02/12/2021 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB9 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 9 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
February 12, 2021
1:31 p.m.
MEMBERS PRESENT
Senator Mia Costello, Chair
Senator Roger Holland, Vice Chair
Senator Gary Stevens
Senator Elvi Gray-Jackson
MEMBERS ABSENT
Senator Joshua Revak
COMMITTEE CALENDAR
SENATE BILL NO. 9
"An Act relating to alcoholic beverages; relating to the
regulation of manufacturers, wholesalers, and retailers of
alcoholic beverages; relating to licenses, endorsements, and
permits involving alcoholic beverages; relating to common
carrier approval to transport or deliver alcoholic beverages;
relating to the Alcoholic Beverage Control Board; relating to
offenses involving alcoholic beverages; amending Rule 17(h),
Alaska Rules of Minor Offense Procedure; and providing for an
effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 9
SHORT TITLE: ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG
SPONSOR(s): SENATOR(s) MICCICHE
01/22/21 (S) PREFILE RELEASED 1/8/21
01/22/21 (S) READ THE FIRST TIME - REFERRALS
01/22/21 (S) L&C, JUD, FIN
02/12/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
SENATOR PETER MICCICHE
Alaska State Legislature*
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 9.
KONRAD JACKSON, Staff
Senator Peter Micciche
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the sectional analysis for SB 9.
GLEN KLINKHART, Interim Executive Director
Alcohol and Marijuana Control Board (AMCO)
Department of Commerce, Community and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Answered questions and provided information
during the hearing on SB 9.
ACTION NARRATIVE
1:31:56 PM
CHAIR MIA COSTELLO called the Senate Labor and Commerce Standing
Committee meeting to order at 1:31 p.m. Present at call to order
were Senators Holland, Stevens, Gray-Jackson, and Chair
Costello.
SB 9-ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG
1:32:37 PM
CHAIR COSTELLO announced the consideration of SENATE BILL NO. 9,
"An Act relating to alcoholic beverages; relating to the
regulation of manufacturers, wholesalers, and retailers of
alcoholic beverages; relating to licenses, endorsements, and
permits involving alcoholic beverages; relating to common
carrier approval to transport or deliver alcoholic beverages;
relating to the Alcoholic Beverage Control Board; relating to
offenses involving alcoholic beverages; amending Rule 17(h),
Alaska Rules of Minor Offense Procedure; and providing for an
effective date."
She stated that this is the first hearing and the intent is to
hear the introduction and hold the bill for further
consideration.
1:33:17 PM
SENATOR PETER MICCICHE, Alaska State Legislature, Juneau,
Alaska, sponsor of SB 9, described the legislation as a
collaborative, years-long, 16,000 hour effort from a large group
of stakeholders to balance the interests of public safety,
public health, industry, the ABC Board, AMCO, and the
legislature. He said the goals are promoting a fair business
climate, protection of health and safety, limiting youth access
to alcohol, promoting responsible alcohol use, reducing the
harms of over consumption, implementing change without
negatively harming existing businesses and responsible
operators, and expanding local control for municipalities.
SENATOR MICCICHE related that the key concepts in Title 4
maintains the three tier system to separate manufacturers,
wholesalers, and retailers to prevent monopolies. Licensure is
restructured and reorganized to make more sense and reflect
current business practices. The number of licenses per community
is also regulated. He acknowledged that not every person who is
part of the industry will like the bill but it has support from
the Brewer's Guild, the Alaska Cabaret, Hotel, Restaurant and
Retailers Association (CHARR), as well as a large number of
municipalities.
1:37:20 PM
KONRAD JACKSON, Staff, Senator Peter Micciche, Alaska State
Legislature, Juneau, Alaska, directed attention to the color-
coded sectional analysis for SB 9. He explained that the
sections highlighted in yellow are unchanged; they are
relocated, renumbered for clarity, and cover one of the goals of
the bill. The sections highlighted in green are new concepts.
The sections highlighted in red/magenta are existing and new
penalties. He emphasized that the penalties for alcohol crimes
are not lighter.
He noted that the bill packets also contain a presentation that
looks similar to previous years but it is updated and current to
SB 9. He asked the chair how she would like him to proceed.
1:39:01 PM
CHAIR COSTELLO asked him to go through the sectional and state
the color of each section so it makes more sense for those
listening online.
