HOUSE BILL NO. 132 An Act relating to the possession or distribution of alcohol in a local option area; requiring liquor license applicants to submit fingerprints for the purpose of conducting a criminal history background check, and relating to the use of criminal justice information by the Alcoholic Beverage Control Board; providing for a review of alcohol server education courses by the Alcoholic Beverage Control Board every two years; and providing for an effective date. HEATHER NOBREGA, STAFF, REPRESENTATIVE NORMAN ROKEBERG, noted that the House Judiciary Committee has been requested to introduce HB 132 to address some problems in the area of bootlegging alcohol, and the issuance of liquor licenses to persons with criminal records outside the State of Alaska. Bootlegging is a prevalent problem in "dry" areas, and is a large contributor to crime in those areas. By requiring applicants for liquor licenses to give their fingerprints, the State could thoroughly investigate the criminal backgrounds so that only responsible individuals might obtain a liquor license. She urged the Committee's support of the legislation. Vice-Chair Bunde asked if the sponsor had a position on the proposed amendment. Ms. Nobrega noted that Representative Rokeberg supported the amendment, however, voiced concern with the potential fiscal impact. He recommended that the House Finance Committee work out the funding concerns. Representative Croft asked where in the bill "six" would be replaced with "12". Ms. Nobrego replied that change would be made in Section 2 and 6. Vice-Chair Bunde questioned if the legislation would make bootlegging more lucrative. Ms. Nobrega replied that was not the intent of the legislation. The intent is to make it more difficult to get the alcohol. DEAN GUANELI, CHIEF ASSISTANT ATTORNEY GENERAL, CRIMINAL DIVISION, DEPARTMENT OF LAW, spoke in support of the legislation. He emphasized the problem that alcohol causes in Alaska. There are provisions in current law that establishes presumptions on the amounts of alcohol. He added that the Criminal Justice Assessment Commission has worked to look at a variety of aspects regarding crime in Alaska and that alcohol is one of the primary concerns. There is a problem with current law as it applies to the attempt to send liquor into dry areas. The problem arises when people attempt to mail or ship alcohol. When they do that and are successful and over a certain amount, it then becomes a Class C felony. If they do not succeed, it is treated as an attempt, which in Alaskan law is handled as a lesser crime. The level of culpability is the same. TAPE HFC 01 - 88, Side B  Mr. Guaneli added that multiple shipments from multiple stores have been used to circumvent the law. The only effective way to deal with that, is to create a "delivery site", an area that all alcohol shipped into a dry area has to be delivered to a central location. Barrow bans the sale of alcohol but allows its importation and operates one of the delivery sites. Mr. Guaneli acknowledged that the price is driven up by that practice, and emphasized that less is getting into the community. The amendment would allow the State to step-in and assume that function. Representative Croft inquired the fiscal impact resulting from the amendment. Mr. Guaneli responded that the Department of Public Safety received a substantial appropriation from the federal government to combat bootlegging alcohol. As a result of that appropriation, the Administration discussed effective ways to deal with the concern. There is sufficient money within that appropriation so that the program could be operated at least for the first fiscal year without any money coming from the general fund. Vice-Chair Bunde asked the administrative costs to the program in Barrow. Mr. Guaneli replied that the program is operated under a contract and did not know the exact dollar amount. The administrative fees cover the costs. Representative Hudson questioned if the concern was principally a rural issue. Mr. Guaneli affirmed it was and noted that it actually applies only to the areas that have banned sales but still allow importation, a couple primary places, Bethel and Kotzebue. They are the hubs for the smaller villages. Representative Hudson questioned the intent. Mr. Guaneli noted that the aim is not to reduce the social use of alcohol. The intent is to address those people that are selling alcohol for a profit through multiple package stores. Profits are enormous and seriously drive that industry. Co-Chair Mulder asked if it were the goal to limit the illegal distribution, and how would the success of the program be evaluated. Mr. Guaneli responded that success would not be measured by the reduction in alcohol. The success would be measured in the reduction in the need for social services and a reduction in crime. He affirmed that there is not a baseline for the reduction of alcohol. He added that the