Legislature(2021 - 2022)SENATE FINANCE 532

05/03/2021 09:00 AM FINANCE

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                 SENATE FINANCE COMMITTEE                                                                                       
                        May 3, 2021                                                                                             
                         9:03 a.m.                                                                                              
9:03:08 AM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Bishop called the  Senate Finance Committee meeting                                                                    
to order at 9:03 a.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Senator Click Bishop, Co-Chair                                                                                                  
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
Senator Natasha von Imhof (via teleconference)                                                                                  
Senator Bill Wielechowski                                                                                                       
Senator David Wilson                                                                                                            
MEMBERS ABSENT                                                                                                                
ALSO PRESENT                                                                                                                  
Representative  Adam Wool,  Sponsor; Ashley  Carrick, Staff,                                                                    
Representative Wool; Senator Peter Micciche, Sponsor.                                                                           
PRESENT VIA TELECONFERENCE                                                                                                    
Teri   Cothren,   Associate    Vice   President,   Workforce                                                                    
Development, University  of Alaska; Doug  Walrath, Director,                                                                    
Northwestern Alaska Career and  Technical Center, Nome; Anna                                                                    
Brawley,   Title   IV   Review   Coordinator,   Agnew   Beck                                                                    
Consulting, Anchorage;  Lee Ellis, President,  Brewers Guild                                                                    
of Alaska, Anchorage.                                                                                                           
SB 9      ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG                                                                               
          SB 9 was HEARD and HELD in committee for further                                                                      
CSHB 69(FIN)am                                                                                                                  
          APPROP: OPERATING BUDGET/LOANS/FUNDS                                                                                  
          CSHB 69(FIN)am was SCHEDULED but not HEARD.                                                                           
CSHB 71(FIN)                                                                                                                    
          APPROP: MENTAL HEALTH BUDGET                                                                                          
          CSHB 71(FIN) was SCHEDULED but not HEARD.                                                                             
HB 100    EXTEND WORKFORCE INVEST BOARD ALLOCATIONS                                                                             
          HB 100 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
HOUSE BILL NO. 100                                                                                                            
     "An Act relating to allocations of funding for the                                                                         
     Alaska Workforce Investment Board; and providing for                                                                       
     an effective date."                                                                                                        
9:03:54 AM                                                                                                                    
Co-Chair Bishop noted  that the committee would  hear HB 100                                                                    
for the first time and intended to set the bill aside.                                                                          
9:04:22 AM                                                                                                                    
REPRESENTATIVE ADAM  WOOL, SPONSOR, discussed HB  100, which                                                                    
proposed  a  three-year  reauthorization  of  the  Technical                                                                    
Vocational Education  Program (TVEP).  The program  used .16                                                                    
percent  of  unemployment  insurance receipts  and  provided                                                                    
grants  around  the  state   to  many  technical  vocational                                                                    
education   programs.   The   total   of   the   grant   was                                                                    
approximately   $12  million   and  impacted   thousands  of                                                                    
students.  The  largest  recipient  was  the  University  of                                                                    
Alaska  (UA), which  received 45  percent  of the  receipts,                                                                    
which it  distributed to various campuses  around the state.                                                                    
Other  colleges  and  programs  that  received  the  funding                                                                    
included the  Alaska Vocational Technical Center  (AVTEC) in                                                                    
Seward, Alaska  Technical Center in Kotzebue,  and Iligsavik                                                                    
College  in  Utqiagvik. He  noted  that  the bill  had  been                                                                    
unchanged  in the  other body.  The  program recipients  and                                                                    
funding amounts had remained unchanged since 2014.                                                                              
9:06:23 AM                                                                                                                    
ASHLEY CARRICK, STAFF, REPRESENTATIVE WOOL, discussed the                                                                       
presentation "Technical Vocational Education Program (TVEP)                                                                     
Re-Authorization" (copy on file).                                                                                               
Ms. Carrick looked at slide 2, "TVEP Program History":                                                                          
     ? Established under AS 23.15.830                                                                                           
     ? Created in 2000 to provide noncompetitive grant                                                                          
     assistance to education entities in Alaska that                                                                            
    delivered specific vocational/ technical training.                                                                          
     ? In 2014, the Legislature increased the amount of                                                                         
     funds diverted to TVEP from 0.15% of unemployment                                                                          
     insurance to 0.16%.                                                                                                        
     ? HB 100 seeks to re-authorize the program for another                                                                     
     3 years.                                                                                                                   
Ms. Carrick spoke to slide 3, "Types of Training":                                                                              
     TVEP Recipients Offer                                                                                                      
     ? Aviation                                                                                                                 
     ? Fisheries                                                                                                                
     ? Construction                                                                                                             
     ? Renewable Energy                                                                                                         
     ? Mining                                                                                                                   
     ? Information Technology                                                                                                   
     ? Transportation                                                                                                           
     ? Health Care                                                                                                              
     ? Other Vocational Training                                                                                                
Ms.  Carrick  referenced slide  4,  "How  TVEP Funding  Gets                                                                    
Distributed," which showed a flow  chart. She noted that the                                                                    
unemployment   insurance  receipts   were  drawn   from  the                                                                    
employee portion  of checks and  then diverted to  the State                                                                    
Training and Employment Program (STEP) and TVEP.                                                                                
Ms. Carrick turned to slide 5, "TVEP Recipients Over Time":                                                                     
     In 2000:                                                                                                                   
     University of Alaska: 52%                                                                                                  
     Kotzebue Training Center: 16%                                                                                              
     Alaska Vocational Technical Center: 32%                                                                                    
     In 2001:                                                                                                                   
     University of Alaska: 63%                                                                                                  
     Kotzebue Training Center: 11%                                                                                              
     Alaska Vocational Technical Center: 22%                                                                                    
     Galena Project Education Training Center: 4%                                                                               
     In 2004:                                                                                                                   
     University of Alaska: 55%                                                                                                  
     Kotzebue Training Center: 11%                                                                                              
     Alaska Vocational Technical Center: 22%                                                                                    
     Galena Project Education Training Center: 4%                                                                               
     Southwest Alaska Vocational Education Center: 4%                                                                           
     Yuut Elitnaurviat, Inc., People's Learning Center: 4%                                                                      
Ms. Carrick considered slide 6, "TVEP Recipients Over Time                                                                      
     In 2008:                                                                                                                   
     University of Alaska: 45%                                                                                                  
     Kotzebue Training Center- Alaska Technical Center: 9%                                                                      
     Alaska Vocational Technical Center: 17%                                                                                    
     Galena Project Education Training Center: 4%                                                                               
     Southwest Alaska Vocational Education Center: 3%                                                                           
     Yuut Elitnaurviat, Inc., People's Learning Center: 9%                                                                      
     Delta Career Advancement Center, Partners for Progress                                                                     
     Delta, Inc.: 3%                                                                                                            
     Amundsen Educational Center: 2%                                                                                            
    Northwestern Alaska Career and Technical Center: 3%                                                                         
     University of Alaska Southeast: 5%                                                                                         
Ms. Carrick displayed slide 7, "Current TVEP Recipients":                                                                       
     In 2014 and again in 2017:                                                                                                 
     Statewide: University of Alaska: 45%                                                                                       
     Kotzebue: Alaska Technical Center: 9%                                                                                      
     Seward: Alaska Vocational Technical Center: 17%                                                                            
     Galena: Galena Project Education Training Center: 4%                                                                       
     Dillingham: Southwest Alaska Vocational Education                                                                          
     Center: 3%                                                                                                                 
     Bethel: Yuut Elitnaurviat, Inc., People's Learning                                                                         
     Center: 9%                                                                                                                 
     Delta: Partners for Progress Delta, Inc.: 3%                                                                               
     Kenai: Amundsen Educational Center: 2%                                                                                     
     Nome: Northwestern Alaska Career and Technical Center:                                                                     
     Utqiagvik: Illisagvik College: 5% (Added in 2014)                                                                          
9:10:08 AM                                                                                                                    
Ms.  Carrick  highlighted  slide  8,  "TVEP  Distributions,"                                                                    
which showed  a chart. She  drew attention to  the far-right                                                                    
column, which  showed proposed distributions for  FY 22. She                                                                    
explained that  even with  the fluctuations  during COVID-19                                                                    
the  previous year  and draws  from unemployment,  there had                                                                    
been  a  relatively  stable  source   of  funding  for  TVEP                                                                    
Ms. Carrick addressed Section 1  of the bill, which extended                                                                    
