Legislature(2021 - 2022)BARNES 124
02/16/2022 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SJR15 | |
| SB9 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SJR 15 | TELECONFERENCED | |
| += | SB 9 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 9-ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG
3:43:57 PM
CO-CHAIR SPOHNHOLZ announced that the final order of business
would be CS FOR SENATE BILL NO. 9(FIN), "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."
3:45:07 PM
CO-CHAIR SPOHNHOLZ opened public testimony on CSSB 9(FIN).
3:45:15 PM
SHERRY STEAD, Owner, Grace Ridge Brewing, suggested an amendment
to CSSB 9(FIN). She stated Alaska has great craft beer, and
locals and tourists love going to tap rooms to try new and
locally made beers. "What has allowed Alaska to have this
thriving craft beer industry?" she asked. "What has brought
Alaska a new economic growth of $330 million per year? What has
created 2,000 new jobs across Alaska?" This growth, she said,
has been allowed by the current State of Alaska licenses of one
brewery with adjacent tap room per 3,000 population.
Legislating out new business growth and opportunities that are
currently available within the state's manufacturing and
adjacent tap room licenses to strictly benefit current breweries
and other alcohol serving businesses is unfair and unethical,
she argued. To keep it fair and ethical, she requested that an
amendment be offered and passed that would keep the current
manufacturing and tap room licenses the same at 1 per 3,000
population.
3:47:15 PM
JED WADE, Co-owner, Bearpaw River Brewing Company, testified in
support of CSSB 9(FIN). He said the bill would create new
opportunities to grow his business and would allow his business
to create more jobs and generate more tax revenue for the State
of Alaska and the City of Wasilla. It is immensely challenging
financially to operate a brewery manufacturing business in
Alaska and Alaska's restrictive beer laws exacerbate these
issues. The bill would create more avenues with which his
business could get its products to consumers in the local
market, he stated, and would have an immediate and positive
impact on his business.
3:48:51 PM
LANCE JOHNSON, Norton Sound Health Corporation, shared
statistics in support of CSSB 9(FIN) from a health care
perspective and as a health care provider. He stated that in
2021, 918 unique individuals presented at Norton Sound Regional
Hospital's emergency department with a substance related
diagnosis. Of those 918, 565 had a primary diagnosis of alcohol
abuse, an additional 100 had a secondary alcohol related
diagnosis, and 72 had a tertiary diagnosis. In 2021, the Nome
Volunteer Ambulance Department serviced 616 calls of which 424
involved substances, mostly alcohol. Last year, the Nome Police
Department reported that 73 percent of the calls (3,394) that it
responded to were alcohol related. The ambulance department has
seven regular first responders, and the police department has
ten officers, to respond to all these calls. Ninety percent of
the inmates at Nome's halfway house and the jail are serving
time for substance related crimes, the majority of which are
from alcohol use or misuse. The jail has 128 beds at $168.74
per inmate per day and the halfway house has 50 beds at $117.
At 90 percent of the cost of incarceration for substance related
crime, that comes to $9,004,587 per year. Since 2019, 465
unique individuals have been served by Nome's day shelter. Last
year, 125 unique individuals were served by Nome's nighttime
shelter. Nearly 100 percent of the guests at each shelter claim
homelessness and alcohol misuse.
MR. JOHNSON stated that with alcohol abuse and misuse an ongoing
recidivistic concern that is taxing emergency resources, the
correctional system, and family systems, the State of Alaska
must consider alcohol related concerns and their related impacts
as a health care crisis. If an unlimited amount of alcohol
hours, licensed stores, bars, and restaurants are allowed and
weakly regulated, these staggering numbers are going to
skyrocket with increased crime, homelessness, and death, and
emergency resources will be further stressed in an already
overburdened system. Late last fall another store received a
license and is now selling spirits three blocks from Front
Street which currently has seven bars, one liquor store, and
three licensed restaurants within a four-block strip. Alaska's
alcohol laws must be strengthened, and alcohol license densities
limited. He therefore urged the bill's passage.
3:52:31 PM
MIKE HEALY, Skagway Brewing Company, testified in support of
CSSB 9(FIN). He said his business is one of a few licensed brew
pubs in Alaska. He explained that currently he cannot self-
distribute his brew to some accounts around town because the
extra distribution fee puts him out of the market. At one of
the accounts where he has a little beer and at which he'd like
more, the tap handles are all Seattle-based breweries. If not
for that distribution fee, he continued, there could be an
Alaskan product in that bar. He further explained that to get
beer to the two restaurants he also owns, he must go through a
distributor that isn't even in Skagway. He delivers the beer,
picks up the kegs, and does everything minus filling out a piece
of paperwork from outside of Skagway. A great deal of
unnecessary cost is added to operating, he advised. He urged
the bill's passage because small operators like him have large
costs and thin margins and every bit of help is needed, plus the
bill would keep money in Alaska instead of sending it out of
state.
3:54:27 PM
JACK MANNING, Duck Creek Market, testified in support of CSSB
9(FIN). He said a lot of work has been done by various
stakeholders for many years, resulting in a good piece of
legislation. The bill has some provisions for package store
owners like himself, such as limited tasting and a chance to get
into some internet sales, and the bill promotes more business
opportunities in Alaska for all license types.
3:55:18 PM
BEVERLY SCHOONOVER, Executive Director, Advisory Board on
Alcoholism and Drug Abuse, Alaska Mental Health Board, testified
in support of CSSB 9(FIN). She noted that these statewide
advisory boards are tasked with evaluating state and federal
laws concerning alcohol, mental health, and substance misuse.
The board supports the provisions in the bill that reduce the
harm caused by alcohol misuse and underage drinking.
MS. SCHOONOVER explained that the difference between alcohol use
and alcohol misuse is that alcohol misuse is drinking in a way
that brings harm to oneself or to others. Alcohol misuse is
present in every Alaskan community and impacts families,
relationships, health and wellness, public safety, and the
economy. According to the Alaska Mental Health Trust, the cost
of alcohol misuse in Alaska in 2018 was $2.4 billion. Liquor
licensing plays a critical role in reducing the social and
economic impacts due to alcohol misuse by regulating the number
of alcohol outlets in a community and regulating the sale of
alcohol to minors.
