Legislature(2017 - 2018)BELTZ 105 (TSBldg)

04/03/2018 01:30 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 76 ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG TELECONFERENCED
Moved CSSSSB 76(L&C) Out of Committee
-- Public Testimony --
+ Bills Previously Heard/Scheduled: TELECONFERENCED
+= SB 205 TELECOMMUNICATIONS REGULATION/EXEMPTIONS TELECONFERENCED
Moved CSSB 205(L&C) Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                         April 3, 2018                                                                                          
                           1:34 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Mia Costello, Chair                                                                                                     
Senator Kevin Meyer, Vice Chair                                                                                                 
Senator Berta Gardner                                                                                                           
Senator Peter Micciche                                                                                                          
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Gary Stevens                                                                                                            
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 205                                                                                                             
"An  Act relating  to the  Regulatory Commission  of Alaska;  and                                                               
relating to telecommunications  regulations, exemptions, charges,                                                               
and rates."                                                                                                                     
                                                                                                                                
     - MOVED CSSB 205(L&C) OUT OF COMMITTEE                                                                                     
                                                                                                                                
SPONSOR SUBSTITUTE FOR SENATE BILL NO. 76                                                                                       
"An  Act  relating  to  alcoholic   beverages;  relating  to  the                                                               
regulation of  manufacturers, wholesalers, retailers,  and common                                                               
carriers   of   alcoholic   beverages;  relating   to   licenses,                                                               
endorsements,   and   permits  involving   alcoholic   beverages;                                                               
relating  to the  Alcoholic Beverage  Control Board;  relating to                                                               
offenses involving alcoholic beverages;  amending Rule 17, Alaska                                                               
Rules of Minor Offense Procedure;  and providing for an effective                                                               
date."                                                                                                                          
                                                                                                                                
     - MOVED CSSSSB 76(L&C) OUT OF COMMITTEE                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 205                                                                                                                  
SHORT TITLE: TELECOMMUNICATIONS REGULATION/EXEMPTIONS                                                                           
SPONSOR(s): SENATOR(s) MEYER                                                                                                    
                                                                                                                                
02/19/18       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/19/18       (S)       L&C                                                                                                    
02/27/18       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
02/27/18       (S)       Heard & Held                                                                                           
02/27/18       (S)       MINUTE(L&C)                                                                                            
03/08/18       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/08/18       (S)       Heard & Held                                                                                           
03/08/18       (S)       MINUTE(L&C)                                                                                            
04/02/18       (S)       L&C AT 9:00 AM BELTZ 105 (TSBldg)                                                                      
04/02/18       (S)       Heard & Held                                                                                           
04/02/18       (S)       MINUTE(L&C)                                                                                            
04/03/18       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
                                                                                                                                
BILL: SB  76                                                                                                                  
SHORT TITLE: ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG                                                                            
SPONSOR(s): SENATOR(s) MICCICHE                                                                                                 
                                                                                                                                
03/03/17       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/03/17       (S)       L&C, JUD                                                                                               
05/11/17       (S)       SPONSOR SUBSTITUTE INTRODUCED-REFERRALS                                                                
05/11/17       (S)       L&C, JUD                                                                                               
03/13/18       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/13/18       (S)       Heard & Held                                                                                           
03/13/18       (S)       MINUTE(L&C)                                                                                            
03/15/18       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/15/18       (S)       Heard & Held                                                                                           
03/15/18       (S)       MINUTE(L&C)                                                                                            
03/20/18       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/20/18       (S)       Heard & Held                                                                                           
03/20/18       (S)       MINUTE(L&C)                                                                                            
03/22/18       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/22/18       (S)       Heard & Held                                                                                           
03/22/18       (S)       MINUTE(L&C)                                                                                            
04/03/18       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
CHRISTINE O'CONNER, Executive Director                                                                                          
Alaska Telecom Association (ATA)                                                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Answered the questions related to SB 205.                                                                 
                                                                                                                                
