closed. He asked
the legislature to clearly define and clarify the intent of the
issue.
5:08:33 PM
ARDEN RANKINS, Owner, Sunrise Inn, spoke in support of HB 301.
She stated she owns the Sunrise Inn in Cooper Landing and
operates with a tourism license. She said she had bought the
10-room inn 2 years earlier. She underlined that Cooper Landing
had around 275 people year-round, so there was no way she could
build 40 more rooms. She underlined the inn is the largest
year-round employer in the community, but she would have to
close and put 10 people out of work if the proposed bill did not
fix the room number issue. She said she was concerned that AMCO
changed how it calculates population. She shared her
understanding that the entire Kenai Peninsula was combined, and
incorporated cities were taken out of the number, meaning her
neighbors were now included with Cooper Landing's population and
some of them are 100 miles away.
5:11:39 PM
REPRESENTATIVE WOOL asked Ms. Rankins how she learned about the
issue.
MS. RANKINS answered that she had been informed through Cabaret,
Hotel, Restaurant and Retailers Association (CHARR).
5:12:40 PM
DALE FOX, Alaska Cabaret, Hotel, Restaurant and Retailers
Association, Inc. (Alaska CHARR), spoke in support of HB 301.
He declared that he was involved in getting the 1985 law passed
and that he regrets it. He was the executive director of the
Alaska Visitors Bureau at the time, and the intent was to
encourage tourism. He said he felt it was a terrible thing to
put those 34 licensees in jeopardy. He stated it was always the
intent to grandfather in businesses. He encouraged the
committee to fix the 1985 law with the proposed legislation.
5:15:46 PM
SASSAN MOSSANEN, Denali Brewing Company, spoke in support of HB
301. He said three of the licensees on the audit list were
neighbors. Due to the size of the town and lot sizes, Talkeetna
had a special-use district, which could prevent the construction
of 40-room hotels. He said he thought seeing tourism licenses
go away would be a great injustice to those three families.
5:17:09 PM
CHAIR KITO announced he would hold public testimony open.
CHAIR KITO held over HB 301.
HB 265-LIQUOR LICENSES; RESTAURANTS/MOTELS
5:17:15 PM
CHAIR KITO announced that the final order of business would be a
return to HOUSE BILL NO. 265, "An Act relating to the renewal of
a license involving alcoholic beverages; and relating to the
transfer or issuance of a beverage dispensary license or a
restaurant or eating place license."
5:17:38 PM
DARRELL BREESE, Staff, Representative George Rauscher, Alaska
State Legislature, presented HB 265 on behalf of Representative
Rauscher. He explained the proposed bill grandfathered in all
licenses from the time they were issued. He added that of the
list of 34 licenses that were in jeopardy, 9 of them were issued
after 1985 and would still be in jeopardy. The proposed bill
would grandfather all licenses at the number of rooms it had at
the time of licensing. There was also a change for the club
licenses, which currently had to be open for 30 8-hour days each
calendar year. With the new legislation, that would change to a
cumulative 240 hours in the calendar year, which could be broken
up into 2- or 4-hour blocks. He stated club license owners can
serve alcohol only to club members, so allowing them to adjust
their hours to fit their needs would be useful as it would
prevent them from being penalized at the time of renewal for not
meeting the 30 8-hour day requirement.
5:21:17 PM
REPRESENTATIVE STUTES stated she was concerned about a statement
in the previous presentation saying the intent was to level the
playing field between clubs and dispensaries.
MR. BREESE apologized for the confusion and explained that he
had been referring to levelling the playing field in the
roadhouse license issue. He gave the example of the Long Rifle
Lodge, which has a tourism license and has 10 rooms. With the
law as it was currently being interpreted, the lodge would have
to have 50 rooms as the board was looking at the Matanuska
population as a whole. The proposed bill created the language
for a roadhouse license requiring only 10 rooms. The new
language would also enable a new business across the highway
from the Long Rifle Lodge to "make a go of it" if it can meet
the requirement of 10 rooms. He explained that was where the
playing field would be levelled.
REPRESENTATIVE STUTES surmised the intent was that the new lodge
would have their licenses issued under the same conditions as
"the guy across the street."
MR. BREESE replied in the affirmative.
5:23:55 PM
REPRESENTATIVE WOOL asked whether HB 301 would allow the
hypothetical new lodge to have fewer than 50 rooms.
5:24:41 PM
MR. BREESE explained the proposed bill's definition of
roadhouses was those located 25 miles outside an incorporated
city or unified borough and on a national scenic byway. This
would include Seward Highway, Parks Highway, Glen Highway, and
Richardson Highway, which were all codified in national law. He
stated the Long Rifle Lodge was located 46 miles outside Palmer,
adding it was in the Matanuska-Susitna borough, but the borough
was not a unified borough.
5:25:55 PM
CHAIR KITO offered that the Alaska Marine Highway System (AMHS)
was also considered a scenic byway. He asked how it was
affected by HB 301.
5:26:13 PM
MR. BREESE answered the national scenic byway started once one
left port and there was no way for someone to build in the
water. He added that Haines Highway was also on the national
scenic byway list but was within the unified borough of Haines
and therefore construction would not be allowed.
5:26:42 PM
REPRESENTATIVE KNOPP asked why the proposed legislation exempted
unified boroughs.
MR. BREESE answered it was because unified boroughs generally
had a single seat of government and it did not make sense to
include them, because the city boundaries were typically the
same as the unified borough.
5:27:27 PM
CHAIR KITO said he would open public testimony on HB 265 but not
hear testimony as the meeting had to adjourn. He said he would
leave public testimony open.
CHAIR KITO held over HB 265.
5:28:43 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
5:28 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB299 Sponsor Statement 1.29.18.pdf |
HL&C 1/31/2018 3:15:00 PM |
HB 299 |
| HB299 ver A 1.31.18.PDF |
HL&C 1/31/2018 3:15:00 PM |
HB 299 |
| HB299 Supporting Document Audit 11.17.17.pdf |
HL&C 1/31/2018 3:15:00 PM |
HB 299 |
| HB299 Fiscal Note DCCED AMCO 1.27.18.pdf |
HL&C 1/31/2018 3:15:00 PM |
HB 299 |
| HB301 Sponsor Statement 1.24.18.pdf |
HL&C 1/31/2018 3:15:00 PM |
HB 301 |
| HB301 Supporting Documents ABC Memo Tourism BDL 9.13.17.pdf |
HL&C 1/31/2018 3:15:00 PM |
HB 301 |
| HB301 Ver D 1.31.18.PDF |
HL&C 1/31/2018 3:15:00 PM |
HB 301 |
| HB265 Fiscal Note DCCED AMCO 1.25.18.pdf |
HL&C 1/31/2018 3:15:00 PM |
HB 265 |
| HB265 Version D 1.31.18.PDF |
HL&C 1/31/2018 3:15:00 PM |
HB 265 |
| HB301 Fiscal Note DCCED AMCO 1.26.18.pdf |
HL&C 1/31/2018 3:15:00 PM |
HB 301 |
| HB265 Explanation of Changes.pdf |
HL&C 1/31/2018 3:15:00 PM |
HB 265 |
| HB265 Sponsor Statement.pdf |
HL&C 1/31/2018 3:15:00 PM |
HB 265 |
| HB301 Support Letters 1.31.18.pdf |
HL&C 1/31/2018 3:15:00 PM |
HB 301 |