Legislature(2019 - 2020)BELTZ 105 (TSBldg)
03/28/2019 01:30 PM Senate LABOR & COMMERCE
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| SB52 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
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+ teleconferenced
= bill was previously heard/scheduled
| += | SB 52 | TELECONFERENCED | |
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OPENALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
March 28, 2019
1:32 p.m.
MEMBERS PRESENT
Senator Lora Reinbold, Chair
Senator Mia Costello, Vice Chair
Senator Click Bishop
Senator Chris Birch
Senator Elvi Gray-Jackson
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 52
"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."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 52
SHORT TITLE: ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG
SPONSOR(s): SENATOR(s) MICCICHE
02/11/19 (S) READ THE FIRST TIME - REFERRALS
02/11/19 (S) L&C, JUD, FIN
03/26/19 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/26/19 (S) Heard & Held
03/26/19 (S) MINUTE(L&C)
03/28/19 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
SENATOR PETER MICCICHE
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as sponsor of SB 52.
ANNA BRAWLEY, Title 4 Project Review Coordinator;
Senior Associate
Agnew Beck Consulting
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on SB
52.
EDRA MORLEDGE, Staff
Senator Peter Micciche
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the sectional analysis for SB 52
on behalf of the sponsor, Senator Micciche.
KAYLA GREEN, representing herself
Eagle River, Alaska
POSITION STATEMENT: Testified in support of SB 52.
ROBIN MINARD, Chief Communication
Mat-Su Health Foundation
Wasilla, Alaska
POSITION STATEMENT: Testified in support of SB 52.
BRIAN OLSON, Co-Owner
Alaska Berries
Soldotna, Alaska
POSITION STATEMENT: Testified during the hearing on SB 52 to
express concerns about the license fees.
CHRYSTAL SCHOENROCK, Owner
4 Land Bar & Liquor
Nikiski, Alaska
POSITION STATEMENT: Testified in opposition to SB 52.
STEPHANIE QUEEN, City Manager
City of Soldotna
Soldotna, Alaska
POSITION STATEMENT: Testified as a stakeholder in favor of SB
52.
KATIE BALDWIN-JOHNSON, Senior Program Coordinator
Alaska Mental Health Trust Authority
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 52.
SHAWN WILLIAMS, Assistant Commissioner
Department of Commerce
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the discussion of
SB 52.
BOB KLEIN, Chair
Alcoholic Beverage Control Board (ABC Board)
Alcohol & Marijuana Control Office
Department of Commerce, Community and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 52.
ERIKA MCCONNELL, Director
Alcohol & Marijuana Control Office (AMCO)
Department of Commerce, Community and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 52.
DICK ROSSTON, General Counsel
Alyeska Resort
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 52.
LORA NORTON-CRUZ, Director
Resilience Initiative Program
Alaska Children's Trust
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 52.
SARAH OATES, President and CEO
Alaska Cabaret, Hotel, Restaurant and Retailers Association
Anchorage, Alaska
POSITION STATEMENT: Testified that Alaska CHARR does not support
SB 52 in its current form.
LEE ELLIS, President
Brewers Guild of Alaska
Juneau, Alaska
POSITION STATEMENT: Testified in support of SB 52.
EVAN WOOD, Co-Owner
Devils Club Brewing Company
Juneau, Alaska
POSITION STATEMENT: Testified in support of SB 52.
ACTION NARRATIVE
1:32:10 PM
CHAIR LORA REINBOLD called the Senate Labor and Commerce
Standing Committee meeting to order at 1:32 p.m. Present at the
call to order were Senators Costello, Gray-Jackson, Bishop,
Birch and Chair Reinbold.
SB 52-ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG
1:32:14 PM
SENATE BILL NO. 52, "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."
1:33:19 PM
SENATOR PETER MICCICHE, Alaska State Legislature, Juneau,
introduced himself as the sponsor of SB 52.
1:33:35 PM
CHAIR REINBOLD directed attention to the sectional analysis for
SB 52. She reminded members that the committee was focusing on
the provisions highlighted in green and [magenta] since the
yellow highlighted provisions related to provisions that were
just relocated or reorganized.
1:33:48 PM
EDRA MORLEDGE, Staff, Senator Peter Micciche, Alaska State
Legislature, Juneau, on behalf of the sponsor, Senator Micciche,
resumed the sectional analysis for SB 52 beginning on page 9,
Section 22. She explained the color coding in the sectional
analysis, that provisions that were relocated or added
references were highlighted in yellow, penalty provisions were
highlighted in magenta, and new concepts were highlighted in
green. She reviewed Section 22 [highlighted in yellow].
Section 22: Application for new license or permit.
Amends AS 04.11.260 Application for a new license,
endorsement, or permit to include the new
endorsements, multiple fixed counter endorsement fees,
and requirements for a conditional contractor's
permit. This section requires the mailing address,
phone number and e-mail of the applicant, requires
annotated licensed premises illustrations and adds
license references with individual application
requirements. (Pages 53-54)
She reviewed Sections 23, 25, and 29 [highlighted in green].
Section 23: Application for new license or permit.
Amends AS 04.11.260 to exempt winery direct shipment
license from the application process for other license
types. (Page 54)
Section 25: Application for renewal of license or
permit. Amends AS 04.11.270 to exempt winery direct
shipment license from the renewal process. (Page 55)
Section 29: Notice of application. Adds new subsection
AS 04.11.310 (c) to exempt winery direct shipment
license from notice requirements. (Page 56)
She said these provisions would exempt winery direct shipment
licenses from the application process because they have their
own application process.
1:34:44 PM
MS. MORLEDGE Sections 24 and 26 [highlighted in yellow].
Section 24: Application for renewal of license or
permit. Amends AS 04.11.270 to add endorsements, adds
conditional contractor's permit, and allows renewal
applications to be sent via electronic mail. (Pages
54-55)
Section 26: Application for transfer of a license to
another person. Amends AS 04.11.280 to add
endorsements as transferrable with a license. (Page
55)
MS. MORLEDGE reviewed Sections 27-28.
Section 27: Criminal justice information and records.
Amends AS 04.11.295(a) to clarify "issuance of"" and
"renewal of" a conditional contractor's permit as it
pertains to criminal justice information records.
(Page 56)
Section 28: Criminal justice information and records.
Amends AS 04.11.295(c)(1) adds reference to
conditional contractor's permit to the definition of
"applicant." (Page 56)
She explained that these sections would clarify references to
conditional contractor's permits.
1:34:57 PM
MS. MORLEDGE reviewed Sections 31-35, and 37 [highlighted in
yellow].
Section 31: Denial of new licenses and permits. Amends
AS 04.11.320(a) to add references to endorsements in
the currently existing denial of new licenses and
permits statute. This section also requires disclosure
of the identity and financing of a licensee. (Pages
56-58)
Section 32: Denial of license or permit renewal.
Amends AS 04.11.330(a) to remove the reference to
public convenience license. (Page 58) [Effective
immediately]
Section 33: Denial of license or permit renewal.
Amends AS 04.11.330(a) (duplicate section) to add
endorsement, adds reference to beverage dispensary
tourism license, and adds reference to seasonal
restaurant or eating place tourism license. [Effective
with other licensing changes 1/1/2021] (Pages 58-59)
Section 34: Denial of license or permit renewal.
Amends AS 04.11.330(b) to include outstanding fees or
penalties due to a state or local government in
addition to unpaid taxes as grounds for denial of an
application or renewal of a license. (Page 59)
Section 35: Denial of license or permit renewal.
Amends AS 04.11.330(d) to allow for a theater license,
a common carrier dispensary license, and a sporting
event license to be renewed if it was exercised at
least once during each of the preceding two calendar
years. This is existing statute in relation to a
recreational site license. (Page 59)
Section 37: Denial of request for relocation. Amends
AS 04.11.340 to remove the reference to public
convenience license regarding a denial of request for
relocation. [Effective immediately] (Page 60)
MS. MORLEDGE said these sections address renumbering license
types, repeal of public convenience, and endorsements. Some
sections were duplicates, some have immediate effective dates
and others take effect on January 1, 2021.
1:35:16 PM
MS. MORLEDGE reviewed Section 36 and 38 [highlighted in green].
Section 36: Denial of license or permit renewal. Adds
new subsection 04.11.330 (e) to exempt a winery direct
shipment license from certain provisions in the denial
of an application section that do not pertain to this
type of license. (Page 60)
Section 38: Denial of request for relocation. Amends
AS 04.11.340 (duplicate section), to add a reference
to 04.11.400(k) and removes reference to 04.11.400(d),
which exempts certain licenses from population limits.
[Effective with other licensing changes, 1/1/2021]
(Pages 60-61)
MS. MORLEDGE reviewed Sections 39, 40, and 45 [highlighted in
yellow]:
Section 39: Denial of transfer of license to another
person. Amends AS 04.11.360 to remove the public
convenience license reference regarding denial of
transfer of a license to another person. [Effective
immediately] (Pages 61-62)
Section 40: Denial of transfer of license to another
person. Amends AS 04.11.360 (duplicate section) to
remove the reference to a public convenience beverage
dispensary license under former 04.11.400(i) or to a
brewpub license regarding denial of transfer of a
license to another person. [Effective with other
licensing changes, 1/1/2021] (Pages 62-63)
Section 45: Population Limitations. Amends AS
04.11.400(a) to remove references to a public
convenience license. [Effective immediately] (Pages
65-66)
She said that these provisions address repeal of public
convenience and renumbering.
1:35:31 PM
MS. MORLEDGE reviewed Sections 41-43 [highlighted in yellow].
Section 41: Licensed premises in multi-unit
residential housing development owned or financed by
the Alaska Housing Finance Corporation. Amends AS
04.11.365 to rename restaurant designation permit to a
restaurant endorsement as a licensed premises in
multi-unit residential housing developments owned or
financed by the Alaska Housing Finance Corporation.
(Pages 63-64)
Section 42: Suspension and revocation of licenses and
permits. Amends AS 04.11.370(a) to add endorsements to
the suspension and revocation of licenses and permits
section. (Pages 64-65)
Section 43: Board Imposed Conditions or Restrictions.