1:40:16 PM
MR. JACKSON delivered the following sectional analysis for SB 9,
version A:
Section 1: Declaration of Policy; purpose; finding. Adds a new section
AS 04.06.005 (Pages 1-2)
Section 2: Amends AS 04.06.020(b) Relating to the
appointment of the public safety sector board member,
replaces 'actively engaged in' with 'from'. (Page 2)
Section 3: Amends AS 04.06.020(c) Relating to the
public safety sector board member, replaces 'actively
engaged in' with 'from'. (Page 2)
Section 4: Amends AS 04.06.020(d)(3) Expands the
definition of "public safety sector" board position to
include 'current or former'. (Page 2)
Section 5: Authority of director. Adds a new
subsection AS 04.06.075 to require that the director
of the Alcoholic Beverage Control board (ABC board)
shall include in the agency's budget resources for
administration, enforcement, education, training, and
prevention activities under Title 4. (Page 2)
Section 6: Delegation of Authority. Amends AS
04.06.080 to add endorsements to the delegated powers
of the director of the ABC board. (Pages 2-3)
Section 7: Powers and duties. Amends AS 04.06.090(b)
to relocate existing language in 04.11.070 and adds
endorsements to the powers of the ABC board. (Page 3)
Section 8: Powers and duties. Amends AS 04.06.090(e)
to add endorsements. This section requires the board
to notify all licensees and municipalities of major
changes to Title 4. (Page 3)
Section 9: Powers and duties. Amends AS 04.06.090 to
add a new subsection (f) that directs the board to
prepare a Title 4 education plan for public safety,
industry, youth, municipalities, and the public with
annual revision. (Page 3)
Adds new subsections (g-j) which direct the board to
review fees every 5 years, allow opinions on
legislation amending this title, requires the board to
provide notice of violations to licensees after
receiving from the court system, and to post FASD
information online. (Pages 3-4)
1:42:43 PM
Section 10: Statewide database. Amends AS 04.06.095 to
allow for certain information from the statewide
database to be retained for 10 years, only identifying
information will be purged annually. Adds a reference
to a package store shipping endorsement. (Pages 4-5)
Section 11: Statewide database. Adds a new subsection
AS 04.06.095(c), which directs the board to produce a
report of aggregate regional sales of alcohol in local
option areas, based on information retained in
database and not including identifying data about an
individual purchaser or seller. (Page 5)
Section 12: Regulations. Amends AS 04.06.100(b)
Regulations, to add endorsements, 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 intended for human
consumption. (Pages 5-6)
1:43:17 PM
New Chapter 9: Licenses, Endorsements and Permits.
Section 13: Adds the new Chapter 09 to Title 4
Licenses, Endorsements and Permits. Relocates and
renumbers many existing licenses and permits from
Chapter 11. Organizes into articles of licenses listed
by the 3 tiers: manufacture, wholesale, retail;
endorsements; and permits. (Pages 6-53)
Article 2. Manufacturer Licenses.
AS 04.09.020. Brewery manufacturer license. Relocates
the brewery license from 04.11.130, moves other
provisions from current brewery license to new retail
license and endorsements, sets the biennial fee at
$1,250 and requires that fermentation must occur on
the licensed premises. (Pages 6-7)
AS 04.09.030. Winery manufacturer license. Relocates
the winery license from 04.11.140, moves other
provisions from current winery license to new retail
license and endorsements, sets the biennial fee at
$1,000 and requires that fermentation must occur on
the licensed premises. (Page 7)
AS 04.09.040. Distillery manufacturer license.
Relocates the distillery license from 04.11.160, moves
other provisions from current winery license to new
retail license and endorsements, sets the biennial fee
at $1,250 and requires that at least 80% of the final
product of distilled spirits sold be manufactured on
licensed premises in Alaska. (Page 7)
AS 04.09.050. Authorized sales. Retains existing
privileges for smaller manufacturers to self-
distribute to retail, wholesale, permitted and out of
state or country licensees. Requires large
manufacturers to go through wholesale distributors.
(Pages 7-8)
AS 04.09.060. Unlicensed manufacturing. Relocates
existing penalty for unlicensed manufacture from
04.11.010. (Page 8)
AS 04.09.080. Unauthorized manufacturer sale. Defines
unauthorized manufacturer sale as violating 04.09.050
and sets the penalty. (Page 8)
AS 04.09.090. Definition. Defines "packaging" in this
section, which is the process of containing alcoholic
beverages in bottles or other containers for sale.
(Page 8)
1:44:48 PM
CHAIR COSTELLO asked what the penalties are in AS 04.09.060 and
.080.
MR. JACKSON explained that the penalty in AS 04.90.060 was
relocated from AS 04.11.010. AS 04.09.080 is strictly a penalty
section that defines unauthorized manufacturer sales as a
violation of AS 04.09.050 and establishes a penalty. This is on
page 8 of the bill.
1:45:20 PM
SENATOR HOLLAND asked if the red/magenta highlighting is to draw
attention to the penalties, but they are not necessarily new.
MR. JACKSON answered that is correct; the red/magenta
highlighting is to point out the penalties. In some cases the
penalties are new and some are simply relocated.
