Legislature(2017 - 2018)BELTZ 105 (TSBldg)
03/15/2018 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB62 | |
| SB76 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 62 | TELECONFERENCED | |
| += | SB 76 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
March 15, 2018
1:36 p.m.
MEMBERS PRESENT
Senator Mia Costello, Chair
Senator Kevin Meyer, Vice Chair
Senator Gary Stevens
Senator Berta Gardner
Senator Peter Micciche
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 62
"An Act repealing the certificate of need program for health
care facilities; making conforming amendments; and providing for
an effective date."
- MOVED CSSB 62(L&C) OUT OF COMMITTEE
SPONSOR SUBSTITUTE FOR SENATE BILL NO. 76
"An Act relating to alcoholic beverages; relating to the
regulation of manufacturers, wholesalers, retailers, and common
carriers of alcoholic beverages; relating to licenses,
endorsements, and permits involving alcoholic beverages;
relating to the Alcoholic Beverage Control Board; relating to
offenses involving alcoholic beverages; amending Rule 17, Alaska
Rules of Minor Offense Procedure; and providing for an effective
date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 62
SHORT TITLE: REPEAL CERTIFICATE OF NEED PROGRAM
SPONSOR(s): SENATOR(s) WILSON
02/17/17 (S) READ THE FIRST TIME - REFERRALS
02/17/17 (S) L&C, FIN
04/06/17 (S) L&C AT 9:00 AM BELTZ 105 (TSBldg)
04/06/17 (S) Heard & Held
04/06/17 (S) MINUTE(L&C)
04/06/17 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
04/06/17 (S) -- MEETING CANCELED --
04/07/17 (S) L&C AT 9:00 AM BELTZ 105 (TSBldg)
04/07/17 (S) Heard & Held
04/07/17 (S) MINUTE(L&C)
02/06/18 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/06/18 (S) Heard & Held
02/06/18 (S) MINUTE(L&C)
03/08/18 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/08/18 (S) Heard & Held
03/08/18 (S) MINUTE(L&C)
03/15/18 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 76
SHORT TITLE: ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG
SPONSOR(s): SENATOR(s) MICCICHE
03/03/17 (S) READ THE FIRST TIME - REFERRALS
03/03/17 (S) L&C, JUD
05/11/17 (S) SPONSOR SUBSTITUTE INTRODUCED-REFERRALS
05/11/17 (S) L&C, JUD
03/13/18 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/13/18 (S) Heard & Held
03/13/18 (S) MINUTE(L&C)
03/15/18 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
NATASHA MCCLANAHAN, Staff
Senator Mia Costello
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided an explanation of changes between
version D and version O of SB 62.
MARGARET BRODIE, Director
Division of Health Care Services
Department of Health and Social Services (DHSS)
Anchorage, Alaska
POSITION STATEMENT: Stated that the CS for SB 62 will have no
fiscal impact on the department.
DONNA STEWART, Executive Director
Office of Rate Review (ORR)
Department of Health and Social Services (DHSS)
POSITION STATEMENT: Provided information relevant to SB 62.
JEAN MISCHEL, Legislative Counsel
Legislative Legal Services
Legislative Affairs Agency
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As drafter, answered questions related to SB
62.
ANNA BRAWLEY, Consultant
Agnew Beck Consulting
Anchorage, Alaska
POSITION STATEMENT: Delivered the sectional analysis for SB 76.
JOEL KADARAUCH
Alaska Beer, Wine & Spirits Wholesalers Association
Anchorage, Alaska
POSITION STATEMENT: Testified in strong support of SB 76.
MICHAEL BALDWIN, Senior Evaluation and Planning Officer
Grants & Administration
Alaska Mental Health Trust Authority (AMHTA)
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Testified in strong support of SB 76.
ERIKA MCCONNELL, Director
Alcohol and Marijuana Control Office
Department of Commerce, Community and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Answered questions related to SB 76.
ALISON KULAS, Executive Director
Advisory Board on Alcoholism and Drug Abuse (ABADA) and
Alaska Mental Health Board (AMHB)
Division of Behavioral Health
Department of Health and Social Services (DHSS)
Juneau, Alaska
POSITION STATEMENT: Testified that both boards are in full
support of SB 76.
TREVOR STORRS, Executive Director
Alaska Children's Trust and
member of the Recover Alaska Steering Committee
POSITION STATEMENT: Testified that the Alaska Children's Trust
supports SB 76 and the components related to underage drinking.
ERIKA MCCONNEL, Director
Alcohol and Marijuana Control Office
Department of Commerce, Community and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Provided information related to SB 76.
NANCY MEADE, General Counsel
Administrative Staff
Office of the Administrative Director
Alaska Court System
Anchorage, Alaska
POSITION STATEMENT: Commented on SB 76.
ACTION NARRATIVE
1:36:13 PM
CHAIR MIA COSTELLO called the Senate Labor and Commerce Standing
Committee meeting to order at 1:36 p.m. Present at the call to
order were Senators Stevens, Micciche, Meyer, Gardner, and Chair
Costello.
1:37:24 PM
SENATOR GARDNER introduced the youths from Facing Foster Care in
Alaska who were job shadowing her today.
1:38:22 PM
At ease
1:40:20 PM
CHAIR COSTELLO reconvened the meeting.
SENATOR MICCICHE introduced the youths from Facing Foster Care
in Alaska who were job shadowing him today.
SB 62-REPEAL CERTIFICATE OF NEED PROGRAM
1:41:17 PM
CHAIR COSTELLO announced the consideration of SB 62 and noted
the proposed committee substitute (CS).
