Legislature(2017 - 2018)BARNES 124

04/11/2018 03:15 PM LABOR & COMMERCE

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Audio Topic
03:21:06 PM Start
03:21:32 PM HB357
05:03:51 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 357 ALCOHOLIC BEVERAGE CONTROL/REGULATION TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= SB 108 MEDICAL CARE/LICENSING/MEDICAL BOARD TELECONFERENCED
<Bill Hearing Postponed>
                     ALASKA STATE LEGISLATURE                                                                                 
           HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                          April 11, 2018                                                                                        
                            3:15 p.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Sam Kito, Chair                                                                                                  
Representative Adam Wool, Vice Chair                                                                                            
Representative Andy Josephson                                                                                                   
Representative Louise Stutes                                                                                                    
Representative Chris Birch                                                                                                      
Representative Gary Knopp                                                                                                       
Representative Colleen Sullivan-Leonard                                                                                         
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Mike Chenault (alternate)                                                                                        
Representative Bryce Edgmon (alternate)                                                                                         
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 357                                                                                                              
"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, Alaska                                                               
Rules of Minor Offense Procedure;  and providing for an effective                                                               
date."                                                                                                                          
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
COMMITTEE SUBSTITUTE FOR SS FOR SENATE BILL NO. 108(FIN)                                                                        
"An  Act relating  to the  State Medical  Board; relating  to the                                                               
licensing  of physicians,  osteopaths, and  podiatrists; relating                                                               
to  the  certification of  medical  assistants;  relating to  the                                                               
practice  of  medicine; relating  to  the  practice of  podiatry;                                                               
relating to the practice of  osteopathy; relating to assault of a                                                               
medical professional; and providing for an effective date."                                                                     
                                                                                                                                
     - BILL HEARING POSTPONED                                                                                                   
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 357                                                                                                                  
SHORT TITLE: ALCOHOLIC BEVERAGE CONTROL/REGULATION                                                                              
SPONSOR(s): REPRESENTATIVE(s) KOPP                                                                                              
                                                                                                                                
02/16/18       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/16/18       (H)       L&C, JUD                                                                                               
04/11/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
REPRESENTATIVE CHUCK KOPP                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented HB 357 as prime sponsor.                                                                       
                                                                                                                                
ANNA BRAWLEY, Title 4 Project Coordinator                                                                                       
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:     Presented  a  PowerPoint   on  Alcoholic                                                             
Beverage Control (ABC) Board, Title 4 Review Project.                                                                           
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:21:06 PM                                                                                                                    
                                                                                                                                
CHAIR  SAM KITO  called  the House  Labor  and Commerce  Standing                                                             
Committee meeting  to order at  3:15 p.m.  Representatives Birch,                                                               
Knopp, Sullivan-Leonard,  Josephson, Wool, and Kito  were present                                                               
at  the call  to order.    Representative Stutes  arrived as  the                                                               
meeting was in progress.                                                                                                        
                                                                                                                                
          HB 357-ALCOHOLIC BEVERAGE CONTROL/REGULATION                                                                      
                                                                                                                                
3:21:32 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that  the only order  of business  would be                                                               
HOUSE  BILL NO.  357, "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, Alaska  Rules of Minor Offense  Procedure; and providing                                                               
for an effective date."                                                                                                         
                                                                                                                                
3:22:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KOPP,  Alaska State Legislature, presented  HB 357                                                               
as prime  sponsor.   He explained that  Alaska alcohol  laws have                                                               
not  been updated  since the  early  1980s and  the industry  has                                                               
evolved at  a rate with  which the  statutes have not  kept pace.                                                               
He said  the aim of  the proposal  is to ensure  that enforcement                                                               
can  be carried  out.    He added  it  offers  clear and  defined                                                               
statutes for just outcomes.   He introduced Ms. Brawley and spoke                                                               
to the history of the proposal.                                                                                                 
                                                                                                                                
3:25:50 PM                                                                                                                    
                                                                                                                                
ANNA   BRAWLEY,  Title   4  Project   Coordinator,  presented   a                                                               
PowerPoint  on Alcoholic  Beverage Control  (ABC) Board,  Title 4                                                               
Review Project [included in committee  packet].  She gave a brief                                                               
overview of the  history of the project and  presented the goals:                                                               
make Title  4 a  clear and  consistent legal  framework; increase                                                               
swiftness,   proportionality   and  consistency   of   penalties;                                                               
increase local law enforcement of  Title 4; and increase licensee                                                               
accountability before the ABC Board  for Title 4 violations.  She                                                               
added that to  date there has been approximately 6  years of work                                                               
for a total of 12,000 hours in the project.                                                                                     
                                                                                                                                