CHAIR COSTELLO asked him to specifically mention the new
penalties.
MR. JACKSON agreed and said he did not believe any of the
previously mentioned penalties were new.
1:46:25 PM
SENATOR MICCICHE advised that the stakeholders learned that many
of the misdemeanors in these sections were never prosecuted so
there was no change in behavior. In light of this, they
determined that it was easier to impose a fine for an infraction
for things like serving an under-age youth or overserving an
intoxicated person. The penalties are instantaneous and can be
used to change the behavior of problematic operators, he said.
SENATOR MICCICHE noted that servers previously were charged with
criminal behavior but there was no connection to the owner of
the establishment. Now the penalties are assessed against both
the server and the owner so the owner can address ongoing
problems in their facility.
1:47:36 PM
MR. JACKSON continued the sectional analysis for SB 9.
Article 3. Wholesale Licenses
AS 04.09.100. General wholesale license. Relocates the general
wholesale license from 04.11.160, moves other existing
components to other places in the chapter, maintains
$2,000 biennial fee, maintains $10,000 maximum fee,
and reduces annual transaction fees for smaller
businesses. (Pages 8-9)
AS 04.09.110. Limited wholesale brewed beverage and
wine license. Relocates limited wholesale license from
previous wholesale license section (AS 04.11.160(b)).
In a separate section, maintains $400 biennial fee,
maintains maximum $10,000 fee, and reduces annual
transaction fees for smaller businesses. (Pages 9-10)
AS 04.09.120. Annual fee and affidavit. Relocates
existing affidavit requirement from previous wholesale
licenses section (AS 04.11.160(c)-(d)), requires a
wholesale licensee to submit an affidavit to the board
stating total value of annual sales, including tax.
(Pages 10-11)
AS 04.09.130. Wholesaler supplier declaration.
Relocates the wholesale supplier declaration from
previous wholesale licenses section (AS 04.11.160(e)),
maintains current fee structure, and simplifies the
required reporting process. (Page 11)
AS 04.09.140. Unlicensed wholesale sale. Relocates unlicensed
wholesale provision from 04.11.010 and maintains
penalty. (Page 11)
AS 04.09.150. Failure to pay annual fee or file
affidavit. States that failure to pay an annual
wholesale fee or file an affidavit is a violation and
sets the penalty. (Pages 11-12)
AS 04.09.160. Failure to pay biennial fee or file
declaration. States that failure to pay a biennial fee
and failure to file a declaration are violations and
sets the penalty. (Page 12)
Article 4. Retail Licensees
AS 04.09.200. Beverage dispensary license. Relocates
and simplifies the BDL license language from
04.11.090, maintains the $2,500 biennial fee,
references the multiple fixed counter endorsement, and
sets the penalty for unauthorized beverage dispensary
activity. Sections in current BDL for bowling alley
and hotel licensees relocated to become separate
endorsements. (Page 12)
AS 04.09.210. Restaurant and eating place license.
Relocates license from 04.11.100, sets biennial fee at
$1250, defines the 1:1 food to alcohol ratio, limits
the number of annual allowed after-hours entertainment
events to six, defines when minors can be on the
premises, and sets penalty for failure to comply with
license terms. (Pages 12-14)
AS 04.09.220. Club license. Relocates license from
04.11.110, sets biennial fee at $1,500, defines what
qualifies as membership, and sets the penalty for
failure to comply with license terms. (Pages 14-16)
AS 04.09.230. Package store license. Relocates license
from 04.11.150, maintains biennial fee of $1,500, and
sets penalty for failure to comply with licenses
terms. Sections in current AS 04.11.150 for delivery,
shipping and other activities relocated to become
separate endorsements. (Pages 16-17)
1:49:30 PM
AS 04.09.240. Pub license. Relocates license from
04.11.220, sets biennial fee at $1,250, and sets
penalty for failure to comply with license terms. Adds
provision allowing designation of alternating
premises, which allows a second location on a
university campus that must be operated during
mutually exclusive hours from existing license. (Pages
17-18)
AS 04.09.250. Theatre license. Relocates license from
regulation (3 AAC 304.695), sets biennial fee at
$1,250, defines theater as including live performance
events, and sets the penalty for failure to comply
with license terms. (Pages 18-19)
AS 04.09.260. Common carrier dispensary license.
Relocates license from 04.11.180, maintains current
fee schedule, removes "vehicle" as a qualifying
premises, and sets penalties for unauthorized common
carrier dispensary activity and common carrier
dispensary noncompliance. (Pages 19-20)
AS 04.09.270. Sporting activity or event license.
