Legislature(1999 - 2000)
03/31/2000 03:24 PM House L&C
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 31, 2000
3:24 p.m.
MEMBERS PRESENT
Representative Norman Rokeberg, Chairman
Representative Andrew Halcro, Vice Chairman
Representative Lisa Murkowski
Representative John Harris
Representative Tom Brice
Representative Sharon Cissna
MEMBERS ABSENT
Representative Jerry Sanders
COMMITTEE CALENDAR
SENATE BILL NO. 78
"An Act relating to the use and prescription of pharmaceutical
agents in the practice of optometry."
- MOVED SB 78 OUT OF COMMITTEE
HOUSE BILL NO. 339
"An Act authorizing the Alaska Commercial Fishing and Agriculture
Bank to make loans relating to tourism and development or
exploitation of natural resources."
- MOVED CSHB 339(L&C) OUT OF COMMITTEE
HOUSE BILL NO. 386
"An Act relating to brewpub licenses."
- HEARD AND HELD
PREVIOUS ACTION
BILL: SB 78
SHORT TITLE: USE OF DRUGS BY OPTOMETRISTS
Jrn-Date Jrn-Page Action
2/18/99 287 (S) READ THE FIRST TIME - REFERRAL(S)
2/18/99 287 (S) L&C
4/15/99 (S) L&C AT 1:30 PM BELTZ 211
4/15/99 (S) MOVED OUT OF COMMITTEE
4/15/99 (S) MINUTE(L&C)
4/16/99 948 (S) L&C RPT 2DP 3NR
4/16/99 948 (S) DP: MACKIE, LEMAN; NR: DONLEY,
4/16/99 948 (S) TIM KELLY, HOFFMAN
4/16/99 948 (S) ZERO FISCAL NOTE (DCED)
5/05/99 (S) RLS AT 12:50 PM FAHRENKAMP 203
5/05/99 (S) MINUTE(RLS)
3/07/00 2547 (S) RULES TO CALENDAR AND 1 OR 3/7/00
3/07/00 2547 (S) ZERO FISCAL NOTE (DCED)
3/07/00 2548 (S) READ THE SECOND TIME
3/07/00 2548 (S) ADVANCED TO THIRD READING UNAN
CONSENT
3/07/00 2548 (S) READ THE THIRD TIME SB 78
3/07/00 2548 (S) PASSED Y18 N2
3/07/00 2551 (S) TRANSMITTED TO (H)
3/08/00 2442 (H) READ THE FIRST TIME - REFERRALS
3/08/00 2442 (H) L&C
3/08/00 2442 (H) REFERRED TO LABOR & COMMERCE
3/31/00 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 339
SHORT TITLE: CFAB LOANS FOR TOURISM & NAT RESOURCES
Jrn-Date Jrn-Page Action
2/04/00 2098 (H) READ THE FIRST TIME - REFERRALS
2/04/00 2098 (H) L&C, FIN
2/04/00 2098 (H) REFERRED TO LABOR & COMMERCE
2/25/00 (H) L&C AT 3:15 PM CAPITOL 17
2/25/00 (H) Heard & Held
2/25/00 (H) MINUTE(L&C)
3/29/00 (H) L&C AT 3:15 PM CAPITOL 17
3/29/00 (H) Scheduled But Not Heard
3/31/00 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 386
SHORT TITLE: BREWPUB LICENSES
Jrn-Date Jrn-Page Action
2/16/00 2215 (H) READ THE FIRST TIME - REFERRALS
2/16/00 2215 (H) L&C
2/16/00 2215 (H) REFERRED TO LABOR & COMMERCE
3/31/00 (H) L&C AT 3:15 PM CAPITOL 17
WITNESS REGISTER
SENATOR JERRY MACKIE
Alaska State Legislature
Capitol Building, Room 427
Juneau, Alaska 99801
POSITION STATEMENT: Testified as the sponsor of SB 78.
DR. JEFF GONNASON, Licensed Alaskan Optometrist (OD)
Alaska Optometry Association
2211 E. Northern Lights Boulevard
Anchorage, Alaska 99508
POSITION STATEMENT: Testified on SB 78.
DR. ROBERT FORD, Ophthalmologist
1600 A Street, Suite 200
Anchorage, Alaska 99501-5146
POSITION STATEMENT: Testified on SB 78.
CATHERINE REARDON, Director
Division of Occupational Licensing
Department of Community & Economic Development
PO Box 110806
Juneau, Alaska 99811-0806
POSITION STATEMENT: Testified on SB 78.
SUSAN SPRINGER, Proprietor
Herring Bay Mercantile
PO Box 257
Seldovia, Alaska 99663
POSITION STATEMENT: Testified on HB 339.
JERRY WEAVER, Senior Vice President
and Manager of Commercial Loans
National Bank of Alaska;
Secretary/Treasurer
Alaska Bankers Association
PO Box 100600
Anchorage, Alaska 99510
POSITION STATEMENT: Testified on HB 339.
CHRIS ANDERSON, Co-Owner
Glacier Brew House
737 W 5th Avenue
Anchorage, Alaska 99501
POSITION STATEMENT: Testified in support of HB 386 and remarked
that he didn't see the need for any limits on the amount of beer
that [a brewpub] can manufacture.
DOUG GRIFFIN, Director
Alcoholic Beverage Control Board
550 W 7th, Number 540
Anchorage, Alaska 99501
POSITION STATEMENT: Answered questions regarding HB 386.
LISA PELTOLA, Beer Sales and Office Manager
Midnight Sun Brewing Company
7329 Arctic Boulevard
Anchorage, Alaska 99518
POSITION STATEMENT: Read a letter from Mr. Staples, President/Owner
of Midnight Sun Brewing Company, in opposition to HB 386.
LARRY HACKENMILLER, Club Manchu
518 Farmers Loop Road
Fairbanks, Alaska 99712
POSITION STATEMENT: Opposed HB 386 and suggested its referral to
the Judiciary Committee.
MATT JONES, Co-Owner
Moose's Tooth Pub & Pizzeria, Brewing Company
PO Box 202549
Anchorage, Alaska 99520
POSITION STATEMENT: Testified in support of HB 386.
KAREN BERGER, Owner
Homer Brewing Company
1562 Homer Spit Road, Number A
Homer, Alaska 99603
POSITION STATEMENT: Testified in opposition to HB 386.
MARCY LARSON
Alaskan Brewing Company
5429 Shaune Drive
Juneau, Alaska 99801
POSITION STATEMENT: Testified in opposition to HB 386.
ROD HANCOCK, Co-Owner
Moose's Tooth Pub & Pizzeria, Brewing Company
PO Box 202549
Anchorage, Alaska 99520
POSITION STATEMENT: Testified in support of HB 386.
GLENN BRADY, President/Owner
Silver Gulch Brewing and Bottling Company
PO Box 82125
Fairbanks, Alaska 99708
POSITION STATEMENT: Testified in opposition to HB 386 as currently
written; however, he favored his amendment as a compromise.
S.J. KLEIN, President and Head Brewer
The Borealis Brewery
349 E. Ship Creek Avenue
Anchorage, Alaska 99501
POSITION STATEMENT: Testified on HB 386.
ACTION NARRATIVE
TAPE 00-40, SIDE A
Number 0001
CHAIRMAN NORMAN ROKEBERG called the House Labor and Commerce
Standing Committee meeting to order at 3:24 p.m. Members present
at the call to order were Representatives Rokeberg, Halcro,
Murkowski and Harris. Representatives Brice and Cissna arrived as
the meeting was in progress.
SB 78-USE OF DRUGS BY OPTOMETRISTS
CHAIRMAN ROKEBERG announced the first order of business is SENATE
BILL NO. 78, "An Act relating to the use and prescription of
pharmaceutical agents in the practice of optometry."
Number 0090
SENATOR MACKIE, Alaska State Legislature, testified as the sponsor
of SB 78. He explained that SB 78 would authorize optometrists in
Alaska to prescribe oral or systemic drugs as is the case in 37
other states. He noted that there was a bill that would have
allowed for laser surgery and other types of practices, but that
was not included in SB 78 as it includes much controversy and
opposition. Therefore, SB 78 allows [qualified] optometrists the
ability to prescribe oral medications for problems with the eye
rather than necessitating a visit to another physician for this.
Senator Mackie specified that SB 78 would not allow an optometrist
to do things in which he/she is not trained, qualified and
certified to do. He noted his understanding that the groups who
have traditionally opposed this in the past, have backed off on
this issue. In closing, Senator Mackie said that he would
appreciate the committee's support of SB 78.
CHAIRMAN ROKEBERG asked if Senator Mackie was aware that the Alaska
State Medical Association (ASMA) opposed SB 78. He further asked
if ASMA came before the [Senate Labor & Commerce Committee].
SENATOR MACKIE replied no. He remarked, "I'd be surprised actually
if they even appeared here."
CHAIRMAN ROKEBERG noted that ASMA has representation in the room.
SENATOR MACKIE recalled that he had spoken, in regard to the
letter, with a representative of ASMA and with Dr. Gonnason. He
noted that the vote on the Senate floor was 18-2 and thus he
believes there is sufficient support for SB 78.
Number 0403
DR. JEFF GONNASON, Licensed Alaskan Optometrist (OD), Alaska
Optometry Association, provided the committee with his one page
statement. Dr. Gonnason stated, "Optometry is a primary health
care profession that examines, diagnoses, and treats disorders of
the human eye and we use therapeutic medications, methods and
procedures in accordance with professional training and
competency." He explained that historically medical doctors have
enjoyed unlimited legislative trust in their scope of practice as
have other health care professions that are commonly referred to as
a limited license such as dentists, podiatrists and nurse
practitioners. The scope of practice for dentists, podiatrists and
nurse practitioners is determined in regulation by the state
boards. Therefore, when something new is invented, their state
board can review that invention and does not have to come before
the legislature. However, every time something new is invented
optometry, it has to come before the legislature for authorization
because of the opposition in the past from medical [groups]. Dr.
