Legislature(2017 - 2018)BARNES 124

05/02/2018 03:15 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 86 ALASKA RAILROAD CORP: LAND;BONDS,FINANCE TELECONFERENCED
Heard & Held
-- Public Testimony --
+ SB 76 ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG TELECONFERENCED
Heard & Held
-- Public Testimony --
         SB 76-ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG                                                                      
                                                                                                                                
4:10:24 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that the  final order of business  would be                                                               
CS FOR  SPONSOR SUBSTITUTE FOR  SENATE BILL NO. 76(FIN),  "An Act                                                               
relating to  alcoholic beverages;  relating to the  regulation of                                                               
manufacturers,  wholesalers, retailers,  and  common carriers  of                                                               
alcoholic  beverages;  relating  to licenses,  endorsements,  and                                                               
permits involving alcoholic beverages;  relating to the Alcoholic                                                               
Beverage Control Board; relating  to offenses involving alcoholic                                                               
beverages; amending Rule 17(h), Alaska Rules of Minor Offense                                                                   
Procedure; and providing for an effective date."                                                                                
                                                                                                                                
4:10:31 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 4:10 p.m. to 4:15 p.m.                                                                       
                                                                                                                                
4:16:35 PM                                                                                                                    
                                                                                                                                
RACHEL  HANKE, Staff,  Senator Peter  Micciche, paraphrased  from                                                               
the explanation of  changes, Version N to Version  C [included in                                                               
member  packets], which  reads as  follows [original  punctuation                                                               
provided]:                                                                                                                      
                                                                                                                                
     Changes by Sponsor Prior to First Hearing                                                                                
                                                                                                                                
     1. Page  6, lines 2,  9, 16: Remove replace  "the" with                                                                    
     "each"                                                                                                                     
     2. Page 13,  lines 3-4, page 26, lines  29-30, and page                                                                    
     112,  lines  27-28:   Insert  existing  definition  for                                                                    
     "entertainment",   was   left  out   inadvertently   in                                                                    
     drafting.                                                                                                                  
     3. Page 19,  lines 6-13: Clarify intent  that a current                                                                    
     recreational  site  license  holder  has  four  renewal                                                                    
     periods to comply with statute.                                                                                            
     4. Page 32, line 6 and  page 33 line 12: Clarify intent                                                                    
     by changing "may" to "shall".                                                                                              
     5. Page  37, line 16:  Specify that package  stores are                                                                    
     intended to  deliver only to  social events  as defined                                                                    
     by the board.                                                                                                              
     6.  Page   38,  lines  2,  5:   Change  "package  store                                                                    
     shipping" to "package store delivery", drafting error.                                                                     
     7.   Page  41,   AS   04.09.520  (Brewery   Repackaging                                                                    
     Endorsement):  Strike previous  (c)(2) which  read "may                                                                    
     only  subdivide   the  holder's  brewed   beverages  in                                                                    
     response  to a  purchase from  a person  who is  on the                                                                    
     licensed premises".  This section is  redundant because                                                                    
     a  person is  already required  to be  on the  licensed                                                                    
     premises.                                                                                                                  
     8.  Page  42,  line  5: Replace  "package  store"  with                                                                    
     "brewery manufacturer", drafting error.                                                                                    
     9.  Page  42,  line  10: Clarify  intent  by  replacing                                                                    
     "owned, wholly or in part" with "controlled".                                                                              
     10. Page 44, lines 22,  25: Change reference from board                                                                    
     to the director at the request of legislative legal.                                                                       
     11.  Page  45, lines  3-4,  31  and  page 46,  line  1:                                                                    
     Grammatical changes for clarity.                                                                                           
     12.  Page   45,  lines  27-30:  Insert   "An  alcoholic                                                                    
     beverage  auction   permit  may  be  operated   on  the                                                                    
     licensed  premises of  a  beverage dispensary  license,                                                                    
     beverage  dispensary  tourism  license,  club  license,                                                                    
     restaurant  or   eating  place  license,   or  seasonal                                                                    
     restaurant   or   eating   place   license."   Existing                                                                    
     regulation language specifies intent.                                                                                      
     13. Page 54, line 9:  Insert "license with" into title.                                                                    
     Clarify that endorsements are  used in conjunction with                                                                    
     a license.                                                                                                                 
     14.  Page 63,  lines 16-17,  20-23: Changes  to clarify                                                                    
     existing       authority       over       restrictions.                                                                    
     Senator.Peter.Micciche@akleg.gov                                                                                           
     15. Page  75, line  20: Remove "or  a new  location" to                                                                    
     clarify that an endorsement  cannot be transferred to a                                                                    
     new location, the license does.                                                                                            
     16.  Page   76,  lines   30-31:  Conforms   to  current                                                                    
     practice.                                                                                                                  
     17.  Page  81,  line  31: Title  change  to  accurately                                                                    
     reflect the section.                                                                                                       
     18. Page  95 line  31, page 96  lines 1-2,  6-7, 22-23,                                                                    
     27-28: Minor language changes for clarity.                                                                                 
     19. Page 112,  line 27: Change five  to three, conforms                                                                    
     to the rest of the bill.                                                                                                   
     20. All effective dates updated.                                                                                           
                                                                                                                                