Relocates and renames recreational site license, sets
biennial fee at $1,250, sets penalty for unauthorized
sporting event activity, and establishes 8-year sunset
dates for licenses issued under former AS 04.11.210
that do not conform to statute. (Page 20)
AS 04.09.280. Outdoor recreation lodge license.
Relocates license from 04.11.225, sets biennial fee at
$2,500, and sets penalty for unauthorized outdoor
recreation lodge activity. (Pages 20-21) AS 04.09.290
Fair license. New license, sets biennial fee at $1,250
(Page 21)
AS 04.09.290 Fair license. New license, sets biennial
fee at $1,250 (Page 21)
1:50:12 PM
AS 04.09.300. Golf course license. Relocates license
from 04.11.115, sets biennial fee at $1,250, and sets
penalty for failure to comply with license terms.
(Pages 21-22)
AS 04.09.310. Destination resort license. Relocates
license from 04.11.255, sets biennial fee at $2,500,
and sets penalty for failure to comply with license
terms. (Page 22)
AS 04.09.320. Brewery retail license. Creates new
license type based on relocated existing language in
AS 04.11.130 for brewery retail activities, sets
biennial fee at $1,250, requires retail license to be
adjacent to manufacturing location, extends brewery
closing time to 10pm, allows limited presentations,
classes and fund raising events on premises and sets
penalty for failure to comply with license terms.
(Pages 23-24)
AS 04.09.330. Winery retail license. Creates new
license type based on existing language in AS
04.11.140 for winery retail activities, sets biennial
fee at $1,000, requires retail license to be adjacent
to manufacturing location, defines sales volume limits
for cider and mead depending on alcohol content,
extends winery closing time to 10pm, allows limited
presentations, classes and fund raising events on
premises and sets penalty for failure to comply with
license terms. (Pages 24-25)
AS 04.09.340. Distillery retail license. Creates new
license type based on existing language in AS
04.11.170 for distillery retail activities, sets
biennial fee at $1,250, requires retail license to be
adjacent to manufacturing location, extends distillery
closing time to 10pm, allows limited presentations,
classes and fund raising events on premises, and sets
penalty for failure to comply with license terms.
(Pages 25-26)
1:51:13 PM
SENATOR MICCICHE highlighted that AS 04.09.320, .330, and .340,
extend brewery, winery, and distillery closing time to 10:00 pm
and allow limited presentations, classes and fund raising events
on premises.
CHAIR COSTELLO asked what the purchase price is for a brewery
license, winery license, and distillery license and how those
compare to the purchase price of a bar license.
MR. JACKSON said it may take some time to get that information.
The renewal fees are set out in the bill and the purchase price
of a license is based on market forces.
1:53:36 PM
MR. JACKSON continued the sectional analysis for SB 9.
AS 04.09.350. Beverage dispensary tourism license.
Relocates license from AS 04.11.400(d), maintains
biennial fee at $2,500, maintains exemption from
number of rooms required for renewing licenses, and
sets penalty for unauthorized beverage dispensary
activity. Other language in AS 04.11.400(d) relocated
to Hotel or Motel Endorsement. (Pages 26-28)
AS 04.09.360. Seasonal restaurant or eating place license. Creates new
license type, sets biennial license fee at $1,250,
defines which communities can qualify for having this
license type, sets out formula for determining number
of allowed licenses per community, and sets penalty
for failure to comply with license terms. (Pages 28-
30)
AS 04.09.370. Winery direct shipment license. Creates new license
type authorizing direct to consumer (including online)
sales of wine for in-state or out-of-state winery,
sets biennial license fee at $200, directs the board
to develop an application form specifically for this
license, prohibits sales by this license type to local
option areas, and sets penalty for failure to comply
with license terms. (Pages 30-32)
1:54:32 PM
Article 5. Endorsements.
AS 04.09.400. Types of endorsements. Defines
endorsements, clarifies that endorsements must be
exercised with a license. (Pages 32-33)
AS 04.09.410. Manufacturer sampling endorsement.
Creates new endorsement for onsite sampling relocated
with existing language from manufacturing licenses,
defines per person per day volume limits by product
type, sets biennial fee at $200, sets penalties for
unendorsed sampling and endorsement noncompliance.
(Pages 33-34)
AS 04.09.420. Multiple fixed counter endorsement.
