City, County & Local Affairs Committee - Senate

We, uh, Stopped while ago before Brian got to finish, so we've only, uh, we've only, I think we've got 7 members here. It's all we're gonna have, we got ones that won't be here, so. But Brianne, you are recognized to continue with your Explanation of the bill. Thank you, Mr. Chair. I was just taking questions, so I'll continue taking questions. If there are any, any other questions? So Right. Thank you, Mr. Chair. Sir Davis, can you, can you give me a fact scenario, like a process from consumer. Wanting a beer to consume or having a beer, what this looks like. Yes, so say I have a uh Walmart delivery account, um, Which I don't like to pick up my groceries in person, but if I did, I would order online, my groceries for the week or I want to make something for dinner real quick, so I go to my cart, I add the groceries that I'd like, and I say, oh, you know what, I'd also like a bottle of white wine with whatever we're having for dinner tonight, so I add it to cart. I'm verified on the front end that I am at least 21 years old. So there's a verification process on the front end with your purchase with the retailer, and then, Where liability changes is when Walmart puts my grocery delivery together and they handed off to the delivery person. That's when liability transfers over to the third party delivery person. Um, company and then they come to my home, I schedule when I want my, the, around the time I want my drop off at 4 to 4:30, they drop off my groceries and they uh verify that I'm 21 or whoever answers the door, maybe I'm, you know, with my 6 year old playing on the floor, I can't get the door, so my husband answers the door, they see that he's over 21, they can see that I'm here and then they're they're able, they're able to hand it off. Now I think there will be more detail in that, that's very high level, um, because there'll be rules that ABC will come up with. For exactly what that looks like for training and to make sure that they're doing it the correct way. I mean, that is part of the bill to ensure that the delivery drivers um are doing age verification. They're not giving, you know, passing it off to someone that's intoxicated, um, and you know, I'm not giving him a fake ID and so that's very high level what that process will look like. So if I, if I don't go direct to a retailer and I use a true third party like Uber Eats that has a menu option I can order from Taikis or whoever just want their service for Uber Eats to boost their sales. Could Uber Eats list a local package store. That wants to participate in their program in that Uber Eats driver would go pick up my meal, swing by the package store. Grab that product based on their platform that are would be rules on how that would be done, and then once that package store hands that product to Uber Eats. They take the liability until they hand it to a 21 or older. Is that, is that accurate? That's correct. OK. Thank you. Or any other questions from the committee? Part C and we have a, a couple of people that's gonna testify, I think 4. Or one against Mr. John Crow. You hear? Yeah, Mr. Crow, if you'll State your name and Yeah. is John Crow 107 liquor in Sherwood. Oh my name's John Crow. I own 107 Liquor in Sherwood. I'm also the president of the United Beverage Retailers of Arkansas, which when I wrote this represented roughly 70 members, but we're up to 80 now. We're we're, we're, we're, everything that's happening here is scaring folks towards me. Um, and I'm used to delivering alcohol, not speeches. So if y'all could just give me some leeway there. Uh, but I'm here to testify in opposition to Senate. 98, which would allow third-party delivery companies to deliver alcohol directly to consumer. This bill aims to fix something that isn't broken. Liquor stores across the state are already successfully and safely delivering purchases to consumers. The consumer need is being met. To date, the ABC has levied zero delivery violations against Arkansas liquor stores. This is in part because liquor stores are held liable for our sales and deliveries, something this bill would eliminate. It is all about accountability. Uh SB 98 shifts liability away from retailers on to third-party delivery drivers, which reduces accountability for underage or improper sales. It also allows third-party delivery into adjacent wet counties, which totally changes the landscape for Arkansas for liquor stores in Northwest Arkansas. That's why that's in there. Importantly, uh, uh, third party delivery services seem unable to comply with local laws and deliver alcohol safely in the state of Oregon, the commission charged with oversight for alcohol sales compliance, and ID checking undertook an assessment project in 2022, designed to collect data about whether third-party delivery services were adhering to the law and following good practices for alcohol delivery. They