The Wire

  • New tunnel, premium RV section at Talladega Superspeedway on schedule despite weather

    Excerpt:

    Construction of a new oversized vehicle tunnel and premium RV infield parking section at Talladega Superspeedway is still on schedule to be completed in time for the April NASCAR race, despite large amounts of rainfall and unusual groundwater conditions underneath the track.

    Track Chairman Grant Lynch, during a news conference Wednesday at the track, said he’s amazed the general contractor, Taylor Corporation of Oxford, has been able to keep the project on schedule.

    “The amount of water they have pumped out of that and the extra engineering they did from the original design, basically to keep that tunnel from floating up out of the earth, was remarkable,” Lynch said.

  • Alabama workers built 1.6M engines in 2018 to add auto horsepower

    Excerpt:

    Alabama’s auto workers built nearly 1.6 million engines last year, as the state industry continues to carve out a place in global markets with innovative, high-performance parts, systems and finished vehicles.

    Last year also saw major new developments in engine manufacturing among the state’s key players, and more advanced infrastructure is on the way in the coming year.

    Hyundai expects to complete a key addition to its engine operations in Montgomery during the first half of 2019, while Honda continues to reap the benefits of a cutting-edge Alabama engine line installed several years ago.

  • Groundbreaking on Alabama’s newest aerospace plant made possible through key partnerships

    Excerpt:

    Political and business leaders gathered for a groundbreaking at Alabama’s newest aerospace plant gave credit to the formation of the many key partnerships that made it possible.

    Governor Kay Ivey and several other federal, state and local officials attended the event which celebrated the construction of rocket engine builder Blue Origin’s facility in Huntsville.

1 week ago

Guest: ABC Board worked to ensure strong safeguards accompany new alcohol bills

(Andreas M, CHUTTERSNAP/Unsplash, YHN)

The Alabama Legislature on Thursday gave its final approval to legislation that would allow wineries anywhere in the country to ship limited quantities of wine directly to Alabama consumers. The bill, HB437, will become law if signed by Gov. Kay Ivey.

This follows a bill, SB126, passed earlier by the Legislature and signed into law by the governor that will allow ABC Board-licensed businesses in the state to deliver wine, beer and spirits to customers’ homes.

In addition, numerous other bills were introduced in this session of the Legislature and are in various stages of the legislative process with their fates undetermined. This session, the ABC Board has tracked 39 bills dealing with alcoholic beverages or affecting some aspect of our regulatory functions. We have not experienced as high a volume of bills in my 10-year tenure as administrator of the ABC Board.

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With such a barrage of bills, both passed and pending, it’s easy to be confused, especially by various versions of legislation dealing with seemingly related topics.

Let me try to clarify things a bit regarding the two bills that have perhaps generated the most confusion – home delivery of beer, wine and spirits (SB126) and direct shipment of wine (HB437).

While these bills might sound similar, they are vastly different.

The home delivery bill (SB126) deals with licensed in-state retailers only – package stores, grocery stores, wineries, breweries, distillers, restaurants, etc. Businesses could use either their employees or third-party contractors to deliver alcohol to customers.

While the measure allows the delivery of beer, wine and spirits, it sets limits on the amounts that can be sold to a customer in any one day.

For canned or bottled beer, the maximum is 120 12-ounce containers. For draft beer, it’s 288 ounces. For wine and spirits, it’s 9,000 milliliters (about 304 ounces).

Businesses with on-premises licenses, such as restaurants, cannot exceed 375 ml of alcoholic beverages, and the delivery must also be accompanied by a meal.

The wine direct shipment bill (HB437), on the other hand, concerns only wine and allows shipments only from wineries to consumers.

A licensed manufacturer of wine, in state or outside Alabama, would be able to get a direct wine shipper license to ship wine to buyers in Alabama. A fulfillment center acting as the agent of the winery would also have to be state-licensed. Customers would be able to buy up to 12 9-liter cases of wine a year from the winery.

ABC’s Regulatory Function

I must point out that the ABC Board does not take a political position on the wisdom of these bills. In our regulatory capacity, our primary concern is to ensure there are adequate and enforceable safeguards in place to protect public safety and public health, including keeping alcohol out of the hands of those under age 21 and those who are already intoxicated.

The ABC Board worked with legislators and the proponents of both bills to strengthen safeguards or put in additional ones where we thought they were lacking. We are satisfied that the safeguards in both bills, combined with specific rules and regulations we are drafting, as called for in the legislation, are adequate to ensure these new services being made available to Alabama consumers will be provided safely and responsibly.

With the home delivery bill, delivery employees will be subject to criminal background checks and fingerprinted, as well as undergo training to help them identify underage or intoxicated individuals and faked or altered IDs. They must require each recipient provide a valid photo ID to confirm the person is 21 or older, and that the recipient sign for the order. If the recipient cannot prove his or her age or appears intoxicated, the delivery person must return the alcoholic beverage purchase to the retailer. The purchase cannot be left unattended under any circumstance.

