Legislature(2019 - 2020)BELTZ 105 (TSBldg)
04/22/2019 06:00 PM Senate JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| SJR3 | |
| SJR4 | |
| SB33 | |
| SB34 | |
| SB52 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 52 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SJR 3 | TELECONFERENCED | |
| += | SJR 4 | TELECONFERENCED | |
| += | SB 33 | TELECONFERENCED | |
| += | SB 34 | TELECONFERENCED | |
SB 52-ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG
9:00:09 PM
CHAIR HUGHES reconvened the meeting and announced that the final
order of business would be SENATE BILL NO. 32, "An Act relating
to criminal law and procedure; relating to controlled
substances; relating to probation; relating to sentencing;
relating to reports of involuntary commitment; amending Rule 6,
Alaska Rules of Criminal Procedure; and providing for an
effective date."
[CSSB 52(L&C), Version S, was before the committee.]
9:00:39 PM
SENATOR MICCICHE, speaking as sponsor of SB 52, said that with
all the focus on drugs and crime, the reality is that a very
high proportion is related to alcohol. Some experts say that the
percentage of alcohol-related crimes is in the high 90s. he
said. He said SB 52 rewrites Title 4, which can be described as
a 30-year accumulation of mistakes and a hodgepodge of
corrections. He said the primary focus is on public safety,
public health, industry, the Alcoholic Beverage Control Board
(ABC Board), and legislative issues. This bill is the result of
approximately 140 stakeholders working together. He noted that
everyone has a different way of viewing the importance of
alcohol. The state supports the industry, which is the third
largest taxpayer in the state, but representatives from public
health and public safety ensure the right mix.
SENATOR MICCICHE, paraphrasing from the sponsor statement,
stated the primary goals that stakeholders established as the
foundation for developing recommendations:
? Promoting a fair business climate and protect public
health and safety.
? Creating rational regulation for all tiers of the
state's alcohol industry.
? Limiting youth access to alcohol.
? Promoting responsible alcohol use and reduce the
harms of overconsumption
? Implementing change without negative impacts on
businesses and responsible operators.
9:02:38 PM
CHAIR HUGHES referred to the April 22, 2019 PowerPoint in
members' packets.
9:02:56 PM
EDRA MORLEDGE, Staff, Senator Peter Micciche, Alaska State
Legislature, Juneau, stated that Ms. Anna Brawley would provide
an overview of the bill. She offered to follow the PowerPoint
presentation with broad strokes of the 21-page sectional
analysis.
9:03:46 PM
ANNA BRAWLEY, Title 4 Project Review Coordinator and Senior
Associate, Agnew Beck Consulting, Anchorage, began a PowerPoint,
titled Alcoholic Beverage Control (ABC) Board Title 4 Review
Project.
9:04:00 PM
MS. BRAWLEY turned to slide 2, "Goals of Title 4 Review
Process." She stated that this process began in 2012 with the
Alcoholic Beverage Control Board (ABC Board) recognizing that
Title 4 needed improvements.
Goals of Title 4 Review Process
Promote a fair business climate and protect public
health and safety.
1. Create rational regulation for all tiers of the
state's alcohol industry.
2. Limit youth access to alcohol, while ensuring youth
are not criminalized
3. Promote responsible alcohol use and reduce the
harms of overconsumption.
Make Title 4 a clear and consistent legal framework.
1. Increase swiftness, proportionality and consistency
of penalties.
2. Increase local law enforcement of Title 4.
3. Increase licensee accountability before the ABC
Board for Title 4 violations.
MS. BRAWLEY turned to slide 3, which listed diverse stakeholder
groups involved in the process.
Diverse Stakeholders:
? ABC Board, AMCO (staff)
? Public Safety and Law Enforcement
? Industry - Manufacturers - Wholesalers - Retailers
? Public Health - Recover Alaska - Department of Health
and Social Services - Alaska Mental Health Trust
Authority - Rasmuson Foundation
? Community Advocates ? Local Governments
MS. BRAWLEY directed attention to the report in members'
packets, "ALASKA TITLE 4 REVIEW FOR THE Alaska Alcoholic
Beverage Control Board Recommendations for Statutory Change
Updated February 2019." She noted she will refer to that report
during this presentation.
9:04:41 PM
MS. BRAWLEY turned to slide 4, "Categories of Recommendations."
1. Alcohol Licenses, Permits and Trade Practices
2. Role and Functions of the ABC Board and Staff
3. Underage Drinking and Youth Access to Alcohol
4. Regulation of Internet Sales of Alcohol
5. Technical or Administrative Law Changes
6. Local Option Communities*
* Note: Local Option recommendations are documented in
the report, but not included in SB 52. More
comprehensive discussion of Local Option laws is
needed in the future.
Note: all section references current to CSSB 52 ver. B
4-19-19
She explained that the categories of recommendations relate to
the subcommittee process the stakeholders went through. She said
the bill makes some technical changes to local option laws, but
most were deferred to further discussion especially in rural
communities. Several parts of Title 4 were not touched in SB 52.
9:05:30 PM
MS. BRAWLEY turned to slide 5, "RB-4 Board as Key Partner."
