Legislature(2019 - 2020)BELTZ 105 (TSBldg)

03/26/2019 01:30 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 69 EXEMPT CHARITABLE GAMING FROM PERMIT/FEES TELECONFERENCED
<Bill Hearing Canceled>
-Invited Testimony Followed by Public Testimony-
+= SJR 8 U.S.-MEXICO-CANADA AGREEMENT ON TRADE TELECONFERENCED
Moved SJR 8 Out of Committee
-Invited Testimony Followed by Public Testimony-
*+ SB 83 TELECOMMUNICATIONS REGULATION/EXEMPTIONS TELECONFERENCED
Heard & Held
-Invited Testimony Followed by Public Testimony-
*+ SB 52 ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG TELECONFERENCED
Heard & Held
-Invited Testimony Followed by Public Testimony-
+ Bills Previously Heard/Scheduled: TELECONFERENCED
+= SB 44 TELEHEALTH: PHYSICIAN ASSISTANTS; DRUGS TELECONFERENCED
Moved CSSB 44(L&C) Out of Committee
**Streamed live on AKL.tv**
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                         March 26, 2019                                                                                         
                           1:31 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lora Reinbold, Chair                                                                                                    
Senator Mia Costello, Vice Chair                                                                                                
Senator Click Bishop                                                                                                            
Senator Chris Birch                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Elvi Gray-Jackson                                                                                                       
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 44                                                                                                              
"An  Act relating  to the  prescription of  drugs by  a physician                                                               
assistant without physical examination."                                                                                        
                                                                                                                                
     - MOVED CSSB 44(L&C) OUT OF COMMITTEE                                                                                      
                                                                                                                                
SENATE JOINT RESOLUTION NO. 8                                                                                                   
Supporting  the ratification  of the  United States-Mexico-Canada                                                               
Agreement  on trade;  encouraging the  federal Administration  to                                                               
remove the steel and aluminum  tariffs on imports from Canada and                                                               
Mexico; and  urging the  United States  Congress and  the federal                                                               
Administration   to  call   on  Canada   and  Mexico   to  remove                                                               
retaliatory tariffs on  all goods and services  exported from the                                                               
United States.                                                                                                                  
                                                                                                                                
     - MOVED SJR 8 OUT OF COMMITTEE                                                                                             
                                                                                                                                
SENATE BILL NO. 83                                                                                                              
"An  Act  relating  to  the   Regulatory  Commission  of  Alaska;                                                               
relating to  the public utility regulatory  cost charge; relating                                                               
to the regulation of  telecommunications; relating to exemptions,                                                               
charges,  and rates  applicable to  telecommunications utilities;                                                               
relating  to regulation  of telephone  services; and  relating to                                                               
alternate operator services."                                                                                                   
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
SENATE BILL NO. 52                                                                                                              
"An  Act  relating  to  alcoholic   beverages;  relating  to  the                                                               
regulation  of  manufacturers,   wholesalers,  and  retailers  of                                                               
alcoholic  beverages;  relating  to licenses,  endorsements,  and                                                               
permits  involving   alcoholic  beverages;  relating   to  common                                                               
carrier  approval to  transport or  deliver alcoholic  beverages;                                                               
relating  to the  Alcoholic Beverage  Control Board;  relating to                                                               
offenses  involving  alcoholic  beverages; amending  Rule  17(h),                                                               
Alaska Rules  of Minor  Offense Procedure;  and providing  for an                                                               
effective date."                                                                                                                
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
SENATE BILL NO. 69                                                                                                              
"An   Act  establishing   an  exception   from  permit   and  fee                                                               
requirements for  certain charitable gaming  activities; relating                                                               
to fees for  applicants for a charitable  gaming permit; amending                                                               
the  definition of  'permittee'; and  providing for  an effective                                                               
date."                                                                                                                          
                                                                                                                                
     - BILL HEARING CANCELED                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 44                                                                                                                   
SHORT TITLE: TELEHEALTH: PHYSICIAN ASSISTANTS; DRUGS                                                                            
SPONSOR(s): SENATOR(s) GIESSEL BY REQUEST                                                                                       
                                                                                                                                
02/04/19       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/04/19       (S)       L&C                                                                                                    
03/14/19       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/14/19       (S)       Heard & Held                                                                                           
03/14/19       (S)       MINUTE(L&C)                                                                                            
03/26/19       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
                                                                                                                                
BILL: SJR 8                                                                                                                   
SHORT TITLE: U.S.-MEXICO-CANADA AGREEMENT ON TRADE                                                                              
SPONSOR(s): SENATOR(s) COSTELLO                                                                                                 
                                                                                                                                
03/01/19       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/01/19       (S)       L&C                                                                                                    
03/21/19       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/21/19       (S)       Heard & Held                                                                                           
03/21/19       (S)       MINUTE(L&C)                                                                                            
03/26/19       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
                                                                                                                                
BILL: SB 83                                                                                                                   
SHORT TITLE: TELECOMMUNICATIONS REGULATION/EXEMPTIONS                                                                           
SPONSOR(s): SENATOR(s) BIRCH                                                                                                    
                                                                                                                                
03/11/19       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/11/19       (S)       L&C                                                                                                    
03/26/19       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
                                                                                                                                
BILL: SB 52                                                                                                                   
SHORT TITLE: ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG                                                                            
SPONSOR(s): SENATOR(s) MICCICHE                                                                                                 
                                                                                                                                
02/11/19       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/11/19       (S)       L&C, JUD, FIN                                                                                          
03/26/19       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
SENATOR CATHY GIESSEL                                                                                                           
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified as sponsor of SB 44.                                                                            
                                                                                                                                
ERIN MCLAUGHLIN, Intern                                                                                                         
Senator Mia Costello                                                                                                            
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented SJR 8 on behalf of the sponsor,                                                                 
Senator Mia Costello.                                                                                                           
                                                                                                                                
MATT MORRISON, Chief Executive Officer                                                                                          
Pacific Northwest Economic Region (PNWER)                                                                                       
Seattle, Washington                                                                                                             
POSITION STATEMENT: Testified during the hearing on SJR 8.                                                                    
                                                                                                                                
KIM SKIPPER, Staff                                                                                                              
Senator Chris Birch                                                                                                             
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented a sectional analysis of SB 83 on                                                                
behalf of the sponsor.                                                                                                          
                                                                                                                                
CHRISTINE OCONNER, Executive Director                                                                                           
Alaska Telecom Association                                                                                                      
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Presented a PowerPoint on telecommunications                                                              
statutes during the hearing on SB 83.                                                                                           
                                                                                                                                
RICK HITTS, Vice-President                                                                                                      
GCI                                                                                                                             
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified during the hearing on SB 83.                                                                    
                                                                                                                                
EDRA MORLEDGE, Staff                                                                                                            
Senator Peter Micciche                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented a sectional  analysis of SB  52 on                                                             
behalf of Senator Micciche.                                                                                                     
                                                                                                                                
SENATOR PETER MICCICHE                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified as sponsor of SB 52.                                                                            
                                                                                                                                
ANNA BRAWLEY, Title 4 Project Review Coordinator;                                                                               
Senior Associate                                                                                                                
Agnew Beck Consulting                                                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions during the  hearing on SB                                                             
52.                                                                                                                             
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:31:04 PM                                                                                                                    
CHAIR  LORA  REINBOLD  called  the   Senate  Labor  and  Commerce                                                             
Standing Committee meeting  to order at 1:31 p.m.  Present at the                                                               
call to order were Senators  Costello, Birch, and Chair Reinbold.                                                               
Senator Bishop arrived shortly thereafter.                                                                                      
                                                                                                                                
         SB 44-TELEHEALTH: PHYSICIAN ASSISTANTS; DRUGS                                                                      
                                                                                                                                
1:32:04 PM                                                                                                                    
CHAIR REINBOLD announced  that the first order  of business would                                                               
be SENATE  BILL NO. 44, "An  Act relating to the  prescription of                                                               
drugs by a physician assistant without physical examination."                                                                   
                                                                                                                                
1:33:03 PM                                                                                                                    
SENATOR  CATHY  GIESSEL,  Alaska State  Legislature,  Juneau,  as                                                               
sponsor of SB 44 said that an amendment was in members' packets.                                                                
                                                                                                                                
1:33:14 PM                                                                                                                    
SENATOR  COSTELLO moved  to  adopt Amendment  1,  work order  31-                                                               
LS0019\U.1, Fisher, 3/22/19, which read as follows:                                                                             
                                                                                                                                
                          AMENDMENT 1                                                                                       
                                                                                                                                
     Page 1, line 2, following "examination":                                                                                 
         Insert "; and providing for an effective date"                                                                       
                                                                                                                                
     Page 3, following line 13:                                                                                                 
     Insert a new bill section to read:                                                                                         
        "* Sec. 5. This Act takes effect March 1, 2020."                                                                    
                                                                                                                                
SENATOR BIRCH objected for the purposes of discussion.                                                                          
                                                                                                                                
SENATOR COSTELLO explained  that at a previous hearing  on SB 44,                                                               
she had asked whether the sponsor  would like to add an immediate                                                               
effective date  to the  bill. The ideal  effective date  would be                                                               
March 1,  2020, to  allow time for  draft regulations  to comport                                                               
with the changes in the bill.                                                                                                   
                                                                                                                                
SENATOR BIRCH removed his objection.                                                                                            
                                                                                                                                
1:34:23 PM                                                                                                                    
SENATOR GIESSEL said that she did not have any further comments.                                                                
                                                                                                                                
CHAIR  REINBOLD,  after  first   determining  no  one  wished  to                                                               
testify, closed public testimony on SB 44.                                                                                      
                                                                                                                                
1:35:06 PM                                                                                                                    
SENATOR BISHOP removed his objection.                                                                                           
                                                                                                                                
1:35:20 PM                                                                                                                    
SENATOR COSTELLO moved  to report SB 44,  work order 31-LS0019\U,                                                               
as amended,  from committee  with individual  recommendations and                                                               
attached fiscal  note(s). There being no  objection, CSSB 44(L&C)                                                               
was  reported  from  the  Senate   Labor  and  Commerce  Standing                                                               
Committee.                                                                                                                      
                                                                                                                                
1:35:33 PM                                                                                                                    
At-ease.                                                                                                                        
                                                                                                                                