RACHEL HANKE, Staff                                                                                                             
Senator Peter Micciche                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Introduced two amendments to SB 76, version                                                               
T.                                                                                                                              
                                                                                                                                
KAREN BERGER                                                                                                                    
Homer Brewing Company                                                                                                           
Homer, Alaska                                                                                                                   
POSITION STATEMENT:  Testified against  the 80/20  provision that                                                             
previously was in SB 76.                                                                                                        
                                                                                                                                
DON MCNAMARA                                                                                                                    
Oceanside Farms                                                                                                                 
Homer, Alaska                                                                                                                   
POSITION  STATEMENT: Testified  that  SB 76  works against  small                                                             
entrepreneurs  that  are  starting  up, and  stated  support  for                                                               
reinserting the grandfather provision.                                                                                          
                                                                                                                                
JOSH HEGNA                                                                                                                      
Girdwood Brewing Company                                                                                                        
Girdwood, Alaska                                                                                                                
POSITION STATEMENT:  Stated that  he didn't  need to  testify now                                                             
that the committee removed the 80/20 provision from SB 76.                                                                      
                                                                                                                                
BEN MILLSPEIN                                                                                                                   
Kodiak Island Brewing Company                                                                                                   
Kodiak, Alaska                                                                                                                  
POSITION STATEMENT: Stated appreciation  that the 80/20 provision                                                             
was removed from SB 76.                                                                                                         
                                                                                                                                
DANA WALUKIEWICZ                                                                                                                
King St Brewing Co                                                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified that  he supports  SB 76  now that                                                             
the 80/20 provision was removed.                                                                                                
                                                                                                                                
TOIVO LUICK                                                                                                                     
Hoarfrost Distilling                                                                                                            
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Thanked the  committee for removing the 80/20                                                             
provision from SB 76.                                                                                                           
                                                                                                                                
EDMOND MINER                                                                                                                    
Gakona Brewing Co                                                                                                               
Gakona, Alaska                                                                                                                  
POSITION STATEMENT:  Testified that  he supports  SB 76  now that                                                             
the 80/20 provision was removed.                                                                                                
                                                                                                                                
DOUG HOGUE                                                                                                                      
Kenai River Brewing Company                                                                                                     
Soldotna, Alaska                                                                                                                
POSITION  STATEMENT:  Thanked  the  committee for  its  work  and                                                             
stated full support for SB 76 as it stands today.                                                                               
                                                                                                                                
BERT COTTLE, Mayor                                                                                                              
City of Wasilla                                                                                                                 
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT: Expressed hope that  the current CS for SB 76                                                             
was not the final product.                                                                                                      
                                                                                                                                
LYN CARDEN, Deputy Administrator                                                                                                
City of Wasilla                                                                                                                 
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT: During the hearing  on SB 76, testified about                                                             
the need to address local option for alcohol licensing.                                                                         
                                                                                                                                
BRANDON HOWARD                                                                                                                  
Amalga Distillery                                                                                                               
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Thanked the  committee for removing the 80/20                                                             
provision from SB 76 and noted that  just 4 or 5 breweries in the                                                               
state could have met that standard.                                                                                             
                                                                                                                                
RYAN LINDSAY                                                                                                                    
Devils Club Brewing                                                                                                             
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Stated full support  for SB 76 now  that the                                                             
80/20 provision was removed.                                                                                                    
                                                                                                                                
MATT BARNABY                                                                                                                    
Barnaby Brewing Company                                                                                                         
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT: During  the  hearing on  SB  76, shared  the                                                             
story of  his business to  demonstrate the positive  impact small                                                               
businesses can have on the economy.                                                                                             
                                                                                                                                
MARK STAPLES                                                                                                                    
Midnight Sun Brewing Co                                                                                                         
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Stated full support for SB 76.                                                                            
                                                                                                                                
