Legislature(2017 - 2018)BARNES 124
04/15/2018 10:00 AM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB357 | |
| HB193 | |
| HB376 | |
| HB357 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 357 | TELECONFERENCED | |
| += | HB 193 | TELECONFERENCED | |
| += | HB 376 | TELECONFERENCED | |
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 |