     Senate Labor & Commerce                                                                                                  
                                                                                                                                
     1.  Page 21,  AS  04.09.310  (Brewery Retail  License):                                                                    
     Delete  subsections (g)  and (h).  Remove reference  to                                                                    
     these in subsection (i).                                                                                                   
     2.  Pages 22,  AS  04.09.320  (Winery Retail  License):                                                                    
     Delete  subsections (g)  and (h).  Remove reference  to                                                                    
     these in subsection (i).                                                                                                   
     3. Page  23, AS 04.09.330 (Distillery  Retail License):                                                                    
     Delete  subsections (g)  and (h).  Remove reference  to                                                                    
     these in subsection (i).                                                                                                   
     Removal of  subsections (g) eliminates  the requirement                                                                    
     of manufacturer retail licensees  to sell not more than                                                                    
     20 percent  of their total  volume to the  public after                                                                    
     four  license renewal  periods. Removal  of subsections                                                                    
     (h)  eliminates   the  grandfathering   provisions  for                                                                    
     current manufacturer  retail licensees  from subsection                                                                    
     (g).                                                                                                                       
     4.  Pages   97  and   99,  AS  04.21.025(a)   and  (f):                                                                    
     Restructures   section  for   clarity.  Adds   existing                                                                    
     section (e) to the penalty provision, subsection (g).                                                                      
                                                                                                                                
     Senate Judiciary                                                                                                         
                                                                                                                                
     1.  Page  13,  line  15:  Lower  $2,500  biennial  club                                                                    
     license fee to $1,500.                                                                                                     
     2. Page 18, line 25:  Amends the sporting event license                                                                    
     by   allowing  service   from  multiple   noncontiguous                                                                    
     locations.                                                                                                                 
     3.  Page 20,  line  23: Amends  the destination  resort                                                                    
     license    by    allowing   service    from    multiple                                                                    
     noncontiguous location.                                                                                                    
     4.  Page  27,  line  28:   Insert  "with  a  zip  code"                                                                    
     following "address".                                                                                                       
     5. Page  28, lines  22-23: Insert  "zip codes  that are                                                                    
     located within" following "public inspection of".                                                                          
     6. Page  48, line 26  through page 50, line  3: Creates                                                                    
     new  Article 7.  Common Carrier  Approval in  section 9                                                                    
     using subsections AS  04.16.125(a)-(f) and (i)-(l) from                                                                    
     sections  104-106  (sec. 105  ver.  M).  This makes  an                                                                    
     important     distinction    between     administrative                                                                    
     violations against  a common  carrier licensee  and the                                                                    
     crime  of  unauthorized   transportation  of  alcoholic                                                                    
     beverages by a common carrier  into a local option area                                                                    
     by a person.                                                                                                               
     7. Page 68,  line 31: Lower the  waiting period between                                                                    
     board petitions from 10 years to 5 years.                                                                                  
     8. Page 86: Deletes previous  sections 92 and 93 (secs.                                                                    
     91&92 ver. C) which  amended the charges for furnishing                                                                    
     or delivering  to a minor. Intention  is that penalties                                                                    
     will remain unchanged.                                                                                                     
     9. Page  87, line 10: Renumbers  the following sections                                                                    
     accordingly.  Removes violation  penalty for  renting a                                                                    
     room for  the purpose of providing  alcoholic beverages                                                                    
     to a person  under 21 years of age and  makes the crime                                                                    
     a class A misdemeanor.                                                                                                     
     10.  Page   88,  lines  11,  15:   Amends  sections  by                                                                    
     specifying that  a person  21 year of  age or  older is                                                                    
     subject to  the $100 fine  for consumption at  a school                                                                    
     event.                                                                                                                     
     11.  Page 89,  lines 19-31  through page  90, line  14:                                                                    
     Adds reference to new  approved common carriers section                                                                    
     [see change  6]. Simplifies  existing AS  04.16.125 and                                                                    
     relocates  existing   class  A  misdemeanor   into  new                                                                    
     subsections (d) and (e) for clarity.                                                                                       
                                                                                                                                