the  program reauthorization  date to  2024. Section  1 also                                                                    
included the list  of ten recipients and  the percentages of                                                                    
funding distribution.  She continued  that Section 2  of the                                                                    
bill  contained   a  retroactivity  clause  and   Section  3                                                                    
included an effective date.                                                                                                     
Senator  Hoffman  recalled  that  there  was  a  termination                                                                    
clause in  the original  program, and  that the  program had                                                                    
been reauthorized numerous times.  He thought the success of                                                                    
the  program  was  evident.  He asked  if  the  sponsor  had                                                                    
considered extending  or removing the sunset  date to create                                                                    
a permanent program.                                                                                                            
Representative Wool relayed  that Senator Hoffman's question                                                                    
had  come up  in the  House  Finance Committee  as well.  He                                                                    
thought  the  reauthorization  period allowed  for  time  to                                                                    
examine  the  list  of funding  recipients,  which  had  not                                                                    
changed in six  or seven years. He thought  the question was                                                                    
whether the recipients should be  locked in indefinitely and                                                                    
pondered whether the funding numbers should be permanent.                                                                       
Senator Wielechowski  asked for an easily  identifiable list                                                                    
of  participants  at  each institution  and  the  number  of                                                                    
students that had successfully completed the program.                                                                           
Ms. Carrick  thought that  the information  was in  the TVEP                                                                    
annual report.                                                                                                                  
9:14:06 AM                                                                                                                    
AT EASE                                                                                                                         
9:14:55 AM                                                                                                                    
Senator Wielechowski  pointed out  that the  information was                                                                    
contained in  the TVEP annual  Report (copy on  file). There                                                                    
was information on page 2 and performance data on page 6.                                                                       
Co-Chair Bishop  suggested that the  next time the  bill was                                                                    
heard  the committee  could invite  the Department  of Labor                                                                    
and Workforce Development (DOL) to address the topic.                                                                           
Senator Wilson  recalled that a  previous bill  had included                                                                    
consideration of  the constitutionality of TVEP  funding and                                                                    
referenced a  letter from the Legislative  Legal Department.                                                                    
He wondered  if the  sponsor had  received a  memo regarding                                                                    
the   constitutionality   of    some   of   the   vocational                                                                    
rehabilitation programs that were privately funded.                                                                             
Representative Wool  was not aware of  the constitutionality                                                                    
of   funding   for   private  institutions   versus   public                                                                    
Ms. Carrick  relayed that  in having  the bill  drafted, the                                                                    
sponsor and staff had not  received any advice regarding the                                                                    
constitutionality of the proposed funding.                                                                                      
Senator  Wilson  wanted  a clear  definition  regarding  the                                                                    
constitutionality of the TVEP,  the Alaska Scholars Program,                                                                    
and  others.  He was  concerned  about  the challenges  that                                                                    
could arise by funding the programs.                                                                                            
Senator  von   Imhof  observed  that  two   percent  of  the                                                                    
allocation  went to  the  Amundsen  Education Center  (AEC),                                                                    
which   was  a   faith-based   non-profit  educational   and                                                                    
vocational training school located  in Soldotna. She thought                                                                    
the  term  "faith-based"  indicated there  was  a  religious                                                                    
component to  the organization, which  she thought  could be                                                                    
unconstitutional.  She  was curious  as  to  why the  public                                                                    
funds were going to a faith-based organization.                                                                                 
Representative  Wool stated  that the  question had  come up                                                                    
before regarding  the efficacy  of the program  in Soldotna,                                                                    
but no one had raised  strong objection to the school since.                                                                    
He thought there was public  and private institutions on the                                                                    
list of grant  recipients. He stated he could  work with the                                                                    
Legislative Legal  Department to gather more  information on                                                                    
the topic.                                                                                                                      
Senator Olson appreciated the intent  of the bill. He wanted                                                                    
to address the AEC, which had  done a great deal of outreach                                                                    
to  people  in  his  district.  He was  in  support  of  the                                                                    
educational   outreach   and   thought   the   program   was                                                                    
Co-Chair Bishop commented that TVEP was a good program.                                                                         
9:19:47 AM                                                                                                                    
TERI   COTHREN,   ASSOCIATE    VICE   PRESIDENT,   WORKFORCE                                                                    
DEVELOPMENT,  UNIVERSITY  OF  ALASKA  (via  teleconference),                                                                    
spoke in  favor of  the bill,  which would  provide critical                                                                    
funding  for  short-term   career  and  technical  education                                                                    
programs  across the  state. She  asserted that  the program                                                                    
would support  the state's  economic recovery  by re-scaling                                                                    
and up-scaling Alaskans for employment.                                                                                         
Ms.  Cothren  spoke  to  highlights  from  the  presentation                                                                    
"University   of  Alaska   Technical  Vocational   Education                                                                    
Program, " (copy on file). As  a TVEP recipient, UA used its                                                                    
funds as a single allocation  within the system. The program                                                                    
was  administered through  a  competitive  request for  fund                                                                    
proposal or  grants process. The program  provided industry-                                                                    
specific, on-the-job, and  classroom training that addressed                                                                    
high demand  and regional workforce  needs. She  thought the                                                                    
program  increased  collaboration   and  was  responsive  to                                                                    
Ms.  Cothren cited  that  UA utilized  TVEP  to train  4,320                                                                    
Alaskans  in  FY  20  for  jobs  in  mining,  oil  and  gas,                                                                    
fisheries,   seafood,   maritime,   construction,   Internet                                                                    
Technology, health, aviation and more.  She cited that in FY                                                                    
20  the   average  cost  per  participant   among  all  TVEP                                                                    
recipients was  $1,349. The University  had averaged  a cost                                                                    
of  $1,300 per  participant,  with nearly  78 percent  being                                                                    
employed following  training. Some  programs had as  much as                                                                    
89  percent employment  in the  state after  graduation with                                                                    
increased  wage   growth.  She   listed  successes   in  the                                                                    
certified nurse's assistant program.                                                                                            
9:22:47 AM                                                                                                                    
Senator  Wielechowski  considered   the  numbers  cited  and                                                                    
thought the average per participant  at the AEC was $11,890.                                                                    
He  wondered why  the amount  was  so much  higher than  the                                                                    
other educational centers.                                                                                                      
Representative  Wool thought  the numbers  were calculations                                                                    
of how much funding the  institution received divided by the                                                                    
number  of  graduates, and  the  AEC  had  a low  number  of                                                                    
graduates. He pondered that  the program reauthorization was                                                                    
an opportunity  to examine the  numbers and make  changes if                                                                    
needed. He  did not have  historical data on the  center and                                                                    
thought  bigger  institutions   would  have  better  average                                                                    
Senator  von Imhof  looked  at  page 6  of  the TVEP  annual                                                                    
report,  which had  performance measurements.  She saw  that                                                                    
various  post-program   employment  rates  ranged   from  45                                                                    
percent  to 63  percent, rather  than the  80 percent  or 90                                                                    
percent she had heard.                                                                                                          
Co-Chair  Bishop affirmed  that the  AEC was  showing an  86                                                                    
percent employment rate after 12 months.                                                                                        
Senator von  Imhof commented  that if  the state  was giving                                                                    
public  money  to  a religious  institution,  it  should  be                                                                    
consistent across all sectors including K-12 education.                                                                         
9:26:13 AM                                                                                                                    
Senator Wielechowski  looked at  page 2  of the  TVEP annual                                                                    
report,  which   indicated  that  the  center   was  getting                                                                    
$249,700, which equated to  $11,890 per participant compared                                                                    
to  the average  of near  $1,300. He  acknowledged that  the                                                                    
success rate  of the center  was good  but thought it  was a                                                                    
good topic for evaluation.                                                                                                      
Co-Chair Bishop thought  it would be helpful  to include DOL                                                                    
in  the future  discussion,  and the  department could  talk                                                                    
about  the specific  careers  that  participants were  being                                                                    
trained for.                                                                                                                    
Senator Olson  thought the success  rate was  more important                                                                    
to consider  than to ponder questions  of constitutionality.                                                                    
He thought the  matter had been addressed.  He was concerned                                                                    
that there was  not as much emphasis on the  success rate of                                                                    
the Amundson Center as compared to some other institutions.                                                                     
Senator von  Imhof asked if  there was any funding  going to                                                                    
the Kenai Peninsula College (KPC).  She understood there was                                                                    
a technical center in Nome and asked how it was faring.                                                                         
Ms. Cothren  detailed that  there was  funding that  went to                                                                    