Amends AS 04.11.395 to change the section title and
adds a reference to endorsements. (Page 65)
She said these provisions add references to endorsements.
1:35:39 PM
CHAIR REINBOLD asked for further clarification on the definition
of public convenience and endorsements.
MS. MORLEDGE deferred to Ms. Brawley.
1:35:56 PM
ANNA BRAWLEY, Title 4 Project Review Coordinator, Senior
Associate, Agnew Beck Consulting, explained that public
convenience refers to the current process in the bill to issue a
restaurant license outside of population limits. A petition
process goes to the board, which she would discuss in more
detail during the presentation. The bill also proposes some
replacements for that process.
She explained that endorsements would be discussed in the
presentation. They are essentially an "add on" to a license,
similar to other types of licenses such as commercial drivers
license, but not currently in alcohol licenses. It could expand
the physical premise of a license or allow activities not
allowed under the base license.
1:36:39 PM
SENATOR MICCICHE added that the reason for the changes to the
public convenience license was to provide more local control to
municipalities. He suggested that this would be further
clarified during the upcoming presentation.
1:37:08 PM
SENATOR BISHOP expressed an interest in Section 49.
1:37:16 PM
MS. MORLEDGE reviewed Section 44 of the sectional analysis for
SB 52 [highlighted in green].
Section 44: Board Imposed Conditions or Restrictions.
Adds a new subsection AS 04.11.395(a) to allow the
director to impose conditions or restrictions on any
permit other than a conditional contractor's permit.
(Page 65)
She said that this provision would allow the Alcohol & Marijuana
Control Office director to place conditions on permits.
1:37:34 PM
MS. MORLEDGE reviewed Sections 46 and 47 [highlighted in green].
Section 46 Population limitations. Amends AS
04.11.400(a) (duplicate section), to edit subsection
references, defines five-mile radius outside cities,
adds new population limit of 1:9,000 for new
manufacturer retail licenses, adds licenses exempt
from population limits and exempts local option
populations from calculations. [Effective with other
licensing changes, 1/1/2021] (Pages 66-68)
Section 47: Population limitations. Repeals and
reenacts AS 04.11.400(i) to list licenses exempt from
population limits, including manufacturer (production
only) licenses, wholesale licenses and currently
exempt retail licenses that primarily cater to
tourists and travelers. (Pages 68-69)
MS. MORLEDGE said Sections 46 and 47 address population limits,
including renumbering licenses, and adding a limit for brewery,
winery, and distillery retail licenses.
1:37:52 PM
CHAIR REINBOLD asked if the limit would be one establishment for
9,000 people.
MS. MORLEDGE deferred to Ms. Brawley.
1:38:23 PM
MS. BRAWLEY said that the proposal would apply the 1 to 9,000
population limit for new licenses issued after the 2021
effective date. It would grandfather in current licenses. The
current population limit for most licenses is 1 to 3,000, she
said. The rationale for imposing this limit on new licenses was
because the bill would also add three new license types to each
community. Every license added would provide more outlets for
alcohol. The 1 to 9,000 population restriction would not flood
the market with new licenses per the goals of the stakeholder
process.
CHAIR REINBOLD said she thought it was a significant change.
1:39:05 PM
SENATOR COSTELLO said the population looks like a different
number but since three licenses are involved, the population
ratio does not change.
SENATOR MICCICHE said the population ratio would be 1 to 3,000,
but since it would apply to three license types, the result
would be the same.
1:40:09 PM
MS. MORLEDGE reviewed Section 48 [highlighted in green].
Section 48: Population limitations. Amends AS
04.11.400(k) to edit reference to beverage dispensary
license, allows relocation of a package store, lowers
borough threshold population for qualifying boroughs,
restricts number of licenses eligible for transfer to
those exceeding population limits and defines number
of allowed transfers by city, not borough. (Page 69)
She said that this would allow relocation of a package store
from a city to a borough.
MS. MORLEDGE reviewed Sections 49-51 [highlighted in green].
Section 49: Petition for additional restaurant or
eating place licenses for certain local governing
bodies. Adds new section AS 04.11.405 that gives first
class cities, home rule cities, or unified
municipalities the Green = New Concept Yellow =
Relocating/Adding References Magenta = Related to
Penalties ability to petition the board for additional
restaurant or eating place licenses allocated to their
jurisdiction. [Effective immediately] (Page 69-71)
Section 50: Petition for additional restaurant or
eating place licenses for certain local governing
bodies. Amends AS 04.11.405(a) (duplicate section)
that gives first class cities, home rule cities, or
unified municipalities the ability to petition the
board to grant additional restaurant or eating place
licenses allocated to their jurisdiction under the new
Article 9. [Effective with other licensing changes,
1/1/2021] (Page 71)
Section 51: Petition for additional restaurant or
eating place licenses for certain local governing
bodies. Amends AS 04.11.405(b) (duplicate section) to
allow the board to issue additional restaurant or
eating place licenses under the new Article 9.
[Effective with other licensing changes, 1/1/2021]
(Page 71)
She explained that this would allow first class and home rule
cities to petition the board for additional restaurant licenses
in their area if certain criteria were met.
1:40:37 PM
SENATOR BISHOP asked whether this was at the request of the
board or the general public
SENATOR MICCICHE answered that Section 49 was requested by
municipalities. He said that he would discuss the petition
method in more detail later.
1:41:00 PM
MS. MORLEDGE reviewed Section 52 [highlighted in yellow] and
Section 53 [highlighted in green].
Section 52: Zoning limitations. Amends AS 04.11.420(a)
to disallow a new or location transfer of a license,
endorsement or permit in a municipality if a zoning
regulation or ordinance prohibits it. (Page 72)
Section 53: Zoning limitations. Adds new subsection AS
04.11.420(c) to allow a license to be renewed if it
was initially issued prior to the effective date of a
local zoning regulation or ordinance that would
prohibit it, if it was issued in compliance with local
zoning regulations and ordinances at the time. (Page
72)
MS. MORLEDGE said that these provisions address zoning
limitations and also allow preexisting licenses to be renewed if
they don't comply after a zoning change.
1:41:19 PM
MS. MORLEDGE reviewed Section 54 [highlighted in green].
Section 54: Person and location. Amends AS 04.11.430
to allow licenses to be issued to government entities
and tribal organizations. Place residency requirements
on corporations and limited liability organizations.
Adds a reference to endorsements in relation to
information required, including telephone number, and
email address. [Effective immediately] (Page 72)
She said that this allows a local government or tribe to be a
license holder and it references endorsements.
MS. MORLEDGE reviewed Sections 55-57 [highlighted in green].
Section 55: Prohibited financial interest. Amends AS
04.11.450(b) to clarify that a wholesaler cannot own a
manufacturer license or a retail license, removes
restrictions on manufacturers owning a retail license,
and removes references to repealed licenses. (Pages
72-73)
Section 56: Prohibited financial interest. Amends AS
04.11.450(e) to clarify that a holder of a general
wholesale or limited wholesale brewed beverage and
wine license cannot be employed by or act as the agent
or employee of a manufacturer or retail license.
Section 57: Prohibited financial interest. Adds new
subsections to AS 04.11.450 (g-h) to restrict
manufacturers above a certain annual production level
from owning a wholesale license or retail license and
defines thresholds for production by product type.
(Page 73)
She said these provisions allow a manufacturer to own a retail
license and maintain the current restrictions on wholesalers
holding licenses in the other two tiers. It prohibits large
manufacturers from holding retail licenses.
1:41:41 PM
MS. MORLEDGE reviewed Section 58 [highlighted in green].
Section 58: Prior public approval. Amends AS 04.11.460
to exempt a winery direct shipment license boundary
restrictions. (Page 74)
She said that Section 58 exempts winery direct shipment licenses
from the application requirement.
1:41:51 PM
MS. MORLEDGE reviewed Sections 59-62 [highlighted in yellow] and
Section 63 [highlighted in green].
Section 59: Objection. Amends AS 04.11.470 to add
endorsements to allowable objections and protest.
(Page 74) Green = New Concept Yellow =
Relocating/Adding References Magenta = Related to
Penalties 13
Section 60: Protest. Amends AS 04.11.480(a) to include
endorsements regarding a person objecting to an
application for issuance, renewal, transfer of
location or transfer to another person. (Pages 74-75)
Section 61: Protest. Amends 04.11.480(b) to include
endorsements in the existing boundary limits for
requesting a public hearing to protest the issuance,
renewal, or transfer of a license. (Page 75)
Section 62: Protest. Amends 04.11.480(c) to include
endorsements in the existing section that allows a
local governing body to establish conditions on a
license's issuance, renewal, or transfer. (Page 75)
Section 63: Protest. Adds new subsection 04.11.480(e)
to clarify more than one local governing body to
protest the issuance, renewal, relocation or transfer
of a license if the location or proposed location is
within the boundaries of more than one local
government. (Pages 75-76)
She said that these provisions add references to
endorsements.
1:41:57 PM
MS. MORLEDGE reviewed Sections 64-67 [highlighted in
yellow].
Section 64: Local option. Amends AS 04.11.491(a) to
insert statutory references to the new license types
(Page 76)
Section 65: Local option. Amends AS 04.11.491(b) to
insert statutory references to the new license types
(Pages 76-77)
Section 66: Local option. Amends AS 04.11.491(d) to
correct statutory references to license types. (Page
77)
Section 67: Local option. Amends AS 04.11.491(g) to
correct statutory references to license types. (Pages
77-78)
She explained that these provisions renumber license types
referenced in the local option laws.
MS. MORLEDGE reviewed Section 68 [not highlighted] and Section
69 [highlighted in yellow].