MS. BRAWLEY  pointed out  that the  project involves  five topic-                                                               
based subcommittees which operate under the steering committee.                                                                 
                                                                                                                                
REPRESENTATIVE KNOPP  asked about  the local  option subcommittee                                                               
and what they were charged to do.                                                                                               
                                                                                                                                
MS. BRAWLEY said the subcommittee  looked at communities' ability                                                               
to vote to restrict alcohol in statute.                                                                                         
                                                                                                                                
3:30:45 PM                                                                                                                    
                                                                                                                                
MS. BRAWLEY moved  to slide 10 to present  the sectional summary,                                                               
which reads as follows:                                                                                                         
                                                                                                                                
        • AS 04. Chapter 6: sections 1 - 8, pp. 1 - 5                                                                           
        • AS 04. Chapter 9: section 9, pp. 5 - 49                                                                               
        • AS 04. Chapter 11: sections 10 - 72, pp. 50  79                                                                       
     • AS 04. Chapter 16: sections 73 - 121, pp. 79 - 97                                                                        
        • AS 04. Chapter 21: sections 122 - 136, pp. 97 - 104                                                                   
        • Other Titles' Changes: sections 137  148, pp. 104                                                                     
          109                                                                                                                   
        • Transition: sections 149  159, pp. 109  114                                                                           
                                                                                                                                
MS. BRAWLEY  presented the six  categories of  recommendations in                                                               
slide 11:                                                                                                                       
                                                                                                                                
     1. Alcohol Licenses, Permits and Trade Practices                                                                           
     2. Role and Functions of the ABC Board and Staff                                                                           
     3. Underage Drinking and Youth Access to Alcohol                                                                           
     4. Regulation of Internet Sales of Alcohol                                                                                 
     5. Technical or Administrative Law Changes                                                                                 
     6. Local Option Communities*                                                                                               
     * Note: Local Option  recommendations are documented in                                                                    
     the  report,   but  not  included   in  HB   357.  More                                                                    
     comprehensive  discussion  of   Local  Option  laws  is                                                                    
     needed in the future.                                                                                                      
                                                                                                                                
                                                                                                                                
REPRESENTATIVE KNOPP  stated his concern about  local options was                                                               
that,  given the  fiscal situation,  communities  could be  given                                                               
some of the responsibilities currently held by the state.                                                                       
                                                                                                                                
CHAIR KITO said that one of  the issues that has arisen regarding                                                               
local   options  is   the  Bethel,   Alaska,  decision   and  the                                                               
consequences of that decision.                                                                                                  
                                                                                                                                
3:34:14 PM                                                                                                                    
                                                                                                                                
MS. BRAWLEY continued  to slide 12-18 detailing  the key concepts                                                               
of Title 4:                                                                                                                     
                                                                                                                                
        • The 3-tier system: separation of manufacturers,                                                                       
        wholesalers and retailers to prevent monopolies                                                                         
        • Population limits: regulates number of licenses                                                                       
          available in each community by type                                                                                   
        • Licenses and permits:                                                                                                 
                  o License: allows a business to sell,                                                                         
                    serve, distribute and/or manufacture                                                                        
                    alcohol for 2 years.                                                                                        
                  o Permit: time-limited alcohol sales or                                                                       
                    service, by a licensee or non-licensed                                                                      
                    organization.                                                                                               
        • Proposed new concept: Endorsements on licenses to                                                                     
          expand premises or allowed activities                                                                                 
                                                                                                                                
REPRESENTATIVE WOOL asked about  "changing trends and values" and                                                               
how they have affected the rewrite of Title 4.                                                                                  
                                                                                                                                
MS. BRAWLEY  gave the examples  of online sales and  direct sales                                                               
of craft manufacturing.                                                                                                         
                                                                                                                                
REPRESENTATIVE  WOOL  asked  about  the three-tier  system.    He                                                               
disclosed that he holds a beverage  license and is subject to the                                                               
laws in question.  He asked about tensions in the industry.                                                                     
                                                                                                                                
MS.  BRAWLEY answered  that the  tensions  do still  exist.   She                                                               
added that the proposed law was  not attempting to be the "be all                                                               
and end all" of the issue.                                                                                                      
                                                                                                                                
REPRESENTATIVE   WOOL  asked   about  the   distinctions  between                                                               
boroughs and cities and about  population limits for the purposes                                                               
of regulation.                                                                                                                  
                                                                                                                                