Gonnason pointed out that optometric training began including
therapeutic treatment of diseases about 30 years ago. In 1976
North Carolina passed legislation allowing qualified optometrists
to prescribe therapeutic medications. Now 37 states allow
qualified optometrists to prescribe therapeutic medications,
including oral and systemic agents. Therefore, SB 78 would bring
Alaska up-to-speed with where North Carolina started. He noted
that currently one state, Oklahoma, allows optometrists to use
lasers in the treatment of eye diseases.
DR. GONNASON pointed out that last session there was a bill that
would have allowed optometrists to change such that a optometrist's
scope of practice would be determined by the State Board of
Examiners, which would be an ideal situation. This would be the
same situation that exists for dentists and podiatrists. However,
that bill met with opposition. Therefore, SB 78 is a compromise
bill that would only allow [optometrists to prescribe] these
additional medications. Dr. Gonnason informed the committee that
the bill packet should include a letter from the malpractice
insurance carriers reporting that there is no difference in
premiums or claims between states with or without oral
pharmaceutical authority. Furthermore, the Alaska State
[Legislative] Budget & Audit Committee performed a study in 1995 in
which the committee reported that eye care was improved in Alaska
by allowing ODs to prescribe; this also saved money on travel and
double visits. This legislation would allow Alaskan optometrists
to practice at the currently accepted standard of care and provide
access to quality, cost-effective eye care.
DR. GONNASON mentioned that last year he wrote a letter to Speaker
Porter in which he basically refuted the allegations in the ASMA
letter. In conclusion, Dr. Gonnason pointed out that optometrists
receive the kind of training necessary to safely prescribe these
medications just as do dentists and podiatrists.
Number 0760
REPRESENTATIVE MURKOWSKI asked if SB 78 merely allows for oral
medication prescriptive authority.
DR. GONNASON specified that SB 78 would allow optometrists to
prescribe or use any medications at all, by any means, necessary to
treat conditions of the eye. He stressed [that these medications
could only be used by optometrists] in the treatment of conditions
of the eye. He clarified that it would include oral medications as
well as suppositories and injectibles.
REPRESENTATIVE MURKOWSKI asked if [SB 78] would include intravenous
(I.V.) [medications].
DR. GONNASON replied yes, but noted that only very rarely are
intravenous drugs required for eye conditions; only one such
condition came to mind.
REPRESENTATIVE MURKOWSKI surmised, then, that the chart in the bill
packet referring to the states that allow oral medication may not
necessarily include all the other ways in which a systemic problem
can be treated. She expressed concern with the I.V. concept.
DR. GONNASON clarified that the list in the bill packet includes
states that allow some form of systemic medication. Some of those
states, such as Tennessee and North Carolina, allow all forms of
systemic medication, which would be the case under SB 78. In some
states, the legislation specifies which drugs can be used by an
optometrist. Texas just passed legislation that would include oral
and injectible medication. Dr. Gonnason remarked, "The main thing
for injectibles is essentially allergic reactions where you do the
'epi' gun, adrenaline in the arm for someone that can't breath
because they're having an anaphylaxis shock reaction; just not done
very often. But we all keep those in our offices, legal or not,
because you need to save the person's life, especially out in the
Bush." He said that each state is different in regard to the
amount of authority of drug use, but almost all states exempt and
do not allow schedule I and II drugs as they are not necessary for
eye practice. Schedule I and II drugs are not included in SB 78.
REPRESENTATIVE HARRIS asked if there are any documented problems in
the other states that use this system.
DR. GONNASON replied no. He commented that if anything had been
before any boards, the committee would have been flooded with it by
the opposition. He noted that optometrists have been prescribing
therapeutic drugs in Alaska since 1992; although orals were
included, [the bill] was limited to topicals at that time. As of
last month there have been no complaints to the state board in
those eight years. Dr. Gonnason remarked that it is very difficult
to convince lay people of an optometrist's education, when very
credentialed surgeons are saying otherwise.
Number 1058
REPRESENTATIVE HARRIS inquired as to what level of education or
competency does one have to show in order to obtain an optometrist
license. He assumed that optometrists in Alaska have to have the
same level of education as those in other states [that allow this].
DR. GONNASON informed the committee that a doctor of optometry
degree is awarded after four years of graduate school; it is a
professional program that is identical to dental school. He
commented that it is similar to medical school in that everyone
uses the medical model and the same textbooks, instructors and
lectures are used [as those used by the medical students].
Therefore, it requires eight years of college to obtain an
optometry degree as with dentistry and medicine. He noted that
most of the opposition is from ophthalmologists, which are
specialized physicians who receive extra training in diseases and
the surgery of the eye. Ophthalmologists "are definitely the top
dog on the food chain in eye care.... We're [Optometrists] not
trying to say that we want to do the advanced things the
ophthalmologists do, we want to do what we are trained to do." He
referred to material in the bill packet which illustrates that the
years of education for optometry, dentistry, podiatry and
medication are essentially the same. Furthermore, most
optometrists now receive a year of residency as well. The graph in
the bill packet also illustrates that in regard to the number of
hours spent in pharmacology training, the hours were identical in
the University of Houston's Optometry College and Baylor College of
Medicine. He noted that he has a copy of a college catalog.
DR. GONNASON, in response to Representative Harris, said that the
training [for optometrists in this area] is there. He pointed out
that in Alaska, as is the case in most states, an optometrist must
pass the National Board of Examiners in Optometry of which there
are three parts. All three parts must be passed in order to apply
to Alaska. Within those national boards there is an examination
referred to as "treatment and management of ocular disease", which
is what is required to prescribe drugs in Alaska. For example,
some of the older practitioners without this training would not be
allowed to use this; one must have an endorsement to his/her
license from the Division of Occupational Licensing. That
endorsement is based upon the additional training and the passage
of the treatment and management of ocular disease test that is
administered by the International Association of Boards of
Examiners in Optometry, which is the worldwide standard exam for
optometry therapeutic practice. He believed that Catherine
Reardon, Division of Occupational Licensing, could attest that the
qualifications, certification and the regulation is very stringent.
REPRESENTATIVE HARRIS pointed out that the letter in the bill
packet from the ASMA says, "Optometrists do not have the education
and training that a licensed physician and surgeon have." The
letter from the ASMA also says, "We feel that if an individual
wishes to practice medicine, he/she should be trained as a
physician." He inquired as to Dr. Gonnason's comment on those
statements by the ASMA.
DR. GONNASON informed the committee that in medical school a
physician or a medical doctor receives about one or two days on the
eye. Therefore, he was confident that an O.D. graduating from
optometry school has far more training in the diagnosis, treatment
and management of diseases of the eye than would a M.D. He
acknowledged that optometrists [receive less training] than
ophthalmologists. Dr. Gonnason related a situation in Nome in
which the local O.D. is called in for any eye emergency not the
M.D. because [the M.D.] does not know how to handle these cases.
If the O.D. has to prescribe a systemic medication, then the
physician's assistant has to prescribe the medication. He noted
that nurse practitioners can prescribe any medication while their
training is at the Master's degree level, which is slightly below
the Doctorate level of optometry. He returned to the dentist
example and asked, "If the M.D.s wrote you a letter and said, 'We
don't think dentists should be prescribing pain medication or
antibiotic pills because they're not physicians.' What would you
say? You would say, 'Well, they're dentists.'" Optometrists
receive the same training [in pharmacology] as dentists.
Number 1400
REPRESENTATIVE HALCRO pointed out that the ASMA is further
concerned that optometrists would be prescribing therapeutics,
"which often have an impact not only on eye [issues] by interact
with many body systems." In regard to the chart comparing the
education, it illustrates that the general practitioner [in
comparison to an optometrist] has almost twice as many hours
required in human anatomy, physiology and neurophysiology. He
asked if this is an area of concern due to an optometrist receiving
far less instruction in this area.
DR. GONNASON remarked that it [the education for general
practitioners and optometrists] is of equal construction. He noted
that the chart in the packet is from 1987. Dr. Gonnason explained
that part of the training in pharmacology is the interaction of
different drugs, which results in a detailed history of a patient.
Part of the training deals with the interaction of drugs as
systemic drugs do affect the entire body. Dr. Gonnason informed
the committee that optometrists are not trained in the prescribing
of cardiac medications. Optometrists would only prescribe related
to the eye. However, he noted that although he is familiar with
cardiac drugs, he is not familiar with the extra hours of detail.
Similarly, the dentist is not trained in that area either, although
a dentist is trained in the emergency treatment of interactions and
allergies with the drugs.
REPRESENTATIVE HALCRO asked whether the difference in the training
in physiology and the neurophysiology is the basis for the ASMA's
contention that optometrists may be prescribing drugs for which
there are other complications that the optometrist would not be
aware of.
DR. GONNASON stated that [ASMA] is not aware of the training of
optometrists. He provided a copy of a more current four year
optometric degree program. Basically, in the third and fourth year
of the optometrist degree program there is a lot of clinic involved
just as in medicine.
Number 1641
CHAIRMAN ROKEBERG asked if the licensure regulations in Alaska
require that optometrists have any mandatory errors and omissions
(E&O) insurance.
DR. GONNASON answered that optometrists all have malpractice
insurance, although he did not believe it is required by statute.