     Senate Finance                                                                                                           
                                                                                                                                
     1. Page  18, line 30:  adds "rodeos" to  the definition                                                                    
     of  "sporting event  site" to  ensure that  the current                                                                    
     practice   for   sporting    event   licenses   remains                                                                    
     consistent.                                                                                                                
     2. Page 61, lines  13-15: codifies the current practice                                                                    
     of allowing  the sale of a  beverage dispensary tourism                                                                    
     license.                                                                                                                   
     3. Page  61: Deletes previous section  37, which sunset                                                                    
     AS 04.11.360(9) and (10)    these are now included with                                                                    
     the  repeals  in  section   152.  All  section  numbers                                                                    
     following this section have been renumbered.                                                                               
     4. Page  63, line  25; Page  64, lines  1, 12,  21, 27;                                                                    
     Page 65, lines 25: statutory reference corrected.                                                                          
     5. Page 66, line 9: Corrects statutory references.                                                                         
     6.  Page  68,  line  31:   shortens  the  time  that  a                                                                    
     municipality  must wait  between requesting  restaurant                                                                    
     or  eating place  licenses to  three years,  instead of                                                                    
     five years.                                                                                                                
     7.  Page  82, lines  28-29:  Rewords  for clarity.  The                                                                    
     intent  is that  the  license holder  is  liable for  a                                                                    
     violation  by an  employee and  they are  subject to  a                                                                    
     $250 administrative penalty.                                                                                               
     8. Page  85, line  25 through page  86, line  18: makes                                                                    
     conforming changes  to AS 04.16.051(d)  and adds  a new                                                                    
     (e). These sections insert  existing penalties into the                                                                    
     correct sections and reformats  the language to conform                                                                    
     to the rest of the bill.                                                                                                   
     9.  Page  86, lines  20-24:  Rewords  for clarity.  The                                                                    
     intent  is that  the  license holder  is  liable for  a                                                                    
     violation  by an  employee and  they are  subject to  a                                                                    
     $250 administrative penalty.                                                                                               
     10. Page 88,  lines 12-13: clarifies the  intent of the                                                                    
     prohibition on "consuming alcohol at a school event."                                                                      
     11.  Page 92,  lines 19-23:  requires a  license to  be                                                                    
     revoked if  for a  third violation of  certain offenses                                                                    
     within five years:                                                                                                         
     o  04.16.022 Online  sales  and  purchase of  alcoholic                                                                    
     beverages                                                                                                                  
     o  04.16.030  Prohibited  conduct relating  to  drunken                                                                    
     persons                                                                                                                    
     o  04.16.052  Furnishing   of  alcoholic  beverages  to                                                                    
     persons under the age of 21 by licensees.                                                                                  
     o  04.16.110   Sale  of  certain   alcoholic  beverages                                                                    
     prohibited.                                                                                                                
     o 04.16.175  Furnishing alcoholic  beverages in  aid of                                                                    
     gambling enterprise.                                                                                                       
     12. Page  104, lines  11-13: Reformats the  language to                                                                    
     conform to the rest of the bill.                                                                                           
     13.  Page   109,  line  3:   Adds  repeals   that  were                                                                    
     previously in section 37 (see page 61 note).                                                                               
     14. Page  109, lines 10-11  through page 111,  line 22:                                                                    
     Corrects  section numbers  and statutory  references in                                                                    
     applicability and transition language.                                                                                     
     15.  Page 113,  lines 8-9:  Corrects effective  dates                                                                      
     specifically removes previous sections  96 and 133 from                                                                    
     immediate  effective date  provision  and add  sections                                                                    
     157(a)(1), 157(a)(2) and 157 (b)(8).                                                                                       
                                                                                                                                
4:27:37 PM                                                                                                                    
                                                                                                                                
TIFFANY HALL,  Executive Director,  Recover Alaska,  testified in                                                               
support of SB 76.                                                                                                               
                                                                                                                                
REPRESENTATIVE  SULLIVAN-LEONARD asked  whether  Ms. Hall  thinks                                                               
the  current version  is  a  good compromise  in  the efforts  to                                                               
rewrite Title 4.                                                                                                                
                                                                                                                                
MS. HALL answered in the affirmative.                                                                                           
                                                                                                                                
REPRESENTATIVE WOOL asked about  the compromises not reflected in                                                               
the bill.                                                                                                                       
                                                                                                                                
MS.  HALL  explained  serving  drinks  in  distilleries  was  one                                                               
example  of  the  issue  not  being  concluded  due  to  lack  of                                                               
consensus.                                                                                                                      
                                                                                                                                
4:30:24 PM                                                                                                                    
                                                                                                                                
DALE  FOX,  President,  Alaska  Cabaret,  Hotel,  Restaurant  and                                                               
Retailers  Association   (Alaska  CHARR),  said  that   the  vast                                                               
majority  of changes  in the  current version  were improvements.                                                               
He underlined  that some  changes were to  areas of  the proposal                                                               
which originally had consensus and did  not with the changes.  He                                                               
said the  definition of manufacturers was  one.  He spoke  to the                                                               
80-20 rule in which 80 percent  of product had to be sold through                                                               
normal retail chains, which had  been changed from a longstanding                                                               
rule of  100 percent.  He  said there is a  harsh penalty section                                                               
which is  not supported  by the  industry.   He gave  examples of                                                               
small  technical changes  that could  make the  bill better.   He                                                               
said that  eating places can serve  a beverage "with a  meal" and                                                               
that language  is not  present in the  proposed legislation.   He                                                               
spoke   to  the   Uniform  Commercial   Code   (UCC)  filing   of                                                               
transactions  regarding  licenses  sold   between  parties.    He                                                               
explained  the licenses  are subject  to  a number  of rules  for                                                               
transfer.  He said  that for  40  years those  filings have  been                                                               
allowed.   Recently  the  ABC  Board has  said  it  is no  longer                                                               
allowed.   He added there are  a number of other  small technical                                                               
issues.                                                                                                                         
                                                                                                                                
