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.