Section 68: Procedure for action on license
applications, suspensions, and revocations. Amends AS
04.11.510(b) to clarify the requirement for immediate
written notice of a denied application and inform the
applicant that they are entitled to submit a request
to the director within 15 days for an informal
conference. The applicant is then entitled to a formal
hearing conducted by the Office of Administrative
Hearings if they are dissatisfied. This section
establishes timelines for these procedures. (Pages 78-
79)
Section 69: Procedure for action on license
applications, suspensions, and revocations. Amends AS
04.11.510(c) to correct the statutory reference to the
Administrative Procedure Act, allows a licensee to
submit a request for an informal conference to the
director within 15 days after an accusation that may
lead to a suspension or revocation of a license. This
section establishes a timeline for this procedure.
(Pages 79-80)
She said that these provisions add more specific timeframes for
informal conferences with the director or board.
1:42:16 PM
CHAIR REINBOLD asked her to discuss Sections 56-58.
1:42:34 PM
MS. MORLEDGE said that Section 56 addresses prohibited financial
interest. This existing concept relates to the three-tier
system, keeping the manufacturer, retail, and wholesale licenses
separate. She said that Section 57 adds another layer by
restricting a large manufacturer from owning a wholesale or
retail license, which keeps the three tiers separate.
CHAIR REINBOLD said the three-tier system is important.
1:43:14 PM
MS. MORLEDGE rereviewed Sections 68-69.
1:43:37 PM
MS. MORLEDGE reviewed Sections 70 [highlighted in green] and
Sections 71-76 [highlighted in yellow].
Section 70: Notice to local governing body. Amends AS
04.11.520 to require the board to notify the local
governing body of an established village, incorporated
city, an organized borough, or a unified municipality
within 10 business days after receipt of an
application for the issuance or renewal of a license,
endorsement, license with endorsements, or the
transfer of a license to another person or location.
(Page 80) Green = New Concept Yellow =
Relocating/Adding References Magenta = Related to
Penalties 14
Section 71: Suspension and revocation based on acts of
employees. Amends AS 04.11.535(a) to add endorsements,
reference to permittee as applicable and clarifying
language. (Pages 80-81)
Sections 72: License, endorsement, and conditional
contractor's permit renewal and expiration. Amends AS
04.11.540 to add endorsements and conditional
contractors permit to the existing statute regarding
renewal and expiration of an application. (Page 81)
Section 73: Appeals. Amends AS 04.11.560(b) to add
endorsements to the appeals procedure in the event of
a board decision relating to the issuance, renewal,
transfer, relocation, suspension, or revocation of a
license or endorsement. (Page 81)
Section 74: Refund and forfeiture of fees. Amends AS
04.11.570 to add endorsements to existing statute
regarding the refund and forfeiture of fees in the
event of a denied application. (Page 81)
Section 75: Surrender or destruction of license.
Amends 04.11.580(b) to clean up time limit language to
"not later than 10 days" from "within 10 days." (Pages
81-82)
Section 76: Disposition of money. Amends AS
04.11.590(a) to include money collected from
endorsements and permits to be transferred by the
board to the Department of Commerce, Community and
Economic Development and deposited to the general
fund. (Page 82)
MS. MORLEDGE said these provisions add references to
endorsements and clarify timeframes in the application process.
1:43:45 PM
CHAIR REINBOLD asked what references to endorsements means.
MS. MORLEDGE answered that endorsements are new to the bill.
That term is being added into these sections.
1:44:20 PM
MS. BRAWLEY explained that an endorsement would not create a new
license but would allow something that an underlying license
would not allow. For example, a package store could get an
endorsement to ship to customers directly whereas the base
license would not allow that to occur. It would allow layering
of activities without creating a bunch of new license types.
CHAIR REINBOLD related her understanding that it would be like a
specialty endorsement.
1:44:57 PM
MS. MORLEDGE reviewed Section 77 [not highlighted].
Section 77: Refund to municipalities. Amends AS
04.11.610 to change "refund" to "allocation"
throughout and specifies content of reporting by
municipalities for how license fee funds were used for
alcohol-related education and enforcement. (Page 82)
MS. MORLEDGE explained that this strengthens the reporting
requirements for municipalities that receive a matching
allocation of the fees collected from licenses in their
jurisdiction.
1:45:12 PM
SENATOR COSTELLO asked Ms. Morledge to reference page numbers
when she skipped sections [highlighted in yellow].
MS. MORLEDGE said that Section 77 is on page 82.
MS. MORLEDGE reviewed Section 78 and 79 [highlighted in yellow].
Section 78: Accessibility of license and licensed
premises to inspection. Amends AS 04.11.630(b) to
require easily available posting of a license,
endorsements, permits, designated premises during a
permitted event. (Page 82-83)
Section 79: Duration of licenses and permits. Amends
AS 04.11.680 to add endorsements, conditional
contractors permit, states that permits must be issued
for a specified time and removes fee reduction for
seasonal licenses. (Page 83)
She said that these sections add references to endorsements.
1:46:09 PM
MS. MORLEDGE turned to page [15] of the sectional analysis for
SB 52. She reviewed Section 80 [highlighted in green] and
Section 81 [highlighted in magenta].
Section 80: Hours of sale and presence on licensed
premises (standard closing hours). Amends AS
04.16.010(c) to clarify the hours that a person cannot
be on the licensed premises outside of allowed
operating hours (8:00 a.m. to 5:00 a.m.) unless to
conduct business with the licensee, maintenance or
improvements, is the holder of a common carrier
license and adds restaurant endorsement reference.
(Page 83-84)
Section 81: Hours of sale and presence on licensed
premises (standard closing hours). Amends AS 04.16.010
to add new subsection (e), making it a violation for a
person to violate this section. (Page 84)
MS. MORLEDGE said these sections allow employees and contractors
to be on licensed premises outside of allowed serving hours to
conduct other business, such as maintenance, provided they are
not consuming or serving alcohol. It adds a penalty for that
conduct. She referred to Chapter 16, Regulation of Sales and
Distribution; Prohibited Acts.
1:46:32 PM
MS. MORLEDGE reviewed Section 82 [highlighted in green] and
Section 83 [highlighted in magenta].
Section 82: Pricing and marketing of alcoholic
beverages. Amends AS 04.16.015(a) to exempt
manufacturer and package store sampling endorsements
from the prohibition on providing alcohol free of
charge and defines a week as seven days from the
prohibition of offering free alcoholic beverages.
(Page 84)
Section 83: Pricing and marketing of alcoholic
beverages. Amends AS 04.16.015 by adding a new
subsection (e) to set the penalty for violating this
section as a violation. (Page 84)
MS. MORLEDGE said this section allows free samples with the
manufacturer or package store sampling endorsement. It also adds
a penalty for violating this section.
1:46:58 PM
MS. MORLEDGE reviewed Section 84 [highlighted in magenta].
Section 84: Trade practices. Adds a new section AS
04.16.017 to specify illegal practices by
manufacturers as defined in federal law and directs
the board to adopt regulations defining exceptions to
these rules and administrative penalties for
violations. (Pages 84-86)
MS. MORLEDGE said this is a new section that strengthens trade
practices, consistent with federal law regarding prohibited
trade practices between manufacturers, wholesalers, and
retailers. It requires the board to establish administrative
penalties in regard to the three-tier system.
1:47:19 PM
CHAIR REINBOLD asked whether this would apply to in-store
sampling or private wine tasting events.
MS. BRAWLEY explained that it would apply to events inside the
store. In response to Senator Reinbold, she explained that in-
store sampling is common in many other places but is not
currently allowed in stores in Alaska. Either the store would
offer samples or a third-party would do so.
1:48:23 PM
SENATOR BISHOP asked whether she was referring to package
stores.
MS. BRAWLEY answered yes; it would specifically relate to
package stores.
1:48:46 PM
MS. MORLEDGE reviewed Section 85 [highlighted in magenta].
Section 85: Solicitation of alcoholic beverages;
purchase on behalf of another. Amends AS 04.16.020 to
set the penalty ($100 violation) for unauthorized
solicitation or purchase of alcoholic beverages. (Page
86)
She said this section sets a $100 fine for solicitation of
alcoholic beverages.
1:49:02 PM
MS. MORLEDGE reviewed Section 86 [highlighted in green].
Section 86: Online sale and purchase of alcoholic
beverages. Adds a new section AS 04.16.022 prohibiting
online purchase and sale to Alaska consumers unless
the licensee has a winery direct shipment license or
package store shipping endorsement and sets penalties.
(Pages 86-87)
She explained that this was a new section that prohibits online
sales of alcohol to Alaska customers unless they have a winery
direct shipment license or a package store license.
1:49:15 PM
CHAIR REINBOLD asked whether the fine for purchase of alcoholic
beverages on behalf of another, such as a minor, was only $100.
MS. MORLEDGE answered yes; the fine would be $100.
SENATOR MICCICHE added that some people have identification that
restricts them from purchasing alcohol, so it could apply to
people purchasing alcohol for those who are not allowed to
purchase alcohol.
CHAIR REINBOLD asked why the fine was set so low.
MS. BRAWLEY clarified that this section refers to purchasing
alcohol for another adult. Purchasing alcohol for minors is
covered under another section. She related her understanding
that this also would involve the "barfly" sitting at the bar and
soliciting people to buy drinks for them to increase sales.
1:50:45 PM
SENATOR MICCICHE pointed out that members will see how the
pieces line up and make sense during the presentation.
CHAIR REINBOLD offered her belief that the technical details
were important so members can watch for them during the
presentation, which would be more of a broad overview.
1:51:28 PM
MS. MORLEDGE agreed it was confusing to go through the bill in a
linear fashion. She again reviewed Section 86.
She reviewed Section 87 [highlighted in magenta].
Section 87: Illegal presence on premises involving
alcoholic beverages. Amends AS 04.16.025(a) to add
statutory references to all penalties involving sale
without a license.
She said that this adds cross references to other penalty
sections.
1:52:12 PM
MS. MORLEDGE reviewed Section 88 [highlighted in magenta].
Section 88: Prohibited conduct relating to drunken
persons. Amends AS 04.16.030 to change existing
penalty for prohibited conduct relating to a drunken
person, adds administrative penalty to licensee if
employee is convicted of a violation of this section,
and adds misdemeanor penalty for licensee who
knowingly allows employees to violate this section.