MS. SCHOONOVER stated that a key provision in the bill is a new
penalty structure for both licensees and servers who serve
alcohol to minors. This provision ensures that licensees are
notified about underage drinking violations on their premises
and makes them accountable for their servers' conduct.
Statewide keg registration requirements, she continued, will
hold adults accountable if they provide alcohol to underage
parties. Regulating internet sales of alcohol will require that
carriers develop alcohol delivery policies to reduce underage
access. The requirement that all servers at permitted events be
trained to check identification and recognize signs of severe
alcohol impairment is an important public safety measure for
Alaska's community events and fund-raising activities.
3:57:52 PM
JEFF JESSEE, testified in support of CSSB 9(FIN). He noted that
he is speaking today as an individual, but that he is the former
dean of the College of Health and former CEO of the Alaska
Mental Health Trust Authority ("the Trust"). He recounted that
a decade ago while he was the CEO, it came to the Trust's
attention that the Alcoholic Beverage Control Board ("ABC
Board") was making some decisions that seemed questionable in
their applicability to current statutes at the time. Upon
investigating this, the Trust realized that the board was doing
its best to deal with an antiquated statutory framework that
served neither the public nor the industry. He and Bob Klein,
chair of the ABC Board at the time, co-chaired a convening,
which over the next several years involved well over 100
individuals and thousands of hours of trying to find common
cause to reform the alcohol beverage control statutory
framework. Each side knew it could probably knock the other off
the play if one side or the other sought to overreach and secure
a bill which only served their interest. But while working
together and talking to each other over the years, the
relationship built into the ability to compromise. With Senator
Micciche's occasional mediation and refereeing, the coalition
stayed together over all these years and is now presenting a
united front.
MR. JESSEE allowed that if he had his druthers he would want to
make some changes to the legislation. However, he continued,
the bill has been forged out of a spirit of compromise and he
believes that it is a huge opportunity for the legislature to
enact a major piece of legislation that will be appreciated by
the community. He urged the committee to push back on deal
breaker amendments and get the legislation done.
4:00:16 PM
SARA CLARK, Volunteers of America, Alaska (VOA), testified in
support of CSSB 9(FIN). She stated that VOA, the behavioral
health provider for youth and young adults in Alaska, sees the
devastating impacts of alcohol misuse on children, families, and
communities every day. The impact of alcohol misuse has been
well documented in Alaska, she continued. In 2019, nine out of
ten leading causes of death in Alaska were associated with
substance misuse, including suicide and homicide. Alcohol
misuse also significantly contributes to death and
hospitalization from motor vehicle crashes. Many youths in
Alaska are experiencing substance use disorders and have sought
access to support for healing and treatment. The cost and harm
associated with alcohol misuse are preventable if ways can be
found to build communities that nurture their health and
development.
MS. CLARK stated that this bill is an opportunity to prevent the
negative impacts of alcohol misuse by limiting access to use.
Multiple pieces of the bill will protect public health,
particularly maintaining regulation of outlet density. This
protection is more important than ever as youth are experiencing
more mental health problems during the [COVID-19] pandemic. In
2020, almost one in three adults reported they were drinking
more. While it is an honor to walk with youth while they
recover from the pain of substance use disorders, more can be
done for young people. How Alaska's communities are built will
shape the culture and choices of the state's youth and this bill
is a great opportunity to protect their health and wellness.
4:02:22 PM
ROBIN MINARD, Chief Communications Officer, Mat-Su Health
Foundation, testified in support of CSSB 9(FIN). She stated
that the foundation shares ownership in the Mat-Su Regional
Medical Center and invests its share of the profits back into
the community to improve the health and wellness of Alaskans
living in the [Matanuska-Susitna Valley]. It is well past time
for Alaska to update its alcohol laws, she continued. The
foundation has worked hard with many partners for more than 10
years on this legislation. It is remarkable that organizations
as diverse as health and the alcohol industry have been able to
come together, but they have, and this bill represents
compromises that are good for all Alaskans.
MS. MINARD specified that research and data are core to the
foundation's work. Year after year the foundation has heard the
same story alcohol and substance misuse are ranked by the
community as the most critical health issue in Mat-Su.
According to the local police chief, the number one challenge in
the field every day is alcohol. At the local emergency
department, alcohol related disorders are the number one cause
of behavioral health admission. Alcohol is a major factor in
many serious crimes committed in Alaska, including domestic
violence and child maltreatment. More than 40 percent of the
arrests in Alaska involve alcohol or other substances and 60
percent of Alaskans report they are negatively affected by
someone else's drinking. The foundation has engaged in many
strategies to reduce the harm of alcohol misuse, from preventing
underage drinking to promoting resilient youth, families, and
communities. Another strategy is this bill.
MS. MINARD expressed the foundation's belief that CSSB 9(FIN)
will promote responsible alcohol use by adults, reduce underage
consumption, and support better enforcement of Alaska's alcohol
laws. While the foundation's interest is primarily public
health, she continued, it is worth noting that this bill has
many benefits for local businesses, something the foundation
also cares about because a sound economy is an important aspect
of a healthy community. That said, it is critical to regulate
outlet density. Greater density of alcohol retailers is
correlated with higher crime rates. This impact to public
safety is detrimental to all communities and even more so in
remote areas like Mat-Su where there is limited Alaska State
Trooper coverage. She urged the bill be moved forward.
4:04:50 PM
ANA FISK, Vice President, Liquor Stores USA North dba Brown Jug
Liquor Store, testified in support of CSSB 9(FIN). She stated
that Brown Jug was started as a family-owned business in the
mid-1930s and is now Alaska's largest chain of package stores.
Brown Jug was acquired by the Afognak Commercial Group in 2020,
and since then Afognak has endeavored to be a responsible
community member in the areas in which it operates. Last year
Afognak donated $2 million to Covenant House in addition to
$150,000 raised by Brown Jug for a variety of nonprofits in
Anchorage.
