City, County & Local Affairs Committee - Senate

10 o'clock. Uh, first of all, let me, let me just say how much I appreciate uh Senator Petty for taking my place last week. I was gone and uh Senator Petty, I appreciate that. So anyway, with that being said, we're going to get started. We have 11 bill on the deferred list, uh, Senator Clark, I put that bill on a deferred list, then we had, we're holding two more, uh, That Probably will be held on Thursday. So, with that being said, We'll start with uh The crypto bill. Senator King is not here, is he? Well, there's another we'll just have to. Senator Hill, This may be a shorter meeting than what y'all anticipated. So that both of the crypto bills are not here. All right, um, Senator Mark Johnson. Wow. Senator Clay Penzo. I Huh? He's a what? Amending that one. OK, he's amending that one. So we want to pull it down for All right, just pull that one in. Just give up. Representative Taj to Taj? Art, art. Senator Wallace, if you want to go ahead and go to the end of the table and state your name and you will recognized to present, uh, Senate bill or the House bill. 1150. OK You Thank you, Mr. Chair. Senator Wallace, Dave Wallace, District 19. Sir, this is a, remember it's a very simple bill, a very good bill that Representative Tos did at the request of the Poinsett County government. It Simply divides the office of the sheriff and the tax collector in the past, uh, the sheriff has been tasked with the responsibility of being the tax collector in most counties in Arkansas, that's not the case, so the Poinsett County government is just requesting that we divide that the sheriff is church with his as well. And with that, I'll stand by to answer your questions. I will say that this is not anything new. years so members that question. in your eyes straight. Sir, I'm, I'm closed. Uh And I make a motion. OK So Good morning, Mr. Chair, members of the committee. Thank you for the opportunity to present to you this morning. This is a piece of legislation for the great folks of Cersei County that I am honored to be able to represent. They, um, I believe, passed a resolution to support this, what this bill does is it separates the sheriff and the tax collector, several counties in the state of Arkansas have done this. Previously, and so, uh, that's all the bill does. I'll be happy to take any questions. Again, I would say this is uh something we've been doing for a long time, so any, any questions from committee? All right, we have a motion to pass and a second, all those in favor say aye. All oppose. All right, congratulations, Senator Irving. Thank you. Thank you, members of the committee. The folks at Cercy County will appreciate it. Thank you. OK, where are we at? Thank you, Mr. Chair. members House Bill 1075 is an attempt to preempt our, our cities and our counties from regulating what type of lawn mower you use for personal or business use. So currently if you go to Home Depot or Lowe's, you can buy a gas-powered, electric powered, probably find a little solar powered, and it's your choice, at your expense. This will prohibit cities from telling you as a consumer that you cannot buy gas-powered or solar powered or electric powered for your personal use. It does not prohibit a city from passing their own law or ordinance to mandate the city use a solar or a gas-powered or a battery operated system. It just prevents them from prohibiting a personal resident from using Um, something that I'd rather not use. So I'm happy to take any questions. Anyone from the audience. All right, I have a motion. And motion motion to pass. The 2nd, in discussion. Your bill passes. Thank you. Santa Hester, are you up? OK. you say your name and you, you'll be recognized. Yeah Thank you, Mr. Chairman. Members, I'm presenting Senate Bill 97. Yeah. And I think I'll start off by being clear what this bill does not do. This bill does not expand the amount of liquor permits available in the state of Arkansas. And I think that's really important on this, certainly important for to to get my to get my support. What it does do, if you currently hold or in the future hold a liquor license in Arkansas, uh, you have the ability to, uh, instead of just own one now, which is the current law, you can have up to 3 with 1. other criteria that it's, you can own a maximum of 1 per county in counties of 200,000 or more, uh, today, that means Benton County, Washington County, and Pulaski County. Now, in the future it could mean a lot, a lot more counties, but uh right now it's just those three counties, so, uh, anybody that owns a a liquor permit, uh, can, what they would have to do is buy out someone else that has a liquor permit, and at that point they could have a A permit in 3 separate counties. I'm happy to take any questions. All right, members, you've heard an