RB-4. ABC Board as Key Partner for Alcohol Education
Efforts
• The ABC Board and AMCO would work with other agencies
and organizations to develop a coordinated education
plan about responsible alcohol use and applicable
laws.
• Coordinate with Department of Health and Social
Services and other agencies tasked with alcohol-
related education.
Section 2, 04.06.075; Section 6, 04.06.0
She said that her presentation focuses on the high-level
policy recommendations. One of the ways to be effective in
enforcement is to work upstream and educate people about
the laws and how to comply with them. One recommendation
was to strengthen the Alcoholic Beverage Control Board's
(ABC Board) role as a key partner in alcohol education. It
is not meant to be in place of other alcohol education
since it is specific to education about Title 4. This
education would include outreach to local governments, the
general public, and the alcohol industry. In response to
Chair Hughes, she identified AMCO as the Alcohol &
Marijuana Control Office.
9:06:29 PM
MS. BRAWLEY turned to slide 6, "Alaska's Liquor License System:
Proposed Changes." This slide illustrated graphics for the
manufacturing and wholesale tiers, which are included in the
Title 4 Review Report Appendix.
Alaska's license system is based on the 3-tier system
of alcohol regulation: separate entities manufacture,
distribute, and sell alcohol to the public.
She stated that the next three slides give a broad overview of
changes to the licensing system. The slides clarify which
endorsements and permits are available for each license.
9:07:17 PM
CHAIR HUGHES reiterated the 3-tier system encompasses
manufacture, distribution, and sales.
9:07:32 PM
MS. BRAWLEY turned to slide 7 "Alaska's Liquor License System:
Proposed Changes." She said that this graphic is intended to
illustrate how all the licenses work together. She indicated the
changes to brewery retail, winery retail, and distillery retail.
One recommendation in SB 52 is to split manufacturing licenses
into a production license and what is commonly referred to as a
tasting room would fall under a retail license that a
manufacturer could hold. The concept of endorsement is new and
is intended to give more flexibility for businesses and the ABC
Board to consider different business models without creating
another license type for that model.
9:08:18 PM
MS. BRAWLEY turned to slide 8, "Alaska's Liquor License System:
Proposed Changes." This continues to illustrate the retail tier,
including tourism licenses that tend to fall outside the
population limits. Liquor licenses essentially are limited to a
number of licenses that are available by community, but those
that specifically serve visitors are outside those limits. A few
license types are proposed for removal from Title 4, with the
intent that they would be replaced by existing license types,
including brewpub, bottling works, and public convenience, she
said. Currently five types of manufacturing licenses exist, so
this bill would also address the types of manufacturer's
licenses. In response to Chair Hughes, she identified REPL as
Restaurant or Eating Place License and directed attention to the
left column on slide 7.
9:09:30 PM
MS. BRAWLEY turned to slide 9, "Proposed: More Retail Options
for Manufacturers." This slide illustrates that most of the
recommendations do not make changes to licenses. One exception
is to manufacturers. Currently, a brewery license has a
production function and a retail function. This bill proposes
splitting those into two different license types. It would also
give manufacturers the ability to obtain a retail license, not
currently allowed except for brewpubs. This would include a bar
license, the beverage dispensary license (BDL), a package store,
or any other retail license type. The establishments could
retain their current retail license, which would have limited
sales volume and limited hours.
9:10:18 PM
MS. BRAWLEY turned to slide 10, "Proposed Manufacturer Sales
Limits." This illustrates the recommendation for each license
type and matches what is currently in statute. She directed
attention to the offsite sales limits for brewery and wine
retail which was changed in the CSSB 52(L&C) adopted on April
19, 2019.
9:10:42 PM
MS. BRAWLEY turned to slide 11, "Proposed: Endorsements on
Licenses."
Add endorsements to existing licenses, giving
businesses more flexibility without creating more
situation-specific license types.
Endorsements would allow sampling on premises,
multiple bar rooms, deliveries by package stores, etc.
Section 10, 04.09.400; endorsements defined in
04.09.410 - .520
She explained that endorsements do not currently exist in Title
4, but it would be an "add on" to a license, similar to a
tobacco endorsement for a business license or commercial
driver's license endorsement. She stated that most of the
endorsements in the bill take existing language from a license
type, permit, or regulation and create an endorsement. She
further explained that either expands the activities that are
allowed under a license or it allows a larger physical premises,
such as a golf course endorsement would allow serving alcohol on
the course. Most of these changes relocate existing language,
she said.
9:11:33 PM
MS. BRAWLEY turned to slide 12, "Proposed Endorsements.
• R-7A | Bowling Alley Endorsement
• R-7B | Package Store Shipping Endorsement
• R-7C | Package Store Delivery Endorsement
• R-7D | Package Store Re-Packaging Endorsement
• [M-2] Manufacturer Sampling Endorsement
• [R-1] Multiple Fixed Counter Endorsement
• [R-1] Hotel/Motel Endorsement
• [R-1] Large Resort Endorsement
• [R-3] Package Store Sampling Endorsement
• [M-1] Brewery Repackaging Endorsement
Section 10, 04.09.410 - .520
She noted the codes on the left side correspond to those in the
report that reference specific recommendations.