MS. BRAWLEY  answered that population  limits had  been examined.                                                               
The  stakeholder group  had concluded  that no  changes would  be                                                               
suggested, with a couple of exceptions.                                                                                         
                                                                                                                                
3:44:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH  asked about exclusions from  the population                                                               
count.  He asked why children were not excluded.                                                                                
                                                                                                                                
MS. BRAWLEY  answered the count  was not directly related  to the                                                               
census.                                                                                                                         
                                                                                                                                
3:45:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL spoke to the  introduction of the new license                                                               
for tasting  rooms.   He asked  about discussions  of eliminating                                                               
the quota system.                                                                                                               
                                                                                                                                
MS.  BRAWLEY shared  her understanding  that language  on tasting                                                               
rooms  was  added to  the  current  license  and  was not  a  new                                                               
license.    She  said  the  group  had  opted  not  to  keep  the                                                               
discussion on the table because there was no consensus.                                                                         
                                                                                                                                
3:47:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   SULLIVAN-LEONARD    mentioned   the   supporting                                                               
documentation for  the bill.   She asked  why some  allowed types                                                               
[of licenses] for  population density are not  in compliance with                                                               
the new proposal.                                                                                                               
                                                                                                                                
CHAIR  KITO asked  whether  there is  any  interested in  getting                                                               
closer to the limit with  the bars and retail establishments that                                                               
currently exist.                                                                                                                
                                                                                                                                
MS. BRAWLEY answered that some  businesses had been grandfathered                                                               
in and  this was  reflected in  the high  density in  some areas.                                                               
She said  the statute  does not contemplate  the total  number of                                                               
licenses  in  an  area,  only  each  type.  She  added  that  the                                                               
stakeholders had opted  not to add a new license  type every time                                                               
a new issue emerged.                                                                                                            
                                                                                                                                
REPRESENTATIVE KNOPP pointed  to the table on slide  16 and asked                                                               
for an explanation of population limits.                                                                                        
                                                                                                                                
3:50:11 PM                                                                                                                    
                                                                                                                                
CHAIR KITO pointed out that  there are separate limits applied to                                                               
cities and  to boroughs.  He  said that [on the  slide] the icons                                                               
in  teal represent  licenses exempt  from population  limits, and                                                               
the icons in goldenrod represent part of the license limits.                                                                    
                                                                                                                                
REPRESENTATIVE  KNOPP suggested  there are  population limits  in                                                               
cities, and they just depend on the type of license.                                                                            
                                                                                                                                
MS. BRAWLEY answered in the affirmative.                                                                                        
                                                                                                                                
REPRESENTATIVE  KNOPP  asked  about population  calculations  for                                                               
boroughs versus cities.                                                                                                         
                                                                                                                                
MS. BRAWLEY answered that the  population for incorporated cities                                                               
would be excluded as they have their own licenses.                                                                              
                                                                                                                                
REPRESENTATIVE  WOOL asked  about the  purpose of  the population                                                               
limit.    He asked  whether  most  cities exceed  the  population                                                               
limit.                                                                                                                          
                                                                                                                                
MS. BRAWLEY answered  the most cities do have  more licenses than                                                               
statute would  allow and suggested  that is due  to grandfathered                                                               
licenses.                                                                                                                       
                                                                                                                                
REPRESENTATIVE KOPP added that the  population limit protects the                                                               
value of the license as well as public safety.                                                                                  
                                                                                                                                
3:54:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  asked why population  limits are so  "out of                                                               
whack" with statute.                                                                                                            
                                                                                                                                
REPRESENTATIVE  KOPP  said  the motivation  behind  the  proposed                                                               
bills  is  the  seeming  randomness   and  disparity  of  license                                                               
allocation.   He  reiterated that  effort is  to standardize  the                                                               
system.                                                                                                                         
                                                                                                                                
3:56:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   STUTES   asked    whether   licenses   are   not                                                               
transferable in the new bill.                                                                                                   
                                                                                                                                
MS. BRAWLEY answered that existing  licenses can be grandfathered                                                               
so do not go away.                                                                                                              
                                                                                                                                
REPRESENTATIVE STUTES asked whether  a grandfathered business can                                                               
transfer the license.                                                                                                           
                                                                                                                                
MS.  BRAWLEY answered  that  population limits  do  not apply  to                                                               
individual licenses.                                                                                                            
                                                                                                                                