Creates new endorsement for multiple fixed counters
with language relocated from duplicate license section
in AS 04.11.090, sets biennial fee at $200, sets
initial application fee of $1,250 per counter, sets
penalties for endorsement noncompliance and unendorsed
service. (Pages 34-35)
AS 04.09.430. Hotel or motel endorsement. Creates new
endorsement using some language relocated from AS
04.11.090, sets biennial fee at $200, sets penalties
for unendorsed hotel or motel service and endorsement
noncompliance. (Pages 35-36)
AS 04.09.440. Large resort endorsement. Creates new
endorsement using some language relocated from AS
04.11.090, defines a large resort, sets biennial fee
at $200, sets penalties for unendorsed large resort
service and endorsement noncompliance. (Pages 36-37)
AS 04.09.450. Restaurant endorsement. Creates new
endorsement using language from the Restaurant
Designation Permit currently in regulation, defines
which license types may qualify for the endorsement,
sets biennial fee at $200, defines situations in which
minors may be present on licensed premises for
employment or dining, and sets penalties for
unendorsed restaurant service and endorsement
noncompliance. (Pages 37-39)
AS 04.09.460. Package store shipping endorsement.
Creates new endorsement by relocating language from AS
04.11.150, allows licensees to accept online orders,
sets biennial fee at $200, maintains requirement to
enter orders to customers in local option areas in
written order database, and sets penalties for
unendorsed package store shipping and endorsement
noncompliance. (Pages 39-40)
AS 04.09.470. Package store delivery endorsement.
Creates new endorsement by relocating language from AS
04.11.150, sets biennial fee at $200, sets penalties
for unendorsed package store delivery and endorsement
noncompliance. (Pages 40-41)
AS 04.09.480. Package store repackaging endorsement.
Creates new endorsement by relocating language from
regulation, sets biennial fee at $200, sets penalties
for unendorsed package store repackaging and
endorsement noncompliance. (Pages 41-42)
AS 04.09.490. Package store sampling endorsement.
Creates new endorsement, defines per person per day
volume limits by product type, sets biennial fee at
$200, sets penalties for unendorsed package store
sampling and endorsement noncompliance. (Pages 42-43)
AS 04.09.500. Bowling alley endorsement. Creates new
endorsement using language from AS 04.11.090, sets
biennial fee at $200, sets penalties for unendorsed
bowling alley service and endorsement noncompliance.
(Pages 43-44)
AS 04.09.510. Golf course endorsement. Creates new
endorsement using language from AS 04.11.115, allows a
beverage dispensary to serve alcoholic beverages on
its course, sets biennial fee at $200, and sets
penalties for unendorsed golf course service and
endorsement noncompliance. (Page 44)
AS 04.09.520. Brewery repackaging endorsement. Creates
new endorsement by relocating language from AS
04.11.135, limits availability to licensees currently
operating brewpubs as of the bill's effective date,
sets biennial fee at $200, sets penalties for
unendorsed brewery repackaging and endorsement
noncompliance. (Pages 44-45)
1:55:45 PM
CHAIR COSTELLO asked, in the interest of time, if he would
review just the new sections highlighted in green and skip the
sections highlighted in yellow that were renumbered and
relocated but the content was unchanged.
1:56:22 PM
MR. JACKSON agreed and moved to the new music festival permit in
Article 6.
Article 6. Permits
AS 04.09.645. Music festival permit. Creates a new
permit, allows a restaurant or eating place to serve
beer or wine at a festival held off the holder's
licensed premises. Requires the festival must take
place in an unorganized borough, may not exceed four
days, festival must have taken place at the same
location for at least the last ten years. (Page 48)
MR. JACKSON described the new music festival permit as
Chickenstock.
AS 04.09.650. Nonprofit organization event permit.
Relocates special events permit from 04.11.240 and
renames, simplifies existing language for application
process. Expands the number of nonprofit organization
event permits per year. (Pages 48-49)
AS 04.09.670. Package Store Tasting event permit.
Creates new permit, allows a package store to host a
tasting event on the package store's licensed premises
with service from its own inventory, sets a time limit
and food requirement, and limits to six events per
license per year. (Page 50)
AS 04.09.685. Live music or entertainment permit.
Creates new permit, allows holders of a brewery retail
license, winery retail license or distillery retail
license to hold up to four live entertainment events
per year, on premises, between the hours of 9am and
10pm on a single day. (Page 51)
AS 04.09.700. Failure to comply with a permit
requirement. Sets the penalties for failure to comply
with permit requirements. (Page 52)
1:58:33 PM
Article 7. Common Carrier Approval
AS 04.09.750. Common carrier approval. Requires the
board to approve a common carrier to transport and
deliver alcoholic beverages to consumers within the
state in response to a consumer's order, and sets
requirements and penalties for common carriers. (Pages
52-53)
Article 8. Prohibited Acts.
AS 04.09.850. Unlicensed retail sale. (a) A person
commits the crime of unlicensed retail sale if the
person knowingly operates without the appropriate
license a retail operation that requires a license
under this chapter. Unlicensed retail sale is a class
A misdemeanor. (Page 53)
1:59:10 PM
MR. JACKSON advised that bill sections 14 through 24 in Chapter
11 on pages 8-9 of the sectional address penalties, none of which
are new. They are simply reordered and renumbered.
