Legislature(2019 - 2020)BELTZ 105 (TSBldg)

04/09/2019 01:30 PM LABOR & COMMERCE

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Audio Topic
01:32:47 PM Start
01:33:30 PM Confirmation Hearing
01:37:09 PM SB52
03:01:20 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Consideration of Governor's Appointees: TELECONFERENCED
Board of Social Work Examiners - Mindy Swisher
-- Public Testimony --
<Item Above Added to Agenda>
+= SB 52 ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG TELECONFERENCED
Heard & Held
-Invited Testimony Followed by Public Testimony-
Invited Testimony:
- Alaska Department of Law
- Alaska Department of Public Safety
- Alaska Cabaret, Hotel, Restaurant, & Retailers
Association
- State Auditor
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                         April 9, 2019                                                                                          
                           1:32 p.m.                                                                                            
                                                                                                                              
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lora Reinbold, Chair                                                                                                    
Senator Mia Costello, Vice Chair                                                                                                
Senator Click Bishop                                                                                                            
Senator Chris Birch                                                                                                             
Senator Elvi Gray-Jackson                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                              
CONFIRMATION HEARING:                                                                                                           
                                                                                                                                
Board of Social Work Examiners                                                                                              
Mindy Swisher - Fairbanks                                                                                                       
                                                                                                                                
     -CONFIRMATION ADVANCED                                                                                                     
                                                                                                                                
SENATE BILL NO. 52                                                                                                              
"An  Act  relating  to  alcoholic   beverages;  relating  to  the                                                               
regulation  of  manufacturers,   wholesalers,  and  retailers  of                                                               
alcoholic  beverages;  relating  to licenses,  endorsements,  and                                                               
permits  involving   alcoholic  beverages;  relating   to  common                                                               
carrier  approval to  transport or  deliver alcoholic  beverages;                                                               
relating  to the  Alcoholic Beverage  Control Board;  relating to                                                               
offenses  involving  alcoholic  beverages; amending  Rule  17(h),                                                               
Alaska Rules  of Minor  Offense Procedure;  and providing  for an                                                               
effective date."                                                                                                                
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 52                                                                                                                   
SHORT TITLE: ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG                                                                            
SPONSOR(s): SENATOR(s) MICCICHE                                                                                                 
                                                                                                                                
02/11/19       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/11/19       (S)       L&C, JUD, FIN                                                                                          
03/26/19       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/26/19       (S)       Heard & Held                                                                                           
03/26/19       (S)       MINUTE(L&C)                                                                                            
03/28/19       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
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)                                                                      
04/02/19       (S)       Heard & Held                                                                                           
04/02/19       (S)       MINUTE(L&C)                                                                                            
04/04/19       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
04/04/19       (S)       -- MEETING CANCELED --                                                                                 
04/09/19       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
MINDY SWISHER, Appointee                                                                                                        
Board of Social Work Examiners                                                                                                  
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Testified as appointee to the Board of                                                                    
Social Work Examiners.                                                                                                          
                                                                                                                                
KRIS CURTIS, Legislative Auditor                                                                                                
Legislative Audit Division                                                                                                      
Legislative Agencies and Offices                                                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified and answered questions on SB 52.                                                                
                                                                                                                                
ERIKA MCCONNELL, Director                                                                                                       
Alcohol and Marijuana Control Office (AMCO)                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified and answered questions on SB 52.                                                                
                                                                                                                                
MICHAEL DUXBURY, Deputy Commissioner                                                                                            
Department of Public Safety (DPS)                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified during the hearing on SB 52.                                                                    
                                                                                                                                
SARAH OATES, President & Chief Executive Director                                                                               
Alaska Cabaret, Hotel, Restaurant, and Retailers Association                                                                    
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified during the hearing on SB 52.                                                                    
                                                                                                                                
JOHN SKIDMORE, Director                                                                                                         
Criminal Division                                                                                                               
Central Office                                                                                                                  
Department of Law                                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Answered questions during the discussion of                                                               
SB 52.                                                                                                                          
                                                                                                                                
BILL HOWELL, representing himself                                                                                               
Sterling, Alaska                                                                                                                
POSITION STATEMENT: Testified in support of SB 52.                                                                            
                                                                                                                                
AMUND RONGSTAD, Co-Owner                                                                                                        
Amalga Distillery                                                                                                               
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of SB 52.                                                                            
                                                                                                                                
BEVERLY SCHOONOVER, Acting Director                                                                                             
Advisory Board of Alcoholism & Drug Abuse                                                                                       
Alaska Mental Health Board                                                                                                      
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of SB 52.                                                                            
                                                                                                                                
GALEN JONES, Co-owner                                                                                                           
Double Shovel Cider Company                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of SB 52.                                                                            
                                                                                                                                
ELIZABETH RIPLEY, Chief Executive Officer                                                                                       
Mat-Su Health Foundation                                                                                                        
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT: Testified in support of SB 52.                                                                            
                                                                                                                                
DOUG HOGUE                                                                                                                      
Kenai River Brewing Company                                                                                                     
Soldotna, Alaska                                                                                                                
POSITION STATEMENT: Testified in support of SB 52.                                                                            
                                                                                                                                
JAN HILL, Member                                                                                                                
Title IV Steering Committee                                                                                                     
Haines, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of SB 52.                                                                            
                                                                                                                                
DIANE DISTANTO, representing herself                                                                                            
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of SB 52.                                                                            
                                                                                                                                
MEL STRYDOM, President                                                                                                          
MSA, Inc.                                                                                                                       
Homer, Alaska                                                                                                                   
POSITION STATEMENT: Testified with concerns about SB 52.                                                                      
                                                                                                                                
ROBERTA BROOKS, Administrator                                                                                                   
Juvenile Alcohol Safety Program                                                                                                 
Member, Healthy Voices, Healthy Choices Coalition                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of SB 52.                                                                            
                                                                                                                                
LOGAN DANIELS, Member                                                                                                           
Healthy Voices, Healthy Choices Coalition                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of SB 52.                                                                            
                                                                                                                                
CHARLIE DANIELS, Director                                                                                                       
Healthy Voices, Healthy Choices Coalition                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of SB 52.                                                                            
                                                                                                                                
ANDI TAYLOR, Member                                                                                                             
Healthy Voices, Member                                                                                                          
Healthy Voices, Healthy Choices Coalition                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of SB 52.                                                                            
                                                                                                                                
BRYAN SAYLOR, Member                                                                                                            
Healthy Voices, Healthy Choices Coalition                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of SB 52.                                                                            
                                                                                                                                
BRANDON SPANOS, Deputy Director                                                                                                 
Tax Division                                                                                                                    
Department of Revenue (DOR)                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Presented the DOR's fiscal note for SB 52.                                                                
                                                                                                                                
MATT DAVIDSON, Social Service Program Officer                                                                                   
Division of Juvenile Justice                                                                                                    
Department of Health and Social Services (DHSS)                                                                                 
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented the DHSS's fiscal note for SB 52.                                                               
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:32:47 PM                                                                                                                    
CHAIR LORA REINBOLD called the Senate Labor and Commerce                                                                      
Standing Committee meeting to order at 1:32 p.m. Present at the                                                                 
call  to  order  were  Senators  Costello,  Birch,  Gray-Jackson,                                                               
Bishop, and Chair Reinbold.                                                                                                     
                                                                                                                                