3:57:44 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  remarked that  the working  group seems  to recognize                                                               
the  issue was  politically volatile  and said  that the  working                                                               
group had  stated it did not  have consensus.  He  said the issue                                                               
of  the number  of licenses  per population  should be  addressed                                                               
legislatively.                                                                                                                  
                                                                                                                                
REPRESENTATIVE  JOSEPHSON asked  whether  a cap  on licenses  was                                                               
being proposed.                                                                                                                 
                                                                                                                                
REPRESENTATIVE  KOPP answered  there is  nothing in  the proposed                                                               
law that would  cause licenses to proliferate.  He  said it would                                                               
allow  the  ABC Board  to  be  more  responsive to  the  changing                                                               
dynamics  of  communities.  He  said he  was  very  sensitive  to                                                               
devaluing current licenses.                                                                                                     
                                                                                                                                
REPRESENTATIVE WOOL  commented the recent addition  of on-premise                                                               
tasting rooms does affect existing licenses.                                                                                    
                                                                                                                                
REPRESENTATIVE KOPP said the proposed bill has not passed yet.                                                                  
                                                                                                                                
4:01:20 PM                                                                                                                    
                                                                                                                                
MS. BRAWLEY addressed the role  of the Alcoholic Beverage Control                                                               
Board  ("ABC  Board").    She  outlined  the  recommendations  as                                                               
follows:                                                                                                                        
                                                                                                                                
     • Designate the ABC Board and AMCO as the agency to                                                                        
          develop a multi-department, public-private sector                                                                     
          education plan about responsible alcohol use and                                                                      
          applicable laws.                                                                                                      
        • Coordinate with Department of Health and Social                                                                       
          Services and other agencies tasked with alcohol-                                                                      
          related education.                                                                                                    
                                                                                                                                
4:05:24 PM                                                                                                                    
                                                                                                                                
MS. BRAWLEY  spoke to the  recommendation to establish  a written                                                               
order database.                                                                                                                 
                                                                                                                                
        • Allow data about direct shipment orders of                                                                            
          alcohol  in local  option communities  to be  made                                                                    
          publicly  available, aggregated  at the  region or                                                                    
          community  level,   for  analysis   and  community                                                                    
          planning.                                                                                                             
        • Written order database can only be accessed by                                                                        
          AMCO enforcement staff, other law enforcement,                                                                        
          and package store licensees who fill written                                                                          
          orders.                                                                                                               
      • Personal information would be kept confidential.                                                                        
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  asked  what  would be  done  with  the                                                               
information collected in the database.                                                                                          
                                                                                                                                
MS. BRAWLEY answered that information  would be collected to give                                                               
local communities information on how  much alcohol is coming into                                                               
the community.                                                                                                                  
                                                                                                                                
REPRESENTATIVE JOSEPHSON suggested the  information would be used                                                               
by some entity.                                                                                                                 
                                                                                                                                
REPRESENTATIVE  KOPP  answered  the   information  would  be  for                                                               
communities  and  law  enforcement  to  understand  the  flow  of                                                               
alcohol in the area.                                                                                                            
                                                                                                                                
4:10:00 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL asked about fees.                                                                                           
                                                                                                                                
MS. BRAWLEY deferred to AMCO staff.                                                                                             
                                                                                                                                
REPRESENTATIVE KOPP added  that the fees also pay  for the public                                                               
health education.                                                                                                               
                                                                                                                                
MS. BRAWLEY said most haven't been changed since the 1980s.                                                                     
                                                                                                                                
REPRESENTATIVE STUTES  asked about the benefit  of publishing the                                                               
community-level data.                                                                                                           
                                                                                                                                
REPRESENTATIVE  KOPP answered  there is  an approval  process for                                                               
any package liquor store to sell alcohol to rural communities.                                                                  
They  have to  identify  the  person they  are  selling  to.   He                                                               
reminded  that communities  have opted  to regulate  the sale  of                                                               
alcohol.    He  said  publishing  helps  communities  to  examine                                                               
collectively the movement of alcohol.                                                                                           
                                                                                                                                
REPRESENTATIVE  STUTES  said  she   can  understand  keeping  the                                                               
records but not publishing the data.                                                                                            
                                                                                                                                
CHAIR KITO  said data can  provide decision-making tools  for the                                                               
board.                                                                                                                          
                                                                                                                                
REPRESENTATIVE STUTES reiterated she  doesn't understand the need                                                               
for publishing the data.                                                                                                        
                                                                                                                                
CHAIR  KITO said  that was  a  concern that  should be  addressed                                                               
during discussion of the proposed bill.                                                                                         
                                                                                                                                