9:11:45 PM
MS. BRAWLEY reviewed slide 13, "R-7 Standardize Permits."
• Unlike licenses, permits are typically issued for single
events, on or off licensed premises.
• Define all permit types in statute, not just in regulation
• Fee for all permits is $50 per event day
• Most permits listed are already in statute or regulation
• New permit: Tasting Event Permit, allowing a Package Store
or Manufacturer to host an event on premises, in
partnership with a BDL
Section 10, 04.09.600; permits defined in 04.09.610 - .690
She said most permits are time limited for a specific event and
defined in regulation. The recommendation is to standardize them
and have a standardized fee.
9:12:14 PM
MS. BRAWLEY reviewed slide 14, "Proposed Permits."
• R-7F | Beverage Dispensary Caterer's Permit (AS 04.11.230;
3 AAC 304.685)
• R-7G | Restaurant Caterer's Dining Permit (3 AAC 304.680)
• R-7H | Club Caterer's Permit (3 AAC 304.690)
• R-7I | Nonprofit Event Permit (AS 04.11.240)
• R-7J | Art Exhibit Permit (3 AAC 304.697)
• R-7K | Alcoholic Beverage Auction Permit (3 AAC 304.699)
• R-7L | Inventory Resale Permit (Retail Stock Sale License,
AS 04.11.200)
• R-7M | Tasting Event Permit (proposed)
Section 10, 04.09.600; permits defined in 04.09.610 - .690
She noted they have statute or regulation references.
CHAIR HUGHES asked whether someone who obtained an endorsement
would also need a permit for a specific event or if someone
could get a permit without a license or endorsement.
MS. BRAWLEY answered that an endorsement must be used with a
license. She clarified that some license types can get permits
but a license is not necessarily required to use a permit. For
example, a nonprofit organization that wants to hold a
fundraiser could apply for a certain type of permit and it would
not need a license.
9:13:00 PM
MS. BRAWLEY reviewed slide 15, "Population Limits: Current Title
4."
• Some license types are exempt from population limits: most
exempt license types are designed to serve tourists and
travelers, such as hotels or outdoor recreation lodges.
• They can be issued if other qualifications are met (ex:
minimum number of hotel rooms).
She stated that population limits provide an important public
health protection against an excessive density of licenses.
These are set by communities. The graphic on slide 15
illustrates that a city within a borough would have two sets of
licenses using a formula that looks at permanent residents. Some
license types are exempt from population limits. For example,
the formula for licenses for restaurants is based on one for
every 1,500 residents in the community, but they are also set by
type. The more types of licenses the more frequently the clock
resets for the number of total licenses. It basically means that
the more types of licenses a community has the more outlets for
alcohol the community could potentially have even though each
one is limited by population.
CHAIR HUGHES said that she resides in the fastest growing part
of the state, although Palmer and Wasilla have fairly small city
limits. She stated that much of commerce is located on the
Wasilla side and it seems to explode during the summer as people
head up the Parks Highway. She said she was not sure of the
population, but it is a fraction of the number of people who
come through Wasilla for services. She asked whether any
accommodation is made for that situation since it would mean a
small number of licenses if it is based on population even
though they serve 100,000 people in the Mat-Su Borough and
probably 30,000-40,000 people on a busy summer weekend.
9:15:11 PM
SENATOR MICCICHE acknowledged that Chair Hughes' issue is a lot
like the one in his community. He said that Soldotna has 4,000
people until summer when 30,000 people arrive. He said that this
issue would be covered in more detail, but this bill would give
some local options for communities to request additional
licenses. He stated that city management from Soldotna and Kenai
were involved in this process and they think they have found a
healthy solution.
9:15:59 PM
CHAIR HUGHES said that the City and Borough of Juneau and the
Municipality of Anchorage each have massive areas and use the
population ratio, but it is different in the Kenai and the Mat-
Su Boroughs that have towns with small populations.
MS. BRAWLEY said some things in current law recognize that
reality. Some license types such as a bar license for a hotel is
exempt from the population limits.
9:16:40 PM
MS. BRAWLEY reviewed slide 16, "Proposed: Convert Public
Convenience Licenses and Applications."
Existing Public Convenience licenses would be
converted to regular Restaurant or Eating Place
Licenses (REPLs).
Applications that have been completed as of the bill's
signing date would be converted to applications for
regular REPLs and could be approved by the ABC Board
outside the existing population limits.
Sections 165-166, Transition
She said that public convenience is not defined in statute, so
the board lacks guidance. The petition process used by an
applicant requires a certain number of signatures, but the board
does not have a process to verify if they are valid since it is
not involved in elections. She said a lot of procedural issues
exist.
MS. BRAWLEY reviewed the three proposed replacements. First, the
bill proposes converting public convenience licenses to REPLs,
which allows transferability to a new location or owner, whereas
public convenience licenses are not transferable. It would allow
anyone going through the process to have their application
converted to a full restaurant.
9:17:47 PM
MS. BRAWLEY turned to slide 17, "Proposed Seasonal REPL
Tourism."
• Seasonal restaurant license
• Available in smaller communities (< 40,000 pop.)