He informed the committee that an optometrist's malpractice
insurance costs about $400 per year. Dr. Gonnason pointed out that
the [Maginnis & Associates Correspondence] says that the claims
rates and the insurance premiums are basically the same regardless
of whether the state allows optometrists to prescribe systemic and
oral drugs or not. He also pointed out that California passed
legislation allowing optometrists to prescribe all topical and some
systemic medications. During that process in California, the
California Optometry and Ophthalmology Association agreed to
commission an independent evaluation assessing the competency and
cost effectiveness of optometrists treating diseases. He had the
highlights from that independent evaluation which was performed by
Price Waterhouse Coopers in 1999. Dr. Gonnason read the conclusion
of that independent evaluation as follows:
Optometrists practice therapeutics with at least the same
level of competence as ophthalmologists and primary care
providers managing the same problems. This conclusion is
based on the study result. Optometric charts show no
significant difference from ophthalmology charts in
compliance with the eye care standards and optometrists
were significantly better compliance than the charts of
general physicians and mid-level practitioners.
DR. GONNASON clarified that he is not knocking general M.D.s, but
in general people go to a general M.D. who prescribes an eye drop
that does not work. In such a case, the person ends up in an
optometrist's office where the drop that does work is administered.
He said, "It's not that the M.D. didn't know, but he's not as
focused in on the details of eye disease as we are."
DR. GONNASON pointed out that this independent study found, in
regard to cost effectiveness, "The magnitude of savings is
substantial and optometrists provide a significant economic benefit
to their patients." He directed the committee's attention to the
chart that details the average cost to a patient with pink eye. A
person with pink eye who sees a general physician, an
ophthalmologist and optometrist faces an average charge of $76, $83
and $41 respectively. Although ophthalmologists are necessary, one
does not need to fly from Nome to Anchorage in order to receive
treatment for pink eye from an ophthalmologist. He noted that
optometrists could not [even] treat pink eye until a few years ago.
CHAIRMAN ROKEBERG noted that the bill packet includes a letter from
Dr. Hart Hodges, Ph.D. from Northern Economics, who disputed the
notion that there is no cost difference in the eye exam conducted
by an ophthalmologist and an optometrist. Chairman Rokeberg found
that interesting as his own personal experience seemed to
illustrate that an eye exam from an ophthalmologist cost more than
one performed by an optometrist. Chairman Rokeberg commented that
he was surprised that, given the rural nature of the state, [the
rural areas] have not been present requesting this earlier.
DR. GONNASON said, "Well, they have." He explained that most of it
has been done under the auspices of public health. Optometrists in
the Bush have been prescribing drugs for 30 years under federal
authority. However, now Native corporations are hiring private
optometrists and their hands are tied. He noted that he had
requested that Dr. Ford, an Ophthalmologist and Surgeon from
Pacific Cataract and Laser, testify on this legislation. Dr. Ford
is one of the world's highly respected eye surgeons.
Number 1901
CHAIRMAN ROKEBERG pointed out that according to Dr. Hodges, Dr.
Ford contracts with optometrists for follow-up care for his laser
surgery patients in the Anchorage area. Chairman Rokeberg asked if
that is true.
DR. GONNASON specified that Dr. Ford co-manages [with optometrists
for follow-up care]. He said, "All of them do." He explained that
if he has a patient that wants laser surgery, he examines the
patient and does all the mathematical numbers for the patient's
surgery. The patient is then sent, with the numbers, to one of the
ophthalmologists in Anchorage. Dr. Gonnason indicated that the
ophthalmologists really do not have a problem with optometrists
using drugs, but rather are concerned with optometrists moving into
the laser end where the money is made. After the surgery, the
patient would return to the optometrist who would perform follow-up
care. The optometrist charges a fee for his part and the surgeon
charges a fee for his part and those fees are totally independent.
DR. GONNASON answered, in response to Chairman Rokeberg, that
anaphylaxis is a technical term. He explained that optometrists
can only prescribe in treatments of the eye; however, this would
allow the treatment of a person in an emergency allergic shock
situation. He commented that it is very rare and that he has never
seen such a case in his 24 years of practice, although he noted
that he is trained to take care of such a situation. Dr. Gonnason
emphasized that anything that is done would only be done in the
standard of care and anything performed outside of that would be a
violation of the law.
CHAIRMAN ROKEBERG recognized that optometrists, under SB 78, would
be excluded from the use of schedule IA and IIA drugs. He inquired
as to what other schedules of prescriptive pharmaceuticals an
optometrist would give. He further inquired as to the percentage
of those that would be administered intravenously.
DR. GONNASON estimated that if he were to write 500 systemic
prescriptions, probably only one or two would possibly be
injectible or administered intravenously. Very few of the
prescriptions optometrists would write in the treatment of the eye
would involve an I.V. In regard to oral prescriptions, he informed
the committee that the main ones would be medication in the
treatment of glaucoma, antibiotics for infection and then pain.
The schedule IA and IIA drugs are excluded as they are the most
dangerous levels of drugs, and furthermore there is almost no
incidence in which an optometrist would need those. Therefore,
that restriction does not really need to included, but it
illustrates that optometrists are not interested in expanding
beyond what is necessary.
Number 2131
REPRESENTATIVE MURKOWSKI referred to the map in the bill packet
which specifies the states that allow the use of oral
pharmaceutical agents by optometrists in the treatment of eye
disease. She asked if SB 78 is more expansive than what the other
states allow with the use of oral medication [by optometrists].
DR. GONNASON answered that SB 78 is more expansive than some
[states] and less expansive than others. Of the 37 states that
allow the use of oral pharmaceutical agents by optometrists, he
estimated that about five states allow a little more than SB 78 as
those states do not restrict the schedule IIA drugs. He estimated
that SB 78 is similarly aligned with about half of the states, with
the remaining states having a more restricted authority. Of those
states with the more restricted authority, Dr. Gonnason said that
those states passed those laws early on and are now seeking
amplification of those laws. Dr. Gonnason estimated that "we"
[Alaska, with SB 78,] would be in the top third of those states in
regard to prescriptive authority.
REPRESENTATIVE MURKOWSKI asked if the treatment of anaphylaxis
treatment would always be an emergency response situation.
DR. GONNASON replied yes. He explained that anaphylaxis is a Type
I allergic reaction and, systemically, it is an emergency.
However, a person can receive a anaphylactic reaction locally such
as when a person receives a mosquito bite to the eyelid, which
instantly puffs up. Such anaphylaxis is not treated with the "epi
gun." He noted that this language is similar to that in almost all
other states.
Number 2248
SENATOR MACKIE requested that Dr. Gonnason speak to the concern
regarding how pharmacists would know who is qualified to issue
prescriptions and who is not. Senator Mackie understood that there
are 80 optometrist in Alaska, of which about 75 are qualified to
issue prescriptions. He further understood that the state would
have to issue an endorsement/certification in order to do this. He
requested that Dr. Gonnason describe how this would all work.
DR. GONNASON explained that basically, the state gives optometrists
their licenses which note a pharmaceutical agent and prescription
use endorsement. Once this law first went into effect, he had to
go to all the pharmacists he knew and provide them with a copy of
his license. Furthermore, the Division of Occupational Licensing
has a copy of all those [optometrists] that are certified.
Basically, the optometrist would make that information available to
the pharmacist. In regard to the endorsement, Dr. Gonnason
stressed that this [SB 78] does not grandfather in anyone.
REPRESENTATIVE MURKOWSKI asked if there is any ongoing [education].
DR. GONNASON interjected, "Yes, 18 hours per year." If the
optometrist does not have the drug authority, then he/she would
only need 12 hours [of continuing education]. In further response
to Representative Murkowski, he pointed out that the board requires
an extra six hours of education in disease management and
pharmacology. With the passage of SB 78, the board may or may not
require additional requirements.
REPRESENTATIVE MURKOWSKI said that she would like to think that
there would be a different set of standards on top of those
[already in place].
DR. GONNASON informed the committee that almost all of the
optometrists in the state took a 100-hour drug training course in
1982. This training course covered the treatment of diseases
because it was thought that optometrists would have drug authority
in 1982. However, it took 10 years before such passed in 1992. He
emphasized that everyone was required to take that [drug training
course] again, which had been updated and included the training for
systemic drugs. Therefore, everyone who currently has a
pharmaceutical agent and prescription use endorsement has the
systemic training, although that portion of the 1992 legislation
was given up in a compromise. This bill, SB 78, would simply
restore that which was compromised eight years ago. He
acknowledged that the board could require, through regulation, that
optometrists need to receive further training. Dr. Gonnason said,
"I can assure you that none of my colleagues would not be
prescribing anything that they weren't completely comfortable with.
Why would they? There's no financial remuneration in it and we're
very conservative." He pointed out that optometrists are primary
care practitioners that handle routine cases. He informed the
committee that he is in a building with family doctors, who send
him all the eye cases. However, if it is a case in which he is
uncomfortable, he refers the patient to a ophthalmologist; that is
how the system works. He attributed that system to be the impetus
for the better relationship that the optometrists and
ophthalmologists have in Anchorage. Therefore, he did not believe
that ophthalmologists have any serious opposition to SB 78.
TAPE 00-40, SIDE B
CHAIRMAN ROKEBERG referred to Mr. Hodges letter, which says that
ophthalmologists "are under some pressure to remain quiet. If any
single ophthalmologist speaks out against the bill, then that
person runs the risk of loosing referral business from optometrists
...." Chairman Rokeberg turned to Dr. Ford's testimony.
Number 0025
DR. ROBERT FORD, Ophthalmologist, testified via teleconference from
Las Vegas. He informed the committee that he has had a practice in
Anchorage for about the last three years. He also informed the
committee that he is the owner and founder of Pacific Cataract and
Laser Institute, which employees six other ophthalmologists and
about 15 optometrists. As mentioned earlier, he noted that he has
worked closely with optometry in co-management for the last 15
years. Dr. Ford completely agreed with everything Dr. Gonnason
said.
