Legislature(2017 - 2018)BARNES 124

04/15/2018 10:00 AM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to 15 Minutes After Adjournment --
+= HB 357 ALCOHOLIC BEVERAGE CONTROL/REGULATION TELECONFERENCED
Heard & Held
-- Public Testimony --
+= HB 193 HEALTH CARE; BALANCE BILLING TELECONFERENCED
Heard & Held
-- Public Testimony --
+= HB 376 ESTABLISH THE ALASKA STATE BANK TELECONFERENCED
Moved HB 376 Out of Committee
-- Public Testimony --
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                         April 15, 2018                                                                                         
                           10:02 a.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                                                                                                             
                                                                                                                                
HOUSE BILL NO. 193                                                                                                              
"An Act  relating to  insurance trade  practices and  frauds; and                                                               
relating to emergency services and balance billing."                                                                            
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 376                                                                                                              
"An  Act  establishing  a  state  bank;  relating  to  insurance,                                                               
mortgage lending,  securities, and permanent fund  dividends; and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
     - MOVED HB 376 OUT OF COMMITTEE                                                                                            
                                                                                                                                
                                                                                                                                
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                                                                              
04/11/18       (H)       Heard & Held                                                                                           
04/11/18       (H)       MINUTE(L&C)                                                                                            
04/13/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
04/13/18       (H)       -- MEETING CANCELED --                                                                                 
04/14/18       (H)       L&C AT 1:00 PM BARNES 124                                                                              
04/14/18       (H)       -- MEETING CANCELED --                                                                                 
04/15/18       (H)       L&C AT 10:00 AM BARNES 124                                                                             
                                                                                                                                
BILL: HB 193                                                                                                                  
SHORT TITLE: HEALTH CARE; BALANCE BILLING                                                                                       
SPONSOR(s): REPRESENTATIVE(s) GRENN                                                                                             
                                                                                                                                
03/24/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/24/17       (H)       HSS, L&C                                                                                               
03/08/18       (H)       HSS AT 3:00 PM CAPITOL 106                                                                             
03/08/18       (H)       Heard & Held                                                                                           
03/08/18       (H)       MINUTE(HSS)                                                                                            
03/27/18       (H)       HSS AT 3:00 PM CAPITOL 106                                                                             
03/27/18       (H)       -- MEETING CANCELED --                                                                                 
03/29/18       (H)       HSS AT 3:00 PM CAPITOL 106                                                                             
03/29/18       (H)       Moved CSHB 193(HSS) Out of Committee                                                                   
03/29/18       (H)       MINUTE(HSS)                                                                                            
03/30/18       (H)       HSS RPT CS(HSS) NT 2DP 4NR                                                                             
03/30/18       (H)       DP: SULLIVAN-LEONARD, SPOHNHOLZ                                                                        
03/30/18       (H)       NR: TARR, ZULKOSKY, KITO, EASTMAN                                                                      
04/03/18       (H)       FIN AT 10:00 AM ADAMS ROOM 519                                                                         
04/03/18       (H)       <Bill Hearing Canceled>                                                                                
04/09/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
04/09/18       (H)       Heard & Held                                                                                           
04/09/18       (H)       MINUTE(L&C)                                                                                            
04/13/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
04/13/18       (H)       -- MEETING CANCELED --                                                                                 
04/14/18       (H)       L&C AT 1:00 PM BARNES 124                                                                              
04/14/18       (H)       -- MEETING CANCELED --                                                                                 
04/15/18       (H)       L&C AT 10:00 AM BARNES 124                                                                             
                                                                                                                                
BILL: HB 376                                                                                                                  
SHORT TITLE: ESTABLISH THE ALASKA STATE BANK                                                                                    
SPONSOR(s): REPRESENTATIVE(s) TUCK                                                                                              
                                                                                                                                
02/21/18       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/21/18       (H)       L&C, FIN                                                                                               
04/09/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
04/09/18       (H)       Heard & Held                                                                                           
04/09/18       (H)       MINUTE(L&C)                                                                                            
04/13/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
04/13/18       (H)       -- MEETING CANCELED --                                                                                 
04/14/18       (H)       L&C AT 1:00 PM BARNES 124                                                                              
04/14/18       (H)       -- MEETING CANCELED --                                                                                 
04/15/18       (H)       L&C AT 10:00 AM BARNES 124                                                                             
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
ANNA BRAWLEY                                                                                                                    
Project Coordinator for Title 4                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Presented a PowerPoint presentation on                                                                   
Alcoholic Beverage Control (ABC) Board, Title 4 Review Project.                                                                 
                                                                                                                                
REPRESENTATIVE CHUCK KOPP                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented HB 357 as prime sponsor.                                                                       
                                                                                                                                
DALE FOX                                                                                                                        
President                                                                                                                       
Alaska Cabaret, Hotel, Restaurant and Retailers Association                                                                     
(Alaska CHARR)                                                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 357.                                                                          
                                                                                                                                
TIFFANY HALL                                                                                                                    
Recover Alaska                                                                                                                  
Executive Director                                                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 357.                                                                          
                                                                                                                                
ALISON KULAS, Executive Director                                                                                                
Advisory Board on Alcoholism and Drug Abuse                                                                                     
Alaska Mental Health Board                                                                                                      
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 357.                                                                          
                                                                                                                                
LEN SORRIN                                                                                                                      
Premera Blue Cross Blue Shield of Alaska                                                                                        
Seattle, Washington                                                                                                             
POSITION STATEMENT:  Testified in opposition of HB 357.                                                                       
                                                                                                                                
DR. SAMI ALI                                                                                                                    
Alaska Emergency Medical Associates                                                                                             
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 193.                                                                          
                                                                                                                                
RHONDA PROWELL-KITTER                                                                                                           
President                                                                                                                       
Alaskans for Sustainable Healthcare Costs                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in the hearing on HB 193.                                                                      
                                                                                                                                
LORI WING-HEIER, Director                                                                                                       
Division of Insurance                                                                                                           
Department of Commerce, Community & Economic Development (DCCED)                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions in the hearing on HB                                                                  
193.                                                                                                                            
                                                                                                                                
ANNE ZINK, Mat-Su Regional Medical Director                                                                                     
Alaska Emergency Physicians                                                                                                     
Palmer, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions in the hearing on HB                                                                  
193.                                                                                                                            
                                                                                                                                
REPRESENTATIVE CHRIS TUCK                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Reintroduced HB 376 as prime sponsor.                                                                    
                                                                                                                                
CHARLES DUNCAN, Staff                                                                                                           
Representative Chris Tuck                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented HB 376 on behalf Representative                                                                
Tuck, prime sponsor.                                                                                                            
                                                                                                                                
REPRESENTATIVE CHUCK KOPP                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions on HB 357 as prime                                                                    
sponsor.                                                                                                                        
                                                                                                                                
ANNA BRAWLEY                                                                                                                    
Project Coordinator for Title 4                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:   Answered questions  in the  hearing on  HB                                                             
357.                                                                                                                            
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
10:02:32 AM                                                                                                                   
                                                                                                                                
CHAIR  SAM KITO  called  the House  Labor  and Commerce  Standing                                                             
Committee meeting  to order at 10:02  a.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                                                                      
                                                                                                                                
10:03:28 AM                                                                                                                   
                                                                                                                                
CHAIR KITO  announced that the  first 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."                                                                                                         
                                                                                                                                
CHAIR  KITO stated  the committee  would continue  to review  the                                                               
presentation from the previous hearing.                                                                                         
                                                                                                                              
10:04:02 AM                                                                                                                   
                                                                                                                                
ANNA  BRAWLEY, Project  Coordinator  for Title  4, continued  the                                                               
presentation of  Alcoholic Beverage Control (ABC)  Board, Title 4                                                               
from the  previous hearing. She  stated she would begin  on slide                                                               
52 of the PowerPoint.  She  said the recommendation was to create                                                               
endorsements, defined in the slide as follows:                                                                                  
                                                                                                                                
        • Create endorsements as add-ons to licenses in                                                                         
          Title 4                                                                                                               
        • Endorsements must be   issued  with  a  license,                                                                      
          renewed biannually with the license, and cannot                                                                       
          be transferred to a new location                                                                                      
        • Endorsements are not population limited                                                                               
        • Convert some existing sections or activities into                                                                     
          endorsements; create new endorsements                                                                                 
                                                                                                                                
MS.   BRAWLEY  briefly   spoke   to  a   list  of   proposed                                                                    
endorsements  on  slide 53.    These  would include  bowling                                                                    
alleys, shipping endorsements  for package stores, sampling,                                                                    
hotel/motel,   large    resort,   and    brewery   repacking                                                                    
endorsements.                                                                                                                   
                                                                                                                                
MS.   BRAWLEY   elaborated   on   package   store   shipping                                                                    
endorsements on slide 54.                                                                                                       
                                                                                                                                
        • Allow orders under   a  Package  Store  Shipping                                                                      
          endorsement to be received in formats other than                                                                      
          a written order from a known customer.                                                                                
        • This allows online ordering from in-state package                                                                     
          stores, including customers in Local Option                                                                           
          areas.                                                                                                                
        • Existing requirements in AS 04.11.150(a) for ID,                                                                      
          shipping and delivery still apply. Package stores                                                                     
          would still be required to report all orders to                                                                       
         Local Option areas in Written Order Database.                                                                          
                                                                                                                                
MS. BRAWLEY addressed the endorsement for onsite product                                                                        
sampling for package stores in slide 55:                                                                                        
                                                                                                                                
        • Create a separate  endorsement to  allow  onsite                                                                      
          sampling at Package Stores.                                                                                           
        • Limits volume per  customer per  day,  hours  of                                                                      
          sampling, public advertising of sampling.                                                                             
        • Providing free samples  of products  at  package                                                                      
          stores is a common practice in several other                                                                          
          cities and states.                                                                                                    
                                                                                                                                
MS. BRAWLEY progressed to slide 56 illustrating the allowable                                                                   
quantities and types of samples recommended in the endorsement.                                                                 
                                                                                                                                
10:07:59 AM                                                                                                                   
                                                                                                                                
MS. BRAWLEY spoke to the proposal to standardize permits on                                                                     
slide 57:                                                                                                                       
                                                                                                                                
