CSHB 155(FIN)-EXTEND ALCOHOLIC BEVERAGE CONTROL BOARD    1:35:28 PM CHAIR ELLIS announced CSHB 155(FIN) to be up for consideration. EMILY WOLF, staff to Representative Kurt Olson, sponsor of HB 155, said because of some difficulties Legislative Audit found, the scheduled extension was changed from 2013 to 2010 by the Finance Committee. 1:36:40 PM PAT DAVIDSON, Legislative Auditor, Division of Legislative Audit, explained said that she recommended that the ABC Board continue to 2013 even thought the standard recommendation for an extension is eight-years. She recommended six-years because of a lack of administrative strategy for accomplishing overall enforcement goals. She explained that the Board is responsible for compliance checks of businesses that serve alcohol. The number of inspections did increase, however their distribution still needs improvement. For example, businesses in Fairbanks and Juneau have a 100 percent chance of being inspected over a four-year period, but Kenai businesses have a 38 percent chance of an inspection over that same time period. The Board also needs to improve notifications of its meetings and activities to provide for better public participation. 1:38:41 PM She said another area where improvement is needed is that the ABC executive director can make a tie-breaking vote and her concern is that basically he is then acting as a public member. However he has never been screened to determine whether he meets the qualifications of a public member. Also, being the executive director, he is privy to more information than the board members are. She said there are alternative ways to get a tie-breaking vote. 1:39:30 PM MS. DAVIDSON said a minor issue of more interest to the Finance Committee than the Labor and Commerce Committee is that the general wholesale license fees are based on sales volume and hadn't changed since 1980. What has happened is that the increase in sales volume has turned what was a progressive tax structure into a regressive tax structure and the legislature might want to adjust that. 1:39:57 PM CHAIR ELLIS asked how she would characterize the ABC Board's reaction to her recommendations. MS. DAVIDSON replied the members were supportive of the recommendations and were looking for ways to change. The Department of Public Safety (DPS) to which the Board is administratively associated was also supportive of the changes and was willing to help it in any way it could. CHAIR ELLIS asked if the administration would have legislation in the future that would address these issues. MS. DAVIDSON replied that she didn't know. 1:40:55 PM DALE FOX, President and CEO, Alaska Cabaret, Hotel, Restaurant and Retailer's Association ( CHARR), said he supported a strong ABC Board and HB 155. He said that beverage licensees around the state are dismayed with ABC's administration and anti-business approach. Many of his members were not aware of this meeting today or they would have been testifying. He said that CHARR has been working both internally and externally to try to correct some of the more significant challenges and he thought a one-year extension would be good so that if improvements aren't seen by then, the legislature could provide remedies. SENATOR BUNDE asked for some specific examples of his organization's concerns. 1:43:33 PM MR. FOX replied everything from the lack of timeliness of response to the garbled response in terms of what the rules are and how they are being reinterpreted. One example is interpretation of TAM card statues and Title 4 regulations. The Board has come up with 3, 4 or 5 different interpretations. He explained that everyone who serves alcohol needs a TAM card and the question then becomes who else needs a TAM card. In previous years it has been the supervisor of people serving alcohol. Then the administration came out and said that included any stockholder. Then it was asked if all CIRRI stockholders have to have TAM cards because CIRRI has a liquor license. He said that CHARR has three different written opinions from the ABC Board on the TAM card issue and the statute tells them a fourth. Another example is enforcement issues. The statute says that you have to have your TAM card on you or that you made a copy. Well, that seems clear to him, but the ABC Board and its enforcers have now said that if you have a copy, that just means you can finish the shift and you still get a ticket. They have gone as far as walking into an establishment to do an inspection and asking to see the TAM card. When the bartender went to her purse to get her TAM card and she was told she had to have it on her person. Also, he said you can't get a license in any sort of reasonable time and enforcement is "punitive from top to bottom." For all these reasons CHARR wanted to see a one-year extension. 1:46:28 PM ANDY LUNDQUIST, Treasurer, Kodiak CHARR, said he is also a 25- year operator of a bar and package store in Kodiak. He said the ABC Board is professionally run and he liked the idea that a number of industry interests are represented on it. He agreed that improvements are still needed and that a one-year sunset would be useful. 1:48:03 PM DOUG GRIFFIN, Director, Alcohol Beverage Control Board (ABC), said the Board appreciated the concerns raised in the audit and that it is trying to respond to them. He said it had implemented all of the recommendations that were made in the prior audit and use this oversight as a tool to seek ways to improve. He reported that the Board is in the process of refining its database to address some other internal control issues that were raised. He concurred that the board director should not be the tie-breaking vote and he has heard the Palin administration was going to introduce legislation about that. 1:50:29 PM He said part of the issue with enforcement of the alcohol beverage laws in Alaska is that it is not done solely by ABC investigators and he has no control over them. In fact, there are only four investigators for the entire state. A trooper is also assigned to do compliance checks, but aside from that meager enforcement staff, they really rely on municipal police departments and the Alaska State Troopers. He said that adequate training to enforcement taken from other agencies needs to happen and that these laws need to be applied in a thoughtful uniform manner. MR. GRIFFIN said he preferred a six-year extension because the Board needs additional time to implement some of the recommendations made by Legislative Audit. If CHARR has issues, those need to be dealt with in separate legislation, not in the sunset vehicle. Some CHARR people don't like the fact that the ABC Board is now in the Department of Public Safety (DPS), but having moved to the DPS has increased its enforcement profile and the audit said that was a good move. 1:54:21 PM CHAIR ELLIS said he thought the administration would come up with legislation to address some of the other issues, but it is a given that the ABC Board will be extended. He narrowed the issue down saying he was comfortable with the three-year extension that was proposed in the version before them. SENATOR BUNDE concurred with the chair. SENATOR STEVENS agreed as well. 1:55:19 PM SENATOR BUNDE moved to pass CSHB 155(FIN) with individual recommendations. There were no objections and it was so ordered.