Section 26: 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, defined instead in AS 04.09.360 (Page 58)
Section 28: Application for renewal of license or
permit. Amends AS 04.11.270 to exempt winery direct
shipment license from the renewal process, defined
instead in AS 04.09.370. (Page 59)
Section 30: Adds a provision for automatic transfer of
a REPL or seasonal REPL license if the board takes no
action within 90 days. (Pages 59-60)
MR. JACKSON explained that REPL stands for restaurant eating
place license.
Section 31: Criminal justice information and records.
Amends AS 04.11.295(a) to clarify issuance and renewal
of a conditional contractor's permit as it pertains to
criminal justice information records. (Page 60)
Section 32: 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 60)
Section 33: Notice of application. Adds new subsection
AS 04.11.310(c) to exempt winery direct shipment
license from notice requirements that do not pertain
to this type of license. (Page 60)
Section 34: False statement on application. Adds a new
subsection to AS 04.11.315, relocating AS 04.16.210
and defines the crime of making false statements on an
application as perjury, with the existing felony C
penalty defined in AS 11.56.200. (Pages 60-61)
2:01:28 PM
MR. JACKSON turned to page 11 of the sectional.
Section 40: 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 64)
Section 48: Adds a new subsection AS 04.11.395(b) to
allow the board delegate authority to the director to
impose conditions or restrictions on any permit other
than a conditional contractor's permit. The director
reviews permit applications and issues all permits.
(Page 69)
2:02:27 PM
Section 50: Population limitations. Amends AS
04.11.400(a) (duplicate section), to edit subsection
references, adds new population limit of 1:12,000 for
new manufacturer retail licenses, adds licenses exempt
from population limits and exempts local option
populations from retail calculations. [Effective with
other licensing changes, 1/1/2023] (Pages 71-72)
Section 51: Population limitations. Repeals and
reenacts AS 04.11.400(i) to list licenses exempt from
population licenses, wholesale licenses limits,
including manufacturer (production only) and currently
exempt retail licenses that primarily cater to
tourists and travelers. (Pages 72-73)
Section 52: 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 73)
Section 53: 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 ability to petition the board for
additional restaurant or eating place licenses
allocated to their jurisdiction. [Effective
immediately] (Pages 73-75)
MR. JACKSON described Section 53 as a key part of the bill
because it provides municipalities the ability to petition for
restaurant or eating place licenses beyond the current population
cap.
2:03:28 PM
Section 58: 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 76)
Section 59: 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. (Page 77)
Section 61: 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.
(Pages 77-78)
Section 62: Prior public approval. Amends AS 04.11.460
to exempt a winery direct shipment license boundary
restrictions that do not pertain to this type of
license. (Page 78)
2:04:37 PM
MR. JACKSON moved to Chapter 16 on page 15 of the sectional.
Chapter 16: Regulation of Sales and Distribution;
Prohibited Acts
Section 84: 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 or is the holder of a common carrier
license, and adds restaurant endorsement reference.
References new subsection (e) to AS 01.16.010. (Pages
87-88)
SENATOR MICCICHE clarified that Section 84 allows someone to
come into a business to do maintenance, which the statute
previously did not allow.
Section 85: Hours of sale and presence on licensed
premises. (Standard closing hours) Adds new
subsections (e) and (f) to clarify the hours that a
person cannot be on the licensed premises outside of
allowed operating hours (10:00 p.m. to 9:00 a.m.) of a
brewery, winery or distillery retail establishment
unless to conduct business with the licensee,
maintenance or improvements. Amends AS 04.16.010 to
add new a penalty section (f), making it a violation.
(Page 88)
Section 87: 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 89)
Section 88: Trade practices. Adds a new section AS
04.16.017 to specify illegal practices by
manufacturers and wholesalers as defined in federal
law, and directs the board to adopt regulations
defining exceptions to these rules and define
administrative penalties for violations. (Pages 89-91)
Section 90: Online sale and purchase of alcoholic
beverages. Ads 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.
(Page 91)
Section 91: 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. (Pages 91-92)
2:06:00 PM
Section 97: Access of persons with restriction on
purchasing alcohol. Amends AS 04.16.047 to reference
the existing penalty for entering and remaining on
licensed premises defined in AS 04.16.160 by adding
new subsections (d-e). (Page 93)
MR. JACKSON advised that the references to the new subsections in
Section 97 relate to the provision allowing access to a facility
after hours for maintenance.
SENATOR MICCICHE clarified that lower level misdemeanors will
change to a penalty, but serious offenses will still be a
misdemeanor. Title 4 offenses that previously were felonies will
continue to be felonies. The penalties for abusing the alcohol
laws are scaled accordingly.