REPRESENTATIVE  WOOL declared  that he  is a  beverage dispensary                                                               
license  (BDL) owner.    He  asked Mr.  Fox  whether  all of  the                                                               
controversial items were "left off" the Title 4 rewrite.                                                                        
                                                                                                                                
MR. FOX  said that a lot  of issues were  left on the table.   He                                                               
underlined the group had always "worked towards yes."                                                                           
                                                                                                                                
4:39:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STUTES asked about  the "three strikes  amendment.                                                               
She said she thinks the amendment is ambiguous                                                                                  
                                                                                                                                
MR. FOX  said that the  group disagreed  with the amendment.   He                                                               
gave  some  scenarios  in  which the  strikes  may  affect  "good                                                               
operators."  He  underlined that the small fine  in the amendment                                                               
would cause  the owner to pay  the fine rather than  go to court,                                                               
leading to  one of the  three strikes.  He  said there is  a wide                                                               
difference between a night club  serving hundreds of people and a                                                               
corner bar  serving the same  small group most  of the time.   He                                                               
suggested  the Alcohol  Beverage and  Control (ABC  Board) should                                                               
examine each instance before revoking  licenses.  He stated, "One                                                               
size does not fit all."                                                                                                         
                                                                                                                                
4:42:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON   asked  whether  the  ABC   board  had                                                               
regulations to understand the totality of the circumstances.                                                                    
                                                                                                                                
CHAIR KITO said the question had been brought to the department.                                                                
                                                                                                                                
REPRESENTATIVE  JOSEPHSON asked  if the  proper fix  would be  to                                                               
revamp the language entirely.                                                                                                   
                                                                                                                                
MR. FOX  explained that currently  the ABC Board may  suspend the                                                               
owner for 45 days for a first  offence, for 90 days at the second                                                               
offence, and revoke  the license for the third offense.   He said                                                               
he thinks it is wise to leave the  decision to the ABC Board.  He                                                               
added  he  thinks it  can  be  achieved  by  change a  couple  of                                                               
sentences in the language.                                                                                                      
                                                                                                                                
4:45:18 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   BIRCH   expressed   his   concern   that   small                                                               
entrepreneurs could be  driven out of business.  He  asked if Mr.                                                               
Fox thought  the bill would grow  small businesses or would  be a                                                               
threat.                                                                                                                         
                                                                                                                                
MR. FOX answered  there has been a change of  business model with                                                               
the introduction of tasting rooms  and samples for manufacturers.                                                               
He  said  many  breweries  are selling  through  standard  retail                                                               
avenues.  However,  some  have  decided  to  sell  through  their                                                               
manufacturing site.   He  said it  is a  "zero-sum game"  but the                                                               
issue is whether  craft manufacturers can offer a  sample so that                                                               
customers can  try the product and  go on to purchase  it in bars                                                               
and stores.   He  added that some  breweries had  also discovered                                                               
they  can make  a  lot  more money  selling  the product  through                                                               
tasting rooms and so have  stopped selling to the standard retail                                                               
outlets.                                                                                                                        
                                                                                                                                
4:50:13 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP asked about sampling in package stores.                                                                    
                                                                                                                                
MR. FOX said  members of the working group had  lots of opinions.                                                               
He said  that the  proposal was  for free  samples only  from the                                                               
stock of  the package store.   He added that the  sample sizes in                                                               
the proposal may be a little too high.                                                                                          
                                                                                                                                
REPRESENTATIVE WOOL asked about  free samples in the manufacturer                                                               
tasting room.                                                                                                                   
                                                                                                                                
MR. FOX answered that he does not know the history.                                                                             
                                                                                                                                
4:54:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH  asked about  the  cost  of a  license  for                                                               
restaurants serving only beer and wine.                                                                                         
                                                                                                                                
MR. FOX said  that the bill provided many new  opportunities.  He                                                               
said  there are  a number  of new  licenses available.   He  drew                                                               
comparisons with different commercial fishing licenses.                                                                         
                                                                                                                                
REPRESENTATIVE  STUTES  commented  that she  thought  the  sample                                                               
sizes for tasting rooms are too large.                                                                                          
                                                                                                                                