There are similar safeguards for direct wine shipment. Wine cannot be shipped to a school, dormitory, prison, health care facility, locker, mailbox, storage facility, or another premises licensed by the board. A fulfillment center cannot mask as a retailer. Alabama would be only the third state to require the licensing, reporting and oversight of fulfillment centers – an important tool in guarding against possible abuses.

Licensees under both measures must pay licensing fees, keep detailed records of purchases and file reports with the ABC Board and Alabama Department of Revenue.

These new laws passed by the Legislature bring added responsibilities to the ABC Board. As the state agency tasked with protecting public safety and health from the misuse and abuse of alcohol, we will ensure all the rules and regulations governing home delivery and direct wine shipments are strictly enforced.

Just as we do with all other alcohol laws in Alabama.

H. Mac Gipson is administrator of the Alabama Alcoholic Beverage Control Board.

6 years ago

ABC Board chief: Decision to close ABC stores fiscally sound, protects consumers

Alcohol

By H. Mac Gipson

The recent decision by the Alabama Alcoholic Beverage Control Board to close or consolidate 15 state-run liquor stores at the end of the year because of budget cuts has generated a great deal of discussion in the media – and commentaries critical of the decision.

Unfortunately, some of the opinions expressed are based on misinformation or a lack of understanding of the ABC Board’s operations.

As administrator of the ABC Board, I want to help clarify the issue.

I will start by pointing out the Alabama ABC Board does not cost Alabama taxpayers one red cent. Through the operation of its liquor stores and warehouse, the ABC Board generates millions of dollars in badly needed revenue to not only pay for its functions, but to help fund other state agencies as well. Only those who purchase spirits pay anything to the state to help it or the ABC Board.

Last year, the ABC Board contributed $215 million to the state – after paying for the costs of its operations. This year, that figure should top $225 million. This money supports the General Fund, Department of Human Resources, Department of Mental Health, the Alabama Law Enforcement Agency, public education, cities and counties.

To get an idea of the size of the contribution the ABC Board makes to the General Fund, note that the General Fund budget passed by lawmakers in September totaled about $1.75 billion. The $215 million from the ABC Board accounted for nearly 13 percent of that amount.

The decision to close or consolidate 15 stores came after the Legislature arbitrarily reduced the ABC Board’s spending authority by transferring $5.5 million from our budget to the General Fund. The Legislature appropriates nothing to the ABC Board, but sets the amount we are allowed to spend from the revenues we generate.

The reduction left the ABC Board – similar to other state agencies facing decreases in their budgets – with difficult decisions to make in order to ensure that our costs do not exceed our spending authority. In making those decisions, the ABC Board had to balance the needs of the residents we serve against those cuts.

Not every ABC liquor store makes money. Some operate to meet the needs of local residents, even if the operation of the store – say, in a rural community – does not result in a net profit. It would be unfair to rural residents to deny them a service that Alabamians who live in urban areas receive.

That is why some stores which have not been profitable will remain open.

It is true that some stores which have been profitable will be closed. Some of these stores will be consolidated with other stores or reopened in areas where traffic patterns and population centers have shifted, thereby reducing costs and making them even more profitable.

Unfortunately, some writers compared the decision by ALEA to close some driver licenses offices in rural counties to the ABC Board’s decision to close some of its stores and keep some open. They noted that some counties without a driver license office will continue to have a state liquor store.

The operation of ABC stores has nothing to do with the operation of driver license offices. The decision by the ABC Board and the decision by ALEA were made independently of each other.

The decision about what stores to close and what stores to keep open was based on sound business practices and our responsibility to meet the needs of residents, wherever they live. That decision was made by the ABC Board.

In other words, the State of Alabama didn’t “choose liquor over driver licenses.” Each agency made difficult decisions based on its needs and finances.

Finally, I want to address the matter of taxes and the price of liquor.

Much has been made of the fact that Alabama’s liquor taxes are high compared to those of other states. It is true, Alabama’s liquor tax of $18.23 per gallon is higher than neighboring Georgia’s $3.79 per gallon, Tennessee’s $4.46, Florida’s $6.50 and Mississippi’s $7.41 (Tax Foundation figures).

But it is the Alabama Legislature, not the ABC Board that sets tax rates. The Legislature can lower the rates, if it chooses to do so. Of course, that would reduce revenue to the already challenged state General Fund.

I realize some of the negative commentaries directed toward the ABC Board are from those who want to see all ABC stores closed. Some have even suggested that the private sector would do a better job with price, quality and selection.