          SJR 8-U.S.-MEXICO-CANADA AGREEMENT ON TRADE                                                                       
                                                                                                                                
1:38:06 PM                                                                                                                    
CHAIR  REINBOLD reconvened  the  meeting and  announced that  the                                                               
next order  of business would  be SENATE JOINT RESOLUTION  NO. 8,                                                               
Supporting  the ratification  of the  United States-Mexico-Canada                                                               
Agreement  on trade;  encouraging the  federal Administration  to                                                               
remove the steel and aluminum  tariffs on imports from Canada and                                                               
Mexico; and  urging the  United States  Congress and  the federal                                                               
Administration   to  call   on  Canada   and  Mexico   to  remove                                                               
retaliatory tariffs on  all goods and services  exported from the                                                               
United States.                                                                                                                  
                                                                                                                                
1:38:21 PM                                                                                                                    
ERIN  MCLAUGHLIN,  Intern,  Senator Mia  Costello,  Alaska  State                                                               
Legislature, Juneau,  presented SJR 8  on behalf of  the sponsor.                                                               
She  reported that  Congressman Don  Young said  that he  did not                                                               
have  an  official  position,  but   he  would  be  listening  to                                                               
Alaskans. Thus,  passage of SJR  8 would inform him  of Alaskans'                                                               
stance on trade, she said.                                                                                                      
                                                                                                                                
1:39:00 PM                                                                                                                    
MATT  MORRISON,   Chief  Executive  Officer,   Pacific  Northwest                                                               
Economic  Region  (PNWER),  Seattle,  stated  that  Alaska  is  a                                                               
founding PNWER  member and has  been PNWER's partner  since 1991.                                                               
He said that  trade and cooperation with Canada  is important and                                                               
essential  to  Alaska especially  since  Alaska  connects to  the                                                               
Lower 48  through Canada. He  said the North American  Free Trade                                                               
Agreement (NAFTA) has provided an  important framework for trade.                                                               
In 2017,  Canada bought $700  million in exports from  Alaska, he                                                               
said.   The   United   States-Mexico-Canada   Agreement   (USMCA)                                                               
negotiations would  provide an updated  agreement for  NAFTA. The                                                               
Congress needs  to hear from the  states that it is  important to                                                               
ratify the USMCA agreement, he said.                                                                                            
                                                                                                                                
He stated  that SJR 8 seeks  to accomplish two things.  First, it                                                               
expresses  to the  Congress  that ratification  of  the USMCA  is                                                               
important. Second,  it would call  on the  administration, Canada                                                               
and  Mexico  to remove  the  tariffs  that adversely  impact  the                                                               
region.  He  reported  that  Section 232  tariffs  on  steel  and                                                               
aluminum, in  particular, affect Alaska. At  last week's hearing,                                                               
he mentioned that U.S. Senator  Lisa Murkowski estimated that the                                                               
cost  of  steel represented  10  -  20  percent  of the  cost  to                                                               
construct  and operate  an oil  field. Certainly,  it would  be a                                                               
major  cost in  pipeline construction,  he said.  The tariffs  on                                                               
steel  and  aluminum  could increase  any  pipeline  construction                                                               
costs  by three  to five  percent. For  example, these  increased                                                               
tariffs  would cost  an  additional $75  million  for a  280-mile                                                               
project.  This  could also  increase  the  cost of  the  proposed                                                               
natural gas pipeline by up to $500 million, he said.                                                                            
                                                                                                                                
MR.  MORRISON related  that  the second  part  of the  resolution                                                               
requests  a  waiver  on  Canada  and Mexico  for  the  steel  and                                                               
aluminum  tariffs   and  requests  those  countries   remove  the                                                               
retaliatory tariffs  on U.S.  producers. He  said that  PNWER has                                                               
considered this  agreement from many  perspectives and  has found                                                               
that  most   states  are  considering  similar   resolutions.  He                                                               
reported that  a resolution  has passed in  the Idaho  Senate and                                                               
the  Montana Senate.  A resolution  has also  been introduced  in                                                               
Oregon, as well. He said that  PNWER believes that the USMCA will                                                               
be  good  for  the  region.  He  has  met  with  members  of  the                                                               
Congressional delegation  and delegation members were  anxious to                                                               
hear  from  the  states.  He  reiterated  that  SJR  8  seeks  to                                                               
officially recognize the importance of the USMCA to Alaska.                                                                     
                                                                                                                                
1:43:23 PM                                                                                                                    
CHAIR REINBOLD closed public testimony on SJR 8.                                                                                
                                                                                                                                
1:44:12 PM                                                                                                                    
CHAIR REINBOLD asked to have the objection removed.                                                                             
                                                                                                                                
SENATOR BISHOP removed his objection.                                                                                           
                                                                                                                                
1:44:24 PM                                                                                                                    
SENATOR COSTELLO moved  to report SJR 8,  work order 31-LS0488\A,                                                               
Version  A, from  committee with  individual recommendations  and                                                               
attached  fiscal note(s).  There being  no objection,  SJR 8  was                                                               
reported from the Senate Labor and Commerce Standing Committee.                                                                 
                                                                                                                                
1:44:44 PM                                                                                                                    
At-ease.                                                                                                                        
                                                                                                                                
         SB 83-TELECOMMUNICATIONS REGULATION/EXEMPTIONS                                                                     
                                                                                                                                
1:46:18 PM                                                                                                                    
CHAIR  REINBOLD reconvened  the  meeting and  announced that  the                                                               
next  order of  business would  be SENATE  BILL NO.  83, "An  Act                                                               
relating to the Regulatory Commission  of Alaska; relating to the                                                               
public   utility  regulatory   cost  charge;   relating  to   the                                                               
regulation   of  telecommunications;   relating  to   exemptions,                                                               
charges,  and rates  applicable to  telecommunications utilities;                                                               
relating  to regulation  of telephone  services; and  relating to                                                               
alternate operator services."                                                                                                   
                                                                                                                                
1:46:27 PM                                                                                                                    
SENATOR COSTELLO clarified that the original bill was before the                                                                
committee.                                                                                                                      
                                                                                                                                
SENATOR BISHOP objected for purposes of discussion.                                                                             
                                                                                                                                
1:46:42 PM                                                                                                                    
SENATOR  BIRCH,  speaking as  sponsor  of  SB  83, said  that  he                                                               
introduced a  similar bill last year  that did not quite  make it                                                               
through  the  process.  He   paraphrased  the  following  sponsor                                                               
statement:                                                                                                                      
                                                                                                                                
     SB 83  seeks to encourage investment  and innovation in                                                                    
     the   telecommunication   industry  by   updating   the                                                                    
     telecommunication    statutes.    Rapid   changes    in                                                                    
     technology   and   in    the   Federal   Communications                                                                    
     Commission  (FCC) regulations,  render portions  of the                                                                    
     existing  statutes obsolete  and/or inefficient  in the                                                                    
     modern telecommunications world.                                                                                           
                                                                                                                                
     All  of  Alaska's telecommunications  providers  worked                                                                    
     together  through  the  Alaska Telecom  Association  to                                                                    
     offer the suggested changes made  in SB 83. The goal of                                                                    
     was   to  maintain   important  consumer   protections,                                                                    
     appropriate  Regulatory  Commission   of  Alaska  (RCA)                                                                    
     jurisdiction,  and  consistency  with  FCC  regulations                                                                    
     while   at  the   same   time   allowing  for   greater                                                                    
     flexibility  to  more  rapidly take  advantage  of  new                                                                    
     technology.                                                                                                                
                                                                                                                                
     Some  existing RCA  regulations are  over 25  years old                                                                    
     and focused  on landline and  traditional long-distance                                                                    
     service. As customers continue  to prefer broadband and                                                                    
     mobile services  and the  demand for  landline services                                                                    
     decreases,   the  outdated   regulations  are   largely                                                                    
     obsolete.   Carrier   of    last   resort   regulations                                                                    
     needlessly  duplicate  existing statutory  requirements                                                                    
     and alternative  operator services are no  longer used.                                                                    
     SB83 places  service providers on a  more level playing                                                                    
     field  and   will  encourage  deployment   of  advanced                                                                    
     technologies and more efficient network design.                                                                            
                                                                                                                                
     SB  83 creates  new  protections in  statute for  rural                                                                    
     areas  by requiring  landline and  long-distance rates,                                                                    
     terms and conditions be the same as in larger towns.                                                                       
                                                                                                                                
     SB 83  requires that  the Regulatory Cost  Charge (RCC)                                                                    
     be   assessed  and   submitted  to   the  RCA   by  all                                                                    
     telecommunication utilities.  Currently the RCC  is not                                                                    
     being paid  by utilities that are  municipally owned or                                                                    
     are  cooperatives. All  members of  the Alaska  Telecom                                                                    
     Association  support this  change.  I would  appreciate                                                                    
     your support for SB 83.                                                                                                    
                                                                                                                                
1:49:01 PM                                                                                                                    
KIM SKIPPER, Staff, Senator Chris Birch, Alaska State                                                                           
Legislature, Juneau, read the sectional analysis for SB 83.                                                                     
                                                                                                                                
     Section   1      Municipal   powers   and  duties.   AS                                                                  
     29.35.070(a)  This  section   is  amended  to  maintain                                                                    
     existing  exclusion   from  municipal   regulation  for                                                                    
     telecommunications companies  which are  exempted under                                                                    
     new subsection AS 42.05.711(u). (Section 8 below).                                                                         
                                                                                                                                
     Section 2   Alaska  Public Utilities Regulatory Act. AS                                                                  
     42.05.141 Adds two  new subsections (e) and  (f) to the                                                                    
     general   powers  and   duties   of   the  RCA.   These                                                                    
     subsections   state  that   the   Commission  may   not                                                                    
     designate a local exchange  carrier or an interexchange                                                                    
     carrier as  the carrier  of last  resort, and  that the                                                                    
     Commission      may      designate     an      eligible                                                                    
     telecommunications carrier consistent  with the federal                                                                    
     law  that  allows  for   federal  subsidies  under  the                                                                    
     federal Universal Service Fund.                                                                                            
                                                                                                                                
     A  carrier  of  last  resort  is  a  telecommunications                                                                  
     company  that  commits  (or  is  required  by  existing                                                                    
     regulation)  to provide  service to  any customer  in a                                                                    
     service  area that  requests it,  even if  serving that                                                                    
     customer   would   not   be  economically   viable   at                                                                    
     prevailing rates.  There are other protections  in this                                                                    
     legislation (Section 7),  remaining Alaska statutes and                                                                    
     federal  law  to  ensure   rural  Alaska  continues  to                                                                    
     receive telecommunications service.                                                                                        
                                                                                                                                