MR.  FOX  agreed that  the  amounts  should  be adjusted  by  the                                                               
committee.                                                                                                                      
                                                                                                                                
REPRESENTATIVE   STUTES  asked   about  the   difference  between                                                               
distilleries and fully licensed bars.                                                                                           
                                                                                                                                
MR. FOX said  he thinks the delineation should be  size of drinks                                                               
and opening  hours.  He said  the product should be  displayed in                                                               
the way it is consumed.  He  added that some of his members think                                                               
distilleries should only be allowed to serve straight product.                                                                  
                                                                                                                                
5:01:39 PM                                                                                                                    
                                                                                                                                
CHAIR KITO opened public testimony on SB 76.                                                                                    
                                                                                                                                
5:01:50 PM                                                                                                                    
                                                                                                                                
CHRYSTAL SHOENROCK, Secretary, Kenai  Peninsula CHARR, shared her                                                               
viewpoint on aspects of the bill.                                                                                               
                                                                                                                                
5:04:42 PM                                                                                                                    
                                                                                                                                
DARWIN BIWER,  Darwin's Theory,  testified in  support of  SB 76.                                                               
He  said he  believes the  bill does  not go  far enough  on some                                                               
issues and  goes too far  on others.   He said he  thinks tasting                                                               
room quantities  are too high.   He said  he thinks it  should be                                                               
reduced  from  36  ounces  to  16 ounces.    He  said  he  thinks                                                               
distilleries should have smaller containers.                                                                                    
                                                                                                                                
5:07:26 PM                                                                                                                    
                                                                                                                                
CHAIR  KITO clarified  that the  limits were  set out  in statute                                                               
prior to the current proposed legislation.                                                                                      
                                                                                                                                
5:08:04 PM                                                                                                                    
                                                                                                                                
JEANNE REILLY,  Reilly's Irish  Pub, testified  in support  of SB                                                               
76.  She  said licenses for distilleries are set  up by the state                                                               
at a reasonable fee.  She said  all of the licenses were based on                                                               
population.  She added that new  licenses are being issued by the                                                               
state at a small fee so that  license owners do not have "as much                                                               
meat in the game" as those possessing BDLs.                                                                                     
                                                                                                                                
5:10:14 PM'                                                                                                                   
                                                                                                                                
ABBY  WILLIAMS, Co-Owner,  Louie's Douglas  Inn, spoke  about the                                                               
unfair  advantage  and  the  three-tier system.    She  gave  her                                                               
opinion of new and innovative  businesses.  She stated she wishes                                                               
to maintain the  integrity of her BDL license.   She said she did                                                               
not expect  to be competing  with a  license owner with  a profit                                                               
margin much smaller than hers.   She said she did not believe the                                                               
intent  of the  three-tier system  was to  allow distilleries  to                                                               
serve cocktails  which put  them in  direct competition  with the                                                               
BDL owners.                                                                                                                     
                                                                                                                                
5:13:09 PM                                                                                                                    
                                                                                                                                
GEORGE TIPTON,  CHARR board  member, testified  in support  of SB                                                               
76.   He said a  few additional amendments are  needed, including                                                               
the UCC filing  issue mentioned by Mr. Fox.   He said the process                                                               
had been  accepted by the  department until recently.   He stated                                                               
many do  not have  the cash  to purchase  licenses outright.   He                                                               
said there  are tax consequences to  the issue.  He  said federal                                                               
income tax  could eat  up the  security interest.   He  stated it                                                               
would be an easy fix.                                                                                                           
                                                                                                                                
MR. TIPTON  said he owns a  number of licenses and  the volume is                                                               
part of  a business  model.  He  said he thinks  it is  fair that                                                               
licenses  follow  the  regulation  that  no  one  remain  on  the                                                               
premises after business hours.                                                                                                  
                                                                                                                                
REPRESENTATIVE KNOPP  asked about the rationale  for not allowing                                                               
UCC filings.                                                                                                                    
                                                                                                                                
MR. TIPTON answered it made no sense to him.                                                                                    
                                                                                                                                
5:17:39 PM                                                                                                                    
                                                                                                                                
ARDEN RANKIN, Sunrise  Inn, testified in support of HB  357.  She                                                               
said  she  thinks  there  needs   to  be  a  clear  and  separate                                                               
distinction between bars and distilleries.   She added she thinks                                                               
samples should  only be  offered in limited  size and  number and                                                               
should not be mixed drinks.                                                                                                     
                                                                                                                                
5:20:14 PM                                                                                                                    
                                                                                                                                
DAVID CALDWELL, Moose's Tooth, Bear  Tooth, and Broken Tooth said                                                               
he hopes the legislation can be passed this year.                                                                               
                                                                                                                                
