Legislature(2019 - 2020)BELTZ 105 (TSBldg)

04/02/2019 01:30 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 83 TELECOMMUNICATIONS REGULATION/EXEMPTIONS TELECONFERENCED
Moved SB 83 Out of Committee
-Invited Testimony Followed by Public Testimony-
+= SB 52 ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
**Streamed live on AKL.tv**
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                         April 2, 2019                                                                                          
                           1:31 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lora Reinbold, Chair                                                                                                    
Senator Mia Costello, Vice Chair                                                                                                
Senator Chris Birch                                                                                                             
Senator Elvi Gray-Jackson                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Click Bishop                                                                                                            
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
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."                                                                                                   
                                                                                                                                
     - MOVED SB 83 OUT OF COMMITTEE                                                                                             
                                                                                                                                
SENATE BILL NO. 52                                                                                                              
"An  Act  relating  to  alcoholic   beverages;  relating  to  the                                                               
regulation  of  manufacturers,   wholesalers,  and  retailers  of                                                               
alcoholic  beverages;  relating  to licenses,  endorsements,  and                                                               
permits  involving   alcoholic  beverages;  relating   to  common                                                               
carrier  approval to  transport or  deliver alcoholic  beverages;                                                               
relating  to the  Alcoholic Beverage  Control Board;  relating to                                                               
offenses  involving  alcoholic  beverages; amending  Rule  17(h),                                                               
Alaska Rules  of Minor  Offense Procedure;  and providing  for an                                                               
effective date."                                                                                                                
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 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)                                                                      
03/26/19       (S)       Heard & Held                                                                                           
03/26/19       (S)       MINUTE(L&C)                                                                                            
04/02/19       (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)                                                                      
03/26/19       (S)       Heard & Held                                                                                           
03/26/19       (S)       MINUTE(L&C)                                                                                            
03/28/19       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/28/19       (S)       Heard & Held                                                                                           
03/28/19       (S)       MINUTE(L&C)                                                                                            
04/02/19       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
CHRISTINE OCONNOR, Executive Director                                                                                           
Alaska Telecom Association                                                                                                      
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Answered questions during the hearing on SB                                                               
83.                                                                                                                             
                                                                                                                                
SENATOR PETER MICCICHE                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified as sponsor of SB 52.                                                                            
                                                                                                                                
EDRA MORLEDGE, Staff                                                                                                            
Senator Peter Micciche                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Answered questions during the hearing on 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.                                                                                                                             
                                                                                                                                
ERIKA MCCONNELL, Director                                                                                                       
Alcohol  and Marijuana  Control Office,  Department of  Commerce,                                                               
Community, and Economic Development                                                                                             
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions during the  hearing on SB                                                             
52.                                                                                                                             
                                                                                                                                
TIFFANY HALL, Executive Director                                                                                                
Recover Alaska                                                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified during the hearing on SB 52.                                                                    
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:31:40 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  Gray-Jackson, Costello,  Birch, and                                                               
Chair Reinbold.                                                                                                                 
                                                                                                                                
         SB 83-TELECOMMUNICATIONS REGULATION/EXEMPTIONS                                                                     
                                                                                                                                
1:32:08 PM                                                                                                                    
CHAIR REINBOLD announced  that the first 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."                                                                                                                      
                                                                                                                                
1:33:54 PM                                                                                                                    
At-ease.                                                                                                                        
                                                                                                                                
1:35:16 PM                                                                                                                    
CHAIR REINBOLD reconvened the meeting.                                                                                          
                                                                                                                                
1:35:22 PM                                                                                                                    
SENATOR GRAY-JACKSON  referred to Section  9, on page 4,  line 8,                                                               
which added  language "or  a local  exchange carrier."  She asked                                                               
whether    local   exchange    carriers    were   regulated    by                                                               
municipalities.                                                                                                                 
                                                                                                                                
1:35:50 PM                                                                                                                    
CHRISTINE   OCONNOR,    Executive   Director,    Alaska   Telecom                                                               
Association, Anchorage, answered that  local exchange carriers or                                                               
landline    providers   are    not    currently   regulated    by                                                               
municipalities.  She  said  that one  municipal  owned  telephone                                                               
company, Ketchikan  Public Utilities,  is governed by  their city                                                               
council.                                                                                                                        
                                                                                                                                
SENATOR  GRAY-JACKSON  asked  whether the  bill  would  basically                                                               
address housekeeping issues.                                                                                                    
                                                                                                                                
MS. OCONNOR answered  yes, that this bill  would update statutes,                                                               
many of which were nearly 50 years old.                                                                                         
                                                                                                                                
1:36:29 PM                                                                                                                    
CHAIR  REINBOLD   announced  that   public  testimony   had  been                                                               
previously closed.                                                                                                              
                                                                                                                                
1:37:07 PM                                                                                                                    
SENATOR COSTELLO reviewed the fiscal  note from the Department of                                                               
Commerce, Community  and Economic  Development (DCCED).  She said                                                               
that SB 83  had no fiscal impact and regulation  changes would be                                                               
adopted  by  December  31,  2023.  The  bill  would  establish  a                                                               
universal  service fund  and requests  that the  RCA establish  a                                                               
communication carrier  section. The RCA  anticipated implementing                                                               
these provisions with existing resources, she said.                                                                             
                                                                                                                                
1:38:04 PM                                                                                                                    
SENATOR  BIRCH related  his understanding  that public  testimony                                                               
had  previously  been  opened  and closed.  He  reported  that  a                                                               
similar  bill was  introduced  last  year. SB  83  would seek  to                                                               
encourage  investment  and  innovation in  the  telecommunication                                                               
industry by  updating the  statutes relevant  to to  the landline                                                               
and   long  distance   services.  This   bill  would   provide  a                                                               
comprehensive fix,  one that  has been needed  for some  time. He                                                               
said he appreciated the work the  industry has put into this bill                                                               
over  the past  several years.  He  characterized it  as a  "good                                                               
bill."                                                                                                                          
                                                                                                                                
1:38:56 PM                                                                                                                    
SENATOR  BIRCH  thanked  his staff,  Kim  Skipper  and  Christine                                                               
O'Connor for their work on this bill.                                                                                           
                                                                                                                                
1:39:52 PM                                                                                                                    
SENATOR COSTELLO moved  to report SB 83,  work order 31-LS0563\M,                                                               
from  committee  with  individual  recommendations  and  attached                                                               
fiscal note.  There being no  objection, SB 83 was  reported from                                                               
the Senate Labor and Commerce Standing Committee.                                                                               
                                                                                                                                
1:40:09 PM                                                                                                                    
At-ease.                                                                                                                        
                                                                                                                                
         SB 52-ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG                                                                      
                                                                                                                              
1:42:26 PM                                                                                                                    
CHAIR  REINBOLD reconvened  the  meeting and  announced that  the                                                               
final 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."                                                                                                                          
                                                                                                                                
1:42:45 PM                                                                                                                    
SENATOR  PETER MICCICHE,  Alaska  State  Legislature, Juneau,  as                                                               
sponsor  of  SB  52,  acknowledged  that  he  had  received  some                                                               
responses  from  the  Cabaret, Hotel,  restaurant  and  Retailers                                                               
Association (CHARR),  the Department  of Commerce,  Community and                                                               
Economic Development  (DCCED), Alaska  Berries, and  responses to                                                               
the department related to license transfers.                                                                                    
                                                                                                                                