KPC as well  as its Kachemak Bay Campus  in Homer. Currently                                                                    
the  funding went  towards a  technical program  as well  as                                                                    
some health programs.                                                                                                           
Co-Chair Bishop added  that the KPC was also  home to Mining                                                                    
Training  and  Petroleum  Institute.  He  noted  there  were                                                                    
different segments in UA that  performed better than others.                                                                    
The  mining industry  employed 88  percent of  the graduates                                                                    
out of the mining training program.                                                                                             
Senator von  Imhof asked about  the Northwest  Alaska Career                                                                    
and  Technical  Center in  Nome.  She  noted there  were  31                                                                    
students that attended  in 2020. She asked  how the students                                                                    
fared and  if was a good  place to stay versus  in Soldotna.                                                                    
She wondered  what was  being offered  in Soldotna  that was                                                                    
not offered in Nome.                                                                                                            
Co-Chair  Bishop thought  there was  invited testimony  that                                                                    
could address Senator von Imhof's question.                                                                                     
9:30:46 AM                                                                                                                    
DOUG  WALRATH,  DIRECTOR,  NORTHWESTERN  ALASKA  CAREER  AND                                                                    
TECHNICAL CENTER,  NOME (via teleconference),  supported the                                                                    
reauthorization of the TVEP funding.  He thought the program                                                                    
provided autonomy  and flexibility to meet  the unique needs                                                                    
of each regions priority  industries. He mentioned in-region                                                                    
workforce  development and  sued healthcare  training as  an                                                                    
example  of   a  top  priority.  The   Norton  Sound  Health                                                                    
Corporation was  the largest regional  employer in  the Nome                                                                    
census  area.  The  corporation  provided  dual-credit  high                                                                    
school   training,   and   industry   certification,   which                                                                    
transitioned high school students into healthcare jobs.                                                                         
Mr.  Walrath  continued that  Nome  was  poised for  several                                                                    
large projects  addressing national interests.  He mentioned                                                                    
a $379 million  appropriation for an Arctic  deep draft port                                                                    
in Nome.  In January, the federal  government had designated                                                                    
a high  priority infrastructure  project 40 miles  from Nome                                                                    
involving a graphite deposit.  He mentioned driver education                                                                    
training and cuts  that had eliminated the  Nome Division of                                                                    
Motor  Vehicles  (DMV)  office.  The  career  and  technical                                                                    
center  in Nome  provided  the only  adult  and high  school                                                                    
driver  education  training  and  was  a  DMV-approved  road                                                                    
tester in the region.                                                                                                           
Mr.   Walrath  addressed   Senator   von  Imhof's   question                                                                    
regarding leaving the region for  training. He discussed the                                                                    
importance of getting a driver's  license. He thought it was                                                                    
critically  important to  make early  outreach to  develop a                                                                    
technically skilled workforce.                                                                                                  
Senator  von  Imhof  appreciated the  explanation  from  Mr.                                                                    
Walrath  and  understood   there  were  specialty  locations                                                                    
around  the state.  She mentioned  ship piloting  in Seward.                                                                    
She asked  about the  use of program  funds in  high schools                                                                    
and  wondered if  it was  appropriate. She  wondered if  the                                                                    
program funding was comingling  with Department of Education                                                                    
and  Early  Development  funds.  She  understood  vocational                                                                    
technical  training started  in  the high  school years  and                                                                    
asked if TVEP had  traditionally funded high school students                                                                    
as opposed to adults.                                                                                                           
9:34:51 AM                                                                                                                    
Senator  Olson  thought  exposure  to  vocational  education                                                                    
opportunities  was important  for high  school students.  He                                                                    
discussed continuing  education after high school  without a                                                                    
break  and   the  importance   of  exposure   to  vocational                                                                    
education.  He  asked  Mr.  Walrath  about  the  35  percent                                                                    
employment achievement at  the center in Nome  as opposed to                                                                    
some other programs.                                                                                                            
Mr.  Walrath noted  that across  all TVEP  recipients, there                                                                    
was a  population of  both adults  and high  school students                                                                    
served. He acknowledged there was  disparity and thought one                                                                    
could see  the impact of  local decision-making. He  cited a                                                                    
research study from 2009 that  indicated that prior to TVEP,                                                                    
the graduation  rate in the  Bering Straits  region averaged                                                                    
about  38  percent.  He  asserted   that  TVEP  had  engaged                                                                    
students and  kept them in  school on a  graduation pathway.                                                                    
He discussed engaging  courses that led to  health care jobs                                                                    
such  as  certified  nurse's  aide  (CNA).  He  thought  the                                                                    
percentage of  employment was  lower as  the number  of high                                                                    
school  program participants  was higher.  He discussed  the                                                                    
increase  in  graduation rate.  He  thought  the impact  was                                                                    
profound based on the small investment.                                                                                         
Mr. Walrath  added to Senator Olson's  remarks about getting                                                                    
high  school  students  through  training  and  participants                                                                    
engaging in  continuing education in the  summer right after                                                                    
high school as opposed to waiting.                                                                                              
9:38:30 AM                                                                                                                    
Senator  Olson considered  that the  previous year  had been                                                                    
complicated  by the  COVID-19 pandemic,  and asked  what Mr.                                                                    
Walrath  expected for  participation the  following year  in                                                                    
the district.                                                                                                                   
Mr. Walrath  cited the TVEP  report, and the impacts  of the                                                                    
pandemic as shown in participation  numbers for the year. He                                                                    
thought looking at data from  the prior three years would be                                                                    
more accurate. He mentioned  sending instructors to villages                                                                    
and hoped the numbers would climb the following year.                                                                           
Co-Chair  Bishop  commented  that   the  state  was  on  the                                                                    
precipice   of  benefitting   from  an   eight-year  federal                                                                    
infrastructure bill. He  thought it was good  timing for the                                                                    
committee  to consider  HB  100  because the  infrastructure                                                                    
work would call for an  increased workforce. He was thankful                                                                    
that there was a workforce  delivery system in place to meet                                                                    
the demand.                                                                                                                     
Senator  Olson  pointed out  that  Nome  deep port  projects                                                                    
seemed to be  progressing. The majority of  funding had been                                                                    
secured from  federal sources. He anticipated  a fair amount                                                                    
of construction in  the Nome area in the  following seven to                                                                    
eight years.                                                                                                                    
Senator  von Imhof  thought TVEP  was  an excellent  program                                                                    
that  she fully  supported and  agreed with  Co-Chair Bishop                                                                    
regarding  training the  next generation  of the  workforce.                                                                    
She  wanted to  ensure that  the program  was being  used as                                                                    
intended. She had received emails  that pondered whether the                                                                    
program  funding was  being used  as intended  and spent  on                                                                    
workforce development.  She thought an audit  or deeper dive                                                                    
could   provide  information   on   details.  She   pondered                                                                    
competing programs.  She offered to forward  the comments on                                                                    
to Co-Chair Bishop.                                                                                                             
9:42:56 AM                                                                                                                    
Co-Chair Bishop OPENED and CLOSED public testimony.                                                                             
Co-Chair Bishop  mentioned there  was an  amendment deadline                                                                    
for Wednesday, May 5 at 5:00 o'clock p.m.                                                                                       
HB  100  was  HEARD  and   HELD  in  committee  for  further                                                                    
9:43:18 AM                                                                                                                    
AT EASE                                                                                                                         
9:46:30 AM                                                                                                                    
SENATE BILL NO. 9                                                                                                             
     "An Act  relating to  alcoholic beverages;  relating to                                                                    
     the  regulation  of   manufacturers,  wholesalers,  and                                                                    
     retailers   of   alcoholic   beverages;   relating   to                                                                    
     licenses,    endorsements,   and    permits   involving                                                                    
     alcoholic   beverages;  relating   to  common   carrier                                                                    
     approval to  transport or deliver  alcoholic beverages;                                                                    
     relating  to  the  Alcoholic  Beverage  Control  Board;                                                                    
     relating  to  offenses involving  alcoholic  beverages;                                                                    
     amending  Rule 17(h),  Alaska  Rules  of Minor  Offense                                                                    
     Procedure; and providing for an effective date."                                                                           
9:46:30 AM                                                                                                                    
Co-Chair Bishop relayed that the  committee was hearing SB 9                                                                    
for the first time and would  consider the bill and then set                                                                    
it aside.                                                                                                                       
9:47:04 AM                                                                                                                    
SENATOR  PETER MICCICHE,  SPONSOR,  discussed  the bill.  He                                                                    