        • Define all permit types in statute, not just in                                                                       
          regulation                                                                                                            
        • Fee for all permits is $50 per event day                                                                              
        • Most permits listed are already in statute or                                                                         
          regulation                                                                                                            
        • New permit: Tasting Event Permit, allowing a                                                                          
          Package Store or Manufacturer to host an event on                                                                     
          premises, in partnership with a BDL                                                                                   
                                                                                                                                
MS. BRAWLEY  said slide 58  displays a list of  proposed permits.                                                               
She  said  that  like  endorsements,  most  exist  in  regulation                                                               
already.  The proposal is to reorganize them into one section.                                                                  
                                                                                                                                
MS. BRAWLEY moved to slide  59 illustrating the new tasting event                                                               
permit.  She specified  the  permit would  be  separate from  the                                                               
sampling endorsement.   She said  it would allow a  package store                                                               
or manufacturer to work with a  BDL to showcase the products they                                                               
sell or  manufacture.  She  said the  permit includes a  limit on                                                               
the number of  hours and specifies the entity must  serve food at                                                               
the event.                                                                                                                      
                                                                                                                                
10:09:36 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE STUTES  remarked that  she found the  sample sizes                                                               
large.  She asked how they were determined.                                                                                     
                                                                                                                                
MS. BRAWLEY answered  the sample sizes are  consistent with those                                                               
proposed   for  manufacturing   sampling.   She  specified   that                                                               
consumers would choose between wine and beer.                                                                                   
                                                                                                                                
REPRESENTATIVE  STUTES asked  for confirmation  that the  amounts                                                               
are the same as for a tasting event.                                                                                            
                                                                                                                                
CHAIR  KITO corrected  that the  size would  be the  same as  the                                                               
manufacturing sample.                                                                                                           
                                                                                                                                
MS. BRAWLEY clarified there is  a proposed manufacturers sampling                                                               
endorsement,  which  is  separate  from  manufacturers,  to  sell                                                               
product onsite through a tasting room.                                                                                          
                                                                                                                                
10:11:19 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  WOOL asked  for  confirmation  that free  samples                                                               
from the  manufacturer are the  same as  for free samples  from a                                                               
package store.                                                                                                                  
                                                                                                                                
MS. BRAWLEY answered that is correct.                                                                                           
                                                                                                                                
REPRESENTATIVE WOOL asked  whether that is in addition  to what a                                                               
customer can buy onsite.                                                                                                        
                                                                                                                                
MS. BRAWLEY answered that is correct.                                                                                           
                                                                                                                                
REPRESENTATIVE WOOL  stated his agreement with  the comments made                                                               
by  Representative Stutes  regarding amounts.   He  spoke to  the                                                               
statement that a  BDL can cater an  event in a tasting  room.  He                                                               
asked why that would be required.                                                                                               
                                                                                                                                
MS. BRAWLEY  clarified the proposed  tasting event  permit allows                                                               
manufactures  to have  the  event on  their  production site  and                                                               
would  not require  an additional  tasting  room license.   If  a                                                               
manufacturer  does not  have a  tasting  room, they  can use  the                                                               
license  to  showcase  their products  without  having  a  retail                                                               
license.                                                                                                                        
                                                                                                                                
REPRESENTATIVE WOOL  asked whether  a retail license  is separate                                                               
from a manufacturing license or is included within it.                                                                          
                                                                                                                                
MS. BRAWLEY  answered that currently  all the  manufacture retail                                                               
activities are  under the manufacture  license.  The  proposal is                                                               
for  splitting them  out so  a manufacturer  with a  tasting room                                                               
would  have to  have  a  production license  and  a tasting  room                                                               
license.                                                                                                                        
                                                                                                                                
10:13:29 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE WOOL asked whether  an endorsement would be needed                                                               
to sell single bottles of beer.                                                                                                 
                                                                                                                                
MS.  BRAWLEY  answered  in  that  affirmative.    She  said  it's                                                               
currently allowed  in regulation.  She  said repackaging includes                                                               
filling growlers and selling single bottles.                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL asked  why a storeowner cannot  take a bottle                                                               
out of a box.                                                                                                                   
                                                                                                                                
MS.  BRAWLEY shared  her understanding  that the  current license                                                               
doesn't allow subdivision of packages.  She deferred to AMCO.                                                                   
                                                                                                                                
10:14:54 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  BIRCH  asked  whether the  proposal  would  allow                                                               
samples at Costco.                                                                                                              
                                                                                                                                
MS. BRAWLEY  answered it would if  Costco opted to get  this type                                                               
of endorsement.                                                                                                                 
                                                                                                                                
10:15:38 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE KNOPP  commented it seems the  interpretations for                                                               
quantities  for sampling  were  "getting really  liberal."     He                                                               
asked why package stores would need sampling privileges.                                                                        
                                                                                                                                
MS.  BRAWLEY  answered  currently   samples  are  allowed  to  be                                                               
provided by  manufacturers with no  limit on size and  there does                                                               
seem  to be  a public  safety  consideration. She  added that  in                                                               
terms of package store sampling,  it does happen in other states.                                                               
She stated a number of  package store stakeholders are interested                                                               
in offering samples.                                                                                                            
                                                                                                                                
10:17:18 AM                                                                                                                   
                                                                                                                                
CHAIR KITO asked about shipping  alcohol and asked Ms. Brawley to                                                               
describe  the process  of protecting  communities who  have opted                                                               
out of allowing alcohol products.                                                                                               
                                                                                                                                
MS.  BRAWLEY answered  that  in  a local  option  area there  are                                                               
several local options,  including the ability to  order a product                                                               
to be  shipped in.   She said other options  prohibit importation                                                               
or  possession.   She  said  that in  current  statute there  are                                                               
monthly  limits to  what a  customer can  order.   She stated  it                                                               
would be  up to the individual  customer in an area  to decide to                                                               
participate.                                                                                                                    
                                                                                                                                
CHAIR  KITO mentioned  the database  and asked  whether it  would                                                               
identify the areas for shippers.                                                                                                
                                                                                                                                
MS. BRAWLEY answered in the affirmative.                                                                                        
                                                                                                                                
10:18:52 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE JOSEPHSON  asked whether  the database  would also                                                               
highlight an individual in a particular area.                                                                                   
                                                                                                                                
MS. BRAWLEY answered she was not sure.                                                                                          
                                                                                                                                
10:19:25 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  CHUCK KOPP,  Alaska State  Legislature, presented                                                               
HB  357 as  prime  sponsor.   He  answered  that  nothing in  the                                                               
proposed  law  does  away  with  the  requirement  to  positively                                                               
identify  the customer,  so  if there  is a  red  strip on  their                                                               
license, a copy would be required.                                                                                              
                                                                                                                                
MS.  BRAWLEY  advanced to  slide  61  regarding the  proposal  to                                                               
improve   the  license,   endorsement,  and   permit  application                                                               
process:                                                                                                                        
                                                                                                                                
        • Several technical changes to statutes for                                                                             
          applications for a license, endorsement or                                                                            
          permit.                                                                                                               
        • Examples:                                                                                                             
               Endorsement renewal part of license renewal                                                                      
               Required items in application process:                                                                           
                       labeled premises diagram, e-mail                                                                         
                     address for licensees                                                                                      
               Simpler signature requirements for multiple                                                                      
                       owners and nonprofit organizations                                                                       
               Simpler operating requirements (number of                                                                        
                       hours) for licenses up for renewal                                                                       
                                                                                                                                
10:19:59 AM                                                                                                                   
                                                                                                                                
MS. BRAWLEY spoke  to Chapter 11 of  Title 4.  She said  a lot of                                                               
those  sections would  not  change or  may  merely contain  minor                                                               
renumbering proposals.   She stated  she would not  highlight the                                                               
details but  would be pointing  out some of the  technical issues                                                               
in statute.   She added that endorsements would have  to be added                                                               
to the application process.                                                                                                     
                                                                                                                                
MS. BRAWLEY  spoke to slides  62-65 regarding  public convenience                                                               
licenses.   She stated the  first proposal is to  repeal existing                                                               
statute  and   create  a  replacement   to  convert   all  public                                                               
convenience restaurants  to fully operating  restaurant licenses.                                                               
She added  there is  a proposal to  create a  seasonal restaurant                                                               
tourism license.   She  said there  is a  proposal to  allow some                                                               
cities  to petition  the  ABC  Board to  increase  the number  of                                                               
restaurant licenses in their cities.                                                                                            
                                                                                                                                
MS.  BRAWLEY  explained  the  process  for  converting  a  public                                                               
convenience license to a restaurant  eating place license (REPL),                                                               
illustrated on slide 64.                                                                                                        
                                                                                                                                
MS. BRAWLEY  explained the process of  local government petitions                                                               
for additional restaurant licenses.                                                                                             
                                                                                                                                
10:25:25 AM                                                                                                                   
                                                                                                                                
MS. BRAWLEY  moved to  slide 66 regarding  the proposal  to allow                                                               
relocation of a package store from a borough to a city:                                                                         
                                                                                                                                
        • Amend AS 04.11.400(k) to allow transfers of both                                                                      
          BDL and  Package Store licenses from  a borough to                                                                    
          a city within the borough.                                                                                            
        • Currently, BDL relocations are allowed in                                                                             
          boroughs with at least 60,000 population.                                                                             
        • HB 357 would make relocation available in                                                                             
          boroughs  with  at  least  50,000  population  and                                                                    
          currently    operating   licenses    that   exceed                                                                    
          population limits.                                                                                                    
                                                                                                                                
10:26:40 AM                                                                                                                   
                                                                                                                                
MS.  BRAWLEY  said  that  slide  68  shows  that  currently  most                                                               
communities have  more operating licenses than  are allowed under                                                               
the statute  limits.  She  said the purpose  is not to  take away                                                               
all the  licenses in the borough.   The bill would  allow for the                                                               
transfer  of the  extra licenses,  so the  borough does  not fall                                                               
below the  number of licenses  that it is  allowed to have.   The                                                               
slide  listed   Fairbanks  North   Star,  Kenai   Peninsula,  and                                                               
Matanuska-Susitna boroughs as those which qualify.                                                                              
                                                                                                                                