Anyone who has shopped at ABC stores and private package stores knows that is simply not the case. ABC stores are well known for providing competitive prices, premier service and greater selection. And, ABC stores’ well-trained employees do an extraordinary job of not selling to underage buyers and those who already have had too much to drink.

The Alabama Legislature created the ABC Board in 1937, after the repeal of Prohibition, to regulate the sale of alcoholic beverages, promote temperance and protect public safety and health. It is doing just that, while at the same time generating much needed revenue for the state and helping keep Alabamians’ overall tax burden low.


 

H. Mac Gipson is administrator of the Alabama Alcoholic Beverage Control Board, which controls the sale of alcoholic beverages in the state through distribution, licensing, compliance enforcement and education. Email: mac.gipson@abc.alabama.gov.

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6 years ago

Gibson: Getting Ala. govt. out of liquor business would increase prices, consumption

Alcohol

If there were a type of “do no harm” Hippocratic Oath that Alabama lawmakers would swear to abide by, they wouldn’t have anything to do with proposed legislation which would weaken state control over the sale of liquor, ultimately leading to higher prices, as well as increased consumption with all its associated social ills.

The legislation, Senate Bill 115, sponsored by state Senator Arthur Orr, R-Decatur, would force the state to close its revenue-producing ABC liquor stores and terminate more than 600 employees. This would open the door for large, out-of-state corporations that have bankrolled similar measures to dismantle controls in other states to come in and profiteer off Alabamians. In 2011, for example, Costco spent $22 million to get Washington State out of – and Costco in – the liquor business.

Sen. Orr says his bill would save Alabama millions of dollars without raising taxes. That’s not what happened in other states (Washington, West Virginia and Iowa) which went down this road. And it is not what is likely to happen here should lawmakers take us along the same path.

An analysis of the Orr bill conducted by respected Auburn University at Montgomery economist Dr. Keivan Deravi points out the change would save the state little to no money. In fact, according to the Deravi study, selling off state stores to profit-driven retailers would hurt the pocketbooks of responsible consumers and saddle Alabamians with increased social costs, including more underage drinking and drunk-driving deaths.

So, who does this bill really benefit? Based on the experiences of other states and the evidence in the Deravi report, it’s certainly not the state, nor the vast majority of our fellow citizens.

Here are some of the highlights of the Deravi report, which we commissioned last year to determine the fiscal and social effects of such legislation after Orr introduced a similar bill:

Despite Orr’s initial claim that closing ABC stores would save the state $46 million a year (a figure he has since lowered to $15 million to $20 million), the most likely saving is between $4 million and $6 million. (Even that, though, is before the costs of severing up to 600 ABC store employees and distribution are considered.) Depending on the number of private package stores that survive the shakeup, it is possible the state won’t realize any financial gain, Deravi states.
Liquor prices would go up, an “implicit tax increase” on responsible consumers, as Deravi terms it.
Increased availability (longer hours and more stores open on Sundays) would lead to increased consumption, especially among underage and problem drinkers.
The increased social costs associated with increased consumption, such as drunk driving, addiction and underage drinking, would be borne by state residents, not the retailers who profit from it.
Hundreds of jobs, and the beneficial economic impact of those jobs, would be eliminated. Some of those laid off would end up on state unemployment.
The ABC Board would go from a self-supporting agency to one dependent on funding from an anemic state General Fund. That could affect the agency’s ability to enforce the state alcohol laws and protect public safety.

None of those outcomes can be described as good for Alabama. They hurt responsible consumers. They endanger public health and safety. And they are detrimental to state budgets.

Alabama is known in the alcohol industry as a “control state.” This means the state, through the Alcoholic Beverage Control Board, controls the sale of alcohol through licensing and the operation of wholesale distribution and retail stores. Since the end of Prohibition in the 1930s, the control system has proven to be the most beneficial – both in terms of revenue for the state and in limiting the social harms of alcohol.

In general, control states like Alabama report lower consumption and higher revenue from the sale of alcohol. That’s a win-win.

Through its efficient operation, the ABC Board provides more than $200 million each year to state and local governments, with money flowing to the General Fund, Department of Human Resources, Department of Mental Health, education, and cities and counties. In fact, since 1937, the ABC Board has sent more than $6 billion to Alabama’s governments and agencies.

Control is clearly working for Alabama. Why change it? Indeed, why, when our state desperately needs stable, dependable revenue sources and Alabamians working and paying taxes, would we take this risk?

Most Alabama legislators may not be physicians. But they can at least avoid doing harm by rejecting a bill that would hurt both the state budget and the public health.


H. Mac Gipson is administrator of the Alabama Alcoholic Beverage Control Board, which controls alcoholic beverages in the state through distribution, licensing, enforcement and education. He can be reached at mac (dot) gipson (at) abc (dot) alabama (dot) gov.

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