1:44:01 PM                                                                                                                    
CHAIR  REINBOLD said  she  would  like to  discuss  the chart  in                                                               
members'  packets  and issues  that  Alaska  Berries raised.  She                                                               
remarked that she  was unfamiliar with Alaska  Berries. She asked                                                               
whether the sponsor had received anything from CHARR.                                                                           
                                                                                                                                
1:45:41 PM                                                                                                                    
EDRA  MORLEDGE,  Staff,  Senator  Peter  Micciche,  Alaska  State                                                               
Legislature, Juneau,  on behalf of  the sponsor, stated  that she                                                               
had not  received any recent official  comments. She acknowledged                                                               
that the sponsor  has had "back and  forth" communications during                                                               
the stakeholder process.                                                                                                        
                                                                                                                                
CHAIR  REINBOLD  highlighted that  the  committee  would like  to                                                               
address issues that CHARR and Alaska Berries raised.                                                                            
                                                                                                                                
1:46:23 PM                                                                                                                    
ANNA  BRAWLEY,   Title  4  Project  Review   Coordinator,  Senior                                                               
Associate, Agnew  Beck Consulting, Anchorage, began  a PowerPoint                                                               
on SB 52.                                                                                                                       
                                                                                                                                
1:47:12 PM                                                                                                                    
MS.  BRAWLEY turned  to slide  18, "F-1.  Adjust License  Fees to                                                               
Reflect Current ABC Budgetary Needs."                                                                                           
                                                                                                                                
       ? Update license fees according to privileges and                                                                        
     administrative  costs of  each, and  collect sufficient                                                                    
     revenue to cover the ABC Board's required activities:                                                                      
       Administration of licenses & permits                                                                                     
       Education about Title 4 and related regulations                                                                          
       Enforcement of Title 4 and related regulations                                                                           
      ? ABC Board required to review license fees at least                                                                      
     every 5 years.                                                                                                             
      ? See Appendix, Table 2 of the Title 4 Review report                                                                      
     for current license fees and proposed changes.                                                                             
                                                                                                                                
MS.  BRAWLEY  offered  to  continue   to  review  policy  changes                                                               
proposed in  SB 52. This  presentation would continue  to outline                                                               
highlights  of  the  bill, beginning  with  license  fees.  These                                                               
license fees  are set  in statute  rather than  regulation, which                                                               
was more typically done. Most of  these fees were last updated in                                                               
the  1980s, she  said.  The Alcohol  &  Marijuana Control  Office                                                               
(AMCO) is a  receipts funded agency, which means  that its budget                                                               
reflects an estimate  of the revenue from  license fees collected                                                               
annually.   The   resources   available   for   enforcement   and                                                               
administration of  licensees is  set by  its funding  level. This                                                               
bill  would  propose   to  increase  fees  and   make  them  more                                                               
consistent   across   license   types.  For   example,   beverage                                                               
dispensary  license or  bar  license fees  are  currently set  at                                                               
$2,500 biennially  whereas the biennial  license fee  for serving                                                               
beverages at restaurants  is $600, at distilleries  is $1,000 and                                                               
at  wineries is  $500. She  referred members  to Table  2 in  the                                                               
Title 4 review  report for details on current  and proposed fees.                                                               
The bill would require the board  to review these fees every five                                                               
years  and  make  recommendations  to  the  legislature  for  fee                                                               
changes.                                                                                                                        
                                                                                                                                
1:49:24 PM                                                                                                                    
MS.  BRAWLEY reviewed  slide 19,  "Proposed: More  Accountability                                                               
for License Fees Allocated to Local Governments."                                                                               
                                                                                                                                
   • Current Title 4 allows for local governments to                                                                            
     receive  half of  the license  fees collected  in their                                                                    
     area, intended  for enforcement of Title  4 and related                                                                    
     ordinances.                                                                                                                
                                                                                                                                
   • Reporting on these activities is required, but not                                                                         
     defined   in   statute.   Some   jurisdictions   report                                                                    
     regularly, while others do not.                                                                                            
                                                                                                                                
MS. BRAWLEY said that in  current statute half the fees collected                                                               
are returned to  the local government to  cover local enforcement                                                               
and  administration  of  licenses.  This bill  does  not  propose                                                               
changing  that  allocation,   but  reporting  requirements  would                                                               
become more  consistent, which  would allow  the state  to better                                                               
understand what local  governments are doing to  enforce Title 4,                                                               
she said.                                                                                                                       
                                                                                                                                
1:50:17 PM                                                                                                                    
MS. BRAWLEY reviewed slide 20,  "Population Limits: Current Title                                                               
4."                                                                                                                             
     Population limits  determine how  many of  each license                                                                    
     type may be issued in each community.                                                                                      
                                                                                                                                
     All  other license  types (bars,  package stores,  golf                                                                    
     courses, breweries, etc.) 1 per 3,000 residents.                                                                           
                                                                                                                                
     Some licenses  are exempt from population  limits: bars                                                                    
     located in  hotels or airports, restaurants  issued for                                                                    
     public convenience, and licenses that serve tourists.                                                                      
                                                                                                                                
MS. BRAWLEY emphasized that this  important concept was currently                                                               
in statute.  The bill would  not fundamentally change  the policy                                                               
system  for license,  but it  does make  some small  changes. She                                                               
said that population  limits were set by the  number of residents                                                               
in each community  but were different for each  license type. For                                                               
example, restaurants  are allowed to  have one license  per 1,500                                                               
residents, but most other license  types were allowed 1 per 3,000                                                               
residents. She  acknowledged there were some  exceptions to this,                                                               
which she would cover on the following slide.                                                                                   
                                                                                                                                
She  emphasized  the importance  of  limits,  since limiting  the                                                               
amount of  retail outlets  for alcohol is  considered one  of the                                                               
"best  practices"  associated  with   reducing  crime  rates  and                                                               
impacts on neighborhoods.                                                                                                       
                                                                                                                                
1:51:10 PM                                                                                                                    
MS. BRAWLEY reviewed slide 21,  "Population Limits: Current Title                                                               
4."                                                                                                                             
                                                                                                                                
   • Some license types are exempt from population limits:                                                                      
        most exempt license types are designed to serve                                                                         
       tourists and travelers, such as hotels or outdoor                                                                        
     recreation lodges.                                                                                                         
   • They can be issued if other qualifications are met                                                                         
     (ex: minimum of hotel rooms).                                                                                              
                                                                                                                                
MS.  BRAWLEY  reiterated  that   population  limits  are  set  by                                                               
community.  Each city  within  a  borough that  has  one or  more                                                               
cities can determine how many of  each license type may be issued                                                               
in  each  community.  Typically,  licenses  cannot  move  between                                                               
boundaries.  Typically,   a  hotel   or  lodge  is   exempt  from                                                               
population limits, she said.                                                                                                    
                                                                                                                                
1:51:44 PM                                                                                                                    
MS.  BRAWLEY   reviewed  slide  22,  "Proposed:   Convert  Public                                                               
Convenience Licenses and Applications."                                                                                         
                                                                                                                                
   • Existing Public   Convenience   licenses   would   be                                                                      
        converted to regular Restaurant or Eating Place                                                                         
     Licenses (REPLs).                                                                                                          
                                                                                                                                
   • Applications that have been completed as of the bill's                                                                     
      signing date would be converted to applications for                                                                       
      regular REPLs and could be approved by the ABC Board                                                                      
     outside the existing population limits.                                                                                    
                                                                                                                                