(Page 87)
She said that this provision adds an administrative penalty for
overserving a drunken person and a misdemeanor penalty for a
licensee who knowingly allows it.
1:52:29 PM
MS. MORLEDGE reviewed Sections 89-90 [highlighted in yellow].
Section 88: Prohibited conduct relating to drunken
persons. Amends AS 04.16.030 to change existing
penalty for prohibited conduct relating to a drunken
person, adds administrative penalty to licensee if
employee is convicted of a violation of this section,
and adds misdemeanor penalty for licensee who
knowingly allows employees to violate this section.
(Page 87)
Section 89: Possession of ingredients for homebrew in
certain areas. Amends AS 04.16.035 to change statutory
reference to all local option areas, consistent with
AS 04.21.025 restricting private manufacture of
alcohol in all local option areas. (Page 88)
She explained that this updates the local option.
1:52:40 PM
SENATOR BISHOP asked the sponsor whether Section 89 was existing
law.
SENATOR MICCICHE deferred to Ms. Brawley and made a general
comment on the section. A general concept throughout the bill is
to create greater personal responsibility. Currently, the server
is the only one charged but this bill increases the
accountability for the licensee as well.
1:53:35 PM
SENATOR BISHOP questioned whether this wasn't overreach because
everyone has sugar, a can of fruit juice and yeast in their
cupboard.
MS. BRAWLEY said that this was existing law that is specific to
local option areas. In those areas, people are not allowed to
home brew. She related her understanding that law enforcement
did not intend to arrest a grandmother who has likes to bake and
has yeast. Their intent is to build a case when someone has
already flushed illegally produced alcohol down the drain but
there are clearly other ingredients present. This would relate
to all five local option areas and clarify existing law.
1:54:56 PM
CHAIR REINBOLD asked for further clarification on the legality
of home brewing.
MS. BRAWLEY answered that this provision is specific to local
option areas, which are the dry communities that have decided to
restrict all alcohol licenses or to restrict possession of
alcohol. This law would not apply to all communities.
CHAIR REINBOLD related her understanding that this would apply
to dry communities and not to Anchorage.
MS. BRAWLEY answered yes. She said that home brew is allowed in
areas that have not adopted a local option.
CHAIR REINBOLD asked how the server would know if someone was
drunk and that it was not the responsibility of the person
consuming. She thought it was a lot of responsibility for the
server.
SENATOR MICCICHE responded that the current law does not allow
servers to serve a drunken person, which applies to every
licensee. Often times the server will turn the other way. The
licensee is the place where the buck stops. This would enable
law enforcement to address an establishment that has frequent
incidents of serving drunken customers.
1:56:50 PM
MS. MORLEDGE reviewed Sections 91-93 [highlighted in magenta].
Section 91: Access of drunken persons to licensed
premises. Adds new subsections to AS 04.16.040 to
relocate and change the penalty for prohibited access
by a drunken person. (Page 88)
Section 92: Obligation to enforce restrictions in
licensed premises. Adds new subsections to AS
04.16.045 (b-c) to relocate and change penalty for
permitting consumption not authorized under a license.
(Page 88)
Section 93: Access of persons with restriction on
purchasing alcohol. Amends AS 04.16.047 to add a
reference to penalty for
She explained these provisions add references to existing
penalties in AS 04.16.160.
1:57:17 PM
MS. MORLEDGE reviewed Sections 94-97 [highlighted in yellow] on
page 16 of the sectional analysis of SB 52.
Section 94: Access to persons under the age of 21 to
licensed premises. Amends AS 04.16.049(a) to add a
reference to restaurant endorsement and club license.
(Pages 88-89)
Section 95: Access to persons under the age of 21 to
licensed premises. Amends AS 04.16.049(c) to add
additional license types allowed to have underage
persons on premises as employees, ages 16 and 17,
provided they are not serving alcohol. (Page 89)
Section 96: Access to persons under the age of 21 to
licensed premises. Amends AS 04.16.049(d) to add
additional license types allowed to have underage
persons on premises as employees, ages 18-20, provided
they are not serving alcohol. (Pages 89-90)
She said that these provisions address minors on licensed
premises, adding references to endorsements, adding license
types, and clarifying that minors can be on licensed premises of
common carrier dispensaries as long as they are not served or do
not consume alcohol.
1:57:43 PM
MS. MORLEDGE reviewed Sections 98 [highlighted in magenta] and
Section 99 [highlighted in yellow].
Section 98: Furnishing or delivery of alcoholic
beverages to persons under the age of 21. Repeals and
reenacts AS 04.16.051(d) to define offense of
furnishing or delivering alcohol to a minor. (Page 90)
Section 99: Furnishing or delivery of alcoholic
beverages to persons under the age of 21. Adds a new
subsection to AS 04.16.051 (e) to relocate the
existing C felony penalty for furnishing or delivering
to a minor by a person, for situations involving
serious harm, repeat offenses, and if the violation
occurs in a local option area. (Pages 90-91)
She said that these provisions maintain the existing
penalties for an adult furnishing a minor and reorganizes
this section.
MS. MORLEDGE reviewed Section 100 [highlighted in magenta].
Section 100: Furnishing of alcoholic beverages to
person under the age of 21 by licensees. Amends AS
04.16.052 to change the penalties for furnishing or
delivering alcohol to a minor by a licensee or
employee, adds administrative penalty to licensee if
an employee is convicted of a violation of this
section and shifts misdemeanor penalty in AS 04.16.150
to the licensee who knowingly allows employees to
violate this section. (Page 91)
She said that this provision adds penalties for furnishing
alcoholic beverages to minors under the age of 21. It adds a
penalty if the licensee knowingly allows it.
1:58:09 PM
CHAIR REINBOLD asked whether the penalty in Section 98 and
Section 99would be a class C felony.
MS. BRAWLEY answered that the base penalty for an adult
furnishing a minor would be a class A misdemeanor, but it can be
bumped up to class C felony in some instances, such as
repetitive violations in the past five years, if it occurred in
a local option area, or if the minor causes serious injury or
damage. In that instance the adult would ultimately be held
liable.
1:58:53 PM
CHAIR REINBOLD said that she thinks this is important to
address. She recalled a recent case in which an adult furnished
alcohol to a minor.
1:59:12 PM
MS. MORLEDGE reviewed Sections 101 and 102.
Section 101: Room rental for purposes of consuming
alcoholic beverages. Amends AS 04.16.055 to maintain
the current penalty of class A misdemeanor for renting
a room for the purpose of providing alcoholic
beverages to a person under 21 years of age. (Page 91)
Section 102: Permitting minor to illegally possess
liquor in a dwelling. Amends AS 04.16.057(b) to
maintain current violation and adds $500 fine. (Pages
91-92)
She said that these sections clarify and maintain existing law
related to renting a room for the purpose of providing alcoholic
beverages to a person under 21 years of age and permitting a
minor to illegally possess liquor in a dwelling.
1:59:35 PM
MS. MORLEDGE reviewed Section 103 [highlighted in green] and
Section 104 [highlighted in magenta] on page 17 of the sectional
analysis of SB 52.
Section 103: Purchase by or delivery to persons under
the age of 21. Amends AS 04.16.060(e) to require that
a person under the age of 21 years of age may not
misrepresent their age or having parental consent in
order to enter and remain in a licensed premises under
AS 04.16.049(a)(2).
Section 104: Purchase by or delivery to persons under
the age of 21. Amends AS 04.16.060 to add penalties
for violating this section. For adults (at least 21
years of age) penalty cannot be reduced. For minors
(under 21 years of age) penalty can be reduced if
youth completes an alcohol safety action program or a
community diversion panel. Applies the same penalty
changes as previously enacted for AS 04.16.049 and
04.16.050 for minors. (Page 92)
She said that this would reorganize the sections on minors
purchasing or attempting to purchase alcohol. It would add a
$500 penalty for youth and adults. It would provide an
opportunity for youth to reduce this fine to $50 if they
complete an alcohol safety action program, which is similar to
minor consuming or minor on premises.
2:00:08 PM
MS. MORLEDGE reviewed Sections 105 [highlighted in yellow] and
Section 106 [highlighted in magenta].
Section 105: Consumption at school events. Amends AS
04.16.080 to edit the title for the section and
prohibits alcohol sales at a school event if it is
expected to attract attendees under 21 years of age.
(Pages 92-93)
Section 106: Consumption at school events. Amends AS
04.16.080 by adding two new subsections (b) and (c) to
define the penalty for violating this section. (Page
93)
She said that these sections clarify that alcohol cannot be sold
at school events if the event is expected to attract minors. A
penalty is defined.
MS. MORLEDGE reviewed Sections 107 [not highlighted], and
Sections 108-110 [highlighted in magenta].
Section 107: Prohibition of bottle clubs. Amends AS
04.16.090(c) clarifies the definition of
"consideration" in relation to bottle clubs. (Page 93)
Section 108: Prohibition of bottle clubs. Adds new
subsections to AS 04.16.090 (d-e) to define the crime
of maintaining a bottle club, relocates and maintains
current penalty. (Page 93)
Section 109: Sale of certain alcoholic beverages
prohibited. Amends AS 04.16.110 to define sale of a
prohibited alcoholic beverage, relocates and maintains
current penalty. (Page 93)
Section 110: Removal or introduction of alcoholic
beverages. Amends AS 04.16.120 to define removal or
introduction of alcoholic beverages, sets penalty and
exemptions. (Page 93-94)
She said that these provisions establish penalties pertaining to
the prohibition of bottle clubs and the sale of certain
alcoholic beverages.
2:00:27 PM
MS. MORLEDGE reviewed Sections 111-113 [highlighted in magenta].
Sections 111-113: Alcoholic beverages transported by
common carrier. Repeals and reenacts AS 04.16.125(a)
to allow for delivery to a person over the age of 21
and adds clarifying language to how the delivery must
be labeled. Maintains penalty for unauthorized
transportation of alcoholic beverages by common
carrier into a local option area and makes
noncompliance a violation. (Page 94-95)
She said that this reorganizes sections related to transporting
alcoholic beverages to local option areas and defines penalties.