DR. FORD stated that he believes that the State of Alaska needs
this bill to be passed. There are so many patients who could have
an episode of acute glaucoma or something requiring a systemic
medication. It is simply not practical for [some of] these people
to see an ophthalmologist soon enough to handle it. He pointed out
that it does not help to see a general M.D. as a general M.D. would
not have the knowledge, although he/she would have the prescriptive
authority. Dr. Ford said that he knew this to be the case as his
father was an excellent family doctor, but not an eye doctor and
thus did not understand the eye as well as optometrists do.
DR. FORD turned to the issue of whether this would be safe and
whether there is adequate training. He pointed out that as an
ophthalmologist, he is legally qualified to prescribe any kind of
medication, including cancer chemotherapy. However, he said that
he does not prescribe such [medications] because he does not
understand them. Dr. Ford said, "Basically, it becomes a matter of
my integrity to only prescribe things I understand." He noted that
most of the drugs he prescribes now are new drugs, new since his
training. Therefore, any drug he chooses to use he must read up on
it and obtain education on the drug before using it. Basically,
that is the same system that the optometrists will use. Even if SB
78 passes, optometrists will have the legal ability to prescribe
medication they do not understand and thus everyone will have to
depend on their professional integrity as is the case with all
other professionals.
CHAIRMAN ROKEBERG asked if Dr. Ford agreed with the ASMA's
statement that this is not a turf issue, but rather a quality of
care issue.
DR. FORD specified that it is not that simple. There are important
questions in regard to safety, which is a quality of care issue.
However, most of the strong feelings that exist are based on turf
issues.
Number 0173
CATHERINE REARDON, Director, Division of Occupational Licensing,
Department of Community & Economic Development, specified that her
division staffs both the [State] Medical Board and the Board of
Optometry. The Optometry Board is on the record as strongly
supporting SB 78 and the Medical Board has not taken a position on
this issue.
CHAIRMAN ROKEBERG requested that Ms. Reardon explain the
requirements and regulations for optometrists in regard to their
continuing education and anything that relates to medications or
drug dispensing.
MS. REARDON explained that AS 08.72.175 allows the board to issue
endorsements authorizing a license holder, an optometrist, to
prescribe and use the pharmaceutical agents described in the
statute being amended [under SB 78]. Therefore, the board has that
authority and has adopted regulations doing that. When the board
adopted regulations, the board decided to do two different sets.
One set of regulations is geared towards optomotrists who can use
the topical drugs and the other set of regulations is geared
towards optomotrists who can prescribe and use. She believes that
two track system was established because perhaps, there were some
optometrists whose training was not as recent or as comprehensive.
Ms. Reardon pointed out that the regulation 12 AAC 48.025 for the
prescription and use endorsement says, "An applicant for that
endorsement must submit documentation of an average of 12 contact
hours of approved continuing education in ocular pharmacology or
pathology for each complete calendar year since the date of the
exam that they had to pass initially on treatment and management of
ocular disease." She noted that this would be the case unless the
exam was passed within two years of the application for the
endorsement. She noted that the regular optometry license
[requires] some continuing education.
Number 0305
REPRESENTATIVE HALCRO related his understanding, from Ms. Reardon,
that optometrists are not currently required to have E&O insurance.
MS. REARDON stated that almost none of the professions licensed
through the division are required to have malpractice liability
insurance.
REPRESENTATIVE HALCRO said, then, there is not a difference between
levels of the profession in which one level would be required to
have malpractice insurance and the other does not.
MS. REARDON replied no.
REPRESENTATIVE MURKOWSKI turned to the issue of notifying people,
pharmacists, whether one is on the prescribe and use list. She
inquired as to how problematic this could be. For example, what if
a pharmacy receives a call, on a Saturday night, from an
optometrist prescribing a medication that would be allowed under SB
78. If the division's offices are not open for confirmation, would
the pharmacy fill the prescription even if there is nothing on
record saying that the optometrist could prescribe the medication.
Or would the pharmacy err on the side of caution?
MS. REARDON pointed out that pharmacists do bear some professional
responsibility for making those decisions and thus some may always
decide to err on the side of caution. She noted that Alaska
receives many visiting doctors, and therefore there are potentially
a lot of new faces that a pharmacists would see. Currently, the
pharmacist may be requesting a copy of the optometrist's license,
which shows the endorsement. Perhaps, some pharmacists will refuse
to allow the prescription until [he/she can verify the endorsement
of the optometrist when] the division office opens. Ms. Reardon
informed the committee that [the division] has an Internet site
where people can look up who is licensed, which she indicated would
ultimately reach the point where people would probably feel
comfortable using the site. She suspected that many late night
pharmacy calls would be an emergency situation.
CHAIRMAN ROKEBERG asked if anyone else wished to testify on SB 78.
There being no one, Chairman Rokeberg closed the public testimony
on SB 78. He then inquired as to the will of the committee.
Number 0491
REPRESENTATIVE MURKOWSKI recalled Dr. Gonnason's comments that the
ophthalmologists are okay with SB 78. However, upon the advice of
Dr. Hodges, she called two ophthalmologists both of which were
opposed to it [SB 78]. Therefore, she commented that she did not
believe the turf wars are over. She acknowledged the concern in
Alaska that there are many areas where there is not an
ophthalmologist.
REPRESENTATIVE HALCRO recalled that last year there was a similar
situation with the psychologists and the psychiatrists. He asked
if that bill is still in the committee.
CHAIRMAN ROKEBERG indicated that to be true.
REPRESENTATIVE HARRIS spoke in favor of SB 78 as 37 other states
are doing similar things without serious problems.
Number 0610
REPRESENTATIVE HARRIS moved to report SB 78 out of committee with
individual recommendations and the accompanying zero fiscal note.
There being no objection, it was so ordered and SB 78 was reported
from the House Labor & Commerce Standing Committee.
The committee took a brief at-ease from 4:27 p.m. to 4:32 p.m.
HB 339-CFAB LOANS FOR TOURISM & NAT RESOURCES
CHAIRMAN ROKEBERG announced the next order of business is HOUSE
BILL NO. 339, "An Act authorizing the Alaska Commercial Fishing and
Agriculture Bank to make loans relating to tourism and development
or exploitation of natural resources."
Number 0707
SUSAN SPRINGER, Proprietor, Herring Bay Mercantile, testified via
teleconference from Soldotna. She stated she has owned small
businesses in Seldovia since 1989. For the past six years, she has
owned a retail gift shop. In the summer of 1994, she and her
husband purchased a lot from the city, constructed a building and
opened Herring Bay Mercantile less than a year later. Because of
their income and expense ratio at the time, they did not seek
conventional bank financing and, instead, relied on family
financing. She feels fortunate to have had that available,
otherwise they could not have undertaken the building and opening
of their business. Herring Bay Mercantile made a profit its very
first season and has been profitable each year since then. She
said their business contributes sales tax, property tax, revenues
to the community, provides a service for residents and a draw for
tourists. It employs people in areas ranging from snow plowing to
computer consulting. She said it "donates to absolutely
everybody." She commented that since their business has been
successful the Homer branches of the National Bank of Alaska and
the First National Bank of Anchorage have made field trips to
Seldovia urging them to borrow money because they are a very low
credit risk. She pointed out that six years ago, when their
balance sheet was not as appealing, their business possessed the
same qualities that it does now. These qualities are vision,
talent and tremendous drive which helped make their business a
success. She said she feels strongly that there are more potential
entrepreneurs like herself out in rural Alaska and many communities
stand to benefit from new business. However, how many of those
potential entrepreneurs do not qualify for conventional bank loans,
but still have the skills to be successful.
MS. SPRINGER further commented that she and her husband purchased
a commercial fishing vessel through CFAB [Alaska Commercial Fishing
and Agriculture Bank]. They found CFAB to be thorough, helpful and
easy to deal with. In 1996 and 1997, she served on a statewide
task force that evaluated the effectiveness of small business
assistance programs. The task force found that CFAB was well
respected for its support of small fisheries business development
through the fisheries business assistance program which was
operated by the Alaska Business Development Center. The task force
hired Dr. Julia Melkar (ph) of the University of Georgia's
Department of Public Administration and Urban Studies. Dr. Melkar
(ph) developed and mailed out approximately 4,000 surveys to small
Alaskan businesses. Nearly 1,500 of those surveys were filled out
and returned, which is a 42 percent response rate. Of the 1,500
who responded, around 40 percent were from urban Alaska and 60
percent were from rural Alaska. One of the questions the survey
asked was: In your opinion, what is the single most important
thing that the State of Alaska can do to assist small businesses?
Although there was a wide range of responses, the most frequent
response was that there is a need for state assistance in access to
capital, marketing and financial management. The respondents were
very specific about the need for access to low-interest loans for
business start-up. The respondents also felt the state should make
loans readily available over the long-term. They felt that
existing loan processes should be streamlined by limiting the
amount of paperwork and redundancy. Assistance with loans was
viewed as a way for small businesses owner to finance start-up
costs and have ready access to capital which then could be utilized
for equipment, renovations, marketing, advertising and other
things.
MS. SPRINGER commented:
If the conventional banking establishment in Alaska is
doing an adequate job of reaching out to and serving
small business people and potential small business
people, then why did our survey find that access to
capital is one of primary challenges to small, Alaskan
entrepreneurs trying to establish themselves in business?
Last month, the First National Bank of Anchorage reported
1999 reduced net earnings of about $28 million. CFAB's
1999 gross earnings were in the neighborhood of $3
million, yet the First National Bank of Anchorage and the
Alaska Banking Association apparently opposed this bill.