She  highlighted that  this is  relevant  since some  communities                                                               
have a small  number of residents and qualify for  a small number                                                               
of licenses. However,  they may have an interest  in serving non-                                                               
residents  or residents  visiting the  region during  the tourism                                                               
season or they have seasonal workers.  One way to address this is                                                               
by  issuing  public  convenience licenses.  This  process  allows                                                               
applicants to  petition the Alcoholic  Control Board  (ABC Board)                                                               
after  having  collected  signatures from  surrounding  residents                                                               
requesting a license to be  issued outside population limits. She                                                               
characterized this as a challenging process.                                                                                    
                                                                                                                                
1:52:34 PM                                                                                                                    
SENATOR  BIRCH said  SouthCentral Alaska  and the  Lower 48  have                                                               
experienced a proliferation  of sharing economies, such  as a bed                                                               
and  breakfast and  vacation rentals  by owner  venues. He  asked                                                               
whether these types of businesses would be affected by the bill.                                                                
                                                                                                                                
MS.  BRAWLEY  answered  that  it  would  depend  on  whether  the                                                               
establishment  was serving  the  public, but  that  it would  not                                                               
likely cover private activity.                                                                                                  
                                                                                                                                
1:53:54 PM                                                                                                                    
MS. BRAWLEY  said the public  convenience process  has logistical                                                               
issues.  It has  the potential  to allow  for a  proliferation of                                                               
licenses.  It is  not a  consistent process  since it  depends on                                                               
individual applicants,  so the board  has no way to  determine if                                                               
the  signatures  are  valid.  The   sponsor  has  proposed  three                                                               
replacements for the public  convenience license application that                                                               
allow  for local  control and  to  give cities  options for  more                                                               
licenses,  especially  restaurant  licenses.  First,  one  option                                                               
would propose  to convert the  public convenience  application to                                                               
full  restaurant licenses.  This would  allow the  license to  be                                                               
transferable  to  a  new  owner  or  location  whereas  a  public                                                               
convenience  license is  not. If  someone was  in the  process of                                                               
applying,  the applicant  could  complete the  application for  a                                                               
full restaurant license and not be penalized.                                                                                   
                                                                                                                                
1:55:18 PM                                                                                                                    
MS.  BRAWLEY   turned  to  slide  23,   "Proposed  Seasonal  REPL                                                               
Tourism."                                                                                                                       
                                                                                                                                
     ? Seasonal restaurant license                                                                                              
     ? Available in smaller communities (< 40,000 pop.)                                                                         
      ? Same operating requirements and privileges as full-                                                                     
     year restaurants (REPL)                                                                                                    
        ? Number of licenses per community determined by                                                                        
     formula:                                                                                                                   
      ? Season defined as up to 6 months per year, in any                                                                       
       combination    Example: May through September + 1                                                                        
     winter month                                                                                                               
                                                                                                                                
MS.  BRAWLEY said  a second  proposal would  be to  create a  new                                                               
Seasonal REPL license  that could be operated for  six months per                                                               
year. It  would be available  in smaller communities  and provide                                                               
the same privileges as other  restaurants. The number of licenses                                                               
issued would not be determined by residents but by a formula.                                                                   
                                                                                                                                
1:56:10 PM                                                                                                                    
MS.  BRAWLEY  reviewed  slide  24,  "Proposed:  Local  Government                                                               
Petition for Additional Restaurant Licenses."                                                                                   
                                                                                                                                
MS.  BRAWLEY   reviewed  the  third   process,  in   which  local                                                               
government would  petition for  additional licenses.  This option                                                               
was brought  to the  attention of stakeholders  by the  cities of                                                               
Soldotna  and  Wasilla.  The local  government  would  prepare  a                                                               
petition  to  Alcoholic Beverage  Control  Board  (ABC Board)  to                                                               
request  more  restaurant  licenses   to  be  issued  within  its                                                               
jurisdictions. The number of restaurants  must not be more than 1                                                               
to 1,500  with the new  population included. The ABC  Board would                                                               
consider the  petition and determine  the number of  new licenses                                                               
to grant  to the city.  If the city  did not obtain  authority to                                                               
proceed, the  entity could  revise its  application and  bring it                                                               
back to  the board. If the  entity was granted the  new licenses,                                                               
it would  need to  wait three  year before  the party  could make                                                               
another petition. This  would allow time for  the new restaurants                                                               
to come online, she said.                                                                                                       
                                                                                                                                
1:57:58 PM                                                                                                                    
MS.  BRAWLEY reviewed  slide 25,  "Proposed:  Option to  Relocate                                                               
Some Licenses from a Borough to a City."                                                                                        
                                                                                                                                
   • Current Title 4 allows relocation of a bar (BDL) from                                                                      
     a borough to a city within that borough.                                                                                   
   • The bill proposes also allowing relocation of package                                                                      
     stores.                                                                                                                    
                                                                                                                                
MS. BRAWLEY said  current Title 4 allows for relocation  of a bar                                                               
license (BDL)  from a borough to  within a city in  that borough.                                                               
This would contemplate jurisdictions  with small populations that                                                               
would like to  concentrate those activities to a  city within the                                                               
borough. This would  also apply to a package  store. For example,                                                               
if a  borough has  additional package stores  that are  not being                                                               
used, they could be moved to a city within the borough.                                                                         
                                                                                                                                
1:58:47 PM                                                                                                                    
MS. BRAWLEY reviewed slide 26,  Proposed: Option to Relocate Some                                                               
Licenses from a Borough to a City.                                                                                              
                                                                                                                                
   • All eligible boroughs have more licenses issued than                                                                       
     population limits allow.                                                                                                   
   • Only the borough's licenses in excess of population limits                                                                 
     would be eligible for relocation into a city.                                                                              
                                                                                                                                
The  goal  would not  be  to  "hollow  out"  the borough  of  the                                                               
licenses.  However,   currently  there  are  more   licenses  for                                                               
beverage  dispensaries and  package  stores than  are allowed  in                                                               
statute  under those  population limits.  The table  on slide  26                                                               
illustrates this, she said.                                                                                                     
                                                                                                                                
1:59:27 PM                                                                                                                    
CHAIR REINBOLD  asked whether  the bill has  had any  pushback on                                                               
this concept.                                                                                                                   
                                                                                                                                
MS. BRAWLEY said  this was discussed by the  stakeholder group in                                                               
2016, with fairly  broad agreement. She said the  City of Wasilla                                                               
initially had  concerns, but the  provisions were  developed with                                                               
the concerns that were shared.                                                                                                  
                                                                                                                                
CHAIR REINBOLD asked  for further clarification on who  is in the                                                               
stakeholder group.                                                                                                              
                                                                                                                                
SENATOR  MICCICHE  responded  that  the stakeholder  list  is  in                                                               
members'  packets. The  communities  asked  for additional  local                                                               
control. This was a direct  response to the communities, he said.                                                               
He said that  some communities would like to  manage every aspect                                                               
of  alcohol licensing.  He  said that  he felt  this  was a  fair                                                               
compromise to  provide local control.  He further  explained that                                                               
the seasonal  REPL license can  "bank" licenses if  the community                                                               
was  interested  in attracting  a  restaurant.  It would  not  be                                                               
necessary  to  have   a  restaurant  in  mind  at   the  time  an                                                               
application  was made.  The  community can  reserve  a couple  of                                                               
licenses for that purpose.                                                                                                      
                                                                                                                                
2:01:35 PM                                                                                                                    
CHAIR  REINBOLD asked  whether anyone  besides Wasilla  expressed                                                               
concern.                                                                                                                        
                                                                                                                                
MS. BRAWLEY answered no, not to her knowledge.                                                                                  
                                                                                                                                
2:01:51 PM                                                                                                                    
MS.  BRAWLEY  reviewed  slide  27,  Proposed:  Regulate  Internet                                                               
Sales."                                                                                                                         
                                                                                                                                