MS. FISK related that Afognak has made major investments in
renovating and updating its Alaska stores, including the
installation of Patronscan systems in four stores in 2021. She
explained that Patronscan is an exterior mounted ID scanner
which keeps the front entrance to a store locked until a valid
ID is scanned. This has reduced crime in those stores by 92
percent and has prevented underage, expired, and fake IDs from
being used to enter those locations.
MS. FISK expressed Afognak Commercial Group's concern about the
unforeseen and growing loophole of out-of-state online sellers
that are not subject to Alaska's alcohol excise tax and state
regulations. State regulators like the Alcohol & Marijuana
Control Office (AMCO) cannot track how much out-of-state alcohol
is ordered through these sellers each year. These untaxed and
largely untracked out-of-state online sellers are not making any
capital investments in Alaska, are not investing in state-of-
the-art systems like Patronscan, and are not making donations to
community organizations. She offered her company's strong
support for the bill's passage to address the internet loophole
through Section 13 and to update Alaska's alcohol statutes.
Brown Jug, she added, looks forward to working with the
legislature and local leaders in finding policy solutions that
positively impact Alaska communities.
4:07:47 PM
DARWIN BIWER, Owner, Darwin's Theory Bar, testified in support
of CSSB 9(FIN). He said he has owned and operated Darwin's
Theory for 41 years, a small bar in downtown Anchorage. He
related that he was board chairman of Alaska Cabaret, Hotel,
Restaurant and Retailers Association (Alaska CHARR) [during the
many different names of SB 9]. He stressed how difficult a
problem it was because all the stakeholders had to be folded in
and compromise Alaska CHARR, brewers, package stores,
wineries, distillers, law enforcement, public health, and even
distributors. In addition, federal laws must be upheld. The
compromise was so difficult that it took 10 years to put it all
together. As this group devised this bill over the years, it
was looking forward with its best guess of what would happen in
the next 30 years, not just today. That's why there are some
issues in the bill with which a lot of people may not agree.
This is a difficult process, he said. If the bill is passed,
any glaring errors can be handled separately next year or in
future years. The committee has heard how the bill affects
certain businesses; it is a necessary passage because Title 4 is
a mess as it currently exists.
4:10:43 PM
PAUL THOMAS, Owner, Alaska Cache Liquor, testified in support of
CSSB 9(FIN). He said passing the bill close to its original
language would give the industry the stability and possibility
for growth, something that has been missing for many years.
Work has been going on to get to the compromises seen in the
bill, compromises that have been made by all the different
stakeholders over many years. With the passing of this bill,
the industry will be able to gain the stability it needs through
improving the licensing process and gaining an understanding of
clear and concise penalties. Given the brutality of COVID-19,
the industry more than ever needs this bill with the provisions
agreed to by the stakeholders over the last 11 years.
4:12:05 PM
JEANNE REILLY, Owner, Reilly's Irish Pub, testified in support
of "the original" SB 9. She said she has been in the industry
since 1975 and has been an owner since 2005. She stated that
many hours were spent writing, debating, arguing, and
compromising on this lengthy task. She urged that there be no
changes made to the bill nor things added to it that were not
written into the original document. The people involved with
writing this bill are either in the industry or involved in the
industry, "involved" meaning police, social services, and so
forth, and the bill speaks for everyone as written.
4:12:57 PM
KASEY ADERHOLD, urged adoption of an amendment to keep in place
the current manufacturing and tap room licensing limits at one
per 3,000 in population. She said the bill [as written] would
impose an incompatible limit of one per 12,000 in population, an
abrupt change from the current limit of one per 3,000 in
population per license. That would prevent future industry
growth in her hometown of Homer and would unfairly target
prospective new brewers with dreams to set up their own
businesses in Homer and other communities in Alaska. She would
welcome new breweries and tap rooms in Homer as they provide a
year-round safe and thriving environment for residents to gather
for socializing, arts, and community activities. As a frequent
consumer of the beverages as well as the vibrant atmosphere of
local breweries and tap rooms, she offered her appreciation for
the bill's language that would extend business hours to 10:00
p.m. and allow four live entertainment events per year. These
improvements, she added, are a long time coming to over-
regulated and tightly constrained businesses.
4:14:37 PM
MICHAEL CERVANTES, Owner, The Banks Alehouse, stated he is
testifying in support of CSSB 9(FIN) as a beverage dispensary
license holder. He said the bill has a tremendous number of
benefits as the committee has heard. He urged the bill's
passage from committee to allow its movement through the
legislature to become law. Now is the time to act given the
bill is over 10 years in the making with the input of many
stakeholders.
4:15:41 PM
JACK LAU, Co-owner, Double Shovel Cider Company, testified in
support of CSSB 9(FIN). He said the bill is good for his
business because it will open significant opportunities to grow
and create new products and employ more Alaskans. As a small
craft manufacturer, the most significant positive immediate
impact will be the removal of overbearing regulations on tasting
rooms. The bill is in line with what other states have and
those states have thriving craft beverage manufacturing
businesses and inter-state distribution. The later hours for
the tap room are critical for his business to generate cash flow
and grow and pay for equipment. The bill will create a craft
industry that better meets the needs of both locals and
tourists, and it will end unfair trade practices that are
significant barriers to entry for small manufacturers. The bill
will create opportunities for the tap room to have entertainment
by permit. Double Shovel will use any positive impact to grow
the business, with the goal of distributing outside the state
and bringing more money into the state, including tax revenue.
4:17:22 PM
JEROME HERTEL, CEO, Alaska State Fair, testified in support of
CSSB 9(FIN). He said the bill provides a fair license with a
clear definition of what an annual fair is and provides the fair
the ability to serve alcohol during the annual fair as well as
during interim events. This license would allow the Alaska
State Fair to operate as it has responsibly for the past 39
years. The Alaska State Fair is host to over 70 events each
year for the community and many of these events are provided
with alcohol service. The loss of alcohol service for these
interim events would have a devastating impact of lost revenue
and facility rental income, a revenue stream that the Alaska
State Fair has come to rely on heavily to survive and prosper.