     The federal  Universal Service Fund  is managed  by the                                                                  
     Federal  Communications Commission  and is  intended to                                                                    
     promote   universal    access   to   telecommunications                                                                    
     services  at reasonable  and affordable  rates for  all                                                                    
     consumers.                                                                                                                 
                                                                                                                                
1:51:02 PM                                                                                                                    
MS. SKIPPER read Sections 3 and 4.                                                                                              
                                                                                                                                
     Section 3  and 4    Regulatory Cost Charge  (RCC). This                                                                  
     section  applies  the  regulatory cost  charge  to  all                                                                    
     certificated telecommunications  provider expanding the                                                                    
     assessment base for the charge.                                                                                            
                                                                                                                                
1:51:25 PM                                                                                                                    
MS. SKIPPER read Sections 5-8.                                                                                                  
                                                                                                                                
     Section  5    Exempt Utility.  AS 42.05.254(i)(2)  This                                                                  
     section  amends the  definition  of  exempt utility  to                                                                    
     apply   the   Regulatory   Cost   Charge   across   all                                                                    
     certificated telecommunications providers.                                                                                 
                                                                                                                                
     Section 6    Tariff Filings AS  42.05.361. This section                                                                  
     prohibits the Commission  from requiring tariff filings                                                                    
     from  telecommunications carriers  except by  providers                                                                    
     of  telecommunications   service  to   prison  inmates.                                                                    
     Tariff  filings in  the competitive  telecommunications                                                                    
     industry  are  outdated,  unnecessary  and  impede  the                                                                    
     ability  of carriers  to respond  to what  the customer                                                                    
     wants and needs.                                                                                                           
                                                                                                                                
     Section 7    Rates AS 42.05.381. This  section adds new                                                                  
     subsections which require  rates, terms, and conditions                                                                    
     of service  to be uniform across  defined service areas                                                                    
     and  the definition  of  "local  exchange carrier"  and                                                                    
     "long  distance telephone"  have the  same meaning  set                                                                    
     forth in AS 42.05.890.                                                                                                     
                                                                                                                                
     Section  8 -  Exemptions from  Alaska Public  Utilities                                                                  
     Regulatory  Act AS  42.05.711.  This  section adds  new                                                                  
     subsections   (u)  and   (v)   which  together   exempt                                                                    
     telecommunication carriers from the  Act except for the                                                                    
     following provisions which will continue to apply:                                                                         
                                                                                                                                
     ? AS  42.05.141(e) and (f)    New sections in  the bill                                                                    
     (Section 2 above)                                                                                                          
     ?  AS 42.05.221     Requiring a  Certificate of  Public                                                                    
     Convenience and Necessity                                                                                                  
     ?  AS   42.05.231     Provision  for   applying  for  a                                                                    
     Certificate of Public Convenience and Necessity                                                                            
     ?  AS 42.05.241     Conditions of  issuing/denial of  a                                                                    
     Certificate of Public Convenience and Necessity                                                                            
     ? AS  42.05.251    Allow public  utilities to  obtain a                                                                    
     permit for use of streets in municipalities.                                                                               
     ? AS 42.05.254  Regulatory cost charge                                                                                     
     ?  AS  42.05.261    Prohibits  a  public  utility  from                                                                    
     discontinuing  or   abandoning  service  for   which  a                                                                    
     certificate has been issued                                                                                                
     ? AS  42.05.271    Allows the Regulatory  Commission of                                                                    
     Alaska  to   amend,  modify,   suspend,  or   revoke  a                                                                    
     certificate                                                                                                                
     ? AS  42.05.281   Prohibiting a  sale, lease, transfer,                                                                    
     or inheritance  of a Certificate of  Public Convenience                                                                    
     and Necessity without RCA permission                                                                                       
     ? AS  42.05.296   Requirements for  providing telephone                                                                    
     services for certain impaired subscribers                                                                                  
                                                                                                                                
1:54:20 PM                                                                                                                    
MS. SKIPPER read Sections 5-8.                                                                                                  
                                                                                                                                
      AS 42.05.306    Allows discounted rates  for customers                                                                    
     receiving  benefits from  a social  services assistance                                                                    
     program   administered   by   the  state   or   federal                                                                    
     government                                                                                                                 
                                                                                                                                
     ?  AS  42.05.381(l)    (n)     New  sections  requiring                                                                    
     uniform rates, terms, and conditions (Section 7 above)                                                                     
                                                                                                                                
       AS  42.05.631   Allows  a public utility  to exercise                                                                    
     the power of eminent domain                                                                                                
                                                                                                                                
     ? AS  42.05.641   Extends the  Regulatory Commission of                                                                    
     Alaska's jurisdiction to  public utilities operating in                                                                    
     a municipality                                                                                                             
                                                                                                                                
     ? AS 42.05.661   Requires entities  to pay a fee to the                                                                    
     Regulatory  Commission of  Alaska when  applying for  a                                                                    
     Certificate of Public Convenience and Necessity                                                                            
                                                                                                                                
     AS   42.05.820      Municipalities  may   not  regulate                                                                    
     landline providers                                                                                                         
                                                                                                                                
     ? AS 42.05.830    Requires the Regulatory Commission of                                                                    
     Alaska to establish exchange access  charges to be paid                                                                    
     by long distance carriers  to compensate local exchange                                                                    
     carriers for  the cost  of originating  and terminating                                                                    
     long distance services                                                                                                     
                                                                                                                                
     ? AS  42.05.840    Allows the Regulatory  Commission of                                                                    
     Alaska to establish a universal service fund                                                                               
                                                                                                                                
     ? AS  42.05.850    Requires local exchange  carriers to                                                                    
     form an association to administer access charges                                                                           
                                                                                                                                
     ? AS  42.05.860   Prohibits a  carrier from restricting                                                                    
     the resale of telecommunications services                                                                                  
                                                                                                                                
1:55:48 PM                                                                                                                    
MS. SKIPPER read Sections 9 - 12.                                                                                               
                                                                                                                                
     Section  9    Municipal Regulation  AS 42.05.820.  This                                                                  
     section amends  AS 42.05.820 to exclude  local exchange                                                                    
     carriers which  are exempted in  whole or in  part from                                                                    
     this chapter from being 3 regulated by a municipality.                                                                     
                                                                                                                                
     Section 10    Calculation of Regulatory  Cost Charge AS                                                                  
     42.06.286(e). This  section is amended to  clarify that                                                                  
     all  telecommunications providers  will continue  to be                                                                    
     assessed the Regulatory Cost Charge (RCC).                                                                                 
                                                                                                                                
     Section  11  and 12     Alternate  Operator Service  AS                                                                  
     45.50.473(a).  This  section  is  amended  to  add  the                                                                  
     definition  of  alternate  operator  service  from  the                                                                    
     statute  that  is  being repealed  in  Section  13  (AS                                                                    
     42.05.325)                                                                                                                 
                                                                                                                                
1:56:38 PM                                                                                                                    
MS. SKIPPER read Section 13.                                                                                                    
                                                                                                                                
     Section  13     Repealers.  This  section  repeals  the                                                                  
     following provisions:                                                                                                      
                                                                                                                                
     ?  AS  42.05.325      Registration  and  regulation  of                                                                    
     alternate  operator  services.  Required  providers  of                                                                    
     alternate operator  services to be registered  with and                                                                    
     regulated  by  the  Regulatory  Commission  of  Alaska.                                                                    
     Alternate operator  service is obsolete  and regulatory                                                                    
     oversight is no longer relevant.                                                                                           
                                                                                                                                
     ?  AS  42.05.810     Long  Distance  Competition.  This                                                                    
     section  required  the  RCA  to  adopt  regulations  by                                                                    
     February 1991  to open-up  the long-distance  market to                                                                    
     competition. The long-distance market  has been open to                                                                    
     competition  since 1991  and it  is a  fraction of  its                                                                    
     earlier  size  and  continues to  shrink  as  consumers                                                                    
     migrate  to  alternative  services.  It  is  no  longer                                                                    
     necessary  to require  the  Commission  to open-up  the                                                                    
     long-distance market to competition.                                                                                       
                                                                                                                                
1:57:41 PM                                                                                                                    
CHRISTINE   OCONNER,    Executive   Director,    Alaska   Telecom                                                               
Association,  Anchorage, recognized  part  of the  team with  her                                                               
today, including  members from  the Alaska  Communications, AT&T,                                                               
and GCI who could answer questions.                                                                                             
                                                                                                                                
MS.  OCONNOR said  that  SB  83 was  solely  related to  landline                                                               
service,  including  local  service  and  long  distance.  Modern                                                               
telecommunication   networks  provide   an   array  of   advanced                                                               
services. She  reviewed slide 2,  "Unanimous Support."  Slide two                                                               
listed Alaska Telecom Association members.                                                                                      
                                                                                                                                
     Adak Eagle  Enterprises, Alaska  Communications, Alaska                                                                    
     Telephone Company, Arctic  Slope Telephone Association,                                                                    
     Cooperative  ASTAC  Wireless AT&T,  Bettles  Telephone,                                                                    
     Bristol   Bay   Cellular   Partnership,   Bristol   Bay                                                                    
     Telephone   Cooperative,   Bush-Tell,   Copper   Valley                                                                    
     Telephone Cooperative, Copper  Valley Wireless, Cordova                                                                    
     Telephone Cooperative, Cordova  Wireless, GCI, Interior                                                                    
     Telephone,    Mukluk   Telephone,    Ketchikan   Public                                                                    
     Utilities,   Matanuska  Telephone   Association,  North                                                                    
     Country Telephone, Nushagak  Cooperative, OTZ Telephone                                                                    
     Cooperative,  OTZ Wireless,  Summit Telephone  Company,                                                                    
     TelAlaska  Cellular,   United  Utilities,   Windy  City                                                                    
     Wireless, and Yukon Telephone Company.                                                                                     
                                                                                                                                
She said  that these companies  are the landline,  long distance,                                                               
wireless,  and broadband  companies  that  serve Alaska,  ranging                                                               
from small local telephone companies  to the statewide providers.                                                               
These companies  have all  agreed that  many of  Alaska's telecom                                                               
statutes were  obsolete, imposing unnecessary  regulatory burdens                                                               
on companies and regulators that do not benefit anyone.                                                                         
                                                                                                                                