     INT-1. Winery Direct Shipment License                                                                                      
      ? Create a license available to all U.S. (including                                                                       
       Alaska) wineries to ship orders of wine to Alaska                                                                        
     customers.                                                                                                                 
       ? Prohibit other online sales of alcohol not under                                                                       
    this   license   or    the   Package   Store   Shipping                                                                     
     endorsement.                                                                                                               
                                                                                                                                
     INT-2. Collect Alaska Excise Tax for Internet Sales                                                                        
     ? Require all out-of-state holders of a Winery Direct                                                                      
     Shipment license to pay the same excise tax on Alaska                                                                      
     orders.                                                                                                                    
                                                                                                                                
      INT-3. Board Approval of Common Carriers for Alcohol                                                                      
     Delivery                                                                                                                   
      ? Require all common carriers who transport deliver                                                                       
     alcohol directly to consumers in Alaska to be approved                                                                     
     by ABC Board.                                                                                                              
                                                                                                                                
MS. BRAWLEY explained that the next  three slides cover a gap, by                                                               
regulating  the online  sales  of alcohol.  She  said that  three                                                               
proposals in the  bill would help ensure  oversight, confirm that                                                               
the  sales are  legal, and  that the  alcohol is  delivered to  a                                                               
responsible adult.  Currently, in state businesses  must obtain a                                                               
license and  pay the state's  alcohol taxes for  liquor licenses,                                                               
but someone  selling via the  internet would  not be held  to the                                                               
same standard. The state does  not currently know the identity of                                                               
the providers.                                                                                                                  
                                                                                                                                
MS.  BRAWLEY  reviewed  slide 28,  "Proposed:  Regulate  Internet                                                               
Alcohol Sales,"  which allows  wine to be  shipped to  homes. She                                                               
said that  this essentially would allow  out-of-state wineries to                                                               
fulfill sales from a customer in  Alaska and have wine shipped to                                                               
their homes. Many out-of-state businesses  are accustomed to this                                                               
process and have similar licenses or permits from other states.                                                                 
                                                                                                                                
She  said  that under  the  bill,  the  company must  verify  the                                                               
customer's age, must use an  approved carrier, and must limit the                                                               
allowable amount  that could be  ordered per year to  ensure that                                                               
it  was for  personal use.  The order  must be  delivered to  the                                                               
customer in  person to verify that  the person was an  adult. The                                                               
company could not ship to a local option area.                                                                                  
                                                                                                                                
2:03:58 PM                                                                                                                    
CHAIR REINBOLD  recalled an earlier testifier.  She asked whether                                                               
this was one  of the measures to help prevent  alcohol from being                                                               
sold via the internet to Alaskan youth.                                                                                         
                                                                                                                                
MS. BRAWLEY answered yes.                                                                                                       
                                                                                                                                
CHAIR  REINBOLD  emphasized  that  it was  important  to  further                                                               
regulate to ensure that youth do not have access to alcohol.                                                                    
                                                                                                                                
She further explained  that all businesses that  sell to Alaskans                                                               
would be required  to pay the state's alcohol tax.  The tax would                                                               
be applied to the destination.                                                                                                  
                                                                                                                                
2:05:24 PM                                                                                                                    
MS. BRAWLEY, in  response to Chair Reinbold, said that  it is not                                                               
possible to assess how many  internet sales occur since the sales                                                               
are not  tracked. She reported  that the  State of Idaho  said it                                                               
had 700 permit holders.                                                                                                         
                                                                                                                                
CHAIR  REINBOLD  remarked  that this  provision  could  have  the                                                               
potential  to raise  state revenue,  increase sales,  and protect                                                               
youth.                                                                                                                          
                                                                                                                                
MS. BRAWLEY agreed.                                                                                                             
                                                                                                                                
2:06:20 PM                                                                                                                    
MS.  BRAWLEY  reviewed  slide 29,  "Proposed:  Regulate  Internet                                                               
Alcohol Sales."                                                                                                                 
                                                                                                                                
   • Common carriers must be approved by the ABC Board to                                                                       
     transport and  deliver alcohol to  consumers throughout                                                                    
     the state.                                                                                                                 
                                                                                                                                
   • Carriers must demonstrate that they have policies and                                                                      
     train  employees   to  properly  handle   shipments  of                                                                    
     alcohol.                                                                                                                   
                                                                                                                                
She  said  that  this  third component  would  help  ensure  safe                                                               
alcohol  delivery to  adults in  person and  that alcohol  is not                                                               
delivered  to someone  in a  local  option area.  This would  not                                                               
create  a license  or permit  but  would require  that the  board                                                               
review  the policies  of common  carriers and  publish a  list of                                                               
approved  carriers.  This  would   not  apply  to  deliveries  to                                                               
businesses, only to consumers.                                                                                                  
                                                                                                                                
2:07:35 PM                                                                                                                    
                                                                                                                                
MS. BRAWLEY reviewed slide 30,  "Tracking Alcohol Orders in Local                                                               
Option Areas: Current Title 4."                                                                                                 
                                                                                                                                
     Residents  in  local   option  communities  that  allow                                                                    
     importation of  alcohol may order  a limited  amount of                                                                    
     alcohol  each  month  for personal  and  non-commercial                                                                    
     use.                                                                                                                       
                                                                                                                                
     The monthly  importation limit would  be 12  gallons of                                                                    
     beer or one half-barrel keg or  24 liters of wine or 32                                                                    
     bottles.                                                                                                                   
                                                                                                                                
She  explained   that  package  stores  can   currently  ship  to                                                               
customers, but they cannot do  so through the internet. This bill                                                               
would allow them  to do so. This bill would  not change the local                                                               
option  limits. The  package  store records  each  order and  can                                                               
change the database  to ensure limits are  followed. The database                                                               
can be accessed by law enforcement, she said.                                                                                   
                                                                                                                                
2:08:34 PM                                                                                                                    
CHAIR REINBOLD  asked for further clarification  on exceptions to                                                               
the limits, for example, for a special event such as a wedding.                                                                 
                                                                                                                                
MS. BRAWLEY deferred to the department.                                                                                         
                                                                                                                                
2:09:17 PM                                                                                                                    
ERIKA MCCONNELL, Director, Alcohol  and Marijuana Control Office,                                                               
Department  of  Commerce,  Community, and  Economic  Development,                                                               
Anchorage, said she  was not aware of any  exceptions for special                                                               
events.                                                                                                                         
                                                                                                                                
CHAIR REINBOLD asked  whether a resident who wanted  to use local                                                               
wines for a wedding would be permitted to do so.                                                                                
                                                                                                                                
MS.  MCCONNELL  said it  would  depend  on  the location  of  the                                                               
wedding,  but typically  they do  not  need to  hold permits.  In                                                               
further  response  to Chair  Reinbold,  she  offered to  research                                                               
whether a  person can order above  the limit for a  special event                                                               
and respond back to the committee.                                                                                              
                                                                                                                                
CHAIR REINBOLD remarked  that the family wanted to  buy wine from                                                               
a local winery in Homer.                                                                                                        
                                                                                                                                
2:11:04 PM                                                                                                                    
MS. BRAWLEY related her understanding  that the limits would only                                                               
apply to dry communities and Homer  is not a dry community so the                                                               
limits would not apply.                                                                                                         
                                                                                                                                
2:11:27 PM                                                                                                                    
MS.  BRAWLEY  reviewed  slide 31,  "Proposed:  Publish  Community                                                               
Level Data from Local Option Order Database."                                                                                   
                                                                                                                                
