Legislature(1995 - 1996)
03/09/1996 10:03 AM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 372 - RESTAURANT LIQUOR LICENSES The next order of business to come before the House State Affairs Committee was HB 372. CHAIR JAMES called on the sponsor, Representative Norman Rokeberg. Number 0350 REPRESENTATIVE NORMAN ROKEBERG thanked the Chair for hearing the bill today. He said it was a simple bill because it repealed a current law. He stated, for the record, he did not have a vested interest in the bill. He said he had a personal friend that was interested in the bill, Michael Gordon, owner of Chilkoot Charlie's in Anchorage. He reiterated he did not have an economic interest in the beverage industry right now, only friendships. He did have experience, however, in the industry. REPRESENTATIVE ROKEBERG explained the Spenard Community Council brought this issue to his attention. The Council passed a resolution asking that taverns be repealed. He cited the reasons were due to a disproportionate large number of drinking establishments in the Anchorage Spenard area, and to the impact of alcohol on society. He further said he wanted the opportunity to right a wrong. Senate Bill 87, passed last year, established taverns. He explained the bill was sold to the members of the House of Representatives under the "Cyrano's" law. Cyrano's Bookstore Cafe and Office Center was allowed under exception to sell liquor. The statute allowed for 10 percent of restaurant or eating places to apply for an exemption from the 50 percent food provision to create a tavern. The current statute also did not allow for entertainment after 9:00 p.m. He said HB 372 had an economic impact as well. The beverage dispensing license was valued and purchased on the secondary market for up to $450,000 in the Anchorage area in the peak of the 1980's. Now, there was no value in a restaurant license because of the decline in the economy. House Bill 372, therefore, allowed for competition that was not there before creating an economic impact. He further said the sobriety movement in the state was another reason to repeal the current statute. Moreover, the Anchorage Municipal Assembly originally supported HB 372 until a member asked for a voter reconsideration upon which it failed. The member who asked for a voter reconsideration had failed to disclose to the Anchorage Municipal Assembly he had applied for a restaurant license and failed to disclose his 2.5 percentage ownership in a restaurant. He suggested it needed to be further reviewed. He asked the committee members to take a favorable look at the bill. The next committee of referral was the House Labor and Commerce Committee. He said it was a good bill and he asked again for the support of the committee members. Number 0826 REPRESENTATIVE ROBINSON wondered if Cyrano's could continue to operate under HB 372. Number 0839 REPRESENTATIVE ROKEBERG replied it would not be able to sell beer or wine without meeting the restaurant 50 percent requirement. He said the bill would not close the establishment, however. Number 0859 REPRESENTATIVE GREEN replied it could sell more sandwiches, for example, to meet the 50 percent requirement. REPRESENTATIVE ROBINSON replied that was a good point. REPRESENTATIVE ROKEBERG wondered if Cyrano's had even applied for an exemption. He reiterated the bill would not put anybody out of business. REPRESENTATIVE ROBINSON wondered if the exempted establishments would be able to continue to operate until they were shut down. REPRESENTATIVE ROKEBERG replied Cyrano's had applied, but had not received it yet. CHAIR JAMES called on the first witness via teleconference in Anchorage, Tom McGrath. Number 0911 TOM MCGRATH said he supported HB 372. He explained Cyrano's was not exempt under the law now. The menu had been expanded to cover the 50 percent requirement. He said many of the Senators and Representatives did not know about the exemption provision in SB 87. The exemption created the possibility of 15 taverns in Anchorage. He cited there were 117 liquor licenses in Anchorage, while the state law only allowed 77. This was due to a grandfather provision. House Bill 372, therefore, would correct a wrong and improve the quality of life in Alaska. CHAIR JAMES called on the next witness via teleconference in Anchorage, Pat Fullerton. Number 1073 PAT FULLERTON, Chairman, Spenard Community Council, said the abuse of alcohol had been a problem in the Spenard area for many years. He said he was a recovering alcoholic and was about to celebrate his 7th year of sobriety. Moreover, the current law allowed the establishment of what he called a "cheap" bar. He wanted to see it repealed so that it did not add further to the proliferation of the liquor license. CHAIR JAMES called on the next witness via teleconference in Anchorage, Doug Griffin. Number 1201 DOUG GRIFFIN, Director, Alcoholic Beverage Control Board, said the previous testimony was an accurate description of what the current bill allowed by Representative Rokeberg and the Spenard Community Council. He did not support HB 372, however. He assumed the legislature knew what it was doing when passing the original bill by including the exemption provision. Moreover, he reminded the committee members, the local governing bodies would have to approve these licenses so safeguards did exist. The original bill did not create a separate type of license due to over licensing based on population quotas, for example. Number 1357 CHAIR JAMES asked Mr. Griffin if there had been any exempt licenses distributed? Number 1370 MR. GRIFFIN replied, "yes." He cited Legal Pizza and Railway Brewing Company in Anchorage, and the Chandalar Inn in the Matanuska-Susitna Borough. There were several in the process as well. Number 1485 CHAIR JAMES thanked Mr. Griffin for his testimony. She was concerned about the establishments caught between the two laws. She was concerned about the economic impact as a result of the establishments changing their business. She suggested a grandfather provision. Number 1569 REPRESENTATIVE ROBINSON said she was also concerned about the establishments caught between the two bills and supported a grandfather provision. She was not opposed to moving the bill forward, however. Number 1620 REPRESENTATIVE PORTER explained many establishments tried to circumvent the intent of the law allowing beer and wine with dinner by offering potato chips as food, for example. He said he was not aware of the exception provision last year when he voted in favor of the legislation. Number 1696 CHAIR JAMES commented she had fond memories of taverns in Washington and Oregon where she grew up. She was not negative towards taverns. Number 1760 REPRESENTATIVE PORTER said the state of Washington distinguished between taverns and cocktail lounges. The cocktail lounges fell under the restaurant requirements similar to Alaska's. CHAIR JAMES announced to Frank Smith in Barrow that HB 348 had already been moved from the House State Affairs Committee. She asked for his testimony in writing for the record. Number 1885 FRANK SMITH thanked the Chair. He said he would submit his testimony in writing for the record. Number 1910 REPRESENTATIVE GREEN commented he did not have fond memories of taverns because they attracted individuals that liked to drink too much where he grew up in Wisconsin. He would support anything to reduce that. Number 1979 CHAIR JAMES reiterated her biggest concern were for the establishments that might fall through the cracks. Number 2059 REPRESENTATIVE ROKEBERG explained he was working on a potential amendment to address her concern. He did not want to disrupt the commerce of the state. He pledged the issue would be reviewed in the next committee of referral - the House Labor and Commerce Committee. Number 2109 REPRESENTATIVE IVAN stated he was also concerned about the establishments that would be affected by this bill. Number 2137 REPRESENTATIVE ROKEBERG explained he was a good friend of the father of Richard Sassary, who wrote a letter against HB 372. CHAIR JAMES wondered if friendship was taking Representative Rokeberg a long way with this issue. REPRESENTATIVE ROKEBERG replied, "no." He just knew a lot of people in Anchorage. REPRESENTATIVE ROBINSON stated, for the record, she grew up in Texas. Number 2198 REPRESENTATIVE PORTER moved that HB 372 move from the committee with individual recommendations and attached fiscal notes. Hearing no objection, it was so moved from the House State Affairs Committee.