found that 37% of home alcohol deliveries were not compliant with ID checking requirements and including 2% that were delivered with no contact at all. I make a lot of the deliveries from my liquor store, and we have requests all the time to leave it at the door, and I've never once left it at the door without looking the person in the eye and taking their information. I don't know that Amazon would do that. Uh, shockingly, delivery drivers were less likely to check the IDs of younger customers, which I don't get, but this is where the study said among 21 to 23 year olds, 46% did not have their IDs checked. Third-party folks don't have anything on the line. I've got my entire Everything I, everything I have is on the line if I deliver to an underage person, leave it at their door, don't see it. I've got a lot at stake here. In California, state regulators also found that food delivery apps contributed to a huge surge in alcohol sales to minors. All this stuff is easily easy to find with the Google search. In April 22 investigation, they found that delivery apps had an astounding 80% failure rate, meaning minors repeatedly and successfully ordered alcohol via a delivery app. The big companies backing this bill want the profits from alcohol delivery, but don't seem willing or able to comply with laws and deliver alcohol legally and safely. That's why I'm asking you to vote no on Senate Bill 98. And I'm more than willing to take any questions that you guys might have. Our committee, anyone have any questions? Senator Bryant Thank you, Mr. Chair. Does this, does this bill prohibit you as the owner and operator of a package store from continuing to deliver no. It, it does not. So you can still compete in the market if somebody has a relationship with you or wants to build that relationship with you, they can still Do you, do you use an app? Do you have an app and a website, yes, and they're actually third party delivery is happening in Arkansas already, but it happens through me. So DoorDash, for example, they blow me up all the time asking me if they can have access to my inventory, they're going to give me an iPad. Orders are going to come through, uh, they will know what my inventory is because I've given them a FTP file transfer protocol thing or whatever, uh, and so they can, it can happen, but I have to be the one making the the delivery. So DoorDash is already doing it. So you, you in this process, what you're glad to do, and you, but you're, and you're taking the liability. Yes, would you agree that if if this were to pass, you can, you could still choose to do that and accept that liability, or you could allow those ask from a third party to come do that for you and take that off your hand while you still make the sales, but now they have the liability. Is that, would that be an accurate statement? I think so. Yes, the liability goes on to if this bill passes, the liability is off of me and goes to them, which I think is dangerous. I mean, if you're in minimum wage employee just running around in a van making deliveries and nobody's coming to the door. Are you going to go make your next delivery. Amazon wants you to keep a schedule. Are you gonna wait there for 1015 minutes for them to come answer the door to check their ID. I think they're probably going to leave it and move on. I'm not gonna do that. Do you, would you agree in the statement. Or do you believe that Amazon has drivers that will do Amazon packaging, because, you know, if you look at the the process as a whole, they have very large warehouses strategically located, and they got the final mile drivers back and forth. So do you think they'll, on their route, They're going to load because the process is quite ingenious, you know, they build these huge cages with routes, yes, that for efficiency and product and do you foresee them like stopping their route to go into your package store to grab that package because they have got a box. No, no, when it comes, I'm sorry. I would see that it's, it's a third party that has the technology and the, and the entrepreneurship and the The ability to create a system of which they still hire and employed drivers, but their sole function is to make those runs directly for the purpose of alcohol rather than the purpose of alcohol and deliver this box of whatever my wife ordered last night at 10 p.m. I don't think Amazon specifically, Amazon. Amazon, they're their drivers are not employees. They're all contract labor. They don't want to pay uh payroll taxes and benefits and things like that. So, uh, what I foresee happening worst case scenario, and I think Senate Bill 97 and 98 put together create a perfect storm to ruin the independent liquor store industry in Arkansas and give it to big companies, and I can walk through all that with you, but, uh, and the three permits, it gives them the state and the adjacent counties, it gives them all the Northwest