^CONFIRMATION HEARING                                                                                                           
                      CONFIRMATION HEARING                                                                                  
                 Board of Social Work Examiners                                                                               
                                                                                                                              
1:33:30 PM                                                                                                                    
CHAIR REINBOLD announced  that the first order  of business would                                                               
be a  confirmation hearing  for Mindy  Swisher, appointee  to the                                                               
Board of Social Work Examiners.                                                                                                 
                                                                                                                                
1:34:18 PM                                                                                                                    
MINDY  SWISHER,  Appointee,  Board   of  Social  Work  Examiners,                                                               
Fairbanks, stated that  she has worked for the  state's Office of                                                               
Children's Services  (OCS) for the  last 12 years.  She currently                                                               
works  as  a  manager  in  the Fairbanks  field  office.  She  is                                                               
currently  a  licensed  clinical  social worker,  she  said.  She                                                               
expressed  her  interest in  serving  on  the board  because  she                                                               
believes that the profession serves  a valuable role. In order to                                                               
uphold the  value and serve  Alaskans ethically, it  is important                                                               
to  have laws,  regulations,  and practices  in  place that  hold                                                               
social workers accountable.  She offered her belief  that this is                                                               
an opportunity  for her  to give  back to  her profession  and to                                                               
enhance the field of social work.                                                                                               
                                                                                                                                
SENATOR BISHOP thanked her for putting her name forward.                                                                        
                                                                                                                                
1:35:56 PM                                                                                                                    
CHAIR  REINBOLD opened  public testimony,  and after  determining                                                               
that no  one wished  to testify, closed  public testimony  on the                                                               
confirmation hearing.                                                                                                           
                                                                                                                                
1:36:19 PM                                                                                                                    
CHAIR REINBOLD stated  that in accordance with  AS 39.05.080, the                                                               
Senate  Labor  and  Commerce   Standing  Committee  reviewed  the                                                               
following and recommends the appointment  be forwarded to a joint                                                               
session for consideration:                                                                                                      
                                                                                                                                
Board of Social Work Examiners                                                                                                
Mindy Swisher - Fairbanks                                                                                                       
                                                                                                                                
[Signing  the  reports  regarding   appointments  to  boards  and                                                               
commissions in  no way reflects  individual members'  approval or                                                               
disapproval  of  the  appointees;   the  nominations  are  merely                                                               
forwarded   to  the   full   legislature   for  confirmation   or                                                               
rejection.]                                                                                                                     
                                                                                                                                
1:37:03 PM                                                                                                                    
At-ease.                                                                                                                        
                                                                                                                                
         SB 52-ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG                                                                      
                                                                                                                              
1:37:09 PM                                                                                                                    
CHAIR REINBOLD 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."                                                                                           
                                                                                                                                
1:38:34 PM                                                                                                                    
KRIS  CURTIS, Legislative  Auditor,  Legislative Audit  Division,                                                               
Legislative Agencies  and Offices, Juneau, stated  that she would                                                               
review the Division  of Legislative Audit's sunset  audit for the                                                               
Alcoholic  Beverage  Control  Board dated  November  2017  [Audit                                                               
Control Number  08-20099-17]. The audit  found that in  all areas                                                               
the  board   was  serving  the   public's  interest   except  for                                                               
licensing. The division recommended  a four-year extension of the                                                               
potential   eight-year   extension   to   recognize   the   eight                                                               
recommendations as part of the  sunset audit. The audit concluded                                                               
that  the  board  should  improve  its  procedures  for  renewing                                                               
licenses,  issuing recreational  site licenses,  and for  issuing                                                               
beverage  dispensary  licenses  that encourage  tourism.  Testing                                                               
found  that  these  licenses  were  not  consistently  issued  in                                                               
accordance   with  statute.   The   auditors   also  found   that                                                               
operational   improvements  were   needed   in  enforcing   laws,                                                               
monitoring  board-related  law   enforcement  activity,  and  for                                                               
processing refunds to municipalities.                                                                                           
                                                                                                                                
1:39:52 PM                                                                                                                    
MS.  CURTIS  offered to  provide  a  high-level overview  of  the                                                               
legislative audit. She reviewed audit recommendation 1:                                                                         
                                                                                                                                
      The authority to renew licenses should be limited to                                                                      
     the board.                                                                                                                 
                                                                                                                                
She explained that the statutes  in place were very specific that                                                               
only the  board may issue  a renewal license. The  statutes allow                                                               
the board to temporarily delegate  its authority to the executive                                                               
director. However, the  audit found that the  board had delegated                                                               
its authority, but it was not temporary.                                                                                        
                                                                                                                                
1:40:12 PM                                                                                                                    
MS. CURTIS reviewed audit recommendation 2:                                                                                     
                                                                                                                                
      The board should issue recreational site licenses in                                                                      
     accordance with statutory requirements.                                                                                    
                                                                                                                                
She  reported that  auditors tested  10 of  29 recreational  site                                                               
licenses that  were active  during the period  and found  all ten                                                               
were  non-compliant with  statutes. She  said that  statutes were                                                               
very specific as to what  qualified as a recreational site, which                                                               
includes  baseball  games,  car  races, hockey  games,  dog  sled                                                               
racing  events, and  curling matches  held during  a season.  The                                                               
non-compliant  entities  were   travel  tour  companies,  bowling                                                               
alleys, an art  council, a movie theater, a pool  hall and a spa.                                                               
The auditors  found the  same issue  when the  division conducted                                                               
the prior sunset audit. In 2017,  the board was aware that it was                                                               
issuing  licenses in  violation  of statute.  However, the  board                                                               
believed  it was  in the  public's best  interest to  do so.  The                                                               
board anticipated  that the licenses  would be dealt with  in the                                                               
future rewrite of Title 4.                                                                                                      
                                                                                                                                
1:41:13 PM                                                                                                                    
MS. CURTIS reviewed audit recommendation 3:                                                                                     
                                                                                                                                
     The board should issue beverage dispensary licenses in                                                                     
     accordance with statutory requirements.                                                                                    
                                                                                                                                
She reported that auditors sampled  16 of 126 beverage dispensary                                                               
licenses and found  that five licenses were  transferred, and six                                                               
licenses were  issued non-compliant with statutes.  She explained                                                               
that statutes  give the board the  authority to renew or  issue a                                                               
beverage dispensary license if it  appears the license encourages                                                               
tourism  without  regard  to   population  limits.  Further,  the                                                               
statutes provide a  minimum number of rental rooms  for an entity                                                               
to qualify  as a business  that encourages tourism.  The auditors                                                               
found  the  errors were  with  entities  that  did not  meet  the                                                               
minimum  number  of  rooms.  The   board  believed  that  it  was                                                               
appropriate  to  continue to  issue  these  licenses because  the                                                               
original licenses were  issued prior to 1985. This  law went into                                                               
effect  on that  date, she  said. However,  the statutes  did not                                                               
provide for any grandfathering provisions.                                                                                      
                                                                                                                                
1:42:23 PM                                                                                                                    
MS. CURTIS reviewed audit recommendation 4:                                                                                     
                                                                                                                                
     The  board, AMCO  director, and  enforcement supervisor                                                                    
     should   work  together   to   formally  establish   an                                                                    
     enforcement plan  to direct AMCO's  limited enforcement                                                                    
     resources.                                                                                                                 
                                                                                                                                