reminded  that the  bill  had passed  the  Senate twice.  He                                                                    
emphasized that the legislation  was a collaborative, year's                                                                    
long  effort   from  a  large  group   of  stakeholders.  he                                                                    
estimated that there was about  16,000 hours invested in the                                                                    
bill.  He  listed   stakeholders  including  public  safety,                                                                    
public  health,  the  industry, the  Alcohol  and  Marijuana                                                                    
Control Office (AMCO) Board,  the Alcoholic Beverage Control                                                                    
(ABC) Board, and the legislature.                                                                                               
Senator  Micciche  relayed   that  stakeholders  had  worked                                                                    
together to meet  the goals of Title IV in  promoting a fair                                                                    
business climate,  protection of  public health  and safety,                                                                    
limiting  youth  access  to alcohol,  promoting  responsible                                                                    
alcohol  use and  reducing  the  harms of  over-consumption,                                                                    
implementing  change  without  negatively  harming  existing                                                                    
businesses  and responsible  operators, and  expanding local                                                                    
control for municipalities.                                                                                                     
Senator Micciche noted  that key concepts of  the bill were:                                                                    
sticking with  a three-tier system to  prevent inappropriate                                                                    
monopolies,  licensure  restructure   with  clearly  defined                                                                    
categories, and regulating the  number of licenses available                                                                    
in each community  by type. He emphasized that  the bill was                                                                    
about balance,  reorganization, and fairness. He  noted that                                                                    
90  percent  of the  bill  proposed  to reorganize  existing                                                                    
Senator  Micciche  identified  that   not  every  bar  owner                                                                    
supported  the   bill,  but   the  Alaska   Cabaret,  Hotel,                                                                    
Restaurant  and Retailers  (CHARR)  Association did  support                                                                    
the  bill. He  noted that  not every  manufacturer supported                                                                    
the  bill, but  the  Alaska Brewers  Guild  did support  the                                                                    
bill. He thought the Department  of Public Safety wanted the                                                                    
bill to  be stricter, but  Recover Alaska, the  Alaska State                                                                    
Troopers,  and  the   Public  Safety  Employees  Association                                                                    
supported  the bill  because of  the balance  that had  been                                                                    
struck  between.  He  thought  the bill  was  important  for                                                                    
economic  recovery  in  the  industry.  He  emphasized  that                                                                    
although alcohol was the number  one substance abuse problem                                                                    
in  the  state,  it  was  also  an  important  industry.  He                                                                    
asserted that  the bill improved public  safety and provided                                                                    
tools for the industry to be successful.                                                                                        
9:50:42 AM                                                                                                                    
ANNA  BRAWLEY,  TITLE  IV  REVIEW  COORDINATOR,  AGNEW  BECK                                                                    
CONSULTING,  ANCHORAGE (via  teleconference), discussed  the                                                                    
presentation "Alcoholic  Beverage Control (ABC)  Board Title                                                                    
4  Review Project  - Overview  of  Senate Bill  9" (copy  on                                                                    
Ms. Brawley  advanced to slide  5, "Goals of Title  4 Review                                                                    
     A comprehensive, systems-level review,  and a series of                                                                    
     compromises to make Title 4 work better for everyone.                                                                      
     Promote  a fair  business  climate  and protect  public                                                                    
     health and safety.                                                                                                         
     1.Create  rational  regulation  for all  tiers  of  the                                                                    
     state's alcohol industry.                                                                                                  
     2.Limit youth  access to alcohol, while  ensuring youth                                                                    
     are not criminalized                                                                                                       
     3.Promote responsible alcohol use  and reduce the harms                                                                    
     of overconsumption.                                                                                                        
     Make Title  4 a  clear and consistent  legal framework.                                                                    
     1.Increase  swiftness, proportionality  and consistency                                                                    
     of penalties.                                                                                                              
     2.Increase local law enforcement of Title 4.                                                                               
     3.Increase  licensee  accountability   before  the  ABC                                                                    
     Board for Title 4 violations                                                                                               
Ms. Brawley  thought the goal  of the  bill was to  strike a                                                                    
balance and  have the state's  alcohol laws work  better for                                                                    
Ms.    Brawley    showed    slide    6,    "Categories    of                                                                    
     1.Alcohol Licenses, Permits and Trade Practices                                                                            
     2.Role and Functions of the ABC Board and Staff                                                                            
     3.Underage Drinking and Youth Access to Alcohol                                                                            
     4.Regulation of Internet Sales of Alcohol                                                                                  
     5.Technical or Administrative Law Changes                                                                                  
     6.Local Option Communities                                                                                                 
     **Note: Local Option  recommendations are documented in                                                                    
     the   report,  but   not  included   in   SB  9.   More                                                                    
     comprehensive  discussion  of   Local  Option  laws  is                                                                    
     needed in the future.6                                                                                                     
     Note: all  section references current  to SB 9  ver. I,                                                                    
Ms. Brawley discussed slide 7, " The 3-Tier System":                                                                            
     Alcohol must  be manufactured, distributed and  sold to                                                                    
     the public  by different  businesses. This  is designed                                                                    
     to prevent monopolies.                                                                                                     
Ms. Brawley  stated that slide  7 was a general  overview of                                                                    
how  the  state managed  alcohol.  There  was a  flow  chart                                                                    
showing  the  three  tiers:  manufacturing,  wholesale,  and                                                                    
retail. She mentioned  that much of the  bill discussion had                                                                    
pondered  how  to keep  the  system  in  place but  be  more                                                                    
flexible and respond to how the current system operated.                                                                        
Ms.  Brawley  spoke to  slide  8,  "Alaska's Liquor  License                                                                    
System: Proposed Changes," which  showed a graph flow chart.                                                                    
She noted that the next three  slides were part of a graphic                                                                    
that illustrated  how SB 9 reorganized  existing licenses so                                                                    
that  they  were  easy to  understand.  The  licenses  would                                                                    
follow  the general  organization of  the three-tier  system                                                                    
and  would  offer  more  options   for  businesses  such  as                                                                    
Ms.  Brawley looked  at slide  9,  "Alaska's Liquor  License                                                                    
System: Proposed  Changes." The  graphical chart  showed the                                                                    
types of  retail licenses  that served  the public,  such as                                                                    
bars, package  stores, and  restaurants. She  explained that                                                                    
most  already existed  in law  save for  a few  new licenses                                                                    
being proposed that she would address in a later slide.                                                                         
Ms.  Brawley  showed  slide  10,  "Alaska's  Liquor  License                                                                    
System: Proposed  Changes." The  graphical chart  showed the                                                                    
retail  tier  licenses.  She thought  it  was  important  to                                                                    
understand that there  were licenses specifically responding                                                                    
to  the  fact  that  the  state had  a  strong  tourism  and                                                                    
hospitality   sector.  The   licenses  were   not  tied   to                                                                    
population limits and  were designed to serve  visitors to a                                                                    
community.  Some of  the licenses  already existed  and were                                                                    
more options proposed in the bill.                                                                                              
9:54:09 AM                                                                                                                    
Ms.  Brawley  addressed  slide 11,  "Proposed:  More  Retail                                                                    
Options for  Manufacturers," which showed a  flow chart. She                                                                    
explained that the slide was an  example of how the bill was                                                                    
proposing  more  flexibility.  She noted  that  currently  a                                                                    
brewery would have one license  that allowed it to make beer                                                                    
and  sell it  to the  public on  a limited  basis. The  bill                                                                    
proposed more options  for the businesses to be  able to own                                                                    
a  bar,  a  restaurant,  or package  store,  which  was  not                                                                    
currently allowed. She mentioned  a "brewpub" business model                                                                    
as opposed to a limited retail space.                                                                                           
Ms.  Brawley  reviewed  slide  12,  "Proposed:  Manufacturer                                                                    
Sales  Limits by  Product Type,"  which  showed a  graphical                                                                    
chart  of onsite  sales versus  offsite  sales for  brewery,                                                                    
winery, and  distillery retail.  The slide  illustrated what                                                                    
was already in  the law and clarified how  much each limited                                                                    
retail license allowed for serving.                                                                                             
Ms. Brawley  spoke to slide  13, "Proposed:  Endorsements on                                                                    
     Add   endorsements   to   existing   licenses,   giving                                                                    
     businesses flexibility in how to operate, without                                                                          
     creating more specific license types.                                                                                      
     BASE LICENSE                                                                                                               
     ENDORSEMENTS - Expanded activities and/or premises to                                                                      
     fit business model                                                                                                         
     Endorsements would allow sampling on premises,                                                                             
     multiple bar rooms, deliveries by package stores, etc.                                                                     
     Section 13, 04.09.400; endorsements defined in                                                                             
     04.09.410 - .520                                                                                                           
Ms.  Brawley  explicated that  rather  than  creating a  new                                                                    
license  type  for every  single  business  model, the  bill                                                                    
proposed to  allow more  flexibility by  adding endorsements                                                                    