Arkansas to make deliveries, but I don't see why Amazon would not buy uh a liquor store permit set up, never have a customer walk in, set up shop in one of their big distribution facilities, and then just deliver everything from there. They they're delivered. Everything you need to your door. So it, it, it changes the landscape and the Amazon's got thousands of vehicles on the road right now in Arkansas, so I've got one delivery van that I've invested in. I've got my whole livelihood on the line if I make it, if I mess up. I, I appreciate that and I'll make a note to the sponsor to ask if the bill allows a third party to own a liquor license. So I don't think it does, but I'll, I'll be sure to ask restrict it. But yeah, good point. Any more questions from the committee to Mr. Crow. Saying no, we have uh Michael Lindsay. Speak for the bill. Thank you, Mr. Chairman. Michael Lindsay, Director of Public Affairs and government relations for Walmart. I'm going to be very brief. I do want to address something that was mentioned earlier about this, the study in Oregon. So whenever Oregon initiated their alcohol delivery, they essentially passed it and allowed it without any rules or requirements. They didn't even require a signature on on their package deliveries in 2023, Oregon passed laws that pretty closely mirror our requirements to create a third party delivery permit so that the Companies that are delivering the products have to be vetted by the the the state agency that oversees alcohol in Oregon requires signatures, requires verification of age, requires verification that the person that is accepting the delivery is not intoxicated, so essentially Oregon realized, yeah, we we can't just go on the honor system with alcohol. We have to verify age, which is what this bill does. So this bill brings all those rules and regulations and requirements that that a customer would face. our store and puts it at a front doorstep as well. And so from our perspective, this bill has the same sort of checks and balances that any customer would see purchasing in a store. I'll close with one last fact in that customers are moving towards delivery. This is where they've decided they want to shop, and this is how they're going to shop and so from our perspective to be successful and to serve our customers, we have to meet them where they're at and where they're at in a growing percentage is Delivery and being able to serve them at home. This is for beer and wine-only grocery. That's the only thing that grocery stores are allowed to sell here in Arkansas. We're not asking for liquor, which is what liquor liquor stores and package stores still have that advantage over anything that we might be able to serve, but and with that, I will close and just open up for any questions that you might have. Or petty. Thank you, Mr. Chair. Thank you, Mr. Lindsay. So I think Walmart has been very successful and it's been very good for Arkansas, uh, what I hear is the potential harm for the small guy, and I come from small towns, small, so I have a lot of uh uh sympathy or empathy for the the smaller operators. That being said, again, I think Walmart brings a lot to to Arkansas and the country. Um You and I had a conversation and, and you can tell me you're not comfortable or don't want to say it now, but I just previously, Walmart had a bill or two and they said that they would be done for 8 years and you were done for 8 years. I've heard you say that with this and the other one that you have, you'll be done for 10 years. Is that, is that your testimony here today when we look at the future and what best serves our customers. The two bills that we're supporting this session, we feel like addresses the needs and what our customers are wanting for at least a decade and so as far as somewhere we have no plans to come back for any legislation, at least for the next decade. I mean, if you would ask me 10 years ago whether delivery was an issue, I would have said, I can't imagine, but here we are 10 years later. And so in 10 years, the customer may be in a different spot and we may need to come back in 10 years. Thank you Our committee, any, any other questions for Mr. Lindsey? Sent to Brian. Thank you, Mr. Chair. So I'm just, um, I made myself a little flow chart of From retailer to consumer, and I put retailer third party. Driver and consumer. So looking at those 4, can you tell me like uh for the Walmart Corporation like in in states that are successful at this at this product, uh, where your relationship and liability end and what you do to ensure The, the consumer. Uh, that Probably created the problem by ordering it, but, but wrecked and it wasn't, he wasn't really 21 because things happen, issues occurred during the process that you couldn't predict or grab a lawyers will. do what lawyers can do. Uh, so I'm just curious where, where your liability ends and if you, if you own the third