     In current Title 4, all data in the Local Option order                                                                     
     database is private and is deleted after 1 year.                                                                           
                                                                                                                                
     The  bill  would   keep  individual  order  information                                                                    
     private  but retain  aggregate data  for  10 years  and                                                                    
     allow  the  ABC Board  to  publish  annual total  sales                                                                    
     volume by region or community.                                                                                             
                                                                                                                                
        This valuable information would be available to                                                                         
     communities and law enforcement to understand the flow                                                                     
       of alcohol into Local Option communities via legal                                                                       
     sales.                                                                                                                     
                                                                                                                                
She  said this  information would  also help  communities address                                                               
the health and  safety issues related to alcohol.  The bill would                                                               
keep the  community level data  for 10 years,  protect individual                                                               
order  data, and  require the  Alcoholic  Beverage Control  Board                                                               
(ABC Board)  to publish an  annual report summarizing  the amount                                                               
of alcohol that is ordered based on the existing data.                                                                          
                                                                                                                                
2:12:31 PM                                                                                                                    
MS. BRAWLEY  reviewed slide 32,  "Proposed: Revise  Penalties for                                                               
Lesser Offenses."                                                                                                               
                                                                                                                                
        • In current law, almost all violations of Title 4                                                                      
          are class A misdemeanors.                                                                                             
                                                                                                                                
        • When penalties are set high across the board and                                                                      
          perceived to be too strict for most offenses, law                                                                     
          enforcement is less likely to issue citations and                                                                     
         courts are less likely to pursue those cases.                                                                          
                                                                                                                                
        • In the bill, many penalties would become minor                                                                        
          offenses.  Serious  violations,  such  as  selling                                                                    
          alcohol  without a  license, allowing  gambling on                                                                    
          the premises, or perjury  on a license application                                                                    
          would  remain misdemeanors  or  felonies, as  they                                                                    
          are today.                                                                                                            
                                                                                                                                
This bill would retain class  A misdemeanor penalties for serious                                                               
offenses, retaining current Title  4 felonies, including ones for                                                               
local option  violations. This provision  would also  change many                                                               
penalties  to   minor  offenses   or  violations  to   allow  law                                                               
enforcement  to  more  easily  enforce  penalties.  For  example,                                                               
during an inspection, law enforcement  would issue a citation for                                                               
noncompliance issues.  This would close some  reporting loopholes                                                               
to  better track  violators,  such  as a  licensee  with a  dozen                                                               
violations. It would help identify  "bad actors" versus operators                                                               
who are generally  responsible but may have  an occasional ticket                                                               
for a violation. This would  provide the board information to act                                                               
against a  licensee during the  renewal process or to  suspend or                                                               
revoke the license for an egregious offense.                                                                                    
                                                                                                                                
2:14:09 PM                                                                                                                    
MS.   BRAWLEY  reviewed   slide  33,   "Licensee  Penalties   for                                                               
Overserving an Adult or Serving a Minor."                                                                                       
                                                                                                                                
        • In current Title 4, a licensee or employee who                                                                        
          knowingly overserves an intoxicated adult or who                                                                      
          serves alcohol to a minor is guilty of a class A                                                                      
          misdemeanor.                                                                                                          
                                                                                                                                
        • The bill would change the penalty for both                                                                            
         statutes to a minor offense with a $500 fine.                                                                          
                                                                                                                                
        • In addition to the penalty to the person who                                                                          
          commits the  violation, the  owner of  the license                                                                    
          would  receive   an  administrative,  non-criminal                                                                    
          penalty  of $250.  This alerts  the  owner that  a                                                                    
          violation   occurred,   holds   them   immediately                                                                    
         accountable and encourages future compliance.                                                                          
                                                                                                                                
MS. BRAWLEY  highlighted two examples of  strengthening penalties                                                               
would   hold   licensees   more   immediately   accountable   for                                                               
overserving an adult  or a minor on their  premises. The licensee                                                               
would  receive  an  administrative fine  automatically  from  the                                                               
Alcoholic Beverage Control Board  (ABC Board). This would provide                                                               
a signal to  licensees to pay close attention to  what happens on                                                               
their premises. Many  owners may be out of state  or they may not                                                               
be  involved in  the  day-to-day operations  so  the employee  or                                                               
manager  may not  disclose the  incident immediately.  This would                                                               
provide  a  communication loop  but  also  give the  licensee  an                                                               
opportunity to train or discipline  employees. Secondly, it would                                                               
provide a  misdemeanor penalty if  the licensee  knowingly allows                                                               
this activity to occur on the premises.                                                                                         
                                                                                                                                
2:15:22 PM                                                                                                                    
CHAIR REINBOLD  related her understanding that  this would change                                                               
the penalty  for both  statutes to  a minor  offense with  a $500                                                               
fine.  She  asked  for  further  clarification  on  the  previous                                                               
penalty.                                                                                                                        
                                                                                                                                
MS. BRAWLEY answered that it  was currently a class A misdemeanor                                                               
for  the employee  and no  penalty  for the  licensee except  for                                                               
potential non-renewal of the license.                                                                                           
                                                                                                                                
CHAIR   REINBOLD  asked   for  further   clarification  on   what                                                               
constitutes a minor offense.                                                                                                    
                                                                                                                                
MS. BRAWLEY answered  that a minor offense, which is  listed as a                                                               
violation  in  statute,  has  a  maximum of  a  $500  fine.  This                                                               
provision would only  apply to an employee who serves  a minor or                                                               
overserves  an adult.  An individual  who  is not  employed by  a                                                               
licensee and serves an adult would  still be subject to a class A                                                               
misdemeanor.  She  indicated the  intent  was  to institute  more                                                               
automatic enforcement.  Some of  the discussion with  the alcohol                                                               
industry was  that the misdemeanor penalties  often require court                                                               
appearances or the  necessity to hire an attorney and  yet do not                                                               
necessarily result in an automatic accountability.                                                                              
                                                                                                                                
CHAIR  REINBOLD suggested  that this  should be  flagged for  the                                                               
Department of  Law to comment.  She offered her belief  that this                                                               
appeared to be a significant issue.                                                                                             
                                                                                                                                
2:17:00 PM                                                                                                                    
SENATOR MICCICHE remarked  that he agreed to  this change because                                                               
enforcement  was not  issuing many  citations  or pursuing  these                                                               
cases, in part, due to case  overload. Thus, the behavior was not                                                               
being  changed  or  corrected.  This  provision  would  fine  the                                                               
license  owner  and  provide  a  fairly  immediate  response.  He                                                               
pointed  out that  the class  A  misdemeanor and  class C  felony                                                               
penalties would still be in place for more serious offenses.                                                                    
                                                                                                                                
MS. BRAWLEY  agreed the  Department of  Law (DOL)  should provide                                                               
its current position. She said she  recalled that the DOL did not                                                               
have a specific objection to this.                                                                                              
                                                                                                                                
2:18:11 PM                                                                                                                    
MS.  BRAWLEY   reviewed  slide  34,  "Proposed;   Regulate  Trade                                                               
Practices."                                                                                                                     
                                                                                                                                
     Some activities,  known a trade practices,  are illegal                                                                    
     in federal law: practices  of alcohol manufacturers and                                                                    
     wholesalers  to  exert  power  over  retailers'  buying                                                                    
     decisions,  or stopping  them from  buying competitors'                                                                    
     products.                                                                                                                  
                                                                                                                                