1:59:04 PM                                                                                                                    
MS. OCONNER reviewed slide 3, "Transformation."                                                                                 
                                                                                                                                
   • Telecommunications has transformed since many of                                                                           
     Alaska's telecom statutes were adopted in 1970s.                                                                           
                                                                                                                                
   • The federal 1996 Telecom Act transformed the                                                                               
     marketplace  and  started  an evolution  toward  light-                                                                    
     touch oversight.                                                                                                           
                                                                                                                                
   • Landline and long-distance use are dramatically                                                                            
     reduced.                                                                                                                   
                                                                                                                                
   • Long distance revenues reduced from $64M to $13M                                                                           
     between 2006-2018.                                                                                                         
                                                                                                                                
   • 48% of Alaska households have a landline, 4% are                                                                           
     landline only.                                                                                                             
                                                                                                                                
   • Landline and long-distance services continue.                                                                              
                                                                                                                                
MS. OCONNOR  said that despite  the shift to  other technologies,                                                               
many  of the  same  regulations have  remained  in place.  Tariff                                                               
filing requirements  use scarce funds  that could be  better used                                                               
to  serve customers.  These  requirements  also divert  resources                                                               
from the regulators that could be better used on other matters.                                                                 
                                                                                                                                
MS. OCONNOR reviewed  slide 4, which showed a  color-coded map of                                                               
the U.S. She  said that 41 states have reduced  or eliminated all                                                               
telecom  regulation.  Although  the details  were  varied,  these                                                               
changes generally  allow telephone companies to  manage their own                                                               
rates. Updating Alaska's statutes  would allow Alaska's companies                                                               
to  take advantage  of some  of the  flexibility that  most other                                                               
states  already experience,  while still  maintaining regulators'                                                               
important   role  of   overseeing   provider   fitness  and   the                                                               
continuance of landline service.                                                                                                
                                                                                                                                
2:00:34 PM                                                                                                                    
MS. OCONNOR reviewed  slide 5, "AS 42.05  Alaska Public Utilities                                                               
Regulatory Act."                                                                                                                
                                                                                                                                
     ? Sections retained                                                                                                        
                                                                                                                                
      Certificate of Public Convenience & Necessity                                                                             
       Fitness of a provider to serve                                                                                           
       Requirement to continue service                                                                                          
      ?Transfer of certificates                                                                                                 
      ?Enforcement of obligations                                                                                               
     ?Regulatory Cost Charge (amended)                                                                                          
     ?Telecommunications Relay Service                                                                                          
     ?Lifeline                                                                                                                  
     ?Interconnection                                                                                                           
     ?Eminent Domain                                                                                                            
     ?Access charges                                                                                                            
     ?Alaska Exchange Carriers Association                                                                                      
     ?Alaska Universal Service Fund                                                                                             
                                                                                                                                
She said  that SB 83  was structured to  exempt telecommunication                                                               
companies from rate  regulation under AS 42.05.  She reviewed the                                                               
sections retained. Statutes  in AS 42.05 that  generally apply to                                                               
the commission  and are not specific  to telecommunications would                                                               
still be  in effect, including  requirements for  public records,                                                               
and the  RCA's authority  to enforce the  statutes that  apply to                                                               
general and housekeeping provisions.                                                                                            
                                                                                                                                
2:01:21 PM                                                                                                                    
MS. OCONNOR reviewed slide 6, "Changes to AS 42.05."                                                                            
                                                                                                                                
   • Rate regulation    and   tariff    management   adopt                                                                      
     cooperative model, protections for consumers remain.                                                                       
    • Rates are limited by federal rules                                                                                        
    • Rates across defined service areas are the same                                                                           
                                                                                                                                
   • Eligible   Telecommunications    Carriers     ("ETC")                                                                      
      designation explicitly authorized by the Regulatory                                                                       
     Commission of Alaska.                                                                                                      
                                                                                                                                
   • COLR designations for ILECs and IXCs eliminated                                                                            
      • Certificate of Public Convenience and Necessity                                                                         
       oversight remains                                                                                                        
    • ETC designation and oversight remains                                                                                     
      • Federal USF/ETC obligations to continue service                                                                         
       remain                                                                                                                   
    • New AS 42.05.381(l) protects rural service                                                                                
                                                                                                                                
   • Regulatory Cost Charge                                                                                                     
                                                                                                                                
She explained that federal caps  and local limits would remain in                                                               
place and  new provisions  would be added  to require  that rates                                                               
across service  areas must  be the same.  Carrier of  last resort                                                               
(COLR)  designations  for  landline and  long-distance  companies                                                               
would  be  eliminated.  Important  protections  would  remain  to                                                               
ensure  that rural  areas  continue to  have  landline and  long-                                                               
distance services. The certificate  (CPCN) authority requires the                                                               
RCA  to approve  both the  entry and  exit of  a provider  from a                                                               
location, she said.                                                                                                             
                                                                                                                                
MS.  OCONNOR  said that  the  RCA  would oversee  those  eligible                                                               
telecommunications carrier designations  or ETC, including annual                                                               
reports and  certifications to the  proper use of  funds. Federal                                                               
rules  prevent  discontinuance   of  landline  and  long-distance                                                               
service   without   approval   by  the   Federal   Communications                                                               
Commission  (FCC).  Federal  universal service  fund  rules  also                                                               
require that  providers must  provide service  upon receipt  of a                                                               
reasonable  request. A  new  section in  the  bill would  require                                                               
providers to  provide the  same rates,  terms, and  conditions to                                                               
everyone  in  the  service  area, which  is  how  Alaska  Telecom                                                               
Association currently  operates. SB 83 would  put those practices                                                               
into statute, she  said. The regulatory cost  charge provides the                                                               
funding mechanism  for the RCA,  which is self-funded,  she said.                                                               
As industry  has changed over  time, it has become  distorted and                                                               
inequitable, so SB 83 would fix that mechanism.                                                                                 
                                                                                                                                
2:03:18 PM                                                                                                                    
CHAIR REINBOLD asked for further  clarification on the regulatory                                                               
cost charge adjustment.                                                                                                         
                                                                                                                                
MS.  OCONNER  explained that  the  regulatory  cost charges  were                                                               
covered in statute  in some detail. The time  spent on activities                                                               
at the regulatory commission was  calculated and converted into a                                                               
percentage. Telephone  companies pass  on these small  charges to                                                               
consumers. The  statute also states  that cooperatives  that have                                                               
voted  to  economically  deregulate cannot  participate  in  that                                                               
mechanism.  This meant  that charges  cannot be  placed on  their                                                               
bills. However, it  also meant that the  remaining companies were                                                               
the only  ones assessing  these charges. SB  83 would  change the                                                               
language  to state  that everyone  would be  assessed the  charge                                                               
since the  telecom activity  was generated by  the RCA  and these                                                               
charges should apply to all users.                                                                                              
                                                                                                                                
2:04:34 PM                                                                                                                    
MS. OCONNOR reviewed slide 7, "Rate Protections."                                                                               
                                                                                                                                
        • Federal rules limit local landline rates                                                                              
                                                                                                                                
        • New subsection AS 42.05.381(l) requires rates,                                                                        
          terms, and conditions of service to be the same                                                                       
          across defined service areas                                                                                          
                                                                                                                                
        • Federal Lifeline program supports low-income                                                                          
          subscribers                                                                                                           
                                                                                                                                
Currently  federal rules  limit local  landline rates,  which are                                                               
certified  each year.  The federal  lifeline program  allows low-                                                               
income subscribers to  receive landlines at a very  low cost, she                                                               
said.                                                                                                                           
                                                                                                                                
2:05:15 PM                                                                                                                    
CHAIR REINBOLD  asked whether these changes  would affect current                                                               
landline  households  in  cities  in Alaska.  She  said  she  has                                                               
landline services and does not want them to be disrupted.                                                                       
                                                                                                                                
MS.  OCONNER  answered that  the  landline  network is  a  robust                                                               
system  that  is  especially   helpful  during  emergencies.  She                                                               
affirmed that these  change would not affect  the availability of                                                               
landlines. It  would add a  new layer of certainty  going forward                                                               
to assure that landline service would always be available.                                                                      
                                                                                                                                
2:05:56 PM                                                                                                                    
SENATOR  BISHOP  said the  rate  protections  seem to  level  the                                                               
playing field and close any loopholes for overcharging.                                                                         
                                                                                                                                
MS. OCONNER  agreed that  leveling the playing  field was  one of                                                               
the biggest benefits of the bill.                                                                                               
                                                                                                                                
MS. OCONNER reviewed  slide 8, "Rate Regulation    It Depends Who                                                               
You Are."                                                                                                                       
                                                                                                                                
   • Cooperatives, with the approval of their members, and                                                                      
     municipal telcoms manage their own tariffs. All other                                                                      
     companies must maintain one or multiple tariffs at the                                                                     
     RCA.                                                                                                                       
                                                                                                                                
   • For other companies review and approval for rate                                                                           
     changes varies, with timelines as long as 420 days.                                                                        
                                                                                                                                
   • This limits the introduction of new offerings due to                                                                       
         the expense of preparing and supporting tariff                                                                         
     filings.                                                                                                                   
                                                                                                                                
   • SB 83 allows all providers to manage their own rates                                                                       
     without costly regulatory filings.                                                                                         
                                                                                                                                
She explained  that companies  set their  rates in  varying ways.                                                               
The cooperatives manage their own  rates, so if customers wish to                                                               
buy services  they can do  so. However, it  could take up  to 420                                                               
days  for other  companies to  change their  rates and  products.                                                               
This change would  move everyone to the  cooperative model, which                                                               
has been  successful for  many years, but  it would  still retain                                                               
limits on landline  rates per the federal rule that  would not be                                                               
changed.                                                                                                                        
                                                                                                                                
MS. OCONNER  summarized that this  bill seeks to put  everyone on                                                               
the same basis.                                                                                                                 
                                                                                                                                
2:07:22 PM                                                                                                                    
MS. OCONNER reviewed slide 9," Burden of Rate Regulation."                                                                      
                                                                                                                                