STEW GRAHAM, City Council Member                                                                                                
City of Wasilla                                                                                                                 
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT:  Stated that  SB 76 does  not do  justice for                                                             
Wasilla and other small towns.                                                                                                  
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:34:53 PM                                                                                                                    
CHAIR MIA COSTELLO called the  Senate Labor and Commerce Standing                                                             
Committee meeting  to order at 1:34  p.m. Present at the  call to                                                               
order  were   Senators  Gardner,   Meyer,  Micciche,   and  Chair                                                               
Costello.                                                                                                                       
                                                                                                                                
        SB 205-TELECOMMUNICATIONS REGULATION/EXEMPTIONS                                                                     
                                                                                                                                
1:35:30 PM                                                                                                                    
CHAIR COSTELLO announced  the consideration of SB  205. She noted                                                               
that  public testimony  had  opened and  closed.  She stated  the                                                               
intention  to move  the  bill after  Ms.  O'Connor addresses  the                                                               
issues that were brought up yesterday.                                                                                          
                                                                                                                                
1:36:22 PM                                                                                                                    
CHRISTINE   O'CONNER,   Executive    Director,   Alaska   Telecom                                                               
Association (ATA),  Anchorage, Alaska,  said she  appreciates the                                                               
opportunity to answer  the questions that came  up yesterday. She                                                               
noted  that audio  difficulties yesterday  prevented the  members                                                               
from hearing her responses.                                                                                                     
                                                                                                                                
She  discussed  the  three  broad   questions  that  were  raised                                                               
yesterday.  The first  was what  happens if  the carrier  of last                                                               
resort decides not to serve an  area. She cited a current example                                                               
that  demonstrates  the  thorough public  interest  process  that                                                               
exists today and will remain in  place should the bill pass. That                                                               
carrier followed the  federal process and notified  the FCC about                                                               
what is happening in that area.  Under the state process, the RCA                                                               
has  sent a  letter to  the FCC  citing the  authority of  public                                                               
convenience  and  necessity  to  require a  carrier  to  serve  a                                                               
certain area.  That authority  may also  be cited  to discontinue                                                               
service.  She said  that  is the  certificate  authority ATA  has                                                               
talked  about during  the last  several hearings.  The RCA  has a                                                               
strong  public interest  authority  today and  will maintain  it,                                                               
regardless of the outcome of SB 205.                                                                                            
                                                                                                                                
The second issue  that was raised related to  the RCA's statutory                                                               
authority to  arbitrate disputes between carriers  about how they                                                               
connect  their  networks  and  the   terms  and  rates  of  those                                                               
agreements. SB 205 does not change that statute.                                                                                
                                                                                                                                
MS.  O'CONNER said  she  appreciates Mr.  Parish  [with the  RCA]                                                               
noting that the  budget changes proposed in the  CS regarding the                                                               
regulatory cost charge add fairness back into the system.                                                                       
                                                                                                                                
The  third  question related  to  reporting.  She said  the  bill                                                               
proposes  a  simple change  to  ensure  that  the detail  in  the                                                               
current  RCA annual  reports will  continue. She  assured members                                                               
that this  change is not intended  to add a legal  billing system                                                               
to the RCA.                                                                                                                     
                                                                                                                                
MS.  O'CONNOR   said  she  had   not  been  able  to   meet  with                                                               
Commissioner McAlpine,  [chair of  the RCA]  to discuss  the bill                                                               
due to  his busy schedule. However,  SB 205 was drafted  based on                                                               
public statements  by RCA commissioners  over the past  two years                                                               
that it was a  waste of resources for the RCA to  review a lot of                                                               
the   currently   required   filings  and   reports.   The   bill                                                               
deliberately  eliminates many  of  those filings  and reports  in                                                               
direct response  to the RCA  concerns. She noted that  the Alaska                                                               
Universal Service  Fund was not  included in the bill  because it                                                               
was  already being  evaluated and  updated  by the  RCA. ATA  was                                                               
participating in the round of comments due on the AUSF today.                                                                   
                                                                                                                                
She  summarized  that SB  205  eliminates  wasted effort  by  the                                                               
industry  and the  RCA and  preserves the  RCA's existing  public                                                               
oversight role.                                                                                                                 
                                                                                                                                