     Tied house                                                                                                                 
     Partial ownership of retail  license by a manufacturer,                                                                    
     to   control  what   products  are   sold  or   exclude                                                                    
     competitors.   Does   not    apply   to   100   percent                                                                    
     manufacturer-owned licenses.                                                                                               
                                                                                                                                
     Exclusive outlet                                                                                                           
     Agreement  between  supplier  and retailer  to  exclude                                                                    
     other retailers or suppliers.                                                                                              
                                                                                                                                
     Commercial bribery                                                                                                         
     Supplier   pays  bonus   or  provides   merchandise  in                                                                    
     exchange  for  exclusive  arrangement not  to  purchase                                                                    
     other products.                                                                                                            
                                                                                                                                
     Consignment sales                                                                                                          
      Supplier and retailer make deals to take back unsold                                                                      
     products.                                                                                                                  
                                                                                                                                
MS.  BRAWLEY  explained  that   regulating  trade  practices  was                                                               
especially  important to  the  industry.  These provisions  would                                                               
protect the  three-tier system by  not allowing one tier  to have                                                               
an  undue  influence on  the  other  tiers. These  illegal  trade                                                               
practice  provisions were  originally brought  up by  wholesalers                                                               
and  manufacturers. These  provisions cover  activities that  are                                                               
illegal  in federal  law. Most,  if  not all,  other states  have                                                               
adopted these  prohibitions into state law  since limited federal                                                               
enforcement from the Tax and  Trade Bureau occurs. She added that                                                               
the federal  law does  not cover beer.  The prohibition  of these                                                               
practices  is intended  to not  put undue  pressure on  retailers                                                               
when  they  make buying  decisions.  For  example, the  exclusive                                                               
outlet provision relates  to a buyer who would  coerce a retailer                                                               
to say they  would give them a better discount  on their products                                                               
if  the retailer  does not  sell the  competitors' products.  She                                                               
characterized these as anti-competitive  practices that have been                                                               
an issue  in the past. That  is why these prohibitions  have been                                                               
put in place  in other states. This provides  the state authority                                                               
to enforce the laws.                                                                                                            
                                                                                                                                
2:19:41 PM                                                                                                                    
MS.   BRAWLEY  reviewed   slide   35,   "Proposed:  Require   Keg                                                               
Registration."                                                                                                                  
   • Reduces adults' incentive to legally purchase alcohol                                                                      
     and supply an underage drinking party.                                                                                     
   •  Kegs tagged with the purchaser's contact information can                                                                  
     be tracked if confiscated at an underage party or other                                                                    
     situation where minors are given access to alcohol.                                                                        
   • A person, not a licensee, possessing an untagged keg                                                                       
     containing alcohol could be fined.                                                                                         
   • Modeled on existing Anchorage and Juneau ordinances.                                                                       
                                                                                                                                
She  explained that  keg  registration  addresses another  public                                                               
health priority  and is something  already being  practiced today                                                               
in Anchorage  and Juneau. Keg  registration identifies  the buyer                                                               
on the  keg and  if the  keg was confiscated  in the  presence of                                                               
underage drinkers,  it can be  legally traced back to  the buyer.                                                               
She characterized  it as a  best practice provision.  It provides                                                               
law enforcement with the tool to trace back the illegal alcohol.                                                                
                                                                                                                                
SENATOR COSTELLO  asked for further clarification  on the penalty                                                               
for serving alcohol to underage minors.                                                                                         
                                                                                                                                
MS.  BRAWLEY answered  that  the  current penalty  is  a class  A                                                               
misdemeanor and it would not be changed under the bill.                                                                         
                                                                                                                                
2:21:09 PM                                                                                                                    
MS.  BRAWLEY  reviewed  slide  36,  "Proposed:  Convert  Existing                                                               
Licenses."                                                                                                                      
                                                                                                                                
         Existing manufacturer licenses will become two                                                                         
     licenses: one for production, one for retail sales.                                                                        
                                                                                                                                
She  referred  to   the  graphics  on  the   final  slide,  which                                                               
illustrated  the  transition  period.   The  bill  would  make  a                                                               
significant  number  of  changes  to the  licensing  system.  The                                                               
Alcoholic  Beverage  Control  Board  (ABC Board)  and  Alcohol  &                                                               
Marijuana Control Office  need time to implement  changes and the                                                               
licensees  and  local  government  need time  to  understand  the                                                               
changes. The effective  date of the bill  anticipates a 12-to-18-                                                               
month transition period to allow  the board to write regulations,                                                               
notify  licensees,  and  develop  educational  materials.  A  few                                                               
provisions,  specifically  public  convenience  license  changes,                                                               
would  become effective  immediately to  provide more  restaurant                                                               
licenses.  One   provision  would   provide  for   conversion  of                                                               
licenses. Most  licenses would be renumbered,  but other licenses                                                               
for manufacturers  would split  into two  types of  licenses. The                                                               
bill would also address applications in process.                                                                                
                                                                                                                                
2:22:34 PM                                                                                                                    
CHAIR  REINBOLD related  her understanding  that some  people are                                                               
concerned about fee increases.                                                                                                  
                                                                                                                                
MS.  BRAWLEY  agreed  that  some fees  would  increase  for  some                                                               
licenses.  She related  her  understanding  that the  application                                                               
process would  allow applicants to  submit a  unified application                                                               
process, but it may allow for more than one license type.                                                                       
                                                                                                                                
CHAIR  REINBOLD recalled  that license  fees  for Alaska  Berries                                                               
would  increase from  $1,500 to  $2,500. She  asked why  the fees                                                               
would increase that much.                                                                                                       
                                                                                                                                
MS.  BRAWLEY   answered  that  the   rationale  was   to  provide                                                               
additional  resources  for  Alcohol &  Marijuana  Control  Office                                                               
because  the agency's  budget  is constrained  by  the amount  of                                                               
license  fees collected.  She reported  that many  fees have  not                                                               
been updated  since the 1980s  or since the license  was created.                                                               
She directed  attention to the  table in  the Title 4  report for                                                               
specific amounts. She offered her  belief that based on inflation                                                               
from 1980 until the present  time fees would triple. For example,                                                               
beverage dispensary license  fees would be closer  to $7,000 than                                                               
the proposed $2,500.                                                                                                            
                                                                                                                                
CHAIR REINBOLD expressed  an interest in reviewing  the fees. She                                                               
said  that the  fee changes  would impact  local businesses.  She                                                               
further asked  whether an  audit has  recently been  conducted on                                                               
the Alcohol & Marijuana Control Office.                                                                                         
                                                                                                                                
MS.  MCCONNELL answered  that AMCO  had  a sunset  audit in  2017                                                               
related to the extension of  the Alcoholic Beverage Control Board                                                               
(ABC  Board). The  last legislative  session reviewed  the sunset                                                               
audit.                                                                                                                          
                                                                                                                                
CHAIR REINBOLD expressed an interest  in hearing about any issues                                                               
raised during the audit at a future hearing.                                                                                    
                                                                                                                                
2:25:26 PM                                                                                                                    
SENATOR  MICCICHE offered  that hundreds  of licensees  commented                                                               
during  the stakeholder  process  on proposed  fee increases.  He                                                               
related that  he was aware  of one licensee who  complained about                                                               
the  license fee  increases for  wineries.  However, overall  the                                                               
vast majority  of licensees provided significant  support for the                                                               
changes. The bill would help  businesses conduct their businesses                                                               
more efficiently. He  said that the proposed  changes would allow                                                               
the  AMCO   Board  to   be  more   responsive  because   of  code                                                               
clarifications.                                                                                                                 
                                                                                                                                
