Legislature(2009 - 2010)SENATE FINANCE 532

03/26/2010 01:30 PM FINANCE

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* first hearing in first committee of referral
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= bill was previously heard/scheduled
Moved Out of Committee 9 a.m. FIN Mtg.
Moved Out of Committee 9 a.m. FIN Mtg.
+ Bills Previously Heard/Scheduled TELECONFERENCED
Heard & Held
Heard & Held
Heard & Held
SENATE BILL NO. 234                                                                                                           
     "An  Act   extending  the   termination  date   of  the                                                                    
     Alcoholic Beverage Control Board;  and providing for an                                                                    
     effective date."                                                                                                           
2:33:07 PM                                                                                                                    
SENATOR KEVIN MEYER explained the legislation.                                                                                  
     AS   04.06.010  established   the  Alcoholic   Beverage                                                                  
     Control  Board   (ABC  Board)  and  provided   for  the                                                                    
     appointment of  members by the governor.  The ABC Board                                                                    
     consists of five members appointed  by the governor and                                                                    
     confirmed  by   a  majority  of  the   members  of  the                                                                    
     legislature in joint session. Two  members of the board                                                                    
     shall  be persons  actively  engaged  in the  alcoholic                                                                    
     beverage industry; at least three  members of the board                                                                    
     shall represent the general public.                                                                                        
     SB 234, if enacted, would extend the ABC Board for one                                                                     
     year to June 30, 2011.                                                                                                     
    In the opinion of Legislative Audit, the Alcoholic                                                                          
     Beverage Control Board (ABC Board) should continue to                                                                      
     regulate the manufacture, sale, barter, and possession                                                                     
     of alcoholic beverages in Alaska in order to protect                                                                       
    the public's health, safety, and welfare. The Board                                                                         
     has demonstrated a need for its continued existence by                                                                     
     providing protection to the general public through the                                                                     
     issuance, renewal, revocation, and suspension of                                                                           
    liquor licenses. Protection has also been provided                                                                          
    through active investigation of suspected licensing                                                                         
    violations and enforcement of the state's alcoholic                                                                         
     beverage control laws and regulations.                                                                                     
     During the review process of the sunset audit, there                                                                       
     were questions raised about the decision of the                                                                            
     Legislature to move the ABC Board from the Department                                                                      
     of Revenue to the Department of Public Safety.  These                                                                      
     questions should be asked and the issue investigated                                                                       
     in depth.  This one year extension will give the                                                                           
    Legislature time over the interim of 2010 to review                                                                         
     the decision and move forward with extending the Board                                                                     
     to 2014 as recommended by the Division of Legislative                                                                      
Senator Olson  asked to  know more  about the  difference in                                                                    
the  board's department.  Senator Meyer  responded that  the                                                                    
board has  demonstrated a need  for its  continued existence                                                                    
by  providing   protection  to   the  general   public.  The                                                                    
responsibilities   of  the   board  include   the  issuance,                                                                    
renewal,   suspension   of   liquor  license,   and   active                                                                    
investigation   of   suspected    license   violations   and                                                                    
enforcement of  the estate's  alcohol beverage  control laws                                                                    
and  regulations. The  review process  of  the sunset  audit                                                                    
raised questions  about the decision  of the  legislature to                                                                    
move the  Alcohol Beverage Compliance  (ABC) board  from the                                                                    
Department  of Revenue  (DOR) to  the  Department of  Public                                                                    
Safety (DPS).  He requested  additional time  to investigate                                                                    
the questions  regarding the  best home  for the  ABC board.                                                                    
The original audit recommended board  extension to 2014, but                                                                    
he requested an extension of one year.                                                                                          
Senator Olson  asked why Senator  Meyer chose not  to extend                                                                    
the  board  for  a  longer time  period  as  recommended  by                                                                    
Legislative Budget and Audit  (LB&A). Senator Meyer informed                                                                    
that the  board may  shift departments. The  extension would                                                                    
not  allow  the opportunity  to  move  the board  among  the                                                                    