5:20:53 PM                                                                                                                    
                                                                                                                                
RYAN  MAKINSTER, Executive  Director,  Brewers  Guild of  Alaska,                                                               
stated  there was  not consensus  or compromise  with the  change                                                               
regarding the  80-20 rule  at the final  meetings.   He addressed                                                               
Representative  Stutes   query   regarding  delineations  between                                                               
tasting rooms and bars.   He underlined that tasting rooms cannot                                                               
serve after 8 p.m.  He said he  does not know of people coming to                                                               
tasting rooms  being served all  day.  He said  the manufacturers                                                               
have capital expenditures placed in tools and materials.                                                                        
                                                                                                                                
5:24:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  asked whether Mr. Makinster  feels that more                                                               
outlets for drinking would devalue the existing licenses.                                                                       
                                                                                                                                
MR. MAKINSTER answered he was  referring to capital costs only in                                                               
terms of the level playing field.                                                                                               
                                                                                                                                
5:27:10 PM                                                                                                                    
                                                                                                                                
JOEL  KADARAUCH,   Director,  Alaska  Beer,  Wine,   and  Spirits                                                               
Wholesalers Association urged passage of HB 357.                                                                                
                                                                                                                                
5:28:37 PM                                                                                                                    
                                                                                                                                
LARRY  HACKENMILLER, General  Manager, CHARR  Interior, spoke  to                                                               
tasting rooms.   He stated  the term  is not defined  in statute.                                                               
He recounted  the behavior of a  tasting room which was  found to                                                               
be preparing  mixed drinks.  He  said he also has  a problem with                                                               
the  amount of  beer  and  wine allowed  in  tasting  rooms.   He                                                               
suggested decreasing  the hours in which  manufacturers can serve                                                               
samples to 5 p.m.                                                                                                               
                                                                                                                                
5:31:27 PM                                                                                                                    
                                                                                                                                
ROB  BORLAND, Ursa  Major Distilling,  stated  statute says  that                                                               
distilleries  cannot be  a de  facto bar.   He  said there  is no                                                               
unfair advantage.  He said  distilleries have the same population                                                               
limits as  BDLs.  He  suggested the reason  for the high  cost of                                                               
BDL licenses was due to the ability to transfer them.                                                                           
                                                                                                                                
5:33:27 PM                                                                                                                    
                                                                                                                                
ERIC FORST, Partner,  Red Dog Saloon, suggested  that the tasting                                                               
levels be  cut back in  the proposed bill.   He said  he supports                                                               
the three-tier system.                                                                                                          
                                                                                                                                
5:36:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL  asked  about   the  concern  regarding  the                                                               
population limits and the cost of the BDL.                                                                                      
                                                                                                                                
MR. FORST  answered that if  the licenses are limited,  the value                                                               
of each would go up.                                                                                                            
                                                                                                                                
5:37:52 PM                                                                                                                    
                                                                                                                                
JACK  MANNING, Owner,  Duck Creek  Market,  said he  is also  the                                                               
president  of  the  local  CHARR   chapter.    He  spoke  to  the                                                               
compromises  during meetings.   He  said many  feel the  proposal                                                               
greatly reduces the role of the ABC Board.                                                                                      
                                                                                                                                
5:39:05 PM                                                                                                                    
                                                                                                                                
RAY KAISER,  Squirez Bar,  said that  he supports  craft products                                                               
but thinks they should be  distributed through standard channels.                                                               
He added he thinks sample sizes should be reevaluated.                                                                          
                                                                                                                                
5:40:00 PM                                                                                                                    
                                                                                                                                
MARK   ERICKSON,  Owner,   Lucky  Lady   Pub,  spoke   about  the                                                               
distilleries  changing   their  approach.     He   mentioned  the                                                               
difference in cost for the BDL and other licenses.                                                                              
                                                                                                                                
5:41:14 PM                                                                                                                    
                                                                                                                                
CHARLIE HERRINGTON,  Juneau's Waterfront Restaurants,  stated his                                                               
concern  regarding the  revocation  of licenses  proposed in  the                                                               
legislation.                                                                                                                    
                                                                                                                                
5:42:18 PM                                                                                                                    
                                                                                                                                
REECIA WILSON, Owner, Hanger on  the Wharf, Twisted Fish Company,                                                               
spoke  to the  new requirement  regarding UCC  filing.   She said                                                               
language to clarify the intent is needed.                                                                                       
                                                                                                                                
5:44:45 PM                                                                                                                    
                                                                                                                                
PAUL THOMAS, Owner,  Alaska Cache Liquor, spoke  about the three-                                                               
strike rule.   He stated  the ABC Board  is designed to  hear and                                                               
decide on infractions.   He voiced his concern  that the proposal                                                               
would condemn good  businesses based on an arbitrary  number.  He                                                               
said  those decisions  should be  made by  the Board.   He  spoke                                                               
about the tasting rooms staying as originally conceived.                                                                        
                                                                                                                                
