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." 3:17:20 PM Co-Chair Seaton MOVED to ADOPT proposed committee substitute for HB 301, Work Draft 30-LS1217\E (Bruce, 2/16/18). Representative Wilson OBJECTED for discussion. LAURA STIDOLPH, STAFF, REPRESENTATIVE ADAM WOOL, indicated that the changes were recommended by DCCED. She reviewed the changes in the committee substitute (CS): Section 3 Page 3, Line 27, remove "established village" Removes the phrase established village from the room rental requirement calculations. This is consistent with how the statute has been applied in the past, and removing it maintains the status quo rather than requiring the recalculation of populations and room requirements, further disrupting the industry and current licensees. Page 4, Line 16, remove "on the licensed premises," after "holder of the license" This was removed to ensure that the entire establishment wasn't considered the licensed premises, otherwise it is possible that a cottage or hotel room Representative Wilson did not understand why the language " established village" was removed. Ms. Stidolph deferred to Ms. McConnell. 3:20:12 PM Ms. McConnell clarified that an established village was defined in statute as "to include an unincorporated community and organized borough that has 25 or more permanent residents and is either on or off the road system depending on its distance to a unified municipality." She explained that her research determined that the concept of an established village was included in the calculation of population for the application of license limits and the number of rooms for a beverage dispensary tourism license but had never been implemented. Including the language had a significant effect on the location and transfer of licenses and would cause momentous disruption. Representative Guttenberg had recently heard that if there was a 10-room hotel a person would be eligible for a license to serve alcohol. He wondered whether the matter was related to the deleted language. Ms. McConnell explained that the Beverage Dispensary Tourism license cited in AS.04.11.400d was an exemption to the population licenses if certain requirements were met including the number of rooms a hotel, motel, or resort had available predicated on the location of the hotel. The larger the community the more rooms were required. She understood that in 1985, the number of rooms changed to more rooms per larger community to halt the increase in alcohol licenses in large communities like Anchorage. Representative Guttenberg asked what effect eliminating established village had on licensing. Ms. McConnell answered that it did not affect how Title 4 was implemented since 1980. She delineated that it appeared that unincorporated communities like Talkeetna and Nikiski inside a borough would have a population limit applied to them that did not apply prior to the addition of the language. 3:24:29 PM Co-Chair Seaton asked whether the definition of the population area established under (a) of this section [in the bill] was the same as the definition DCCED used for community assistance and whether the list was inclusive. Ms. McConnell suggested he was referring to statute concerning established villages as it related to refunds to municipalities. Co-Chair Seaton clarified that he was referring to page 3 of the bill and referred to the definition Ms. McConnell read for established village and thought it sounded like the definition of "a community" that was used to determine DCCED's Community Assistance Program. He wondered whether the same population parameters applied. Ms. McConnell was not familiar with the Community Assistance Program but offered to provide the information. Representative Wilson WITHDREW her OBJECTION. CSHB 301 (FIN) was adopted as the working draft. 3:27:14 PM Representative Wool explained the bill. He reiterated that under the tourism dispensary license an establishment in any size community could provide a facility with 10 rooms and obtain a liquor license and the number of bars proliferated. As a result, the population determinates were added to statute. He detailed that the limit in Anchorage and Fairbanks was 50 rooms; the number of rooms required depended on the size of the municipality. He qualified that 34 establishments obtained their tourism dispensary license prior to 1985. He communicated that when the room law was rewritten the 34 establishments were not grandfathered in, were in areas such as Fairbanks and other locations in the state. Allowing the establishments to continue to operate was challenged and the ability for the them to renew their licenses was in question. House Bill 301 would grandfather hospitality businesses that have been operating prior to 1985 except for a "couple" business that obtained licenses in 1986 with an inadequate number of rooms that were included in the bill. He reported that many businesses had been operating for over thirty years and he wanted them to remain in business. The legislation primarily grandfathered in the 34 businesses. In addition, current statute mandated that alchohol licensed businesses remain open for 30 8-hour days per year. He noted that some businesses were only open on weekends, and one was being fined for not operating under the 8-hour day requirement. The bill changed the statute to state that the business had to operate for 240 hours per year. Finally, a provision added "outdoor recreation lodge licenses" to the list of establishments that could be voter approved. He noted the its omission from statute was an oversite and the outdoor lodges had been issued licenses. Representative Thompson asked whether the grandfathered licenses were eligible to be sold. Representative Wool answered in the affirmative and added that the establishment must remain in the location and operate in the same manner. 