1:41:59 PM
At ease
1:42:21 PM
CHAIR COSTELLO reconvened the meeting.
SENATOR MEYER moved to adopt the CS for SB 62, version 30-
LS0502\O, as the working document.
CHAIR COSTELLO objected for an explanation of the changes.
1:42:54 PM
NATASHA MCCLANAHAN, Staff, Senator Mia Costello, Alaska State
Legislature, Juneau, Alaska, paraphrased the following
explanation of changes between versions D and O of SB 62:
Version O allows for an exemption from the certificate
of need program if the new construction of a
healthcare facility, alteration of bed capacity, or
addition of a category of health services is in a
location that is over 75 miles from another healthcare
facility. This is a change from 100 miles in Ver. D to
75 miles in Ver. O. The change assists more
communities that are currently struggling to attract
and retain healthcare services to better provide equal
access to care for all Alaskans.
CHAIR COSTELLO removed her objection and asked if there was
further objection.
1:44:04 PM
SENATOR GARDNER asked the rational for selecting 75 miles from
another health care facility.
CHAIR COSTELLO said individuals, especially from Delta Junction,
testified that the community had been unsuccessful going through
the CON process even though the closest health care facility was
100 miles away. The reason for selecting 75 miles was that it is
about an hour away under good driving conditions. She noted a
map in the packets that shows which Alaskan communities would be
affected.
1:46:29 PM
SENATOR GARDNER removed her objection.
CHAIR COSTELLO stated that without further objection, version O
was adopted.
SENATOR MEYER observed that the fiscal notes would probably need
to be updated.
CHAIR COSTELLO asked if he would like Margaret Brodie to comment
on the department's response to the committee substitute.
SENATOR MEYER said yes.
CHAIR COSTELLO asked Ms. Brodie to speak to the fiscal impact
and the department's response to the committee substitute.
1:47:21 PM
MARGARET BRODIE, Director, Division of Health Care Services,
Department of Health and Social Services (DHSS), Anchorage,
Alaska, explained that the CS will result in a zero fiscal note
because the department already does this work. She said the
department was "fine" with the CS.
SENATOR GARDNER asked if the department had a position on the
current draft of the bill.
MS. BRODIE clarified that the department would support this
change and the bill.
1:48:55 PM
SENATOR MICCICHE asked how the CS changes the Certificate of
Need Program other than exempting a facility that is 75 miles
from another health care facility from the CON statutes.
MS. BRODIE deferred the question to Donna Stewart.
1:49:38 PM
DONNA STEWART, Executive Director, Office of Rate Review (ORR),
Department of Health and Social Services (DHSS), explained that
ORR currently reviews all applications that fit the criteria of
the statute. The current draft of the bill allows an exemption
for facilities that are built 75 miles away from an existing
[CON] facility. Theoretically, the department would see fewer
applications. Over the last eight to ten years, the few small
communities that applied for a certificate of need all had
additional circumstances attached so they would have still gone
through the CON process. Delta Junction would be the first
community that would fall under the new requirement of 75 miles
from another CON facility.
SENATOR MICCICHE posed the hypothetical situation of a for-
profit facility opening in Delta Junction next door to the
nonprofit facility that opened under the proposed exemption. He
asked if the second health care facility would be required to
obtain a certificate of need.
MS. STEWART said it would depend on the timing. Until the
nonprofit receives certification that it is an active and viable
hospital, it could be in jeopardy of having a competitor open
next door.
1:53:16 PM
SENATOR STEVENS said he was uncomfortable with the amendment
because he wasn't sure whether the hospitals that objected to
the original version would be placated by the current draft.
1:54:09 PM
CHAIR COSTELLO asked Jean Mischel to comment on Senator
Micciche's question.
1:54:17 PM
JEAN MISCHEL, Legislative Counsel, Legislative Legal Services,
Legislative Affairs Agency, Alaska State Legislature, Juneau,
Alaska, said the statute is drafted to mean that the expenditure
of $1 million plus the inflation adjustment would trigger the
need for the certificate of need. Once the nonprofit spent what
is now equivalent to $1.4 million, it would have a good argument
that it had vested its interest in the health care facility
enough to meet the exception standard before the for-profit
hospital comes in. However, if the nonprofit came in under the
exception and later decided to expand services, it would need a
certificate of need. Also, if the nonprofit beat the for-profit
facility within the 75-mile radius, the for-profit facility
would be required to meet the standard for the certificate of
need for that area.
CHAIR COSTELLO said that was her understanding; page 2 talks
about where the health care facility is initiated. She thanked
Senator Micciche for the question.
SENATOR MICCICHE expressed a little confusion about how a
facility that was exempted from the CON process could ever
qualify for CON protection. "It keeps pointing back to [AS
18.07.031] and we just changed .031"
MS. MISCHEL said .031(a) doesn't just provide the exception for
the 75-mile radius. It also prohibits a person from expending $1
million or more for the three types of facilities and that would
still apply to facilities that have initiated construction.
1:58:04 PM
At ease
1:59:45 PM
CHAIR COSTELLO reconvened the meeting. She found no further
questions and solicited a motion.
1:59:57 PM
SENATOR MEYER moved to report the CS for SB 62, version 30-
LS0502\O, from committee with individual recommendations and
forthcoming revised fiscal note(s).
CHAIR COSTELLO found no objection and announced that CSSB
62(L&C) moved from Senate Labor and Commerce Standing Committee.