10:27:15 AM                                                                                                                   
                                                                                                                                
MS.  BRAWLEY  progressed  to   slide  69,   Strengthen  Reporting                                                               
Requirements for Municipal Enforcement:                                                                                         
                                                                                                                                
        • Include in statutory requirements (AS 04.11.610)                                                                      
          that  municipalities submit  quarterly reports  on                                                                    
          Title  4 enforcement  and education  activities to                                                                    
          the    ABC    Board:    violations,    educational                                                                    
          presentations,   other   activities   related   to                                                                    
          alcohol control.                                                                                                      
        • Municipalities with local law enforcement receive                                                                     
          a matching  allocation ("refund") of  license fees                                                                    
          collected   within   their   jurisdiction.   Funds                                                                    
          intended to be used for Title 4 enforcement.                                                                          
                                                                                                                                
REPRESENTATIVE  SULLIVAN-LEONARD gave  an example  of a  petition                                                               
for liquor  licenses in  her district.   She said  the signatures                                                               
had  been submitted  and then  were  gathered again.   She  asked                                                               
whether there  is a  proposal to ensure  the signatures  stay "on                                                               
the docket" for a few months.                                                                                                   
                                                                                                                                
MS. BRAWLEY answered that illustrates  one of the issues with the                                                               
current system.   She said the proposal would give  the city more                                                               
restaurant licenses.                                                                                                            
                                                                                                                                
10:30:30 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE STUTES asked  whether one of the  objectives is to                                                               
devalue the BDL.                                                                                                                
                                                                                                                                
MS.  BRAWLEY answered  the purpose  of  this project  was not  to                                                               
negatively impact  existing businesses.   She said the  intent is                                                               
to  rationalize the  licensing system  and  give businesses  more                                                               
options.                                                                                                                        
                                                                                                                                
REPRESENTATIVE   STUTES  shared   her  interpretation   that  the                                                               
proposal  would be  allowing endorsements  which would  devalue a                                                               
BDL.                                                                                                                            
                                                                                                                                
MS. BRAWLEY answered  that many of the endorsement  apply to BDLs                                                               
as well.   She explained  that many  of the retail  activities of                                                               
manufacturers are allowed in current  law.  She said the proposal                                                               
would  give  manufacturers  the  opportunity  to  purchase  other                                                               
retail licenses.                                                                                                                
                                                                                                                                
REPRESENTATIVE  STUTES asked  for examples  of endorsements  that                                                               
would affect BDLs.                                                                                                              
                                                                                                                                
MS. BRAWLEY gave the example of bowling alleys and golf courses.                                                                
                                                                                                                                
REPRESENTATIVE  STUTES   asked  whether  those   entities  cannot                                                               
currently achieve that by way of a caterer's permit.                                                                            
                                                                                                                                
MS. BRAWLEY answered those apply only to an event.                                                                              
                                                                                                                                
10:34:10 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE   WOOL  asked   about  the   proposal  to   repeal                                                               
convenience licenses.  He asked  whether there is a public safety                                                               
issue with restaurants serving beer and wine.                                                                                   
                                                                                                                                
MS.  BRAWLEY  answered  public  convenience  licenses  involve  a                                                               
number  of  administrative issues.    She  said the  benefit  for                                                               
cities  is   having  more   restaurant  licenses   available  for                                                               
businesses to  grow and  be transferable,  unlike in  the current                                                               
system.                                                                                                                         
                                                                                                                                
REPRESENTATIVE  WOOL  asked  about   the  funds  being  used  for                                                               
education and enforcement.                                                                                                      
                                                                                                                                
MS. BRAWLEY answered that license  fees are currently distributed                                                               
to communities.  She said reports  have not be submitted to date,                                                               
so it is hard to say how the funds are being used.                                                                              
                                                                                                                                
REPRESENTATIVE  KOPP added  that any  application for  additional                                                               
restaurant licenses  has to be  submitted by a  local legislative                                                               
body.  He  said it is a safeguard before  the application goes to                                                               
the ABC Board.   He said local government is  responsive to local                                                               
business.   He added  that many  local governments  had expressed                                                               
there is a lack of any  avenue to pursue additional licenses.  He                                                               
stated the pause  on the request would allow time  for data to be                                                               
collected  regarding   public  safety   issues.    He   said  law                                                               
enforcement has  been required for  decades to report  on alcohol                                                               
licenses.                                                                                                                       
                                                                                                                                
REPRESENTATIVE SULLIVAN-LEONARD  stated she  thinks ten  years to                                                               
request a new license is not realistic.                                                                                         
                                                                                                                                
10:41:47 AM                                                                                                                   
                                                                                                                                
CHAIR  KITO   asked  for  more   information  on   the  ten-years                                                               
provision.                                                                                                                      
                                                                                                                                
MS.  BRAWLEY stated  the current  system  requires an  individual                                                               
applicant   to  seek   out  signatures   for   support  for   the                                                               
application.   She said  the proposal  is for  a city  to request                                                               
more licenses.   She gave the example of asking  for six licenses                                                               
even if six licenses were not currently being sought.                                                                           
                                                                                                                                
CHAIR KITO suggested the city  would have the ability to approach                                                               
the ABC Board regarding the number of licenses it can hold.                                                                     
                                                                                                                                
MS. BRAWLEY answered  that is correct.  She  added that regarding                                                               
the determination of  the licenses, AMCO does it  annually and is                                                               
a separate process.                                                                                                             
                                                                                                                                
10:44:29 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE STUTES asked about  Ms. Brawley's affiliation with                                                               
the industry.                                                                                                                   
                                                                                                                                
MS. BRAWLEY  answered she  is not  affiliated with  the industry.                                                               
She informed she has been asked  to be project coordinator and to                                                               
speak for the stakeholders as a whole.                                                                                          
                                                                                                                                
REPRESENTATIVE   STUTES  asked   whether   Ms.   Brawley  was   a                                                               
participant in the rewrite of Title 4.                                                                                          
                                                                                                                                
MS.  BRAWLEY answered  in  the affirmative.  She  stated she  was                                                               
presented  at the  first meeting  in  2012 and  in most  meetings                                                               
since then.                                                                                                                     
                                                                                                                                
10:45:16 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  WOOL asked  whether other  stakeholders would  be                                                               
presenting to the committee.                                                                                                    
                                                                                                                                
REPRESENTATIVE  KOPP  answered  that anyone  can  participate  in                                                               
public testimony.   He underlined  that Ms. Brawley  has approval                                                               
from the  stakeholder group and she  is not authorized to  take a                                                               
position outside the consensus of the  group.  He said she has to                                                               
speak to the consensus points.                                                                                                  
                                                                                                                                
REPRESENTATIVE  WOOL spoke  to convenience  licenses.   He  asked                                                               
about an issue of consistency with public health concerns.                                                                      
                                                                                                                                
REPRESENTATIVE KOPP  answered there  is nothing  in the  law that                                                               
prevents someone  from going bar  to bar  in Juneau, Alaska.   He                                                               
said bars  are not allowed to  overserve.  He added  that outside                                                               
Alaska many  package stores  offer beer and  wine samplings.   He                                                               
said all  this does  is recognizes how  the industry  has evolved                                                               
over time.   He  reiterated it  is not  aimed at  devaluing other                                                               
licenses.                                                                                                                       
                                                                                                                                
REPRESENTATIVE WOOL  said it  seems to  him that  limiting places                                                               
where  wine can  be  consumed  with a  meal  yet expanding  those                                                               
without food seems inconsistent with the public safety issue.                                                                   
                                                                                                                                
10:50:16 AM                                                                                                                   
                                                                                                                                
CHAIR KITO  suggested there is  confusion about  distilleries and                                                               
breweries.  He said the proposal  is for changing the process for                                                               
adding   restaurant  licenses   independent  from   accommodating                                                               
economic development of new industries.                                                                                         
                                                                                                                                
REPRESENTATIVE KOPP answered that is accurate.                                                                                  
                                                                                                                                
10:51:13 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  WOOL  stated   that  by  eliminating  convenience                                                               
licenses  while  making  it  more  difficult  to  add  restaurant                                                               
licenses seems contradictory.                                                                                                   
                                                                                                                                
REPRESENTATIVE KOPP answered the  proposal is not eliminating any                                                               
restaurant  licenses  but  adding   more.    He  said  individual                                                               
businesses  can  come  to  the  board  whenever  necessary.    He                                                               
underlined  that the  ten-year provision  regards municipalities.                                                               
He  said regarding  public  health and  the  tastings, there  are                                                               
currently no limits on amounts.                                                                                                 
                                                                                                                                
10:53:25 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  STUTES  said  the   brewery  does  tastings  with                                                               
limits.                                                                                                                         
                                                                                                                                
CHAIR  KITO  corrected  that  right now  anyone  can  offer  free                                                               
tastings and  there is no  quantity limit on free  tastings, only                                                               
on the amount which can be sold in a tasting room.                                                                              
                                                                                                                                
REPRESENTATIVE STUTES said that is incorrect.                                                                                   
                                                                                                                                
CHAIR KITO asked Ms. Brawley whether  it is correct that there is                                                               
no limit on free  samples but there is a limit  on amount sold in                                                               
a tasting room.                                                                                                                 
                                                                                                                                
MS. BRAWLEY stated that is correct.                                                                                             
                                                                                                                                
10:54:53 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE WOOL  asked why  Alaska would  have both  free and                                                               
paid samples.                                                                                                                   
                                                                                                                                
REPRESENTATIVE KOPP answered  it has been part  of the discussion                                                               
on enabling breweries and startups  to market their products.  He                                                               
said  those  businesses  are  currently  a  significant  economic                                                               
engine in  Alaska.  He  added those products ultimately  are sold                                                               
by BDLs.                                                                                                                        
                                                                                                                                
10:57:09 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  JOSEPHSON asked  whether  the  bill affords  free                                                               
tasting for all  licenses or whether it is  restricted to certain                                                               
licenses.                                                                                                                       
                                                                                                                                
REPRESENTATIVE KOPP  said he believes  it is true [that  the bill                                                               
allows free tastings for all licenses.]                                                                                         
                                                                                                                                