to licenses. She  used the example of allowing  for a larger                                                                    
premises  or allowing  sampling not  allowed under  the base                                                                    
licenses.  She   thought  licenses  had  been   expanded  in                                                                    
inconsistent ways  in the past  and that  endorsements would                                                                    
allow more options.                                                                                                             
Ms. Brawley spoke to slide 14, "Proposed Endorsements":                                                                         
     ? R-7A | Bowling Alley Endorsement                                                                                         
     ? R-7B | Package Store Shipping Endorsement                                                                                
     ? R-7C | Package Store Delivery Endorsement                                                                                
     ? R-7D | Package Store Re-Packaging Endorsement                                                                            
     ? [R-1] Multiple Fixed Counter Endorsement                                                                                 
       [R-1] Hotel/Motel Endorsement                                                                                            
     ? [R-1] Large Resort Endorsement                                                                                           
     ? [R-3] Package Store Sampling Endorsement                                                                                 
     ? [M-1] Brewery Repackaging Endorsement                                                                                    
Ms.  Brawley noted  that many  of the  proposed endorsements                                                                    
were already  in law  but were  not standardized  nor easily                                                                    
added to a license.                                                                                                             
Ms.  Brawley referenced  slide 15,  "Proposed: Limited  Free                                                                    
Samples for Package Stores":                                                                                                    
      In current title 4, Package Stores cannot allow any                                                                    
        consumption on premises                                                                                                 
      the bill would allow small free samples, with a                                                                        
        Package Store Sampling Endorsement                                                                                      
      Ounce limits defined as: "Any combination of                                                                           
        products, not to exceed the alcohol equivalent of                                                                       
        any single product type"                                                                                                
      Ex: Customer A chooses 12 oz. beer. Customer B                                                                         
        chooses 6 oz. cider and 3 oz. wine. Customer C                                                                          
        chooses 2 oz. wine, and 4 oz. beer.                                                                                     
Ms. Brawley looked at slide 16, " R-7 Standardize Permits":                                                                     
    ? Unlike licenses, permits are typically issued for                                                                         
     single events, on or off licensed premises.                                                                                
     ? Define all permit types in statute, not just in                                                                          
     ? Fee for all permits is $50 per event day                                                                                 
     ? Most permits listed are already in statute or                                                                            
     ? New permit: Tasting Event Permit, allowing a                                                                             
     Package Store to host an event on premises                                                                                 
     Section 13,  04.09.600; permits defined in  04.09.610 -                                                                    
Ms. Brawley showed slide 17, "Proposed Permits":                                                                                
     ?  R-7F  |  Beverage Dispensary  Caterer's  Permit  (AS                                                                    
     04.11.230; 3 AAC 304.685)                                                                                                  
     ?  R-7G |  Restaurant  Caterer's Dining  Permit (3  AAC                                                                    
     ? R-7H | Club Caterer's Permit (3 AAC 304.690)                                                                             
     ? R-7I | Nonprofit Event Permit (AS 04.11.240)                                                                             
     ? R-7J | Art Exhibit Permit (3 AAC 304.697)                                                                                
     ?  R-7K  | Alcoholic  Beverage  Auction  Permit (3  AAC                                                                    
     ?  R-7L |  Inventory Resale  Permit (Retail  Stock Sale                                                                    
     License, AS 04.11.200)                                                                                                     
     ? R-7M | Package Store Tasting Event Permit (proposed)                                                                     
     ? [2020] | Music Festival Permit (proposed)                                                                                
     ?   [2020]  |   Live  Music   &  Entertainment   Permit                                                                    
     Section 13,  04.09.600; permits defined in  04.09.610 -                                                                    
Ms. Brawley noted that some of the listed permits were held                                                                     
by licensees, and others were held by non-profits. The bill                                                                     
proposed to reorganize what was allowed.                                                                                        
Ms. Brawley reviewed slide 18, "Proposed: Package Store                                                                         
Tasting Event Permit":                                                                                                          
      Allows a package store  to host  a special  tasting                                                                    
        event on its own premises, with onside consumption                                                                      
        of alcohol for those attending event.                                                                                   
      The event may be in  the store  or another  area of                                                                    
        their property, such as a special event space. it                                                                       
        may not be held in an offsite location.                                                                                 
      Licensees can   only   offer   products  in   their                                                                    
     Hosting license                                                                                                            
      Event may last up to 4 hours, and must end by 9 p.m.                                                                   
      Must also serve food                                                                                                   
      Each license can host 6 events per year in the same                                                                    
        community as the license is located                                                                                     
Ms. Brawley spoke to slide 19, "Population Limits: Current                                                                      
Title 4 (AS 04.11.400)":                                                                                                        
     Population limits  determine how  many of  each license                                                                    
     type may be issued in each community.                                                                                      
     Restaurants: 1 per 1,500 residents.                                                                                        
     All  other license  types (bars,  package stores,  golf                                                                    
     courses, breweries, etc.): 1 per 3,000 residents.                                                                          
     Some licenses  are exempt from population  limits: bars                                                                    
     located in  hotels or airports, restaurants  issued for                                                                    
     public convenience, and licenses that serve tourists.                                                                      
Ms.  Brawley explained  that the  next few  slides addressed                                                                    
population   limits.  She   communicated  that   there  were                                                                    
exceptions to what was listed  on slide 19, specifically for                                                                    
9:58:05 AM                                                                                                                    
Ms. Brawley addressed slide 20, "Population Limits: Current                                                                     
Title 4 (AS 04.11.400)":                                                                                                        
     Some license  types are exempt from  population limits:                                                                    
     most  exempt  license  types   are  designed  to  serve                                                                    
     tourists  and  travelers,  such as  hotels  or  outdoor                                                                    
     recreation lodges.                                                                                                         
     They  can be  issued  if other  qualifications are  met                                                                    
     (ex: minimum number of hotel rooms).                                                                                       
Ms.  Brawley commented  that  the bill  did  not propose  to                                                                    
throw the system out, and  that there were health and safety                                                                    
reasons for  wanting to  limit the  number of  licenses. She                                                                    
recognized there  were existing  licensees that  bought into                                                                    
the system. The stakeholders had  discussed how to allow for                                                                    
more flexibility for  small cities with a  limited number of                                                                    
Ms.  Brawley  reviewed  slide 21,  "Proposed  Seasonal  REPL                                                                    
     ?Seasonal restaurant license                                                                                               
     ?Available in smaller communities (< 40,000 pop.)                                                                          
     ?Same   operating   requirements  and   privileges   as                                                                    
     full-year restaurants (REPL)                                                                                               
      Number  of   licenses  per  community   determined  by                                                                    
          5-year average of annual visitors/months in                                                                           
          season = Average monthly visitor population                                                                           
          Residents + average monthly visitors)/1,500 =                                                                         
          Available Seasonal REP Tourism Licenses                                                                               
      Season  defined as  up to  6 months  per year,  in any                                                                    
      Example: May through September + 1 winter month                                                                           
     Section 13, 04.09.360                                                                                                      
Ms.  Brawley  showed  slide  22,  "Proposed:  Covert  Public                                                                    
Convenience Licenses and Applications":                                                                                         
     Existing   Public   Convenience   licenses   would   be                                                                    
     converted  to   regular  Restaurant  or   Eating  Place                                                                    
     Licenses (REPLs).                                                                                                          
     Public Convenience - Not transferable                                                                                      
     REPL - Transferrable to a new owner or location                                                                            
     Applications that have been completed  as of the bill's                                                                    
     signing  date would  be converted  to applications  for                                                                    
     regular REPLs, and  could be approved by  the ABC Board                                                                    
     outside the existing population limits.                                                                                    
     Public Convenience                                                                                                         
    REPL - can be approved outside of population limits                                                                         
     Sections 167-169, Transition                                                                                               
Ms.  Brawley   noted  that   the  application   process  for                                                                    
converting to  restaurants had been  cumbersome for  all and                                                                    
under the proposed changes would be more streamlined.                                                                           
Ms. Brawley discussed slide  23, "Proposed: Local Government                                                                    
Petition for  Additional Alcohol  Licenses," which  showed a                                                                    
flow chart  of a proposed  bill provision that  would expand                                                                    
options  for licenses  in communities.  The provision  would                                                                    
allow a municipality to prepare  a petition for more alcohol                                                                    
licenses in the community.  The community could petition the                                                                    
ABC  Board  for more  licenses  of  a  certain type  in  the                                                                    
jurisdiction.  The city  would have  recourse to  revise the                                                                    
application if it was rejected.                                                                                                 