The earning statements alone should tell you that CFAB
serves a niche clientele and I don't believe it poses a
significant threat to the prosperity of the conventional
banking establishments. In conclusion, I serve on the
boards of the Alaska Tourism Marketing Council, the
Alaska Travel Industry Association and I'm also in my
second term on the Seldovia City Council. And if these
three bodies share one common niche and one common scene,
it is the need to support small businesses and enhance
economic development in Alaska. I think that you have
before you, with HB 339, the opportunity to give Alaskan
entrepreneurs a tremendous shot in the arm, and the
lovely part of this is that you don't have to scrape
together any scarce state dollars in order to do so.
Number 0985
CHAIRMAN ROKEBERG asked why CFAB would have any different lending
standards than a commercial bank.
MS. SPRINGER replied that she does not think it is the lending
standards, but rather the lending climate. The task force found
that the conventional banking climate was not user friendly to
small entrepreneurs. Many people did not know how to write a
business plan in order to satisfy the requirements of the
conventional banking community. There are all kinds of state
programs that walk some of these people through writing a business
plan because of that. The focus of CFAB has been oriented towards
more small loans and more user friendly [loans]. It is her
assumption and her expectation that CFAB would serve this niche
market better than the conventional banking establishment presently
does.
Number 1057
JERRY WEAVER, Senior Vice President and Manager of Commercial
Loans, National Bank of Alaska; and Secretary/Treasurer, Alaska
Bankers Association, testified via teleconference from Anchorage.
With respect to the proposed committee substitute (CS) for HB 339,
he stated that the Alaska Bankers Association finds it
significantly improved. However, the bill still has one flaw that
would cause opposition to it. The proposed bill would effectively
permit CFAB to make loans to all Alaskan business enterprises while
preserving a very important niche monopoly for CFAB; this has been
one of their concerns with CFAB since the first day. He pointed
out that CFAB is an exclusive, private lender and the only one
which can legally finance the purchase of state limited entry
permits, which are now viewed by the market place as collateral.
Therefore, the ability to finance those permits should be permitted
to all lenders. He noted that CFAB began giving this exclusive,
private lending niche 19 years ago when the marketplace was vastly
different than it is today with IFQs [Individual Fishing Quotas],
CDQs [Community Development Quotas] and other intangible fishing
rights that are associated in the industry. The banking industry
actively finances those now. He stated, "Mr. Chairman, if this
small amendment is added to HB 339, the Alaska Bankers Association
will become an active supporter of this legislation."
CHAIRMAN ROKEBERG asked Mr. Weaver if he is aware that the fishing
community and the state wish to maintain a limited entry permit not
as personal property for the purpose of making it "not attachable
by the IRS as chattel and, additionally, so as to not allow for the
sale of limited entry permits to non-Alaska residents."
MR. WEAVER replied that the IFQ would certainly be almost identical
and it would be argued that it is not personal property. He said
he thinks it's time to recognize that there should not be one
exclusive lender. Mr. Weaver related his belief that if more loans
were permitted against these permits, the value would rise and the
cost of borrowing against them would be less for the commercial
fishing industry.
Number 1241
REPRESENTATIVE HALCRO made a motion for the adoption of the
proposed committee substitute for HB 339 [LS1285\G, Utermohle,
3/9/00]. There being no objection, CSHB 339 (L&C), Version G, was
adopted by the House Labor and Commerce Standing Committee.
Number 1294
REPRESENTATIVE HARRIS made a motion to move CSHB 339(L&C) out of
committee with individual recommendations and the attached fiscal
notes.
REPRESENTATIVE MURKOWSKI objected for the purpose of discussion.
She appreciates what the sponsor of the bill has done in an attempt
to accommodate her concerns. She said:
This is wide open. If we're going to open it to tourism
and natural resources and oil drilling and gas drilling
and coal and everything else under the sun, CFAB
shouldn't be called CFAB anymore. It's a fishing and
agriculture and it seems like we've strayed a long way
from the purpose. Some side bars have been put in here,
but I'm still uncomfortable. As I read, we can make
these loans up to $5.5 million and as long as you use
just a majority of it in tourism -- and the definition of
tourism is very broad [and] very expansive. And the
definition of natural resources are very expansive and
I'm just not comfortable with it.
REPRESENTATIVE HALCRO explained that, at a previous hearing on HB
339, the committee debated the financial footing of CFAB. He
agrees with Representative Murkowski. He stated:
This brings to mind another piece of legislation that's
floating around out there where you've got the Joint
Insurance Association [JIA] wants to act as an insurance
company...like CFAB, set up for a very specific reason
when the market needed and the small guys needed help,
and now that they have solid footing in going forward,
they want to act like a bank. And I say, if they want to
act like a bank, or, in the other case, act like an
insurance company, more power to them, but they need to
play by the rules. I know we're all sensitive on this
committee to government competing with private
enterprise, but this is one of those things where I think
you have to step back and say, "Okay. Yeah, it might be
good for the small guys, but, in the end, should they be
playing under the same rules as everybody else in the
same competitive market place."
CHAIRMAN ROKEBERG commented that the bill is also troubling for
him, specifically with respect to underwriting. He stated:
I seem to sense the implication from testimony that a
vote against this bill is like a vote against small
business. I just want to go on the record saying that
I've been a small business person for over 30 years in
the State of Alaska and I've never needed a state
subsidy.
REPRESENTATIVE MURKOWSKI removed her objection.
CHAIRMAN ROKEBERG stated that CSHB 339(L&C) moved out of the House
Labor and Commerce Standing Committee with no objection.
HB 386-BREWPUB LICENSES
CHAIRMAN ROKEBERG announced the next order of business is HOUSE
BILL NO. 386, "An Act relating to brewpub licenses." Chairman
Rokeberg informed the committee that he intended to take all the
testimony on HB 386 and depending upon the testimony, he doubted
that the bill would move out of the committee.
Number 1615
REPRESENTATIVE HALCRO, Alaska State Legislature, testified as the
sponsor of HB 386. He explained that HB 386 was introduced after
one of his constituents [brought this problem to his attention].
This constituent has one of the few brewpub licenses in the state
and thus they own a brewery and a restaurant. The problem, the
limit of 75,000 gallons of beer [manufactured] per year [under a
brewpub license], surfaced when they attempted to open a second
restaurant in Anchorage. With a second restaurant, they will reach
the aforementioned limit in September or October and won't be able
to sell their own beer in their own restaurant. Representative
Halcro acknowledged the concerns from some of the small brewers and
stated that he was open to ideas such as limiting [the manufacture
of] anything over the 75,000 gallons per year to be strictly sold
within the [restaurant]. He specified that it is not his intent to
create a "super brewery" as some of his opponents have charged.
The intent was simply to allow this company that was opening a
second location the ability to sell its own beer in its own
restaurant. Representative Halcro noted that there is a proposed
committee substitute (CS), which merely tightens the language in
the title.
Number 1756
REPRESENTATIVE MURKOWSKI moved that the committee adopt the
proposed CSHB 386, version LS1469\G, Ford, 3/31/00, as the working
document. There being no objections, it was so ordered.
CHRIS ANDERSON, Co-Owner, Glacier Brew House, testified via
teleconference from Anchorage. He stated that he didn't have a
problem with increasing [the amount of beer manufactured under the
brewpub license] from 75,000 to 150,000 gallons. Although the
Glacier Brew House will not be affected by this legislation in the
short term, he anticipated being in the same situation as the
Moose's Tooth by this time next year [because] the Glacier Brew
House is in the process of opening its second restaurant in May.
Mr. Anderson informed the committee that the local production is
only about 7 percent of the total beer served in the state.
Therefore, the target is not the local breweries. In fact, he
expressed the need to expand beer production throughout the state
through brewpubs or breweries. Personally, Mr. Anderson didn't see
any reason to have a limit at all. However, if the [limit in the
manufacture of beer under a brewpub license] is to be 150,000 this
year, he fully supported that [amount].
Number 1897
DOUG GRIFFIN, Director, Alcoholic Beverage Control (ABC) Board,
testified via teleconference from Anchorage. He informed the
committee that he was present in order to answer questions and
observe as the board does not have a formal position on this.
However, the ABC Board has talked with many of those involved in
this matter. He noted that the ABC Board also shares some of the
concerns of Representative Halcro in regard to competition and what
can been done to maintain the health of the industry as a whole.
REPRESENTATIVE HALCRO pointed out that last year HB 69 made folks
such as Mr. Anderson purchase a beverage dispensary license, which
cost about $125,000 to $150,000, in order to be able to open
another restaurant. He asked if Mr. Griffin saw the need for, what
Representative Halcro considered, fairness. Two restaurants have
had to [purchase a beverage dispensary license] simply because
competitors have raised a fuss and now these [two restaurants] are
in a spot with the opening of additional locations that only serve
beer. He asked if the ABC Board has discussed that matter.
MR. GRIFFIN answered that the board itself has not had discussions
on that matter; however, he has had discussions with the Chairman
of the ABC Board, Mr. Robert Klein, who is probably a good
indicator of how the board would view this. Mr. Griffin related
his belief that the ABC Board and Mr. Robert Klein would not have
a problem raising the limit on the amount of beer manufactured for
sale within [the brewpub's] own restaurant. He believes the big
concern was in regard to competing with breweries in the
marketplace as a whole and competing with other tap lines in other
bars. Although [the brewpubs] did have to purchase a beverage
dispensary license, these [brewpubs] have the benefit of the income
generated by the operation of the restaurant and the bar to
subsidize the marketing of their beer in competition with the
brewers, who only have one means of support [income]. The brewers
only have the sale of their beer as a means of support. Therefore,
Mr. Griffin didn't believe that the ABC Board would find it
problematic to raise the limit of the manufacture of beer in order
to have enough beer to sell in the restaurant. However, if the
desire is to raise the limit [for these brewpubs] so they can
market their beer in competition with other beers that are in the
marketplace, then that creates the problem.