1:41:11 PM                                                                                                                    
CHAIR  COSTELLO thanked  Ms.  O'Connor for  coming  to Juneau  to                                                               
respond in person to some of the concerns raised yesterday.                                                                     
                                                                                                                                
1:41:29 PM                                                                                                                    
SENATOR  MICCICHE said  his  only concern  was  rate changes  and                                                               
those were no longer part of  the bill. He opined that that issue                                                               
will entail  a longer  conversation than there  is time  for this                                                               
year.                                                                                                                           
                                                                                                                                
SENATOR MEYER asked for confirmation  that ATA represents all the                                                               
telephone companies in the state.                                                                                               
                                                                                                                                
MS.  O'CONNOR  replied ATA  represents  all  the phone  companies                                                               
except the small Circle Telephone Company.                                                                                      
                                                                                                                                
SENATOR MEYER  noted that the  RCA testified  that the CS  was an                                                               
improvement,  but they  did not  state support  for the  bill. He                                                               
asked what could be done to gain their support.                                                                                 
                                                                                                                                
MS.  O'CONNOR said  she didn't  know what  other changes  the RCA                                                               
would  find  beneficial since  the  bill  was drafted  in  direct                                                               
response  to their  concerns stated  on the  public record.  This                                                               
legislation  leaves  the  RCA   ample  authority  to  investigate                                                               
companies to protect the public  interest, it has multiple layers                                                               
of annual  reporting on  services, and  it says  what the  use of                                                               
federal and  state universal  service funds  are. She  noted that                                                               
the  RCA  has  stated  it  needs to  eliminate  a  lot  of  their                                                               
regulations that have become obsolete.                                                                                          
                                                                                                                                
1:43:47 PM                                                                                                                    
SENATOR MEYER moved to report the  CS for SB 205, version U, from                                                               
committee  with individual  recommendations  and attached  fiscal                                                               
note(s).                                                                                                                        
                                                                                                                                
1:44:03 PM                                                                                                                    
CHAIR COSTELLO  found no objection  and CSSB 205(L&C)  moved from                                                               
the Senate Labor and Commerce Standing Committee.                                                                               
                                                                                                                                
At ease                                                                                                                         
1:44:22 PM                                                                                                                    
                                                                                                                                
         SB  76-ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG                                                                     
                                                                                                                                
1:46:42 PM                                                                                                                    
CHAIR  COSTELLO   reconvened  the   meeting  and   announced  the                                                               
consideration  of SB  76. She  noted  that the  intention was  to                                                               
consider two proposed amendments and continue public testimony.                                                                 
                                                                                                                                
1:47:24 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
1:48:18 PM                                                                                                                    
CHAIR COSTELLO  reconvened the meeting  and invited Ms.  Hanke to                                                               
present the amendments.                                                                                                         
                                                                                                                                
1:48:30 PM                                                                                                                    
RACHEL  HANKE,  Staff,  Senator   Peter  Micciche,  Alaska  State                                                               
Legislature,   Juneau,   Alaska,    paraphrased   the   following                                                               
explanation of Amendment 1 for SB 76. :                                                                                         
                                                                                                                                
     This amendment proposes removal  of subsections (g) and                                                                    
     (h)  from  all   three  manufacturer  retail  licenses.                                                                    
     Subsection (g) requires manufacturers  to sell not more                                                                    
     than 20  percent of  their total  volume to  the public                                                                    
     after  four  license  renewal periods.  Subsection  (h)                                                                    
     grandfathers current manufacturer retail licensees.                                                                        
                                                                                                                                
1:49:01 PM                                                                                                                    
SENATOR MICCICHE moved to adopt Amendment 1, labeled 30-                                                                        
LS0015\T.4.                                                                                                                     
                                                                                                                                
                          AMENDMENT 1                                                                                       
                                                                                                                                
                                                                                                                                
     OFFERED IN THE SENATE                  BY SENATOR MICCICHE                                                                 
         TO: CSSSSB 76(  ), Draft Version "T"                                                                                   
                                                                                                                                