4:18:48 PM
KATIE BALDWIN-JOHNSON, Chief Operating Officer, Alaska Mental
Health Trust Authority, testified in support of CSSB 9(FIN).
She stated that provisions in the bill will directly impact the
health and wellness of Alaskans and, specifically, beneficiaries
of the Alaska Mental Health Trust Authority ("the Trust").
Beneficiaries of the Trust include Alaskans who experience
substance use disorders, mental illness, developmental
disabilities, Alzheimer's Disease and related dementias, and
traumatic brain injuries. While beneficiaries experiencing
substance use disorders can be explicitly linked to alcohol
misuse, it is known that alcohol misuse can have negative
impacts on all the Trust's beneficiary groups and all Alaskans.
MS. BALDWIN-JOHNSON related that the bill represents a
stakeholder-driven process that has garnered the unprecedented
support of the public health community and the industry. As one
of the original sponsors of the effort to revisit the alcohol
statutes, the Trust has remained an active partner in Title 4
reform efforts, along with many other partners representing
industry, public health, and public safety. The collaborative
work amongst these stakeholders has arrived at the compromise
that is this bill. Updates to Title 4 could have positive
impact on the Trust's beneficiaries.
MS. BALDWIN-JOHNSON noted that besides health-related impacts,
alcohol misuse comes with a significant economic cost. A recent
McDowell report commissioned by the Trust found that the cost of
alcohol and Alaskan misuse in 2018 was $2.4 billion, which
includes costs associated with health care, the criminal justice
system, lost or reduced workplace productivity, public
assistance and social services, and a range of other impacts
related to substance misuse. Harder to quantify in a dollar
amount are the significant impacts of alcohol misuse to quality
of life on those who are misusing it and their families,
friends, and communities. Sixty-nine percent of Alaskans report
being negatively affected by someone else's drinking. A 2018
study from the Alaska epidemiologist cites that almost half of
Alaska's children in out-of-home placements were connected to
homes with parental alcohol abuse. Between 2006 and 2016
roughly 18 percent of all criminal justice convictions were
attributed to alcohol.
MS. BALDWIN-JOHNSON said the bill would create a rational
regulatory structure for Alaska's state licensing system. It
would control online alcohol sales, limit youth access to
alcohol, promote responsible alcohol use, and simultaneously
support a fair business environment. It is for these reasons
that the Alaska Mental Health Trust Authority supports this
bill. The Trust opposes any changes to the bill that will allow
for an unlimited number of outlets selling alcohol. Limited
outlet density is a proven strategy in reducing alcohol misuse
and a significant increase of outlets selling alcohol will
impact public health.
4:22:12 PM
JONATHAN GAILIN, testified he generally supports CSSB 9(FIN),
but with a caveat. He noted he has been an alcohol wholesaler
for decades and is one of a few licensed beverage consultants.
He said the [bill's proposed licensing limit] of one brewery tap
room license per 12,000 people is problematic and urged that it
remain at the current level of one per 3,000 people. He related
that an article in today's issue of the "Anchorage Daily News"
reported that two applicants flipped a coin for [the one license
available] in Cordova, which is not the spirit of
entrepreneurism. He further related that this same article
reported that there are only eight cities or boroughs that have
more than 12,000 and said this will stifle free enterprise.
Affluent individuals from Outside could come and bid up these
permits, he continued. This has happened with the beverage
dispensary license in Alaska, as he has clients who spent
anywhere from $180,000 to over $350,000 some years ago for a
beverage dispensary license.
4:24:54 PM
TREVOR STORRS, President, CEO, Alaska Children's Trust,
testified in support of CSSB 9(FIN). He said the Alaska
Children's Trust is the statewide lead organization focused on
the prevention of child abuse and neglect. He related that
alcohol plays a major role in many of the social, behavioral,
and physical issues that Alaska's communities are addressing
every day, including child abuse and neglect. Prevention is a
key tool for addressing current trends. One component of
prevention is to minimize alcohol consumption by youth.
Research shows that when consumption is reduced in youth,
negative impacts later in life are also reduced.
MR. STORRS stated that the bill would do three core things to
help reduce underage drinking: require keg registration that
will hold adults who supply minors with alcohol accountable,
regulate internet sales, and establish licensee liabilities for
selling to minors. Besides the need to curb underage drinking,
he continued, it is known that over 80 percent of substantiated
child abuse and neglect cases involve substance misuse, usually
alcohol, which has a huge expense to the state. This bill has
been a collective process involving individuals from multiple
sectors, including government, nonprofits, and the alcohol
industry, ensuring a strong, fair, and comprehensive approach.
4:26:52 PM
JASON DAVIS, testified he owns a winery in Homer and that he
generally supports CSSB 9(FIN) but with a caveat. He said the
bill, overall, is a good thing, as it tightens up the hodgepodge
of regulations. However, he continued, changing the population
limits for the manufacturers and tap rooms of breweries and
wineries is not the way to go. Manufacturers are creating new
products [locally] in Alaska, for example his operation buys
honey from local beekeepers and fruits and berries from local
foragers and farmers. The bill's [proposed] regulation would
allow one brewery for a city of 20,000 people, he stated, and
this doesn't make sense. The [current] limitation of one per
3,000 is already restrictive. Homer is already maxed out with
two breweries, but the town could conceivably have another one
in the next few years. As far as he can tell, though, that
would never happen under this legislation. He urged the
committee to amend the bill to keep the current population
limits.
4:28:29 PM
CO-CHAIR SPOHNHOLZ closed public testimony after ascertaining
that no one else wished to testify.
4:29:50 PM
CO-CHAIR SPOHNHOLZ moved to adopt Amendment 1, labeled 32-
LS0124\G.6, Dunmire, 2/10/22, which read:
Page 87, line 21, following "enter":
Insert ", or remain on,"
Page 87, line 22, following "enter":
Insert ", or remain on,"
4:29:52 PM
CO-CHAIR FIELDS objected.