price of alcohol would be a measure. Mr. Guaneli emphasized the difficulty creating a perfect system. The intent is to limit persons to the amount that they can statutorily receive in any month. There will always be situations in which people try to circumvent the law. Co-Chair Mulder referenced the amendment and asked why the Committee should consider adopting it as Bethel already has it in place. Mr. Guaneli advised that it is already allowed, but is not being done in certain locations throughout the State. Given the amount of money that the State spends in that area, there is a strong need to limit the flow. It will not hurt to grant authority to the State. He reiterated that this funding was available from another source this year. Co-Chair Mulder asked if it would be better to put a sunset on the legislation. Mr. Guaneli replied that a study would be a legitimate expenditure. Co-Chair Mulder commented that measuring the success of such a program would be nebulous. He reiterated applying a sunset to justify that the program has been successful. Mr. Guaneli agreed that following a period of time, if the State does not show some success, then perhaps the effort should be abandoned. Representative Harris commented that there was an election in Barrow that turned down the funding for the project. He agreed that a sunset should be applied. Vice-Chair Bunde endorsed the sunset. He noted that he was preparing an amendment to the amendment proposing a 50% local match. He hoped it would encourage a local buy-in. DOUGLAS GRIFFIN, (TESTIFIED VIA TELECONFERENCE), DIRECTOR, ALCOHOLIC CONTROL BOARD (ABC), ANCHORAGE, stated that language is needed by the Legislature to provide for a statewide check. Mr. Griffin identified Section 3 of the bill, which speaks to the criminal background check. There needs to be specific information that allows the ABC Board to access the Federal Bureau of Investigation (FBI) data bank to provide a nationwide background data check. Currently, ABC can only access criminal convictions within the State of Alaska. He stressed that the addition of that language would provide for a cost savings to the State. Mr. Griffin pointed out that everything is run through the Department of Public Safety. The State would benefit from a more complete background check. Representative Croft MOVED to ADOPT Amendment #1 with the conceptual addition of a 3-year sunset and a provision that if any general fund was required, a 50% local match would be required. [Copy on File]. Representative Harris OBJECTED for the purpose of discussion. Representative Harris asked if the federal money could be encumbered during the process. Mr. Guaneli believed that the $1.4 million federal dollars was available. A portion of that money has been earmarked for a certain number of troopers and prosecutors. He added that there is another source of federal money re-occurring every year for drug and alcohol concerns. Mr. Guaneli was confident that federal funding would be available for at least the first year. Until contracts and regulations are available, it will be difficult to know what the amount is. He added that the fees need to be assessed. Representative Harris asked if the Administration was confident that within the next three years, no general funds would need to be used to maintain the program. Mr. Guaneli reiterated that he could not guarantee that no federal funds would be required for the entire length of the program. Representative Harris asked if the sunset should be one year. Mr. Guaneli replied that a one-year sunset would be too short, as it will take time to write the contracts and regulations. Three years would be an appropriate length of time. Representative Harris WITHDREW his OBJECTION. Co-Chair Williams advised that the drafter recommended that a Letter of Intent should accommodate the bill. Representative Hudson recommended making a separate adoption of the Letter of Intent. Representative Croft redefined Amendment #1, adding to it the three year sunset date. There being NO OBJECTION, Amendment #1 was adopted. Representative Hudson MOVED to ADOPT the Letter of Intent stating that: "It is the intent of the Legislature that any general fund money that goes into the operation of this program must have a 50% local match". Co-Chair Williams OBJECTED for a question. Vice-Chair Bunde pointed out that Michael Ford, Legal Drafter, had submitted the intent language. Co-Chair Williams WITHDREW his OBJECTIN. Representative Hudson MOVED to report CS HB 132 (FIN) out of Committee with individual recommendations, the Letter of Intent and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CS HB 132 (FIN) was reported out of Committee with a "do pass" recommendation and with fiscal notes by Department of Revenue dated 3/26/01, Department of Law dated 3/26/01, Department of Corrections dated 3/26/01, Department of Administration dated 3/26/01 and the Alaska Court System dated 4/03/01.