REPRESENTATIVE JOSEPHSON asked  about the policy reason  if it is                                                               
not universal.                                                                                                                  
                                                                                                                                
REPRESENTATIVE KOPP deferred to Ms. Brawley.                                                                                    
                                                                                                                                
MS.  BRAWLEY answered  currently manufacturers  and brewpubs  can                                                               
offer free  samples.  The only  change would be to  allow package                                                               
stores to offer them as well.                                                                                                   
                                                                                                                                
10:58:49 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE STUTES  asked whether  dispensary licenses  do not                                                               
currently allow free samples.                                                                                                   
                                                                                                                                
MS. BRAWLEY answered that is her understanding.                                                                                 
                                                                                                                                
10:59:07 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  KNOPP asked  who  owns the  licenses for  package                                                               
stores.                                                                                                                         
                                                                                                                                
MS.  BRAWLEY  answered there  is  two  types of  alcohol  control                                                               
systems.  She  said in one the state itself  owns and distributes                                                               
alcohol through ABC  stores.  The rest of the  states are license                                                               
states   in  which   the  private   sector  does   manufacturing,                                                               
wholesaling, and retail of alcohol, and Alaska is one.                                                                          
                                                                                                                                
REPRESENTATIVE  KNOPP asked  what other  state governments  do in                                                               
regard   to    licensing   based   on   population    and   other                                                               
considerations.                                                                                                                 
                                                                                                                                
MS. BRAWLEY  answered there are many  different variations across                                                               
states.    She  said  some  have quotas  and  others  have  local                                                               
licensing.  She  stated it is hard to  compare universally across                                                               
each state.                                                                                                                     
                                                                                                                                
11:01:46 AM                                                                                                                   
                                                                                                                                
MS. BRAWLEY moved  to slides 72-74 regarding revision  of Title 4                                                               
penalties.                                                                                                                      
                                                                                                                                
        • Review penalties for all Title 4 sections, and                                                                        
          revise as needed to make penalties proportionate                                                                      
        to the offense, and more consistently enforced.                                                                         
        • Reduce most current Class A Misdemeanors to Minor                                                                     
          Offenses.                                                                                                             
        • Retain existing Misdemeanor and  Felony  charges                                                                      
          for serious  offenses, particularly  those causing                                                                    
          harm to children.                                                                                                     
        • Ensure that the  ABC   Board,  and  licensee  if                                                                      
          applicable, is informed  about Title 4 convictions                                                                    
          by requiring  the court to  send records  to AMCO,                                                                    
          and AMCO to send to the licensee.                                                                                     
        • ABC Board  retains   its  authority   to  impose                                                                      
          conditions  or   additional  penalties,  including                                                                    
          suspending or revoking license.                                                                                       
        • See Appendix, Table 3, pp.  67-72 in  Report for                                                                      
          table  of  all   current  penalties  and  proposed                                                                    
          changes.                                                                                                              
                                                                                                                                
11:03:12 AM                                                                                                                   
                                                                                                                                
MS. BRAWLEY moved on to  slide 74 showing the differences between                                                               
classes of offenses.   She said most were proposed  to be reduced                                                               
to a minor  offense with a fine.  She  underlined the proposal is                                                               
not  to reduce  enforcement, but  to improve  enforcement and  to                                                               
focus  on major  offenses.   She  added that  the penalties  with                                                               
changes are listed in the sectional summary and in the report.                                                                  
                                                                                                                                
MS. BRAWLEY progressed to slide  75 showing the proposal to allow                                                               
business activities on licensed premises during off hours.                                                                      
                                                                                                                                
        • Retain required closing hours (5:00 to 8:00 a.m.)                                                                     
          for  service and  sales of  alcohol to  consumers,                                                                    
          but  allow other  non-serving business  activities                                                                    
          on the premises.                                                                                                      
        • Local communities are  already  allowed  to  set                                                                      
          stricter hours by ordinance.                                                                                          
                                                                                                                                
MS. BRAWLEY addressed  slide 76 regarding the aim  to align state                                                               
statutes with federal law regarding trade practices.                                                                            
                                                                                                                                
        • Add provisions in  Title   4  to  match  current                                                                      
          federal   law   regarding  trade   practices   and                                                                    
          agreements  between retailers  and wholesalers  or                                                                    
          manufacturers.                                                                                                        
        • Alaska is  the  only  state  without   any  laws                                                                      
          regarding    trade    practices,    and    federal                                                                    
          enforcement of existing laws is limited.                                                                              
                                                                                                                                
11:05:36 AM                                                                                                                   
                                                                                                                                
MS.  BRAWLEY  spoke  to  slide  77  showing  examples  of  trades                                                               
practices which are prohibited in federal law.                                                                                  
                                                                                                                                
MS. BRAWLEY  said slide 78  highlights changes to  the penalties.                                                               
She said the  proposal is to reduce penalties  regarding sales to                                                               
a minor  (Class A  misdemeanor to Minor  Offence with  $500 fine)                                                               
and over service  to an employee (administrative  penalty of $250                                                               
to licensee).                                                                                                                   
                                                                                                                                
MS.  BRAWLEY   advanced  to  slide   79  which   illustrates  the                                                               
administrative penalties  for overserving  an adult or  serving a                                                               
minor.                                                                                                                          
                                                                                                                                
11:07:51 AM                                                                                                                   
                                                                                                                                
MS. BRAWLEY advanced to slide  80 regarding the proposal to allow                                                               
minors on some premises for employment or travel.                                                                               
                                                                                                                                
        • Allow  limited   employment    of   minors    by                                                                      
          Wholesalers,   Common    Carriers,   and   Outdoor                                                                    
          Recreation Lodges.                                                                                                    
        • Consistent with existing rules for Restaurants.                                                                       
        • Clarify that minors are allowed at certain                                                                            
          licensed businesses, in some circumstances: ex.                                                                       
          restaurants, common carriers.                                                                                         
                                                                                                                                
11:08:30 AM                                                                                                                   
                                                                                                                                
MS.  BRAWLEY  moved on  to  slide  81  detailing to  proposal  to                                                               
require board approval of common carriers for alcohol delivery.                                                                 
                                                                                                                                
        • Require all common carriers who transport deliver                                                                     
          alcohol directly to consumers in Alaska to be                                                                         
          approved by the ABC Board.                                                                                            
        • Carriers must   maintain    policies   for   age                                                                      
          verification, safe handling of alcohol, and in                                                                        
          person delivery to an adult customer.                                                                                 
        • Does not apply to shipments of alcohol from                                                                           
          business to business, only customer orders.                                                                           
                                                                                                                                
11:09:36 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE JOSEPHSON  spoke to his concerns  about changes in                                                               
Sections 93  and 95.   He asked  why the legislature  should make                                                               
policy expressing  less concerned with  an adult renting  a hotel                                                               
room with the purpose of providing alcohol to minors.                                                                           
                                                                                                                                
MS. BRAWLEY  shared her general understanding  that the rationale                                                               
is that there  are different circumstances in  which the scenario                                                               
can occur.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  asked  whether the  statute  could  be                                                               
written to include some scenarios and exclude others.                                                                           
                                                                                                                                
MS. BRAWLEY said she thinks that it does make sense.                                                                            
                                                                                                                                
REPRESENTATIVE KOPP  said it  is hard  to accurately  reflect all                                                               
scenarios  in  law.   He  agreed  that  Representative  Josephson                                                               
brings up good points.                                                                                                          
                                                                                                                                
11:13:12 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE WOOL  asked whether  hours for  BDLs are  the same                                                               
for package stores.                                                                                                             
                                                                                                                                
MS. BRAWLEY said it is  her understanding that the hour provision                                                               
applies to all license types.                                                                                                   
                                                                                                                                
REPRESENTATIVE WOOL  asked about addressing how  late someone can                                                               
buy alcohol.                                                                                                                    
                                                                                                                                
MS. BRAWLEY answered  it was discussed in  the stakeholder group.                                                               
She  said the  group did  not make  a recommendation  on a  state                                                               
level since many municipalities address the issue.                                                                              
                                                                                                                                
11:14:52 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  JOSEPHSON asked  why  the  requirement to  impose                                                               
Alcohol Safety  Action Program participation for  offenders under                                                               
age 21 would be repealed.                                                                                                       
                                                                                                                                
MS.  BRAWLEY  asked  Representative  Josephson  to  indicate  the                                                               
section.                                                                                                                        
                                                                                                                                
REPRESENTATIVE JOSEPHSON answered it is AS 14.16 180d.                                                                          
                                                                                                                                
MS. BRAWLEY  answered that was  due to  changes made a  couple of                                                               
years ago to minor consuming laws.                                                                                              
                                                                                                                                
REPRESENTATIVE KOPP  added that  in 2015, the  legislature passed                                                               
Senate Bill 165,  which moved the offense  into violation status.                                                               
He  said  that   disconnected  part  of  the   statute  from  the                                                               
previously criminal offense.                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  clarified the  program was taken  up in                                                               
that bill.                                                                                                                      
                                                                                                                                
REPRESENTATIVE KOPP answered that is correct.                                                                                   
                                                                                                                                
11:16:45 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  WOOL asked  whether it  is a  misdemeanor offense                                                               
for a spouse under 21 to be found drinking alcohol.                                                                             
                                                                                                                                
REPRESENTATIVE  KOPP answered  that it  is  not.   He added  that                                                               
currently  a  child  may  drink  with a  parent.    He  said  the                                                               
legislative intent is that it be a parental oversight decision.                                                                 
                                                                                                                                
11:17:47 AM                                                                                                                   
                                                                                                                                
MS.  BRAWLEY moved  to  slide 84  regarding  proposed changes  in                                                               
Chapter  21.     She  specified  that  the   chapter  deals  with                                                               
protecting  minors.       She  said  one  of   the  proposals  is                                                               
registration of kegs.                                                                                                           
                                                                                                                                