2:00:34 PM
At ease
SB 76-ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG
2:03:44 PM
CHAIR COSTELLO reconvened the meeting and announced the
consideration of SB 76. This is the Title 4 rewrite introduced
by Senator Micciche. She asked Ms. Brawley to continue
presenting the sectional analysis that began during the previous
hearing.
2:04:24 PM
ANNA BRAWLEY, Consultant, Agnew Beck Consulting, Anchorage,
Alaska, advised that she would briefly go through the sectional
analysis for the chapters presented on Tuesday. Those were
Chapters 06, 16, and 21 in Title 4 and in the sectional. She
said she would reference the larger recommendations that were
presented on Tuesday. She paraphrased and supplemented as
follows:
Chapter 06. Alcoholic Beverage Control Board
Pages 1-5
Section 1 Authority of the director
AS 04.06.075 is a new subsection that provides that
the director of the ABC Board shall prepare the
budgets for administration, enforcement, education,
training, and prevention activities under Title 4. The
main change being education and prevention.
Section 2 Delegation of authority
AS 04.06.080 adds endorsements to the list of
delegated powers. It also edits cross references.
Section 3 - Powers and duties
AS 04.06.090(b) relocates language from existing AS
04.11.070 stating that the board is the entity that
issues, renews, and transfers licenses.
Section 4 Powers and duties
AS 04.06.090(e) also adds endorsements.
Section 5 Powers and duties
AS 04.06.090 adds a new subsection that directs the
board to prepare a Title 4 education plan for public
safety, industry, youth, municipalities, and the
public with annual revision.
Adds new subsections which direct the board to review
the license fees in the statute every 10 years, allows
the board to give opinions on pending legislation
amending Title 4, requires the board to provide notice
of violations to licensees and to post FASD
information online for package store and winery
licensees to include with shipped orders. This is
something that's done now but not electronically.
2:07:10 PM
SENATOR GARDNER asked if the board isn't already allowed to
provide opinions on pending legislation.
MS. BRAWLEY confirmed the board can do that now, but it's not
explicitly stated in statute.
SENATOR MICCICHE added that statute clearly states that other
boards and commissions have this ability. The idea here is that
the board should not only have the opportunity to comment on
legislation, it should also be clear that there is an
expectation that the board would speak up, so they are not
politically engaged in an issue.
2:08:10 PM
MS. BRAWLEY continued the sectional analysis.
Section 6 Statewide database
AS 04.06.095 allows for certain information stored in
the statewide database for local option orders to be
retained up to 10 years [currently it's kept just one
year]. Only identifying information will be purged
annually. It also adds reference to endorsement.
Section 7 Statewide database
AS 04.06.095(c) adds a new subsection which directs
the board to produce a report of aggregate regional
sales of alcohol in local option areas, based on
information retained in the database and not including
identifying data about an individual purchaser or
seller.
Section 8 Regulations
AS 04.06.100(b) adds endorsements to the board's power
to create regulations, removes the board's power to
create additional licenses and permits in regulation,
and adds the power to restrict manufacturing,
packaging, sale, and distribution of products
containing alcohol for consumption.
Section 9 Proposed new chapter AS 04.09 to replace
sections defining license types and permit types
currently in AS 04.11 and regulation.
2:09:01 PM
SENATOR GARDNER asked if there was any concern that under
Section 6 the information collected and retained in a statewide
database could track back to just one person or household in
communities that are very small.
MS. BRAWLEY said that would certainly be a concern and should
probably be addressed in regulation before the board releases
that information.
MS. BRAWLEY advised that she would skip the portions of the bill
that have not been introduced to regulation. She asked the
members to turn to page 13 of the sectional analysis which is
page 79 of the bill.
Chapter 16. Regulation of Sales and Distribution.
Pages 79-97
Section 73 Hours of sale and presence on licensed
premises (standard closing hours)
AS 04.16.010(c) is amended to allow a person to be on
the licensed premises outside of the hours of sale to
conduct business with the licensee, maintenance, or
improvements, common carrier licensees, and adds
restaurant endorsement reference.
Section 74
AS 04.16.010 adds a penalty for violating the section.
Section 75 Pricing and marketing of alcoholic
beverages
AS 04.16.015(a) issues an exemption for sampling
endorsements and defines a week of an alcoholic
beverage price as seven days, as opposed to a calendar
week.
Section 76
AS 04.16.015 adds a penalty for violating the section.
Section 77 Trade practices
AS 04.16.017 new section that specifies which illegal
trade practices cannot be practiced by manufacturers
or wholesalers and directs the board to adopt
regulations defining exceptions to those rules as well
as administrative penalties for violations.
Section 78 Solicitation of alcoholic beverages;
purchase on behalf of another
AS 04.16.020 sets penalty for unauthorized
solicitation or purchase of alcoholic beverages.
Section 79 Online sale and purchase of alcoholic
beverages
AS04.16.022 new section prohibiting online purchase
and sale in Alaska unless the licensee has a winery
direct shipment license or package store shipping
endorsement. It also defines the penalties.
Section 80 Illegal presence on premises involving
alcoholic beverages
AS 04.16.025(a) adds statutory references to all
penalties involving sale without a license. [As
discussed, there were changes to that original
section.]
Section 81 Prohibited conduct relating to drunken
persons
AS 04.16.030 changes the existing penalty for
prohibited conduct relating to a drunken person, adds
an administrative penalty to the licensee if the
employee is convicted of a violation of this section,
and adds misdemeanor penalty for the licensee who
knowingly allows employees to violate this section.
[Ms. Brawley said that last piece is a provision in
the existing AS 04.16.150.]