4:29:56 PM
CO-CHAIR SPOHNHOLZ explained that Amendment 1 is a technical
amendment to make sure that the intent of the sponsor and
stakeholders is being met by the legislation. Ambiguity was
identified in the other body. Amendment 1 would remove
ambiguity about 10:00 p.m. being a hard closing time for
brewery, winery, and distillery retail licenses by clarifying
that patrons cannot enter, nor remain, on premises after 10:00
p.m.
4:30:23 PM
CO-CHAIR FIELDS removed his objection.
4:30:29 PM
REPRESENTATIVE MCCARTY objected. He requested an explanation of
this specific category and what it entails.
4:31:17 PM
SENATOR PETER MICCICHE, Alaska State Legislature, as prime
sponsor of the bill, answered that Amendment 1 cleans up the
bill's intent by clarifying that it is "a hard close."
Regarding statements about the [limits of] one per 3,000 and one
per 12,000, he said that that allowed a substantial amount of
other business models and activities as well as four events a
year. He specified that the bill [proposes] unlimited
breweries, distilleries, and wineries; those would no longer be
one per 3,000. It is just the tasting rooms that are limited.
Instead of having a soft close at 8:00 p.m. [the bill provides]
that it would now be a hard close. This has been talked about
all through the record. It was Senator Costello who noticed
that the language isn't clear; it says someone cannot enter a
tasting room after 10:00 p.m., but it doesn't say someone cannot
remain on, so the same problem of today could remain. The
problem today is that someone can get their last three beers at
8:00 p.m. and then sit there all night. This gives the
breweries a couple hours of extra operation but also allows
employees to go home at 10:00 p.m. Amendment 1 simply clarifies
that it is a hard close.
4:32:47 PM
REPRESENTATIVE MCCARTY removed his objection. There being no
further objection, Amendment 1 was adopted.
4:32:55 PM
CO-CHAIR SPOHNHOLZ moved to adopt Amendment 2, labeled 32-
LS0124\G.8, Dunmire, 2/15/22, which read:
Page 21, line 13:
Delete "during an event"
Insert "at an annual fair"
Page 21, following line 18:
Insert a new subsection to read:
"(d) In this section, "annual fair" means an annual
gathering of residents of all or a portion of the
state that offers competitive exhibitions of livestock
and agricultural crops, carnival amusement rides and
games, and displays of arts and crafts."
4:32:57 PM
CO-CHAIR FIELDS objected.
4:32:58 PM
CO-CHAIR SPOHNHOLZ explained that Amendment 2 clarifies the
definition of the annual fair. Amendment 2 puts the former
definition agreed on by the Alaska State Fair along with other
stakeholders back into statute.
4:33:19 PM
CO-CHAIR FIELDS removed his objection.
4:33:23 PM
REPRESENTATIVE MCCARTY objected. He said it appears that this
is reflecting only for the annual fair activities, and he is
concerned that there are 70 other rental activities of the
fairgrounds during the year.
SENATOR MICCICHE recounted that the Senate Judiciary Committee
made it so there can be, for example, a Ken and Peter's Brewfest
which would have the same rights as the annual fair and be open
every night selling beer and wine without a license other than
the fair license. The fair has agreed that this represents what
occurs at an annual fair; that's why the annual fair definition
is important. This supports things like the Palmer fairgrounds.
Amendment 2 and [Amendment 3] meet the current needs of the
Palmer fair and other similar fairs. It defines the fair as the
annual gathering so this other thing cannot be created, and
there is a limit to how many events. Everyone has agreed to
this to make sure that the Palmer fair can continue doing what
it has been doing for years.
4:35:31 PM
REPRESENTATIVE MCCARTY removed his objection.
4:35:39 PM
REPRESENTATIVE SNYDER objected. She observed that Amendment 2
and Amendment 3 would insert new subsections, both labeled (d).
She asked whether Representative Spohnholz would like the
subsection in Amendment 2 to be labeled (e).
CO-CHAIR SPOHNHOLZ replied that the motion will include the
ability for Legislative Legal Services to make conforming
changes to ensure the bill flows.
REPRESENTATIVE SNYDER removed her objection. There being no
further objection, Amendment 2 was adopted.
4:36:23 PM
CO-CHAIR SPOHNHOLZ moved to adopt Amendment 3, labeled 32-
LS0124\G.11, Dunmire, 2/15/22, which read:
Page 21, following line 18:
Insert a new subsection to read:
"(d) The holder of a fair license may not sell brewed
beverages or wine at more than 30 events, other than
an annual fair, held on the fairgrounds in a calendar
year."
4:36:25 PM
CO-CHAIR FIELDS objected.
4:36:27 PM
CO-CHAIR SPOHNHOLZ explained that Amendment 3 sets the number of
events that are included in the fair license in addition to the
annual fair at 30 events. Such events could be weddings and
fundraisers, events that are outside of the annual fair itself.
Stakeholders, including representatives from the Alaska State
Fair, came together to figure out this number - it will allow
for current annual events and accommodate future growth.
Amendment 3 does not change the opportunity for the fair to
petition for additional nonprofit permits.
4:37:02 PM
CO-CHAIR FIELDS removed his objection.
4:37:07 PM
REPRESENTATIVE MCCARTY objected. He recalled that there was
testimony about 70 events throughout the year and asked whether
the [Alaska State Fair's] revenue source would be taken away by
limiting the number to 30.
SENATOR MICCICHE responded that he is a huge supporter of the
[Alaska State Fair] and sponsored a "Save the Fair" bill a few
years back. He said [CSSB 9(FIN)] tries to meet the fair's need
of alcohol-related events and he doesn't believe 30 alcohol
related events has ever been exceeded at the fair. However, he
continued, if the need for more than 30 were to occur, the fair
could apply for nonprofit event permits and for caterer permits.
The fair could bring in another licensee if it ran into that
trouble. He said he thinks this is the right number, the
[Alaska State Fair] has agreed to that number, and if it ends up
being a problem in the future it can be re-discussed.
4:39:11 PM
REPRESENTATIVE MCCARTY removed his objection. There being no
further objection, Amendment 3 was adopted.