        • Require all beer kegs purchased in the state to                                                                       
          be registered (and tagged with customer's name).                                                                      
        • Law enforcement who confiscate a keg at an                                                                            
          underage   party   can   determine   who   legally                                                                    
          purchased the keg and hold adults responsible for                                                                     
          furnishing alcohol to minors.                                                                                         
      • Modeled on existing laws in Anchorage and Juneau                                                                        
        • Applies to kegs (containers) 4 gal. or larger.                                                                        
        • Licensee keeps customer information about keg                                                                         
          purchase on file for a period of time.                                                                                
        • Purchaser can be fined for removing tag on a full                                                                     
          keg.                                                                                                                  
                                                                                                                                
11:19:08 AM                                                                                                                   
                                                                                                                                
MS. BRAWLEY  spoke to  slide 86 outlining  the requirement  for a                                                               
server  education  card  for  all retail  sales  and  service  of                                                               
alcohol.                                                                                                                        
                                                                                                                                
        • Server education includes training in verifying                                                                       
          age and identification, responsible alcohol                                                                           
          service, overserving, and applicable penalties                                                                        
          for violations.                                                                                                       
        • Some, but not all, license types are required                                                                         
          that servers (employees) have alcohol server                                                                          
          education cards. Also not required for servers at                                                                     
          permitted events.                                                                                                     
        • Proposed in SB76: Require all license types who                                                                       
          serve the public, including sampling activities,                                                                      
          to maintain server education cards.                                                                                   
        • Require servers for permitted events to be                                                                            
          certified prior to the actual event.                                                                                  
                                                                                                                                
11:20:16 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  WOOL asked  whether  the keg  sales provision  is                                                               
only from a  licensee directly to a consumer and  not business to                                                               
business.                                                                                                                       
                                                                                                                                
MS. BRAWLEY answered in the affirmative.                                                                                        
                                                                                                                                
11:20:34 AM                                                                                                                   
                                                                                                                                
MS.  BRAWLEY said  the last  few sections  of the  bill highlight                                                               
transitions  provisions  for existing  licenses.    She said  the                                                               
effective date would be January  2020, allowing 18 months for the                                                               
boards to educate licensees.                                                                                                    
                                                                                                                                
        • Define process for current licensees of certain                                                                       
          types to be converted to equivalent license(s) in                                                                     
          the new system.                                                                                                       
        • Also define process of converting applications                                                                        
          for repealed or renumbered license types.                                                                             
        • Included in Transition sections of HB 357.                                                                            
        • See table on page 61 of Report for details.                                                                           
                                                                                                                                
MS. BRAWLEY addressed slides 89-91  showing how existing licenses                                                               
would be converted.                                                                                                             
                                                                                                                                
MS. BRAWLEY  described the  effective dates  on the  final slide.                                                               
She  highlighted  that  some  provisions  would  go  into  effect                                                               
immediately, while others would go into effect in 2020.                                                                         
                                                                                                                                
11:23:00 AM                                                                                                                   
                                                                                                                                
CHAIR KITO opened public testimony on HB 357.                                                                                   
                                                                                                                                
11:23:16 AM                                                                                                                   
                                                                                                                                
DALE  FOX,  President,  Alaska  Cabaret,  Hotel,  Restaurant  and                                                               
Retailers Association (Alaska CHARR),  testified in support of HB                                                               
357.  He described the six-year  effort in the proposed bill.  He                                                               
described his organization.   He  said the framework is good.  He                                                               
said Alaska CHARR believes in it.                                                                                               
                                                                                                                                
11:25:26 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  WOOL asked  whether Mr.  Fox would  have answered                                                               
any of the questions put to Ms. Brawley differently.                                                                            
                                                                                                                                
MR.  FOX  answered  the  challenge with  compromise  is  to  work                                                               
through  that  compromise.     He  said  there  were   a  lot  of                                                               
compromises  made over  a  long  period of  time.    He said  the                                                               
dividing line  between BDLs  and tasting rooms  is an  issue that                                                               
needs refining.   He stated he wanted to be  loyal to the process                                                               
and to the effort that has gone into the bill.                                                                                  
                                                                                                                                
11:27:15 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  STUTES said  she would  like  to have  a list  of                                                               
stakeholders that were involved in creating the bill.                                                                           
                                                                                                                                
REPRESENTATIVE  KOPP said  he believes  there  is a  list in  the                                                               
committee packet.                                                                                                               
                                                                                                                                
MS. BRAWLEY confirmed that there is a list in the packet.                                                                       
                                                                                                                                
11:28:02 AM                                                                                                                   
                                                                                                                                
TIFFANY HALL,  Executive Director,  Recover Alaska,  testified in                                                               
support of  HB 357.  She  said she had a  number of organizations                                                               
on the  board of her organization.   She described the  work that                                                               
had gone  into the bill.   She underlined  that much of  the bill                                                               
would clean up  parts of the statute that are  not clear or would                                                               
integrate  new  practices.     She  highlighted  that  population                                                               
considerations are backed up by  evidence.  She spoke to research                                                               
showing  that   additional  outlets  for  consuming   do  add  to                                                               
consumption.                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  asked Ms. Hall  whether she thinks  there is                                                               
an  inconsistency with  reducing the  number of  places in  which                                                               
someone can have alcohol with  a meal and increasing those places                                                               
where alcohol can be served without food.                                                                                       
                                                                                                                                
MS. HALL  shared her  understanding that  some of  the additional                                                               
licenses  would   be  restaurants  but  that   for  manufacturing                                                               
licenses  would be  more restricted  by population  limits.   She                                                               
added  that all  of the  other license  types would  be bound  by                                                               
population limits.                                                                                                              
                                                                                                                                
REPRESENTATIVE  WOOL  asking  whether  her  research  shows  that                                                               
Portland,  Oregon, is  more dangerous  due to  the fact  that all                                                               
restaurants seem to be able to serve alcohol.                                                                                   
                                                                                                                                
MS. HALL  answered that she  does not know the  crime statistics.                                                               
She  said different  states operate  differently  and Alaska  has                                                               
operated under  the population  system for some  time.   She said                                                               
she personally agrees  that the sample sizes are  higher than she                                                               
would like,  she wants  to honor the  process and  the agreements                                                               
that were reached in the  process.  She underlined that currently                                                               
limits are not in statute.                                                                                                      
                                                                                                                                
11:36:23 AM                                                                                                                   
                                                                                                                                
ALISON KULAS,  Executive Director,  Advisory Board  on Alcoholism                                                               
and Drug Abuse, Alaska Mental  Health Board, testified in support                                                               
of HB 357.   She said both boards are in support of  HB 357.  She                                                               
said the  boards appreciate  that the  2013 Alaska  Strategies to                                                               
Prevent  Underage   Drinking  recommendations  were   taken  into                                                               
account.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  KNOPP stated  he was  never supportive  of onsite                                                               
consumption for marijuana stores.   He said the argument had been                                                               
that  package  stores do  not  have  onsite consumption,  so  why                                                               
should marijuana  stores.   He asked  whether there  are concerns                                                               
about allowing onsite consumption in package stores.                                                                            
                                                                                                                                
MS. KULAS  said there is a  focus on the training  aspect for the                                                               
servers of samples.  She said it was part of the agreements.                                                                    
                                                                                                                                
REPRESENTATIVE  KNOPP asked  whether  the training  would be  any                                                               
different from the current training.                                                                                            
                                                                                                                                
MS. KULAS  said it was a  fair point and data  would be collected                                                               
so that other solutions could be developed.                                                                                     
                                                                                                                                
11:43:26 AM                                                                                                                   
                                                                                                                                
CHAIR KITO stated he would recess the meeting.                                                                                  
                                                                                                                                
CHAIR KITO  said there is a  Senate companion bill that  would be                                                               
forthcoming.                                                                                                                    
                                                                                                                                
11:45:09 AM                                                                                                                   
                                                                                                                                
CHAIR  KITO  recessed  the  House  Labor  and  Commerce  Standing                                                               
Committee meeting to a call of the chair.                                                                                       
                                                                                                                                
                                                                                                                                
3:30:55 PM                                                                                                                    
                                                                                                                                
CHAIR  SAM KITO  called  the House  Labor  and Commerce  Standing                                                               
Committee meeting  back to order  at 3:30  p.m.  [Chair  Kito did                                                               
not call roll.]                                                                                                                 
                                                                                                                                
3:30:41 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  advised that  HB 357  is open  and available,  but he                                                               
would work through the next two bills first.                                                                                    
                                                                                                                                
[HB 357 was held over.]                                                                                                         
                                                                                                                                
              HB 193-HEALTH CARE; BALANCE BILLING                                                                           
                                                                                                                              
3:31:04 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that  the next order  of business  would be                                                               
HOUSE  BILL  NO.  193,  "An   Act  relating  to  insurance  trade                                                               
practices  and frauds;  and relating  to  emergency services  and                                                               
balance billing."                                                                                                               
                                                                                                                                
LEN SORRIN, Premera  Blue Cross Blue Shield  of Alaska, testified                                                               
in opposition  to HB 357.   He paraphrased his  written testimony                                                               
[included in committee packet],  which reads as follows [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
        • Thank you, Chair Kito and Members of the                                                                              
          Committee.                                                                                                            
        • For the record, I am Len Sorrin with Premera Blue                                                                     
          Cross Blue Shield of Alaska.                                                                                          
        • I am here today testifying with concerns on HB                                                                        
          193                                                                                                                   
        • We share your commitment to ensuring that our                                                                         
          members  are not  subject  to  balance billing  or                                                                    
          surprise billing  by non-contracted  providers. We                                                                    
          understand    that   surprise    billing   imposes                                                                    
          substantial  and unexpected  financial burdens  on                                                                    
          Alaskan   families,  many   of  who   are  already                                                                    
          struggling.                                                                                                           
        • The challenge is  to  achieve  that  goal  while                                                                      
          moderating  Alaska's  health   care  premiums  and                                                                    
          costs, which are already among  the highest in the                                                                    
          nation.  HB 193  can achieve  the goal  of banning                                                                    
          balance  billing, but  it  will exacerbate  Alaska                                                                    
          health care costs and premiums  as a result of its                                                                    
          use of  the 80th  percentile and 350%  of Medicare                                                                    
          as the likely rates to  be paid to providers under                                                                    
          the bill.                                                                                                             
        • The 80th percentile provision  in  the bill  has                                                                      
          been characterized  as just  one of  three options                                                                    
          in the bill. That much  is true. However, the bill                                                                    
          requires  that carriers  pay  the  highest of  the                                                                    
          three  options. The  80th percentile  will be  the                                                                    
          highest in the vast majority  of cases. And in the                                                                    
          rare case it  is not, an even higher  rate will be                                                                    
          mandated.                                                                                                             
        • Make no mistake: the use of the  80th percentile                                                                      
          as   the  highly   likely  mandatory   choice  for                                                                    
          reimbursement  will increase  costs for  Alaskans.                                                                    
          Outside analyses confirm this.                                                                                        
        • The recent study by Milliman makes clear that the                                                                     
          80th  percentile standard  has contributed  to the                                                                    
          unsustainable  level  of   health  care  costs  in                                                                    
          Alaska.   In   2015,   the  Alaska   Health   Care                                                                    
          Commission   recommended  that   Alaska  "consider                                                                    
          modifying the  current usual and  customary charge                                                                    
          payment  regulation  to eliminate  the  unintended                                                                    
          adverse pricing consequence."                                                                                         
        • In addition to the problems presented by the use                                                                      
          of  the 80th  percentile standard,  the Department                                                                    
          of   Administration   stated   that   the   bill's                                                                    
          reimbursement    structure     "could    encourage                                                                    
          providers to  leave the networks and  could result                                                                    
         in long-term growth in the cost of services."                                                                          
        • Our experience reflects  that  concern.  Let  me                                                                      
          provide you examples.                                                                                                 
                                                                                                                                
