SB 52-ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG   6:47:49 PM CHAIR HUGHES 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." 6:48:23 PM At-ease. 6:49:09 PM CHAIR HUGHES reconvened the meeting. She asked Ms. Morledge to discuss the changes that were made in the Senate Labor and Commerce Standing Committee. 6:49:22 PM EDRA MORLEDGE, Staff, Senator Peter Micciche, Alaska State Legislature, Juneau, explained the changes in Version S, beginning with Article 2. Explanation of Changes CS SENATE BILL NO. 52 (L&C) Version: 31-LS0004/S Page 6, Lines 13-15: Requires the fermentation process of all brewed beverages offered for sale for a brewery manufacturer licensee to occur on the holder's premises in the state. Page 6, Lines 20-21: Requires the fermentation process of all wine offered for sale by a winery manufacturer licensee to occur on the holder's premises in the state. MS. MORLEDGE explained that this is a change from the previous version that required 80 percent of the final product of brewed beverages be manufactured on site. The same change is made for winery manufacturers. 6:50:42 PM MS. MORLEDGE turned to the next two changes, which are very similar for breweries and wineries. Page 22, Lines 8-10: Clarifies that brewery retail license holders can sell up to 5.167 gallons of the holder's beer or sake for consumption off the premises. Page 23, Lines 9-11: Clarifies that the holder of a winery retail license can sell up to 5.167 gallons of the holder's wine, mead, or cider for consumption off the premises, regardless of alcohol content. She said the only change on page 22 is to add sake although the state does not currently have any sake manufacturers. 6:52:00 PM SENATOR KIEHL said that he appreciated the differentiation between wine and cider. He asked whether the amount of wine was doubled. MS. MORLEDGE responded that in current statute both breweries and wineries can sell up to five gallons. The original version of the bill changed it to nine liters. Some wineries said that change would negatively impact their profits. She said in the Lower 48 wineries are selling kegs for special events and functions. 6:52:56 PM SENATOR REINBOLD said that was her amendment and it was conforming language. She said that the committee heard that people wanted to have a wedding and were limited by the nine liters, she said. 6:53:19 PM MS. MORLEDGE continued with Section 10. This took out the prohibition of manufacturer sampling license holders to advertise sampling activities on their premises. She said that was at the request of wineries who wanted to advertise to seasonal visitors to come to their premises and purchase their products. 6:54:14 PM MS. MORLEDGE continued [Sec. 04.09.440(a)]. Page 33, Lines 23-24: Clarifies that consumption of alcoholic beverages on a large resort is permitted whether under or not the locations are in the same building or under the same roof of the large resort. MS. MORLEDGE said that this would allow customers at a large resort to move the wine from a bonfire to another location on the resort's property. 6:55:01 PM MS. MORLEDGE continued. She turned to Section 27. Page 55, Line 22 to Page 56, Line 10: Adds a new section to allow for the automatic transfer of a license if no action has been taken by the board within 60 days. This applies to restaurant and eating places with or without endorsements, and seasonal restaurant or eating place tourism license with or without endorsements. MS. MORLEDGE said that this relates to the transfer of license to another person. 6:55:48 PM MS. MORLEDGE continued. She turned to Section 45. Page 65, Line 30 to Page 66, Line 2: Changes the authority to impose conditions or restrictions on a permit from the Director to the Board Removed the prohibition for the holder of a manufacturer sampling license to advertise sampling activities. (Version U, Page 31, Lines 13-17) 6:56:23 PM CHAIR HUGHES referred to Section 27 on the automatic transfer. She asked whether backlogs caused problems. SENATOR MICCICHE acknowledged that some problems have occurred on the transfer of ownership when people buy a new restaurant or eating place. He said that this raises some timing issues and it is something he will probably have to reconsider. He supports the concept but thinks that some additional work needs to be done. He referred to the next change on page 65-66. He said that this language change was to not give the director the opportunity to make changes that only the board can make. Currently, the director cannot put conditions on the permit. He said he thinks that people believe the conditions are negative. However, the realty is that the conditions would be positive. He said it could slow down the process for people who have a minor problem to correct. Going through the process could slow things down and the event may be long over before the board meets. He said he understands the reason for the change, but it will need some work to function as intended. 6:58:47 PM SENATOR MICCICHE thanked the Chair of the Senate Labor & Commerce Committee. He said it is a big bill and the committee made some important changes. He acknowledged that as mentioned a few more changes need to be worked on, but they will be minor ones. SENATOR REINBOLD related her understanding that it has taken six or seven years for the sponsor to get to this point. She said a lot of work was done in the previous committee. She has several amendments. She said she is very supportive of this bill. [SB 52 was held in committee.]