4:16:19 PM                                                                                                                    
                                                                                                                                
MS. BRAWLEY  addressed Chapter 9  on licenses,  endorsements, and                                                               
permits.  She  said all of the proposals would  be moved into one                                                               
chapter  in the  bill.   She said  most license  types would  not                                                               
change, just be renumbered.                                                                                                     
                                                                                                                                
MS. BRAWLEY said slides 28-30  show how the system would operate.                                                               
She  briefly mentioned  license  types and  exemptions. She  said                                                               
some license  types are set for  repeal and would be  replaced by                                                               
an existing license type.                                                                                                       
                                                                                                                                
MS.  BRAWLEY spoke  to population  limits.   She said  the limits                                                               
apply only  to retail  licenses and  would not  affect wholesale,                                                               
manufacturing, tourism, or Winery Direct Shipment licenses.                                                                     
                                                                                                                                
MS. BRAWLEY spoke to simplifying  manufacturing licenses as shown                                                               
on slide 32:                                                                                                                    
                                                                                                                                
        • Keep three manufacturing license types:                                                                               
          Brewery (AS 04.11.130), Winery (AS 04.11.140),                                                                        
          Distillery (AS 04.11.170).                                                                                            
      • Remove Bottling Works (AS 04.11.120) and Brewpub                                                                        
          (AS 04.11.135) license types from statute.                                                                            
                                                                                                                                
MS. BRAWLEY explained the definitions for qualifications                                                                        
for Alaska manufacturing licenses shown on slide 34.                                                                            
                                                                                                                                
        • Require in Brewery, Winery, and Distillery                                                                            
          Manufacturer licenses that at  least 80 percent of                                                                    
          alcohol products for sale were  made on the Alaska                                                                    
          licensed premises.                                                                                                    
        • Based on ABC Board regulation for distilleries.                                                                       
                                                                                                                                
4:21:30 PM                                                                                                                    
                                                                                                                                
MS. BRAWLEY said that small manufacturers would be allowed                                                                      
to hold retail licenses.  The recommendations appear on                                                                         
slide 35 as follows:                                                                                                            
                                                                                                                                
        • Remove the restriction in Prohibited Financial                                                                        
          Interest  (AS  04.11.450),  which does  not  allow                                                                    
          manufacturers   to  hold   retail  licenses,   for                                                                    
          smaller manufacturers.                                                                                                
        • Only manufacturers who produce less than a                                                                            
          certain  amount  of   product  annually  would  be                                                                    
          eligible.                                                                                                             
        • Large manufacturers   would    be   limited   to                                                                      
          production.                                                                                                           
        • The proposed thresholds exceed the current                                                                            
          production   of  Alaska's   largest  manufacturing                                                                    
          licensees.                                                                                                            
                                                                                                                                
MS. BRAWLEY spoke to the recommendation to allow                                                                                
manufacturing retail licenses to allow limited onsite                                                                           
consumption and offsite sales.                                                                                                  
                                                                                                                                
        • Add-on  retail    licenses   specifically    for                                                                      
          manufacturers to allow  limited onsite consumption                                                                    
          and offsite sales.                                                                                                    
          o Existing licensees converted                                                                                        
          o  New retail  licenses  have  1:9,000  population                                                                    
             limit                                                                                                              
          o  After 8 years, new licensees limited to only 20                                                                    
             percent of sales volume in retail room, or                                                                         
             waiver from Board                                                                                                  
        • A separate endorsement for free samples.                                                                              
                                                                                                                                
MS. BRAWLEY mentioned the onsite and offsite consumption                                                                        
limits for breweries, wineries, and distilleries.                                                                               
                                                                                                                                
4:26:41 PM                                                                                                                    
                                                                                                                                
MS. BRAWLEY discussed recommendations for wholesale                                                                             
licenses.  She indicated there were fewer recommended                                                                           
changes for this group.                                                                                                         
                                                                                                                                
        • Adjust fees for  both Wholesale  licenses  (both                                                                      
          defined  in   AS  04.11.160)  to   retain  current                                                                    
          maximum but reduce burden on small operators.                                                                         
        • Remove the requirement to provide a full list of                                                                      
          suppliers to the ABC Board.                                                                                           
                                                                                                                                
MS. BRAWLEY moved to the recommendations for "Multiple                                                                          
Licensed Premises with a Beverage Dispensary License" on                                                                        
slides 42-43.                                                                                                                   
                                                                                                                                
