Legislature(2009 - 2010)BELTZ 105 (TSBldg)

02/15/2010 01:30 PM Senate JUDICIARY

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          SB 194-CIVIL DAMAGES FOR ALCOHOL VIOLATIONS                                                                       
1:32:25 PM                                                                                                                    
CHAIR FRENCH announced the consideration  of SB 194 and asked for                                                               
a motion to adopt the new committee substitute (CS).                                                                            
SENATOR WIELECHOWSKI  moved to adopt  CS for SB 194,  labeled 26-                                                               
LS0895\S,  as the  working document.  There  being no  objection,                                                               
version S was before the committee.                                                                                             
O.C. MADDEN, Director of Operations,  Brown Jug, Inc., introduced                                                               
CHAIR  FRENCH  asked Mr.  Madden  how  his business  applies  the                                                               
statutes  pertaining to  civil penalties  for alcohol  violations                                                               
and the affect they've had.                                                                                                     
MR. MADDEN reported  that the Brown Jug has been  using the civil                                                               
penalty  laws since  1998 to  prevent underage  drinking; they've                                                               
proven  to  be  very  effective.  In  1998  the  Municipality  of                                                               
Anchorage enacted the  laws and in 2001 they were  enacted on the                                                               
state level. He explained that  when an underage person is caught                                                               
trying to purchase alcohol he  sends the minor a letter demanding                                                               
payment. When  he hears  back, he  offers some  alternatives. The                                                               
first option is  to simply pay the $1,000 civil  fine. The second                                                               
option is  to reduce the penalty  to $300 if the  minor agrees to                                                               
complete a  two-day alcohol education class  and presentations by                                                               
Mothers  Against  Drunk  Driving  (MAAD)  and  Standing  Together                                                               
Against Rape (STAR).  Mr. Madden said that he uses  the $300 as a                                                               
bonus payment to the employee  who caught the minor. This process                                                               
rewards  employees and  gets  the minors  and  their families  in                                                               
education and treatment programs, he said.                                                                                      
1:35:26 PM                                                                                                                    
CHAIR  FRENCH asked  if Brown  Jug's vigilant  approach might  be                                                               
driving some underage buying to other stores.                                                                                   
MR. MADDEN replied  he doesn't speak for other  retailers, but it                                                               
does  seem to  be  common  knowledge among  kids  that if  you're                                                               
underage, Brown  Jug is  the last  place you want  to try  to buy                                                               
SILVIA  VILLAMIDES, Director,  Anchorage CHAAR,  stated that  the                                                               
civil penalty  process has been  important to CHAAR  members. She                                                               
said  that when  kids  under  age 18  are  caught  trying to  buy                                                               
alcohol their  parents get involved,  but it's more  difficult to                                                               
engage the kids  over age 18. They ignore the  demand letters and                                                               
they move around leaving no  forwarding address. She claimed that                                                               
the  law  unfairly  punishes  licensees  when  minors  enter  the                                                               
premises. She believes  it should be the minor  who is penalized.                                                               
We do  our best to go  through training and licensing.  "We don't                                                               
want to serve young kids," she emphasized.                                                                                      
1:38:27 PM                                                                                                                    
SENATOR COGHILL asked what reasonable  costs might be assessed in                                                               
addition to the civil penalty.                                                                                                  
MS. VILLAMIDES deferred to Mr. Madden.                                                                                          
MR.  MADDEN  said he  doesn't  know  if  all attorney  costs  are                                                               
reimbursed, but  he does  know that it's  very time  consuming to                                                               
deal  with the  minors,  their families,  and  the agencies  that                                                               
coordinate treatment. Since  1998 Brown Jug has  dealt with about                                                               
2,100 kids.  Most of the time  that's spent on these  cases is up                                                               
front,  before  there's  a  suit  or a  judgment  so  there's  no                                                               
reimbursement for  those costs.  That's part  of the  reason that                                                               
increasing the penalty to $1,500 is a good idea.                                                                                
SENATOR COGHILL  thanked him for  clarifying that  increasing the                                                               
civil penalty  to $1,500  helps cover  the cost  of getting  to a                                                               
ED O'NEILL,  President, Anchorage Responsible  Beverage Retailers                                                               
Association  (ARBRA),  said  he's  also with  Brown  Jug  and  he                                                               
reiterates  Mr. Madden's  testimony.  He asked  the committee  to                                                               
keep  in mind  that  kids today  have  a lot  of  money in  their                                                               
pockets  so  it's easy  for  them  to  skirt the  $1,000  penalty                                                               
without  telling  their  parents.   ARBRA  is  trying  to  inform                                                               
licensees  statewide so  that  they can  take  advantage of  this                                                               
provision, he said.                                                                                                             
1:42:52 PM                                                                                                                    
SENATOR COGHILL  asked how many  cases go  to court and  how many                                                               
are settled out of court.                                                                                                       
MR. O'NEILL replied  Anchorage CHAAR has negotiated  42 cases and                                                               