Number 2163
REPRESENTATIVE HALCRO reminded everyone that last year part of the
opposition from some of the brewpubs was directed at the $125,000
to $150,000 beverage dispensary license [that the brewpubs had to
purchase in order to expand] even though they didn't want to serve
hard liquor. Therefore, the notion that these brewpubs would make
up that cost through bar sales is off-the-mark as the desire was to
merely open a new location. Representative Halcro asked if Mr.
Griffin felt that the ABC Board would be amenable to inserting
language to the effect that any beer manufactured over 75,000
gallons would have to be sold in the [brewpub's] restaurant.
MR. GRIFFIN indicated that the ABC Board would probably [be
amenable] to [language] such as that. However, he didn't know how
that would be regulated, specifically what gallons are sold at
which establishment and thus there may be some technical aspects
that require consideration. Mr. Griffin noted that he provided
committee staff with a provision that was in the ABC Board's bill
[SB 138] from the last legislature. The provision refers to a
"soft cap," which means that if a brewpub believes that it will
exceed the 75,000 limit in September or October, the brewpub [would
need] to petition the board and request a waiver in order to
produce more [beer]. At that time, the board could query the
brewpub as to why they need to exceed the limit, where [the beer]
would be sold and how many tap lines [that particular brewpub] has
in other parts of the state. Based on the responses from the
brewpub, the board could determine whether or not to grant the
waiver. He also noted that regulations could provide a framework
in regard to how [such a decision] would be applied. He viewed
this as a way for the legislature to delegate this matter to the
wisdom of the board that regulates the industry.
CHAIRMAN ROKEBERG pointed out that the economic interest provision
of the existing statute prohibits a brewery from owning a
restaurant. He asked if that is the root cause of the problems and
the legislation that occurred last year.
MR. GRIFFIN agreed that [the economic interest provision] is part
of the problem.
TAPE 00-41, SIDE A
Number 0018
MR. GRIFFIN reviewed the situation with the Glacier Brew House and
the Moose's Tooth, their desire to expand, which resulted in last
year's discussion and the conversion of these breweries to
brewpubs. Due to the conversion from the brewery to the brewpub
model, they were given additional flexibility - that brewpubs
didn't have [before] - to be able to sell their product
off-premise. He believes that is the point at which the breweries
became concerned because the 75,000-gallon limit was a safeguard
[in regard to the brewpub's ability to market their beer beyond
their own restaurants]. He reiterated that this [problem] began
with the original model which was "cut out from under them," which
left them scrambling. He commented that he has sympathy for all
parties involved in this matter. Therefore, he indicated the need
to arrive at some balance for everyone, which may be placing this
matter in the hands of the board in order to come to a resolution
in an open meeting with all involved parties.
CHAIRMAN ROKEBERG informed everyone of his position that if the
Alaska State Senate would agree to the elimination of the economic
[interest] provision, that would allow any brewery to own its own
restaurant and vice versa. However, he believes that last year's
legislation [illustrated] that the cap is present for a reason, [in
order] to differentiate between the brewpubs and the breweries.
Number 0251
LISA PELTOLA, Beer Sales and Office Manager, Midnight Sun Brewing
Company, testified via teleconference from Anchorage. She informed
the committee that she would read the letter in the committee
packet from Mark Staples, President/Owner of Midnight Sun Brewing
Company. She read the letter as follows:
This letter is to voice my opposition to HB 386. HB 386
is designed to help two brewpubs, which currently hold
"super licenses". The super license, passed under last
year's HB 69, allows owners of dispensary licenses to
sell up to 75,000 gallons of beer. The 75,000-gallon cap
was designed to allow these license holders to produce as
much beer as they need to satisfy the demands of their
own bars. Both of these license holders have essentially
reached or are close to reaching maximum beer sales based
on square footage and seating capacity. At their
maximum, the demand from their own bars is far under the
75,000-gallon cap. It is not feasible that demand from
either of these bars will exceed 75,000 gallons.
The true reason for HB 386 is that both of these brewpubs
are selling significant amounts of beer to other bars and
restaurants. The current super license puts breweries at
an extremely competitive disadvantage as it allows these
businesses to sell to other bars, restaurants and events
at lower prices as a way to promote their own
establishments. By undercutting the pricing of other
Alaskan breweries and at times offering free beer, these
super license holders are undermining the Alaska "free
enterprise" beer market. By promoting their beers and
pubs with near-cost beer prices to other bars and
restaurants, they increasing [increased] their own
brewpub business where highly profitable sales are made.
A recent example is that Glacier Brew House gave free
beer and bar service to the Anchorage Nordic Ski
Association's annual ski train event. Midnight Sun has
sold beer to this event in 1997, 98 and was scheduled to
in 99 before it was canceled. While Midnight Sun
certainly cannot afford to donate beer free to such
events, ... these events still remain our bread and
butter and Glacier Brew House merely uses it as a
promotional vehicle to draw customers to its
establishment. I'd like to have that every event, big or
large, every draft account for Midnight Sun is our bread
and butter; it's what keeps us alive.
The spirit intended in last year's HB 69 was clearly
designed to allow the brewpubs to make enough beer to
satisfy the demands of their onsite customers. This new
bill goes beyond these intentions, increasing the
75,000-gallon limit would create full production and
distribution breweries fronting as brewpubs.
Super license holders are selling or have sold beer to
the following establishments: Humpy's, Harry's, Simon's
and Seifert's, Snow City Cafe, Southside Bistro, Piper's
at West Coast Int'l Inn, Outback, Cattle Company,
Sitxmar, Chair 5, Upper One in the Anchorage airport and
many others.
By passing HB 386, you're sabotaging Alaska's brewing
industry. Breweries work very hard to play by the rules
and please don't let a couple of brewpubs destroy fair
business in Alaska.
If you look at the profits made by brewpubs versus
breweries, its clear to see this bill could easily
jeopardize some of the current breweries operating. It
takes away our bread and butter.
Thank you for taking time to understand Midnight Sun's
position.
Number 0510
LARRY HACKENMILLER, Club Manchu, testified via teleconference from
Fairbanks. He noted that he agreed with the statements in regard
to why HB 69 was passed last year and why the 75,000-gallon limit
was established. Mr. Hackenmiller thanked Mr. Anderson for
basically making his point; he reminded the committee of Mr.
Anderson's testimony that indicated he didn't know why there is a
limit, but if the limit is 150,000 gallons this year, then that is
what he would "go for." Mr. Hackenmiller said, "The intent here is
special interest, if you will, would be to just have whatever they
want to have." He informed the committee that his point of view is
not as a brewer, but [as a] full beverage license holder as he has
a tavern. He further informed the committee that there are certain
restrictions [with taverns]. For instance, if alcohol is sold by
the drink, [the establishment] is not allowed to give away free
alcohol. If a brewpub is allowed to [provide free alcohol] under
the full beverage license, then the brewpub has an exception to the
rule. He didn't view that as very competitive. Furthermore, if
one has a package store license, consumption is not allowed on the
premise while consumption can occur on the premise of a brewpub.
MR. HACKENMILLER stated that one of the reasons an ABC Board exists
with regulations as well as a distinction in licenses is in order
to ensure that one doesn't cross the lines. For example, if one
has a package store in the same building as a full beverage
license, these have to have separate doors. These strict
guidelines exist for a purpose, although those have been set aside
for brewpubs. In essence, any restrictions imposed on a package
store license or a full beverage license [don't apply] to a brewpub
and now the desire is to increase the cap to 150,000 gallons. He
remarked that [the brewpubs] will probably come back next year [to
raise the cap]. He inquired as to the purpose behind this and
refuted the notion that the purpose is for consumption on their own
premises. Therefore, Mr. Hackenmiller emphasized his opposition
to HB 386 and raising the cap to the 150,000-gallon limit. He
further emphasized that he is tired of returning year after year to
deal with brewpub rights, exceptions and grandfather rights. He
indicated that brewpubs seem to be moving towards eliminating Title
IV. In conclusion, Mr. Hackenmiller also suggested that HB 386
should be referred to the Judiciary Committee as there are unfair
conflicts between what brewpubs are allowed versus full beverage
licenses.
CHAIRMAN ROKEBERG agreed with Mr. Hackenmiller; however, he wasn't
sure HB 386 needs to have a referral to the Judiciary Committee.
REPRESENTATIVE HALCRO asked if Mr. Hackenmiller brews his own beer.
MR. HACKENMILLER replied no and specified that he is basically a
tavern as he does not have a brewery or brewpub.
REPRESENTATIVE HALCRO asked if Mr. Hackenmiller would support a
provision specifying that any beer produced over the 75,000 gallons
would have to be sold in that brewpub's own restaurant. He asked
if Mr. Hackenmiller would support giving the ABC Board the ability
to make special determinations when situations arise.
MR. HACKENMILLER replied no because it would be too ambiguous.
Furthermore, it would allow the ABC Board to make decisions based
on political pressure. He felt that the ABC Board's job should be
as easy as possible with clear [lines].