explanation of the bill, any, any discussion? Uh, Senator Bryant. Thank you Mr. Chair. Just, just so I'm A better understanding, I believe it's page 2 1st lines 1 and 2, they may become the holder up to 2 additional retail permits, so they have to acquire those from two current retail. Permits. That's correct. They would have to buy some buy someone out. Does that have to be purchased within the same county in which we intend this law to effect, or could they go over to a neighboring county and acquire. You know, a license from a Berryville in Carroll County and move it over into Benton County to make this law. No, it would not. They would have to purchase it from the county of which they intend to, to use it. We're we're not adjusting any of the any of the standards and requirements for population, you know, permits for population. All right, any other questions from members? Senator Ross. Is there a shortage? Of liquor or places to buy liquor. Now that you know of, I'm not familiar with as much with the 200,000 population. Right, no, and this, this wouldn't address a shortage either. It does not increase the amount of permits available. What we've seen is proliferation of, of Liquor bills in the years I've been down here. Used to in my lifetime, I've I've hit milestones, so I think about things a little bit different now, but Used to be mom and pop stores. Uh, new liquor store was. She's in Otte County. And now we have these big liquor warehouses. It's kind of an event, evidently to kind of go in what I see as a retailer. More small people pushed out or big event type people. And any other by the license. But you're gonna see, you know, uh, uh, a total change and I'll just remind the committee, you know, I've heard somebody say, well, somebody said this would be the last thing somebody's asking for, you know, this is not all, maybe all big box stores or or whatever they're going to be the larger retailers. And They say, you know, we don't, we're not gonna come back and ask for any more. I can tell you it'll be more and it'll be more counties been, been talked about trying to get all the dry counties in Arkansas, changed over, so just to remind everybody, it's not the last one you'll see. And uh That's what 5 members of the committee want, or 18 members in the Senate won't, uh, that's fine. Thank you. Know me, you know that I voted against most of the liquor bills for the last 14 years. And, and one of the reasons I voted against those was because I've seen so many deaths. Uh, on the highways, I lost, uh, I had a friend who lost his wife and daughter this last summer. From alcohol you cannot, you cannot bring them back. And uh I, I wonder sometimes when we're gonna reach the, I mean, how much more alcohol does it take to, to satisfy our needs for some kind of stimulant. But anyway, I've, I've, I've lost a lot of friends, some, some young ones. As a result of alcohol. So, of course, I'll be a no on this, uh, any other members have questions? Yes, Senator Davis. Thank you, Mr. Chair. Just to be clear, this bill does not expand any additional liquor license across the state. It simply allows, you know, a business or entity to purchase an available one. And if all the small liquor stores own all of the liquor license across the state. They can choose not to sell the license they have to anyone else, but it's not expanding, it's just simply saying if one's available and it's purchased, then they're allowed to have it. Is that correct? That's absolutely correct. Yeah, we are not expanding and look, we are in a, uh, you know, economics based on supply and demand. We are not increasing the supply of uh licenses, but we are increasing the demand on them. So I, I, I believe based on basic economics of supply and demand, the, the valuations of liquor licenses will, will, will go up in the state of Arkansas and that's to go up for everybody that owns one. That's the smallest mom and pop, uh, liquor retailer to, to the big box that owns them. Or any other members have questions? Alright, Senator Tester, you recognize the clothes for your bill. I don't know if we've offered people to speak for and against. We have a If someone speak here for or against the bill? For the bill the books. Mr. Michael Lindsay. I mean Thank you, Mr. Chairman. Appreciate it. Michael Lindsay, director of Public Affairs and government relations for Walmart, and we are speaking in support of this bill. I think it's, it's been discussed already, but I want to reiterate that this doesn't expand alcohol in Arkansas. It just allows companies and individuals to own more than one license. If you look at our surrounding states, Missouri, Kansas, Oklahoma, Texas, they all allow more than one license, uh, like Arkansas does. Arkansas is very restrictive in this and we would to see us more match other states, and this