        • Alaska Communications                                                                                                 
                                                                                                                                
        • "We have 4 local exchange tariffs with a mixture                                                                      
          of  tariff rules  that apply?Each  time we  make a                                                                    
          tariff  change we  must do  basically 5  times for                                                                    
          the  local  exchange  since  one  study  area  has                                                                    
          different rules  to follow. We  also have  a long-                                                                    
          distance  tariff which  has even  different rules.                                                                    
          When filing 5 different tariffs plus a long-                                                                          
          distance  tariff, it  simply is  not an  efficient                                                                    
          business    practice    especially   when    these                                                                    
          regulations   do  not   apply  across   all  other                                                                    
          carriers."                                                                                                            
                                                                                                                                
      - Lisa Phillips, Senior Manager, Regulatory Affairs                                                                       
     and Risk Management                                                                                                        
                                                                                                                                
She  said  that  Alaska  Communications is  one  of  the  largest                                                               
companies in  Alaska, serving dozens  of remote villages  as well                                                               
as  Alaska's urban  centers.  Alaska  Communications must  manage                                                               
2,500  pages  of tariffs,  rarely  accessed  by the  public.  The                                                               
statutes  are outdated,  and rate  regulation consumes  resources                                                               
that could be better spent serving customers.                                                                                   
                                                                                                                                
2:08:00 PM                                                                                                                    
MS.  OCONNER  reviewed  slide  10,  "Eligible  Telecommunications                                                               
Carrier (ETC)."                                                                                                                 
                                                                                                                                
        • ETC designation qualifies a telecommunications                                                                        
          provider  to  participate   in  federal  Universal                                                                    
          Service Fund programs.                                                                                                
                                                                                                                                
        • Each program requires specific performance and                                                                        
          accountability.                                                                                                       
                                                                                                                                
        • The Regulatory Commission of Alaska provides                                                                          
          annual     certification     to    the     Federal                                                                    
          Communications Commission.                                                                                            
                                                                                                                                
        • New subsection AS 42.05.141(f) makes explicit the                                                                     
          RCA's authority to designate a provider an ETC.                                                                       
                                                                                                                                
She  explained that  "ETC" [Eligible  Telecommunications Carrier]                                                               
would remain  unchanged. This designation  provides the  RCA with                                                               
an oversight  role to provide  consumer protection.  For example,                                                               
companies must  report to the  RCA on  their ETC status.  The RCA                                                               
designates  ETCs, which  qualifies companies  to receive  federal                                                               
funding. She said that SB 83  would make the authority to oversee                                                               
the ETC process explicit for the RCA.                                                                                           
                                                                                                                                
2:08:37 PM                                                                                                                    
MS.  OCONNER   reviewed  slide  11,   "Carrier  of   Last  Resort                                                               
Designation (COLR)."                                                                                                            
                                                                                                                                
        • COLR regulations implemented in 2010                                                                                  
        •                                                                                                                       
        • Explicit funding for COLR duties ended Jan. 1,                                                                        
     2019                                                                                                                       
                                                                                                                                
        • COLR is redundant to state statutes and federal                                                                       
     rules                                                                                                                      
                                                                                                                                
        • Certificate of Public Convenience and Necessity                                                                       
        oversight remains                                                                                                       
        • Eligible Telecommunications Carrier designation                                                                       
        and oversight remains                                                                                                   
        • Federal obligations to continue service remain                                                                        
        • New AS 42.05.381(l) requires uniform rates, terms                                                                     
        and conditions                                                                                                          
                                                                                                                                
She  explained  that  landline  Carrier  of  Last  Resort  (COLR)                                                               
regulations  were  implemented in  2010.  They  were intended  to                                                               
ensure  that landline  service  remains in  an  area by  offering                                                               
financial  support  to  one  provider   per  service  area.  That                                                               
explicit financial support  was removed in January  2019. Now the                                                               
COLR regulations still remain as  a duplicate layer of regulation                                                               
that  injects  regulatory  uncertainty  into  telecommunications,                                                               
which  SB  83 would  eliminate.  However,  the obligations  would                                                               
remain since  long standing federal and  state protections exist.                                                               
She read the  bullet points, including comments that  the RCA has                                                               
relied  on the  power  of the  certificate  authority defined  in                                                               
statute.  This  certificate  has   been  effective  in  requiring                                                               
companies to serve in certain locations, she said.                                                                              
                                                                                                                                
2:10:25 PM                                                                                                                    
MS. OCONNER reviewed slide 12, "Regulatory Cost Charge."                                                                        
                                                                                                                                
   • Funding for telecommunications-related activity at the                                                                     
     RCA is inequitable                                                                                                         
   • Cooperative   members    have     elected    economic                                                                      
     deregulation, resulting in exclusion from RCC statutes                                                                     
   • SB 83 restores fair assessment by applying RCC                                                                             
     statutes to all telecommunications providers                                                                               
                                                                                                                                
She said that the regulatory  cost charge has become distorted by                                                               
the statutory  age and the  changes in the marketplace.  She said                                                               
that SB 83  would fix the inequity by  including all certificated                                                               
telecommunication  providers in  that  mechanism.  This has  been                                                               
unanimously supported  by the industry, even  by the cooperatives                                                               
since they recognize it as a matter of fairness.                                                                                
                                                                                                                                
2:10:53 PM                                                                                                                    
MS. OCONNER reviewed slide 13, "Consumer Protection."                                                                           
                                                                                                                                
   • Strong consumer protections today                                                                                          
    • Certificate of Public Convenience and Necessity                                                                           
    • (CPCN)                                                                                                                    
    • Eligible Telecommunications Carrier (ETC)                                                                                 
    • New 42.05.381(l) rate protection                                                                                          
    • Regulatory Affairs and Public Advocacy (RAPA)                                                                             
                                                                                                                                
    • Attorney General Consumer Protection Unit                                                                               
       •  FCC Consumer Complaint Center                                                                                         
                                                                                                                                
   •  SB 83 maintains these protection                                                                                          
                                                                                                                                
She said  that when  someone files  a complaint  with the  FCC, a                                                               
company must respond within a defined time period.                                                                              
                                                                                                                                
2:11:25 PM                                                                                                                    
MS. OCONNER reviewed slide 14, "Benefits to Consumers."                                                                         
                                                                                                                                
 • Mandates rates in remote areas match rates in larger areas                                                                   
   • Allows companies to respond more quickly to consumer                                                                       
     preferences                                                                                                                
   • Focuses resources on consumer services                                                                                     
   • Corrects existing distorted assessment of regulatory cost                                                                  
     charge                                                                                                                     
                                                                                                                                
She said  that this  bill would remove  regulatory delay  and the                                                               
cost of  providing new service.  It also provides  companies with                                                               
the same ability across the  playing field to respond to consumer                                                               
needs.                                                                                                                          
                                                                                                                                
2:11:50 PM                                                                                                                    
MS. OCONNER reviewed slide 15, "SB 83 in Summary."                                                                              
                                                                                                                                
   • Updates statutes and streamlines regulations which                                                                         
      only apply to landline-accessed services both local                                                                       
     and long distance                                                                                                          
   • Exempts from many obsolete statutes                                                                                        
   • Reduces cost and delay of regulation                                                                                       
   • Maintains oversight of providers and continuance of                                                                        
     service                                                                                                                    
                                                                                                                                
She   said   that   the  Federal   1996   Telecom   Act   changed                                                               
telecommunications,   putting   everyone   on   a   path   toward                                                               
competition, innovation, and light-touch  regulation instead of a                                                               
traditional monopoly-style regulation. She  related that 41 other                                                               
states  have  recognized  this   transformation  and  the  Alaska                                                               
Telecom Association proposes  that Alaska do the  same and tailor                                                               
its  statutes  to ensure  that  service  continues, but  to  stop                                                               
wasting resources on work that  is without value, she said. Since                                                               
last year, ATA  has held multiple discussions with  the RCA about                                                               
this proposal.  It has participated  in multiple  public meetings                                                               
and  through  those  discussions  have  modified  the  bill.  She                                                               
reported  that in  February 2019,  the  Regulatory Commission  of                                                               
Alaska (RCA) voted to support SB 83.                                                                                            
                                                                                                                                
2:14:10 PM                                                                                                                    
SENATOR   COSTELLO   reminded   members  that   the   legislature                                                               
previously  heard this  bill.  She asked  whether  there was  any                                                               
opposition to the bill.                                                                                                         
                                                                                                                                
MS. OCONNER answered no.                                                                                                        
                                                                                                                                
2:14:46 PM                                                                                                                    
CHAIR REINBOLD opened public testimony on SB 83.                                                                                
                                                                                                                                
2:15:53 PM                                                                                                                    
RICK  HITTS, Vice-President,  GCI,  Anchorage, said  that he  has                                                               
worked  in telecommunications  in Alaska  for over  33 years.  He                                                               
said  he  is  familiar  with the  statutes  and  regulations.  He                                                               
expressed gratitude that the committee  would encourage this type                                                               
of  legislation,  especially since  it  was  overdue. The  entire                                                               
industry  is  in  support  of   SB  83,  he  said.  Further,  the                                                               
Regulatory Commission  of Alaska (RCA)  voted 4-1 to  support the                                                               
bill. In  addition, this bill  is consistent with  the governor's                                                               
goal  to reduce  unnecessary  regulation. He  offered his  belief                                                               
that  government  was  becoming   more  efficient,  with  a  more                                                               
productive  industry, and  most importantly  that better  service                                                               
would be provided  to the end user. SB 83  contains safeguards to                                                               
protect places  where competition was  not as robust, such  as in                                                               
rural areas. He encouraged members to pass the bill.                                                                            
                                                                                                                                
2:17:34 PM                                                                                                                    
CHAIR REINBOLD suggested that this bill provided deregulation.                                                                  
                                                                                                                                
MR.  HITTS  agreed  it  was  deregulation  but  that  it  retains                                                               
necessary regulation.                                                                                                           
                                                                                                                                
[SB 83 was held in committee.]                                                                                                  
                                                                                                                                
2:18:31 PM                                                                                                                    
At-ease.                                                                                                                        
                                                                                                                                