        The 80th percentile  regulation requires that  it be                                                                    
        updated  twice   a  year.   This   creates  a   cost                                                                    
        compounding impact  that often  exceeds the  broader                                                                    
        health  care  cost  trend,   increasing  costs  even                                                                    
        further.                                                                                                                
        Premera's 80th percentile  updates in  2017 resulted                                                                    
        in UCR  trends that  were over  4 times  higher than                                                                    
        Premera's overall  unit cost  trend  for 2017.  That                                                                    
        drives  a   real   escalation   in  overall   costs,                                                                    
        increasing  premiums   and  consumer   out-of-pocket                                                                    
        expenses                                                                                                                
        The guaranty  of 80th  percentile reimbursement  for                                                                    
        out of network care has also caused contracted rates                                                                    
        to be far higher  than they would be  otherwise. Our                                                                    
        contracted network  rates  in  Alaska for  the  four                                                                    
        hospital-based specialties are between  32% and 275%                                                                    
        higher than in Washington  as a percent  of Medicare                                                                    
        ... and that  is on top  of Medicare rates  that are                                                                    
        already 25%  higher  here.  Other specialties  range                                                                    
        upward of 1000% of Medicare.                                                                                            
                                                                                                                                
        • The challenge in determining fair  reimbursement                                                                      
          is to not  disrupt what can be  a very challenging                                                                    
          environment for health plans  to build networks in                                                                    
          Alaska. Premera's Alaska network  has grown in the                                                                    
          last few  years and continues  to do so.  But it's                                                                    
          been  very   hard  work,  due   in  part   to  the                                                                    
          attraction of the  80th percentile requirement for                                                                    
          out-of-network care.                                                                                                  
        • That challenge can be greater when attempting to                                                                      
          contract  with  hospital   based  emergency  care,                                                                    
          anesthesiology,    radiology   pathology,    where                                                                    
          members   are  unable   unable  to   choose  their                                                                    
          provider. As  a result,  these provider  types are                                                                    
          guaranteed to  see health plan  members at  an in-                                                                    
          network hospital  with or without a  contract, and                                                                    
          hence   have   less   incentive   than   providers                                                                    
          generally to contract with health plans.                                                                              
        • We want to  continue our  progress  in  building                                                                      
          bigger and  stronger networks  for our  members to                                                                    
          access,  offering  members  lower  out  of  pocket                                                                    
          costs.                                                                                                                
        • Reimbursing out of  network  care  at  the  80th                                                                      
          percentile  of   billed  charges  as  part   of  a                                                                    
          solution  to  balance  billing  will  impede  that                                                                    
          effort. While  balance billing may  be prohibited,                                                                    
          Alaskans  will be  exposed to  ever-increasing out                                                                    
          of  pocket costs  as providers  take advantage  of                                                                    
          the     out-of-network    reimbursement     levels                                                                    
          unencumbered  by  the   risk  of  balance  billing                                                                    
          members. Member coinsurance  costs overall will be                                                                    
          higher when based on  the 80th percentile standard                                                                    
          than they would when  based on a more market-based                                                                    
          rate. Premiums will increase as well.                                                                                 
        • We've proposed removing the 80th percentile with                                                                      
          three  options  for reimbursement  standards:  the                                                                    
          first two are the  median health plan fee schedule                                                                    
          for the  specific specialty (as is  in the present                                                                    
          bill)  and  two   different  percent  of  Medicare                                                                    
          options. The  third option we've proposed  is even                                                                    
          simpler:  it's simply  the  median contracted  fee                                                                    
          schedule.                                                                                                             
        • It's hard to come up with a better indicator of                                                                       
          the actual  health care market  than one  based on                                                                    
          the  median fee  schedule to  which providers  and                                                                    
          health plans  have agreed. Markets are  defined by                                                                    
          a price or term to which parties agree.                                                                               
        • This is an opportunity for a balance billing                                                                          
          solution  for  Alaskans  to actually  reflect  the                                                                    
          market   in   Alaska   and  maintain   broad   and                                                                    
          affordable network access for Alaskans.                                                                               
        • We would also like to share with the committee                                                                        
          concerns    unrelated    to   the    reimbursement                                                                    
          methodology.                                                                                                          
        • First, we have suggested an amendment to the                                                                          
          "hold harmless"  section. The  provision currently                                                                    
          requires an  insurer to "hold harmless"  or ensure                                                                    
          that a  member does not  incur costs in  excess of                                                                    
          what  they owe  for the  in-network benefit  under                                                                    
          the bill. Premera will of  course pay claims under                                                                    
          the bill  at the in-network benefit  level and the                                                                    
          member's responsibility under  their contract with                                                                    
          us  will be  limited to  that amount.  However, we                                                                    
          have  no   ability  to  control  whether   a  non-                                                                    
          contracted provider  will bill a member  in excess                                                                    
          of the  amounts allowed  under the bill.  We would                                                                    
          request that  the provision be amended  to reflect                                                                    
          that reality.                                                                                                         
        • Second, we agree with the Department of                                                                               
          Administration that the bill's  intent is to apply                                                                    
          to  services rendered  during  emergency care.  We                                                                    
          also  agree  with  their  concern  that  the  bill                                                                    
          actually  reaches   far  beyond   those  services.                                                                    
          Separate  from  emergency services  and  emergency                                                                    
          medical  conditions, the  bill's  terms extend  to                                                                    
          any  non-network provider  who provides  "services                                                                    
          at an  in-network hospital or  ambulatory surgical                                                                    
          center."  That   would  apply  to   literally  any                                                                    
          service provided by  an out-of-network provider at                                                                    
          an in-network facility ...  for example a surgical                                                                    
          service of any kind.                                                                                                  
        • This will result in a prohibition of balance                                                                          
          billing far  broader than  intended and  will also                                                                    
          mandate  the   higher  in-network   benefit  level                                                                    
          required  under the  bill even  for consumers  who                                                                    
          choose  to  see   an  out-of-network  provider.  A                                                                    
          prohibition on balance  or surprise billing should                                                                    
          protect  consumers  who  are unable  to  choose  a                                                                    
          network provider and not those  who are free to do                                                                    
          so.                                                                                                                   
        • To resolve this, we suggest that "in-network                                                                          
          hospital"  and   "in-network  ambulatory  surgical                                                                    
          center"  be linked  only  to "emergency  services"                                                                    
          and  the   treatment  of  an   "emergency  medical                                                                    
          condition" to  resolve any ambiguity on  the reach                                                                    
          of the bill.                                                                                                          
        • The bill also provides balance billing protection                                                                     
          to any  patient who  has not consented  in writing                                                                    
          to balance billing when being  referred to an out-                                                                    
          of-network provider. Insurers have  no way to know                                                                    
          whether or not a  referring physician was involved                                                                    
          at  some point,  or  whether a  patient agreed  in                                                                    
          writing  to  be  responsible  for  the  additional                                                                    
          costs of out-of-network care.                                                                                         
          As  a  result,  paying  that  claim  correctly  is                                                                    
          difficult  if not  impossible.  It  would also  be                                                                    
          exceedingly rare for a referral  to be involved in                                                                    
          emergency care.                                                                                                       
        • Finally, the bill in any form will require                                                                            
          changes  to  claims  systems,  changes  to  member                                                                    
          benefit  structures  and  a range  of  member  and                                                                    
          other  communications.  In addition,  product  and                                                                    
          rate filings for 2019  will commence very shortly.                                                                    
          In   order  to   ensure  that   implementation  is                                                                    
          thorough, and that the impacts  of the bill to all                                                                    
          of these processes is  well understood, we request                                                                    
          an effective date of plans  filed or renewed on or                                                                    
          after January 1, 2019.                                                                                                
        • Thank you. I would be happy to respond to any                                                                         
          questions you might have.                                                                                             
                                                                                                                                
3:41:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  said he  has heard that  his doctor  may not                                                               
know whether  he is in-network  or out-of-network.  He  asked for                                                               
an explanation of the terms.                                                                                                    
                                                                                                                                
MR. SORRIN answered that typically  a provider with Premera would                                                               
be  in  all  of Premera's  networks.      He  said it  should  be                                                               
relatively straightforward.                                                                                                     
                                                                                                                                
REPRESENTATIVE WOOL  asked whether  a health care  provider could                                                               
be in more than one network.                                                                                                    
                                                                                                                                
MR. SORRIN  answered in the  affirmative.  He said  providers are                                                               
free to join any network.                                                                                                       
                                                                                                                                
3:43:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   SULLIVAN-LEONARD   spoke   to   testimony   from                                                               
emergency room doctors.  She asked  whether they are able to join                                                               
the network with Premera.                                                                                                       
                                                                                                                                