• Same operating requirements and privileges as full-
year restaurants (REPL)
• Number of licenses per community determined by
formula:
5-year average of annual visitors/months in season =
Average monthly visitor population
(Residents + average monthly visitors) 1,500 =
Available Seasonal REP Tourism licenses
• Season defined as up to 6 months per year, in any
combination
– Example: May through September + 1 winter month
Section 10, 04.09.350
MS. BRAWLEY said that second replacement would be to have a
Seasonal REPL Tourism license with its own limit. This would be
similar to a bar license BVL tourism license in existing statute
and would be available in communities under 40,000 in
population. It would have the same privileges as a full year
restaurant, but it would operate seasonally. She said seasonally
would be defined as up to six months per year although it does
not have to be consecutive months. For example, it could be the
summer months and a winter month, she said.
9:18:18 PM
MS. BRAWLEY reviewed slide 18, "Proposed: Local Government
Petition for Additional Restaurant Licenses," which depicts a
graphic flowchart that describes the process to apply for
additional restaurant licenses. This would allow the city to
petition the ABC Board for a certain number of licenses and use
the 40,000 people traveling as justification. If approved, the
city cannot petition again for more licenses for another three
years. In the event the ABC Board denies the petition the city
can reapply with a revised application.
9:19:36 PM
MS. BRAWLEY reviewed slide 19, "F-1. Adjust License Fees to
Reflect Current ABC Budgetary Needs."
• Update license fees according to privileges and
administrative costs of each, and collect sufficient
revenue to cover the ABC Board's required activities:
– Administration of licenses & permits
– Education about Title 4 and related regulations
– Enforcement of Title 4 and related regulations
• ABC Board required to review license fees at least every 5
years.
• See Appendix, Table 2 of the Title 4 Review report for
current license fees and proposed changes.
Section 6, 04.06.090; License fees throughout Section 10
MS. BRAWLEY said this is the first of several global changes to
Title 4 that are intended to make it work better as a system.
Many license fees have not been increased since 1980. Currently,
a restaurant license to serve beer and wine is $600. A
recreational license is somewhere between $400-$800; and a bar
license is $2,500. The Alcohol & Marijuana Control Office (AMCO)
is a receipts-funded agency. The amount of license fees it takes
in for alcohol and marijuana sets its budget. This limits the
amount of enforcement, education, and customer service it can
provide. The recommendation is to increase the resources
available to the agency, not just for enforcement but to provide
proactive education, prevention, and working with licensees.
CHAIR HUGHES asked whether these are one-time fees and if the
board charges fees for endorsements.
MS. BRAWLEY replied that all license fees are biennial so every
two years the licenses must be renewed. She said that most
endorsements have a $200 fee that renews biennially. She said
that the license fees are set in statute and the proposal is
that the ABC Board would be required to review those fees at
least every five years and make recommendations to the
legislature with any proposed changes.
9:21:38 PM
SENATOR KIEHL asked whether all of the Alcohol & Marijuana
Control Office's (AMCO) receipts are spent on AMCO.
MS. MORLEDGE deferred the question to Ms. McConnell.
9:22:06 PM
ERIKA MCCONNELL, Director, Alcohol and Marijuana Control Office
(AMCO), Anchorage, said that in the last five years, AMCO has
returned approximately $280,000 to the general fund each year.
9:22:35 PM
MS. BRAWLEY directed members to the Title 4 Review Report,
Appendix Table 2 for a table of all the current and proposed
fees.
9:22:51 PM
MS. BRAWLEY turned to slide 20, "More Accountability for License
Fees Allocated to Local Governments." One of the benefits of
increasing license fees is that it not only raises revenue for
the ABC Board and AMCO, but for local governments that receive
an amount equal to the license fees collected in their
jurisdiction. This varies year to year depending on the number
of licenses and whether the license renewal is occurring in that
year. She said that the recommendation in SB 52 is for
municipalities to report on education activities related to
Title 4. For example, the municipality would need to report to
AMCO if it performed a routine inspection of a bar. This is
designed to help share the burden of the licensing process and
enforcement of licensees in those communities. She said the 2017
sunset audit of the ABC Board found that municipalities
receiving these funds are not consistently reporting how those
funds are used. She said it takes considerable work for local
governments to review license applications, consider a protest,
and hold public hearings.
CHAIR HUGHES asked whether any of the fees to keep Alcohol &
Marijuana Control Office (AMCO) running are used for education
or prevention or if the unused portion of the $280,000 goes back
to the general fund.
MS. MCCONNELL answered that AMCO has a local government
specialist on staff whose main purpose is education for local
governments and licensees. She offered her belief that the
alcohol taxes are distributed in various ways. For example, some
of the taxes are dispersed to the Department of Health and
Social Services (DHSS) for education programs. She said this is
not her area of expertise.
9:25:24 PM
SENATOR KIEHL said that his initial question was triggered by
Ms. Brawley stating that the license fees define the AMCO
budget. He corrected that by stating that the appropriation
process sets the budget. He recalled some requests have been
made for the authority to use more of its fees for enforcement.
He said that some of these requests have not ended up in the
staffing allocation. He asked the sponsor to provide at some
point information on the obligations that municipalities have to
provide education.