                                                                                                                                
     Page 22, lines 2 - 14:                                                                                                     
          Delete all material.                                                                                                  
                                                                                                                                
     Reletter the following subsections accordingly.                                                                            
                                                                                                                                
     Page 22, line 17:                                                                                                          
          Delete "(d), (e), (f), or (g)"                                                                                        
          Insert "(d), (e), or (f)"                                                                                             
                                                                                                                                
     Page 23, lines 18 - 30:                                                                                                    
          Delete all material.                                                                                                  
                                                                                                                                
     Reletter the following subsections accordingly.                                                                            
                                                                                                                                
     Page 24, line 2:                                                                                                           
          Delete "(d), (e), (f), or (g)"                                                                                        
          Insert "(d), (e), or (f)"                                                                                             
                                                                                                                                
     Page 25, lines 3 - 15:                                                                                                     
          Delete all material.                                                                                                  
                                                                                                                                
     Reletter the following subsections accordingly.                                                                            
                                                                                                                                
CHAIR COSTELLO objected for continued explanation.                                                                              
                                                                                                                                
SENATOR  MICCICHE explained  that  Amendment 1  removes both  the                                                               
80/20 and  the grandfather provisions.  He said he has  agreed to                                                               
chat  about a  path  forward in  the future,  but  he felt  those                                                               
provisions were outside the consensus spirit of the bill.                                                                       
                                                                                                                                
CHAIR COSTELLO removed her objection. Finding no further                                                                        
objection, Amendment 1 was adopted.                                                                                             
                                                                                                                                
1:50:49 PM                                                                                                                    
MS. HANKE paraphrased the following explanation of Amendment 2:                                                                 
                                                                                                                                
     This amendment  clarifies that a common  carrier is not                                                                    
     subject to  board approved alcohol server  education by                                                                    
     referencing the exception  in existing [subsection] (e)                                                                    
     in subsection  (a). The  sections are  restructured for                                                                    
     further  clarity. This  amendment  also  makes a  minor                                                                    
     correction  to  the  penalty provision  of  failure  to                                                                    
     comply  with alcohol  server education  requirements by                                                                    
     referencing existing [subsection] (e).                                                                                     
                                                                                                                                
SENATOR MICCICHE moved to adopt Amendment 2, labeled 30-                                                                        
LS0015\T.5.                                                                                                                     
                                                                                                                                
                          AMENDMENT 2                                                                                       
                                                                                                                                
                                                                                                                                
     OFFERED IN THE SENATE                  BY SENATOR MICCICHE                                                                 
          TO:  CSSSSB 76(   ), Draft Version "T"                                                                                
                                                                                                                                
                                                                                                                                
     Page 99, line 16:                                                                                                          
          Delete "As"                                                                                                           
          Insert "Except as provided under (e) and (f) of                                                                       
     this section, as"                                                                                                          
                                                                                                                                
     Page 99, lines 21 - 22:                                                                                                    
          Delete "This section does not apply to the                                                                            
     following licenses:"                                                                                                       
                                                                                                                                
     Page 99, line 23, through page 100, line 1:                                                                                
          Delete all material.                                                                                                  
                                                                                                                                
     Page 100, following line 25:                                                                                               
     Insert a new subsection to read:                                                                                           
          "(f)  This section does not apply to the                                                                              
     following licenses:                                                                                                        
               (1)  brewery manufacturer license under                                                                          
     AS 04.09.020, unless the  licensee holds a manufacturer                                                                    
     sampling endorsement;                                                                                                      
               (2)  winery manufacturer license under                                                                           
     AS 04.09.030, unless the  licensee holds a manufacturer                                                                    
     sampling endorsement;                                                                                                      
               (3)  distillery manufacturer license under                                                                       
     AS 04.09.040, unless the  licensee holds a manufacturer                                                                    
     sampling endorsement;                                                                                                      
               (4)  general wholesale license under                                                                             
     AS 04.09.100;                                                                                                              
               (5)  limited wholesale brewed beverage and                                                                       
     wine license under AS 04.09.110;                                                                                           
               (6)  winery direct shipment license under                                                                        
     AS 04.09.360."                                                                                                             
                                                                                                                                