4:39:23 PM
CO-CHAIR FIELDS moved to adopt Amendment 4, labeled 32-
LS0124\G.10, Dunmire, 2/15/22, which read:
Page 31, line 18:
Delete "9"
Insert "4.5"
Page 31, line 21:
Delete "54"
Insert "27"
Page 31, line 23:
Delete "27"
Insert "13.5"
4:39:26 PM
CO-CHAIR SPOHNHOLZ objected for purposes of discussion.
4:39:27 PM
CO-CHAIR FIELDS explained that Amendment 4 addresses direct
shipment of wine, beer, and liquor, and is a proposal of the
coalition that has worked on this bill for many years. He said
Amendment 4 would reduce the volume of alcohol that can be
shipped while maintaining a volume that is high enough to
support Alaska's small businesses. The bill would allow direct
shipment of wine, beer, and liquor (distilled spirits). Under
current law only wine can be direct shipped, so Amendment 4
supports local breweries and distilleries. The underlying law
is anachronistic and allows a very high volume of alcohol be
shipped. In the interest of maintaining a balance of supporting
small businesses as well as public health, Amendment 4 would
reduce the overall volume of alcohol that can still be shipped.
This reduction would still allow consumers to buy a meaningful
amount of alcohol and support small businesses, which is
important because the preference as a state is to have
transparency around direct shipment of alcohol rather than the
current situation of a total lack of transparency with online
shipments from the Lower 48.
4:40:56 PM
CO-CHAIR SPOHNHOLZ removed her objection.
4:41:01 PM
REPRESENTATIVE MCCARTY objected. He observed that Amendment 4
would amend line 18 [on page 31] of the bill by replacing "9"
liters with "4.5" liters per year. He said this would put a
crimp on how much industry can distribute and, while encouraging
low-risk drinking is wanted, his concern is that this is almost
like a prohibition attempt.
CO-CHAIR FIELDS answered that he is not a prohibitionist as he
enjoys many locally produced Alaska alcoholic products himself
and fully supports local businesses. He drew attention to page
31 of the bill and noted that currently a person can buy up to
54 liters of wine per year, so a household of two adults can buy
[108] liters of wine, equivalent to about 130 bottles, which is
probably more than most couples would need to order through
direct shipment considering they are also allowed to buy
locally. Amendment 4, he continued, tries to strike the right
balance between public health and accessibility by consumers.
4:43:35 PM
SENATOR MICCICHE responded to Representative McCarty's concern.
He said Amendment 4 is a new amendment and a good amendment that
he supports. He noted that [under the bill's original language]
only wine could be shipped - an enormous amount of wine. [That
language was amended] to allow spirits and beer to also be
shipped. Currently, a distillery in Alaska cannot ship its
products in state, which is unfair to Alaska businesses. He
recounted that [he] went back to the team [of stakeholders] to
discuss reducing the quantity of wine that could be shipped to a
reasonable amount to a typical family. Other parts of the bill
were also discussed - direct shipment, the tracking, and the
provisions for identifying bootleggers and how to put them out
of business. Senator Micciche stated that [the amount proposed
in Amendment 4] is a fair amount for family usage, and likely
even more than what a family would consume, but he thinks it is
the right mix. He said the amendment promotes Alaska businesses
being able to ship but not in quantities that would support a
bootlegging operation in rural Alaska.
4:45:56 PM
SARAH OATES, CEO/President, Alaska Cabaret, Hotel, Restaurant
and Retailers Association (Alaska CHARR), responded to
Representative McCarty's concern. She stated that current
statute doesn't allow for in-state manufacturers to ship at all,
whereas there is no regulation and no limitations on out-of-
state manufacturers and suppliers that ship direct to consumers
in Alaska. The original language in SB 9 would have only
allowed for wineries to do direct shipment. That language was
amended in the Senate Finance Committee to allow for breweries
and distilleries to also do direct shipment. Alaska CHARR and
its constituents discussed how much the direct shipment by
manufacturers could potentially impact local retailers, and the
public health side discussed possible public health
implications. Testimony has been heard about the security that
takes place and the procedures in place to ensure that alcohol
does not fall into the hands of underage persons or people who
should not be purchasing alcohol. Collectively the stakeholders
who have been largely involved in this process from the
beginning thought these reduced numbers were reasonable.
4:47:55 PM
REPRESENTATIVE MCCARTY removed his objection. There being no
further objection, Amendment 4 was adopted.
4:48:10 PM
CO-CHAIR FIELDS moved to adopt Amendment 5, labeled 32-
LS0124\G.7, Dunmire, 2/11/22, which read:
Page 111, lines 28 - 29:
Delete "without a restaurant endorsement issued
under AS 04.09.450"
Page 112, line 2:
Delete "[,]"
Insert ", does not allow the sale of pull-tabs in
portions of the establishment designated as a bona
fide restaurant under AS 04.09.450,"
4:48:12 PM
CO-CHAIR SPOHNHOLZ objected for purposes of explanation.
4:48:13 PM
CO-CHAIR FIELDS explained Amendment 5 is a technical cleanup
amendment. In moving the bill through the process, he stated,
stakeholders identified unintentional language that would create
a legal grey area where potentially some existing bar owners and
pull-tab operators might not be able to operate in the way they
currently do. One principle of this bill has been to support
Alaska's long-standing local businesses. This technical change
clarifies that for bar owners who have been selling pull-tabs
the bill is not trying to monkey with gaming in Alaska. He
deferred to the bill sponsor to speak further.
SENATOR MICCICHE deferred to his chief of staff, Konrad Jackson,
to speak to Amendment 5.
4:49:16 PM
KONRAD JACKSON, Chief of Staff, Senator Peter Micciche, Alaska
State Legislature, spoke to Amendment 5 on behalf of Senator
Micciche, prime sponsor. He stated that the goal of this bill
is not to poke anyone in the eye. Currently, folks with gaming
permits have vendors outside of their establishments who are
selling pull-tabs. Currently, those are sold in establishments
that are accessible only to persons aged 21 years and older.