MR.  SORRIN  answered  that  Premera would  love  to  have  every                                                               
hospital-based  provider  in  its  network.  Sometimes  it's  not                                                               
possible as the  contracting dynamic is complicated.   He said at                                                               
times  hospitals  contract  separately with  some  providers.  He                                                               
underlined that Premera  tries hard to enter  into contracts with                                                               
the provider types.   He added that if the  consumer doesn't have                                                               
a choice, it  can result in the type of  balance billing that the                                                               
proposed bill is trying to prevent.                                                                                             
                                                                                                                                
REPRESENTATIVE  SULLIVAN-LEONARD  asked  whether Mr.  Sorrin  has                                                               
spoken with the bill sponsor about an amendment.                                                                                
                                                                                                                                
MR. SORRIN answered he had spoken  with the sponsor but not about                                                               
the issue  of emergency care.   He said he thought  the intention                                                               
is to  address emergency  care.   He added he  would be  happy to                                                               
work with the sponsor.                                                                                                          
                                                                                                                                
3:46:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON surmised  the  insurance company  would                                                               
not be happy with the legislation for a series of other reasons.                                                                
                                                                                                                                
MR. SORRIN  addressed some  of the  concerns with  the bill.   He                                                               
                      th                                                                                                        
said the use of the 80   percentile would lead to a higher number                                                               
of  out-of-network  hospital-based  providers.   He  provided  an                                                               
anecdote from the state of Washington's market.                                                                                 
                                                                                                                                
3:48:59 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP asked  what leads the company  to enter into                                                               
a contract with higher rates.                                                                                                   
                                                                                                                                
MR. SORRIN answered  some of the high  levels involve specialties                                                               
that have very few providers.   He said the higher available out-                                                               
of-network   reimbursement  raises   the   level  of   in-network                                                               
reimbursement.                                                                                                                  
                                                                                                                                
REPRESENTATIVE  KNOPP  stated  he  doesn't  believe  any  of  the                                                               
hospitals  in his  area are  in  a network.   He  asked why  some                                                               
decide not to participate.                                                                                                      
                                                                                                                                
MR. SORRIN  answered his  organization attempts  to have  as many                                                               
hospitals as  it can.   He stated  that in Washington  around 100                                                               
out of 105 hospitals are in the network.                                                                                        
                                                                                                                                
REPRESENTATIVE  KNOPP  asked  what determines  whether  providers                                                               
enter the network.                                                                                                              
                                                                                                                                
MR.  SORRIN  answered  that  Premera works  hard  to  enter  into                                                               
contracts with hospitals in less densely populated areas.                                                                       
                                                                                                                                
3:52:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH  asked whether  there is objection  from the                                                               
company to  paying an in-network rate  for a customer who  has an                                                               
emergency out-of-network procedure.                                                                                             
                                                                                                                                
MR. SORRIN answered the company does pay in those situations.                                                                   
                                                                                                                                
CHAIR KITO clarified  the issue is paying the  amount between the                                                               
in-network rate and out-of-network rate.                                                                                        
                                                                                                                                
3:54:16 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  asked for clarification  regarding hospitals                                                               
versus doctors being in-network.                                                                                                
                                                                                                                                
MR. SORRIN answered that the  company contracts with the hospital                                                               
and  some  hospital-based  providers  are  not  employed  by  the                                                               
hospital.   They  may not  have a  plan that  contracts with  the                                                               
hospital.                                                                                                                       
                                                                                                                                
REPRESENTATIVE WOOL  asked whether, if the  proposed bill passes,                                                               
the provider would take a loss on the billing.                                                                                  
                                                                                                                                
MR.  SORRIN answered  the provider  would get  whatever rate  the                                                               
proposed  bill  may  end  up  providing.    He  added  there  are                                                               
different  rates across  the  networks. He  said  that under  the                                                               
proposed  bill,  all  of  the  providers  seen  in  an  emergency                                                               
situation  would  be   subject  to  whatever  rate   the  HB  193                                                               
establishes.                                                                                                                    
                                                                                                                                
3:57:32 PM                                                                                                                    
                                                                                                                                
DR. SAMI  ALI, Alaska Emergency Medical  Associates, testified in                                                               
support  of HB  193.     She  described  her  organization.   She                                                               
corrected that physicians are not  employees of the hospital, but                                                               
contract with the hospital.                                                                                                     
                                                                                                                                
4:00:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL  asked  whether  Dr. Ali  agrees  that  some                                                               
providers could leave the network.                                                                                              
                                                                                                                                
DR. ALI answered  that it is hard  to say, but that  some may get                                                               
out of their contracts.                                                                                                         
                                                                                                                                
4:00:46 PM                                                                                                                    
                                                                                                                                
RHONDA  PROWELL-KITTER,   President,  Alaskans   for  Sustainable                                                               
Healthcare  Costs, testified  in  the  hearing on  HB  193.   She                                                               
stated some concerns  with the proposed bill.  She  said that one                                                               
requirement of  the proposed  bill would  be that  the in-network                                                               
provider should inform the patient  when another provider is out-                                                               
of-network.   She  queried why  an in-network  provider would  be                                                               
responsible for tracking another  provider's network status.  She                                                               
said that  the current version  of the bill requires  the highest                                                               
                                                                th                                                              
of three  calculations.  She  said mandating the  use of the  80                                                                
percentile would allow  out-of-network providers to be  paid at a                                                               
higher rate than in-network providers.  She mentioned Oregon bill                                                               
HB 2339.   She warned against unintended  consequences that allow                                                               
out-of-network   providers   to   be  billed   above   in-network                                                               
providers.                                                                                                                      
                                                                                                                                
4:04:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON asked for the Oregon law details.                                                                      
                                                                                                                                
MS. PROWELL-KITTER answered the bill  was HB 2339 which went into                                                               
effect on 1 March 2018.                                                                                                         
                                                                                                                                
4:05:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  suggested she  was saying  that if  a doctor                                                               
                                                th                                                                              
who is  out-of-network is  reimbursed at the  80   percentile, it                                                               
could be  more than  that reimbursed  to an  in-network provider.                                                               
He suggested this could be an  incentive for doctors to leave the                                                               
network.                                                                                                                        
                                                                                                                                
MS. PROWELL-KITTER answered that is her understanding.                                                                          
                                                                                                                                
4:05:53 PM                                                                                                                    
                                                                                                                                
CHAIR KITO closed public testimony on HB 193.                                                                                   
                                                                                                                                
4:06:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   WOOL  asked   whether  the   administration  had                                                               
reviewed similar legislation in other states.                                                                                   
                                                                                                                                
4:07:01 PM                                                                                                                    
                                                                                                                                
LORI WING-HEIER,  Director, Division of Insurance,  Department of                                                               
Commerce,  Community  &  Economic Development  (DCCED),  answered                                                               
questions  in  the hearing  on  HB  193.    She answered  in  the                                                               
                              th                                                                                                
affirmative.  She  said the 80   percentile issue is  one part of                                                               
the governor's bi-partisan approach to the health care issue.                                                                   
                                                                                                                                
                                          th                                                                                    
REPRESENTATIVE WOOL  asked whether the  80  percentile  is common                                                               
in other states.                                                                                                                
                                                                                                                                
MS. WING-HEIER answered  that Alaska is probably the  first.  She                                                               
added that the  Institute of Social and  Economic Research (ISER)                                                               
                                         th                                                                                     
is currently conducting a study on the 80 percentile.                                                                           
                                                                                                                                
4:08:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  stated he  appreciates the goals  of HB                                                               
193.   He said it  seems there is  a game of  "whack-a-mole" with                                                               
issues popping up.                                                                                                              
                                                                                                                                
MS. WING-HEIER answered this is a  complex problem.  She said the                                                               
whole health care system in the state will take time.                                                                           
                                                                                                                                
4:11:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP asked whether  any benefit has been observed                                                               
in  the Anchorage,  Alaska, legislation  to  mandate health  care                                                               
cost transparency.                                                                                                              
                                                                                                                                
MS. WING-HEIER  answered that  no benefit had  been seen  as yet,                                                               
but  the mandate  was very  recent.   She corrected  that Central                                                               
Peninsula is in the Premera network.                                                                                            
                                                                                                                                
4:11:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH asked  about  the financial  impact to  the                                                               
state.                                                                                                                          
                                                                                                                                
MS. WING-HEIER answered the division  wouldn't have a fiscal note                                                               
(FN)  for  the  proposed  bill.     She  added  the  Division  of                                                               
Retirement  and Benefits  is  not  required to  pay  at the  80th                                                               
percentile.                                                                                                                     
                                                                                                                                
4:13:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL asked  whether the motivation is  to give the                                                               
patient a better medical bill at the end of a day.                                                                              
                                                                                                                                
4:14:14 PM                                                                                                                    
                                                                                                                                
ANNE  ZINK, Mat-Su  Regional Medical  Director, Alaska  Emergency                                                               
Physicians,  answered  the  goal  is  to  prevent  out-of-network                                                               
billing.   She  reiterated most  providers in  the state  are in-                                                               
network.  She  added she did not think providers  would leave the                                                               
network.  She spoke to the situation in Washington and Oregon.                                                                  
                                                                                                                                
REPRESENTATIVE JOSEPHSON  opined the  state needs a  single payer                                                               
system.                                                                                                                         
                                                                                                                                
REPRESENTATIVE  WOOL  suggested  if   someone  is  an  in-network                                                               
                                                   th                                                                           
provider they would  likely be reimbursed at the 80   percentile,                                                               
so there would be no migration to out-of-network.                                                                               
                                                                                                                                
                                                                th                                                              
DR.  ZINK  answered  that  is  correct.    She   stated  the  80                                                                
percentile has been in place since 2004.   She said the aim is to                                                               
avoid balance billing on top of that.                                                                                           
                                                                                                                                
4:18:11 PM                                                                                                                    
                                                                                                                                
CHAIR KITO commented that balance billing  has been an issue.  He                                                               
mentioned individuals  or families  that have to  file bankruptcy                                                               
due to balance  bills.   He  said at some point there  may be the                                                               
need for  a task force  for the state to  work on the  issue, but                                                               
there is no reason not to attempt to work on it.                                                                                
                                                                                                                                