         SB 52-ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG                                                                      
                                                                                                                                
2:30:54 PM                                                                                                                    
CHAIR  REINBOLD reconvened  the meeting.  She announced  that the                                                               
next  order of  business would  be SENATE  BILL NO.  52, "An  Act                                                               
relating to  alcoholic beverages;  relating to the  regulation of                                                               
manufacturers,   wholesalers,   and    retailers   of   alcoholic                                                               
beverages;  relating  to   licenses,  endorsements,  and  permits                                                               
involving  alcoholic   beverages;  relating  to   common  carrier                                                               
approval to  transport or  deliver alcoholic  beverages; relating                                                               
to  the Alcoholic  Beverage Control  Board; relating  to offenses                                                               
involving alcoholic beverages; amending  Rule 17(h), Alaska Rules                                                               
of  Minor  Offense  Procedure; and  providing  for  an  effective                                                               
date."                                                                                                                          
                                                                                                                                
2:31:05 PM                                                                                                                    
                                                                                                                                
SENATOR  COSTELLO  clarified the  original  bill  was before  the                                                               
committee. Senator Bishop objected for purposes of discussion.                                                                  
                                                                                                                                
2:31:31 PM                                                                                                                    
EDRA  MORLEDGE,  Staff,  Senator  Peter  Micciche,  Alaska  State                                                               
Legislature,  Juneau,  paraphrased  from the  sponsor  statement,                                                               
which read as follows:                                                                                                          
                                                                                                                                
     SB  52 modernizes  the Title  4 statutes  governing the                                                                    
     Alcoholic  Beverage  Control  Board (board).  The  bill                                                                    
     allows the  board to function more  efficiently as they                                                                    
     regulate  the   alcohol  industry  in  a   manner  that                                                                    
     promotes  public safety  and  health, while  supporting                                                                    
     the alcohol  industry's continued growth  and viability                                                                    
     in today's  current climate. This  bill is  the product                                                                    
     of  a seven-year,  unprecedented collaboration  of over                                                                    
     100  stakeholders  from  a  diverse  group  of  alcohol                                                                    
     industry  representatives,  public  health  and  safety                                                                    
     entities,  local governments  and advocates  for youth.                                                                    
     Stakeholders   established   shared    goals   as   the                                                                    
     foundation for developing recommendations:                                                                                 
                                                                                                                                
     ? Promoting a fair  business climate and protect public                                                                    
     health and  safety. ? Creating rational  regulation for                                                                    
     all tiers of the state's alcohol industry.                                                                                 
                                                                                                                                
     ? Limiting youth access to alcohol.                                                                                        
                                                                                                                                
     ?  Promoting responsible  alcohol  use  and reduce  the                                                                    
     harms of overconsumption.                                                                                                  
                                                                                                                                
     ? Implementing  without negative impacts  on businesses                                                                    
     and   responsible   operators.    The   result   is   a                                                                    
     reorganization  that  clearly  defines the  rights  and                                                                    
     obligations  of licensees,  restructures penalties  for                                                                    
     offenses in  Title 4, and  organizes the statutes  in a                                                                    
     logical, common-sense  manner for all users  of Title 4                                                                    
     statutes.                                                                                                                  
                                                                                                                                
     The bill  requires that the director  prepare an annual                                                                    
     enforcement,   education,   training,  and   prevention                                                                    
     budget and requires  the Board to review  fees every 10                                                                    
     years.   Penalty  sections   are   amended  to   ensure                                                                    
     consistent   enforcement   and   just   outcomes.   New                                                                    
     statutory  provisions retain  the three-tier  licensing                                                                    
     system   but   create   more  flexibility   for   small                                                                    
     manufacturers;  create  a  new  endorsement  system  to                                                                    
     expand  the  boundaries   of  licensed  businesses  and                                                                    
     accommodate special  events; and modify  the permitting                                                                    
     system  for  clarity.  The   bill  also  creates  local                                                                    
     control   in   community    population   limits,   adds                                                                    
     mechanisms  to  prevent  underage  access  to  alcohol,                                                                    
     regulates  common  carriers  who  deliver  alcohol  and                                                                    
     provides  for  a   smooth  transitional  implementation                                                                    
     period.                                                                                                                    
                                                                                                                                
2:33:19 PM                                                                                                                    
MS.  MORLEDGE  said one  of  the  main  goals is  to  restructure                                                               
licensing  to make  the current  licensing clearer  and to  place                                                               
regulatory provisions  in statute.  The permitting  process would                                                               
remain  in  regulation,  she  said.  She  said  the  goal  is  to                                                               
streamline  the  process,  place  it under  one  title  and  make                                                               
regulation  easy for  the board  and industry  members. She  said                                                               
that  the  goals  included promoting  a  fair  business  climate,                                                               
protecting  public health  and safety,  limiting youth  access to                                                               
alcohol, promoting  responsible alcohol  use, reducing  the harms                                                               
of  overconsumption, and  implementing change  without negatively                                                               
harming existing businesses and  responsible operators. The other                                                               
main  goal  is to  make  Title  04  as  clear and  consistent  as                                                               
possible  for  the board,  licensees,  and  law enforcement,  she                                                               
said.                                                                                                                           
                                                                                                                                
2:34:43 PM                                                                                                                    
MS.  MORLEDGE explained  the key  concepts in  Title 04  were the                                                               
three-tier    system,    including   separating    manufacturers,                                                               
wholesalers,  and retailers  to  prevent  monopolies. Second,  it                                                               
would restructure and reorganize  the licensing system to include                                                               
the  clearly  defined  categories.   Finally,  it  would  address                                                               
population  limits,  which  regulates   the  number  of  licenses                                                               
available in  each community  by type. One  of the  issues raised                                                               
has been  the length  of the  bill. She  explained that  this was                                                               
necessary because changes affect many different sections.                                                                       
                                                                                                                                
2:35:25 PM                                                                                                                    
SENATOR PETER  MICCICHE, Alaska State Legislature,  Juneau, spoke                                                               
as sponsor of  SB 52. He stated  that he has worked  on a rewrite                                                               
of  the  alcohol beverage  control  statutes  for at  least  five                                                               
years.                                                                                                                          
                                                                                                                                
2:36:15 PM                                                                                                                    
SENATOR BIRCH  asked whether this  was substantially the  same as                                                               
last year's bill or if there were any substantive changes.                                                                      
                                                                                                                                
SENATOR MICCICHE answered  that it was essentially  the same bill                                                               
that passed last year, with  a few minor changes. The stakeholder                                                               
groups met  during the interim  and some minor changes  were made                                                               
at their request.                                                                                                               
                                                                                                                                
2:37:31 PM                                                                                                                    
SENATOR  MICCICHE explained  his interest  in the  rewrite. As  a                                                               
legislator, he  was initially  surprised at  the number  of bills                                                               
that  come before  the legislature  related to  alcohol. Then  he                                                               
discovered that the statutes were  outdated, in part, because the                                                               
industry has dramatically  changed in the last 30  years. He said                                                               
the he  reviewed the public  health and safety  issues, including                                                               
overserving,  serving minors,  and the  quality of  operators. He                                                               
said  that he  realized that  these issues  were intertwined.  He                                                               
pulled together  a group of  stakeholders to address  things that                                                               
did  not  make sense.  He  highlighted  that  the goals  were  to                                                               
support this industry since it is  an important one to the state,                                                               
but still  obtain the best  results for public health  and public                                                               
safety. He said  that SB 52 was  the result of this  work. He has                                                               
observed  the interaction  between  industry  and the  [Alcoholic                                                               
Beverage  Control  Board  (ABC Board).  He  said  that  sometimes                                                               
people are  upset with them  when they  follow the law,  but also                                                               
when they  do not. This bill  would clarify the law,  so everyone                                                               
would  understand  expectations  for operators.  He  offered  his                                                               
belief  that this  bill would  promote a  fair business  climate,                                                               
limit youth  access to alcohol, promote  responsible alcohol use,                                                               
and reduce the  harms of overconsumption. He said  that this bill                                                               
would  implement  these   changes  without  negatively  impacting                                                               
existing businesses and responsible operators.                                                                                  
                                                                                                                                
2:39:43 PM                                                                                                                    
SENATOR MICCICHE  said that the  legislature has been  focused on                                                               
the opioid epidemic. However, alcohol  still represented about 95                                                               
percent of  the substance abuse  problem in Alaska. He  said that                                                               
many  things  that have  affected  public  health and  safety  in                                                               
Alaska  for generations,  including  suicide,  sexual abuse,  and                                                               
domestic violence  were all tied  to alcohol abuse. He  said that                                                               
this bill  would take  it all into  account and  redistribute the                                                               
statutes to make  sense. It would add  licensing and endorsements                                                               
to  reflect  today's  operations   and  provide  a  comprehensive                                                               
approach that resets how alcohol is managed in Alaska.                                                                          
                                                                                                                                
2:41:26 PM                                                                                                                    
MS.  MORLEDGE  said that  pages  1-5  of  the summary  relate  to                                                               
chapter 6 of Title 4, the Alcoholic Beverage Control Board.                                                                     
                                                                                                                                
     Chapter 6: Alcoholic Beverage Control Board                                                                                
                                                                                                                                
      Section 1: Declaration of Policy; purpose; finding.                                                                       
     Adds a new section AS 04.06.005 (Pages 1-2.                                                                                
                                                                                                                                
2:41:57 PM                                                                                                                    
MS. MORLEDGE read Section 2.                                                                                                    
                                                                                                                                
     Section   2:  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)                                                                              
                                                                                                                                
2:42:16 PM                                                                                                                    
MS.  MORLEDGE referred  to the  color coded  the document;  green                                                               
referred to  new concepts, yellow highlighting  showed provisions                                                               
that  were  relocated,  and  magenta   referred  to  the  penalty                                                               
provisions.                                                                                                                     
                                                                                                                                
2:43:01 PM                                                                                                                    
SENATOR BISHOP  complimented staff because  this made it  easy to                                                               
follow.                                                                                                                         
                                                                                                                                
2:43:42 PM                                                                                                                    
MS. MORLEDGE read Sections 3 and 4.                                                                                             
                                                                                                                                
     Section   3:  Delegation   of   Authority.  Amends   AS                                                                    
     04.06.080 to  add endorsements to the  delegated powers                                                                    
     of the director of the ABC board. (Page 2)                                                                                 
                                                                                                                                
     Section 4:  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 2)                                                                      
                                                                                                                                
2:44:05 PM                                                                                                                    
MS. MORLEDGE reviewed Section 5.                                                                                                
                                                                                                                                
     Section 5:  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 2)                                                                                               
                                                                                                                                
She said that the yellow highlighting relates to existing law.                                                                  
                                                                                                                                