        • Clarify the parameters   that  would  allow  and                                                                      
          require  multiple fixed  counters  for a  Beverage                                                                    
          Dispensary license (AS 04.11.090).                                                                                    
        • Replace Duplicate licenses with  Multiple  Fixed                                                                      
          Counter endorsements.                                                                                                 
        • Create a Hotel/Motel  endorsement, and  a  Large                                                                      
          Resort   endorsement,   which  allows   additional                                                                    
          licenses in separate buildings.                                                                                       
                                                                                                                                
4:31:04 PM                                                                                                                    
                                                                                                                                
MS. BRAWLEY spoke to recommendations for pub licensing for                                                                      
alternating premises on slide 44.                                                                                               
                                                                                                                                
        • Allow a  university  with   a  Pub   license  to                                                                      
          designate  a  second licensed  premises,  operated                                                                    
          during mutually exclusive hours.                                                                                      
        • Example: existing Pub License at UAF (Fairbanks)                                                                      
          could alternate with service of  alcohol at the UA                                                                    
          Museum of the North during daytime hours                                                                              
                                                                                                                                
MS. BRAWLEY spoke to renaming Recreational Site Licenses to                                                                     
Sporting Event License.                                                                                                         
                                                                                                                                
        • Ensure the   definition   of   "recreation"   is                                                                      
          consistently applied to  Recreational Site license                                                                    
          holders.                                                                                                              
        • Make a sunset provision of 8 years to review and                                                                      
          retire licenses  that do not meet  this definition                                                                    
          (AS 04.11.210), if they are not in compliance                                                                         
          with the statute.                                                                                                     
                                                                                                                                
MS. BRAWLEY spoke to seasonal REPL tourism licenses in                                                                          
slide 46:                                                                                                                       
                                                                                                                                
        • Seasonal restaurant license                                                                                           
      • Available in smaller communities (< 20,000 pop.)                                                                        
        • Same operating requirements  and  privileges  as                                                                      
          full-year restaurants (REPL)                                                                                          
        • Number of licenses per  community determined  by                                                                      
          formula                                                                                                               
        • Season defined as up to 6 months per year, in any                                                                     
          combination                                                                                                           
             o Example: May through September + 1 winter                                                                        
               month                                                                                                            
                                                                                                                                
MS. BRAWLEY  spoke to internet  direct sales.  She mentioned                                                                    
that Alaska  is one of  the few  states with no  rules about                                                                    
Internet  sales  of  alcohol.    She  said  that  there  are                                                                    
currently no  limits purchases of  alcohol online  from out-                                                                    
of-state sellers.                                                                                                               
                                                                                                                                
        • Create a license available to  U.S. wineries  to                                                                      
          ship orders of wine to Alaska customers.                                                                              
        • Prohibit online sales  through this  license  in                                                                      
          Local Option areas.                                                                                                   
        • Prohibit other online sales of alcohol not under                                                                      
          this license or the Package Store Shipping                                                                            
          endorsement.                                                                                                          
        • Modeled on  similar  licenses  or   permits  for                                                                      
          wineries that exist in 44 other states.                                                                               
        • Requires age verification and delivering  to the                                                                      
          customer in person, including a signature to                                                                          
          acknowledge receipt.                                                                                                  
        • Exempt from Alaska population limits.                                                                                 
                                                                                                                                
4:35:31 PM                                                                                                                    
                                                                                                                                
MS. BRAWLEY stated one of the motivations regarding the                                                                         
recommendations for Internet sales was to ensure the state                                                                      
could collect Alaska Excise Tax for Internet Sales.                                                                             
                                                                                                                                
        • In addition to maintaining current collection of                                                                      
          excise tax on sales from in-state wineries,                                                                           
          require all out-of-state holders of a Winery                                                                          
          Direct Shipment license to pay the same excise                                                                        
          tax on Alaska orders.                                                                                                 
      • Currently, no tax is collected from online sales                                                                        
          of alcohol to Alaska customers.                                                                                       
      • Legal precedent for collecting state alcohol tax                                                                        
          from out-of-state alcohol manufacturers: Granholm                                                                     
          v. Heald (2005)                                                                                                       
                                                                                                                                
4:36:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   STUTES   asked   about   brewery   manufacturing                                                               
licenses.    She asked  whether  an  onsite sample  provision  is                                                               
included.                                                                                                                       
                                                                                                                                
MS. BRAWLEY  answered that breweries  would need  a manufacturing                                                               
retail license or a separate retail license.                                                                                    
                                                                                                                                
REPRESENTATIVE STUTES surmised  there would be a  limit to amount                                                               
or size of samples.                                                                                                             
                                                                                                                                