party, um, or if you are like, do you own your own drivers now in your process and you're just going to add this component to them or just anything you can envelope in the system. Sure, and again, I'm just speaking for Walmart and other companies, other retailers may use a different system, but Walmart's probably a little bit unique in that, uh, we actually, our, our delivery system, we have our own platform, so like DoorDash has a platform and Uber Eats has a platform and other companies have their platforms. We have a platform as well called Spark. Um, they're contractors that work for us and deliver our groceries now and so it's technically part of Walmart, but they're still independent contractors. So the way it works, they just as Brianne stated, you go on the Walmart app, you place your order if you're over 21, and you, you select a beer or wine selection that's in stock in our store, then it then it's available to be put in your cart. You check out, we pull the order together. We have a driver come up that's that has gone through the training process that's been approved by ABC after we've gotten our our permit license, company license. So the driver that's been approved to deliver alcohol, and not all of them may be approved to deliver alcohol. They have to complete that training program, but once they complete that training program, they come pick it up, they take it to the doorstep, they ring the doorbell. They verify. They scan, they take the ID. They have to scan it in our we've got handheld apps that if you don't scan it, the cell, the delivery isn't complete, which is fine if the driver can't complete the delivery, the person's not home. Somebody over 21 isn't there, then they just bring it back to the store and it's they still get their and they're paid, so there's no incentive for them to just drop it off at the door, and they can't, they cannot complete a delivery unless they scan a license. So for us, for liability for the store liability, it ends once we hand it to the the Spark driver. The, the platforms liability then picks up until they make a successful delivery to the customer. All right, brunch, you're finished. All right, uh, committee, anyone else have any questions? Yeah, I'm sorry. Are you good? OK, you're excused then, Michael. All right. Any, any other discussion on, we have one more. yeah. Maybe I'm Bill Pasco and I represent Uber, who John is the president of, and I just wanted to come to the table and thank Senator English for even, even getting us to this point. She's the one that sponsored the delivery bill in 201 that has been very successful as John mentioned, our liquor stores have been delivering since then. We have about 60 or more around the state that do deliveries today and we've had zero violations in that time and Our only debate today, we don't have any problem with grocery stores delivering. We don't have any problem with Walmart delivering. It's just accountability. the end accountability, who is accountable and the bill that Senator English passed put that accountability on the store and it made employee of that store, you have to have an employee deliver that and that that's the only debate here today. It's not that we don't want Walmart to deliver or to build the liver. We don't have any problem with that. It's just who ultimately is accountable if something goes wrong if they deliver into a dry county or delivered to an underage person. And one last point, uh, the delivery money now that the liquor stores are getting it, they're local. That money stays here. Aside from Michael's spark, DoorDash and Uber Eats and those folks, they're not local. That money's leaving the state, so that puts our independent folks in a little bit of a disadvantage, but, um, it's, it's nuanced. I know that, but I wanted to come to the table and say thank you to Senator English for even getting us to this point to this discussion. Well, thank you. We, we kind of like her too. Thank you. All right, excuse. Uh, any other questions or comments or From the committee, our audience. If not, Senator Davis, you'll recognized to close. Thank you. Thank you, Mr. Chair. Um, so specifically I'd like to address just a couple of things. The first one, is to address Senator Bryant's questions about, you know, if they buy a permit for a retail store, and then are then delivering if Amazon or whoever did that. So on page 2, line 26 of the bill, it specifically says that a third party delivery permit shall not be issued to the holder of a permit in the manufacturer our wholesale tier of the alcoholic beverage industry, um, of course, we know there are only so many um retail permits across the state, um, it's already legal if you have a retail liquor store and you want to deliver or, you know, that you can, so that wouldn't prohibit that, but it does say it does address specifically manufacturing and wholesale. Um, the second thing is the liability