3:33:33 PM Representative Pruitt wanted further clarification. He wondered whether the businesses would operate under the previous provisions in place at the time they were licensed. Representative Wool replied in the affirmative. Ms. Stidolph interjected that section 3, lines 8 through 10 of the bill specifically addressed the issue. She read the following: however, an application may not be denied because a prospective transferee under AS 04.11.400(d)(2) does not have the qualifications required under AS 04.11.400(d)(1); Representative Pruitt asked if a grandfathered establishment could sell to a newly built lodge in another location meeting the requirements of the grandfathered licensed. Representative Wool responded in the negative. Representative Pruitt asked for the definition of an outdoor recreation lodge. Ms. Stidolph read the definition from statute: Sec. 04.11.225. Outdoor recreation lodge license. (a) An outdoor recreation lodge license authorizes the holder to sell alcoholic beverages to a registered overnight guest or off-duty staff of the lodge for consumption on the licensed premises or in conjunction with purchased outdoor recreation activities provided by the licensee. An outdoor recreation lodge license may not be transferred. (b) The biennial fee for an outdoor recreation lodge license is $1,250. (c) In this section, "outdoor recreation lodge" means a licensed business that provides overnight accommodations and meals, is primarily involved in offering opportunities for persons to engage in outdoor recreation activities and has a minimum of two guest rooms. Representative Kawasaki asked about the value of the licenses. Representative Wool clarified that the licenses were not separate from beverage dispensary licenses, and if the business was sold the license would have to remain at the same address. He was uncertain of the sale price. Representative Kawasaki was confused because of the number of different types of licenses. He asked if all were considered beverage dispensary licenses and whether the tourism dispensary license was not limited to caps that were currently assessed per community for other beverage dispensary licenses. Representative Wool replied in the affirmative. He affirmed that there were many kinds of beverage dispensary licenses and agreed it was confusing. ^PUBLIC TESTIMONY 3:39:11 PM DEBBIE CARY, SELF, NINILCHIK (via teleconference), supported the legislation. She owned one of the licenses in question. She was a bar owner and operated her establishment for 28 years; the license was originally issued in 1963. She argued that the 40-room update was not possible on the Kenai Peninsula due to lack of supporting infrastructure such as wells and septic systems. She related that her business served her community by providing a meeting place, hosting weddings and funerals. She had personally provided her services for fund raisers as a way of "giving back" to the community. 3:41:17 PM NANCY TRUMP, LATITUDE 62 LODGE, MATANUSKA SUSITNA BOROUGH (via teleconference), had owned her establishment since May 1986. She was not just a bar but a full-service motel, restaurant, and bar. She characterized her business as a "town meeting place" and hosted weddings, birthday parties, baby showers, and much more. The location was near an elementary school, which enabled the lodge to be listed as a safe place for school evacuation. She operated year around and employed 15 to 20 people. She maintained that it would be difficult to stay in business without the grandfathered license. She thanked members for their support. 3:43:12 PM ALLEN CHOY, AL'S ALASKAN INN, ANCHORAGE (via teleconference), spoke in favor of the legislation and provided a history of his business. He explained that his father moved to Anchorage in 1956 and at the time there was a severe lack of housing. Anchorage had no hotels south of 13th Avenue. He believed the tourism dispensary license was provided as an incentive. His father opened the business in 1964 then called the Candle Inn. He spoke to the 10-room requirement and explained how it was changed based on population after Atlantic Richfield Company discovered oil on the North Slope in 1968. He agreed with the change and did not want a "bar on every corner." He indicated that the intent of the legislature in 1985 was to grandfather in the prior tourism licensees. He believed that the ABC board "misinterpreted" the intent of the law by deciding that the pre-1985 license holders were currently non-compliant. He argued that it was not economically feasible to add the rooms in Anchorage. Currently in Anchorage there were hotels on every corner. He emphasized that the legislature's intent in 1985 was for the pre-1985 licensees to be grandfathered in. 3:50:17 PM PETE HANSON, ALASKA CHARR, ANCHORAGE (via teleconference), favored HB 301. He noted that the bill supported long- standing business. He believed that the intent of the legislature wanted grandfathered protection for the existing business and "the unintended ambiguity" existed in the law. He thanks the legislature for it consideration. 3:51:18 PM Co-Chair Seaton CLOSED Public Testimony. He reviewed the agenda for the following day. He also indicated that amendments for HB 301 were due to Co-Chair Foster's office by Friday, February 22 at 5:00 P.M.