2:44:21 PM                                                                                                                    
SENATOR   COSTELLO   acknowledged    that   this   document   was                                                               
highlighted.  She suggested  that the  committee skip  the yellow                                                               
highlighted provisions  and spend more  time on the  new concepts                                                               
that  were  highlighted  in  green  and  the  penalty  provisions                                                               
highlighted in magenta.                                                                                                         
                                                                                                                                
CHAIR REINBOLD agreed.                                                                                                          
                                                                                                                                
2:45:22 PM                                                                                                                    
MS. MORLEDGE  read Section 10, "Proposed  Chapter 9, Endorsements                                                               
and Permits."                                                                                                                   
                                                                                                                                
     Proposed Chapter 9: Licenses, Endorsements and Permits                                                                     
                                                                                                                                
     Section  10: Adds  the  new  Chapter 09  to  Title 4                                                                       
     Licenses,  Endorsements  and  Permits.  Relocates  many                                                                    
     existing   licenses  and   permits  from   Chapter  11,                                                                    
     organizes into  articles of licenses,  endorsements and                                                                    
     permits. (Pages 5-50).                                                                                                     
                                                                                                                                
2:45:36 PM                                                                                                                    
MS. MORLEDGE referred to page  3 of the sectional analysis [shown                                                               
in magenta].                                                                                                                    
                                                                                                                                
     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. (Page 11)                                                                                                
                                                                                                                                
     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. (Pages 11-12)                                                                                            
                                                                                                                                
2:46:21 PM                                                                                                                    
MS. MORLEDGE reviewed page 4,  [shown in yellow] that reorganizes                                                               
existing retail licenses.                                                                                                       
                                                                                                                                
2:46:39 PM                                                                                                                    
At-ease.                                                                                                                        
                                                                                                                                
2:47:24 PM                                                                                                                    
CHAIR REINBOLD reconvened the meeting.                                                                                          
                                                                                                                                
MS. MORLEDGE  reverted to  page 2, to  "New Chapter  9: Licenses,                                                               
Endorsements  and  Permits."  She   explained  that  this  entire                                                               
section pertained  to "Article  1, License  Types and  Article 2,                                                               
Manufacturer   Licenses,"   including    brewery,   winery,   and                                                               
distillery  manufacturer  licenses.  These  provisions  refer  to                                                               
existing licenses, which were put into the new article.                                                                         
                                                                                                                                
2:47:56 PM                                                                                                                    
MS. MORLEDGE read AS 04.09.050.                                                                                                 
                                                                                                                                
     AS   04.09.050.   Authorized  sales.   Allows   smaller                                                                    
     manufacturers to self-distribute  to retail, wholesale,                                                                    
     permitted  and  out  of  state  or  country  licensees.                                                                    
     Requires  large manufacturers  to go  through wholesale                                                                    
     distributors and not hold retail licenses. (Pages 6-7)                                                                     
                                                                                                                                
MS. MORLEDGE referred to page  3 of the sectional analysis, which                                                               
relocated  the   existing  penalties  in  AS   04.09.060  and  AS                                                               
04.09.070. She read the new penalty provision in AS 04.09.080.                                                                  
                                                                                                                                
     AS 04.09.060.  Unlicensed manufacturing.  Relocates the                                                                    
     existing  penalty   for  unlicensed   manufacture  from                                                                    
     04.11.010. (Page 7)                                                                                                        
                                                                                                                                
     AS  04.09.070.  Unlicensed  manufacturing  in  a  local                                                                    
     option  area.   Relocates  the  existing   penalty  for                                                                    
     unlicensed  manufacture in  a  local  option area  from                                                                    
     04.11.010. (Pages 7-8)                                                                                                     
                                                                                                                                
     AS 04.09.080.  Unauthorized manufacturer  sale. Defines                                                                    
     unauthorized manufacturer  sale as  violating 04.09.050                                                                    
     and sets the penalty. (Page 8)                                                                                             
                                                                                                                                
SENATOR   MICCICHE  suggested   she   review   the  new   penalty                                                               
provisions.                                                                                                                     
                                                                                                                                
2:49:20 PM                                                                                                                    
MS.  MORLEDGE  read  AS  04.09.150 and  AS  04.09.160  [shown  in                                                               
magenta].                                                                                                                       
                                                                                                                                
     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. (Page 11)                                                                                                
                                                                                                                                
     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. (Pages 11-12)                                                                                            
                                                                                                                                
2:49:40 PM                                                                                                                    
MS. MORLEDGE referred  to page 4, "Article  4. Retail Licensees,"                                                               
[shown   in  yellow]   were   provisions   being  relocated   and                                                               
reorganized.  In response  to Chair  Reinbold, she  explained the                                                               
reason to  reorganize was  because some  licenses exist  in other                                                               
areas of the  state statutes. She said the sponsor  seeks to have                                                               
all of the licenses relocated to AS 04.09.                                                                                      
                                                                                                                                
MS. MORLEDGE  reviewed page  5 of the  sectional analysis  to the                                                               
provisions  [shown  in green]  related  to  brewery, winery,  and                                                               
distillery licenses.                                                                                                            
                                                                                                                                
     AS  04.09.310.  Brewery  retail  license.  Creates  new                                                                    
     license  type   based  on   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,  and  sets   penalty  for                                                                    
     failure to comply with license terms. (Pages 21-22)                                                                        
                                                                                                                                
     AS  04.09.320.  Winery   retail  license.  Creates  new                                                                    
     license  type   based  on   existing  language   in  AS                                                                    
     04.11.140 for  winery retail activities,  sets biennial                                                                    
     fee at  $1,250, requires retail license  to be adjacent                                                                    
     to  5  manufacturing  location,  defines  sales  volume                                                                    
     limits  for   cider  and  mead  depending   on  alcohol                                                                    
     content, and  sets penalty for  failure to  comply with                                                                    
     license terms. (Pages 22-23)                                                                                               
                                                                                                                                
     AS  04.09.330. 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, and  sets penalty                                                                    
     for failure  to comply  with license terms.  (Pages 23-                                                                    
     24)                                                                                                                        
                                                                                                                                
2:51:16 PM                                                                                                                    
MS. MORLEDGE reviewed AS 04.09.350 and AS 04.09.360 [shown in                                                                   
green], which were new provisions.                                                                                              
                                                                                                                                
     AS  04.09.350.  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 26-27)                                                                                               
                                                                                                                                
     AS 04.09.360.  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 27-                                                                    
     29)                                                                                                                        
                                                                                                                                
2:51:51 PM                                                                                                                    
SENATOR MICCICHE explained the brewery, winery, and distillery                                                                  
references on this slide were incorrect and would be updated.                                                                   
                                                                                                                                
2:52:16 PM                                                                                                                    
MS. MORLEDGE  reviewed "Article  5. Endorsements,"  on page  6 of                                                               
the  sectional analysis  [shown in  green]. She  said that  these                                                               
provisions  would  allow  for  manufacturer  licenses  to  obtain                                                               
varying endorsements  for activities occurring on  their licensed                                                               
premises.  As  an  example,  she  referred  to  the  manufacturer                                                               
sampling endorsement under as 04.09.410.                                                                                        
                                                                                                                                
     AS   04.09.410.   Manufacturer  sampling   endorsement.                                                                    
     Creates new  endorsement for  onsite sampling  based on                                                                    
     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 30-31)                                                                      
                                                                                                                                
She explained  that breweries currently provide  tasting samples.                                                               
This  provision  would  create   a  new  endorsement  for  onsite                                                               
sampling.                                                                                                                       
                                                                                                                                
2:53:11 PM                                                                                                                    
MS. MORLEDGE reviewed AS 04.09.420.                                                                                             
                                                                                                                                
     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 31-32)                                                                                                     
                                                                                                                                
She said that  a bar with several rooms would  get an endorsement                                                               
under one license  rather than obtaining a  duplicate license for                                                               
each of the rooms.                                                                                                              
                                                                                                                                
2:53:30 PM                                                                                                                    
MS. MORLEDGE reviewed AS 04.09.420.                                                                                             
                                                                                                                                
     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 31-32)                                                                                                     
                                                                                                                                
     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 32-33                                                                                                
                                                                                                                                
     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 33-35)                                                                       
                                                                                                                                
2:53:53 PM                                                                                                                    
SENATOR BISHOP asked if the definition  of a large resort was for                                                               
a 100-room occupancy.                                                                                                           
                                                                                                                                
2:54:58 PM                                                                                                                    
ANNA  BRAWLEY,   Title  4  Project  Review   Coordinator;  Senior                                                               
Associate,  Agnew Beck  Consulting,  Anchorage,  answered that  a                                                               
large resort  would be a  place that offers  outdoor recreational                                                               
activities and overnight  lodging for guests. It  would also have                                                               
at least 10  contiguous acres. She said that it  could be one big                                                               
property or parcel.                                                                                                             
                                                                                                                                
2:55:22 PM                                                                                                                    
SENATOR BISHOP asked whether 10 acres was the key.                                                                              
                                                                                                                                
MS. BRAWLEY  answered that the  language would  require overnight                                                               
lodging, but it did not require a specific number of rooms.                                                                     
                                                                                                                                
2:55:39 PM                                                                                                                    
MS. MORLEDGE suggested that the  presentation at the next hearing                                                               
would help to clarify some things.                                                                                              
                                                                                                                                
2:56:04 PM                                                                                                                    
MS. MORLEDGE reviewed AS 04.09.450 [shown in green and yellow].                                                                 
                                                                                                                                
     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 35-36)                                                                                               
                                                                                                                                
She  said  that some  provisions  were  being redefined  under  a                                                               
separate endorsement.                                                                                                           
                                                                                                                                
     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 36-38)                                                                                               
                                                                                                                                
     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. (Page 38)                                                                                                   
                                                                                                                                
     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. (Page 39)                                                                                       
                                                                                                                                
2:56:56 PM                                                                                                                    
MS. MORLEDGE turned to page 7 of the sectional analysis.                                                                        
                                                                                                                                
She referred to AS 04.09.490. Package store sampling endorsement                                                                
[shown in green].                                                                                                               
                                                                                                                                
     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 39-40)                                                                      
                                                                                                                                
She reviewed the next three provision [shown in green and                                                                       
yellow].                                                                                                                        
                                                                                                                                
     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 40-41)                                                                                                              
                                                                                                                                
     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. (Pages 41-42)                                                                                   
                                                                                                                                
     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 42-43)                                                                                               
                                                                                                                                