MS. MORLEDGE offered to do so.
9:26:11 PM
MS. BRAWLEY turned to slide 21, "Proposed: Regulate Trade
Practices." She said the industry brought an issue to the
stakeholders' attention, that Alaska is one of the only states
without an equivalent state law to the federal law for illegal
trade practices. She described these as essentially a set of
anti-competitive practices that are illegal at the federal
level. For example, situations in which a wholesaler or
manufacturer may pressure a retailer to purchase their products
and not their competitor's products. The bill proposes putting
those into statute so they can be enforced at the state level.
They are also not in federal law for beer, just for wine and
spirits and this proposal would provide enforcement across the
board. It would allow the board to create administrative
penalties, recognizing these are business and not criminal
issues.
9:27:04 PM
MS. BRAWLEY reviewed slide 22, "Regulate Internet Alcohol Sales.
INT-1. Winery Direct Shipment License
• Create a license available to all U.S. (including
Alaska) wineries to ship orders of wine to Alaska
customers.
• Prohibit other online sales of alcohol not under this
license or the Package Store Shipping endorsement.
INT-2. Collect Alaska Excise Tax for Internet Sales
• Require all out-of-state holders of a Winery Direct
Shipment license to pay the same excise tax on Alaska
orders.
INT-3. Board Approval of Common Carriers for Alcohol
Delivery
Require all common carriers who transport deliver
alcohol directly to consumers in Alaska to be approved
by ABC Board
Section 10, 04.09.360; section 87, 04.16.022
She said the next few slides address another absence in Alaska
law, which is to regulate Internet alcohol sales. She explained
that currently, anyone can go online in Alaska and purchase
alcohol, even in a local option community or if they are
underage. Neither AMCO nor public safety would be aware of these
purchases. She said this would be addressed in three parts.
First, the winery direct shipment license, which is addressed in
the next slide. Second, it would allow the Department of Revenue
to collect Alaska Alcohol Excise Tax for Internet sales from out
of state sellers to consumers. Third, it would regulate common
carriers to ensure that any alcohol being delivered is done so
responsibly to consumers.
9:28:01 PM
MS. BRAWLEY turned to slide 23, "Regulate Internet Alcohol
Sales."
• Alaska does not limit online sales of alcohol. Orders from
out-of-state businesses are not subject to Alaska's alcohol
excise tax, and the state cannot track how much alcohol is
ordered each year.
• The bill would create a Winery Direct Shipment License and
allow online alcohol sales only from U.S. wineries and
Alaska package stores.
She said that this system is modeled on one used in 43 or 44
states. This would allow a winery to ship to a customer. The
winery would be responsible for ensuring that the person is of
age, not in a local option area, and be limited to the amount of
personal use alcohol that could be ordered annually. She said
Idaho has 780 registered customers for wine and cider. She
commented that wineries are accustomed to using this type of
system.
9:28:51 PM
MS. BRAWLEY turned to slide 24, "Regulate Internet Alcohol
Sales."
• Common carriers must be approved by the ABC Board
to transport and deliver alcohol to consumers
throughout the state.
• Carriers must demonstrate that they have policies
and train employees to properly handle shipments
of alcohol.
She said the third way Internet sales are regulated is by
approving common carriers. The stakeholder group worked with
FedEx and UPS [United Parcel Service]. These services do not
allow shipment of beer and spirits from commercial sellers. This
is in line with the system being used in many other states.
9:29:33 PM
MS. BRAWLEY turned to slide 25, "Tracking Alcohol Orders in
Local Option Areas: Current Title 4."
Residents in Local Option communities that allow
importation of alcohol may order a limited amount of
alcohol each month for personal and non-commercial
use.
Sections 7-8, 04.06.095; monthly limits defined in AS
04.11.01
She said that the Winery Direct Shipment license would not allow
shipment to local option areas, but this is already allowed for
Alaska package stores. She said the ABC Board maintains a
database of these orders to ensure that someone is not a
restricted purchaser, that the individual has not met his/her
monthly limit and that the sale is legal in the community.
9:30:12 PM
MS. BRAWLEY turned to slide 26, "Public Community-Level Data
from Local Option Order Database."
• In current Title 4, all data in the Local Option
order database is private and deleted after 1
year.
• The bill would keep individual order information
private but retain aggregate data for 10 years
and allow the ABC Board to publish annual total
sales volume by region or community.
• This valuable information would be available to
communities and law enforcement to understand the
flow of alcohol into Local Option communities via
legal sales.
Sections 7-8, 04.06.095; monthly limits defined
in AS 04.11.010
9:30:51 PM
MS. BRAWLEY turned to slide 27, "RB - 6 Revise Title 4
Penalties."
• Review penalties for all Title 4 sections and revise
as needed to make penalties proportionate to the
offense, and more consistently enforced.
• Retain existing Misdemeanor and Felony charges for
serious offenses, particularly those causing harm to
children.
• Ensure that the ABC Board, and licensee, is informed
about Title 4 convictions: require court to send
records to AMCO, and AMCO to send to the licensee.
