HOUSE BILL NO. 155 "An Act extending the termination date of the Alcoholic Beverage Control Board; and providing for an effective date." ELEANOR WOLFE, STAFF, REPRESENTATIVE KURT OLSON, related that the bill extends the sunset date of the Alcoholic Beverage Control (ABC) Board for six years at the recommendation of the Legislative Budget and Audit Committee (LB&A). 2:47:36 PM DOUGLAS GRIFFIN, DIRECTOR, ALCOHOLIC BEVERAGE CONTROL BOARD, DEPARTMENT OF PUBLIC SAFETY, related the Board's process of complying with LB&A's recommendations. He explained about the process of securing funding for those improvements. He explained the make up and duties of the ABC Board. Vice Chair Stoltze questioned if there is a plan to increase the size of the board to include rural members. Mr. Griffin noted that there was interest brought out by the transition report to look at broader geographical representation to include at least one rural member. There was also some discussion about expanding the size of the board, which would take further action. 2:52:05 PM Representative Hawker spoke to audit items (copy on file.) He felt that items one to three were profound and indicative of weaknesses of paramount importance. He questioned if improvements have been made and recommended a shortened sunset date. PAT DAVIDSON, LEGISLATIVE AUDITOR, LEGISLATIVE AUDIT DIVISION, LEGISLATIVE AFFAIRS AGENCY, noted that they had not updated the audit. She noted that the recommendation was for a maximum of six years, which is less than the statutory authority for eight years. Representative Hawker questioned if Ms. Davidson would recommend a six-year period given the seriousness of the concerns. Ms. Davidson noted that there are two alternatives to following up on concerns, one is to shorten the termination date; the other would be for a request to do a follow-up. The six-year recommendation only speaks to whether the board should continue to exist. Representative Hawker ascertained that priority be given to statutory deadline audits. 2:56:42 PM In response to a question by Representative Crawford, Ms. Davidson noted that the recommendation addresses six items. Sometimes procedures were in place, but not followed; at other times procedures were not in existence, such as in data base access. There is a process for municipal refunds, but it was not followed. Representative Joule noted the recent audit date and asked if it would be difficult to see if items were being addressed. He pointed out that there is a new administration and questioned if there could be a conditional six-year extension with a two-year review. Ms. Davidson noted that a lack of segregation of duties in Fairbanks will take some time to address. She felt that most issues could be addressed within a year. She acknowledged that there is a backlog and those with statutory deadlines have priority. She suggested that an audit request would take two years. 3:02:03 PM Representative Joule questioned if the ABC Board is short staffed. Ms. Davidson clarified that there are responsibilities that can be reallocated between staff. Ms. Wolfe explained that they were aware of the issues and were advised that they would be addressed by the current administration. Mr. Griffin did not know of other legislation to address the audit problems. In response to a question by Representative Kelly, Ms. Davidson explained that the last audit had eight recommendations, most of which have been implemented. The outstanding issue was security over the database. Ms. Davidson observed that the same executive director is in charge, but that the Board has just been moved to the Department of Public Safety. She did not know the makeup of the Board. Representative Kelly continued to express concerns. 3:07:01 PM Ms. Davidson explained that the Department of Public Safety and Board had responded separately to the concerns and both indicated support for the recommendations and indicated that they would be addressed. In response to a question by Vice Chair Stoltze, Ms. Davidson noted that a survey resulted in positive responses regarding law enforcement and community groups' opinion of how well the ABC Board was doing. There was some concern about enforcement activities because there is unequal enforcement across the state. Businesses in Juneau and Fairbanks are inspected within four years, while Kenai only has a 50% chance of inspection. 3:11:14 PM Representative Hawker asked about the priority for legislative audits based on who made the request. Ms. Davidson noted that no priority was given regarding individual legislators versus committees. Representative Kelly commented that even three years would be a long time. He expressed concern with a three-year extension. Co-Chair Meyer noted that some issues would take a couple of years. Ms. Davidson noted that a three-year extension would occur in 2010, which is when they are required to have an audit. She related the time frame needed. Representative Kelly suggested that a three-year extension would send a strong signal. 3:15:10 PM Representative Hawker MOVED to ADOPT Conceptual Amendment 1: Change the date on line 5 from June 30, "2013" to "2010." There being NO OBJECTION, it was so ordered. Representative Gara asked about the removal of the voting ability of the director. Ms. Davidson explained that recommendation was based on a policy standpoint. Co-Chair Meyer mentioned that a new fiscal note would be needed. 3:18:13 PM Vice Chair Stoltze MOVED to REPORT HB 155. There being NO OBJECTION, it was so ordered. CSHB 155 (FIN) was REPORTED out of Committee with a "do pass" recommendation and with a new fiscal note by the Department of Public Safety. 3:19:58 PM