HB 234-BREWPUBS; ABC BOARD  CHAIR BUNDE announced HB 234 to be up for consideration. MR. KEITH HILLIARD, staff to Representative Lesil McGuire, sponsor of HB 234, said it does basically three things and that there was a blank CS before the committee. SENATOR SEEKINS moved to adopt SCSCSHB234 (L&C), version B, as the working document. There were no objections and it was so ordered. MR. HILLIARD explained that the committee substitute they just adopted establishes that the Alcohol Beverage Control (ABC) Board under the Department of Public Safety for administration. The department felt that the investigative responsibilities of the ABC Board needed to be under their direction rather than the Department of Revenue. Second, it addresses current inconsistencies in Alaska statute found in AS 04.111.135(d) regarding the sales of beer by brewpubs in quantities of not more than five gallons per day, so-called growlers. Under current statutory language, sales of growlers are limited to brewpubs that brew their beer on the premises, but this restriction unfairly disadvantages Alaskan brewpub operators who may brew their product in one location of the state and dispense it at another. So, we're going to remove that arbitrary restriction. Lastly, SCSCSHB 234(L&C) extends the life to the Alcoholic Beverage Control Board to June 30, 2007. MS. PAT DAVIDSON, Legislative Auditor, said their report contained eight recommendations and two of them were for legislative changes; five were operational improvements; one was to the Governor's Office recommending that they move faster in keeping the board filled. There was general concurrence by the ABC staff with the recommended operational improvements. MS. DAVIDSON said she recommended a three-year rather than a four-year extension that would provide for timely follow-up of issues identified during the course of the audit. The two statutory recommendations are first to have the ABC Board determine the need to get investigative responsibilities for gambling and prostitution. While the idea that when the investigators are in the bars, they be looking for other illegal activity is appealing from a synergistic standpoint, anytime there is an investigation, it takes time and energy. Right now, there was more than enough work for the ABC investigators focusing on issues critical to the state for controlling alcohol. Investigating prostitution and gambling expands the scope of the work assigned to the ABC investigators, but there was no additional funding for additional investigators and no more time to do their job. The audit recommended that the legislature refocus any violations on the alcohol laws of the state. The second recommendation was to consider whether or not the ABC Board should be given the authority to do summary suspensions. Those are powers that are allowed on a great many boards, like occupational boards. In recommending that, she recognizes that there needs to be a clear presence of an emergency, because a summary suspension has significant economic impact on the owners and employees of the establishment. Careful consideration would have to be given to what constituted the emergency and be put in regulation. SENATOR STEVENS asked if she had seen the letter from Homer Brewing Company. MS. DAVIDSON answered that she had not. SENATOR STEVENS said his concern was over verbiage regarding brewpubs. CHAIR BUNDE commented that the turf battles would continue on. MR. MATT JONES, Moose's Tooth in Anchorage, said this bill seeks to amend a drafting oversight that was made in the 1999 bill that singled them out as the one brewpub that cannot sell growlers. All other brewpubs are allowed to sell growlers, but because our brewing facility is not co-located with our restaurant facility and the language of the 1999 bill said that growlers had to be sold where the beer is manufactured... All other brewpubs that are covered under a separate section were allowed to sell their growlers where a customer was present on the licensed premises in the retail area. We have been the one brewpub that can't sell their growlers to a person who is present at the restaurant... Representative Rokeberg said this was never the intended consequence when he drafted this legislation back in 1999. 2:21 p.m. SENATOR STEVENS said he was sure Mr. Jones didn't have the letter from Homer Brewing that said this legislation would widen the gap between brewpub licensees and brewery licensees and would hurt present and future breweries. He asked if he had any comments on that issue. MR. JONES responded said he didn't think this legislation would change the position between brewpubs and breweries. "All it would do is put us back in having the same bundle of rights as all other brewpubs currently have..." CHAIR BUNDE asked if there was a maximum gallonage he could use off premise. MR. JONES replied yes, that they have a total production cap and a [indisc.] cap. CHAIR BUNDE asked if that cap wouldn't exist for a brewery. MR. JONES replied there is no cap for a brewery. SENATOR SEEKINS moved to pass SCS CSHB 234(L&C), version B, from committee with attached fiscal note and individual recommendations. SENATORS DAVIS, FRENCH, SEEKINS, STEVENS and BUNDE voted yea and the motion carried.