CHAIR  REINBOLD   remarked  that  it  was   pretty  amazing  that                                                               
licensees were  not complaining about increases  in license fees.                                                               
She  indicated that  the  committee would  be  watching for  that                                                               
healthy tension in this bill.                                                                                                   
                                                                                                                                
2:26:24 PM                                                                                                                    
SENATOR COSTELLO  asked for further clarification  on the Alcohol                                                               
& Marijuana  Control Office budget.  She asked what she  would do                                                               
with the additional funds.                                                                                                      
                                                                                                                                
MS.  MCCONNELL answered  that currently  the combined  budget for                                                               
alcohol and marijuana oversight is  $3.8 million. She submitted a                                                               
fiscal note  that includes costs  to replace the  database, which                                                               
is the  most significant need  to implement changes in  the bill.                                                               
Further,  the fiscal  note reflects  costs for  a long-term  non-                                                               
permanent project  manager for  two years  to help  implement the                                                               
changes.  She anticipated  software fees  and costs  for outreach                                                               
and  education  in  the outgoing  years.  She  also  contemplated                                                               
adding additional law enforcement resources.                                                                                    
                                                                                                                                
SENATOR  COSTELLO wondered  if the  database would  speed up  the                                                               
timeframe for license transfers for businesses.                                                                                 
                                                                                                                                
MS.  MCCONNELL  acknowledged  that   was  the  goal,  to  improve                                                               
customer  service  and  allow licensees  to  submit  applications                                                               
through  a  website  and  be  able  to  track  them  online.  She                                                               
envisioned  that it  would speed  up  the process,  but it  would                                                               
depend on the software.                                                                                                         
                                                                                                                                
MS. BRAWLEY  added that  nothing in  the bill  directly addresses                                                               
marijuana. However, those fees were  also reviewed. She explained                                                               
that  those fees  were set  by regulation  and most  license fees                                                               
were  $5,000 annually  although  a few  smaller operator  license                                                               
fees were set at $1,000.                                                                                                        
                                                                                                                                
SENATOR BIRCH  asked for the  split in fee revenue  for marijuana                                                               
and alcohol.                                                                                                                    
                                                                                                                                
MS.  MCCONNELL  recalled  that  AMCO  receives  approximately  $2                                                               
million in revenue  from alcohol and the  marijuana revenues were                                                               
approximately  $1.5   to  $2  million.  She   reported  that  the                                                               
marijuana board  just increased  the license  fees and  the board                                                               
anticipates an  increase in revenue  in the next  license renewal                                                               
period.                                                                                                                         
                                                                                                                                
2:30:16 PM                                                                                                                    
MS. BRAWLEY said that concludes her presentation.                                                                               
                                                                                                                                
2:30:32 PM                                                                                                                    
CHAIR  REINBOLD related  her understanding  that  there were  140                                                               
stakeholders involved in the process.                                                                                           
                                                                                                                                
MS.  BRAWLEY agreed.  She clarified  that those  were individuals                                                               
who  were directly  involved in  stakeholder discussions,  but it                                                               
does  not  reflect  all  of   the  licensees,  members  of  trade                                                               
associations,  and others  who have  not directly  spoken to  her                                                               
during this process.                                                                                                            
                                                                                                                                
CHAIR REINBOLD asked whether the  stakeholder list was published.                                                               
She  noted that  the  report  was published  on  the website  [at                                                               
Senate.labor.and.commerce@akleg.gov].                                                                                           
                                                                                                                                
SENATOR MICCICHE directed attention to  the appendix on pages 70-                                                               
77  of the  Alaska  Title  4 Review  for  the Alcoholic  Beverage                                                               
Control Board, February 2019, for  a list of the stakeholders and                                                               
organizations.                                                                                                                  
                                                                                                                                
CHAIR REINBOLD remarked that the Title  4 review has been a long,                                                               
hard process. She wanted the  public to know the stakeholders who                                                               
were involved. She said the list  was very broad and included the                                                               
Alaska State Troopers, and the Alaska Mental Health Trust Board.                                                                
                                                                                                                                
2:32:14 PM                                                                                                                    
SENATOR  BIRCH echoed  Chair Reinbold's  comments.  He said  that                                                               
this process started  in 2012. He read from the  appendix on page                                                               
70,"The Steering  Committee extends sincere appreciation  for the                                                               
efforts  of each  individual  and organization  on  this list  to                                                               
carry this  project forward." He  said that this  process spanned                                                               
seven years and  a wide array of stakeholders  has been involved.                                                               
He said that he  was proud to support this. He  said the bill was                                                               
presented  very  well  and  he  appreciated  the  opportunity  to                                                               
consider SB 52.                                                                                                                 
                                                                                                                                
SENATOR MICCICHE  said that the  focus has been to  involve every                                                               
interest  group,  including municipalities,  communities,  tribal                                                               
organizations, and  the industry. Further, the  primary focus has                                                               
been on public health and  public safety while still supporting a                                                               
healthy industry, he said.                                                                                                      
                                                                                                                                
2:34:02 PM                                                                                                                    
CHAIR REINBOLD  acknowledged that  Ms. Brawley  represented Agnew                                                               
Beck Consulting.                                                                                                                
                                                                                                                                
2:35:39 PM                                                                                                                    
TIFFANY  HALL,  Executive  Director, Recover  Alaska,  Anchorage,                                                               
stated that she  is a lifelong Alaskan. SB 52  is the culmination                                                               
of seven  years of  work. Members  of the  ABC Board  started the                                                               
process because  they recognized the  dire need for  revisions to                                                               
Title   4.  The   current   statutes   have  some   contradictory                                                               
provisions. The  statutes are confusing  for license  holders and                                                               
for Alcohol & Marijuana Control Office.                                                                                         
                                                                                                                                
She said  that most of  SB 52 reorders, redefines,  and clarifies                                                               
current law. It also adds safety and health aspects.                                                                            
                                                                                                                                
MS. HALL  related that Recover  Alaska works to  reduce excessive                                                               
alcohol use  and its harmful  effects throughout  Alaska. Recover                                                               
Alaska is not an abstinence  only organization, but advocates for                                                               
low-risk drinking. For  some people that means  zero alcohol use,                                                               
but  many  people  can  responsibly  drink  at  moderate  levels.                                                               
Recover Alaska has been working on  the content of SB 52 for many                                                               
years,  hand  in hand  with  numerous  public health  and  safety                                                               
organizations and industry throughout  the process. She expressed                                                               
thanks  for   the  opportunity   to  develop   partnerships  with                                                               
industry,  such  as  Cabaret,  Hotel,  Restaurant  and  Retailers                                                               
Association  (CHARR).  For  example,  she worked  with  CHARR  in                                                               
Anchorage  during St.  Patrick's  Day "pub  crawl."  Many of  the                                                               
venues offered non-alcoholic drinks  because they recognized that                                                               
not everyone  wants to  drink alcohol at  each stop.  She pointed                                                               
out that  the Narrows  bar and  Amalga Distillery  partnered with                                                               
Recover Alaska during sobriety awareness month.                                                                                 
                                                                                                                                
2:37:45 PM                                                                                                                    
MS. HALL said that Alaska  struggles with alcohol issues. Alcohol                                                               
costs the  state $1.84  billion every year  in health  care, lost                                                               
productivity, public  safety, and early death.  Alaska has higher                                                               
levels of  treatment admissions per  capita than the rest  of the                                                               
country. Alaskans  binge drink heavier  and more often,  have the                                                               
highest fetal alcohol spectrum disorder  rates in the nation, and                                                               
Alaskans are  dying at rates  nearly three  times as high  as the                                                               
rest of the nation.                                                                                                             
                                                                                                                                