Section 82 - Possession of ingredients for homebrew in
certain areas
AS 04.16.035 changes the statutory reference from one
specific local option area to all local option areas,
consistent with AS 04.21.025 restricting private
manufacture of alcohol in all local option areas.
2:12:26 PM
Section 83
AS 04.16.035 maintains the current penalty for
possession of ingredients for homebrew.
Section 84 - Access of drunken persons to licensed
premises
AS 04.16.040 rewords language relating to licensed
premises.
Section 85
AS 04.16.040 relocates and changes penalty for
prohibited access by a drunken person to licensed
premises.
Section 86 Obligation to enforce restrictions in
licensed premises
AS 04.16.045 relocates and changes penalty for
permitting consumption not authorized under a license.
Section 87 Access of persons with restriction on
purchasing alcohol
AS 04.16.047 adds a reference to a penalty for
entering and remaining on licensed premises defined in
AS 04.16.160. [She noted it does not change the
penalty.]
2:13:06 PM
SENATOR MICCICHE reminded the committee of the color coding in
the sectional. Existing in Statute; Existing in Regulations;
Penalty or Fee Change; New Concept. [For example, language that
is highlighted in yellow is existing statute that has been
relocated in this legislation.]
SENATOR GARDNER asked why Section 83 is highlighted in yellow if
it's not relocating.
SENATOR MICCICHE reiterated that anything that is highlighted in
yellow is in current statute but has been relocated in the
statute, so it makes more sense.
MS. BRAWLEY continued the sectional analysis.
Section 88 Access to persons under the age of 21 to
licensed premises
AS 04.16.049(a) amends a reference to restaurant
endorsement and club license.
Section 89
AS 04.16.049(c) adds additional license types to those
allowed to have underage persons on premises as
employees, ages 16 and 17, provided they are not
serving alcohol.
Section 90
AS 04.16.049(d) adds additional license types allowed
to have underage persons on premises as employees,
ages 18-20, provided they are not serving alcohol.
Section 91
AS 04.16.049 adds additional license types allowed to
have underage persons on premises if traveling,
provided they are not served or consume alcohol. That
would include common carrier dispensaries like
airlines.
Section 92 Furnishing or delivery of alcoholic
beverages to persons under the age of 21
AS 04.16.051(d) defines the offense of furnishing or
delivering to a minor. [She noted it does not change
the penalty.]
Section 93
AS 04.16.051 changes penalties for furnishing or
delivering to a minor by a person, maintains one C
felony charge for situations where a minor is given
alcohol and causes serious injury or harm but removes
C felony for the offense of serving a minor in a Local
Option area, consistent with change in Section 61.
Section 94 Furnishing of alcoholic beverages to
person under the age of 21 by licensees
AS 04.16.052 changes penalties for furnishing or
delivering to a minor by a licensee or employee, adds
administrative penalty to licensee if employee is
convicted of a violation of this section and shifts
misdemeanor penalty in AS 04.16.150 to licensee who
knowingly allows employees to violate this section.
Section 95 -Room rental for purposes of consuming
alcoholic beverages
AS 04.16.055 changes the penalty for renting a room
for the purpose of providing alcoholic beverages to a
person under 21 years of age.
Section 96 Permitting minor to illegally possess
liquor in a dwelling
AS 04.16.057(b) maintains current violation for
allowing a minor to possess alcohol in a dwelling and
adds a $500 fine.
Section 97 Purchase by or delivery to persons under
the age of 21
AS 04.16.060(e) relocates the requirement for persons
under the age of 16 to be accompanied by a person 21
years of age and have parental consent to remain in a
restaurant that serves alcohol, now in proposed AS
04.09.450 in Section 9.
Section 98
AS 04.16.060 defines penalties for purchase by a
person under 21 years of age and delivery to a person
under 21 years of age. For persons under 21, adds
similar penalty structure as those in AS 04.16.049 and
AS 04.16.050, $500 fine for violation with option to
reduce fine to $50 if youth completes treatment or
community diversion panel.
Section 99 Sales or consumption at school events
AS 04.16.080 edits title for the section.
Section 100
AS 04.16.080 sets the penalty for consuming at a
school event.
Section 101 Prohibition of bottle clubs
AS 04.16.090(c) makes the list exclusive and adds
cover charge and other services or products provided
on the premises.
Section 102
AS 04.16.090 defines the crime of maintaining a bottle
club, relocates and maintains current penalty.
Section 103 Sale of certain alcoholic beverages
prohibited
AS 04.16.110 defines sale of a prohibited alcoholic
beverage, relocates and maintains current penalty.
Section 104 Removal or introduction of alcoholic
beverages
AS 04.16.120 defines removal or introduction of
alcoholic beverages, sets penalty and exemptions.
2:18:13 PM
SENATOR GARDNER asked for the definition of a bottle club.
MS. BRAWLEY said her understanding is that it's an unlicensed
premise that imposes a cover charge or offers to store a
person's bottle on the premises for consumption there. It looks
like a bar but does not sell alcohol directly. These are
currently illegal in statute.
2:18:46 PM
Section 105 Alcoholic beverages transported by
common carrier
AS 04.16.125 repeals and reenacts the section. Allows
for delivery of alcohol to a person over the age of 21
with signature from an order filled by a package store
or winery direct shipment licensee only by an approved
carrier, requires board to review carrier policies and
publish a list of approved carriers, and removes some
detailed language for delivery to a local option area.
Maintains penalty for unauthorized transportation of
alcoholic beverages by common carrier into a local
option area and makes noncompliance a violation.