Number 0761
MATT JONES, Co-Owner, Moose's Tooth Pub & Pizzeria, testifying via
teleconference from Anchorage, noted his support of HB 386. He
informed the committee that the Moose's Tooth is about to open a
second location and within a couple of months of operation, "we'll"
be out of beer. Mr. Jones turned to the prior suggestion that any
amount over the 75,000-gallon limit be sold only in [the brewpub's]
own establishment. In regard to how that would be tracked, he said
that it would be easy to track that as brewpubs already have to
indicate, on a monthly basis, where their beer went on the
Department of Revenue tax forms. He then turned to the suggestion
of providing the ABC Board the ability to make special
determinations when situations arise. He felt that a
regulatory/discretionary process with the ABC Board would be an
unknown result. For example, the ABC Board granted the brewpubs
an exception to have live entertainment beyond 11:00 p.m. one night
a month. After receiving complaint(s), that [exception] was
decreased to nine times per year.
MR. JONES turned to the charge that this would create a super
brewery. He agreed that there hasn't been a level playing field
between the breweries and the brewpubs. Perhaps, the only time it
ever was a level playing field between those two, was prior to 1996
when one could open a restaurant and a brewery or have a brewpub.
He said that he would like to have a level playing field, which he
indicated would require parity between the instate breweries and
brewpubs as well as parity between Alaska and the Lower 48. There
are breweries in the Lower 48 that have their own pub and are
allowed to brew as much beer as they can sell. Some of the large
micro breweries in the Northwest distribute a good portion of their
beer into Alaska and thus companies in Southcentral Alaska have to
compete with companies [from the Lower 48] that run a brewpub and
a production brewery. Therefore, Mr. Jones reiterated the need to
review parity within the state as well as with the Lower 48. He
remarked that the reason some [brewpubs] are successful is because
"we" made a better product for cheaper not because someone had an
advantage. In response to the charge that the [the brewpubs] sell
a lot of beer off-premises, Mr. Jones informed the committee that
last year [the Moose's Tooth produced] about 1,500 barrels of which
about 200 went to taps, which amounts to about 13 percent. He
expressed the desire for that number to grow; however, he didn't
view the Moose's Tooth as a ruthless brewery [taking control] of
tap handles left and right.
CHAIRMAN ROKEBERG inquired as to Mr. Jones' current production
level.
MR. JONES answered that currently, [the Moose's Tooth] produces
1,500 barrels. He explained that the federal system is based on
barrels while the state system is based on gallons. Therefore,
1,500 barrels amounts to approximately 49,600 gallons. In further
response to Chairman Rokeberg, he said that his new establishment
is not open yet.
Number 1101
KAREN BERGER, Owner, Homer Brewing Company, testified via
teleconference from Homer. Ms. Berger announced that she opposed
HB 386. If the brewpubs intend to produce and serve their product
in a licensed establishment for which they are covered, it appears
that the 75,000-gallon limit per year would be sufficient. She
informed the committee that 75,000 gallons [of beer] equates to
600,000 pints [of beer]; pints are a standard measure of beer. She
further informed the committee that Mr. Anderson [as reported] by
the Anchorage Press on September 30, 1999, stated that the Glacier
Brew House had served roughly a total of 200,000 customers in their
four years of business, which would amount to an average of 50,000
customers per year. Therefore, Ms. Berger felt that the current
600,000 pints per year limit would be plenty of product for a
family restaurant that serves responsibly. However, last year's
change allowed these brewpubs to sell [their beer] in the wholesale
market as well. Breweries such as the Homer Brewing Company are
allowed to exist in the wholesale market and thus the change has
allowed brewpubs to unfairly compete with breweries in Alaska by
offering incentives to other retail, eating, drinking
establishments and package stores that cannot be afforded by those
whose primary business is the wholesale market. She pointed out
that the proposed increase to the brewing cap to 150,000 [gallons]
is desired so that [the brewpubs] can serve this wholesale market.
She further pointed out that this new limit would equate to
1,200,000 pints of beer or more than two pints per person per year
for the population of the entire state. Therefore, Ms. Berger felt
that this becomes an infringement on the three-tier system, which
protects against the brewer controlling both the wholesale and
retail markets.
MS. BERGER said that Homer Brewing Company and the other breweries
of the state have established their business based on the laws in
place and not by overbuilding and hoping to change the laws in
order to best suit their personal business plans. She pointed out,
"The combination licenses that were granted in such a nebulous way
in 1996, have been changed and provided for by last year's HB 69
and the current HB 386 to the detriment of those holding licenses
that run their businesses with the intent of the laws as they are
stated." She suggested that the change encompassed in HB 386 will
curtail future small endeavors such as the Homer Brewing Company.
Furthermore, [HB 386] will likely create a monopoly by the state's
only regional brewery, which she believes "they" don't want to
happen. Ms. Berger asked that the committee not pass HB 386 as
currently written.
Number 1307
MARCY LARSON, Alaskan Brewing Company, stated her opposition to HB
386. She informed the committee that [the Alaskan Brewing Company]
has held a brewery license since 1986 and since that time there
have been many changes in the laws. When the Alaskan Brewing
Company began no brewpubs were allowed nor was home brewing and
thus everything was fairly clear; she agreed with some of the
brewers that that situation was not the best. She informed the
committee that she enjoyed having a lot of brewers, but the problem
becomes the balance. Currently, there is a brewpub license and a
brewery license. She explained that the brewpub license is meant
to rely upon the on-premise retail sales, while the brewery license
is meant to rely on the wholesale sales to distributors and outside
markets. She acknowledged that there have been bumps along the way
with the simultaneous openings of restaurants and breweries.
Furthermore, the balance includes the other liquor license holders
as well. Although it seems simple to raise the limit, it is
complicated. Ms. Larson informed the committee that 75,000 gallons
of beer is approximately 5,000 kegs per year, which would amount to
100 kegs a week. Therefore, it would be a fairly large bar that
puts through that quantity and thus she indicated concern in regard
to doubling that amount. In regard to the idea of capping [the
amount over 75,000 gallons] sold to wholesale venues, that business
could sell the entire 75,000 to the outside markets. Perhaps, one
suggestion would be to eliminate the wholesale aspect of the
brewpubs and focus them on their establishments [where they could
sell whatever amount they wanted]. Ms. Larson expressed
frustration with this brewpub law that has had five amendments
since its inception and every time the slope gets [more slippery].
Therefore, she expressed the need to develop something stable that
everyone can agree upon.
REPRESENTATIVE HALCRO asked if Ms. Larson would support eliminating
all of the restrictions, which would allow a brewer to open a
restaurant.
MS. LARSON answered that there would be many things to take into
consideration. She identified a problem in that [the brewer] can
be a wholesaler, a retailer and a supplier; the brewing industry
would be the only ones having that kind of total freedom. She
didn't know if that would fly.
CHAIRMAN ROKEBERG returned to his earlier comment that the economic
interest clause has caused many of these problems. He mentioned
that he would like to see that go away. If breweries were taken
out of [the economic interest clause], then breweries could do what
they wish with the proper license.
MS. LARSON interjected that the small breweries have entered
thinking that all they can do is wholesale and thus such a shift
would require utilizing retail as well in order to stay
competitive. Therefore, there could be a down side to that.
Number 1573
REPRESENTATIVE HALCRO pointed out that other states have fairly
liberal laws that allow one to brew beer and open up restaurants.
He expressed concern with the situation at hand in which a company
wants to open a second location and employee an additional 100
people; however, they are being handicapped with HB 69. He feels
that [HB 69] is unfair protectionism and he didn't feel that
competition should be held back. However, he didn't want to create
an unfair playing field and thus agreed that perhaps eliminating
all the barriers would level the playing field.
MS. LARSON informed the committee that in Oregon the McMenamins
brewpub situation was tackled by allowing every brewery the ability
to support two on-premise establishments. That situation seems to
be working. She commented that there is a different situation in
California and Gordan (ph) Beer Restaurants were brewpubs, but just
had to sale all of their restaurants and go strictly into the
brewery business due to a similar situation.
Number 1720
ROD HANCOCK, Co-Owner, Moose's Tooth Pub & Pizzeria and Brewing
Company, testified via teleconference from Anchorage. Mr. Hancock
first commented on the need to maintain free competition and noted
two failures in [this industry in the Anchorage] area: Bird Creek,
a brewery; and Railway, [a brewpub]. He pointed out that the
restaurant business is a difficult business, which has the highest
rate of failure of any business type. Therefore, he didn't view [a
restaurant] as an unfair advantage.
MR. HANCOCK informed the committee that [the Moose's Tooth's]
business plan is based on a Northwest model. In regard to
McMenamins, that brewpub is allowed to self-distribute to two
brewpubs and brew as much beer as desired to be [sold] to whomever,
although they must use a distributor [for that beer]. He then
turned to the Deschutes (ph) Brewing Company, which is not
considered a micro brewery. Mr. Hancock explained that he came
here with the [Northwest] model that was legal in 1996; the laws
changed [after] we started and the [Moose's Tooth] could not use
its brewery. Therefore, a compromise was struck with the creation
of the beverage dispensary license that would allow them to supply
multiple locations; however, now there isn't enough beer to do that
as the brewery can't be used to its potential. Mr. Hancock
reiterated that "we" are trying to fix our model that was legal to
begin with.
MR. HANCOCK acknowledged the probable frustration of the committee
in regard to the divergent views of [the breweries and the
brewpubs]. He noted his own frustration. However, he felt it
natural that one would want to restrict one's competition if there
isn't much consequence. Still, he indicated that everyone feels
that it is about beer and brewing. In conclusion, Mr. Hancock
explained that without raising the [75,000-gallon] cap, he will be
forced to contract brew in the Lower 48 where the beer would be
made and then returned to the state. Therefore, jobs would be
created in the Lower 48 and they will keep the profits. Under that
model, [brewpubs] still can't distribute their beer. Although [the
brewpubs] can aggressively promote their beer, it would be from the
Lower 48 not from the brewery that was built in Alaska.