• ABC Board retains authority to impose conditions or
additional penalties, including suspending or revoking
license.
• See Appendix, Table 3 in Title 4 Review Report for
table of all current penalties and proposed changes.
Defined throughout; most prohibited acts defined in
chapters 11 + 16
She related that this last set of global changes to Title 4
would address penalties. Currently almost everything in Title 4
is a class A misdemeanor. The stakeholder group recommended
keeping any serious felonies or misdemeanor under current law,
but to make business-related violations or non-compliance minor
offenses. She said that this would make enforcement more
automatic and retain the ABC Board to take action against a
licensee. For example, the board could take action and revoke,
suspend, or otherwise take action if a licensee had a stack of
violations. In response to Chair Hughes, she clarified that
unless otherwise defined the penalties would be a class A
misdemeanor.
9:32:48 PM
MS. BRAWLEY referred to the Title 4 Review Report and to a list
of all the sections under current law with a penalty.
CHAIR HUGHES asked the sponsor whether penalties were considered
in the prior committees and if the penalty provisions were
previously vetted.
SENATOR MICCICHE responded that this bill came before the Senate
Judiciary Standing Committee last year. He explained that the
bill would retain misdemeanor and felony charges for serious
crimes, but minor violations were not being prosecuted. The bill
would separate minor technical issues as violations and retain
misdemeanor and felony charges for the more serious offenses,
such as serving children. He offered to review the details but
suggested that the logic will become apparent.
CHAIR HUGHES suggested that it might be helpful to have a cheat
sheet to identify violations, misdemeanors, and felonies.
MS. MORLEDGE directed attention to page 68 of the Title 4 Review
Report in members' packets, to a six-page cheat sheet of current
law and the proposed changes.
9:35:09 PM
MS. BRAWLEY turned to slide 28, "Why change penalties in Title
4?" Two pie charts on this slide illustrate Title 4 charges,
including that 38 percent of all Title 4 charges between the
years 2009-2013 were dismissed and 62 percent resulted in
convictions. The second pie charge lists the total number of
minor consuming alcohol cases between the years 2009-2013 at
16,357 and all other Title 4 cases numbered 5,457.
Prosecutors were dismissing MCA charges; penalties
were seen as too high for the offense, or not worth
the resources.
Violations of other sections of Title 4 are rare. AMCO
has very limited enforcement resources to inspect
1,900 establishments statewide.
She reiterated that the rationale for changing penalties is that
they are not proportional to the offense. The state has 1,900
alcohol licenses and AMCO has limited resources to conduct
inspections. She explained that if violations are not
documented, it would not come to the ABC Board's attention, so
this is an opportunity to close that communication loop. This
would allow the board to take action when issues arise on
premises, she said.
9:35:48 PM
CHAIR HUGHES asked whether AMCO pursues misdemeanors and
felonies or is limited to violations. She asked whether they
need to bring in other law enforcement.
9:36:10 PM
ERIKA MCCONNELL, Director, Alcohol and Marijuana Control Office
(AMCO), Anchorage, Alaska, said statute gives AMCO and its
employees the authority to criminally enforce these statutes.
9:36:30 PM
MS. BRAWLEY turned to slide 29, "Revise Penalties."
• In current law, almost all violations of Title 4
are class A misdemeanors.
• When penalties are set high across the board and
perceived to be too strict for most offenses, law
enforcement is less likely to issue citations and
courts are less likely to pursue those cases.
• In the bill, many penalties would become minor
offenses. Serious violations, such as selling
alcohol without a license, allowing gambling on
the premises, or perjury on a license application
would remain misdemeanors or felonies, as they
are today.
Defined throughout; most prohibited acts defined in
chapters 11 + 16
She said that the slide also provides some examples of
violations, misdemeanors, and felonies. As Ms. Morledge
mentioned, the table in the back of the report gives more
detail, she said.
9:36:48 PM
MS. BRAWLEY turned to slide 30, "Proposed: Licensee Penalties
for Overserving an Adult or serving a minor."
In current Title 4, a licensee or employee who
knowingly overserves an intoxicated adult or who
serves alcohol to a minor is guilty of a class A
misdemeanor.
The bill would change the penalty for both statutes to
minor offense, with a $500 fine.
In addition to the penalty to the person who commits
the violation, the owner of the license would receive
an administrative (non-criminal) penalty of $250. This
alerts the owner that a violation occurred, holds them
immediately accountable, and encourages future
compliance.
Section 89, 04.16.030; section 101, 04.16.052;
sections 124 - 126, 04.16.180
She said the goal is to ensure that not only are servers
following the law, but also that the licensees are aware of what
is happening on their premises and actively involved in
addressing any issues. She said that currently licensees are
held accountable during the license renewal process or can be
brought before the board for egregious violations on an
emergency basis. She acknowledged that the manager might not
disclose that the premise was ticketed. The bill would also
recommend administrative penalties for overserving or serving
alcohol to a minor, including an automatic $250 fine.
SENATOR MICCICHE stated the penalty for knowingly serving
alcohol to a minor would be increased to a class A misdemeanor.
9:38:24 PM
MS. BRAWLEY turned to slide 31, "Proposed: Require Keg
Registration."