Section 106 Stock confined to licensed premises
AS 04.16.130 sets a penalty for unauthorized storage
of alcoholic beverages.
Section 107 - Sale or consumption of alcoholic
beverages in a warehouse
AS 04.16.140 sets a penalty for consumption or sale of
alcoholic beverages in a warehouse.
Section 108 Licensee responsible for violations
AS 04.16.150 changes the penalty for failure to ensure
compliance by a licensee on their licensed premises.
Section 109 Restriction on purchasing alcoholic
beverages
AS 04.16.160 maintains the current penalty for failure
to comply with a restriction on purchasing alcoholic
beverages.
Section 110 - 111 Source of alcoholic beverages
AS 04.16.170 exempts winery direct shipment license
and maintains current penalty for sale of alcoholic
beverages from or to an unlicensed person.
Section 112 - 113 Restrictions on purchase and sale
of alcoholic beverages
AS 04.16.172 renumbers the cross-references to license
types and maintains current penalty for licensee
obtaining alcoholic beverages from an unlicensed
seller.
Section 114 Furnishing alcoholic beverages in aid of
gambling enterprise
AS 04.16.175 maintains the current penalty for the
crime of furnishing an alcoholic beverage in aid of a
gambling enterprise. It defines the crime in that
section
Section 115 Penalties for violation
AS 04.16.180(b) adds statutory references to
prohibited conduct related to drunken persons and
furnishing alcoholic beverages to persons under the
age of 21 by licensees.
2:21:00 PM
SENATOR GARDNER referred to Sections 110-111 and asked what the
winery direct shipment license was exempt from.
MS. BRAWLEY explained that this section is part of the three-
tier system which is intended to keep a separation between
businesses that manufacture, distribute, and sell alcohol to the
public. Generally, part of the statute says one must buy certain
alcoholic beverages from someone who is designated as the
primary source of supply. The proposal is to exempt winery
direct shipment licensees because they would primarily be out-
of-state businesses and therefore would be manufacturing or
distributing product outside Alaska.
Section 116
AS 04.16.080(e) adds a definition for "conviction".
Section 117
AS 04.16.180 clarifies that licensees are subject to
administrative penalties imposed by the board for
violations of AS 04.16.030 (Section 81) and AS
04.16.052 (Section 94) and adds mitigating
circumstances for licensees. A mitigating circumstance
would be showing consistent evidence of providing
employee training and no history of violations.
Section 118 - 121 Forfeitures and seizures
AS 04.16.220(a) renumbers cross-references.
2:22:40 PM
At ease
2:23:53 PM
CHAIR COSTELLO reconvened the meeting and asked Ms. Brawley to
continue to review the sectional for SB 76.
2:24:04 PM
MS. BRAWLEY advised that she was on page 18 of the sectional
starting into Chapter 21 that begins on page 97 of the bill.
Chapter 21. General Provisions.
Pages 97-104
Section 122 Keg registration
AS 04.21.012 adds new section establishing a keg
registration process including proof of age,
registration form requirements, identification tags,
and establishes the penalty for possession and sale of
alcoholic beverages in an unregistered keg.
CHAIR COSTELLO asked if this language contemplates the
circumstance of a wedding where the bride may be paying for the
keg but is not the one who picks it up.
MS. BRAWLEY said the language does not specifically address that
situation.
CHAIR COSTELLO asked if it's written such that the person who is
paying for the keg must pick it up.
MS. BRAWLEY said it doesn't specify that, but the penalties and
the language of the statute focus on the purchaser.
Section 123 - 124 Civil liability of persons
providing alcoholic beverages
AS 04.21.020(a) renumbers cross-references.
Section 125 Alcohol server education course
AS 04.21.025(a) repeal and reenact section to list
license types that do not require server education
training: only licenses not serving the public are
exempt from the requirement.
Section 126
AS 04.21.025(b) adds reference to permit holders and
individuals listed on an application as servers for a
permitted event.
Section 127
AS 04.21.025(c) adds reference to permit holders and
requires servers listed on the permit application to
have a current alcohol servers card by the first event
day.
Section 128
AS 04.21.025 defines the offense of failure to comply
with alcohol server education requirements and sets
penalty.
Section 129 Proof of age and of not being restricted
from purchasing alcoholic beverages
AS 04.21.050(a) renumbers cross-reference.
Section 130 Warehousing of alcoholic beverages
AS 04.21.060 defines the offense of unauthorized
warehousing and establishes penalty.
Section 131 Posting of warning signs
AS 04.21.065(a) updates list of license types that
require warning signs. She noted that not all license
types that serve the public are included the list now.
The intent is to include them.
Section 132
AS 04.21.072. Fines and other criminal penalties. New
section which sets penalties for other violations,
misdemeanors, or felonies unless otherwise specified.
[She noted that the default penalty in Title 4 is a
class A misdemeanor. The bill would put individual
penalties in each section and if there is a penalty
for something that hasn't been defined, it would be a
minor offense or a violation with a $250 fine.]
AS 04.21.074. Bail forfeiture schedule. Directs the
supreme court to set a bail schedule for Title 4
violations.
AS 04.21.076. Suspension of fine or sentence. Prevents
the court from suspending fines or sentences for minor
offenses. [She noted that the purpose is that they can
be processed more automatically rather than what
happens now, which is a possible court appearance.]
Section 133 Court records of persons under 21 years
of age
AS 04.21.078 adds additional statutory reference to
violations of AS 04.16.060. She noted that this is
consistent with Senate Bill 165 that passed in 2016
for minor consuming and minor on licensed premises.