2:57:13 PM                                                                                                                    
MS. MORLEDGE reviewed "Article 6. Permits" [shown in yellow],                                                                   
which were consolidated in the same place, she said.                                                                            
                                                                                                                                
She directed attention to AS 04.09.670 [shown in green] on page                                                                 
8.                                                                                                                              
                                                                                                                                
     AS  04.09.670.   Tasting  event  permit.   Creates  new                                                                    
     permit, allows a package store  to host a tasting event                                                                    
     on the  package store's licensed premises,  and service                                                                    
     from its product inventory, sets  a time limit and food                                                                    
     requirement, and  limits to six events  per license per                                                                    
     year. (Pages 47-48)                                                                                                        
                                                                                                                                
MS. MORLEDGE said that this would allow a package store to host                                                                 
a tasting event on premise.                                                                                                     
                                                                                                                                
She reviewed AS 04.09.700 [shown in magenta].                                                                                   
                                                                                                                                
     AS  04.09.700.   Failure  to   comply  with   a  permit                                                                    
     requirement. Sets  the penalties for failure  to comply                                                                    
     with   permit  requirements.   (Pages  48-49)   setting                                                                    
     penalties for requirements                                                                                                 
                                                                                                                                
MS. MORLEDGE reviewed "Article 7. Common Carrier Approval"                                                                      
[shown in green].                                                                                                               
                                                                                                                                
     AS  04.09.750. Common  carrier  approval. Requires  the                                                                    
     board  to approve  a common  carrier  to transport  and                                                                    
     deliver  alcoholic  beverages  to  persons  within  the                                                                    
     state  in  response  to a  consumer's  order  and  sets                                                                    
     requirements and penalties  for common carriers. (Pages                                                                    
     49-50)                                                                                                                     
                                                                                                                                
2:58:30 PM                                                                                                                    
MS. MORLEDGE reviewed "Chapter 11. Licensing. Section 14."                                                                      
                                                                                                                                
     Section  14:  Purchase   from  nonlicensee  prohibited.                                                                    
     Amends AS 04.11.015 to prohibit  the purchase or barter                                                                    
     for  alcoholic beverages  from a  nonlicensee and  adds                                                                    
     penalty with $250 fine. (Page 51)                                                                                          
                                                                                                                                
She related that Section 14 [shown in magenta] added a penalty.                                                                 
                                                                                                                                
2:58:48 PM                                                                                                                    
MS. MORLEDGE said that Sections 16-19 and Section 21 on page 9                                                                  
[shown in magenta] added penalty provisions.                                                                                    
                                                                                                                                
     Section  16:  Board  approval of  transfers.  Adds  new                                                                    
     subsections to AS  04.11.040 (d) and (e) to  make it an                                                                    
     offense and provide for a  penalty for the unauthorized                                                                    
     transfer of  an alcoholic  beverage license  or permit.                                                                    
     It is a violation. (Page 52)                                                                                               
                                                                                                                                
     Section  17:  Reports  required  of  limited  liability                                                                    
     organization. Adds new subsections  to AS 04.11.045 (c)                                                                    
     and  (d) to  add  a  penalty for  failure  to report  a                                                                    
     change in  member interest or  manager with  $250 fine.                                                                    
     (Page 52)                                                                                                                  
                                                                                                                                
     Section 18: Reports required  of corporations. Adds new                                                                    
     subsections  to  AS 04.11.050  (c)  and  (d) to  add  a                                                                    
     penalty  for  failure to  report  a  stock transfer  or                                                                    
     change  of officers  or board  members with  $250 fine.                                                                    
     (Page 52)                                                                                                                  
                                                                                                                                
     Section 19: Reports required  of partnerships. Adds new                                                                    
     subsections  to  AS 04.11.055  (c)  and  (d) to  add  a                                                                    
     penalty   for  failure   to   report   a  transfer   of                                                                    
     partnership interest or change  of general partner with                                                                    
     $250 fine. (Page 52)                                                                                                       
                                                                                                                                
2:59:08 PM                                                                                                                    
MS. MORLEDGE said that Section 20 was relocated. She reviewed                                                                   
Section 21 [shown in magenta], which added a penalty provision.                                                                 
                                                                                                                                
     Section 21:  Nonresident distiller, brewer,  winery, or                                                                    
     wholesaler.   Amends  AS   04.11.060  to   add  a   new                                                                    
     subsection (b)  to provide a penalty  for violating the                                                                    
     previous  section, making  it  a  class A  misdemeanor.                                                                    
     (Page 53)                                                                                                                  
                                                                                                                                
MS. MORLEDGE reviewed Section 23 [shown in green].                                                                              
                                                                                                                                
     Section  23: Application  for  new  license or  permit.                                                                    
     Amends AS  04.11.260 to  exempt winery  direct shipment                                                                    
     license from the application  process for other license                                                                    
     types. (Page 54)                                                                                                           
                                                                                                                                
She  said  that  this  provision would  exempt  a  winery  direct                                                               
shipment license from the application process.                                                                                  
                                                                                                                                
2:59:43 PM                                                                                                                    
SENATOR BISHOP asked whether he  could contact a winery in Oregon                                                               
and have wine shipped directly to his home.                                                                                     
                                                                                                                                
MS.  MORLEDGE   answered  that  existing  wine   clubs  currently                                                               
deliver. However, they were not  licensed companies in the state,                                                               
but this would provide licensure.                                                                                               
                                                                                                                                
SENATOR MICCICHE  explained that the  reason it was  important is                                                               
because anyone can order wine and  liquor, but they may not be of                                                               
age or  be in  a dry community.  He said the  goal is  to license                                                               
them  so the  state knows  who the  companies are  and that  they                                                               
would be taxed similarly to other establishments in Alaska.                                                                     
                                                                                                                                
[SB 52 was held in committee.]                                                                                                  
                                                                                                                                
3:00:42 PM                                                                                                                    
CHAIR REINBOLD reviewed upcoming committee announcements.                                                                       
                                                                                                                                
3:01:11 PM                                                                                                                    
There being  no further  business to  come before  the committee,                                                               
Chair Reinbold  adjourned the Senate Labor  and Commerce Standing                                                               
Committee meeting at 3:01 p.m.                                                                                                  

Document Name Date/Time Subjects
SB44 Amendment Effective Date Amendment SL&C.pdf SL&C 3/26/2019 1:30:00 PM
SB 44
SJR 8 USTR Statement for the Record.pdf SL&C 3/26/2019 1:30:00 PM
SJR 8
SJR 8 Alaska USMCA and Section 232 Impacts and Benefits.pptx SL&C 3/26/2019 1:30:00 PM
SJR 8
SB 83 Version M.pdf SL&C 3/26/2019 1:30:00 PM
SB 83
SB 83 Sponsor Statement.pdf SL&C 3/26/2019 1:30:00 PM
SB 83
SB 83 Sectional Analysis.pdf SL&C 3/26/2019 1:30:00 PM
SB 83
SB 83 Supporting Document Myth v Fact Modernizing Alaska's Telecommunications Legislation - Alaska Telecom Assn.pdf SL&C 3/26/2019 1:30:00 PM
SB 83
SB 83 Supporting Document Modernizing Alaska's Telecommunications Legislation - Alaska Telecom Assn.pdf SL&C 3/26/2019 1:30:00 PM
SB 83
SB 83 Alaska Telecom Association Presentation.pdf SL&C 3/26/2019 1:30:00 PM
SB 83
SB 83 - Letters of Support.pdf SL&C 3/26/2019 1:30:00 PM
SB 83
SB83-DCCED-RCA-03-20-19.pdf SL&C 3/26/2019 1:30:00 PM
SB 83
SB 52 Version U.PDF SJUD 4/22/2019 6:00:00 PM
SL&C 3/26/2019 1:30:00 PM
SB 52
SB 52 Sponsor Statement.pdf SJUD 4/22/2019 6:00:00 PM
SL&C 3/26/2019 1:30:00 PM
SB 52
SB 52 Sectional Analysis 2.19.19.pdf SJUD 4/22/2019 6:00:00 PM
SL&C 3/26/2019 1:30:00 PM
SB 52
SB 52 Title 4 Bill Summary Changes SB 76 (2018) to SB 52 (2019).pdf SJUD 4/22/2019 6:00:00 PM
SL&C 3/26/2019 1:30:00 PM
SB 52
SB 76
SB 52 Sectional Analysis v.U.pdf SJUD 4/22/2019 6:00:00 PM
SL&C 3/26/2019 1:30:00 PM
SB 52
SB 52 Summary of Proposed Penalties.pdf SJUD 4/22/2019 6:00:00 PM
SL&C 3/26/2019 1:30:00 PM
SB 52
SB 52 Summary of Goals.pdf SJUD 4/22/2019 6:00:00 PM
SL&C 3/26/2019 1:30:00 PM
SB 52
SB 52 Title 4 Review Report.pdf SL&C 3/26/2019 1:30:00 PM
SB 52
SB52 Title4 Letter Support Firetap Alehouse.pdf SL&C 3/26/2019 1:30:00 PM
SB 52
SB 52 Letter of Support ABC Board 2.18.19.pdf SL&C 3/26/2019 1:30:00 PM
SB 52
SB52 Title4 Resolution Support Firetap Alehouse.pdf SL&C 3/26/2019 1:30:00 PM
SB 52
SB 52 Letter of Support Recover Alaska.pdf SL&C 3/26/2019 1:30:00 PM
SB 52
SB 52 Letter of Support ALPHA 3.25.19.pdf SL&C 3/26/2019 1:30:00 PM
SB 52
SB 52 Letter of Opposition AK Berries.pdf SL&C 3/26/2019 1:30:00 PM
SB 52
SB 52 AK Berries Winery Fees Table.pdf SL&C 3/26/2019 1:30:00 PM
SB 52
SB052-DCCED-AMCO-03-22-19.pdf SL&C 3/26/2019 1:30:00 PM
SB 52
SB052-DHSS-PS-3-22-2019.pdf SL&C 3/26/2019 1:30:00 PM
SB 52
SB052-DCCED-CBPL-02-14-19.pdf SL&C 3/26/2019 1:30:00 PM
SB 52
SB052-DOR-TAX-3-21-2019.pdf SL&C 3/26/2019 1:30:00 PM
SB 52
SJR8-SLAC-03-21-19.pdf SL&C 3/26/2019 1:30:00 PM
SJR 8