Co-Chair  Stedman   mentioned  one  fiscal  note   from  the                                                                    
Department of Public Safety.                                                                                                    
2:37:53 PM                                                                                                                    
SHIRLEY GIFFORD, DIRECTOR,  ALCOHOL BEVERAGE COMPLIANCE (via                                                                    
teleconference),    expressed   awareness    of   licensee's                                                                    
dissatisfaction  with  the ABC  board.  She  opined that  an                                                                    
extension of  the ABC board offers  stability. She explained                                                                    
that  she  made  recommended changes.  She  exemplified  the                                                                    
issues. She applauded the efforts  of the agents and servers                                                                    
who  make the  correct decisions.  She anticipated  that the                                                                    
changes would  be well  received. She  wished to  provide an                                                                    
agency that is supportive  of licensees. She understood that                                                                    
licensing and enforcement comprised  the two aspects of ABC.                                                                    
Without enforcement,  laws will  be broken. When  people are                                                                    
held accountable and responsible then they act accordingly.                                                                     
Co-Chair Stedman  noted the  four recommendations  listed in                                                                    
the  audit  report. Ms.  Gifford  explained  that one  major                                                                    
recommendation  was  an  enforcement plan.  The  other  item                                                                    
concerned  a  procedural manual.  She  stated  that she  had                                                                    
organized a  ten year strategic  plan. All three  items have                                                                    
been approved  by the  board of  directors. She  stated that                                                                    
she was  grateful to have  the audit occur at  the beginning                                                                    
of her appointment.  She explained that the  audit allowed a                                                                    
road map to efficiency for the operation of the agency.                                                                         
2:43:41 PM                                                                                                                    
Co-Chair Stedman expressed  concern about "sting operations"                                                                    
with underage  persons sent into  a liquor  establishment to                                                                    
purchase alcohol.  His concern included the  risk associated                                                                    
with the  licensed premises operator  and the effect  on his                                                                    
insurance premiums  along with potential felony  charges for                                                                    
the bartender.                                                                                                                  
Ms. Gifford responded that she  was also concerned about the                                                                    
issue.  She stated  that Representative  Ramras  had a  bill                                                                    
that  addressed  minors  using illegal  identification.  She                                                                    
stated  that  law  enforcement must  retain  the  focus  and                                                                    
priority. She mentioned that she  is a member of a committee                                                                    
addressing statistical  crime reporting. She was  pleased to                                                                    
be  included because  departments  across  the state  should                                                                    
report Title 4 violations.                                                                                                      
2:47:19 PM                                                                                                                    
Co-Chair  Stedman clarified  several  concerns about  minors                                                                    
testing the  liquor establishment by attempting  to purchase                                                                    
liquor as  part of a  "sting operation." He  understood that                                                                    
it  was  illegal to  have  an  underage  minor in  a  liquor                                                                    
establishment although the ramifications  exist only for the                                                                    
business proprietor  and the bartender  if they sell  to the                                                                    
Ms. Gifford responded  that Title 4 for  AS 41.60.490 covers                                                                    
access of persons under the  age of 21 to licensed premises.                                                                    
She continued  that Section  F of the  statute reads  that a                                                                    
person under  21 years of  age does not violate  the section                                                                    
if the person  enters or remains on  premises licensed under                                                                    
this title  at the request  of a police officer.  She stated                                                                    
that  the ABC  board is  afforded  the ability  to do  these                                                                    
compliance  checks.  She  explained   that  an  increase  in                                                                    
compliance checks led to a  decrease in violations. Co-Chair                                                                    
Stedman responded that the shifting  of the ABC board to the                                                                    
Department of Public Safety has  led to increased discomfort                                                                    
among proprietors.                                                                                                              
Ms.  Gifford stated  that the  compliance check  program was                                                                    
not initiated  because the  ABC board  was placed  under the                                                                    
Department of  Public Safety.  The compliance  check program                                                                    
occurs across  the nation  in an  effort to  combat underage                                                                    
2:51:55 PM                                                                                                                    