4:20:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  commented that the system  is so complicated                                                               
that  he does  not know  what  the effect  would be  of moving  a                                                               
single piece.                                                                                                                   
                                                                                                                                
4:21:44 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 4:21 p.m. to 4:26 p.m.                                                                       
                                                                                                                                
4:26:28 PM                                                                                                                    
                                                                                                                                
CHAIR KITO held over HB 193.                                                                                                    
                                                                                                                                
             HB 376-ESTABLISH THE ALASKA STATE BANK                                                                         
                                                                                                                                
4:26:37 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that  the next order  of business  would be                                                               
HOUSE BILL NO.  376, "An Act establishing a  state bank; relating                                                               
to insurance,  mortgage lending,  securities, and  permanent fund                                                               
dividends; and providing for an effective date."                                                                                
                                                                                                                                
4:26:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE    CHRIS   TUCK,    Alaska   State    Legislature,                                                               
reintroduced HB 376 as prime sponsor.   He said the proposed bill                                                               
would  create a  monetary policy  for Alaska  for infrastructure,                                                               
science, and technology projects.                                                                                               
                                                                                                                                
4:28:21 PM                                                                                                                    
                                                                                                                                
CHARLES DUNCAN,  Staff, Representative  Chris Tuck,  Alaska State                                                               
Legislature, presented  HB 376 on behalf  of Representative Tuck,                                                               
prime sponsor.   He said  that as  a researcher, he  believes the                                                               
most  important reason  to create  the  Alaska State  Bank is  to                                                               
allow the legal ability to  access the Federal Reserve to prepare                                                               
for the next financial crisis.                                                                                                  
                                                                                                                                
REPRESENTATIVE TUCK  said the proposal  is to get money  into the                                                               
economy for long-term infrastructure projects.   He said the most                                                               
the state would participate is 35 percent.                                                                                      
                                                                                                                                
4:32:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP  asked where  the funds  for the  state bank                                                               
would come from.                                                                                                                
                                                                                                                                
REPRESENTATIVE  TUCK answered  some  funds would  come from  loan                                                               
guarantees, capital purchase, and the credit stimulus method.                                                                   
                                                                                                                                
REPRESENTATIVE KNOPP asked  whether Alaska Industrial Development                                                               
and Export Authority (AIDEA) already does those things.                                                                         
                                                                                                                                
MR. DUNCAN answered that AIDEA  doesn't directly fund science and                                                               
technology.                                                                                                                     
                                                                                                                                
4:35:55 PM                                                                                                                    
                                                                                                                                
CHAIR  KITO  shared his  understanding  that  the proposal  would                                                               
allow the state  to issue bonds for infrastructure  projects.  He                                                               
asked about the revenue source for paying back the funds.                                                                       
                                                                                                                                
MR. DUNCAN answered the bank  would be active as  a securitizer."                                                               
He said  it would create packages  which would be put  on account                                                               
with the Federal Reserve.                                                                                                       
                                                                                                                                
CHAIR KITO  suggested the infrastructure bonds  are for municipal                                                               
governments and they are paid back through municipal taxes.                                                                     
                                                                                                                                
MR. DUNCAN answered that is correct.                                                                                            
                                                                                                                                
4:37:39 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  suggested the state of  Alaska can go to  the federal                                                               
government with  the bonds and  the federal government  can allow                                                               
the  state   to  lend  or   generate  capital  for   science  and                                                               
technology.                                                                                                                     
                                                                                                                                
MR. DUNCAN answered in the affirmative.                                                                                         
                                                                                                                                
CHAIR KITO  suggested it  increases the  state bank's  ability to                                                               
enter into additional loans to support science and technology.                                                                  
                                                                                                                                
MR. DUNCAN answered in the affirmative.                                                                                         
                                                                                                                                
CHAIR KITO clarified  there is a two-step procedure.   The credit                                                               
holding with  the federal government  allows for the  creation of                                                               
additional  loans.   He  said  monetary  policy means  little  to                                                               
people  in Alaska.   He  said it  would be  creating a  method to                                                               
access capital that is not currently accessible to the state.                                                                   
                                                                                                                                
4:39:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP spoke to issuance of  bonds.  He said he had                                                               
not heard  how they  were to  be repaid.   He stated  science and                                                               
technology are not necessarily revenue generators.                                                                              
                                                                                                                                
MR. DUNCAN  said the  aim is  to prepare  for the  next financial                                                               
reforms.                                                                                                                        
                                                                                                                                
REPRESENTATIVE TUCK said that as  bonds are packaged together for                                                               
municipal projects  and the Federal  Reserve takes them  over, it                                                               
frees up more money.                                                                                                            
                                                                                                                                
REPRESENTATIVE  KNOPP said  the state  does already  have a  bond                                                               
bank established.                                                                                                               
                                                                                                                                
REPRESENTATIVE TUCK answered  he doesn't know what  the bond bank                                                               
is or whether it is able to do fractional reserve banking.                                                                      
                                                                                                                                
CHAIR KITO answered  it is the Alaska Municipal Bond  Bank and it                                                               
is available for cities to support municipal bond programs.                                                                     
                                                                                                                                
4:42:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL mentioned  the state  bank would  provide 35                                                               
percent  as  a down  payment  for  commercial  banks.   He  asked                                                               
whether commercial banks are welcoming the initiative.                                                                          
                                                                                                                                
MR. DUNCAN clarified it also concerns other state agencies.                                                                     
                                                                                                                                
REPRESENTATIVE WOOL  asked whether  the funds  would be  the seed                                                               
money to give commercial banks confidence.                                                                                      
                                                                                                                                
REPRESENTATIVE  TUCK answered  that the  banking association  had                                                               
been  in  Juneau,  Alaska,  about  two  weeks  previous  and  the                                                               
proposal had peaked their interest.                                                                                             
                                                                                                                                
4:45:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KNOPP   asked  whether  the  committee   had  any                                                               
testimony from  the Department  of Revenue  or AIDEA  or received                                                               
any thoughts from the administration.                                                                                           
                                                                                                                                
CHAIR  KITO  answered  that  to  date  there  had  not  been  any                                                               
commentary from the administration.                                                                                             
                                                                                                                                
REPRESENTATIVE TUCK added that since  the last hearing there is a                                                               
fiscal note.                                                                                                                    
                                                                                                                                
CHAIR KITO said the proposal was for a specific revenue source.                                                                 
                                                                                                                                
REPRESENTATIVE  BIRCH  commented it  doesn't  sound  like a  good                                                               
business solution to him.                                                                                                       
                                                                                                                                
REPRESENTATIVE  WOOL   commented  he  does  not   understand  the                                                               
proposal.                                                                                                                       
                                                                                                                                
REPRESENTATIVE KNOPP  commented he  is not  ready to  support the                                                               
proposed bill but is ready to  support the concept.  He said he'd                                                               
like to see a working group come forward with recommendations.                                                                  
                                                                                                                                
4:50:07 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 4:50 p.m. to 4:51 p.m.                                                                       
                                                                                                                                
4:51:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL moved to report  HB 376 out of committee with                                                               
individual recommendations and the accompanying fiscal notes.                                                                   
                                                                                                                                
4:51:48 PM                                                                                                                    
                                                                                                                                
A roll call  vote was taken.   Representatives Stutes, Josephson,                                                               
Wool, and Kito  voted in favor of HB 376.   Representatives Birch                                                               
and Knopp voted  against it.  Therefore, HB 376  was reported out                                                               
of the House  Labor and Commerce Standing Committee by  a vote of                                                               
4-2.                                                                                                                            
                                                                                                                                
4:52:31 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 4:52 p.m. to 4:54 p.m.                                                                       
                                                                                                                                
          HB 357-ALCOHOLIC BEVERAGE CONTROL/REGULATION                                                                      
                                                                                                                                
4:54:39 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that the  final 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."                                                                                                         
                                                                                                                                
4:55:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL  commented  it  seems  like  a  lot  of  the                                                               
training and education in the proposal is already in place.                                                                     
                                                                                                                                
4:56:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CHUCK KOPP,  Alaska  State Legislature,  answered                                                               
questions on HB 357 as prime  sponsor.  He answered that the bill                                                               
standardizes the requirements. He said  it would use a better job                                                               
of using  fees for training  and education.   He deferred  to Ms.                                                               
Brawley.                                                                                                                        
                                                                                                                                
REPRESENTATIVE WOOL asked what is  different in the proposal from                                                               
what is already going on.                                                                                                       
                                                                                                                                
ANNA BRAWLEY,  Project Coordinator  for Title  4, noted  that the                                                               
requirement for TAMS cards is  only subject to some license types                                                               
and do  not apply to  breweries, manufacturer tasting  rooms, and                                                               
other new licenses types.  She  added that a non-profit would now                                                               
be subject to the requirements.                                                                                                 
                                                                                                                                
REPRESENTATIVE WOOL  asked about funding that  comes from license                                                               
fees for enforcement.                                                                                                           
                                                                                                                                
REPRESENTATIVE  KOPP  answered  the  focus is  on  a  cooperative                                                               
effort with public safety.                                                                                                      
                                                                                                                                
MR. FOX  added that he would  like to see more  education through                                                               
the public  safety officers, rather  than the issuing of  Class A                                                               
misdemeanors.   He  recounted  an episode  in  which an  underage                                                               
server was involved in a beer order at a pizzeria.                                                                              
                                                                                                                                
5:05:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  suggested the funding isn't  based on number                                                               
of contacts with licensees.   He asked whether license money goes                                                               
to the state or the local municipality.                                                                                         
                                                                                                                                
REPRESENTATIVE KOPP answered it would depend on the entity that                                                                 
has that enforcement in their job function.                                                                                     
                                                                                                                                
CHAIR KITO held over HB 357.                                                                                                    
                                                                                                                                
5:08:09 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Labor and Commerce Standing Committee meeting was adjourned at                                                                  
5:08 p.m.                                                                                                                       

Document Name Date/Time Subjects
HB193 Opposition Letters 4.16.18.pdf HL&C 4/15/2018 10:00:00 AM
HB 193
HB 193 Followup HL&C Letter 4.19.18.pdf HL&C 4/15/2018 10:00:00 AM
HB 193