     Reletter the following subsections accordingly.                                                                            
                                                                                                                                
     Page 100, line 26, following "(c)":                                                                                        
          Insert "or (e)"                                                                                                       
                                                                                                                                
CHAIR COSTELLO found no objection and Amendment 2 was adopted.                                                                  
                                                                                                                                
1:51:30 PM                                                                                                                    
CHAIR  COSTELLO  found no  further  amendments  or questions  and                                                               
solicited  a motion  to  adopt  the CS  for  SB  76, version  30-                                                               
LS0015\T as amended.                                                                                                            
                                                                                                                                
1:51:50 PM                                                                                                                    
SENATOR  MEYER moved  to adopt  the CS  for SB  76, version  T as                                                               
amended, as the working document.                                                                                               
                                                                                                                                
CHAIR COSTELLO found  no objection and CSSSSB 76(  ), as amended,                                                               
was adopted. She continued public testimony on SB 76.                                                                           
                                                                                                                                
1:52:19 PM                                                                                                                    
KAREN BERGER,  Homer Brewing Company, Homer,  Alaska, stated that                                                               
the 80/20 provision  does not reflect current  market trends. She                                                               
asked the committee  to consider removing that  provision for all                                                               
licensees.                                                                                                                      
                                                                                                                                
1:54:32 PM                                                                                                                    
SENATOR MICCICHE clarified that  the testimony should address the                                                               
current version of  the bill. The 80/20 provision  and the common                                                               
carrier sections have been removed.                                                                                             
                                                                                                                                
1:55:05 PM                                                                                                                    
DON MCNAMARA, Oceanside  Farms, Homer, Alaska, stated  that SB 76                                                               
works against small entrepreneurs that  are starting up. New York                                                               
State in 2014  helped all their apple growers  get cider licenses                                                               
and it  boosted revenue  to the state.  By comparison,  Alaska is                                                               
trying to  triple the  license fees. He  also stated  support for                                                               
maintaining the grandfather provision.                                                                                          
                                                                                                                                
1:56:25 PM                                                                                                                    
JOSH HEGNA,  Girdwood Brewing Company, Girdwood,  Alaska, said he                                                               
didn't  need  to  testify  now  that  the  80  20  provision  was                                                               
eliminated.                                                                                                                     
                                                                                                                                
1:56:52 PM                                                                                                                    
BEN  MILLSPEIN, Kodiak  Island Brewing  Company, Kodiak,  Alaska,                                                               
said  he appreciates  that the  80/20 provision  was removed.  He                                                               
supports Ms. Berger's comments.                                                                                                 
                                                                                                                                
DANA WALUKIEWICZ, King St Brewing  Co, Anchorage, Alaska, said he                                                               
supports SB 76 now that the 80/20 provision was removed.                                                                        
                                                                                                                                
1:58:11 PM                                                                                                                    
TOIVO  LUICK, Hoarfrost  Distilling,  Fairbanks, Alaska,  thanked                                                               
the committee  for removing  the 80/20 provision  from SB  76. It                                                               
makes sense for the industry.                                                                                                   
                                                                                                                                
1:58:45 PM                                                                                                                    
EDMOND  MINER,  Gakona  Brewing   Co,  Gakona,  Alaska,  said  he                                                               
supports SB 76 now that the 80/20 provision was removed.                                                                        
                                                                                                                                
1:59:05 PM                                                                                                                    
DOUG  HOGUE,  Kenai  River  Brewing  Company,  Soldotna,  Alaska,                                                               
thanked the  committee for its  work and stated full  support for                                                               
SB 76 as it stands today.                                                                                                       
                                                                                                                                