MS.  BRAWLEY  answered  samples  would  be  limited  in  the  new                                                               
proposal.                                                                                                                       
                                                                                                                                
4:38:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  asked whether there  is a food  component in                                                               
the pub provision.                                                                                                              
                                                                                                                                
MS. BRAWLEY  returned to slide 33.   She explained there  are two                                                               
different  types  of brewpubs  in  the  statute.   She  said  the                                                               
Restaurant  Eating  Place License  (REPL)  requires  sales be  50                                                               
percent  food.   The Beverage  Distribution License  (BPL) allows                                                               
breweries to produce and distribute onsite.                                                                                     
                                                                                                                                
REPRESENTATIVE WOOL  suggested a  brewpub could keep  the current                                                               
license, produce beer, and have a tasting room.                                                                                 
                                                                                                                                
MS.  BRAWLEY answered  the license  would be  converted from  the                                                               
brewpub license to a brewery license.   They could then decide to                                                               
get a tasting room license.                                                                                                     
                                                                                                                                
REPRESENTATIVE WOOL spoke  to free sampling.   He suggested other                                                               
states are either free sampling or  for sale sampling states.  He                                                               
asked whether Alaska is both.                                                                                                   
                                                                                                                                
MS. BRAWLEY said that is what is in current law.                                                                                
                                                                                                                                
REPRESENTATIVE WOOL spoke  to mental health issues  in the state.                                                               
He asked whether  the proposal contains anything  that would help                                                               
reduce alcohol problems in the state.                                                                                           
                                                                                                                                
MS. BRAWLEY  said that  part of  the goal is  to ensure  that the                                                               
laws  are  clear  and  easy  to  follow.    She  said  there  are                                                               
recommendations ensuring that people  serving alcohol are trained                                                               
and recommendations for safeguarding youth.                                                                                     
                                                                                                                                
4:43:15 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH  asked  about non-profits  selling  alcohol                                                               
during events.                                                                                                                  
                                                                                                                                
MS.  BRAWLEY said  for  individual licenses  she  would defer  to                                                               
AMCO.    She said  the  proposal  does  not  change most  of  the                                                               
permits.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  KOPP answered  that  catering  permits would  not                                                               
change in the proposed bill.                                                                                                    
                                                                                                                                
4:45:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STUTES   asked  about  samples  in   the  various                                                               
licenses.                                                                                                                       
                                                                                                                                
MS. BRAWLEY  said that  sampling would not  change in  the retail                                                               
license.                                                                                                                        
                                                                                                                                
REPRESENTATIVE STUTES  asked whether  there are any  ounce limits                                                               
in the proposal.                                                                                                                
                                                                                                                                
MS. BRAWLEY  answered that brewpubs already  have retail licenses                                                               
and would not  be limited.  Manufacturers would be  limited.  She                                                               
underlined the ounce limits proposed are for manufacturers.                                                                     
                                                                                                                                
4:47:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  asked why public convenience  licenses would                                                               
be eliminated.                                                                                                                  
                                                                                                                                
MS. BRAWLEY answered that proposed  replacements for the licenses                                                               
to be repealed would be addressed further in the presentation.                                                                  
                                                                                                                                
4:48:18 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL spoke to seasonal  tourism licenses.  He gave                                                               
the example of Juneau, Alaska,  with seasonal establishments that                                                               
would go away in the new  proposal due to the population limit of                                                               
20,000.                                                                                                                         
                                                                                                                                
MS.  BRAWLEY   answered  the  seasonal   license  would   not  be                                                               
eliminated.  She said the proposal  is for a new license type and                                                               
current operating establishments would not be affected.                                                                         
                                                                                                                                
REPRESENTATIVE WOOL suggested it would curtail any new business.                                                                
                                                                                                                                
MS. BRAWLEY  answered that  the license  type does  not currently                                                               
exist.   She  said  that would  mean  Juneau, Alaska,  businesses                                                               
would have to apply for a standard restaurant license.                                                                          
                                                                                                                                
4:50:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KNOPP asking  why  the  recreational license  was                                                               
being renamed.                                                                                                                  
                                                                                                                                
MS. BRAWLEY  answered that the  proposal is merely to  rename the                                                               
license.   She said there  is a specific definition  for sporting                                                               
events and the proposal does not change that definition.                                                                        
                                                                                                                                
REPRESENTATIVE  KOPP  said  that   under  the  Recreational  Site                                                               
License, a  health club could  get a beer  and wine license.   He                                                               
said renaming  it to involve  sporting events, it  truly reflects                                                               
what the license type was intended to be.                                                                                       
                                                                                                                                
