Senate City, County, and Local Affairs Committee
January 28, 2025
Senator Gary Stubblefield [00:00:01] If everyone would take your seat. We're going to get started. It's 10:00. First of all, let me just say how much I appreciate Senator Petty for taking my place last week. I was gone, and so I appreciate that. So anyway, with that being said, we're going to get started. We have one bill on the deferred list. Senator Clark has put that bill on the deferred list. We're holding two more that probably will be held on Thursday.
So with that being said, we'll start with the crypto bill. So Senator King is not here, is he? Well, there's another one we'll just have to. Senator Hill. This might be a shorter meeting than what y'all anticipated. Both of the crypto bills are not here. All right. Senator Mark Johnson. Wow. Senator Clint Penzo. He's a what? He's amending that one. So we want to pull it down? All right, just pull that one out. Representative Dwight Tosh. Alright.
Senator Wallace, you want to go ahead and go to the table and state your name and you are recognized to present House Bill 1150. You're recognized.
Senator Dave Wallace [00:02:53] Thank you, Mr. Chair. Senator Wallace, Dave Wallace, District 19. So this is a very simple bill. Very good bill that Representative Tosh did at the request of the Poinsett county government. It simply divides the office of the sheriff and the tax collector. In the past, 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 in concurrence with that as well. And with that, I'll stand by to answer your questions.
Senator Gary Stubblefield [00:03:46] Do any members have questions? Anyone in the audience to speak for or against the bill? Are you closed?
Senator Dave Wallace [00:04:01] Sir, I am closed. And I make a motion.
Senator Gary Stubblefield [00:04:07] We have a motion do pass. And a second. All those in favor, say aye. All opposed.
Senator Missy Irvin [00:05:05] 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 Searcy County that I am honored to be able to represent. They, 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 that's all the bill does. And I'll be happy to take any questions.
Senator Gary Stubblefield [00:05:40] Again, I would say this is something we've been doing for a long time. So any question from committee? All right. We have a motion do pass and a second. All those in favor say aye. All opposed. All right. Congratulations, Senator Irvin.
Senator Missy Irvin [00:06:02] Thank you. Thank you, members of the committee. The folks of Searcy County will appreciate it. Thank you.
Senator Gary Stubblefield [00:06:09] [Off mic]
Senator Joshua Bryant [00:06:39] Thank you, Mr. Chair. Members, House Bill 1075 is an attempt to preempt 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, 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 a 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 something that you'd rather not use. So I'm happy to take any questions.
Senator Gary Stubblefield [00:07:36] [Off-mic] I have a motion do pass, and a second. Discussion? Your bill passes.
Senator Joshua Bryant [00:08:02] Thank you.
Senator Gary Stubblefield [00:08:15] Senator Hester, Are you next? Okay. After you state your name and you'll be recognized.
Senator Bart Hester [00:08:27] Thank you, Mr. Chairman. Members I'm here presenting Senate Bill 97. 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. I think that's really important on this. Certainly important to get my support. What it does do, if you currently hold or in the future hold, a liquor license in Arkansas, you have the ability to instead of just own one now, which is the current law, you can have up to three, with one other criteria that you can own a maximum of one per county in counties of 200,000 or more.
Today, that means Benton County, Washington County and Pulaski County. Now, in the future, it could mean a lot more counties. But right now it's just those three counties. So anybody that owns a liquor permit, what they would have to do is buy out someone else that has a liquor permit. And at that point, they could have a permit in three separate counties. I'm happy to take any questions.
Senator Gary Stubblefield [00:09:39] Members, you've heard the explanation of the bill. Any discussion? Senator Bryant.
Senator Joshua Bryant [00:09:49] Thank you, Mr. Chair. Just so I have a better understanding. I believe it's page 2 lines 1 and 2. May become the holder of up to two additional retail permits. So they have to acquire those from two current retail permits.
Senator Bart Hester [00:10:07] That's correct. They would have to buy someone out.
Senator Joshua Bryant [00:10:10] 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 a license from Berryville and Carroll County and move it over into Benton County to make this law?
Senator Bart Hester [00:10:24] No, it would not. They would have to purchase it from the county of which they intend to use it. Yeah. We're not adjusting any of the standards and requirements for population, you know, permits per population.
Senator Gary Stubblefield [00:10:38] All right. Any other questions from members? Senator Rice.
Senator Terry Rice [00:10:44] Is there a shortage of liquor, places to buy liquor now that you know of? I'm not familiar with the 200,000 population.
Senator Bart Hester [00:10:58] No, and this wouldn't address a shortage either. It does not increase the amount of permits available.
Senator Terry Rice [00:11:03] What we've seen is proliferation of liquor bills in the years I've been down here. In my lifetime, I've hit milestones. I think about things a little bit different now. But used to be mom and pop stores. Everybody knew where the liquor store was if you were in a wet county. And now we have these big liquor warehouses, kind of an event evidently, to kind of go in.