She directed attention to Article  VII, Section 4 of Constitution                                                               
of the State  of Alaska, which states that  the legislature shall                                                               
provide for  the promotion and  protection of public  health. She                                                               
acknowledged that the  committee has heard the goal of  SB 52 was                                                               
to ensure  that Alaska has a  high-functioning and well-regulated                                                               
alcohol  industry,  but  it also  addresses  crime,  safety,  and                                                               
health problems related to alcohol.                                                                                             
                                                                                                                                
2:38:22 PM                                                                                                                    
MS.  HALL emphasized  her  comments were  related  to safety  and                                                               
health.                                                                                                                         
                                                                                                                                
SB 52  would limit youth  access to alcohol,  promote responsible                                                               
alcohol use,  and reduce the  harms of overconsumption.  It would                                                               
hold  businesses   accountable  if   an  intoxicated   person  is                                                               
overserved or  if a  minor is  served, which  will allow  the ABC                                                               
Board to intervene  sooner to ensure those  businesses are taking                                                               
action to improve. It would  allow license holders more financial                                                               
incentive to ensure their employees are properly trained.                                                                       
                                                                                                                                
MS. HALL stated  that the bill would establish  regulation of the                                                               
internet  sales  of alcohol.  Currently,  Alaska  is one  of  few                                                               
states  without any  regulation in  this area,  which means  that                                                               
alcohol can be  shipped to dry zip codes or  ordered by teenagers                                                               
and left  on their doorsteps.  Alaska would also  collect license                                                               
fees  and  taxes,  in addition  to  mandating  identification  be                                                               
verified when internet sales are delivered.                                                                                     
                                                                                                                                
She offered her belief that  the license fee increases would make                                                               
them  more  equitable.  More   importantly,  this  would  provide                                                               
adequate  funding for  AMCO to  provide  additional education  to                                                               
license  holders, and  more effectively  conduct enforcement  and                                                               
compliance checks.  She reported that compliance  checks have not                                                               
been  done in  the last  three years  due to  a lack  of funding.                                                               
Compliance checks would  also help reduce both  public health and                                                               
criminal-related issues.                                                                                                        
                                                                                                                                
2:39:51 PM                                                                                                                    
MS.  HALL  said  that  under current  law,  keg  registration  in                                                               
Anchorage  and Juneau  is required.  These requirements  have not                                                               
created  an  undue  burden  on the  licensees  or  industry.  She                                                               
characterized it  as another  evidence-based policy,  which holds                                                               
adults  who  buy  alcohol  and  furnish  it  to  underage  minors                                                               
accountable for their actions.                                                                                                  
                                                                                                                                
SB 52  would mandate training  for every server prior  to serving                                                               
alcohol to  the public,  which would close  a loophole.  The bill                                                               
would address  population limits using creative  solutions agreed                                                               
to by  the alcohol industry and  municipalities. She acknowledged                                                               
that  concerns about  these provisions  were initially  raised by                                                               
Soldotna and  Wasilla. These communities  were invited  to attend                                                               
[stakeholder]  meetings  to  discuss  their  concerns.  In  2016,                                                               
stakeholders agreed  on the three processes  Ms. Brawley outlined                                                               
today. The initial provision in  the bill would allow communities                                                               
to  ask  for  additional  licenses every  ten  years,  which  was                                                               
reduced to three  years to address concerns  communities had that                                                               
economic growth would be stymied.  This change was adopted by the                                                               
stakeholders, she said.                                                                                                         
                                                                                                                                
MS. HALL  offered her  belief that population  limits are  one of                                                               
the most  effective public health strategies  to reduce diseases,                                                               
crime, and other harms associated with alcohol.                                                                                 
                                                                                                                                
MS. HALL highlighted  that these were the top  issues for Recover                                                               
Alaska,  but  the entire  bill  works  to  create a  more  easily                                                               
understandable Title 4, which reduces  the burden on both license                                                               
holders and the  state. SB 52 would make it  easier for licensees                                                               
and  agencies to  follow  and  easier to  enforce.  She said,  "I                                                               
believe that the  vast majority of people involved  in alcohol in                                                               
our state  have really good  intentions and want to  be positive,                                                               
safe operators. SB 52 will facilitate that."                                                                                    
                                                                                                                                
2:42:00 PM                                                                                                                    
                                                                                                                                
MS. HALL  acknowledged that  the language  in SB  52 was  full of                                                               
compromises.  She remarked  that if  she were  to write  the bill                                                               
herself,  it would  be stronger  in  terms of  public health  and                                                               
safety and one written by  industry or local municipalities would                                                               
lean in another direction.                                                                                                      
                                                                                                                                
She emphasized that  SB 52 was nearly identical to  the bill that                                                             
passed the Senate last year. That  bill had full support from the                                                               
alcohol  industry,  public   safety,  local  municipalities,  and                                                               
public  health. She  said that  this bill  is the  culmination of                                                               
substantial   work   and   compromises   by   stakeholders.   She                                                               
appreciated hearing from CHARR with their concerns.                                                                             
                                                                                                                                
MS. HALL  said that during  the seven-year  process, stakeholders                                                               
worked to ensure  that current business models  were not removed.                                                               
She  encouraged people  to address  issues that  arose last  year                                                               
related to manufacturers in other bills, not in SB 52.                                                                          
                                                                                                                              
MS.  HALL  expressed  concern  that the  longer  the  state  goes                                                               
without  making the  necessary  revisions to  Title  4, the  more                                                               
frustrations will  arise with the  ABC Board and AMCO.  They have                                                               
been directed to more closely  follow statutes in board decision-                                                               
making,  but   it's  incredibly   difficult  to   follow  current                                                               
conflicting statutes. She  urged members to pass SB  52 this year                                                               
to assist business owners and  license holders and to address the                                                               
public safety issues.                                                                                                           
                                                                                                                                
2:43:53 PM                                                                                                                    
SENATOR BIRCH said he has only  been in the legislature for a few                                                               
years. He thanked  her for her help and source  of information on                                                               
these issues and the bill.                                                                                                      
                                                                                                                                
2:44:31 PM                                                                                                                    
CHAIR REINBOLD asked whether she  had specific information on the                                                               
number of deaths from drunk drivers in Alaska.                                                                                  
                                                                                                                                
MS.  HALL recalled  statistics that  related 287  alcohol-related                                                               
deaths occur  in Alaska  per year, which  was higher  than deaths                                                               
caused  by  opioids,  methamphetamine,   and  all  other  illicit                                                               
substances  combined. She  said that  the mortality  rate in  the                                                               
nation is  eight deaths per  100,000, but Alaska has  a mortality                                                               
rate  three  times  higher,  or  22  per  100,000.  However,  the                                                               
incidence in the Alaska Native population is 56 per 100,000.                                                                    
                                                                                                                                
CHAIR REINBOLD expressed  an interest in isolating  the number of                                                               
deaths caused by  drunk drivers, so she can  report these figures                                                               
to her constituents and to justify the reason the legislature                                                                   
was taking on such a large overhaul of Title 4.                                                                                 
                                                                                                                                
[SB 52 was held in committee.]                                                                                                  
                                                                                                                                
2:47:00 PM                                                                                                                    
CHAIR REINBOLD reviewed upcoming committee announcements.                                                                       
                                                                                                                                
2:48:34 PM                                                                                                                    
There being no further business to come before the committee,                                                                   
Chair Reinbold adjourned the Senate Labor and Commerce Standing                                                                 
Committee meeting at 2:48 p.m.                                                                                                  
                                                                                                                                

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