REPRESENTATIVE  KNOPP  said it  seems  the  proposal attempts  to                                                               
"tighten the reins" on the definition.                                                                                          
                                                                                                                                
REPRESENTATIVE KOPP answered in the affirmative.                                                                                
                                                                                                                                
REPRESENTATIVE  WOOL  asked  whether the  University  of  Alaska,                                                               
Fairbanks pub license is the only pub license in the state.                                                                     
                                                                                                                                
MS. BRAWLEY answered that is her understanding.                                                                                 
                                                                                                                                
REPRESENTATIVE  WOOL   suggested  it   would  create   a  license                                                               
specifically for  the UAF  museum.  He  asked whether  the museum                                                               
area that  served alcohol  would be closed  off from  those under                                                               
age.                                                                                                                            
                                                                                                                                
MS. BRAWLEY  said the  language states alcohol  would have  to be                                                               
secured on the premises.                                                                                                        
                                                                                                                                
CHAIR KITO  said there  may be other  university premises  in the                                                               
state which  may wish to  take advantage  of the proposal  in the                                                               
future.                                                                                                                         
                                                                                                                                
4:55:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON   asked  whether  consensus   has  been                                                               
achieved among the stakeholders.                                                                                                
                                                                                                                                
REPRESENTATIVE KOPP answered that  the communication in the group                                                               
has been  "extraordinary" and the  effort to arrive  at consensus                                                               
has  been strong.   He  mentioned Dale  Fox from  Alaska Cabaret,                                                               
Hotel, Restaurant  and Retailers Association (Alaska  CHARR).  He                                                               
said he did  not expect the committee to be  besieged by industry                                                               
members with complaints.                                                                                                        
                                                                                                                                
REPRESENTATIVE JOSEPHSON  spoke to the issue  of criminal justice                                                               
reform.    He   mentioned  Senate  Bill  91   and  asked  whether                                                               
Representative Kopp has any comment or recommendation.                                                                          
                                                                                                                                
REPRESENTATIVE  KOPP answered  that he  supports a  strong public                                                               
safety  effort  and   supports  the  licensees.     He  said  the                                                               
Department of Law  had recommended some penalties.  He stated the                                                               
proposal before the committee predates the 2016 bill.                                                                           
                                                                                                                                
5:00:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  asked whether Representative Kopp  feels the                                                               
proposal is a "tenuous balance."                                                                                                
                                                                                                                                
REPRESENTATIVE KOPP  answered that it  is a sensitive issue.   He                                                               
said it  takes tremendous consensus  to get the proposal  to move                                                               
forward.   He said it is  a different kind  of a bill due  to the                                                               
amount of collective work that went into it.                                                                                    
                                                                                                                                
5:02:52 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  said the rest  of the presentation could  be examined                                                               
online.                                                                                                                         
                                                                                                                                
[HB 357 was held over.]                                                                                                         
                                                                                                                                
5:03:51 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Labor and Commerce Standing Committee meeting was adjourned at                                                                  
5:03 p.m.                                                                                                                       

Document Name Date/Time Subjects
HB357 Sponsor Statement 3.19.2018.pdf HL&C 4/11/2018 3:15:00 PM
HB 357
HB357 Supporting Document Title 4 Review 3.19.2018.pdf HL&C 4/11/2018 3:15:00 PM
HB 357
HB357 Supporting Documnet - Alaska Alcohol Licenses Proposed Changes 3.19.2018.pdf HL&C 4/11/2018 3:15:00 PM
HB 357
HB357 Ver A.PDF HL&C 4/11/2018 3:15:00 PM
HB 357
HB357 HLAC Presentation 4.11.2018.pdf HL&C 4/11/2018 3:15:00 PM
HB 357
HB357 Sectional Analysis 3.19.2018.pdf HL&C 4/11/2018 3:15:00 PM
HB 357
HB357 Supporting Document - Comprehensive Report Summary 3.19.2018.pdf HL&C 4/11/2018 3:15:00 PM
HB 357
HB357 Supporting Document - Internet Sales 3.19.2018.pdf HL&C 4/11/2018 3:15:00 PM
HB 357
HB357 Fiscal Note DCCED AMCO 4.6.18.pdf HL&C 4/11/2018 3:15:00 PM
HB 357
SB108 Letters of Support 4.11.18.pdf HL&C 4/11/2018 3:15:00 PM
SB 108
SB108 Letters of Opposition 4.11.18.pdf HL&C 4/11/2018 3:15:00 PM
SB 108