1:59:36 PM                                                                                                                    
BERT COTTLE, Mayor,  City of Wasilla, Alaska, said  he hopes that                                                               
the current CS for SB 76  is not the final product. Local leaders                                                               
and  local communities  would like  more input  to guard  against                                                               
state government overreach into  local government regarding local                                                               
options. Wasilla  currently has seven package  store licenses and                                                               
to add two  more would require a population base  of over 21,000.                                                               
The  current population  is 9,000.  Wasilla is  already over  the                                                               
limit on restaurant  beer/wine licenses and couldn't  bring a new                                                               
one  in if  one of  the existing  businesses lost  their license.                                                               
That  limits the  potential for  economic development.  He opined                                                               
that allowing local communities more  local option will result in                                                               
a better product.                                                                                                               
                                                                                                                                
CHAIR COSTELLO said it's a legitimate concern that she shares.                                                                  
                                                                                                                                
SENATOR  MICCICHE thanked  the City  of Wasilla  and the  City of                                                               
Soldotna for their  active participation in the  process. He said                                                               
the bill increases the ability  to move licenses around but local                                                               
option  wasn't fully  addressed because  there was  no consensus.                                                               
However, he and  other legislators are very  interested in moving                                                               
forward  on  those  local  option   issues  that  did  not  reach                                                               
consensus.                                                                                                                      
                                                                                                                                
2:03:15 PM                                                                                                                    
LYN  CARDEN,  Deputy  Administrator,  City  of  Wasilla,  Alaska,                                                               
stated that the  City of Wasilla agrees that  amendments to Title                                                               
4 that address local option  for alcohol licensing should be done                                                               
independent of  SB 76  due to  the complexity  of the  issue. She                                                               
also highlighted  that a carryover from  the original stakeholder                                                               
recommendations that eliminates the  option for an REPLPC license                                                               
should  be removed  from the  bill. She  noted that  is the  only                                                               
avenue available  for municipalities to get  new restaurants with                                                               
liquor licenses  within their city limits.                                                                                      
                                                                                                                                
CHAIR COSTELLO  said her office  was interested in working  on an                                                               
amendment to address that issue.                                                                                                
                                                                                                                                
2:05:06 PM                                                                                                                    
BRANDON HOWARD,  Amalga Distillery,  Juneau, Alaska,  thanked the                                                               
committee for removing  the 80/20 provision from SB  76 and noted                                                               
that  just 4  or 5  breweries in  the state  could have  met that                                                               
standard. He highlighted  that craft breweries in  the state have                                                               
                                           th                                                                                   
a $232  million economic impact.  That is 6   in the  country per                                                               
capita. Small  businesses are an  economic engine for  the state.                                                               
He  said a  video  he  watched on  the  power  of small  business                                                               
inspired  him to  start  an economic  impact  of distilleries  in                                                               
Alaska. It shows that:                                                                                                          
                                                                                                                                
   • Every job that a distillery produces adds 1.5 more jobs to                                                                 
     the state economy.                                                                                                         
 • Distilleries generate about $2.8 million in labor income.                                                                    
   • Every dollar of income from a distillery yields $2.50 in                                                                   
     income to workers in other industries.                                                                                     
   • Distilleries create almost $26 million in business                                                                         
     revenues; $19.7 million among the distilleries and $6.5                                                                    
     million for other industries.                                                                                              
                                                                                                                                
MR. HOWARD  said this small  industry that is comprised  of small                                                               
businesses is surprisingly impactful. SB  76 has the full support                                                               
of the Distillers Guild of Alaska.                                                                                              
                                                                                                                                
2:07:44 PM                                                                                                                    
RYAN LINDSAY, Devils Club Brewing,  Juneau, Alaska, said he fully                                                               
supports SB 76  now that the 80/20 provision was  removed. It was                                                               
an impossible threshold for small brewers to meet.                                                                              
                                                                                                                                