The drafting being addressed by Amendment 5 is that folks with
the restaurant or eating place licenses are still allowed to
sell pull-tabs, but still in the areas that are accessible by
people aged 21 and older. It isn't being suggested that pull-
tabs be sold at a restaurant table that is not allowed now and
isn't going to be allowed. This just makes sure to not limit
small businesses that act as vendors for pull-tabs for
nonprofits and nonprofits which sell "rippies" to the vendors.
4:50:47 PM
CO-CHAIR SPOHNHOLZ removed her objection. There being no
further objection, Amendment 5 was adopted.
4:51:01 PM
CO-CHAIR FIELDS moved to adopt Amendment 6, labeled 32-
LS0124\G.12, Dunmire, 2/15/22, which read:
Page 73, line 31, following "additional":
Insert "restaurant or eating place"
Page 74, line 1, following "A":
Insert "first class city, a home rule city, or a
unified"
Page 74, lines 2 - 3:
Delete "licenses under this chapter"
Insert "restaurant or eating place licenses under
AS 04.11.100"
Page 74, line 5:
Delete "licenses of each type under this chapter"
Insert "restaurant or eating place licenses under
AS 04.11.100"
Page 74, following line 7:
Insert new subparagraphs to read:
"(A) serves as a center for commercial
activity within and outside the boundaries of the
municipality by providing goods and services to a
population that is greater than the permanent resident
population within the boundaries of the municipality;
(B) maintains a local law enforcement
department;"
Reletter the following subparagraphs accordingly.
Page 74, lines 10 - 11:
Delete "each type of license requested in the
petition; and"
Insert "restaurant or eating place licenses
issued under AS 04.11.100;"
Page 74, line 13, following "petition":
Insert "; and
(3) granting the additional licenses is in
the public interest"
Page 74, line 17:
Delete "and"
Page 74, lines 18 - 19:
Delete all material and insert:
"(2) the most recent estimate of the number
of people who claim residency or work outside the
boundaries of the municipality and who are served by
the municipality, including the
(A) population located outside the
boundaries of the municipality that relies on the
municipality for goods and services;
(B) visitor population; and
(C) nonresident worker population that
resides in the municipality, but that is not counted
in the latest federal or state census for the
municipality;
(3) the number of existing restaurant or
eating place licenses
(A) within the boundaries of the
municipality;
(B) in a geographic area that the
municipality serves under (2) of this subsection;
(4) information showing that the number of
additional licenses requested does not exceed one
license for each 1,500 population of the population
identified under (2) of this subsection; and
(5) additional justification, as necessary,
to demonstrate that granting of the additional
licenses is in the public interest.
(d) If the board grants a petition for
additional restaurant or eating place licenses under
this section to a municipality, the board may not
authorize additional restaurant or eating place
licenses to the same municipality under this section
for the following year."
Page 74, line 21, following "A":
Insert "first class city, a home rule city, or a
unified"
Page 74, lines 22 - 23:
Delete "licenses under AS 04.09 [THIS CHAPTER]"
Insert "restaurant or eating place licenses under
AS 04.09.210 [AS 04.11.100]"
Page 74, line 27:
Delete "licenses of each type under AS 04.09
[THIS CHAPTER]"
Insert "restaurant or eating place licenses under
AS 04.09.210 [AS 04.11.100]"
Page 74, following line 29:
Insert new subparagraphs to read:
"(A) serves as a center for commercial
activity within and outside the boundaries of the
municipality by providing goods and services to a
population that is greater than the permanent resident
population within the boundaries of the municipality;
(B) maintains a local law enforcement
department;"
Reletter the following subparagraphs accordingly.
Page 75, lines 1 - 2:
Delete "each type of license requested in the
petition; and"
Insert "restaurant or eating place licenses
issued under AS 04.09.210 [AS 04.11.100];"
Page 75, line 4, following "petition":
Insert "; and
(3) granting the additional licenses is in the public
interest"
4:51:03 PM
CO-CHAIR SPOHNHOLZ objected for purposes of explanation.
4:51:05 PM
CO-CHAIR FIELDS explained Amendment 6 returns to the intent of
the stakeholders and bill sponsor in drafting this bill and
sticking with population limits on the number of establishments
serving alcohol. While he supports the local businesses in his
district that serve wine, beer, and distilled spirits at bars
and breweries, he continued, it is important that this bill does
not allow a concentration of alcohol serving establishments that
has some of the pernicious public health impacts heard about
from Lance Johnson of Norton Sound Health Corporation. It is
important to strike that public health balance, he stressed, and
Amendment 6 ensures adherence to that balance which was struck
by the stakeholder group. He deferred to members of the
stakeholder group to explain why the balance and the amendment
are important.
4:52:22 PM
LEE ELLIS, President, Brewers Guild of Alaska, addressed the
importance of Amendment 6. He noted that the committee has
heard a lot about the delicate balance that was struck by the
[stakeholder] group. He said the group is always supportive of
increasing commerce industry but must always be cautious about
the realities of the public health aspect point of view, and
Amendment 6 is critical to maintain balance. He recounted that
the original intent of the amendment that changed the
[stakeholder] agreement brought a lot of concerns and issues
from across the industry and from public health. His industry
is highly concerned about changing statutory standards for where
it can operate and how it can operate, he continued. Amendment
6 brings it back to what it should be and what the hard work of
all the stakeholders produced. Plenty of room is still left for
growth and modernization of the industry.
4:54:04 PM
TIFFANY HALL, Executive Director, Recover Alaska, addressed the
importance of Amendment 6. She stated that Amendment 6 is the
most critical one to public health and safety representatives.
Not including Amendment 6 would make this bill go from overall
win for public health and safety to actively detrimental to
health and safety; not passing this amendment would be a giant
step backwards. Multiple studies from around the US and the
world show that regulating alcohol outlets is one of the
absolute best public health strategies to reduce related harms
of alcohol it is a proven strategy to reduce crime, violence,
disease, and motor vehicle incidents. Amendment 6 would help
the state continue to control alcohol, which is not a regular
commodity like coffee or sugar. Alcohol comes with a $2.4
billion price tag to Alaska, and it kills Alaskans at a rate
twice as high as the rest of the nation. Alcohol absolutely
cannot be treated like bread at the corner store.