She said the  Alcohol & Marijuana Control  Office (AMCO) provides                                                               
support  for  the  Marijuana  Control  Board  and  the  Alcoholic                                                               
Beverage  Control  Board  (ABC Board).  She  explained  that  the                                                               
office  has limited  resources, but  it did  not have  a plan  to                                                               
prioritize the use of the resources.                                                                                            
                                                                                                                                
1:42:54 PM                                                                                                                    
MS. CURTIS reviewed audit recommendation 5:                                                                                     
                                                                                                                                
     The board and AMCO  director should implement a process                                                                    
     to  monitor and  track  complaints to  ensure they  are                                                                    
     assessed  for follow  up action  and investigated  in a                                                                    
     timely manner.                                                                                                             
                                                                                                                                
1:43:04 PM                                                                                                                    
MS. CURTIS reviewed audit recommendation 6:                                                                                     
                                                                                                                                
     The  board and  AMCO  director  should develop  written                                                                    
     procedures  for updating  the  statewide database  with                                                                    
     restricted purchasers.                                                                                                     
                                                                                                                                
She explained  that the statewide  database of written  orders is                                                               
used to  control the sale of  alcohol to restricted areas  of the                                                               
state. It is also used to  provide package store licensees with a                                                               
list  of  individuals  who  have   been  convicted  of  illegally                                                               
manufacturing or selling alcohol.  The stores are prohibited from                                                               
selling  alcohol  to  these restricted  purchasers.  The  auditor                                                               
found that the restricted purchasers  were not being entered into                                                               
the database. The  auditors also found that the  court system was                                                               
not  consistently providing  the  reports of  convictions to  the                                                               
office.                                                                                                                         
                                                                                                                                
1:43:49 PM                                                                                                                    
MS. CURTIS reviewed audit recommendation 7:                                                                                     
                                                                                                                                
     The board  and AMCO director should  improve procedures                                                                    
     to   ensure   municipalities   report   violations   of                                                                    
     alcoholic beverage laws.                                                                                                   
                                                                                                                                
She  explained that  current statute  requires municipalities  to                                                               
provide this information as a  condition of receiving half of the                                                               
biennial  license  fees.  The  auditors found  that  four  of  40                                                               
locations had been submitting the  information, yet the fees were                                                               
being routinely refunded to the municipalities.                                                                                 
                                                                                                                                
1:44:13 PM                                                                                                                    
MS. CURTIS reviewed audit recommendation 8:                                                                                     
                                                                                                                                
         The AMCO director should develop and implement                                                                         
       procedures to ensure refunds to municipalities are                                                                       
     appropriately reviewed.                                                                                                    
                                                                                                                                
She  reported  that auditors  found  only  one staff  person  was                                                               
calculating  and   approving  the  amount  of   the  refunds  and                                                               
approving  the  payments  to  the  municipalities.  Those  duties                                                               
should be segregated, she said.                                                                                                 
                                                                                                                                
1:44:35 PM                                                                                                                    
SENATOR BIRCH  directed attention  to recommendation 6.  He asked                                                               
for further  clarification on restricted purchasers  and if these                                                               
purchasers  were a  limited pool.  He said  he was  familiar that                                                               
Anchorage  liquor stores  were required  check drivers'  licenses                                                               
for a  red stripe  [that indicates  the licensee  cannot purchase                                                               
alcohol].                                                                                                                       
                                                                                                                                
MS. CURTIS  answered that restricted purchasers  were individuals                                                               
who  were   convicted  of  illegally  selling   or  manufacturing                                                               
alcohol. The court system has  been providing that information to                                                               
the  Alcohol &  Marijuana  Control Office  and  staff enters  the                                                               
information into the database. The  stores check that information                                                               
to  ensure  that   alcohol  is  not  being   sold  to  restricted                                                               
purchasers, she said.                                                                                                           
                                                                                                                                
SENATOR BIRCH  asked for further clarification  on the mechanics.                                                               
He said it was not as simple as looking for a red stripe.                                                                       
                                                                                                                                
1:46:08 PM                                                                                                                    
ERIKA MCCONNELL,  Director, Alcohol and Marijuana  Control Office                                                               
(AMCO),  Anchorage,  answered  that AMCO  maintains  a  statewide                                                               
database as  required by statute.  She related  her understanding                                                               
that stores  check the database  at the time written  orders, but                                                               
stores check walk  in customers by evaluating the  red stripes on                                                               
the licenses.                                                                                                                   
                                                                                                                                
MS. MCCONNELL offered  to provide information on  the process and                                                               
number  of   restricted  purchasers   in  the  database   to  the                                                               
committee.                                                                                                                      
                                                                                                                                
1:47:17 PM                                                                                                                    
SENATOR COSTELLO  thanked Ms. McConnell for  providing her office                                                               
with  information on  the number  of licenses  in the  process of                                                               
being  transferred  to  a  new owner.  She  explained  that  some                                                               
restaurants in  her district have  operated in the  same location                                                               
for years,  but after being sold,  the new owner could  not serve                                                               
alcoholic  beverages  until  the   liquor  license  transfer  was                                                               
completed.  She said  that  these owners  were  reluctant to  ask                                                               
about the transfer for fear that it might slow down the process.                                                                
                                                                                                                                
She  reported that  46 liquor  licenses  were in  the process  of                                                               
being transferred. The AMCO website  indicates that owners should                                                               
plan for  a three to six  month delay for processing  the license                                                               
transfer.  However, several  businesses on  the list  have waited                                                               
longer.  She reported  that at  least one  restaurant has  waited                                                               
since last  June. She acknowledged  that the ABC Board's  work is                                                               
important.  However, she  also thought  the  processing time  for                                                               
liquor license transfers was excessive  and bordered on punitive.                                                               
She indicated  that she has an  amendment to the Title  4 rewrite                                                               
bill  [SB 52]  to address  this situation.  She said  that people                                                               
purchase a restaurant  and expect that the same  food and alcohol                                                               
could be  served. She asked  whether the license  transfers could                                                               
happen in a timelier manner.                                                                                                    
                                                                                                                                
MS. CURTIS offered  to respond in generic terms  that would apply                                                               
to all  occupational boards. She  said that when the  Division of                                                               
Legislative  Audit conducts  an  audit and  identifies a  problem                                                               
such as  delays, it  sometimes is due  to limited  resources. For                                                               
example,  an occupation  or board  may  receive a  big influx  of                                                               
applications and the board may  not enough staff to process them.                                                               
Other   times  delays   are  caused   by  applicants   submitting                                                               
inaccurate  or  incomplete  applications.   Delays  may  also  be                                                               
related to how often a board  meets to conduct its business. Some                                                               
boards allow  electronic applications  with edit checks  or staff                                                               
has revised the applications to  help reduce errors or omissions.                                                               
She was unsure what the specific  problem was with the ABC Board,                                                               
but during the survey portion of  the audit, the division did not                                                               
identify  timeliness  as  an  issue.   She  offered  to  consider                                                               
timeliness during the next sunset audit.                                                                                        
                                                                                                                                
SENATOR COSTELLO  asked whether anything prevents  the board from                                                               
holding telephonic meetings.                                                                                                    
                                                                                                                                
MS. CURTIS said she was unsure.                                                                                                 
                                                                                                                                