5:47:34 PM                                                                                                                    
                                                                                                                                
TOM  MANNING, Owner,  Duck  Creek  Market, said  he  has owned  a                                                               
number of licenses and has served  on the ABC Board.  He declared                                                               
support for  the proposed bill.   He said he does  not agree with                                                               
the  three-strike rule.    He  said the  tasting  room should  be                                                               
clearly defined.                                                                                                                
                                                                                                                                
5:50:15 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KNOPP  asked  whether Mr.  Manning  supports  UCC                                                               
filing.                                                                                                                         
                                                                                                                                
MR. MANNING  answered in  the affirmative.   He said  that should                                                               
stay.                                                                                                                           
                                                                                                                                
REPRESENTATIVE WOOL asked whether Mr.  Manning had any insight on                                                               
the definition of a bar.                                                                                                        
                                                                                                                                
MR. MANNING said  that he supported the craft  manufacturers.  He                                                               
mentioned  the   local  brewery.     He   said  he   thought  the                                                               
distilleries  would be  producing  craft products.    He said  he                                                               
thinks  a  pre-distilled  product  is more  about  flavoring  and                                                               
serving them in the  same way as in a bar is  no longer a tasting                                                               
room.                                                                                                                           
                                                                                                                                
5:53:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH asked  Mr. Manning how room can  be made for                                                               
the manufacturing operations.                                                                                                   
                                                                                                                                
MR. MANNING answered he thinks  Alaska Brewing Company is a great                                                               
example of  doing it right.   He said,  "You say it's  about your                                                               
product; make it about your product."                                                                                           
                                                                                                                                
5:56:09 PM                                                                                                                    
                                                                                                                                
LEANN THOMAS, Triangle Club, stated  she encourages passage of SB                                                               
76.   She spoke to  tasting rooms and limits based on population.                                                               
She  said  there  should  be  limits on  tasting  room  hours  of                                                               
operation.   She said  she thinks  manufacturing should  refer to                                                               
the use  of raw materials.   She clarified that  limiting tasting                                                               
rooms by  population for Juneau,  Alaska, would mean  there would                                                               
be four  tasting rooms.   She suggested otherwise  those entities                                                               
could purchase BDLs like bars.                                                                                                  
                                                                                                                                
6:00:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  corrected that  there is currently  no limit                                                               
on the  number of tasting rooms  and a city like  Juneau, Alaska,                                                               
could have four breweries, four distilleries, and four wineries.                                                                
                                                                                                                                
MS. THOMAS said she thinks an  easy solution would be to make the                                                               
limit 1:9,000 across all types.                                                                                                 
                                                                                                                                
6:01:14 PM                                                                                                                    
                                                                                                                                
PETE THIBODEAU,  Owner, Thibodeau's Market, Inc.,  said there are                                                               
only so  many customers  out there and  increasing the  number of                                                               
licenses does not make the "pot bigger."                                                                                        
                                                                                                                                
6:01:51 PM                                                                                                                    
                                                                                                                                
CHRIS MIEIER,  Alaska Travel Adventures, testified  in support of                                                               
SB 76.   He spoke to  seasonal licenses limited by  population at                                                               
20,000.   Under SB 76, as  is, Juneau would be  excluded from the                                                               
new  class of  tourism licenses.    He added  that currently  the                                                               
provision states hours  from 1 p.m. to 11 p.m.  and he would like                                                               
to see it changed to include lunch hours.                                                                                       
                                                                                                                                
6:03:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP asked whether  Mr. Mieier anticipates a need                                                               
for new seasonal tourism licenses.                                                                                              
                                                                                                                                
MR. MIEIER said, "Absolutely.                                                                                                   
                                                                                                                                
6:04:05 PM                                                                                                                    
                                                                                                                                
JARED CURE,  The Narrows Bar,  stated he has concerned  about the                                                               
three-strikes policy.   He said the  ABC Board is already  set up                                                               
to  handle  those cases.    He  stated  he support  UCC  filings,                                                               
without which  he would not be  in business.  He  suggested there                                                               
be a limit  to what tasting rooms  can offer.  He  spoke to costs                                                               
for manufacturers.                                                                                                              
                                                                                                                                
6:06:46 PM                                                                                                                    
                                                                                                                                
BRANDON HOWARD, Owner/Founder,  Amalga Distillery, commented that                                                               
the committee  has heard from a  lot of BDL license  holders.  He                                                               
described the process  of his distillation and the  use of Alaska                                                               
grain  from Delta  Junction, Alaska.    He explained  how gin  is                                                               
made.    He said  claiming  that  Alaska distilleries  are  being                                                               
deceitful worries him.                                                                                                          
                                                                                                                                
6:13:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH  asked whether there are  any limitations on                                                               
bringing distillery products on cruise ships.                                                                                   
                                                                                                                                
MR.  HOWARD answered  cruise ship  passengers have  to check  any                                                               
bottles that they purchase to take home.                                                                                        
                                                                                                                                