Section 134 Definitions
AS 04.21.080(b)(6) adds reference to permit holders
and license holders.
Section 135
AS 04.21.080(b)(15) adds endorsements.
Section 136
AS 04.21.080(b) adds definitions for terms not
currently defined in Title 4.
MS. BRAWLEY asked if the committee wanted her to review the
remainder of the sectional that covers changes outside of Title
4.
2:29:25 PM
SENATOR GARDNER asked her to describe updating bar" definition
in Section 137.
MS. BRAWLEY said her understanding is that there are several
other places in statute that reference specific license types or
licensed premises. These sections generally renumber those
references according to the changes in the license types. She
offered to look into it further.
2:31:05 PM
At ease
2:32:59 PM
CHAIR COSTELLO reconvened the meeting and advised that Ms.
Brawley just walked through Chapters 6, 16, and 21. She asked
her to walk through the sections that cover changes outside of
Title 4.
2:33:27 PM
MS. BRAWLEY advised that she was starting on page 19 of the
sectional, bill Section 137.
Amendments to Various Other Titles.
Pages 104-109
Section 137 - Definitions
AS 05.15.690(48) renumber beverage dispensary license
reference and update "bar" definition.
Section 138 143
Amends references to Title 4 in Titles 9, 11, 12 and
18.
Section 144 - Unlawful practices in places of public
accommodation
AS 18.80.230(b) amends reference to chapter 04.11.
Section 145 Definitions
AS 39.50.200(b) adds the marijuana control board to
the list of state commissions or boards. This is
requiring the members of that board to make financial
disclosures the same as the Alcoholic Beverage Control
Board and other state boards.
Section 146 Winery direct shipment tax; statement;
audit
AS 43.60.060 establishes tax collection on direct wine
shipments from out of state businesses holding this
license and outlines requirements for the Department
of Revenue to collect that tax. [She noted that all
manufacturers and wholesalers are subject to this tax
for sales of alcohol within the state. This would
establish out of state businesses with that license
subject to this tax.]
Section 147 - 148
AS 43.70.105(a) amends references to chapter 04.11 in
Titles 43 and 45.
MS. BRAWLEY asked how to proceed. The remaining sections relate
to transition of license types.
CHAIR COSTELLO thanked Ms. Brawley and asked members if they had
questions.
2:35:55 PM
SENATOR MEYER asked if a small winery in California will know it
must charge tax under Section 146 and pay it to the Department
of Revenue (DOR).
MS. BRAWLEY clarified that state law cannot regulate sales made
in person or on premises outside the state. Section 146 is
specific to businesses that have signed up to have the winery
direct shipment license and are serving Alaska customers through
online sales. She understands that many states have this type of
system so wineries that participate are familiar with this type
of requirement and having this license.
SENATOR MEYER asked how the wineries will be notified that they
need to start collecting tax on Alaska sales.
SENATOR MICCICHE said those wineries will be notified when they
become licensed. His office worked with companies that do mail
order internet wine sales to standardize the process that most
other states follow for licensing and notification.
SENATOR MEYER asked if wine is the only alcoholic beverage that
can be ordered online.
SENATOR MICCICHE confirmed that other sales are not allowed over
the internet.
CHAIR COSTELLO turned to public testimony on SB 76.
2:39:24 PM
JOEL KADARAUCH, Alaska Beer, Wine & Spirits Wholesalers
Association, Anchorage, Alaska, said he was testifying in strong
support of SB 76 although the association had concerns about
unregulated e-commerce and the fact that Alaska is silent on
unfair trade practices.
2:40:31 PM
MICHAEL BALDWIN, Senior Evaluation and Planning Officer, Grants
& Administration, Alaska Mental Health Trust Authority (AMHTA),
Department of Revenue (DOR), testified in strong support of SB
76. He said compromise was reached with many stakeholders at the
table. It was a systematic redraft of Title 4 that will help the
ABC Board carry out its mission, fairly represent the interests
of all Alaskans, promote a fair business climate, and protect
the public health and safety.
2:43:14 PM
SENATOR STEVENS asked Mr. Kadarauch if he represents just Alaska
businesses or out-of-state suppliers as well.
MR. KADARAUCH said the association represents both out-of-state
and instate manufacturers, but his testimony related only to
business conducted within the state.
CHAIR COSTELLO asked Senator Stevens if he wanted to ask Ms.
McConnell about the scope of responsibility for education that
the bill ascribes to the ABC Board.
SENATOR STEVENS said it seems that the ABC Board is not only
responsible for the education of license holders but also the
general public. He asked if it was prepared for that
responsibility.
2:45:17 PM
ERIKA MCCONNELL, Director, Alcohol and Marijuana Control Office,
Department of Commerce, Community and Economic Development
(DCCED), Anchorage, Alaska, said her understanding was that the
staff's efforts would be focused on education and the licensing
and enforcement provisions regarding Title 4. She noted that the
office added a local government specialist about 18 months ago
and that person was solely focused on education and outreach for
alcohol and marijuana. Her understanding was that the
discussions in the steering committee were that the ABC Board
would be responsible for adding additional education components
to the website and collaborating with other agencies.
SENATOR STEVENS said he was referring to slide 6 of the
presentation the committee heard on 3/13/18 that says that the
ABC Board will be the lead agency for alcohol education efforts.
"That seems like a big job."
MS. MCCONNELL agreed that a comprehensive plan to educate
constituents on the responsible use of alcoholic beverages and
the relevant state statutes, regulations, and policies was a big
job.