2:00:46 PM
MS. MORLEDGE reviewed Sections 114-119 and Sections 121, 122
[highlighted in magenta].
Section 114: Stock confined to licensed premises. Adds
a new subsection to AS 04.16.130 (c) to set the
penalty for unauthorized storage of alcoholic
beverages. It is a violation. (Page 95)
Section 115: Sale or consumption of alcoholic
beverages in a warehouse. Amends AS 04.16.140 to add
new subsections (b-c) to set the penalty for consuming
alcoholic beverages in a warehouse. It is a violation.
(Page 95)
Section 116: Licensee responsible for violations.
Amends AS 04.16.150 to set the penalty for failure to
ensure compliance as a violation. (Page 95)
Section 117: Restriction on purchasing alcoholic
beverages. Amends AS 04.16.160 to add new subsections
(c-d) to set the penalty for noncompliance on a
restriction of purchasing an alcoholic beverage at a
class A misdemeanor. (Page 95)
Section 118: Source of alcoholic beverages. Amends AS
04.16.170 to exempt winery direct shipment license and
maintains current penalty for sale of alcoholic
beverages from or to an unlicensed person. (Page 95)
Section 119: Source of alcoholic beverages. Amends AS
04.16.170 to add new subsections (c-d) to set the
penalty for violating this section as class A
misdemeanor. (Page 95-96)
Section 121: Restrictions on purchase and sale of
alcoholic beverages. Amends AS 04.16.172 to add new
subsections (b-c) to maintain the current penalty for
violating this section as a class A misdemeanor. (Page
96)
Section 122: Furnishing alcoholic beverages in aid of
gambling enterprise. Amends AS 04.16.175 to add new
subsections that maintain the current penalty for the
crime of furnishing an alcoholic beverage in aid of a
gambling enterprise. (Page 96)
She said that these provisions define penalties for violations
of these sections.
2:01:00 PM
MS. MORLEDGE reviewed Section 120 [highlighted in yellow].
Section 120: Restrictions on purchase and sale of
alcoholic beverages. Amends AS 04.16.172 to renumber
and a statutory references to the new license types
and maintains current penalty for licensee obtaining
alcoholic beverages from an unlicensed seller. (Page
96)
She said that Section 120 renumbers license types.
2:01:07 PM
MS. MORLEDGE reviewed Sections 121-122 [highlighted in magenta].
Section 121: Restrictions on purchase and sale of
alcoholic beverages. Amends AS 04.16.172 to add new
subsections (b-c) to maintain the current penalty for
violating this section as a class A misdemeanor. (Page
96)
Section 122: Furnishing alcoholic beverages in aid of
gambling enterprise. Amends AS 04.16.175 to add new
subsections that maintain the current penalty for the
crime of furnishing an alcoholic beverage in aid of a
gambling enterprise. (Page 96)
She said that these sections define penalties for restrictions
on the purchase and sale of alcoholic beverages and furnishing
alcoholic beverages in aid of gambling.
2:01:18 PM
CHAIR REINBOLD asked what types of gambling operations are found
in Alaska.
MS. BRAWLEY clarified that this pertains to an illegal gambling
operation providing alcohol.
2:01:51 PM
MS. MORLEDGE reviewed Section 123-125 [highlighted in magenta].
Section 123: Penalties for violation. Amends AS
04.16.180(b) to add statutory references to prohibited
conduct related to drunken persons and furnishing
alcoholic beverages to persons under the age of 21 by
licensees. (Pages 96-97)
Section 124: Penalties for violation. Amends AS
04.16.180(b) to add definition for "conviction." (Page
97)
Section 125: Penalties for violation. Amends AS
04.16.180 to add new subsections (f-g), adds
clarification that licensees are subject to
administrative penalties imposed by the board for
violations of AS 04.16.030 and AS 04.16.052, and adds
mitigating circumstances for licensees. (Pages 97-98)
She said these sections add cross references to administrative
penalties for overserving, serving a minor, and allowing for
mitigating circumstances if the licensee demonstrates that they
have been a responsible operator.
2:02:21 PM
MS. MORLEDGE reviewed Sections 126-129 [highlighted in yellow].
Section 126-129: Forfeiture and seizures. Amends AS
04.16.220 to renumber and cross-reference the new
license types. (Pages 98-100)
2:02:43 PM
MS. MORLEDGE referred to Chapter 21, General Provisions. She
reviewed Section 130 [highlighted in green] on page 18 of the
sectional analysis of SB 52.
Section 130: Keg registration. Adds a new section
04.21.012 establishing a keg registration process
including proof of age, registration form
requirements, identification tags, and establishes the
penalties for possession and sale of alcoholic
beverages in an unregistered keg. (Pages 100-101)
She said that this section adds keg registration as a statewide
requirement.
MS. BRAWLEY said that this was one of the important ways to
reduce underage drinking by holding adults accountable. She said
that this is current law in Anchorage and Juneau.
2:03:23 PM
MS. MORLEDGE reviewed Sections 131-132 [highlighted in yellow].
Section 131-132: Civil liability of persons providing
alcoholic beverages. Amends AS 04.21.020 to renumber
and cross-reference the new license types. (Pages 101-
102)
She clarified that the text shows the highlighting in green, but
it should be yellow because it pertains to existing law.
2:03:46 PM
MS. MORLEDGE reviewed Section 133-135 [highlighted in yellow]
and Section 136 [highlighted in magenta].
Section 133: Alcohol server education course. Repeals
and reenacts AS 04.21.025, which requires a license
holder and their employees to check ID's, to include
the holder of a conditional contractor permit. (Page
102)
Section 134: Alcohol server education course. Amends
section AS 04.21.025(b) to require permittees (along
with licensees, agents, and employees) to keep the
alcohol server education card on the licensed premise
during working hours. (Page 102)
Section 135: Alcohol server education course. Amends
section AS 04.21.025(c) to require permittees (along
with licensees, agents, and employees) to take and
pass an alcohol server education course within 30 days
after being licensed, permitted, or employed.
Additionally, a person may not sell or serve alcoholic
beverages, or check the ID of a patron at a permitted
event unless that person possesses a valid alcohol
server card. (Pages 102-103)
Section 136: Alcohol server education course. Amends
AS 04.21.025 to add new subsections (f-h), which
exempts manufacturer license holders from the server
alcohol education course requirement unless they also
hold a sampling endorsement and defines the offense of
failure to comply and sets the penalty as a violation.
(Page 103)
She said that these provisions address alcohol server education,
requiring servers at permitted events to have identification
cards, and requiring all licensees serving the public to have
server education. It provides a penalty for failure to comply.
2:04:02 PM
MS. MORLEDGE reviewed Section 137 and 139 [highlighted in
yellow].
Section 137: Proof of age and of not being restricted
from purchasing alcoholic beverages. Amends AS
04.21.050 to renumber references to license types.
(Pages 103-104)
Section 139: Posting of warning signs. Repeals and
reenacts AS 04.21.065(a) to update the license and
permit types required to post warning signs and adds
statutory references. (Pages 104-105)
MS. MORLEDGE referred to Section 138 [highlighted in magenta].
Section 138: Warehousing of alcoholic beverages.
Amends AS 04.21.060 to add a new subsection (b), which
define the penalty of violating this section and sets
it at a violation. (Page 104)
She said this provision sets the penalty at a violation.
2:04:20 PM
MS. MORLEDGE reviewed Section 140 [highlighted in magenta].
Section 140: Fines and other criminal penalties. Adds
a new section AS 04.21.072 to set penalties for other
violations, misdemeanors or felonies, unless otherwise
specified. Directs the Supreme Court to establish a
bail schedule and places requirements on the courts
for suspending fines or imposition/execution of
sentence. (Pages 105-106)
She said that this section sets the default penalty for minor
offenses in this title at a $250 fine and directs the court to
set a bail schedule.
2:04:32 PM
MS. MORLEDGE reviewed Section 141 [highlighted in yellow].
Section 141: Court records for persons under 21 years
of age. Amends AS 04.21.078 to add additional
statutory reference to violations of AS 04.16.060
Purchase by or delivery to persons under the age of
21. (Page 106)
She said that this section adds references to minor purchasing
or attempting to purchase as an offense that is not published on
CourtView for minors.
2:04:55 PM
CHAIR REINBOLD asked for the reason.
SENATOR MICCICHE answered that this law passed [in Senate Bill
165]. The idea was to reduce the record for underage drinking.
For example, a person could be at a high school party and not be
drinking, but the police officer might arrest everyone for minor
consuming, and it could be on their record forever. A student
with a 4.0 grade average could apply to a competitive college
and be declined due to the minor consuming record. This was
addressed by setting the violation at a higher amount but
allowing it to be reduced to $50 if the person attended an
alcohol counseling class.
2:05:59 PM
CHAIR REINBOLD asked whether the minor would still receive a
violation.
SENATOR MICCICHE answered yes.
2:06:18 PM
SENATOR BIRCH related his understanding that if someone was not
consuming but gave minors who were consuming a ride home the
driver would not be charged. He thought it was to encourage
sober kids to give rides. He said it might have been something
the Municipality of Anchorage was doing.
SENATOR MICCICHE answered that it was not part of this bill. He
said he could research it. In response to Senator Reinbold, he
confirmed that he sponsored Senate Bill 165 in 2016.
2:07:24 PM
MS. MORLEDGE reviewed Sections 142-143 [highlighted in yellow]
and Section 144 [highlighted in green].
Section 142: Definitions. Amends AS 04.21.080(b)(6) to
add permit holders and license holders. (Page 106)
Section 143: Definitions. Amends AS 04.21.080(b)(15)
to add endorsement to a licensed premises. (Page 106)
Section 144: Definitions. Amends AS 04.21.080(b) to
add a new paragraph defining bona fide restaurant,
brewed beverage, calendar year, cider, distilled
spirit, golf course, kombucha, mead, sake, and wine.
(Pages 106-107)
She said that Sections 142 and 143 were existing definitions and
Section 144 contained new definitions.