MS. MCCONNELL  responded that  the ABC Board  does not  require a                                                               
business  to stop  selling alcohol  while a  transfer process  is                                                               
underway. She recalled  a situation that arose  with a restaurant                                                               
in Senator Costello's  district. She said she was  unsure why the                                                               
business stopped serving  and selling alcohol because  it was not                                                               
at the direction  of her office. As Ms.  Curtis mentioned certain                                                               
elements  of  the  transfer  process fall  under  the  ABC  Board                                                               
office's control  and other elements  fall under  the applicant's                                                               
control. She  referred to the  first two licensees listed  on the                                                               
chart  that  she  provided  in her  presentation,  which  used  a                                                               
transfer with  a security interest.  The applicants  are required                                                               
to  provide  the  ABC  Board with  the  final  recorded  security                                                               
documents  after  board  approval,  before the  transfer  can  be                                                               
effectuated,  she said.  In those  situations, the  division must                                                               
await information  from the licensees  before the process  can be                                                               
finalized.  She  offered  her  belief that  if  the  board  could                                                               
modernize its online license application  to a more user friendly                                                               
system, one that  reduced errors, the process  could be improved.                                                               
For  example,   an  applicant  could  be   directed  on  specific                                                               
information to enter for each field.                                                                                            
                                                                                                                                
MS. MCCONNELL said  the division requested funding  to update and                                                               
modernize its licensing system.  In terms of telephonic meetings,                                                               
a provision  in AS 04.06.050  that states, "The board  shall also                                                               
meet at  least once each  year in  each judicial district  of the                                                               
state to study  this title and modify  existing board regulations                                                               
in  light  of  statewide  and local  problems.  She  related  her                                                               
understanding  that  this  provision  is in  statute  because  it                                                               
recognizes  that communities  have  different  issues related  to                                                               
alcohol. It  also allows  licenses to have  some access  to their                                                               
regulatory body.                                                                                                                
                                                                                                                                
1:54:36 PM                                                                                                                    
SENATOR   COSTELLO   suggested   that    there   must   be   some                                                               
miscommunication. She  said that  the license transfer  issue has                                                               
occurred  with  several  restaurants.  She asked  the  record  to                                                               
reflect that  the board should  communicate to an  applicant that                                                               
the business  can continue  to serve  alcohol while  its transfer                                                               
application is  being processed.  She said that  these businesses                                                               
can suffer an economic downturn.                                                                                                
                                                                                                                                
1:56:22 PM                                                                                                                    
MICHAEL  DUXBURY,  Deputy   Commissioner,  Department  of  Public                                                               
Safety,  Anchorage, said  he has  been in  consultation with  the                                                               
Department of Law and the  departments' special assistants on the                                                               
bill.  He  related  his  understanding  some  issues  were  being                                                               
addressed. He  said that  he looks  forward to  ways to  help the                                                               
sponsor of SB 52.                                                                                                               
                                                                                                                                
1:58:14 PM                                                                                                                    
SARAH  OATES,  President  &   Chief  Executive  Director,  Alaska                                                               
Cabaret,  Hotel, Restaurant,  and Retailers  Association (CHARR),                                                               
Anchorage,  stated  that  CHARR  does  not  support  the  current                                                               
version  of the  bill. She  said  she previously  worked for  the                                                               
Alcohol & Marijuana Control Office  for seven and one-half years.                                                               
She  said  that  the  legislature  has  considered  a  number  of                                                               
versions of  a comprehensive  bill in the  past five  years. Each                                                               
session  only  very small  changes  have  passed the  legislature                                                               
because  of ongoing  debates by  the three  tiers of  the alcohol                                                               
industry about  current and proposed privileges  and prohibitions                                                               
of manufacturing license  types. During this time  members of the                                                               
three  tiers   have  attempted  to   come  to  a   compromise  on                                                               
manufacturing operations  with mild success.  Unfortunately, most                                                               
of the proposed changes that  would add clarity and significantly                                                               
benefit the public have yet to pass through the legislature.                                                                    
                                                                                                                                
She explained that  SB 52 is largely identical to  the version of                                                               
Senate  Bill   76  that  passed   the  Senate  during   the  last                                                               
legislative session. In its final  form, Senate Bill 76 removed a                                                               
section  of   the  original  bill  that   represented  a  crucial                                                               
component of  the industry compromise,  but it left  other pieces                                                               
of the compromise in the  bill. Consequently, Alaska CHARR cannot                                                               
support SB 52 in its current form.                                                                                              
                                                                                                                                
MS. OATES recommended that the  contentious pieces of the bill be                                                               
removed.  This   refers  to  nearly  all   of  the  manufacturing                                                               
provisions  in   the  bill,  except   for  the   revised  penalty                                                               
provisions for  manufacturing. Alaska CHARR  supports downgrading                                                               
class  A  misdemeanors  for   manufacturing  to  violations.  She                                                               
supported increasing  license fees for manufacturing  licenses to                                                               
$2,500 per  license type to be  on par with retail  and wholesale                                                               
license fee increases.                                                                                                          
                                                                                                                                
She  said that  Alaska CHARR  proposes including  in the  bill at                                                               
least 80  percent of  alcohol products offered  for sale  must be                                                               
manufactured  on  the  licensed   premises.  She  said  that  the                                                               
prohibitions  for large  manufacturers,  which are  substantially                                                               
larger than any currently in  Alaska, would be limited to selling                                                               
their products  to licensed wholesalers  or to entities  in other                                                               
states and countries.  This would prevent someone  from coming in                                                               
and monopolizing Alaska's current alcohol industry businesses.                                                                  
                                                                                                                                
MS. OATES recommended a couple  of other small changes, including                                                               
that the tasting  event permit language be amended.  In 2018, one                                                               
licensee  recommended   changes  to  the  tasting   event  permit                                                               
section,  but those  changes were  not agreeable  to the  rest of                                                               
CHARR's  alcohol industry  members. She  said that  those changes                                                               
were included in  SB 52. She directed attention  to Attachment A,                                                               
in members' packets. This would  revert the language back to what                                                               
the industry has agreed upon during the last five years.                                                                        
                                                                                                                                
She referred to  Section 145, which would  specifically amend the                                                               
gaming  statutes. The  current  language  would disqualify  about                                                               
one-third  of  existing  vendor locations  that  many  non-profit                                                               
industries  use for  gaming revenue.  She expressed  concern that                                                               
this   language    could   adversely   affect    many   nonprofit                                                               
organizations.                                                                                                                  
                                                                                                                                
2:03:42 PM                                                                                                                    
MS.   OATES  stated   that  she   has  been   communicating  with                                                               
wholesalers and working together to consider proposed changes.                                                                  
                                                                                                                                
2:04:09 PM                                                                                                                    
SENATOR  BIRCH  expressed  his  concern  that  some  issues  were                                                               
outstanding because he thought the  legislature was almost to the                                                               
finish line  last year.  He said he  understood she  represents a                                                               
large number of organizations. He  asked whether she would prefer                                                               
the status quo.                                                                                                                 
                                                                                                                                
MS.  OATES clarified  that  the  Alaska CHARR,  as  a whole,  has                                                               
supported  existing manufacturing  operations.  However, as  more                                                               
manufacturers  come on  board it  substantially cutting  into the                                                               
revenues of  retailers across the  state. She said  that removing                                                               
most  of  the manufacturing  sections  of  the bill  would  allow                                                               
existing  manufacturers to  continue operating  in their  current                                                               
form. She  expressed an  interest in retaining  all of  the "good                                                               
portions" of the  bill. She suggested that  industry could settle                                                               
those smaller  pieces that  address manufacturing  privileges and                                                               
prohibitions  in  a separate  bill.  She  was  not aware  of  any                                                               
proposed legislation to  do so, but the goal would  be to "battle                                                               
out" those things in the future.                                                                                                
                                                                                                                                