• Reduces adults' incentive to legally purchase alcohol and
supply an underage drinking party.
• Kegs tagged with the purchaser's contact information can be
tracked if confiscated at an underage party or other
situation where minors are given access to alcohol.
• A person, not a licensee, possessing an untagged keg
containing alcohol could be fined.
• Modeled on existing Anchorage and Juneau ordinances.
Section 131, 04.21.012
She emphasized this relates to public health and public safety
since it addresses adults legally purchasing alcohol and
providing it to minors. She said that keg registration is a best
practice and is already in place in the City and Borough of
Juneau and the Municipality of Anchorage. She described the
registration process used when the adult purchases the keg, and
if it is not found in an illegal gathering, no issue would
arise. However, if the keg was confiscated, it could be traced
to the person who purchased it. She said this helps to close the
loophole on what is known as "social hosts" when adults provide
alcohol to minors.
9:40:22 PM
MS. MORLEDGE, in response to Chair Hughes, agreed that the
sectional analysis for SB 52 is 21 pages.
CHAIR HUGHES directed attention to a two-page summary in
members' packets titled, "Sectional Summery, SB 52: Alcoholic
Beverage Control; Alcohol Regulations."
9:40:54 PM
SENATOR MICCICHE pointed out that SB 52 is a 119-page bill. He
said the vast majority of the bill reorganizes Title 4.
CHAIR HUGHES said that the long sectional analysis is color-
coded, which is helpful to assist members in navigating the
changes to Title 4.
9:42:00 PM
MS. MORLEDGE provided a brief sectional analysis of SB 52. She
said Sections 1-9, pages 1-5 of SB 52, set out the authority and
duties of the ABC Board. It also includes a requirement for
education plans, budget resources, enforcement, training, and
prevention. She said it also requires them to post FASD [Fetal
Alcohol Syndrome] information online. It also includes a
provision for the statewide database Ms. Brawley mentioned.
9:43:00 PM
MS. MORLEDGE said that the licensing reorganization is in new
Chapter 9 of Title 4. Several articles address endorsements,
licenses, and permits. It sets fees, and penalties for non-
compliance. She pointed out it addresses three manufacturer's
licenses, including brewery, winery, and distillery. It also
covers two wholesale licenses, including general and limited
wholesale of brewed beverages and wine. She indicated that there
are 17 retail licenses.
9:43:50 PM
MS. MORLEDGE said that SB 52 would provide 12 types of
endorsements, and Article 6 covers permits. SB 52 has nine
permits. Article 7 covers the common carrier approval process.
9:44:08 PM
MS. MORLEDGE referred Chapter 11, Sections 11-80, (pages 50-83)
pertaining to Title 4 licensing. These sections also provide for
the winery direct shipment license exemption from the
application and renewal process. This chapter relates to
imposing restrictions or conditions on licenses, endorsements,
permits, population limits, and prohibited financial interests.
It adds penalties throughout and reorganizes and renumbers
various sections.
9:44:51 PM
MS. MORLEDGE turned to Chapter 16, Sections 81-130 (pages 83-
100) relating to regulation of sales and distribution and
prohibited acts. This allows a person to be on a licensed
premises off hours to conduct business, such as restocking or
maintenance. It aligns state law with federal law regarding
illegal trade practices. It also adds penalties throughout.
Further, it includes the prohibition of online sales unless the
licensee has a winery direct shipment license or a package store
shipment license.
9:45:32 PM
MS. MORLEDGE turned to Chapter 21, Sections 131-145, (pages 100-
107). These sections provide general provisions, including
sections related to the statewide keg registration program,
provisions relating to alcohol server education, and it provides
penalties throughout the chapter. It reorganizes and renumbers
existing statutes and provides definitions.
9:45:57 PM
MS. MORLEDGE turned to Chapter 21, Sections 146-157 (pages 108-
113). She said that these are changes to other titles to amend
statutory references to the new license types. In response to
Senator Micciche, she reiterated the Sections are 146-157. This
chapter also allows the Department of Revenue (DOR) to collect
an excise tax pertaining to the winery direct shipment license.
9:46:36 PM
MS. MORLEDGE turned to Sections 158-170 (pages 114-119), which
includes the transition language and effective dates.
9:46:48 PM
CHAIR HUGHES asked whether she could highlight the things that
are brand new. For example, she recalled that the winery direct
shipment license is new.
MS. MORLEDGE deferred to Ms. Brawley.
MS. BRAWLEY responded that in terms of license types and
endorsements [the winery direct shipment license] is new. She
turned to page 2 and said that the package store sampling
endorsement and the package store sampling endorsements are new.
She related that under permits, the tasting event permit for
package stores would allow them to hold events on their
premises. She reiterated that the illegal trade practice
provisions are also new.
9:48:18 PM
SENATOR MICCICHE said that Alaskan business owners collect taxes
on everything they sell. This bill would also level the playing
field to support Alaska businesses. Not only will hard liquor no
longer be able to be purchased out-of-state, but it will be
taxed.
9:49:20 PM
SENATOR KIEHL asked whether the committee could run through the
changes that were made by the Senate Labor and Commerce Standing
Committee to the original bill.