2:07:51 PM
SENATOR BISHOP asked for the alcohol content for kombucha.
MS. BRAWLEY responded that federal law and state law regulate
alcoholic beverages containing .5 alcohol by volume. Kombucha
tends to be below that so this bill would contemplate that if
someone wanted to make higher potency kombucha, the person would
need to obtain a brewer's license. She related her understanding
that current producers of kombucha stay below that limit because
they do not intend to produce an alcoholic beverage.
2:08:42 PM
MS. MORLEDGE reviewed Sections 145-154 [highlighted in yellow].
Changes to Other Titles
Section 145: Definitions. Amends AS 05.15.690(48) to
define vendor to include an establishment that holds a
beverage dispensary license under the new license
type. (Pages 107-108)
Section 146-154: Amendments to various other titles.
Amends references to Title 4 in Titles 9, 11, 12 and
18. (Pages 108-113)
She said that these sections relate to renumbering license types
and cross references.
2:08:59 PM
MS. MORLEDGE reviewed Section 155 [highlighted in green].
Section 155: Winery direct shipment tax; statement;
audit. Adds a new section AS 43.60.060 to establish
tax collection on direct wine shipments from out of
state business holding this license and outlines
requirements for the Department of Revenue. (Page 113)
She said that this section allows the Department of Revenue to
collect alcoholic beverage excise taxes from out-of-state
sellers with a winery direct shipment license.
2:09:09 PM
MS. MORLEDGE reviewed Sections 156-157 [highlighted in yellow].
Section 156: Exemptions. Amends statutory reference to
Title 4 for the new license section. (Pages 113- 114)
Section 157: Definitions. Amends the statutory
reference found in the definition of "business
proprietor." (Page 114)
She said these sections address renumbering of license types.
2:09:17 PM
CHAIR REINBOLD asked for further clarification on Section 155.
She said it was an important concept.
SENATOR MICCICHE answered that this would allow the department
to collect the same tax that people would pay in Alaska. This
would support local businesses who sell wine and can currently
be undercut. This would also provide a record of who would have
a license to sell in Alaska so a minor or someone in a dry
community cannot order online.
2:10:11 PM
MS. MORLEDGE reviewed Section 158.
Section 158: Adds a new section to the uncodified law
of the State of Alaska, adding a Direct Court Rule
Amendment, amending Rule 17(h) Alaska Rules of Minor
Offense Procedure, to add AS 04.16.060(g) to joinder
limits. (Page 114)
She said that this would address court rules for minor
purchasing or attempting to purchase alcohol.
2:10:27 PM
MS. MORLEDGE reviewed Sections 159-162.
Section 159-160: Repeals various sections of AS 04.11
amended by the sections of this bill. (Page 114)
Section 161: Repeals the AS 04.09.270(f) to sunset
licenses issued as recreational site licenses before
the effective date of the legislation. The repeal is
effective 1/1/2029. (Page 114)
Section 162: Repeals the transition sections (165 &
166) of this legislation on 1/1/2021. (Page 114)
She said that these sections address repeals, including
sunset provisions and transition provisions.
MS. MORLEDGE reviewed Sections 163.
Section 163: Applicability section for offenses
committed on or after the effective date of certain
sections. (Pages 114-115)
She said that changes to penalties are not retroactive.
MS. MORLEDGE reviewed Sections 164-167 [not highlighted].
Section 164: Adds a new section to uncodified law
regarding transition. The ABC board may begin to
immediately implement certain sections that are
effective 1/1/2021 through applications under the new
licensing structure and collecting fees at the newly
established amounts. [Effective 9/1/2020] (Page 115)
Section 165: Adds a new section to uncodified law to
provide transition language for the ABC board to
convert certain licenses under this Act within 90 days
of the effective date of this section. (Pages 115-117)
Section 166: Adds a new section to uncodified law to
provide transition language for the ABC board to issue
a seasonal restaurant or eating place tourism license
before new section AS 04.09.350, seasonal restaurant
or eating place tourism license, takes effect. (Pages
117-119
Section 167: Adds transition language for the
department to promulgate regulations.
She said that SB 164-167 provide transition language.
2:10:57 PM
MS. MORLEDGE reviewed Sections 168-170.
Section 168: Effective dates for sections to be
implemented immediately.
Section 169: Effective dates for board to initiate
application process and collect new fees for licenses
beginning 1/1/2021.
Section 170: Except as provided elsewhere, effective
date of this Act is 1/1/2021
She said that these sections provide for an immediate effective
date for some sections, but most have an effective date of
January 1, 2021.
2:11:42 PM
CHAIR REINBOLD opened public testimony on SB 52.
2:11:54 PM
KAYLA GREEN, representing herself, Eagle River, Alaska, spoke
about how important SB 52 was for her community. She said that
growing up in Chugiak and Eagle River made her aware of how easy
it is for youth to obtain alcohol. She said that penalties and
youth access to alcohol need to be looked at because it simply
cannot continue to happen.
CHAIR REINBOLD said she appreciated Ms. Green's email. She said
that the community had a sad incident where a drunk driver hit
two youth on the sidewalk and seriously injured them.
2:13:08 PM
ROBIN MINARD, Chief Communication, Mat-Su Health Foundation,
Wasilla, spoke in support of SB 52. She said that they share
ownership in Mat-Su Regional Medical Center and invest the
profits from that partnership into the community to improve the
health and wellness of Alaskans in the Mat-Su area. The
foundation is also a founding member of Recover Alaska, which is
a funding collaborative that seeks to reduce the harm caused by
alcohol across the state. The Mat-Su Health Foundation and its
community partners conducted a community health needs
assessment, which included data analysis and public polling in
24 community forums. She said that alcohol and substance abuse
is the number one health issue in the Mat-Su valley. Mat-Su
local police captains consistently identify the number one
substance abuse problem as alcohol, and it is a factor in many
domestic violence and child maltreatment crimes. The number-one
reason to visit the hospital emergency room for behavioral
health needs is alcohol-related disorders.
She said that the foundation supports the multi-year effort of
the stakeholder group that led to the rewrite of the outdated
statutes in Title 04. This bill would benefit organizations and
individuals affected by alcohol, including provisions designed
to help eliminate underage drinking. She urged members to pass
SB 52.
2:15:10 PM
CHAIR REINBOLD advised testifiers that they could submit written
testimony to senate.labor.and.commerce@akleg.gov.
2:15:33 PM
BRIAN OLSON, Co-Owner, Alaska Berries, Soldotna, said that he
and his wife own a small winery. He expressed concern with
several aspects of the bill that would adversely affect his
family's winery, including the winery license fee. Currently,
biennial fees are $500 plus a $200 filing fee, but under the
bill, his winery would be subject to a 480 percent increase. He
suggested that the fees should be raised to $1,500.
He said that currently, the winery is allowed to sell up to five
gallons of wine, or approximately two cases or one keg per
customer. Under the bill, it would be reduced to one. Alaska
Berries was the first and only winery in Alaska certified by the
Department of Natural Resources (DNR) as Alaska Grown. Some
Alaskans make an annual trip to their winery specifically to
stock up and these limits would be onerous.
MR. OLSON spoke in opposition to endorsements, including the
$200 proposed fee for a sampling endorsement without allowing
advertising or charging customers a small fee. They currently
pay for one license. Creating multiple permits and licenses
would only create more work for the Alcoholic Beverage Control
Board (ABC Board) and would attempt to fix a non-existent
problem. Currently, the winery is not prohibited from
advertising their winery sampling and tasting room, he said.
He said he has discussed online sales with Ms. Brawley. The
proposed change would prohibit online sales without an
additional endorsement or fee. Alaska Berries is a self-
distributor, which is beneficial to a small family winery. There
are currently four active wineries in Alaska. He would like to
see a level playing field so they can compete with online wine
sales. He referred to a letter in members' packets that
highlighted six issues and his concerns about the effect of the
proposed changes in SB 52.
CHAIR REINBOLD offered to read his letter and hold committee
discussions.
2:21:14 PM
CHRYSTAL SCHOENROCK, Owner, 4 Lands Bar & Liquor, Nikiski,
testified in opposition to SB 52 because it would add
unnecessary regulation and increase business costs to industry.
She asked whether this bill would increase fees for bar
licenses.
CHAIR REINBOLD asked her to submit questions to the sponsor
sen.peter.micciche@akleg.gov, or to the committee at
senate.labor.and.commerce@akleg.gov.
MS. SCHOENROCK said that the state has enough laws on the books
for the liquor industry. She said that the state does not need
to complicate it. She expressed concern that it could affect her
business, which has been adversely impacted by people leaving
the state and job reductions.
2:22:46 PM
STEPHANIE QUEEN, City Manager, City of Soldotna, Soldotna, spoke
in support of SB 52. She said that she joined the stakeholder
group about three years ago after speaking to local business
owners who were affected by the current population limits for
liquor licenses. She explained that she approached the
stakeholder group with ideas to add flexibility within the
system while still keeping with the broader goals of limiting
access to youth, limiting the total number of licensees, and
maintaining fairness within the industry.
She offered her belief that several important improvements in
the bill really get to the heart of these issues in her
community. In the Kenai Peninsula Borough, one-third of the
population is located in five incorporated cities within the
borough. The majority of the population falls outside these
cities. Currently, a package liquor store license or beverage
dispensary license that is available outside of the cities could
be bought or transferred, so long as they are located outside
the cities. The proposed change to allow existing licenses to
move from a borough to a city would not impact the overall
number of licensees, but it would give owners the flexibility to
relocate.
She said that the second change would allow additional beer and
wine licenses for restaurants, which are currently limited by
population. She said that businesses in her region serve a much
bigger area. Current statutes allow applicants to petition for a
public convenience license by obtaining signatures. However,
from her perspective and from the Alcohol & Marijuana Control
Office's (AMCO) perspective, this process is arduous, she said.
SB 52 would provide a new mechanism supported by the stakeholder
group that would allow a local elected government body to
petition the ABC Board with justification on whether the
additional licenses were appropriate. She offered her belief
that this was important for economic development in the area.
She said she hoped that SB 52 would pass this year.