2:06:53 PM                                                                                                                    
SENATOR BIRCH related  his understanding that the goal  is not to                                                               
disrupt current  operations for  manufacturers. He  asked whether                                                               
Alaska CHARR would  support moving forward with SB  52 and coming                                                               
up with some modifications to address manufacturers later.                                                                      
                                                                                                                                
MS. OATES related that CHARR  would support the bill with changes                                                               
as  outlined  in  the  document  sent  on  Saturday  [Summary  of                                                               
Proposed  Changes and  Sectional Analysis  of SB  52 prepared  by                                                               
Sarah  Oates,  March  26,  2019]  and work  out  the  issues  and                                                               
disputes in separate legislation.                                                                                               
                                                                                                                                
CHAIR  REINBOLD  remarked  that  she  looked  into  the  class  A                                                               
misdemeanor.  She said  Section 145  was an  important provision.                                                               
However,  it   almost  seemed  as   though  she  was   trying  to                                                               
micromanage  wineries,  distilleries,  and breweries  by  forcing                                                               
restrictions, she said. She offered  her belief that breweries in                                                               
her area  were struggling  with increased  fees. She  agreed that                                                               
Alaska  Grown  local  products  is  important,  noting  that  the                                                               
committee would  consider her comments and  suggestions. However,                                                               
she indicated  that everyone needed  to compromise and  CHARR may                                                               
need  to do  so. She  recalled that  the bill  stalled last  year                                                               
because of  restrictions to onsite tasting  quantities, which she                                                               
said she thought  was outrageous. She asked  whether those limits                                                               
were being sought again.                                                                                                        
                                                                                                                                
MS. OATES answered  that CHARR was not  proposing restrictions to                                                               
any Title  4 bills to  the ways in which  manufacturers currently                                                               
can operate.                                                                                                                    
                                                                                                                                
CHAIR REINBOLD  remarked that she  supports local  businesses and                                                               
not ones that fly up products.                                                                                                  
                                                                                                                                
2:10:19 PM                                                                                                                    
JOHN  SKIDMORE,  Director,  Criminal  Division,  Central  Office,                                                               
Department of  Law, Anchorage,  said that SB  52 was  designed to                                                               
address industry  regulation. However,  the DOL  does not  take a                                                               
position on  how the industry  is regulated. Instead,  it focuses                                                               
on the prosecution  of crimes in local option areas,  such as the                                                               
manufacture  of  alcohol.  Some  areas have  opted  to  not  have                                                               
alcohol in their local communities,  he said. He highlighted four                                                               
things  the department  has noticed  in  SB 52,  which have  been                                                               
discussed  with  the sponsor.  He  offered  his belief  that  the                                                               
issues will be resolved.                                                                                                        
                                                                                                                                
2:11:42 PM                                                                                                                    
MR.  SKIDMORE  said  the  first  area  related  to  manufacturing                                                               
provisions in  the bill. These  seemed to focus on  the industry,                                                               
he  said. The  department encounters  "home brew"  in some  rural                                                               
communities. For example, some people  take a five-gallon bucket,                                                               
add sugar and  yeast to make an alcoholic concoction.  He said it                                                               
was unclear if  the definitions found in Section 144  on page 107                                                               
would cover  that type  of manufacturing, such  as home  brew. He                                                               
read the  terms, "brewed beverages, distilled  spirits, kombucha,                                                               
mead,  sake, wine,"  and wondered  whether the  terms were  broad                                                               
enough to  include the manufacturing  conduct he  just described.                                                               
He clarified  that he was not  talking about an activity  such as                                                               
brewing beer at home for personal consumption.                                                                                  
                                                                                                                                
2:12:47 PM                                                                                                                    
MR.  SKIDMORE  said the  second  concern  is the  importation  of                                                               
alcohol  into the  local  option  areas. The  bill  seemed to  be                                                               
focused  on  the  industry,  but the  department  does  not  find                                                               
industry actively trying to send  alcohol into these communities.                                                               
However, some of  the sections appear to  remove statutes related                                                               
to possessing with  the intent to import  alcohol. The department                                                               
uses  that  significant  phrase in  interdiction  of  alcohol  or                                                               
drugs. Although  someone may not have  completed the importation,                                                               
the attempted conduct  still needs to be  addressed. For example,                                                               
there is a presumption to  sell when someone possesses quantities                                                               
of alcohol  and is  at an  airport or on  a snow  machine heading                                                               
into  a  village.  However,  if  a person  has  not  crossed  the                                                               
jurisdictional boundary,  the department still needs  to have the                                                               
ability to  prosecute the attempts. He  suggested greater clarity                                                               
would be helpful to protect the communities.                                                                                    
                                                                                                                                
MR. SKIDMORE said that the  bill requires licenses for breweries,                                                               
distilleries, or  wineries or for  retail sales on  premises. The                                                               
department is concerned about people  putting a number of bottles                                                               
of alcohol  into their luggage and  selling it out of  a backpack                                                               
or  luggage.  This activity  is  different  than a  premise-based                                                               
sale, but it was not clear  that this activity could be addressed                                                               
as currently drafted.                                                                                                           
                                                                                                                                
2:15:02 PM                                                                                                                    
MR. SKIDMORE  raised a  third concern,  related to  penalties. He                                                               
characterized this as an oversight                                                                                              
                                                                                                                                
AS 04.16.200 is  not listed in the bill and  relates to mandatory                                                               
minimum penalties  for importation  or other activities  in local                                                               
option communities.  Since the penalty  provision refers  back to                                                               
the  statute that  originally criminalized  it, AS  04.11.010 has                                                               
now been  broken up since  the conduct  has been placed  in other                                                               
statutes. He suggested that AS  04.16.200 needed to be amended if                                                               
the sponsor's intent is to apply mandatory minimum penalties.                                                                   
                                                                                                                                
MR. SKIDMORE raised  a fourth concern related  to common carriers                                                               
and  transportation  of  alcohol   into  communities.  He  stated                                                               
ambiguity  exists,   as  to  whether  labeling   requirements  or                                                               
restrictions apply to  small amounts of alcohol  going into local                                                               
option  communities.  Packages  have  to be  labeled  for  common                                                               
carriers, but the  provisions don't apply under  a certain amount                                                               
of alcohol. He  clarified that smaller referred  to amounts under                                                               
a felony level, such as three  or four bottles, not 20-30 bottles                                                               
of alcohol. In closing, he  stated that the department identified                                                               
areas of unintended consequences. He  said that the department is                                                               
working with sponsor to clarify those items.                                                                                    
                                                                                                                                
2:17:06 PM                                                                                                                    
SENATOR BIRCH asked whether the  department performs any periodic                                                               
assessments or purges outdated statutes.                                                                                        
                                                                                                                                
MR.  SKIDMORE said  he could  speak to  the efforts  the criminal                                                               
division makes.  The criminal  division solicits  suggestions for                                                               
revisions from  its prosecutors each  year, which  are discussed,                                                               
and ultimately  shared this with  the administration  to address.                                                               
He clarified  that the department  does not maintain a  list, but                                                               
it works on a continuous review.                                                                                                
                                                                                                                                
2:21:32 PM                                                                                                                    
CHAIR REINBOLD opened public testimony on SB 52.                                                                                
                                                                                                                                