gets us a little bit farther down the road to matching our other states. Can't like, for example, Texas, they allow up to 250 licenses per individual or per company, so this isn't something that's unique around the country. It's not something that's unique to our area. It's something that puts us more in line with our neighbors to the, to the west and to the south. So this is something that works well in other states. It allows entrepreneurs to grow their business from 1 store to 3 and growing parts of the state, it limits it to one per county, which still encourages competition, a company or a person can't own 3 liquor stores and in one city, so it's one liquor store, one city, one county, so you still have strong competition among all of the liquor store owners, so you still have strong competition. We're matching what other states do around us and encourages that entrepreneurial spirit for for owners as they currently exist and gives them some opportunity. that if they want to grow their business, this is the way to do it without expanding excess to alcohol. It's just changing of ownership, but I'd be happy to answer any questions that you might have so in reality you're what you're saying is this basically just let this bill just basically levels the playing field. Well, I, it puts us closer to par with our neighbors and allows entrepreneurs to expand their business, and everybody, so but it doesn't create a situation to where one company or one individual can come into a single market and just dominate that single market and run out competition. This encourages competition by limiting it to just one per county, so Walmart or anybody else, Costco or an individual can own one store in Pulaski County, Walmart, another individual or another company could have one store. in Fayetteville, we're not dropping in 3 stores into a single market, and so it's again it's a competition won against the the rest of the market and so versus trying to dominate the market would be my argument. Or any other members have questions? Alright, Michael, thank you. Thank you. To Mr. Kelly, John Kelly. Mr. Kelly, if you'll state your name. So come on who you're with, you'll be recognized. Just come on automatically. I'm not sure. Is it on? OK. My name is John Kelly. Um, I'm right. I own a liquor store. I bought a liquor store, uh, started a liquor store when Saline County went wet. back 8 years ago or so. Um, I'm here to talk to you about Competition. And why probably it seems to a lot of you that The small liquor stores owners just kind of complained that we're being mistreated. It gets complicated and so Bear with me a minute. And what I really wanna go focus on is not all the rules that are around the liquor store business because they're long, deep and complicated. I'm not going to spend time on that, but I have An area that I really want to focus in on so that to help, hopefully help y'all understand what we're up against. Um Senator Hammer, when Costco went in and wrote a letter to the ABC saying he didn't want the bill to the permit to be issued. And in that letter he mentioned about their buying leverage. They're buying power. That's why he didn't want it. Because it hurts small businesses, it hurts the community when you hurt small businesses, and they're buying power. So I want to talk about that. I want to hone in on that. But, you know, is, is, as I sit in where I think y'all's perspective is, you're trying to make real changes and whether you take baseball, you take football, when you make rule changes, the people that decide what rule changes are going to happen. They're experts at it. Their depth, they have a depth of knowledge both to what, what the rules are, how they're being applied. And what they're trying to do, speed up baseball, make it more entertaining. So I'm here to hopefully help you guys understand a little bit more about the way the rules work and don't work. I'm not, I don't know everything, but I do know what I've experienced. ABC. Alcohol beverage control. So what was the ABC, even the people that came before y'all had in mind when they when they started the ABC. It was To make sure that alcohol distributions was done in a fair Fair In a safe manner. When I opened my store, I noticed when I started talking to my family members. In, in the public and the people that I knew. One of the things that really perplexed me. was everybody kept saying, oh, I know so and so. They have multiple stores. So I go. Down to the Mary Robbins, who called, called the ABC and spoke to Mary Robbins on the phone. I think she was not the director at the time. She was on staff, and I started asking her questions, and I said, Mary, I don't get this. I understand you can only own one store. I can you LLC your way around it? Can you structure a business deal or organization around