What I see as a retailer, more small people pushed out, more big event type people in. And, yeah, they will buy the license. But you're going to see a total change. And I would just remind the committee, you know, I heard somebody say, somebody said, this to be the last thing somebody is asking for. You know, this is not all, maybe our big box stores or whatever. But they're going to be the larger retailers.
And they say, we're not going to come back and ask for any more. But I'll tell you, it'll be more and it'll be more counties. Been talk 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 that's what five members of the committee want and 18 members of the Senate, well, that's fine. Thank you.
Senator Gary Stubblefield [00:12:44] You know me. You know that I voted against most of the liquor bills for the last 14 years. And one of the reasons I voted against those was because I've seen so many deaths on the highways. I had a friend who lost his wife and daughter just last summer from alcohol. You cannot, You cannot bring them back. And I wonder sometimes when we're going to reach the limit. I mean, how much more alcohol does it take to satisfy our needs for some kind of stimulant? But anyway, I've lost a lot of friends, some young ones, as a result of alcohol. So of course I'll be a no on this. Any other members have questions? Yes. Senator Davis.
Senator Breanne Davis [00:13:42] Thank you, Mr. Chair. Just to be clear, this bill does not expand any additional liquor license across the state. It simply allows 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 is available and it's purchased, then they're allowed to have it. Is that correct?
Senator Bart Hester [00:14:10] That's absolutely correct. Yeah. We are not expanding. And look, we are in economics based on supply and demand. We are not increasing the supply of licenses, but we are increasing the demand on them. So I believe based on basic economics of supply and demand, the valuations of liquor licenses 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 liquor retailer to the big box that owns them.
Senator Gary Stubblefield [00:14:41] Any other members have questions? Senator Hester, you are recognized to close for your bill.
Senator Bart Hester [00:14:51] I don't know if we've offered people to speak for and against.
Senator Gary Stubblefield [00:14:54] We have someone to speak here for or against the bill? For the bill? For the bill, Mr. Michael Lindsay.
Michael Lindsay [00:15:15] 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 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 like Arkansas does.
Arkansas is very restrictive in this. And we would like to see us more match other states. And this gets us a little bit farther down the road to matching other states, 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 west and to the south.
So this is something that works well in other states, allows entrepreneurs to grow their business from one store to three in growing parts of the state. It limits it to one per county, which still encourages competition. A company or a person can't own three liquor stores 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 we have strong competition. We're matching what other states do around us and encourages that entrepreneurial spirit for owners as they currently exist and give them some opportunities that if they want to grow their business, this is the way to do it without expanding access to alcohol. It's just changing of ownership. But I'd be happy to answer any questions that you might have.
Senator Gary Stubblefield [00:16:55] So in reality, what you're saying is this basically this bill just basically levels the playing field?
Michael Lindsay [00:17:02] Well, it puts us closer to par with our neighbors and it allows entrepreneurs to expand their business and everybody-- 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 own one store in Fayetteville. We're not dropping in three stores into a single market. And so it's, again, it's a competition, one against the rest of the market versus trying to dominate the market would be my argument.
Senator Gary Stubblefield [00:17:46] Any other members have questions? All right, Michael, thank you. Mr. Kelly. John Kelly. Mr. Kelly, if you'll state your name. Come on over. And who you're with, you'll be recognized.
John Kelly [00:18:18] Will it just come on automatically? I'm not sure. Is it on? Okay. My name is John Kelly from Little Rock. I own a liquor store. I bought a liquor store, started a liquor store when Saline County went wet eight years ago or so. I'm here to talk to you about competition and why-- probably it seems to a lot of you that the small liquor store owners just kind of complain that we're being mistreated. It gets complicated.
And so bear with me a minute. And what I really want to 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 you all's time on that. But I have an area that I really want to focus in on. So to hopefully help people understand what we're up against, Senator Hammer, when Costco went in and wrote a letter to the ABC saying he didn't want the building permit to be issued.
And in that letter he mentioned about their buying leverage, their buying power. That's why he didn't want it, because it hurt small businesses, hurts the community when you hurt small businesses and their buying power. So I want to talk about that and I want to hone in on that. But, you know, as I sit and where I think y'all's perspective is you're trying to make rule 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. They have a depth of knowledge both to 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 don't know everything, but I do know what I've experienced. ABC. Alcohol Beverage Control. So what was it the ABC, even the people that came before you all, had in mind when started the ABC? It was to make sure that alcohol distribution was done in a fair and safe manner. When I opened my store, I noticed when I started talking to my family members and the public and the people that I knew, one of the things that really perplexed me was everybody kept saying, I know so-and-so. They have multiple stores.
So I go down to Mary Robins, called the ABC, spoke to Mary Robins on the phone. I think she was not the director at the time. She was on staff. And I started to ask her questions and I said, Mary, I don't get this. I understand you can only own one store. 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 that happened, she actually tried to forward me to the director and I didn't get to go there.
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, why are all these people got multiple stores? Or 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. Okay. 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. You can't do that. So I ask Mary, Hey, why would people want to own multiple stores if they can't do that? I don't really understand.