2:07:37 PM
MR. JACKSON moved to Section 112 on page 17 of the sectional.
Section 112: 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 98)
Section 113: Sale of certain alcoholic beverages
prohibited. Amends AS 04.16.110 by adding new
subsection to define sale of a prohibited alcoholic
beverage, relocates and maintains current penalty.
(Page 98)
Section 114: Removal or introduction of alcoholic
beverages. Amends AS 04.16.120 by adding new
subsections (d-g) to define removal or introduction of
alcoholic beverages, sets penalty and exemptions.
(Pages 98-99)
2:08:28 PM
MR. JACKSON noted that he was only highlighting the new
penalties.
Section 121 Restriction on purchasing alcoholic
beverages. Amends AS 04.16.160 to add new sections
(cd) to maintain existing penalty for noncompliance on
a restriction for purchasing alcohol. (Page 100)
Section 125: Restrictions on purchase and sale of
alcoholic beverages. Amends AS 04.16.172 to add new
subsections (b-c) to maintain the existing misdemeanor
A penalty for violating this section. (Page 101)
Section 126: Furnishing alcoholic beverages in aid of
gambling enterprise. Amends AS 04.16.175 to add new
subsections that maintain the existing misdemeanor A
penalty for the crime of furnishing an alcoholic
beverage in aid of a gambling enterprise. (Page 101)
2:09:18 PM
Chapter 21: General Provisions
Section 134: 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 105-106)
Section 139: 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. (Page 107)
Section 148: Definitions. Amends AS 04.21.080(b) with
definitions: bona fide restaurant, brewed beverage,
calendar year, cider, distilled spirit, golf course,
kombucha, mead, sake, and wine. (Pages 111-112)
Changes to Other Titles
Section 159: 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 118)
2:10:17 PM
MR. JACKSON advised that Section 160 through the last page of
the sectional has some uncodified law changes, transition
language, and effective dates, all of which have been updated
from prior versions of the bill.
2:11:10 PM
SENATOR GRAY-JACKSON asked why some breweries aren't happy with
the bill.
SENATOR MICCICHE said the point was that some individuals in each
license type might be unhappy, but the groups that represent
those businesses support the bill.
SENATOR GRAY-JACKSON said she asked because the breweries that
emailed her last year did not seem to have an issue.
SENATOR MICCICHE said most of the emails he received from
breweries were to request the changes that appear in this bill.
These are such things as the two extra hours of operation and the
ability to have entertainment on site.
2:14:30 PM
SENATOR STEVENS asked what happened to the bill last year.
SENATOR MICCICHE replied the previous bill passed the Senate
unanimously and went through the House committee process
unchanged, but time ran out due to COVID-19.
CHAIR COSTELLO requested a sheet that spells out the acronyms
used in the sectional and any other supporting documents and
communications, and a list of the membership of the organizations
such as CHARR and the Brewers Guild that worked on the bill. She
also asked what areas of the legislation caused the most concern
in the past.
SENATOR MICCICHE said it was difficult initially because each
group was trying to amend the bill to put other groups out of
business. He said the current bill provides for licenses,
permits, and endorsements. Endorsements create some consistency
for the licenses and permits to add to what is offered to the
customer without having a Chickenstock issue. For example, now
there will be a fair license and an event license where people
can do those things.
CHAIR COSTELLO asked for an explanation of Chickenstock.
SENATOR MICCICHE replied that there is a large event in Chicken
Alaska each summer and the way that licensee has provided service
has caused difficulties and sometimes was illegal for a short
time. The Chickenstock type of activity is now included in the
fair license. He reminded members that there was a Chickenstock
amendment in a previous bill.
2:20:32 PM
CHAIR COSTELLO asked for a description of the event.
SENATOR MICCICHE said he believes it is a typical Alaska music
event that provides a reason to drive your motorhome to a place
you wouldn't normally go and perhaps buy jewelry from vendors.
SENATOR HOLLAND asked for further explanation of the provision
that allows municipalities to apply for an additional license.
SENATOR MICCICHE said the bill has a couple of provisions that
support municipalities' efforts to grow commerce responsibly. One
is that unused borough licenses that are outside a city may be
moved into the city. Another provision allows municipalities that
are growing rapidly to petition the board every ten years for
additional licenses.
SENATOR HOLLAND asked if this was a restriction to control
growth.
SENATOR MICCICHE answered no; it is an expansion. This is a way
for communities that have reached their cap to request additional
licenses.
SENATOR STEVENS mentioned the effects of COVID-19 on alcohol
license holders generally and asked if that may be reflected in
the bill.