it. And her answer was no. You cannot. So what this law does is it does change the rules. You can have multiple stores now. So when, when that, when that happened, I, I She actually tried to forward me to the director, and I didn't get him that, that go around. But then A few years later when she became the director, I went back down there again. And I sat down and talked to her and I asked her again. What gives Well, how can, why are all these people got multiple stories where I'm being told they all have multiple stores when you're only supposed to have one store. And let me regress a second. The topic that I want to talk to you about is leverage buying. OK? So if I have multiple stores or control multiple stores. What might I want to do? Negotiate prices based on all of the stores that I manage. Can't do that. So I asked Mary, Hey, why, why would people want to own multiple stores if they can't do that. I don't really understand. And she or her explanation was pretty simple. John, we don't have the forensic accounting staff. To investigate whether these people are doing that. I'm not the director of the ABC. I don't know what goes on with all that, but after the grocery store bill went through and this body chose to expand that. We had a meeting, the Uber group had a meeting and we invited in the enforcement director and he talked, he was a, I believe. I think it was Boyce Hamlin at the time. It's been a few years. And he said, John If you've got some evidence The people are grouped by it. Come to me. Provide me the evidence and I'll be sure to investigate. Well, as a business owner and, and, and a person who's lived a little bit and knows that people don't really get into things unless they're vested in it. They've got skin in the game. I thought that was quite a bizarre set of circumstances. And as far as I know, that's exactly the way it is today. The reason I bring that up, and the reason I bring that up in relationship to this bill. is because as far as I know, now I believe the director may be here so y'all can ask her if you want. As far as I know. Nobody Ask Costco or Walmart or the, or the distributors. What kind of deals do you make for them? Do they get to buy, do they, because one of the things that we were told in a conference meeting. That the way it works, Is Walmart goes to Anheuser-Busch. I'm not gonna pick on Walnut. Costco probably does the same thing. Walmart goes to Anheuser-Busch. Anheuser-Busch goes to Golden Eagle. And delivers Golden Eagle the bad news. Now I wasn't able to cross-examine and ask him all kinds of questions, understand exactly what he's saying, but I think everybody here is bright enough to know that this, that's an indication. That Walmart's negotiating beer prices directly with Anheuser-Busch. Now, do I know that those beer prices are being negotiated with Anheuser-Busch based on all the beer that Walmart's selling throughout the entire country or Costco selling throughout the entire country? No, I don't know that. I don't know that. There's a The idea of practicality of me coming up with evidence. To prove that these entities, whether it's stores that are individual stores that are putting their Connections together and buying. Or whether it's Walmart or Costco, I don't know. And for me to have to, to, to be expected. The laws are going to be enforced based on my ability. To investigate and get Evidence To get an investigation started? I think that that's why me personally believe That this is a bad, the whole dynamic until enforcement is done, so everybody plays on the same level playing field. We don't need to do anything. That's just my opinion. And I guess I, I, I'll conclude with Something that's caught my attention recently, and many of you may be familiar with this. The Federal Trade Commission. Recently filed a legal action against glaziers. And they follow the action and I've read lots about it, so I, I'm not going to get into the everything I know about it or all the issues that I thought it brought up. But it basically said glaziers was unfairly offering discounts to chain stores. Meaning in these other states like Texas. Yeah, you can have a, a, a chain can own 15 stores. You can still have a mom and pop store. But you, but a chain can own 15 stores. So the Federal Trade Commission just recently filed a legal action against glaziers for mistreating small businesses. Now The, the investigation, according to the Federal Trade Commission's Response to it and disclosure to it. It took them 2 years to investigate that. And I just wonder, has the state of Arkansas Has anybody From the state of Arkansas. Ever forth to the ABC. Information That was, that would lead to believe that people were group buying. Has the ABC ever checked to see what kind of pricing That the distributors are giving to Walmart, Costco, Glazier's