2:21:39 PM                                                                                                                    
BILL HOWELL, representing himself,  Sterling, spoke in support of                                                               
SB 52 as  written without restrictions on  manufacturers. He said                                                               
he does not  manufacture, distribute or sell any  alcohol, but he                                                               
writes about  beer and  consumes it. He  offered his  belief that                                                               
the  bill  is  a  good  idea since  the  system  is  complex  and                                                               
difficult to  navigate. The  bill would  clarify many  things. He                                                               
acknowledged  that CHARR  indicated some  opposition to  the bill                                                               
because  bars  and  restaurants   purchase  liquor  licenses.  He                                                               
offered his  belief that Alaskans  are supportive of a  more open                                                               
way to purchase alcohol and  he supports the economic development                                                               
that the [manufacturers] bring to the state.                                                                                    
                                                                                                                                
2:24:10 PM                                                                                                                    
AMUND  RONGSTAD, Co-Owner,  Amalga Distillery,  Juneau, spoke  in                                                               
support of  SB 52. He said  that he thinks  SB 52 is a  good step                                                               
forward in  terms of alcohol  laws in  the state. He  offered his                                                               
belief that  the bill provides clarity  and increases enforcement                                                               
funding, which  would be good  for public safety. He  pointed out                                                               
that the  bill does not  directly benefit the distillery,  but it                                                               
does clarify certain  laws that may help his  or other distillery                                                               
businesses  in  the future.  He  related  his understanding  that                                                               
license fees  would double, but  he supported the  increased fees                                                               
since he hopes it would go towards enforcement.                                                                                 
                                                                                                                                
2:25:30 PM                                                                                                                    
BEVERLY   SCHOONOVER,   Acting   Director,  Advisory   Board   of                                                               
Alcoholism  & Drug  Abuse, Alaska  Mental  Health Board,  Juneau,                                                               
stated that these agencies are  statutorily charged with planning                                                               
and coordinating behavioral health  services funded by the state.                                                               
The boards  support SB 52 that  provides a much needed  update to                                                               
the Title  4 provisions. This  bill includes  prevention measures                                                               
to reduce underage  drinking. According to the  annual youth risk                                                               
behavioral survey (YRBS), there have  been declines in the number                                                               
of  youth  starting  to  drink  under the  age  of  13.  However,                                                               
underage drinking  in Alaska  happens and  teens binge  drink. In                                                               
2017, nearly  14 percent of  students surveyed admitted  to binge                                                               
drinking within the last 30 days.  Binge drinking is four or more                                                               
drinks for females  and five or more drinks for  males, she said.                                                               
Underage  drinking,  especially  binge drinking,  is  harmful  to                                                               
adolescent brain  development. It's important that  teens are not                                                               
driving  while under  the influence  or engaging  in other  risky                                                               
behaviors.  The   boards  believe  that  that   the  preventative                                                               
measures outlined in SB 52  will reduce underage drinking because                                                               
the  bill  holds  adults   accountable,  by  maintaining  current                                                               
penalties  for furnishing  alcohol to  a minor.  This bill  would                                                               
ensure that everyone who sells  alcohol at a licensed business or                                                               
permanent event is properly trained  to check identification. The                                                               
bill also would provide much  needed resources for enforcement of                                                               
title  4 by  increasing license  fees, many  which have  not been                                                               
increased in  decades and  limits the ABC  Board's ability  to do                                                               
its job.  For example, compliance  checks at  licensed businesses                                                               
have not been funded for  the last three years. Compliance checks                                                               
are a nationwide best practice  and when all licensees know their                                                               
businesses  will  be regularly  inspected,  it  provides a  clear                                                               
incentive  for properly  training  their staff.  She thanked  the                                                               
sponsor and the  stakeholders and to Recover Alaska  for its work                                                               
on this bill.                                                                                                                   
                                                                                                                                
2:27:52 PM                                                                                                                    
GALEN JONES,  Co-owner, Double  Shovel Cider  Company, Anchorage,                                                               
said he has attended numerous  steering committee meetings in the                                                               
past three  years. He said  that most of the  suggested revisions                                                               
were  incorporated into  the bill.  These revisions  will benefit                                                               
Alaska's  economy  since  it  promotes   an  atmosphere  that  is                                                               
friendly  and  conducive  to new  manufacturing  investments  and                                                               
startups  in Alaska.  He said  that this  progressive legislation                                                               
would  create additional  tax revenue,  vibrant hospitality  that                                                               
can  attract tourism  and create  skilled jobs.  Most of  all, it                                                               
enables  growth  of  manufacturers wholesale  capacity  so  these                                                               
businesses can  export products and  bring money back  to Alaska.                                                               
He suggested that local manufacturers  have the ability to create                                                               
tax revenue. He  urged the state to strive  to create regulations                                                               
that promote this bright spot  in Alaska's economy. Other states,                                                               
like  Colorado  and  Washington have  booming  manufacturing  and                                                               
export massive  volumes of craft beverages.  He cautioned against                                                               
moving  the  state  backwards  by  restricting  manufacturing  or                                                               
hospitality companies,  which includes  bars and  restaurants. He                                                               
said that Alaskans  have shown an overwhelming  desire to support                                                               
local companies and  consume locally made products.  He said that                                                               
his company could live with the  higher license fees, but it will                                                               
cut  into   the  small   margins  due   to  shipping   costs  for                                                               
ingredients. However,  he also understands that  the license fees                                                               
will  better  serve  Alaskans  with  consistent  enforcement  and                                                               
faster customer service.                                                                                                        
                                                                                                                                
2:30:26 PM                                                                                                                    
SENATOR BIRCH thanked him for  his leadership in this process. He                                                               
said he  was struck by the  parallels with Uber and  Lyft. He has                                                               
clearly  demonstrated that  the  craft  beverage, breweries,  and                                                               
cideries have  expanded the market  in Alaska. He said,  "Keep up                                                               
the good work and I appreciate your testimony this afternoon."                                                                  
                                                                                                                                
MR. JONES thanked Senator Birch.                                                                                                
                                                                                                                                
2:31:18 PM                                                                                                                    
ELIZABETH   RIPLEY,  Chief   Executive  Officer,   Mat-Su  Health                                                               
Foundation, Wasilla,  said that  the foundation  shares ownership                                                               
in the Mat-Su  Regional Medical Center and  reinvests the profits                                                               
back into  the community in  the form of grants  and scholarships                                                               
to measurably  improve the  health of  the Mat-Su  population. In                                                               
2013,  the   foundation  conducted   a  community   health  needs                                                               
assessment, reviewed  data analysis, conducted polling,  and held                                                               
24 community  forums. Residents voted  and identified  alcohol as                                                               
the number one health issue  in the Mat-Su, followed by substance                                                               
abuse.  The foundation  spoke to  many people  in the  community,                                                               
including police  captains and chiefs, who  identified the number                                                               
one substance  abuse issue as  alcohol. Further, alcohol  was the                                                               
number  one reason  that people  ages 19-64  to visit  the Mat-Su                                                               
Regional Medical Center  emergency room and it is  a major factor                                                               
for many crimes committed in  Alaska, including domestic violence                                                               
and child maltreatment.                                                                                                         
                                                                                                                                
She  said  that having  a  well-regulated  alcohol industry  that                                                               
understands and  follows the  laws is part  of the  solution. She                                                               
said that alcohol is not  an ordinary commodity. According to the                                                               
Alaska Mental  Health Trust 2015 report,  alcohol generates $1.84                                                               
billion in costs  annually, due to loss  of productivity, traffic                                                               
collisions, criminal justice, and costs for health care.                                                                        
                                                                                                                                