And 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.
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 that people are group buying, come to me, provide me the evidence and I'll be sure to investigate. Well, as a business owner and a person that has 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 asked Costco or Walmart or the distributors, what kind of deals do you make for them? Do they get to buy-- 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 going to pick on WalMart. Costco probably does the same thing. WalMart goes to Anheuser Busch. Anheuser Busch goes to Golden Eagle and delivers Golden Eagle the bad news.
No, I wasn't able to cross examine and ask him all kinds of questions to understand exactly what he's saying. But I think everybody here is bright enough to know that 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 Wal Mart's selling throughout the entire country or Costco's selling throughout the entire country? No, I don't know that. I don't know that.
There's 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 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's why me personally believe that 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'll conclude with. Something that just caught my attention recently, and many of you may be familiar with this. The Federal Trade Commission recently filed a legal action against Glazers. And they filed the action and I've read lots about it. So I'm not going to get into everything I know about it or all the issues that I thought it brought up. But it basically said Glazers was unfairly offering discounts to chain stores, meaning in these other states like Texas, yeah, a chain can own 15 stores. You could still have a mom and pop store, but a chain can own 15 stores.
So the Federal Trade Commission just recently filed a legal action against Glazers for mistreating small businesses. Now, the investigation, according to the Federal Trade Commission's response to it and disclosure to it, it took them two years to investigate that. And I just wonder, has anybody from the state of Arkansas ever put forth to the ABC information 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?
Glazer's response to this lawsuit do spoke very directly to this exact subject. The state of Arkansas, because of the 21st Amendment, has the right to and 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 say one way or the other. But Glazer's response was that the federal government needs to just stay out of our business because we are-- and 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 said Americans see fewer choices, they pay higher prices and communities suffer.' The profits Costco makes and Wal Mart makes don't stay, they don't all stay in Arkansas. They spread all over the place. Appreciate your time. Be glad to answer any questions.
Senator Gary Stubblefield [00:30:20] You've heard the testimony. Are there any questions from committee members? Senator Bryant.
Senator Joshua Bryant [00:30:27] Thank you, Mr. Chair. I took notice, and it may be a question for ABC if they're in the room, but we cannot have liquor co-ops.
John Kelly [00:30:38] Yes, that is correct.
Senator Joshua Bryant [00:30:39] So you can't join a group and have a set of your own by laws?
John Kelly [00:30:43] Purchasing, what they call group purchasing. So you can't create a GPO. You can't group buy.
Senator Joshua Bryant [00:30:51] So I guess, Mr. Chair, if ABC is in the room. Maybe she can answer me. Is that by rule or by statute? If you'll come to the table.
Senator Gary Stubblefield [00:31:10] If you will come, state who you're with, yor name, you're recognized to speak.
Christy Bjornson [00:31:18] Christy Bjornson, Arkansas tobacco control and Arkansas alcoholic beverage control.
Senator Joshua Bryant [00:31:32] To restate the question, the prohibition for owners of individual chains to form a buying power group, which is very common in many, many other industries, is that set by rule or statute?
Christy Bjornson [00:31:46] 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.
Senator Joshua Bryant [00:31:59] So to his point, how does the ABC manage the expectations that that is not occurring in this state? Is that just driven complaint only or do you have audits?
Christy Bjornson [00:32:11] 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 of each permit per year. They also do compliance checks based on what they uncover in inspections. And we also do respond to any complaint that we would receive. The agents 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.
Senator Joshua Bryant [00:32:39] All right. Thank you. Thank you, Mr. Chair.
Senator Gary Stubblefield [00:32:42] Any questions from committee members while ABC is up here? Senator Petty.
Senator Jim Petty [00:32:53] Just a curiosity question on the co-op buying. To Senator Bryant's point, what's the basis for not allowing that 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.
Christy Bjornson [00:33:14] 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 as only allowing one owner per liquor store, they didn't want to group buying. It just keeps competition healthy between individual companies.
Senator Gary Stubblefield [00:33:36] All right. Any other questions from a member? Seeing none, you're excused.
Christy Bjornson [00:33:44] Thank you.
Senator Gary Stubblefield [00:33:54] Is anyone else listed up here? No one else is left to speak for or against the bill? That being the case, Senator Hester, you are recognized to close for the bill.
Senator Bart Hester [00:34:08] Members, thank you for the time on this. Again, I'll just say it's been stated many times here, this is not an expansion of licenses or expansion of alcohol in the state of Arkansas. This puts every current and former and in the future license holder on the same field that they can have more licenses in different counties. And look I'm not looking to expand alcohol. 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 any way. It's my desire to help the local liquor stores with this permitting where they can operate in more counties. I make a motion do pass.
Senator Gary Stubblefield [00:34:56] Okay. Do we have a second? A motion do pass and a second. Any discussion? All those in favor say aye. All opposed. Your motion carries. All right. I think that, Senator Davis, you're pulling those two until Thursday? Okay. Then we are, we're done. Thank you for coming today.