Ms.  Brawley  looked  at  slide  24,  "Proposed:  Option  to                                                                    
Relocate Some Licenses from a Borough to a City":                                                                               
      Current Title 4 allows relocation of a bar (BDL)                                                                       
       from a borough to a city within that borough.                                                                            
      The bill proposes also allowing relocation of                                                                          
        package stores                                                                                                          
Ms.  Brawley spoke  to slide  25, "Proposed:  Regulate Trade                                                                    
     Some  trade  practices  are  illegal  in  federal  law:                                                                    
     practices of  alcohol manufacturers and  wholesalers to                                                                    
     compel  retailers' buying  decisions  or stopping  them                                                                    
     from buying competitors products.                                                                                          
     Proposed: add equivalent sections to Title 3, protect                                                                      
     retails and allow for state enforcement.                                                                                   
          Tied House                                                                                                            
          Partial   ownership  of   retail   license  by   a                                                                    
          manufacturer,  to control  what products  are sold                                                                    
          or  exclude competitors.  Does  not  apply to  100                                                                    
          percent manufacturer-owned licenses.                                                                                  
          Exclusive outlet                                                                                                      
          Agreement between supplier and retailer to                                                                            
          exclude other retails or suppliers.                                                                                   
          Commercial bribery                                                                                                    
          Supplier pays bonus or provides merchandise in                                                                        
          exchange for exclusive arrangement or agreement                                                                       
          not to purchase other products.                                                                                       
          Consignment sales                                                                                                     
          Supplier and retailer make deals to take back                                                                         
          unsold products.                                                                                                      
     Section 88, 04.16.017                                                                                                      
Ms. Brawley  noted that the  slide showed things  illegal in                                                                    
federal  law but  that were  not enforced.  Most states  had                                                                    
laws  that allowed  an agency  such as  AMCO to  enforce the                                                                    
rules. She noted that the  manufacturers and wholesalers had                                                                    
brought up the topic with the bill stakeholders.                                                                                
10:02:00 AM                                                                                                                   
Ms. Brawley  referenced slide 26, "F-1.  Adjust License Fees                                                                    
to Reflect Current ABC Budgetary Needs":                                                                                        
       Update license fees according to privileges and                                                                          
     administrative costs of each, and collect sufficient                                                                       
     revenue to cover the ABC Board's required activities:                                                                      
            Administration of licenses & permits                                                                                
            Education about Title 4 and related regulations                                                                     
            Enforcement of Title 4 and related regulations                                                                      
     ? ABC Board required to review license fees at least                                                                       
     every 5 years.                                                                                                             
     ? See Appendix, Table 2 of the Title 4 Review report                                                                       
     for current license fees and proposed changes.                                                                             
     Section 8, 04.06.090; License fees throughout Section                                                                      
Ms. Brawley noted that the  ABC Board and AMCO were receipt-                                                                    
funded agency. The fees had not been changed in many years.                                                                     
Ms.   Brawley   spoke   to   slide   27,   "Proposed:   More                                                                    
Accountability   for  License   Fees   Allocated  to   Local                                                                    
      Current Title 4  allows  for local  governments  to                                                                    
        receive an  allocation  equal  to the  license  fees                                                                    
        collected in their area, intended for enforcement of                                                                    
        Title 4 and related ordinances.                                                                                         
      Reporting on these activities in required,  but not                                                                    
        defined  in   statute.  Some   jurisdictions  report                                                                    
        regularly, while others do not.                                                                                         
      The bill includes better  reporting and  prevention                                                                    
        about use  of  these  funds, and  requiring  reports                                                                    
        about education activities as well as enforcement.                                                                      
     Section 81, 04.11.610                                                                                                      
Ms. Brawley discussed slide 28, "RB-4. ABC Board as Key                                                                         
Partner for Alcohol Education Efforts":                                                                                         
      The ABC Board and AMCO,  subject matter  experts on                                                                    
        Title  4,  would   work  with  other   agencies  and                                                                    
        organizations to  develop  a  coordinated  education                                                                    
        plan about  responsible alcohol  use and  applicable                                                                    
      Coordinate with Department  of  Health  and  Social                                                                    
        Services and  other  agencies  tasked with  alcohol-                                                                    
        related education.                                                                                                      
     28 Section 5, 04.06.075; Section 9, 04.06.090                                                                              
Ms. Brawley showed slide 29, "Internet Sales in Alaska: Few                                                                     
     ? Alaska is one of the only states with no rules for                                                                       
     Internet sales of alcohol.                                                                                                 
     ?  Alaska Package  Stores cannot  sell alcohol  online,                                                                    
     only via (paper) written orders.                                                                                           
     ? Alaska Wineries  and Package Stores can  ship wine to                                                                    
     customers in some circumstances.                                                                                           
     ? Without  state laws  restricting online  sales, there                                                                    
     are currently no limits on  purchases of alcohol online                                                                    
     from out-of-state sellers.                                                                                                 
     ? Alaska consumers also do  not pay state excise tax on                                                                    
     online  purchases,  as they  do  on  products sold  and                                                                    
     purchased in state.                                                                                                        
Co-Chair Bishop asked if there had been an amendment in the                                                                     
Senate Labor and Commerce Committee that had related to                                                                         
taxation of wine.                                                                                                               
Senator Micciche affirmed that there had been such an                                                                           
amendment to the bill, the but the bill had not passed.                                                                         
Ms. Brawley discussed slide 30, "Proposed: Regulate                                                                             
Internet Alcohol Sales":                                                                                                        
      Alaska does not limit online sales of alcohol. Order                                                                   
        from out of state businesses are not subject to                                                                         
        Alaska's alcohol excise tax, and the state cannot                                                                       
       track how much alcohol is ordered each year.                                                                             
      The bill would  create  a  Winery  Direct  Shipment                                                                    
        License and allow online alcohol sales only from                                                                        
        U.S. wineries and Alaska package stores.                                                                                
     -Alaska customer orders wine online from winery                                                                            
          Wine only: no beer or spirits                                                                                         
     -Winery Direct Shipment Licensee verifies:                                                                                 
          Is the customer 21 or older?                                                                                          
          Is customer in a non-Local Option area?                                                                               
          Is order within limit for personal use?                                                                               
               6 cases per sale                                                                                                 
               12 cases per year                                                                                                
     -Common  carrier  receives,   transports  and  delivers                                                                    
     -Carrier verifies customer is  21+, delivers package in                                                                    
     Section 13,  04.09.370; Section 90,  04.16.022; Section                                                                    
     159, 43.60.060                                                                                                             
10:06:04 AM                                                                                                                   
Ms. Brawley addressed slide 31, "Proposed: Regulate                                                                             
Internet Alcohol Sales":                                                                                                        
      Common carriers must be approved by the ABC board to                                                                   
        transport and deliver alcohol consumers throughout                                                                      
        the state.                                                                                                              
      Carriers must demonstrate that  they have  policies                                                                    
        and train employees to properly handle shipments of                                                                     
     -Carrier maintains policies:                                                                                               
         Safe alcohol handling                                                                                               
         Delivery to adult, age 21+                                                                                          
         Delivery in-person only                                                                                             
     -ABC board reviews and approves carrier for alcohol                                                                        
     transport and delivery                                                                                                     
     -ABC board publishes list of approved carriers                                                                             
     Section 13, 04.09.750                                                                                                      
Ms. Brawley looked at slide 32, "Tracking Alcohol orders in                                                                     
Local Option Areas: Current title 4":                                                                                           
     Residents  in  Local   Option  communities  that  allow                                                                    
     importation of  alcohol may order  a limited  amount of                                                                    
     alcohol  each  month  for personal  and  non-commercial                                                                    
     Monthly Importation Limit                                                                                                  
         12 gal. Beer - Or 1 half-barrel (15.5 gal) keg                                                                      
         24L wine (32 bottles)                                                                                               
         10.5 L spirits (14 bottles)                                                                                         