2:26:21 PM
KATIE BALDWIN-JOHNSON, Senior Program Coordinator, Alaska Mental
Health Trust Authority, Anchorage, spoke in support of SB 52.
She read from the following prepared testimony:
The Mental Health Trust Authority (MHTA) exists to
improve the lives of beneficiaries, including a broad
group of Alaskans with mental illness, developmental
disabilities, Alzheimer's disease and related
dementia, traumatic brain injuries, and Alaskans with
chronic alcohol or drug addiction. The MHTA has been
an active partner over the years of the Title 4 reform
effort, with many partners representing the industry
and public health and safety.
The MHTA is committed to this bill because it sees
many public health benefits that directly impact the
health and wellness of all Alaskans, and more
specifically for beneficiaries of the Mental Health
Trust.
Alcohol abuse and overconsumption is costly to Alaska.
The 2017 McDowell report commissioned by the trust
outlines those impacts. Title 4 is outdated and does
not create a clear and consistent framework for
alcohol regulation.
The MHTA engaged in Title 4 reform early, recognizing
that improving the statutes will have a positive
impact on public health through changes currently
included in SB 52. Controlling and limiting access to
alcohol and controlling alcohol sales, which prevents
youth from ordering online as well as dry communities
are also included in this bill and are examples of
positive public health impacts.
The MHTA sees values in making Alaska's alcohol laws a
clear framework that is easier to understand, comply,
and enforce. This bill creates a rational regulatory
structure for the state's licensing system. It would
limit youth access to alcohol and promotes responsible
alcohol use balanced with public health and business
opportunities.
As a committed partner in this effort, the MHTA
respectfully recognize the level of compromise and
partnership that has been put into this legislation
and the hundreds of hours and many years of effort
bringing stakeholders to this point.
Title 04 needs to be modernized and SB 52 is the
vehicle that provides this clear framework. The
legislation before members represents the very
thoughtful, careful development of how to do this. It
was developed with transparency and opportunity to
contribute to the final recommendations that are
included in this bill.
SB 52 has garnered unprecedented support of public
health, public safety, and industry. She urged members
to support SB 52.
2:29:15 PM
SHAWN WILLIAMS, Assistant Commissioner, Department of Commerce,
Anchorage, said the department would like to ensure that this
bill does not increase the regulatory burden on alcohol
licensees. He expressed concern that the investigative arm of
the Alcohol & Marijuana Control Office may overreach at times.
The department suggests prorating new liquor licenses, he said.
CHAIR REINBOLD asked him to submit the department's concerns in
writing.
2:31:20 PM
BOB KLEIN, Chair, Alcoholic Beverage Control Board (ABC Board),
Alcohol & Marijuana Control Office, Department of Commerce,
Community and Economic Development (DCCED), Anchorage, echoed
previous testifiers, stating that this bill was the result of
years of work by the stakeholders. He credited Ellen Ganley, CEO
& Principal Consultant, Information Insights in May 2012 with
taking the approach of having a group of stakeholders work
together to address the issues. These stakeholders have
volunteered thousands of hours to work on this bill. He thanked
Senator Micciche and his staff for their support and effort.
MR. KLEIN spoke in support of SB 52. He stated that Title 4 was
adopted in the 1980s, but since then the ABC Board has seen
significant changes in the industry. The board has had to make
accommodations, but the statutes have not kept pace.
He said the board sets population limits and determines the
number of licenses. However, the board has not taken into
account changes in Alaska, such as the significant increase in
population in the Wasilla area. The board has considered a
number of things, including the effect on population from
tourism, such as when several cruise ships are in port. In
closing, he said the board highly recommends the legislature
pass SB 52.
CHAIR REINBOLD advised him that a letter [dated February 18,
2019] was in members' packets.
2:34:44 PM
ERIKA MCCONNELL, Director, Alcohol & Marijuana Control Office
(AMCO), Department of Commerce, Community and Economic
Development, Anchorage, voiced support for SB 52.
2:35:08 PM
SENATOR COSTELLO asked about liquor licenses in transition due
to changes in restaurant ownership. She requested a list of
licenses not decided upon and for an estimate of the processing
time.
MS. MCCONNELL agreed to provide the information.
2:35:45 PM
DICK ROSSTON, General Counsel, Alyeska Resort, Anchorage, stated
that SB 52 would update Title 4. He indicated that he was one of
the initial people working on this bill.
He summarized that SB 52 would update Title 4, level the playing
field, promote a fair business climate, and protect public
health and safety. Further, it would help limit youth access to
alcohol, reducing harm of overconsumption.
In terms of the industry, he offered his belief that the bill
would bring Alaska's statutes in line with other states. He
cited the provision to allow sampling as an example. He said it
would be easier for licensees to understand and comply with the
laws. It would also address many issues that the ABC Board has
struggled with due to ambiguities in current law. He said that
the Alyeska Resort supports the overall bill. He urged members
to pass it.
2:37:38 PM
LORA NORTON-CRUZ, Director, Resilience Initiative Program,
Alaska Children's Trust, Anchorage, said that she works at the
Alaska Children's Trust, a lead statewide organization focused
on the prevention of child abuse and neglect. She said that
children are Alaska's most precious resource and their wellbeing
affects all aspects of Alaskan life. Many of the state's
children suffer due to the impacts of alcohol. Alaska has one of
the highest rates per capita of child abuse and neglect in the
nation. Each year, the Office of Children's Services in the
Department of Health and Social Services has between 2,000 and
3,000 substantiated cases of child abuse and neglect.
Approximately 80 percent of these cases involve alcohol or other
substances. In addition, over 20 percent of adolescents in
grades 9-12 reported drinking in the last 30 days. When youth
have access to alcohol, either through adults supplying alcohol
or through internet alcohol sales, it increases the risk of
addiction later in life.
She said that SB 52 is a strong step forward to help Alaska
address and change these trends. The changes to Title 4 provide
practical solutions for some of Alaska's longstanding problems
related to alcohol and ensure a well-regulated industry. This
bill would benefit youth by expanding the reforms enacted in
Senate Bill 165 in 2016. It would help prevent youth access to
alcohol while not criminalizing youth for one mistake. It
incentivizes youth to seek alcohol education treatment or
community-based justice. It also holds adults who supply alcohol
to youth accountable. She urged members to move the bill forward
to help ensure that alcohol does not continue to have the
devasting impact on Alaska's children.
2:40:14 PM
SARAH OATES, President and CEO, Alaska Cabaret, Hotel,
Restaurant and Retailers Association (CHARR), Anchorage, said
that she recently became CEO of CHARR. She formerly worked for
seven years for the Alcohol & Marijuana Control Office (AMCO),
most recently as the program coordinator. She said thousands of
hours have gone into the effort to rewrite Title 4. She spent
several thousand hours on this project, bringing a unique
regulatory perspective and subject matter expertise. She said
that Alaska CHARR is supportive of the necessary and
comprehensive Title 4 reform.
As a regulator she understood the difficulties of trying to
enforce and interpret the existing outdated and confusing
statutes. The state needs a comprehensive overhaul to help the
industry understand its obligations. She said that this is the
third bill to come before the legislature in the last five
years. Contentious issues were largely between retailers and
manufacturers. The three-tier system of manufacturers,
wholesalers, and retailers has changed. The retailers have
historically supported giving manufacturers more privileges than
allowed since the end of prohibition. New manufacturers use
business models that sell direct to the public and do not go
through the wholesale or retail tiers. Contentious issues have
arisen within the industry by those who want to curb
manufacturers' practices, while the manufacturers wanted to
embrace the new climate and expand their privileges. These
conflicts created obstacles for passage of previous
comprehensive bills that were whittled down and passed.
She said that she worked with breweries to identify contentious
issues. She offered to send a four-page summary that recommends
changes to remove the contentious issues yet retain the
provisions in SB 52 that would benefit public health and safety
and the industry as a whole. Alaska CHARR does not support SB 52
in its current form, she said.
2:46:03 PM
LEE ELLIS, President, Brewers Guild of Alaska, Juneau, spoke in
support of SB 52. First, it would streamline the licensing
process, including adding endorsements. Second, it would level
the playing field so brewers can compete with out-of-state and
international breweries. These changes are relevant to changes
in the industry in the Lower 48 and internationally. Third, it
would allow breweries to expand their businesses by removing
caps for licensees that have a brewery license and a beverage
dispensary license. Although these changes will not favorably
impact his business, it is important to create a level playing
field for all breweries. When all manufacturers compete, it
provides the best products for consumers. The craft industry is
a consumer driven industry and this bill does not give brewers
many new privileges, so it is not "a win" for them. He
characterized this bill as equitable and fair. It maintains the
integrity of the three-tier system, he said.
2:48:10 PM
EVAN WOOD, Co-Owner, Devils Club Brewing Company, Juneau, said
that he is one of the founders and owners of Devils Club Brewing
Company. Their business has been open less than a year, so they
have not participated in the thousands of hours of work that led
to SB 52. However, he offered his belief that this is a clear
compromise between all the sectors. He spoke in support of SB
52. It does not help his business, but one of the main barriers
of entry that they experienced in their hometown was to try to
navigate the statutory provisions in Title 4. It took them
months to evaluate and determine what they were and were not
able to do. SB 52 would remove barriers by clearly defining
allowable activities for each license type and streamline the
process. These things will be good for the state as a whole and
add necessary enforcement. He spoke in support of SB 52.
2:49:32 PM
MS. BRAWLEY began a PowerPoint on the Alcoholic Beverage Control
(ABC) Board, Title 4 Review Project; Overview of Senate Bill 52.
She offered to breeze through things that were previously
covered. She skipped slide 2, "Goals of Title 4 Review Process,"
which read.
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 reviewed slide 3, "Diverse Stakeholders."
Diverse Stakeholders included
? ABC Board, AMCO (staff) ? Public Safety and Law
Enforcement
? Industry - Manufacturers - Wholesalers - Retailers
? Public Health - Recover Alaska - Department of Health
and Social Services - Alaska Mental Health Trust
Authority - Rasmuson Foundation
? Community Advocates
? Local Governments
She referred members to the report that was provided to the
legislature that includes the history, recommendations, and
lists the hundreds of stakeholders that have been involved.