4:55:36 PM
CO-CHAIR SPOHNHOLZ requested the sponsor to comment on how
Amendment 6 relates to the overall structure of CSSB 9(FIN).
SENATOR MICCICHE responded that he is a small government, let
the free market fly, have as much local community control as
possible, kind of person, which is what is being done with this
bill. Ten years ago, he recounted, people were brought together
who were from opposite ends. The focus, he advised, should be
on what this group has been able to do as a legislature. The
interests of each one of these people were different and they
came up with a balance. The group came up with this unique plan
on additional licensing, starting with restaurant or eating
place licenses. He posed a scenario in which someone wants to
open a restaurant in a city of 6,000 that grows to 50,000 in the
summer and wants to get a restaurant or eating place license.
Once a year the [Alcoholic Beverage Control] Board can be
approached, he stated, and the board will approve it or not
approve it and explain why. Senator Micciche continued:
This is a way to prove that municipalities can handle
some additional licensing. What the amendment did was
say that anyone in the state, whether they're an
organized municipality with the wherewithal and a
police force to handle a facility like this, can apply
for any type of license anywhere, at any time, in any
number. You're not going to get there by trying to do
things in one fell swoop. ... Going back to the way it
was will demonstrate that municipalities can work with
the industry, work with public safety, and be
successful for additional licensing; going all out is
simply not supported.
SENATOR MICCICHE said Amendment 6 sets it back to where it was,
which was a great balance and gave municipalities that role on
moving forward and managing some of their own licensing. It can
demonstrate that this can work in the future.
4:59:01 PM
CO-CHAIR SPOHNHOLZ removed her objection to Amendment 6.
4:59:07 PM
REPRESENTATIVE MCCARTY objected. He said things are still
unclear to him.
4:59:34 PM
The committee took an at-ease from 4:59 p.m. to 5:01 p.m.
5:01:18 PM
REPRESENTATIVE MCCARTY observed that Amendment 6 would insert
"restaurant or eating place" [on page 73, line 31, following
"additional"]. He further observed that page 73, lines 17 and
18, refer to the language that is asked to be inserted. He said
this seems to be redundant and requested an explanation.
SENATOR MICCICHE responded that [page 73, lines 17 and 18] are
not part of what was changed. As an ex-mayor, he said, he
understands the reason for the amendment, but it was a step too
far for the supporters of the bill; it opened it up to all
license types. Amendment 6 would reinsert just the restaurant
or eating place [in Section 53] on page 73, line 31.
5:03:27 PM
REPRESENTATIVE MCCARTY allowed he was looking at Section 52
rather than 53. He removed his objection. There being no
further objection, Amendment 6 was adopted.
5:04:01 PM
REPRESENTATIVE KAUFMAN offered his respect for the work and
compromise of the many stakeholders and said he supports the
bill as amended.
REPRESENTATIVE MCCARTY noted the industry's strong support.
CO-CHAIR SPOHNHOLZ thanked the bill sponsor, the coalition, and
others for their years of work on this legislation that
modernizes Alaska's alcohol laws, which will create equity among
licensees and protect public health at the same time. She
recognized the immense amount of compromise the bill represents.
5:06:33 PM
CO-CHAIR FIELDS moved to report CSSB 9(FIN), as amended, out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, HCS CSSB 9(L&C) was
reported from the House Labor and Commerce Standing Committee.
5:06:46 PM
CO-CHAIR SPOHNHOLZ stated that the committee gives Legislative
Legal Services the authority to make any conforming changes.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SJR 15 Sponsor Statement 2.3.22.pdf |
HL&C 2/7/2022 4:30:00 PM HL&C 2/16/2022 3:15:00 PM |
SJR 15 |
| SJR 15 ver. A 2.7.22.PDF |
HL&C 2/7/2022 4:30:00 PM HL&C 2/16/2022 3:15:00 PM |
SJR 15 |
| SJR 15 Supporting Document - Canada Fact Sheet 2.7.22.pdf |
HL&C 2/7/2022 4:30:00 PM HL&C 2/16/2022 3:15:00 PM |
SJR 15 |
| SJR 15 Letter of Support 2.7.22.pdf |
HL&C 2/7/2022 4:30:00 PM HL&C 2/16/2022 3:15:00 PM |
SJR 15 |
| SJR 15 Testimony as of 2.7.22.pdf |
HL&C 2/16/2022 3:15:00 PM |
SJR 15 |
| SB 9 Title 4 Presentation 2.11.22.pdf |
HL&C 2/11/2022 9:00:00 AM HL&C 2/16/2022 3:15:00 PM |
SB 9 |
| SB 9 Fiscal Note DCCED - CBPL 2.4.22.pdf |
HL&C 2/11/2022 9:00:00 AM HL&C 2/16/2022 3:15:00 PM |
SB 9 |
| SB 9 Fiscal Note DCCED - AMCO 2.4.22.pdf |
HL&C 2/11/2022 9:00:00 AM HL&C 2/16/2022 3:15:00 PM |
SB 9 |
| SB 9 Explanation of Changes ver I to Ver G.pdf |
HL&C 2/16/2022 3:15:00 PM |
SB 9 |
| SB 9 CS HFIN ver. G 2.10.22.PDF |
HL&C 2/11/2022 9:00:00 AM HL&C 2/16/2022 3:15:00 PM |
SB 9 |
| SB 9 Fiscal Note JUD - ACS 2.4.22.pdf |
HL&C 2/11/2022 9:00:00 AM HL&C 2/16/2022 3:15:00 PM |
SB 9 |
| SB 9 Fiscal Note DOR - TAX 2.4.22.pdf |
HL&C 2/11/2022 9:00:00 AM HL&C 2/16/2022 3:15:00 PM |
SB 9 |
| SB 9 Fiscal Note DFCS - PS 2.4.22.pdf |
HL&C 2/11/2022 9:00:00 AM HL&C 2/16/2022 3:15:00 PM |
SB 9 |
| SB 9 Amendments 2.16.22.pdf |
HL&C 2/16/2022 3:15:00 PM |
SB 9 |