response to this bill to this suit. is very directly spoke very directly to this exact subject. The state of Arkansas, it, it because of the 21st Amendment. has the right to in, in the obligation to enforce the law. They've been given that right. The question is, are they enforcing the law? I don't know. I can't, I can't say. For one way or the other. But they glazier's response was, leave the federal government means to to stay out of our business because we are And I want to, I want to read exactly what they said. Alcohol distributors face numerous Regulations. That dictate How they compete. The price that they get to charge and the discounts that they offer. The Federal Trade Commission chairman. He said Americans see fewer choices. They pay higher prices and communities suffer. The profits from the Costco makes and Walmart makes, don't stay, they don't all stay in Arkansas. They spread all over the place. I appreciate your time. I'd be glad to answer any questions. I You've heard the testimony. Is there any, any questions from committee members, uh, Senator. Josh. Thank you, Mr. Chair. I just, I took notice, um, And it may be a question for ABC if they're in the room, but we cannot have liquor co ops, is that, that was your testimony that's correct. So you can't join a group and have a set of your own bylaws, what they call group purchasing GPOs. You can't create a GPO. You can't group by um, so I, I guess, Mr. Chair, if the ABC is in the room. Uh, maybe she can answer me, is that by rule or by statute? I believe that we're being, if you'll come to the table. If you come, uh, say who you're with, your name, uh, you recognized. Orson, director of alcoholic beverage Control in Arkansas Tobacco Control. Christy Bjornsen, Arkansas Tobacco Control and Arkansas Alcoholic Beverage Control. I'll just restate the question. The prohibition for owners of of individual chains to form a buying power group, which is very common in many, many other industries. Is that set by a rule or a statute? I believe it is in statute and mirrored in rule that there is no group buying, and there are also no secret deals allowed. Offered to one individual or company that wouldn't be offered to someone else. So, so to, um, His, his point, how do we, how does the ABC manage the expectations that that is not occurring in the state. Is that just driven complaint only or do you have audits? We have a robust enforcement staff. We have about 46 different agents who are boots on the ground, they work in regional territories and they do mandated inspections at each permit per year. They also do compliance checks based on what they uncover, um, and inspections and we also do respond to any complaint that we would receive. The ag ent s do typically look at invoices and things of those natures that are addressed in our rules to make sure that there's compliance on that end. All right. Thank you. Thank you, Mr. Chair. Thank you Questions from committee members while ABC is up here. But uh central Petty. Just a curiosity question on the co op buying to Senator Bryant's point is what's the basis for not allowing that and and would you be in support of that and would you not be in support? I mean, what's the basis for not having these buying co-ops. I mean you do that in so many other industries. I can't speak to the spirit of that law having not researched why specifically it was passed my best guess would be that in the same spirit is only allowing one owner per liquor store, they didn't want to to group buying. It just keeps competition healthy between individual companies. All right, any other questions for a member? Saying no Thank you. Thank you. You're Jews. Uh Is anyone is anyone else? Listed up here. No one else has wished to speak for or against the bill. That being the case, and Hester, you are breaking close for your bill. Members, thank you for the time on this. Uh again, I'll just say what's been stated many times here. This is not an expansion of licenses or expansion of, of alcohol in the state of Arkansas. This puts every current and former and and in the future license holder on the same field that they that they could have more license in in different counties and look, I'm not, I'm not looking to expand alcohol. I think I think I'm at a running total of $0 in my life spent at a liquor store. So that is not my desire to be helpful in way is my desire to, you know, help help the local liquor stores, um, uh. With with this permitting where they can operate in more counties. Anyway, I make a motion to pass. Are where we have a second motion to pass in a second. In discussion All those in favoral All those in favor, all opposed. Uh, your motion carries. All right, I think that uh. Senator Davis, you're pulling those too, so Till Thursday? OK. Then we are, We're done. Thank you for coming to.