2:24:57 PM
SENATOR MICCICHE said some license holders received temporary and
expanded regulations such as off-site or drive-up sales, but it
depended on the municipal controls. He said he was willing to
listen to businesses about improving their ability to respond.
MR. JACKSON said the stakeholders supported the very business
friendly bill last year before COVID-19 ended the session and he
believes the committee will see that support flow over to this
bill.
2:26:45 PM
CHAIR COSTELLO asked either Glen Klinkhart or Melissa Walter who
are with the Alcohol and Marijuana Control Office (AMCO) to talk
about how often the board meets, the length of the meetings, the
workload, and whether or not the combined marijuana and alcohol
board is working.
2:28:35 PM
GLEN KLINKHART, Director, Alcohol and Marijuana Control Office
(AMCO), Department of Commerce, Community and Economic
Development (DCCED), Anchorage, Alaska, said AMOC is a relatively
small organization so the employees have to wear lots of hats,
but they have managed to strike a balance to satisfy both
industries.
He said he was pleased to see that SB 9 recognizes that the
penalties for some low-level crimes were not changing behavior
and those crimes were changed to infractions. He also voiced
support for holding the licensee responsible for mistakes
employees make. He said, "We've been taking some of the things
that they mentioned today about penalties and we're working to
also transfer that over. So we do a lot of juggling of things
like that, trying to make it better."
MR. KINKHART reported that the board meets about four times a
year. The members are volunteers from public health, law
enforcement, and industry and he has been very impressed by the
mix on both boards. They look at problems from different vantage
points but find good solutions.
He said COVID-19 threw things into chaos; both boards met from 12
to 14 times to try to help the industry and protect public
safety. Some of the things they did was try to spread people out,
curbside delivery, and emergency home delivery. The workload has
been considerable. He said he often feels as though he is going
from fire to fire, but the staff works hard and both boards are
incredible.
2:32:57 PM
SENATOR STEVENS asked if onsite consumption of marijuana passed.
MR. KINKHART answered that it passed and one or two licenses have
been allowed. He offered to follow up with whether those licenses
have been implemented.
SENATOR STEVENS asked if he was learning things from the alcohol
bill that should be applied to marijuana.
MR. KINKHART answered yes. Changing some of the hammer like
criminal penalties for alcohol to infractions is an example of
rethinking how to get people to comply. Marijuana on the other
hand did not have robust regulations and the fines could be very
inconsistent. "Sometimes they were 10 or even 100 times more than
a very equal fine or penalty in alcohol." The industry pointed
out the unfairness and he had to agree.
MR. KINKHART advised that they have developed a working group to
develop similar fines for marijuana as those found in SB 9. The
goal is to have two sets of penalties that are reasonable,
equitable, and change behavior.
SENATOR STEVENS said it was interesting to learn about the
commonalities.
2:36:05 PM
CHAIR COSTELLO requested a list of the names and addresses of the
restaurants and eating places that have transferred ownership,
the date of the transfer, and whether the beer and wine license
transfer was still pending. She said she was trying to get an
idea for how long those license transfers are taking.
MR. KINKHART agreed.
2:38:04 PM
CHAIR COSTELLO held SB 9 in committee for future consideration.
2:39:00 PM
There being no further business to come before the committee,
Senator Costello adjourned the Senate Labor and Commerce Standing
Committee meeting at 2:39 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 9 Sponsor Statement version A 1.22.21.pdf |
SL&C 2/12/2021 1:30:00 PM |
SB 9 |
| SB 9 Sectional Analysis version A 2-10-21.pdf |
SFIN 5/3/2021 9:00:00 AM SL&C 2/12/2021 1:30:00 PM |
SB 9 |
| SB 9 Title 4 Review Report 02.2019.pdf |
SFIN 5/3/2021 9:00:00 AM SFIN 1/19/2022 1:00:00 PM SL&C 2/12/2021 1:30:00 PM |
SB 9 |
| SB 9 Title 4 Presentation to SLAC 2.12.2021.pdf |
SL&C 2/12/2021 1:30:00 PM |
SB 9 |
| SB 9 Letter of Support combined as of 2.10.21.pdf |
SFIN 5/3/2021 9:00:00 AM SL&C 2/12/2021 1:30:00 PM |
SB 9 |
| SB 9 Fiscal Note DCCED 1.pdf |
SL&C 2/12/2021 1:30:00 PM |
SB 9 |
| SB 9 Fiscal Note DCCED 2.pdf |
SL&C 2/12/2021 1:30:00 PM |
SB 9 |
| SB 9 Fiscal Note DHSS.pdf |
SL&C 2/12/2021 1:30:00 PM |
SB 9 |
| SB 9 Fiscal Note DOR.pdf |
SL&C 2/12/2021 1:30:00 PM |
SB 9 |