portion, so to be clear, you know, if Walmart or Kroger said, well, we don't want to bother with a third party, we just want to have our employees do it, deliver themselves, um, then the liability never transfers. So at all times, regardless of whether it's the retail store or the third-party delivery company, um, somebody has a liability and if, if Walmart or Kroger never transfers the grocery delivery into the hands of a third party, um. delivery service, then that liability stays with them all the way to the front door. So there is accountability, I think, addressed pretty specifically throughout this bill, and it gives ABC the ability to promulgate rules and ensure that the training and compliance that they're looking for from these employees employed by the third party delivery service, uh, meet the standards that they want before they issue a permit. And if a company is not meeting the standards or, you know, handing out. You know, beer to 15 year olds, then they stand to lose their permit, that is the accountability. Very bad headlines, losing their permit, unable to do business in the state of Arkansas in terms of, um delivery in all of these ways. So 100% from the time that you order to the time it's delivered to your front door, um, somebody's liable and, and somebody answers to ABC the whole time. So to me there is accountability all throughout, throughout. this bill, it's very clear. So, um thank you all for your consideration, um, you know, we talk about small business and, you know, big box stores, all this stuff, but ultimately allowing third-party delivery, um, of alcohol, beer and wine, supports the local brick and mortar businesses. Um, it creates local jobs within stores and within these uh delivery, delivery uh related work. So we're, they're actually employing people from your communities to work. and to pay taxes into your local community, um, and hopefully make your community a great place to live and continue thriving with that, I'm closed for the bill, ask for a good vote. Thank you. All right, committee, you have heard uh An explanation or the closing of the bill. Do I have the chair would entertain a motion. Thank you have a motion to pass. Any discussion? We have a 2 All those in favor say aye. All opposed? Your bill passes. Of Senator Johnson, uh, is going to put off his bill till next Tuesday. So do we have Senator Penzo, do you get a bill? A Mr. Chair, I also have a Senate Bill 102. OK, if you want to go ahead and run that, that while you're there, just go ahead. You recognize. Thank you, Mr. Chair. So, Um, Senate Bill 102 to give a short background on it is in 2021, myself and then Representative Michelle Gray, uh, passed Act 951, and it essentially set standards statewide for paid canvassers. Um, we said a lot of different things, um, you cannot be, have been convicted of numerous different crimes, um, you have to be a resident of the state. It's all listed out. It's, it's been in practice for several years now. But there were no standards um for local canvassers paid local canvassers. So this bill simply takes everything that we did for statewide paid canvassers and put it into local paid canvassers. Um, so we set the same standards so that it would be clear and easy for anyone to understand and that there would be continuity between state and local paid campusers. Um, the only thing I'll say is there's new language in one spot. And that is page 4, line 19. And right there, we just said that the signature section of the petition shall be formatted as prescribed by the county clerk because they're the ones that are in charge of, you know, some of the standards of these paid uh local canvassers, um, in these local elections, and it shall contain the same number of signature lines prescribed by the Secretary of State for statewide poi petitions. We put that in there because every 2 years, the Secretary of State puts um out guidelines for uh Paid petitioners, well, for canvassing, um, if anyone's trying to get something on, you know, the state across the board on the ballot statewide. So typically there's a page listed that shows an example of a form of how you want to pass around and collect signatures, and we just said, hey, that we're just gonna say that the page will look the same in terms of number of signatures prescribed by the Secretary of State, it'll just be the same. At the local level. So that's the only thing that's new, but we're just making it the same um as we already do statewide. I'm happy to answer any questions. OK, can we, you've heard an explanation of the bill. Any questions? Anyone here to speak for or against the bill? Not the chair would entertain emotion. Uh, motion to pass a motion to pass for a second. Any discussion? All those in favor say aye. I opposed. Uh, congratulations, Senator Davis. Anyone else that has a bill to run today. All right, seeing none, we are adjourned till next Tuesday.