2:50:18 PM
MS. BRAWLEY reviewed slide 4, "Alaska's Liquor License System:
Proposed Changes."
Alaska's license system is based on the 3-tier system
of alcohol regulation: separate entities, manufacture,
distribute, and sell alcohol to the public.
She referred to the three-tier system that defines a
manufacturing tier, a wholesale tier and a retail tier. One of
SB 52's recommendations would be to reorganize the licenses in
statutes and ensure the language is consistent and clear. She
said this graphic was on slides 4-6.
2:51:09 PM
MS. BRAWLEY reviewed slide 5, "Alaska's Liquor License System:
Proposed Changes." She said the graphic illustrates the "big-
picture" of the proposed licensing system, including
endorsements for each license and license types being added to
statute.
SENATOR BISHOP asked whether the common carrier shown on slide 5
refers to the out-of-state wine shipments.
MS. BRAWLEY answered that it relates to common carrier
dispensary, such as Alaska Airlines serving alcohol on their
vessels, but it does not refer to common carrier as it relates
to shipment. It would not require a separate license, she said.
2:51:53 PM
MS. BRAWLEY reviewed slide 6, "Alaska's Liquor License System:
Proposed Changes." She explained that this bill proposes
repealing some types of licenses and replacing them with other
existing license types. Provisions in the bill would allow for
that conversion. She said that this slide intends to show the
endorsements and expanded activities and/or premises to fit the
business model.
MS. BRAWLEY reviewed slide 7, "Proposed: Manufacturer & Retail
Licenses." This slide graphically depicted the types of
licenses. The text read:
Manufacturer licenses allow production only and are
not subject to population limits.
Retail licenses are specific to each product type and
allow limited sales for onsite and offsite
consumption. Retail licenses are subject to population
limits.
A retail license must be connected to the correct type
of manufacturer, license, and cannot be used on its
own.
Section 10, 04.09.020 and .310, .320, .330. and .340.
She highlighted that the three-tier system separates
manufacturing and retail activities. The proposal would split
the brewery, winery, and distillery licenses so someone could
opt to only produce and have a tasting room or to have a brewery
retail license. It would not change the rules for manufacturing,
such as self-distribution that would allow them to sell to
retailers rather than to use a wholesaler.
2:52:48 PM
MS. BRAWLEY reviewed slide 8, "Proposed: More Retail Options for
Manufacturers."
Product-specific Manufacturer Retail License
• Same as existing retail operations for Breweries
• Limited sales volume
• Limited hours
Manufacturer Sampling Endorsement for small free
samples
Obtain existing retail licenses
Operated a regular retail license, with no production
or sales limit
BDL, REPL, Package store
The Brewery license used as an example.
Section 10, 04.09.321, .320; Sections 55-57, 04.11.450
This slide helps to illustrate the options manufacturers would
have. For example, a brewery could opt to get a tasting room
license as they do today, obtain a restaurant license, or a
package store, which is not currently allowed except for
brewpubs. The bill would give more options without undermining
the underlying three-tier system. A location could be a
manufacturing site and provide free samples, she said.
2:53:22 PM
MS. BRAWLEY reviewed slide 9, "Proposed: Limited Free Samples by
Manufacturers."
• Small free samples can be provided to the public, with a
Manufacturer Sampling Endorsement
• Ounce limits are defined by product type, and roughly
correspond to alcohol by volume (ABV)
• A retail license is not required for sampling but is
required for any product sales to the public.
Section 10, 04.09.410
She said that samples can currently be offered but there are no
set limits in statute, so it was not currently being regulated.
This would allow manufacturers to opt into the system. The
proposed limits would depend on alcohol content. For example,
cider tends to have less alcohol content than wine.
2:53:50 PM
CHAIR REINBOLD asked whether this was one of the contentious
issues that was raised during deliberations on Senate Bill 76 in
the last legislature.
SENATOR MICCICHE answered no. He stated that this bill does not
increase what breweries can serve, but some parties would like
to limit what their competition can serve. He said he would not
support that restriction. He favors the free market.
CHAIR REINBOLD recalled that the conflict was a result of the
bars versus the manufacturers, which was an important issue the
committee would address.
SENATOR MICCICHE answered that some issues exist between some
CHARR members versus brewers rather than bars versus the
distilleries or breweries. He said that he supports a healthy
discussion, but he would not regulate the free market out of
business with this bill.
2:55:08 PM
MS. BRAWLEY reviewed slide 10, "Proposed: Manufacturer Sales
Limits by Product Type. Section 10, 04.09.310, .320, .330." This
slide depicts the daily limits of retail brewery, winery, and
distilleries for onsite and offsite sales.
She said that these limits generally represent the current
limits. The theory is to allow higher sales depending on the
alcohol content, consistent with current law.
2:55:41 PM
MS. BRAWLEY reviewed slides 11 and 12, "Proposed: Endorsements
on Licenses."
Slide 11:
Add endorsements to existing licenses, giving
businesses more flexibility without creating more
situation specific license types. Endorsements would
allow sampling on premises, multiple bar rooms,
deliveries by package stores, etc.
Slide 12:
Section 10, 04.09.400; endorsements defined in
04.09.410 - .520
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
? [M-2] Manufacturer Sampling 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
Section 10, 04.09.410 - .520
She said that this lists proposed endorsements. The codes shown
on the left correspond to the recommendations in the Title 4
report. Most of the proposed endorsements refer to existing
statutory language. For example, most of the package store
endorsements exist in current law, she said.
2:56:03 PM
MS. BRAWLEY reviewed slide 13, "Proposed: Options for Multiple
Bar (Beverage Dispensary) Locations.
• To operate two or more bar rooms in a beverage
dispensary (BDL), a multiple fixed counter endorsement
would be required. This would replace the duplicate
license.
• Large establishments like hotels and resorts could
have additional bar locations in separate buildings on
the property.
Multiple Fixed Counter
• One room with fixed bar per additional endorsement.
• Must be on the same (connected) licensed premises
Hotel or Motel
• Can serve in multiple rooms, including banquet rooms
• Hotel rooms can be stocked with alcohol for purchase
• must be on same or adjacent property to main premises
Large Resort
• Can serve at multiple buildings within resort property
• Hotel rooms can be stocked with alcohol for purchase
• Property must be 10+ acres, offer outdoor recreation &
lodging
She said that current law allows a duplicate license for a bar,
which means the bar could obtain a second license. The board has
struggled with what this means, whether it would be a second
room in the same building or a license down the street. Alyeska
Resort has multiple licenses associated with the complex. These
provisions would give the board more clarity and would rename it
to a "Multiple Fixed Counter Endorsement."
2:57:21 PM
MS. BRAWLEY reviewed slide 14, "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 limited defined as, "Any combination of
products, not to exceed the alcohol equivalent of any
single product type."
• Example: Customer A chooses 12 ounces of beer.
Customer B choose 6 ounces of cider and 3 ounces of
wine. Customer C chooses 2 ounces of wine, 2 ounces of
sake, and 4 ounces of beer.
She said that sampling is popular in the Lower 48. Stakeholders
wanted to solve issues without adding other ones. This provision
gives businesses the ability to showcase the products they serve
and to talk about their products, but it would provide limits.
It would give the package store some options for different sized
samples.
2:57:56 PM
SENATOR BIRCH asked whether package stores would include the
neighborhood Costco stores.
MS. BRAWLEY answered yes.
2:58:12 PM
MS. BRAWLEY reviewed slide 15, "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
regulation
? Fee for all permits is $50 per event day
? Most permits listed are already in statute or
regulation
? New permit: Tasting Event Permit, allowing a Package
Store or Manufacturer to host an event on premises, in
partnership with a BDL
Section 10, 04.09.600; permits defined in 04.09.610-
690
She explained that it would apply to anyone with a package store
license.
2:58:48 PM
MS. BRAWLEY reviewed slide 16, "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 304.680)
• 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 304.699)
• R-7L | Inventory Resale Permit (Retail Stock Sale License,
AS 04.11.200)
• R-7M | Tasting Event Permit (proposed)
Section 10, 04.09.600; permits defined in 04.09.610 - .690
She said that the bill would reorganize permits. Currently, most
permits are defined in regulation. This provision clarifies that
a permit is for a time limited event, but not for year-round
use.
2:58:52 PM
MS. BRAWLEY reviewed slide 17, "Proposed: Package Store Tasting
Event Permit."
• Allows a package store or manufacturer to host a
special tasting event on its own premises, with onsite
consumption of alcohol for those attending the event.
• The event may be in the store or another area of the
property, such as a special event space.
• Licensees can only offer products in their inventory.
She explained that these events are typically three course
dinners with a wine tasting at the package store. Protections
for public health and safety include limited hours. Each license
would be limited to six events per year in the same community as
the license is located.
2:59:21 PM
CHAIR REINBOLD related her understanding that the tasting events
and sampling are new provisions.
MS. BRAWLEY agreed.
2:59:47 PM
SENATOR MICCICHE said that he will work with Department of
Commerce, Community and Economic Development (DCCED). SB 52
would reduce regulations and the legislature supports a safe,
responsible, and well-operated industry through less regulation
and expanded rights. He said this bill would place many current
regulations in statute since it has been confusing working with
the ABC Board. He acknowledged the issues testifiers raised and
offered to work to provide a greater understanding of the
changes in SB 52.
[SB 52 was held in committee.]
3:00:53 PM
CHAIR REINBOLD reviewed upcoming announcements.
3:01:44 PM
There being no further business to come before the committee,
Chair Reinbold adjourned the Senate Labor and Commerce Standing
Committee meeting at 3:01 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB52 Powerpoint Senate Labor and Commerce 3-28-19.pdf |
SL&C 3/28/2019 1:30:00 PM |
SB 52 |
| SB 52 Sectional Summary V U - Color Coded.pdf |
SL&C 3/28/2019 1:30:00 PM |
SB 52 |