MS. RIPLEY said that Alaska  needs this systemic redraft of Title                                                               
4, which would help the ABC  Board carry out its mission, benefit                                                               
organizations  and   individuals  whose   work  is   affected  by                                                               
alcoholic beverage  laws and  regulations. The  health foundation                                                               
is  particularly interested  in  the public  health aspects,  she                                                               
said. She characterized  SB 52 as a bill with  wins and takeaways                                                               
for  each stakeholder  group. She  thanked Recover  Alaska, as  a                                                               
large stakeholder group that participated  for many years in this                                                               
process. The  Mat-Su Health  Foundation is  also part  of Recover                                                               
Alaska, she said.  She also thanked CHARR for its  help to create                                                               
this revised compromise document.                                                                                               
                                                                                                                                
She  said  she  appreciated   Senator  Micciche's  leadership  in                                                               
bringing SB  52 forward.  She offered her  belief that  CHARR has                                                               
been using this  bill to fight competition due to  changes on the                                                               
competitive  landscape,   similar  to   ones  taxis   faced  with                                                               
ridesharing. However,  this bill needs  to move forward,  even if                                                               
it is without CHARR's support, she said.                                                                                        
                                                                                                                                
2:34:32 PM                                                                                                                    
At-ease.                                                                                                                        
                                                                                                                                
2:36:34 PM                                                                                                                    
CHAIR  REINBOLD  reconvened the  meeting  and  continued to  take                                                               
public testimony.                                                                                                               
                                                                                                                                
DOUG  HOGUE,  Kenai River  Brewing  Company,  Soldotna, spoke  in                                                               
support of  SB 52,  as written.  He stated  that the  brewery has                                                               
been  operating  for about  13  years.  He currently  employs  22                                                               
fulltime employees and recently expanded  by building a brand new                                                               
facility. His  business contributes  to many local  nonprofit and                                                               
charitable events.  He echoed previous  testimony, that  the bill                                                               
has  taken years  of work  by many  stakeholders. He  offered his                                                               
belief  that  passing the  bill  would  bring fairness,  a  clear                                                               
understanding of  licensure, and easy compliance  for all license                                                               
holders. He thanked the sponsor.                                                                                                
                                                                                                                                
2:38:14 PM                                                                                                                    
JAN HILL, Member,  Title IV Steering Committee,  Haines, spoke in                                                               
support  of  SB  52.  She  stated  that  she  has  been  involved                                                               
throughout  the stakeholder  process,  including  serving as  co-                                                               
chair  of  the  local  option   subcommittee.  She  has  multiple                                                               
perspectives on alcohol policy. As  a former member of the Alaska                                                               
Native  Health Board,  she is  acutely  aware of  the impacts  of                                                               
alcohol  on Native  Alaskans and  the health  of Alaska's  Native                                                               
people.  While she  was  not  speaking on  behalf  of the  Haines                                                               
Borough. In her role as  mayor, she supports economic development                                                               
in  her community.  She also  understands the  importance of  the                                                               
hospitality industry  for Southeast communities. She  cares about                                                               
health and  safety and crime  reduction in her  Haines community.                                                               
As a member of the Alaska  Municipal League and the Conference of                                                               
Mayors,  she has  gained  an appreciation  for  the diversity  of                                                               
challenges local governments face  throughout Alaska and the need                                                               
to balance  economic development with  the real costs  of alcohol                                                               
to Alaska and its cities.                                                                                                       
                                                                                                                                
She offered her  belief that Title 4 needed to  be modernized and                                                               
SB 52  is a  huge step  forward. She  said that  the stakeholders                                                               
have worked on  this issue for seven years to  get to this point.                                                               
The  local  option  subcommittee  talked  extensively  about  the                                                               
impacts of alcohol  in dry and damp  communities, alcohol related                                                               
crimes and the  need to improve Title 4  to increase enforcement.                                                               
While  there is  still much  work to  be done  with local  option                                                               
laws, SB 52  makes some important changes. One change  is that it                                                               
gives  rural  communities access  to  existing  data about  legal                                                               
alcohol  sales and  delivery so  communities and  law enforcement                                                               
can understand  the flow  of alcohol  into rural  Alaska. Another                                                               
change is to  regulate internet sales to ensure that  a person in                                                               
a  dry community  cannot  use  this loophole  to  get around  the                                                               
monthly order  limit. She said  that she supports this  bill. She                                                               
urged members to pass SB 52 this year.                                                                                          
                                                                                                                                
2:41:16 PM                                                                                                                    
DIANE  DISTANTO,   representing  herself,  Anchorage,   spoke  in                                                               
support of  SB 52.  She said  that she  has seen  the destructive                                                               
effects of  alcohol on families, communities,  and public health.                                                               
She  said  that  she  was  sorry  to  hear  CHARR  say  that  the                                                               
organization is  not happy with  the bill. She said  that efforts                                                               
have been  ongoing since  2012. She  echoed the  other testifiers                                                               
with the  importance of the bill.  She urged members to  get this                                                               
bill passed.                                                                                                                    
                                                                                                                                
2:42:28 PM                                                                                                                    
MEL STRYDOM, President, MSA, Inc.,  Homer, said that he holds six                                                               
package  store  licenses  in  the City  of  Homer.  He  expressed                                                               
concern  that Section  48  would allow  a  borough package  store                                                               
license to  be transferred into  the city. He offered  his belief                                                               
that most cities  in Alaska are over the statutory  limit for the                                                               
number  of  allowable  package stores  based  on  the  population                                                               
limits. Using the population limit,  the city would only have two                                                               
licenses,  but it  has grandfather  privileges, so  the city  has                                                               
eight package stores.  His main concern is  the financial concern                                                               
that  SB 52  will  have on  his business.  He  said that  borough                                                               
liquor  licenses   are  typically   less  expensive   because  of                                                               
population  density.  The  bill  would greatly  devalue  his  six                                                               
liquor licenses  and cause him  significant financial  losses. He                                                               
said he does not understand the  need for the provision since the                                                               
sponsor statement  states the  bill would  not have  any negative                                                               
impacts.  He  said  that  he  related  his  concerns  to  Senator                                                               
Micciche, but he has not yet heard from him.                                                                                    
                                                                                                                                
2:44:30 PM                                                                                                                    
CHAIR  REINBOLD said  she would  speak to  the sponsor  about his                                                               
concerns.                                                                                                                       
                                                                                                                                
2:44:55 PM                                                                                                                    
ROBERTA BROOKS,  Administrator, Juvenile Alcohol  Safety Program,                                                               
Member,  Healthy Voices,  Healthy  Choices Coalition,  Anchorage,                                                               
spoke  in support  of  SB  52. She  stated  that  she works  with                                                               
children  ages  13-18,  dealing   with  the  harmful  effects  of                                                               
alcohol, underage drinking, and  high-risk choices. She said that                                                               
these youth  are uneducated  and unaware of  the risks  for these                                                               
choices and  the permanent  effects it can  have on  their lives.                                                               
She  urged members  to pass  the bill  to empower  those who  are                                                               
working to keep kids from underage drinking.                                                                                    
                                                                                                                                