CHAIR HUGHES said she would plan that for the next hearing on SB
52. She noted that she previously served on the Recover Alaska
group.
9:50:20 PM
TIFFANY HALL, Executive Director, Recover Alaska, said that she
is a lifelong Alaskan. She has served as the Executive Director
of Recover Alaska for about three and a half years. She said
that her organization has been working on this bill for over
seven years. She said over 120 stakeholders and thousands of
hours have been put in, largely with a focus to improve the
legislation and make it easier to follow. It also emphasizes
public health and safety. She highlighted that this bill is
evidence-based on best practices that have been in place
throughout the rest of the country. She emphasized some
important aspects of the bill, including the statewide keg
registration, increased license fees to allow for compliance
checks. She related that data has shown that underage minors can
order online and receive alcohol, so Internet sales regulation
of alcohol is important. She said that Recover Alaska works to
reduce excessive alcohol use in homes across the state. She said
that her organization is not a prohibitionist organization. She
recognized that low risk drinking in moderation occurs. This
process has allowed her to become familiar with members in the
alcohol industry and work together on issues. As a result of
this work, other partnerships have been formed outside of this
effort, she said. She expressed gratitude to be part of the
process.
9:52:40 PM
CHAIR HUGHES said that SB 52 would be held in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SJR 3 Version A.PDF |
SJUD 4/12/2019 1:30:00 PM SJUD 4/15/2019 1:30:00 PM SJUD 4/17/2019 6:00:00 PM SJUD 4/19/2019 1:30:00 PM SJUD 4/22/2019 6:00:00 PM |
SJR 3 |
| SJR 3 - Sponsor Statement.pdf |
SJUD 4/12/2019 1:30:00 PM SJUD 4/15/2019 1:30:00 PM SJUD 4/17/2019 6:00:00 PM SJUD 4/19/2019 1:30:00 PM SJUD 4/22/2019 6:00:00 PM |
SJR 3 |
| SJR 4 version A.pdf |
SJUD 4/22/2019 6:00:00 PM SSTA 3/26/2019 1:30:00 PM SSTA 3/27/2019 6:00:00 PM SSTA 3/28/2019 3:30:00 PM |
SJR 4 |
| SJR 4 Transmittal Letter.pdf |
SJUD 4/15/2019 1:30:00 PM SJUD 4/22/2019 6:00:00 PM SSTA 3/26/2019 1:30:00 PM SSTA 3/27/2019 6:00:00 PM SSTA 3/28/2019 3:30:00 PM |
SJR 4 |
| SJR 4 Sectional Analysis.pdf |
SJUD 4/22/2019 6:00:00 PM SSTA 3/26/2019 1:30:00 PM SSTA 3/27/2019 6:00:00 PM SSTA 3/28/2019 3:30:00 PM |
SJR 4 |
| CSSB 33(JUD) Version U.pdf |
SJUD 4/19/2019 1:30:00 PM SJUD 4/22/2019 6:00:00 PM |
SB 33 |
| CSSB33 Explanation of Changes from Version M to U.pdf |
SJUD 4/19/2019 1:30:00 PM SJUD 4/22/2019 6:00:00 PM |
SB 33 |
| CSSB 33 Amendments.pdf |
SJUD 4/22/2019 6:00:00 PM |
SB 33 |
| CSSB 34(JUD) Version K.pdf |
SJUD 4/22/2019 6:00:00 PM |
SB 34 |
| CSSB34 Explanation of Changes from Version U to K.pdf |
SJUD 4/22/2019 6:00:00 PM |
SB 34 |
| SB 52 Version U.PDF |
HL&C 3/11/2020 3:15:00 PM SJUD 4/22/2019 6:00:00 PM SL&C 3/26/2019 1:30:00 PM |
SB 52 |
| SB 52 Sponsor Statement.pdf |
SFIN 2/11/2020 9:00:00 AM SJUD 4/22/2019 6:00:00 PM SL&C 3/26/2019 1:30:00 PM |
SB 52 |
| SB 52 Sectional Analysis 2.19.19.pdf |
SJUD 4/22/2019 6:00:00 PM SL&C 3/26/2019 1:30:00 PM |
SB 52 |
| SB 52 Title 4 Bill Summary Changes SB 76 (2018) to SB 52 (2019).pdf |
SJUD 4/22/2019 6:00:00 PM SL&C 3/26/2019 1:30:00 PM |
|
| SB 52 Sectional Analysis v.U.pdf |
SJUD 4/22/2019 6:00:00 PM SL&C 3/26/2019 1:30:00 PM |
SB 52 |
| SB 52 Sponsor Statement.pdf |
SJUD 4/22/2019 6:00:00 PM |
SB 52 |
| SB 52 Summary of Proposed Penalties.pdf |
SJUD 4/22/2019 6:00:00 PM SL&C 3/26/2019 1:30:00 PM |
SB 52 |
| SB 52 Summary of Goals.pdf |
HL&C 3/9/2020 3:15:00 PM SFIN 2/11/2020 9:00:00 AM SJUD 4/22/2019 6:00:00 PM SL&C 3/26/2019 1:30:00 PM |
SB 52 |