Co-Chair Hoffman  pointed out number  4 and number 3  of the                                                                    
audit recommendation.  He referred  to the policy  stated in                                                                    
number  4 addressing  a  board vote  during  a tie  breaking                                                                    
situation. Ms. Gifford responded  that Alaska statute covers                                                                    
this issue.  Ms. Gifford believed  that this  statute should                                                                    
be  changed. She  noted that  she agrees  with the  auditors                                                                    
because she is in a  position where she has more information                                                                    
than the board.                                                                                                                 
Co-Chair Hoffman mentioned number  three and the compliance.                                                                    
He asked  if the board  records were complete  and accurate.                                                                    
Ms.  Gifford replied  that the  record keeping  has improved                                                                    
2:55:24 PM                                                                                                                    
Senator  Olson asked  how  a  tie might  occur  with a  five                                                                    
member board.   Ms. Gifford answered that a  tie might occur                                                                    
if a  member of  the board  was absent,  as a  quorum exists                                                                    
with four people.                                                                                                               
Senator  Thomas asked  how  long Ms.  Gifford  had been  the                                                                    
director.  Ms.  Gifford  answered  that  she  has  been  the                                                                    
director since January 5, 2009.                                                                                                 
Senator Thomas  asked about  other issues  in the  audit. He                                                                    
asked  if the  four agents  employed by  the ABC  board were                                                                    
sufficient.   Ms.  Gifford   answered  that   she  requested                                                                    
additional   investigators  because   of  duties   including                                                                    
inspections  of  licensed  premises and  investigations  for                                                                    
violations of  the law.  She explained  that she  depends on                                                                    
the state troopers for help.                                                                                                    
2:58:01 PM                                                                                                                    
Senator  Thomas commented  on the  audit and  the compliance                                                                    
check program.  Ms. Gifford  responded that  the enforcement                                                                    
of the  strategic plan adds  a mechanism limiting  visits to                                                                    
Senator  Thomas asked  about mailings  to the  licensees. He                                                                    
asked  about the  mailings and  the cost  to the  state. Ms.                                                                    
Gifford  was not  aware  of state  mailings,  but agreed  to                                                                    
respond to Senator Thomas at a later date.                                                                                      
3:00:37 PM                                                                                                                    
Co-Chair  Stedman wondered  how much  time is  given to  the                                                                    
entity to achieve compliance prior to elimination.                                                                              
PAT   DAVIDSON,  LEGISLATIVE   AUDITOR,  LEGISLATIVE   AUDIT                                                                    
DIVISION,  LEGISLATIVE  AFFAIRS   AGENCY  offered  that  the                                                                    
improvements observed in the prior  audit occurred under the                                                                    
current executive director. She  stated that the major issue                                                                    
for  LB&A   was  establishing  quantifiable   and  objective                                                                    
enforcement  goals. Enforcement  is a  large segment  of the                                                                    
ABC  board. Compliance  checks should  not be  based on  the                                                                    
location of  the inspectors.  Issues about  record retention                                                                    
and  data  input  are  smaller issues  and  do  not  require                                                                    
reorganization of the board.                                                                                                    
Co-Chair Stedman asked about the  potential extension of the                                                                    
board. He  asked if  one year  was ample  time to  come into                                                                    
compliance with the audits.                                                                                                     
Ms. Davidson stated that an extension of one year means                                                                         
that LB&A will revisit the board and provide the committee                                                                      
with a status of the current audit recommendations.                                                                             
3:03:04 PM                                                                                                                    
SB 234 was HEARD and HELD in Committee for further                                                                              

Document Name Date/Time Subjects
SB92 Press[1].pdf SFIN 3/26/2010 1:30:00 PM
SB 92
SB92 Sponsor Statement[1].pdf SFIN 3/26/2010 1:30:00 PM
SB 92
SB 92 Sectional[1].pdf SFIN 3/26/2010 1:30:00 PM
SB 92
SB 264 2010 HB 159 2003 backup.pdf SFIN 3/26/2010 1:30:00 PM
HB 159
SB 264
SB 264 2010 Payments for Examinations.pdf SFIN 3/26/2010 1:30:00 PM
SB 264
SB 264 2010 Sectional.pdf SFIN 3/26/2010 1:30:00 PM
SB 264
SB 264 2010 Sponsor Statement.pdf SFIN 3/26/2010 1:30:00 PM
SB 264
SB92 Letters of Support.pdf SFIN 3/26/2010 1:30:00 PM
SJUD 2/19/2010 1:30:00 PM
SB 92
SB 264 CFAB Mar 2003 Ltr HB 159.pdf SFIN 3/26/2010 1:30:00 PM
HB 159
SB 264
SB 264 Support Letter Huppert 2010.pdf SFIN 3/26/2010 1:30:00 PM
SB 264
SB 92 RNC letter of support.pdf SFIN 3/26/2010 1:30:00 PM
SB 92
SB92 Letters of Support[1].pdf SFIN 3/26/2010 1:30:00 PM
SB 92
SB 92 National Popular Vote 2010.pdf SFIN 3/26/2010 1:30:00 PM
SB 92