2:46:19 PM                                                                                                                    
LOGAN   DANIELS,   Member,   Healthy  Voices,   Healthy   Choices                                                               
Coalition,  Anchorage, spoke  in support  of  SB 52.  He said  he                                                               
works with Ms. Brooks. He offered  his support for SB 52 since it                                                               
would modernize the language and to curb underage drinking.                                                                     
                                                                                                                                
CHARLIE  DANIELS,  Director,   Healthy  Voices,  Healthy  Choices                                                               
Coalition, Anchorage, spoke in support of SB 52.                                                                                
                                                                                                                                
2:47:38 PM                                                                                                                    
ANDI  TAYLOR, Member,  Healthy  Voices,  Member, Healthy  Voices,                                                               
Healthy Choices Coalition, Anchorage, spoke  in support of SB 52.                                                               
She said  she provides evaluations  for this coalition  and other                                                               
coalitions throughout the state  to address underage drinking and                                                               
adult alcohol abuse.                                                                                                            
                                                                                                                                
2:47:55 PM                                                                                                                    
BRYAN SAYLOR, Member, Healthy  Voices, Healthy Choices Coalition,                                                               
Anchorage,  spoke  in  support  of   SB  52.  He  said  he  works                                                               
throughout the state to help communities address these issues.                                                                  
                                                                                                                                
2:48:22 PM                                                                                                                    
CHAIR  REINBOLD,  after  first   determining  no  one  wished  to                                                               
testify, closed public testimony on SB 52.                                                                                      
                                                                                                                                
2:49:01 PM                                                                                                                    
BRANDON  SPANOS, Deputy  Director,  Tax  Division, Department  of                                                               
Revenue, Anchorage, reviewed the DOR's  fiscal note for SB 52. He                                                               
said  the current  alcohol tax  applies to  sales within  Alaska.                                                               
Section 155  of SB  52 would  broaden the  base would  expand the                                                               
current  tax collection  on  shipments of  wine  into the  state.                                                               
Since the state does not have  data on online sales, the bill has                                                               
an  indeterminate  fiscal  note.  The  tax  division  requests  a                                                               
capital  budget request  of  $50,000 to  update  the tax  revenue                                                               
management system.  to include shipments into  Alaska. This would                                                               
require businesses  who sell alcohol  into the state  to register                                                               
with  the tax  division  and  file tax  returns  using an  online                                                               
registration.  The  additional  taxes   collected  would  have  a                                                               
positive revenue effect, he said.                                                                                               
                                                                                                                                
2:51:01 PM                                                                                                                    
SENATOR  BISHOP said  the state  will  find out  how much  online                                                               
sales occur.                                                                                                                    
                                                                                                                                
2:51:14 PM                                                                                                                    
MS.  MCCONNELL  reviewed  the  fiscal   note  for  the  Alcoholic                                                               
Beverage  Control  Board  (ABC Board),  Department  of  Commerce,                                                               
Community and  Economic Development (DCCED) dated  4/17/2019. She                                                               
anticipated that the needs expressed  in the fiscal note could be                                                               
fully  funded through  program receipts  and licensing  fees. The                                                               
department   would  not   need   any   additional  funding   from                                                               
unrestricted general  funds (UGF).  She reported the  fiscal note                                                               
requests an  increased appropriation, in thousands,  of $230.8 in                                                               
FY 2020, $570.8  in FY 2021, and $55.6 in  out years beginning in                                                               
FY 2022.                                                                                                                        
                                                                                                                                
She  said that  the department  anticipates the  changes in  fees                                                               
will provide $518.0 [in thousands] in  2021 and $435.0 in the out                                                               
years. She explained  the reason for higher costs in  FY 2021 was                                                               
because shifting the duplicate  beverage dispensary licenses into                                                               
endorsements  will  require  a $200  biennial  endorsement  year,                                                               
except for the  first year. In FY 2021,  the one-time endorsement                                                               
fee would  be $1,250. The  four-fold purpose would include  a two                                                               
year long-term project  assistant to manage the  transition for a                                                               
total  cost of  $98.2 in  FY  2020 and  $88.2 in  FY 2021,  split                                                               
between personnel services and  services and commodities. Second,                                                               
the  bill  would require  a  rewrite  of regulations  that  would                                                               
entail  additional  board  meetings  to review  and  take  public                                                               
comment.  It would  also cover  costs for  the Department  of Law                                                               
review, educational  materials, printing and public  notice fees,                                                               
and postage for a total cost of $27.0 in FY 2020 and FY 2021.                                                                   
                                                                                                                                
MS.  MCCONNELL said  the third  cost would  cover travel  for the                                                               
local government specialist for  increased education and outreach                                                               
for $5.6 per year. The  fourth item would cover anticipated costs                                                               
of new licensing software database  of $500.0 spread over FY 2020                                                               
and  FY  2021,  based  on   anticipated  revenue,  with  a  $50.0                                                               
maintenance fee.                                                                                                                
                                                                                                                                
She  highlighted   fee  increases  for  biennial   license  fees,                                                               
including  a  new  license  for  direct  shipment  of  wine  from                                                               
wineries.  She  described the  assumptions,  noting  that as  Mr.                                                               
Spanos mentioned, the  number of online sales is  unknown, so the                                                               
Alcohol &  Marijuana Control  Office is unsure  of the  number of                                                               
new  licensees.  The figures  are  based  on  an average  of  one                                                               
endorsement  per  license,  although   some  will  have  multiple                                                               
endorsements  and others  will have  none, she  said. The  permit                                                               
fees  are based  on  $50 per  day, which  is  negligible and  not                                                               
reflected in the fiscal note.                                                                                                   
                                                                                                                                
2:56:52 PM                                                                                                                    
SENATOR BISHOP suggested that the  office may need a higher range                                                               
than a range 16 to implement the complexities required.                                                                         
                                                                                                                                
MS. MCCONNELL noted his comment.                                                                                                
                                                                                                                                
CHAIR REINBOLD cautioned her to use every penny wisely.                                                                         
                                                                                                                                
2:57:59 PM                                                                                                                    
MATT  DAVIDSON,  Social  Service  Program  Officer,  Division  of                                                               
Juvenile  Justice,  Department  of  Health  and  Social  Services                                                               
(DHSS), Juneau,  presented the DHSS's  fiscal note for SB  52. He                                                               
stated that the bill has a  zero fiscal note from the department.                                                               
He  pointed out  that  the fiscal  note  analysis was  inaccurate                                                               
since  it  reflected  an  earlier bill  version.  He  offered  to                                                               
resubmit another zero  fiscal note. The division  does not handle                                                               
underage drinking, that  it is primarily covered  by the district                                                               
courts.  In  2016,  the  penalties  for  underage  drinking  were                                                               
decriminalized, payable by  a fine, and a referral  to an alcohol                                                               
education program,  administered by the Department  of Health and                                                               
Social Services (DHSS).                                                                                                         
                                                                                                                                
CHAIR REINBOLD said that the 2016  bill was a concern to her. She                                                               
suggested  that   the  department  provide  information   on  the                                                               
effectiveness of  decriminalizing some  behaviors and how  it has                                                               
affected the incidence of underage  drinking. She noted that some                                                               
other  countries, such  as Norway,  have effective  penalties for                                                               
drunk driving.                                                                                                                  
                                                                                                                                
[SB 52 was held in committee.]                                                                                                  
                                                                                                                                
3:01:20 PM                                                                                                                    
There being no further business to come before the committee,                                                                   
Chair Reinbold adjourned the Senate Labor and Commerce Standing                                                                 
Committee meeting at 3:01 p.m.