REPRESENTATIVE HALCRO requested that Mr. Hancock provide the
committee with a brief outline in regard to competition and how
[the Moose's Tooth] markets its beer to retail establishments. He
informed Mr. Hancock that one of the opponents of HB 386, in a
letter in the committee packet, lists the establishments in which
[the Moose's Tooth] is selling beer. Representative Halcro
imagined that [the Moose's Tooth], when going into any
establishment, would have to compete for their sales just as anyone
else would.
MR. HANCOCK pointed out that he has to compete with the local
breweries as well as those from the Lower 48. Mr. Hancock informed
the committee, in regard to indications that [the Moose's Tooth] is
undercutting the market, that he lost his tap handle at the Outback
Steakhouse, where he sold a keg for $110. That is about [the
standard keg price] on the market. However, Pete's Wicked Ale came
in and sold a keg for $80.
Number 2025
GLENN BRADY, President/Owner, Silver Gulch Brewing and Bottling
Company, testified via teleconference from Fairbanks. He informed
the committee that Silver Gulch Brewing is a micro brewery licensed
by the state. He noted that the [committee packet] should include
a copy of his letter [, and an amendment,] to the committee. Mr.
Brady stated his opposition to HB 386 as currently written. In
regard to Mr. Griffin's earlier testimony, Mr. Brady generally
agreed with Mr. Griffin's ideas as well as those ideas from the
breweries. However, Mr. Brady believes that removing the barriers
to competition would open a can of worms with the holders of the
dispensary licenses and the existing three-tier system. He
indicated that the existing three-tier system is possibly too
difficult to deal with legislatively [and thus] more clear
boundaries would create a level playing field for everyone. Mr.
Brady turned to his proposed amendment, which would say that it
wouldn't matter how much [beer] was produced as long as it was sold
on the premises. Therefore, it would relieve the competition that
Alaskan breweries face in the open marketplace in that small
breweries compete, as mentioned by Mr. Hancock, with breweries in
the Lower 48 as well as with brewpubs that can subsidize the
overhead of beer production with high margin restaurant retail
sales. In regard to Mr. Hancock's comment that [brewpubs] could
possibly face turning to breweries in the Lower 48 to produce their
beer, Mr. Brady noted that [the brewpubs] could come to the
[Alaskan breweries] and thus keep the dollars in the state. In
conclusion, Mr. Brady reiterated his opposition to HB 386 as
currently written; however, he favored his amendment as a
compromise.
REPRESENTATIVE HALCRO inquired as to how many brewpubs Mr. Brady
competes against in the Fairbanks market.
MR. BRADY answered that he currently competes against two brewpubs:
the Moose's Tooth and Glacier Brew House. He specified that he is
referring to tap handle draft placements in bars in Fairbanks.
REPRESENTATIVE HALCRO clarified that he classifies a brewpub as an
eating establishment that sells its own beer.
MR. BRADY responded, then, that there are no brewpubs in Fairbanks.
CHAIRMAN ROKEBERG interjected that the product from the brewpubs is
being exported through a wholesaler to the Fairbanks' market.
Number 2192
S.J. KLEIN, President and Head Brewer, The Borealis Brewery,
testified via teleconference from Anchorage. He first noted his
appreciation of the committee's full understanding of this
[industry and this] issue. He then informed the committee that The
Borealis Brewery is a production brewery under Alaska law. He
identified the problem as the state's designation that there are
two different types of operations that make beer in the state. The
difference between the production brewery and the brewpub
designation is that the brewpub has the ability to sell beer to
itself, while the production brewery has the ability to sell beer
to anyone else. The [75,000-gallon] cap was the mechanism by which
the difference between the two was established. He explained that
the idea behind [this differentiation was that] if someone builds
a brewery [and then] wants to make it a brewpub, [the brewpub] can
only sell an amount that makes sense for what a brewery can sell to
itself. The cap was established in order that [brewpubs] could
build to a certain capacity, but [brewpubs] were given the legal
ability to sell excess capacity to a distributor to sell on the
open market. As a brewer, Mr. Klein has the specific goal of
seeing local beer produced and sold for local consumption.
Ideally, he would like to see any brewery follow the example of the
Alaskan Brewery. However, it is going to take more than raising
the cap for a specific and special interest group. Barring
returning to the level playing field, a framework exists. If the
[law/framework] is going to be changed every time the brewpub
expands or changes its business, the same problem will exist in
that production breweries will [still] be prohibited from owning a
bar or a restaurant while [brewpubs] can subsidize their breweries
with the restaurant.
Number 2355
MR. KLEIN turned to the question of where to go from here. He
suggested that first, the committee should ask itself: "What are
the goals of legislation governing the brewing industry?" He
didn't foresee anyone arguing that a goal of brewery legislation
should encourage the beer that is consumed in Alaska to be produced
in Alaska. However, a system has been created such that it is an
incredibly unfair playing field. Mr. Klein informed the committee
that, in view of this cap, he is seriously considering purchasing
a liquor license, although he is not [particularly interested] in
selling liquor. Mr. Klein said that he doesn't really want to
become a brewpub; however, he expressed the desire to have the
ability to do so if he decided he wanted to have a tap room once he
is selling beer nationwide. In conclusion, Mr. Klein reiterated
that an unfair playing field exists and this exemption makes it
more so. He said that Alaska has a good set of laws governing the
on-premise sale of liquor in the state. With the exception of the
four to six brewpubs, every bar, store and restaurant complies with
those laws. Therefore, the other license holders are opposed to
freeing the production of beer. He echoed earlier comments that
the current brewpub legislation allows brewpubs to do everything.
REPRESENTATIVE HALCRO asked if Mr. Klein sells kegs to retail
outlets or restaurants.
MR. KLEIN replied yes. He informed the committee that he has a
total of 180 accounts from Talkeetna down to Homer.
REPRESENTATIVE HALCRO inquired as to the average cost of a keg.
TAPE 00-41, SIDE B
[A portion of the exchange between Mr. Klein and Representative
Halcro was not recorded as the tape reversed to Side B.]
CHAIRMAN ROKEBERG interjected that Mr. Klein didn't have to answer
[Representative Halcro's] question.
MR. KLEIN answered that he is the most expensive beer, beer that is
made in the Anchorage area, on the market.
REPRESENTATIVE HALCRO referred to Mr. Hancock's testimony that he
is competing for the same accounts that Mr. Klein is, but Mr.
Hancock is sometimes having to walk away from accounts due to lower
beer prices from the Lower 48. The example from Mr. Hancock's
testimony was approximately $30 cheaper than what Mr. Hancock was
willing to charge. Therefore, Mr. Hancock illustrates that he
needs to make money on the beer sold to restaurants and they are
not in a position "to take a hit."
MR. KLEIN seemed to question the logic of [raising the cap] for
this situation in which [these brewpubs claim they] are going to
run out of beer in their own two establishments while selling beer
to other establishments. To Representative Halcro's point, Mr.
Klein agreed that it is a very competitive marketplace. He pointed
out that part of the pricing is tied to the amount of beer that one
makes. Although he agreed that Mr. Hancock may not have reduced
his prices, Mr. Klein felt that the way the industry is set up, a
brewpub has the ability to subsidize its beer sales through the
profits of its restaurant. Mr. Klein offered to provide examples
in which he has been bumped by other brewpubs giving away beer or
selling it at half the cost of what they sell their beer in other
markets. Mr. Klein remarked that Mr. Jones and Mr. Hancock are
very responsible restauranteurs and do an admirable job of
marketing their beer. However, the ways these laws are being
manipulated doesn't correlate with the intent of the original law.
Number 0128
REPRESENTATIVE HALCRO referred to another portion of Mr. Klein's
letter, the portion referring to special legislation. He noted
that he wasn't in the legislature in 1995 when the brewpub
legislation was passed. However, Representative Halcro viewed it
as a window of opportunity under which these folks built
restaurants and breweries because they assumed that they would be
able to grow their business under the terms of the brewpub law.
CHAIRMAN ROKEBERG clarified that wasn't the brewpub law, it was the
tavern law. The brewpubs were before that.
REPRESENTATIVE HALCRO maintained his point that brewpubs were
established as allowed by state law.
MR. KLEIN interjected that his opposition to the current state of
law began when that gap was closed; from that point forward,
everything has been thrown into a conundrum and there became an
unfair situation for businesses to compete. Therefore, he saw the
solution as returning to the freedom to brew beer as it should be
a goal of legislation to encourage local production of beer. Mr.
Klein related his belief that the brewpub designation should be
eliminated as well as the Tidehouse (ph) rule for local breweries.
Therefore, if Ms. Larson wanted to start a restaurant, she would
have to obtain a restaurant license and run that operation as a
restaurant by the rules governing restaurants. He didn't believe
too many people would argue against such a model and if they did,
he believed it would be argued out of self-interest.
Number 0252
MR. ANDERSON informed the committee that in 1999 450,000 barrels of
beer or 900,000 kegs were sold in Alaska. He stated that the
"super license" allowed him to sell 874 kegs of that 900,000.
Therefore, less than three-tenths of one percent of total beer and
keg sales was from the Glacier Brew House. He emphasized that this
is such a minor issue.
CHAIRMAN ROKEBERG noted that he has been independently involved in
this issue for a number of years. He said that he agreed with
everything everyone has said with the exception of dismantling the
three-tier system. Chairman Rokeberg reiterated his belief that
the solution to this is to eliminate the word "brewery" from the
economic interest clause, which he announced would be one of his
major goals. Chairman Rokeberg announced that HB 386 would held at
this time.
ADJOURNMENT
There being no further business before the committee, the House
Labor & Commerce Standing Committee was adjourned at 6:00 p.m.
| Document Name | Date/Time | Subjects |
|---|