     -Alaska customer sends order to package store                                                                              
     -Licensee verifies:                                                                                                        
         Is customer 21 or older?                                                                                            
         Has customer met monthly order limit?                                                                               
         is new order within monthly limit?                                                                                  
     -Licensee records new order in ABC Board database                                                                          
     -Access limited to:                                                                                                        
         ABC Board                                                                                                           
         Package stores                                                                                                      
         Law enforcement                                                                                                     
     -Common carrier receives, transports and delivers                                                                          
     -Carrier delivers package                                                                                                  
     Sections 10-12 & 16,04.06.095; existing monthly limits                                                                     
     defined in AS 04.11.010                                                                                                    
Ms. Brawley discussed slide 33, "Proposed: Publish                                                                              
Community-Level Data from Local Option Order Database":                                                                         
      In current Title 4, all data in the Local Option                                                                       
        order database is private, and deleted after 1 year.                                                                    
      the bill would keep individual order information                                                                       
        private, but retain aggregate data for 10 years and                                                                     
        allow the ABC Board to publish annual total sales                                                                       
        volume by region or community.                                                                                          
      This valuable information would be available to                                                                        
        communities and law enforcement to understand the                                                                       
        flow of alcohol into Local Option communities via                                                                       
        legal sales.                                                                                                            
     - Keep community level data 10 years                                                                                       
     - Protect individual order data                                                                                            
     - ABC Board publishes annual data reports                                                                                  
     Sections 10-12, 04.06.095                                                                                                  
10:07:17 AM                                                                                                                   
Senator Wielechowski  asked about slide 30,  which addressed                                                                    
creating a  winery-direct shipment  license and  would allow                                                                    
online alcohol  sales from U.S. wineries  and Alaska package                                                                    
stores.  He asked  about sales  from  brewing companies  and                                                                    
distillers and  whether the businesses were  allowed to sell                                                                    
online under the bill.                                                                                                          
Ms. Brawley indicated that most  states had a similar system                                                                    
in  which  only  the  shipment  of  wine  was  allowed.  She                                                                    
understood that UPS and FedEx  would not ship products other                                                                    
than wine and required a contact  with the winery to be able                                                                    
to ship.                                                                                                                        
Senator Wilson  asked if breweries  and distilleries  in the                                                                    
state could ship  their product. He asked if  there were any                                                                    
other  group  or industry  that  had  expressed interest  in                                                                    
shipping products other than wine within the state.                                                                             
Ms. Brawley did  not want to speak for  other industries and                                                                    
sectors  regarding   the  provision.  She  noted   that  the                                                                    
stakeholder group had not heard  opposition to the provision                                                                    
from  other  industry  stakeholders.  She  thought  the  law                                                                    
differed by state.                                                                                                              
Co-Chair Bishop  asked if  the bill  would allow  an Alaskan                                                                    
distiller to sell spirits online to the Lower 48.                                                                               
Senator  Micciche thought  there  was  an invited  testifier                                                                    
that could address  the question. He stated that  he had not                                                                    
heard  from  any parties  that  had  a business  model  that                                                                    
resulted in  shipping beer  or spirits.  He knew  there were                                                                    
some people  in the state  that did  ship wine to  the Lower                                                                    
48, and under  the bill would be able to  continue doing so.                                                                    
He  reiterated that  most states  were doing  wine only.  He                                                                    
mentioned excise taxes for selling within the state.                                                                            
10:11:07 AM                                                                                                                   
LEE  ELLIS, PRESIDENT,  BREWERS GUILD  OF ALASKA,  ANCHORAGE                                                                    
(via  teleconference),  addressed  shipping  out  of  state.                                                                    
Shipping  directly  into  any state  was  regulated  by  the                                                                    
receiving state.  Brews or distillers  in Alaska  could ship                                                                    
to other states that allowed it.  He noted that UPS did ship                                                                    
beer.  He  thought  brewers  had  not  expressed  particular                                                                    
interest in the  subject of shipping prior  to the pandemic.                                                                    
He  thought  Alaska had  an  unfair  law regarding  personal                                                                    
importation.   The  current   law   allowed  breweries   and                                                                    
distilleries to ship to Alaska,  while Alaskan breweries and                                                                    
distilleries were not allowed  to ship directly to consumers                                                                    
in the state.                                                                                                                   
Senator Wilson  was interested in  helping to try  and level                                                                    
the playing field, and would work with the bill sponsor.                                                                        
Ms.  Brawley  addressed  slide 34,  "RB-6.  Revise  Title  4                                                                    
     ?  Review  penalties  for all  Title  4  sections,  and                                                                    
     revise  as needed  to make  penalties proportionate  to                                                                    
     the offense, and more consistently enforced.                                                                               
     ? Retain  existing Misdemeanor  and Felony  charges for                                                                    
     serious  offenses, particularly  those causing  harm to                                                                    
     ? Ensure that the ABC  Board, and licensee, is informed                                                                    
     about  Title  4  convictions:  require  court  to  send                                                                    
    records to AMCO, and AMCO to send to the licensee.                                                                          
     ? ABC  Board retains authority to  impose conditions or                                                                    
     additional penalties, including  suspending or revoking                                                                    
     ? See  Appendix, Table 3  in Title 4 Review  Report for                                                                    
     table of all current penalties and proposed changes.                                                                       
     Defined  throughout; most  prohibited  acts defined  in                                                                    
     chapters 11 + 16                                                                                                           
Ms. Brawley  informed that the  remaining slides  would deal                                                                    
with  penalties. She  noted that  the stakeholder  group had                                                                    
addressed how  to rebalance penalties for  minor offenses to                                                                    
be  dealt with  while keeping  serious crimes  prosecuted at                                                                    
current levels.                                                                                                                 
Ms. Brawley discussed slide 35, "Proposed: Revise Penalties                                                                     
for Lesser Offenses":                                                                                                           
      In current law, almost all violations of Title 4 are                                                                   
        Class A misdemeanors.                                                                                                   
      When penalties are set  high across  the board  and                                                                    
        perceived to be too strict for most offenses, law                                                                       
        enforcement is less likely to issue citations and                                                                       
       courts are less likely to pursue those cases.                                                                            
      In the bill,  many  penalties  would  become  minor                                                                    
        offenses.  Serious   violations,  such   as  selling                                                                    
        alcohol without a license, allowing  gambling on the                                                                    
        premises, or perjury on a  license application would                                                                    
        remain misdemeanors felonies, as they are today.                                                                        
     Minor Offense (Violation                                                                                                   
         Up to $500 fine (most are $250)                                                                                     
         Community work service                                                                                              
         Does not require court appearance                                                                                   
     Example:  Failure  to   post  required  warning  signs,                                                                    
     noncompliance with a permit regulation                                                                                     
     Class A Misdemeanor                                                                                                        
         up to $10,000 fine                                                                                                  
         Up to 1 year in prison                                                                                              
         10 years probation                                                                                                  
         Requires court appearance                                                                                           
     Example: Selling  alcohol without a  license, knowingly                                                                    
     allowing underage sales by employees                                                                                       
     Class C Felony                                                                                                             
         Up to $50,000 fine                                                                                                  
         Up to 5 years in prison                                                                                             
         10 years probation                                                                                                  
         Requires court appearance                                                                                           
     Example:  Perjury on  state license  application (Class                                                                    
     B),  importing  large  amounts of  alcohol  into  local                                                                    
     option area                                                                                                                
     Defined  throughout; most  prohibited  acts defined  in                                                                    
     chapters 11 + 16                                                                                                           
Ms. Brawley summarized that the  bill proposed to move minor                                                                    
offenses  to minor  offense or  violation charges  and allow                                                                    
the ABC Board  or another local enforcement  agency to issue                                                                    
a  fine.  Anything  that  was a  serious  offense  would  be                                                                    
retained as a felony or misdemeanor.                                                                                            