6:14:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  asked whether there are  other distillers in                                                               
Alaska making distilled products from raw materials.                                                                            
                                                                                                                                
MR. HOWARD explained the distillery processes.                                                                                  
                                                                                                                                
REPRESENTATIVE  WOOL asked  whether there  are distilleries  that                                                               
may  have  a more  comprehensive  license  but only  offer  their                                                               
product.                                                                                                                        
                                                                                                                                
MR.  HOWARD answered  that  he has  seen the  model,  but not  in                                                               
Alaska.   He  said he  has not  seen a  locale that  features one                                                               
singular product.                                                                                                               
                                                                                                                                
REPRESENTATIVE WOOL asked about the 80/20 rule.                                                                                 
                                                                                                                                
MR. HOWARD answered  his business had just  began distribution in                                                               
December 2017,  and rolling  out product  in January  2018, since                                                               
then about  66 percent of  the product is  shipped out.   He said                                                               
the 80/20 rule discourages smaller businesses.                                                                                  
                                                                                                                                
6:20:16 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  said he  would take  further testimony  the following                                                               
day.                                                                                                                            
                                                                                                                                
6:20:38 PM                                                                                                                    
                                                                                                                                
DIANE KAPLAN, President, CEO, Rasmussen  Foundation, spoke to the                                                               
issue  of  alcoholism  in  Alaska.    She  gave  some  statistics                                                               
regarding  alcohol  abuse  in  the  state.    She  said  a  clear                                                               
framework  for alcohol  laws would  strengthen public  health and                                                               
protect underage residents.  She  spoke to the lack of regulation                                                               
on on-line sales.                                                                                                               
                                                                                                                                
6:24:23 PM                                                                                                                    
                                                                                                                                
HEATHER  SHADE,  Port  Chilkoot Distillery,  shared  her  concern                                                               
about  the  focus  on   restricting  the  manufacturing  industry                                                               
further through  SB 76.   She described the industry  and current                                                               
trends.                                                                                                                         
                                                                                                                                
6:31:01 PM                                                                                                                    
                                                                                                                                
ROBIN   MINARD,   Director,   Public   Affairs,   Mat-Su   Health                                                               
Foundation,  testified in  support of  SB 76.   She  stated local                                                               
police emphasize  that the  number one problem  is alcohol.   She                                                               
spoke  to the  years  of  work that  had  gone  into the  rewrite                                                               
process.                                                                                                                        
                                                                                                                                
6:32:07 PM                                                                                                                    
                                                                                                                                
DICK ROSSTON, Alyeska Resort, testified in support of SB 76.                                                                    
                                                                                                                                
6:33:22 PM                                                                                                                    
                                                                                                                                
ALISON KULAS,  Executive Director,  Advisory Board  on Alcoholism                                                               
and  Drug Abuse,  Alaska Mental  Health Board,  Statewide Suicide                                                               
Prevention Council, Division of  Behavioral Health, Department of                                                               
Health  and Social  Services, asked  the committee  not to  throw                                                               
away  all the  work that  has gone  into clarifying  the laws  in                                                               
Title 4.  She said if  the public understands the regulations, it                                                               
will go a long way to improving public health.                                                                                  
                                                                                                                                
6:35:25 PM                                                                                                                    
                                                                                                                                
CHAIR KITO held over SB 76.                                                                                                     

Document Name Date/Time Subjects
SB86 ARRC Land Sale Resolutions.pdf HL&C 5/2/2018 3:15:00 PM
SB 86
SB86 ARRC Land Sale Properties Proposal 17APR18 - FINAL.PDF HL&C 5/2/2018 3:15:00 PM
SB 86
SB86 Letters of Support 4.23.18.pdf HL&C 5/2/2018 3:15:00 PM
SB 86
SB86 Version U-A.PDF HL&C 5/2/2018 3:15:00 PM
SB 86
SB86 Fiscal Note DCCED ARRC 2.2.18.pdf HL&C 5/2/2018 3:15:00 PM
SB 86
SB76 Sectional Analysis Ver. C 4.30.2018.pdf HL&C 5/2/2018 3:15:00 PM
SB 76
SB76 Fiscal Note 3 - DCCED-AMCO 4.30.2018.pdf HL&C 5/2/2018 3:15:00 PM
SB 76
SB76 Ver. C 4.30.2018.pdf HL&C 5/2/2018 3:15:00 PM
SB 76
SB76 Explanation of Changes Ver. N to Ver. C 4.30.2018.pdf HL&C 5/2/2018 3:15:00 PM
SB 76
SB76 Fiscal Note 2 - DHSS-PS 4.30.2018.pdf HL&C 5/2/2018 3:15:00 PM
SB 76
SB86 Version N.pdf HL&C 5/2/2018 3:15:00 PM
SB 86
SB86 Explanation of Changes Version U.A to N 05.02.18.pdf HL&C 5/2/2018 3:15:00 PM
SB 86