has 15  court cases pending.  He noted  that Mr. Madden  has been                                                               
the  most  successful;  he  could teach  other  retailers  to  be                                                               
similarly effective.                                                                                                            
CHAIR FRENCH asked  how many enforcement actions  are settled and                                                               
how many go through a court proceeding to finality.                                                                             
MR.  MADDEN   said  Brown  Jug   has  been  very   successful  at                                                               
negotiating with  minors and their parents.  Reducing the penalty                                                               
to  $300 if  the minor  agrees to  the educational  component has                                                               
proven effective  and it  doesn't bog down  the courts.  He noted                                                               
that  he has  given classes  on how  to do  this to  licensees in                                                               
Fairbanks, Nome, and Juneau. He  would be happy to continue doing                                                               
that in the future.                                                                                                             
SENATOR COGHILL  said since  most of  these cases  are negotiated                                                               
rather than  going to court,  his concern is that  increasing the                                                               
limit could impose  a barrier for people to  defend themselves in                                                               
court should they feel that need.                                                                                               
MR.  MADDEN clarified  that the  only minors  they deal  with are                                                               
those  that  have been  caught  and  identified on  the  licensed                                                               
premises.  Under the  law this  is both  a criminal  and a  civil                                                               
violation. The process  after they identify the minor  is to send                                                               
a letter demanding  payment under Alaska civil law.  That step is                                                               
necessary in  order to move ahead  with a civil action  in court.                                                               
They have  discussions with  the minor  and make  a determination                                                               
about whether or not to drop the  case or to move forward. When a                                                               
case ends up in a small  claims action, the first thing the court                                                               
does is to  assign a mediator to come up  with a solution. That's                                                               
why Brown Jug  starts working on options once  the minor responds                                                               
to the demand letter.                                                                                                           
1:47:30 PM                                                                                                                    
SENATOR COGHILL  asked if they  call the troopers or  police when                                                               
they identify someone who is using a fraudulent ID.                                                                             
MR.  MADDEN said  yes;  it's very  well  established. Some  cases                                                               
don't  warrant  moving  forward,  but  sometimes  they've  caught                                                               
minors  more  than once.  "That's  where  having a  $1,500  civil                                                               
penalty would be an effective tool," he said.                                                                                   
SENATOR  WIELECHOWSKI asked  what  he thinks  about  the idea  to                                                               
expand this  provision to  include a penalty  for people  who are                                                               
prohibited from purchasing alcohol.                                                                                             
MR. MADDEN  replied that's  already on the  books. He  added that                                                               
Representative Crawford has a bill  to increase the civil penalty                                                               
from $1,000 to $2,000 for persons with alcohol restricted IDs.                                                                  
SENATOR  WIELECHOWSKI asked  if  he would  support  that in  this                                                               
MR. MADDEN replied he supports the idea.                                                                                        
1:50:00 PM                                                                                                                    
JERRY  MCCUTCHEON,  representing  himself, described  SB  194  as                                                               
toothless  legislation and  a ruse  for legislators  to say  that                                                               
they  acted  to protect  the  public.  He  claimed that  this  is                                                               
special legislation for Brown Jug  because smaller retailers have                                                               
neither the time nor the resources to take advantage of the law.                                                                
CHAIR FRENCH  closed public  testimony and  asked the  sponsor to                                                               
describe what the new Sections 5 and 6 do.                                                                                      
SENATOR  KEVIN MEYER,  sponsor of  SB 194,  said his  staff would                                                               
explain  the changes.  Responding to  the previous  testimony, he                                                               
explained that CHAAR undertakes  the process for small businesses                                                               
that  don't have  the time  or resources  to do  so. He  wouldn't                                                               
object  if  the committee  wants  to  include  in this  bill  the                                                               
increased penalty  for persons  trying to  buy alcohol  when they                                                               
have an alcohol-restricted ID.                                                                                                  
1:53:41 PM                                                                                                                    
CHRISTINE  MARASIGAN,  Staff to  Senator  Kevin  Meyer, told  the                                                               
committee  that  the  changes  in  the  CS  were  recommended  by                                                               
Legislative  Legal  Services  to   correct  cross  references  in                                                               
CHAIR  FRENCH asked  the committee  what  it wanted  to do  about                                                               
adding the  provisions of Representative Crawford's  bill to this                                                               
SENATOR WIELECHOWSKI offered to bring the appropriate language.                                                                 
1:55:25 PM                                                                                                                    
CHAIR FRENCH held SB 194 in committee awaiting an amendment.                                                                    

Document Name Date/Time Subjects
SB222 letter.pdf SJUD 2/15/2010 1:30:00 PM
SB 222
SB222 Sectional Analysis.pdf SJUD 2/15/2010 1:30:00 PM
SB 222