10:14:14 AM                                                                                                                   
Ms. Brawley  showed slide 36, "Proposed:  Licensee Penalties                                                                    
for Overserving an Adult or Serving a Minor":                                                                                   
     (AS 04.16.030 and AS 04.16.052)                                                                                            
      In current Title  4,  a  licensee or  employee  who                                                                    
        knowingly overserves an intoxicated adult or who                                                                        
        serves alcohol to a minor is guilty of a Class A                                                                        
      The bill would change the penalty for both statutes                                                                    
        to a Minor Offense, with a $500 fine.                                                                                   
      In addition to the penalty to the person who commits                                                                   
        the  violation,  the  owner  of  the  license  would                                                                    
        receive an administrative (non-criminal)  penalty of                                                                    
        $250.  This  alerts  the  owner   that  a  violation                                                                    
        occurred, holds  them  immediately  accountable  and                                                                    
        encourages future compliance.                                                                                           
     Employee serves a minor                                                                                                    
      -  Employee receives  ticket and  $500  fine from  law                                                                    
      -  Licensee  receives  $250  administrative  from  ABC                                                                    
     Section   92,   04.16.030;  Section   104,   04.16.052;                                                                    
     Sections 127 - 129, 04.16.180                                                                                              
Mr.  Brawley   discussed  incentivizing  good   behavior  of                                                                    
businesses.  She emphasized  businesses knowing  a violation                                                                    
happened,  and  an  incentive  for  corrective  action.  She                                                                    
thought  the proposed  $500  fine was  a  stiff penalty  for                                                                    
serving a  minor. She  thought the  tickets would  allow the                                                                    
ABC Board  to track offenses  and know if  corrective action                                                                    
was needed.                                                                                                                     
Senator Wielechowski  asked about the standard  of knowingly                                                                    
serving a minor.  He asked if the charge was  proposed to be                                                                    
dropped from a misdemeanor to a $500 fine.                                                                                      
Ms.  Brawley  affirmed  that the  standard  was  "knowingly"                                                                    
serving a  minor. She  thought the  Department of  Law could                                                                    
speak more  definitively to  the definition.  She reiterated                                                                    
that  there   had  been  a   lack  of  enforcement   of  the                                                                    
misdemeanor  charge, and  the group  had discussed  the most                                                                    
effective way to go forward.                                                                                                    
Senator   Wielechowski  asked   about   the  potential   for                                                                    
additional penalties for multiple offenses.                                                                                     
Ms. Brawley shared that the  stakeholder group had discussed                                                                    
the idea  of graduated penalties,  which was not  built into                                                                    
the proposed  bill. She  reminded that  the ABC  Board could                                                                    
step  in and  suspend  an operator's  license,  which was  a                                                                    
significant deterrent.                                                                                                          
Senator  Wielechowski   asked  how  many   individuals  were                                                                    
charged per year with overserving or serving a minor.                                                                           
Ms.  Brawley did  not have  current data  but recalled  that                                                                    
previous data  regarding Title IV offenses  showed that half                                                                    
of   the  offenses   were   related   to  minor   consuming.                                                                    
Vanishingly  few of  the  offenses were  to  an employee  or                                                                    
licensee under the proposed statute.                                                                                            
10:18:11 AM                                                                                                                   
Senator Micciche  explained that it  had taken time  for him                                                                    
to support  the proposed change  listed on slide 36.  He had                                                                    
learned   that  the   misdemeanor  cases   were  not   being                                                                    
prosecuted  and that  the courts  had higher  priorities. He                                                                    
related  that the  proposed bill  provided more  enforcement                                                                    
and education  with greater available licensing  dollars. He                                                                    
emphasized  that  the  proposed system  would  provide  more                                                                    
information for  licensees. He  thought the  proposed change                                                                    
would  make  the  issue more  self-correcting  as  employees                                                                    
would have tickets on record.                                                                                                   
Ms.  Brawley  addressed  slide 37,  "Proposed:  Require  Keg                                                                    
      Reduces adults' incentive to legally purchase                                                                          
      alcohol and supply an underage drinking party.                                                                            
      Kegs tagged with the purchaser's contact information                                                                   
        can be tracked if confiscated at an underage party                                                                      
        or other situation where minors are given access to                                                                     
      A person, not a licensee, possessing an untagged keg                                                                   
        containing alcohol could be fined.                                                                                      
      Modeled on existing Anchorage and Juneau ordinances.                                                                   
    Licensee sells keg, tags with purchaser information                                                                         
          Party with responsible adults                                                                                         
          - Keg returned to licensee, tag removed                                                                               
          Party with underage drinkers                                                                                          
          - Ticket to keg purchases for furnishing alcohol                                                                      
          to minors                                                                                                             
     Section 134, 04.21.012                                                                                                     
Ms. Brawley  stated that the  proposed keg  registration not                                                                    
only  tried to  try to  help  with the  problem of  underage                                                                    
drinking  but used  enforcement  to address  the issue.  The                                                                    
proposed keg  registration practice was already  in place in                                                                    
Anchorage  and  Juneau.  She   asserted  that  the  proposal                                                                    
signified a public health best practice.                                                                                        
Senator Wielechowski  asked about  the penalty for  an adult                                                                    
that knowingly purchased alcohol for a minor.                                                                                   
Ms.  Brawley stated  that for  a  person not  employed by  a                                                                    
licensee, the penalty would still  be a Class A misdemeanor.                                                                    
The  keg registration  would be  an additional  penalty. She                                                                    
imagined that  if the  keg purchaser  was identified  as the                                                                    
source  of  alcohol  consumed   by  underage  drinkers,  the                                                                    
purchaser would be charged with a misdemeanor.                                                                                  
10:22:42 AM                                                                                                                   
Senator Olson  understood that currently breweries  were not                                                                    
allowed  to have  live  music to  perform  on the  premises,                                                                    
while many  manufacturers could have  non-profit fundraisers                                                                    
with music.  He asked if the  bill would allow for  a change                                                                    
the treatment of live music.                                                                                                    
Ms.  Brawley affirmed  that the  bill would  clarify that  a                                                                    
brewery,  winery, or  distillery with  a retail  license was                                                                    
allowed to have  live music on the premises.  The bill would                                                                    
make  a slight  change to  allow for  closure at  10 o'clock                                                                    
Senator Micciche commented that  there was a compromise that                                                                    
had  occurred two  years previously.  He  recalled that  the                                                                    
board  had  been  trying to  enforce  some  regulations  for                                                                    
manufacturers facility.  Part of the compromise  went from a                                                                    
"soft close" at  8 o'clock in the evening to  a "hard close"                                                                    
at 10 o'clock  in the evening. The bill  limited new tasting                                                                    
rooms  to  one in  12,000.  There  could be  four  permitted                                                                    
events per  year, as  well as community  events such  as art                                                                    
shows  and  fundraisers.  He   recalled  that  the  previous                                                                    
director of  AMCO was terminated  due to 12 pages  of public                                                                    
testimony against  the regulations.  He thought there  was a                                                                    
balance by working with different user groups.                                                                                  
Senator Wilson  asked if the  bill would allow  for curbside                                                                    
Senator  Micciche  answered  in  the  negative  but  thought                                                                    
allowing curbside pickup would  be helpful for the industry.                                                                    
He thought it was a concept worth considering.                                                                                  
SB  9   was  HEARD  and   HELD  in  committee   for  further                                                                    
Co-Chair Bishop discussed the agenda for the following day.                                                                     
10:26:55 AM                                                                                                                   
The meeting was adjourned at 10:26 a.m.                                                                                         

Document Name Date/Time Subjects
HB 100 Backup ATC Support Letter.pdf HFIN 4/14/2021 9:00:00 AM
SFIN 5/3/2021 9:00:00 AM
HB 100
HB 100 Backup Galena City School District Support Letter.pdf HFIN 4/14/2021 9:00:00 AM
SFIN 5/3/2021 9:00:00 AM
SFIN 5/14/2021 1:00:00 PM
HB 100
HB 100 Backup City of Kenai Fire Support Letter.pdf HFIN 4/14/2021 9:00:00 AM
SFIN 5/3/2021 9:00:00 AM
HB 100
HB 100 UA Presentation 3.15.21.pdf HL&C 3/15/2021 6:30:00 PM
HL&C 3/17/2021 5:45:00 PM
SFIN 5/3/2021 9:00:00 AM
SFIN 5/14/2021 1:00:00 PM
HB 100
HB 100 Backup Intro Presentation 041421.pdf HFIN 4/14/2021 9:00:00 AM
SFIN 5/3/2021 9:00:00 AM
HB 100
HB 100 Backup NACTEC Support.pdf HFIN 4/14/2021 9:00:00 AM
SFIN 5/3/2021 9:00:00 AM
SFIN 5/14/2021 1:00:00 PM
HB 100
HB 100 Backup TVEP Annual Report FY20.pdf HFIN 4/14/2021 9:00:00 AM
SFIN 5/3/2021 9:00:00 AM
SFIN 5/14/2021 1:00:00 PM
HB 100
HB 100 Backup UA Result Report.pdf HFIN 4/14/2021 9:00:00 AM
SFIN 5/3/2021 9:00:00 AM
SFIN 5/14/2021 1:00:00 PM
HB 100
HB 100 Backup UA Results Overview.pdf HFIN 4/14/2021 9:00:00 AM
SFIN 5/3/2021 9:00:00 AM
SFIN 5/14/2021 1:00:00 PM
HB 100
HB 100 Backup UAFAA Support Letter.pdf SFIN 5/3/2021 9:00:00 AM
HB 100
SB 9 Sectional Analysis version A 2-10-21.pdf SFIN 5/3/2021 9:00:00 AM
SL&C 2/12/2021 1:30:00 PM
SB 9
SB 9 Title 4 Review Report 02.2019.pdf SFIN 5/3/2021 9:00:00 AM
SL&C 2/12/2021 1:30:00 PM
SB 9
SB 9 Letter of Support combined as of 2.10.21.pdf SFIN 5/3/2021 9:00:00 AM
SL&C 2/12/2021 1:30:00 PM
SB 9
SB 9 Letter of Support MSHF.pdf SFIN 5/3/2021 9:00:00 AM
SL&C 3/3/2021 1:30:00 PM
SB 9
SB 9 Opposition Mat-Su Borough.pdf SFIN 5/3/2021 9:00:00 AM
SL&C 3/10/2021 1:30:00 PM
SB 9
SB 9 Sectional Analysis version B 2.10.21.pdf SFIN 5/3/2021 9:00:00 AM
SJUD 3/29/2021 1:00:00 PM
SB 9
SB9 Sectional Analysis Version B
SB 9 Sponsor Statement ver B.pdf SFIN 5/3/2021 9:00:00 AM
SJUD 3/29/2021 1:00:00 PM
SB 9
SB9 Sponsor Statement
SB9 ALL Public Testimony February 10- April 7.pdf SFIN 5/3/2021 9:00:00 AM
SB 9
SB 9_Title4Pres_Senate_FIN_5.2021.pdf SFIN 5/3/2021 9:00:00 AM
SB 9
HB 100 Backup SFIN UA Presentation.pdf SFIN 5/3/2021 9:00:00 AM
HB 100