CHAIR COSTELLO said Senator Stevens was probably envisioning
public education campaigns. She asked Ms. McConnell how she
interprets that role and if there would be a fiscal impact
associated with that expanded role.
MS. MCCONNELL said the department submitted a fiscal note that
included travel costs and printing, design, and publication
costs for educational materials for the local government
specialist. With the regulations process, there would also be
extra days of board meeting in the first few years.
CHAIR COSTELLO asked if the members wanted Ms. McConnell to
explain the fiscal impact related to the education question.
SENATOR GARDNER asked if the fiscal note was in the packet.
2:48:56 PM
At ease
2:49:39 PM
CHAIR COSTELLO reconvened the meeting and advised that the
committee would return to the fiscal note later in the meeting.
SENATOR MICCICHE clarified that SB 76 simply requires the ABC
Board to develop a comprehensive plan for education. Agencies
that the legislature already funds would deliver the educational
components.
SENATOR STEVENS said he was uncomfortable making the ABC Board
the lead agency. That designation has tremendous responsibility
and if it's not funded it won't happen.
SENATOR MICCICHE read the language in subsection (f) on page 2,
lines 23-27, and emphasized that the board would not deliver the
education. However, it is important that there is a central
clearing house for the material that entities like Recover
Alaska would deliver to the public.
2:53:07 PM
ALISON KULAS, Executive Director, Advisory Board on Alcoholism
and Drug Abuse (ABADA) and Alaska Mental Health Board (AMHB),
Division of Behavioral Health, Department of Health and Social
Services (DHSS), Juneau, Alaska, advised that these boards are
the state agencies that are statutorily charged with advising
the governor, the legislature, and the departments for the
planning and coordination of behavioral health services that are
funded by the state.
She stated that both boards are in full support of SB 76, which
provides a much-needed update to Title 4. It was the result of a
six-year stakeholder effort to improve how alcohol is regulated
for the health and safety of Alaskans. The recommendations have
been vetted by over 100 members of the alcohol industry, public
health, public safety, local governments and other stakeholders
who use Title 4 daily. She said she sat on the licensing
subcommittee as a public health representative. It helped her
understand the industry perspective and what it was willing to
compromise on so that public health and safety could be
protected while allowing for a fair business environment. The
proposed regulatory structure is consistent for license types
and increases fees to support enforcement. They give the ABC
Board consistent information about violations, which will ensure
that businesses are operating fairly.
SB 76 protects youth by limiting access to alcohol,
incentivizing youth who need it to seek alcohol education and
treatment, promoting responsible alcohol use, and reducing the
harms of over consumption. The boards believe that SB 76 will
fix current issues in Title 4, clearly define business
practices, and promote a safer environment for all Alaskans.
SENATOR MICCICHE asked what kind of outreach the Advisory Board
on Alcoholism and Drug Abuse and the Alaska Mental Health Board
will do to deliver education once the ABC Board created a
comprehensive plan for education.
MS. KULAS said she anticipates the boards will support the
business license education the ABC Board is doing and work to
ensure that the public education campaigns by Recover Alaska,
the Division of Behavioral Health, the Mental Health Trust, and
other nonprofits are happening.
2:57:15 PM
TREVOR STORRS, Executive Director, Alaska Children's Trust, and
a member of the Recover Alaska Steering Committee, said the
Alaska Children's Trust supports SB 76 and the components
related to underage drinking. This is the statewide lead
organization focused on Alaska's children, families, and youths.
Safe and healthy children is a value everyone shares. Alcohol
plays a major role in the social, behavioral, and physical
issues that communities address daily. This includes child abuse
and neglect. Prevention is a key tool that can be utilized to
help address current trends. One of the components of prevention
is to minimize alcohol consumption with youth. Research shows
that when consumption is reduced in youth, consumption and
negative impacts later in life are also reduced. SB 76 does
three core things related to underage drinking: requiring the
keg registration, consistent but fair penalties for underage
drinking will ensure youth are not punished for the rest of
their lives for one mistake, and it builds resiliency versus
adding on more trauma. Licensees will be held immediately
accountable for what happens on their premises and given an
opportunity to correct the issue before the ABC Board reviews
their license for renewal. These are all steps that protect
youth. SB 76 has been a collaborative and collective effort that
has made a strong and fair bill.
CHAIR COSTELLO thanked Mr. Storrs for providing specifics on why
he liked the bill.
She asked Ms. McConnell to walk through the Department of
Commerce, Community and Economic Development fiscal note, OMB
Component 3119 related to the Alcohol and Marijuana Control
Office.
3:00:15 PM
ERIKA MCCONNEL, Director, Alcohol and Marijuana Control Office
(AMCO), Department of Commerce, Community and Economic
Development (DCCED), asked if the committee wanted a review of
the full fiscal note or just the educational component.
CHAIR COSTELLO asked her to walk through the full fiscal note
and comment on the education pieces.
MS. MCCONNEL advised that AMCO estimates that under SB 76 fees
from licenses and endorsements will bring an additional $500,000
per year starting in 2020. The first year looks a little higher
than the outlying years because it reflects the one-time $1,250
fee for fixed bar endorsements that replace the current
duplicate license system. Endorsement renewals will be $200.
She said the agency has identified several issues for which it
would need additional receipt authority. The first is to hire a
Range 16 regulations specialist for two years for the
regulations project necessitated by SB 76. There would also be
additional services and supplies associated with the position.
The second is the expenditure to hold four additional board
meetings in FY10-FY20 to consider and take public comment on the
regulations package. The third is to have AMCO's existing local
government specialist take a 2-day trip to each of the four
judicial districts every year for the first three years for
education. The estimated expenditures are $6,400 per year and
$10,000 per year for printing, design, and publication costs.