2:08:18 PM                                                                                                                    
MATT BARNABY,  Barnaby Brewing Company,  Juneau, Alaska,  said he                                                               
no longer needed to testify  against the 80/20 provision since it                                                               
was removed, but he wanted to  share his story to demonstrate the                                                               
positive  impact of  small businesses.  He and  his wife  own and                                                               
operate Barnaby Brewing in downtown  Juneau. This is the smallest                                                               
brewery  in Southeast  Alaska. They  currently employ  four year-                                                               
around staff and seven in the  summer. They have been in business                                                               
almost a  year and have won  gold for their California  Common at                                                               
the U.S. Open Championship. It  is the second largest competition                                                               
in  the country.  They also  participated in  the Great  American                                                               
Beer Fest  in Denver, Colorado  that was attended by  over 60,000                                                               
people. They  talked to people  who had visited Alaska  and their                                                               
brewery  and to  others who  were  planning to  visit Alaska.  He                                                               
urged  the committee  to continue  to be  sensitive to  potential                                                               
impacts on small businesses.                                                                                                    
                                                                                                                                
2:10:56 PM                                                                                                                    
MARK STAPLES, Midnight Sun Brewing  Co, Anchorage, Alaska, stated                                                               
full support for SB 76. The bill  solves a lot of the problems in                                                               
Title 4 that make doing business as a brewery very difficult.                                                                   
                                                                                                                                
2:11:57 PM                                                                                                                    
STEW GRAHAM, City  Council Member, City of  Wasilla, Alaska, said                                                               
the  committee is  to be  congratulated for  solving some  of the                                                               
problems for brewers,  but SB 76 does not do  justice for Wasilla                                                               
and other  small towns. The  City of  Wasilla is 13  square miles                                                               
and  has about  9,000  residents, but  about  75,000 people  live                                                               
within  10 miles  and  they come  to Wasilla  to  shop and  dine.                                                               
Wasilla currently has  41 or 42 establishments where  one can get                                                               
a meal and a  drink. He said the citizens voted  for the level of                                                               
government of  a first  class city and  the state  should respect                                                               
the right of the city to  control its own destiny. They should be                                                               
able  to decide  how  many liquor  licenses  are appropriate  and                                                               
forward their decisions to the Board for consideration.                                                                         
                                                                                                                                
SENATOR MICCICHE  said he gets it  but that amendment to  Title 4                                                               
is  not ready  for  prime time  in  the bill,  but  he and  other                                                               
legislators  are  willing  to  work on  that  going  forward.  He                                                               
believes it should be a separate effort.                                                                                        
                                                                                                                                
2:17:05 PM                                                                                                                    
CHAIR COSTELLO closed public testimony on SB 76.                                                                                
                                                                                                                                
2:17:15 PM                                                                                                                    
SENATOR MEYER  moved to report  CSSSSB 76, version T  as amended,                                                               
from  committee  with  individual  recommendations  and  attached                                                               
fiscal note(s).                                                                                                                 
                                                                                                                                
2:17:31 PM                                                                                                                    
CHAIR COSTELLO announced that without objection, CSSSSB 76(L&C)                                                                 
moved from the Senate Labor and Commerce Standing Committee.                                                                    
                                                                                                                                
2:17:55 PM                                                                                                                    
There being no further business to come before the committee,                                                                   
Chair Costello adjourned the Senate Labor and Commerce Standing                                                                 
Committee meeting at 2:17 p.m.                                                                                                  

Document Name Date/Time Subjects
SB76 Comparison of Other States Brewery and Sampling Laws.pdf SL&C 4/3/2018 1:30:00 PM
SB 76
SB76 Distillery Tasting Rooms State Comaprison.pdf SL&C 4/3/2018 1:30:00 PM
SB 76
SB76 Existing AS 04.21.025(e) .pdf SL&C 4/3/2018 1:30:00 PM
SB 76
SB 76 Amendment T.4.pdf SL&C 4/3/2018 1:30:00 PM
SB 76
SB 76 Amendment T.5.pdf SL&C 4/3/2018 1:30:00 PM
SB 76
SB76 Explanation of Amendments 4.2.2018.pdf SL&C 4/3/2018 1:30:00 PM
SB 76