The travel expenditure is in FY19, FY20, and FY21. The services
appear in FY19 and FY20.
The last major issue is to replace the alcohol licensing
database system. The anticipated cost of the new system is
$500,000 spread over FY19 and FY20. The anticipated maintenance
fee is $50,000 per year in the outlying years. That is in the
services line of the fiscal note. The expectation is that the
increase in revenue would more than cover the increased
expenditures for 2020 to 2024. There is no request for
additional money for 2019 to implement the bill because AMCO
will use the $280,000 it generally returns to the general fund
each year. The ABC Board recently approved a regulation project
to increase the fees for applications that are new, transfer,
and renewal effective on July 1, 2018. The anticipated increase
in revenue is $175,000. "We anticipate sufficient receipts to
support the expenditures from the passage of this bill."
3:10:59 PM
CHAIR COSTELLO asked Ms. Meade to comment on the priority
legislation related to minor offenses that was passed by a
previous legislature, and the proposed violation and penalty
changes that appear in the table in the packet.
3:12:33 PM
NANCY MEADE, General Counsel, Administrative Staff, Office of
the Administrative Director, Alaska Court System, Anchorage,
Alaska, stated that the Court System is neutral on the bill, but
views the penalty provisions as the most important aspect.
She said her reading of the new Sec. 04.21.074 in bill Section
132 is it requires the supreme court to establish a bail
schedule for the 63 violations under Title 4 and allow
disposition without a mandatory court appearance. She said it's
a substantial project to create these 63 new codes, ensure that
they're cited appropriately, and communicate the new electronic
table to law enforcement so the appropriate codes are used on
their hand-held ticketing devices. Once the codes are created,
court administrative staff will meet with the Department of Law
and others to ensure they are summarized appropriately and
everybody agrees that is how it should be handled. This will
then be presented to the supreme court to sign and it becomes
enacted into a Court Rule. She advised that the court is
prepared to undertake this additional work without fiscal
impact.
MS. MEADE advised that the court also maintains a table of all
crimes and cleans up that electronic database when a crime is
changed from one category to another. That was done after SB 91
passed and when other laws changed things to violations.
CHAIR COSTELLO said the committee has heard that the process to
bring SB 76 before the legislature was collaborative, but she'd
like specific details on the philosophy behind the changes the
bill makes.
MS. MEADE said she participated in meetings related to minor
consuming alcohol which is the piece that was removed and passed
as priority legislation (Senate Bill 165) by a previous
legislature. Minor consuming was previously a semi criminal
offense for which the court had an entirely separate procedure.
It was not helpful to kids to be charged with something that was
more criminal than it needed to be, and it was complicated to
charge. The thinking was that by lowering the offense to a
violation would make it easier for law enforcement to write the
ticket and the minor could pled guilty and pay the fine in
court. However, for whatever reason the number of cases of minor
consuming has been lower than it was before the legislation.
Based on discussions she heard during the meetings she attended,
that probably wasn't what people expected. Senate Bill 165
directed the court to stop posting those cases on CourtView and
SB 76 would extend that to one more violation, which the court
can easily accomplish.
CHAIR COSTELLO expressed interest in receiving the data related
offenses of minor consuming before and after Senate Bill 165
passed. She recalled that the idea was that the consequence for
a mistake would not be life-altering.
MS. MEADE agreed to supply the data.
SENATOR MEYER referenced Sec. 04.16.059 and asked her to comment
on the increase in penalties from a class A misdemeanor to a
class C felony for anyone who is a registered sex offender or
child kidnapper.
MS. MEADE said she didn't recall that was changed in the bill,
but she would take another look and provide an answer.
SENATOR MEYER said he doubts there would be many of those cases,
but the increase in penalty would come at a cost. "Like you
said, you're saving money elsewhere, so it may be an offset."
MS. MEADE clarified that SB 76 neither saves nor costs the court
money. The court doesn't experience an impact when one or two
cases move from a misdemeanor to a felony. The reverse is also
true; the court doesn't experience a monetary savings when an
offense is reclassified from a felony to a misdemeanor.
SENATOR MEYER said he understood that it cost the Court System
more if someone was charged with a felony versus a misdemeanor.
MS. MEADE said she would classify any savings as theoretical.
There is no outlay of money, but there is a little less work.
CHAIR COSTELLO thanked all the participants.
3:23:40 PM
CHAIR COSTELLO held SB 76 in committee with public testimony
open.
3:23:55 PM
CHAIR COSTELLO introduced the youths from Facing Foster Care in
Alaska who were job shadowing her today.
3:25:18 PM
There being no further business to come before the committee,
Chair Costello adjourned the Senate Labor and Commerce Standing
Committee meeting at 3:25 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| CSSB 62 Ver. J.pdf |
SL&C 3/15/2018 1:30:00 PM |
SB 62 |
| CSSB62 Explanation of Changes Ver. D to J.pdf |
SL&C 3/15/2018 1:30:00 PM |
SB 62 |
| CSSB 62 - 03.14.18 Legislative Research Request - Alaska Communities Without Nearby Health Care Facilities.pdf |
SL&C 3/15/2018 1:30:00 PM |
SB 62 |
| CSSB 62 Ver. O.pdf |
SL&C 3/15/2018 1:30:00 PM |
SB 62 |
| CSSB62 Explanation of Changes Ver. J to O.pdf |
SL&C 3/15/2018 1:30:00 PM |
SB 62 |