CS FOR SENATE BILL NO. 9(FIN) "An Act relating to alcoholic beverages; relating to the regulation of manufacturers, wholesalers, and retailers of alcoholic beverages; relating to licenses, endorsements, and permits involving alcoholic beverages; relating to common carrier approval to transport or deliver alcoholic beverages; relating to the Alcoholic Beverage Control Board; relating to offenses involving alcoholic beverages; amending Rule 17(h), Alaska Rules of Minor Offense Procedure; and providing for an effective date." 2:52:56 PM Representative Wool MOVED to ADOPT Amendment 10, 32- LS0124\W.13 (Dunmire, 3/30/22) (copy on file): Page 51, lines 24-25: Delete "four live music or entertainment permits to a licensee in a calendar year" Insert "one live music or entertainment permit to a licensee in a calendar quarter" Co-Chair Merrick OBJECTED for discussion. Representative Wool explained that the amendment would allow one live events per quarter to occur in a brewery, tasting room, or distillery. The amendment would limit events to one event per quarter rather than unlimited events. The motivation was to put additional sidebars on individuals in the entertainment business and manufacturers of alcohol in order to avoid impacting the business of the bar industry. Representative Rasmussen thought the amendment was over- restrictive. She would be opposing the amendment. Representative LeBon agreed with Representative Rasmussen. He thought it would be too restrictive and that businesses should have the ability to schedule events as they please. He could not imagine a concert outside in January in Fairbanks. Representative Wool was not trying to impose excessive restrictions. He suggested there were seasonal rules that applied to other businesses like fishing. He did not think the idea was met with objection by individuals in the alcohol manufacturing industry. He agreed that an outdoor concert in Fairbanks in January would not make sense, but the concert could be indoors. Senator Micciche did not have a problem with the amendment. He thought it was fair. Co-Chair Merrick WITHDREW the OBJECTION. Representative LeBon OBJECTED. A roll call vote was taken on the motion. IN FAVOR: Lebon, Ortiz, Rasmussen, Thompson, Carpenter, Josephson OPPOSED: Wool, Johnson, Merrick Representative Edgmon was absent from the vote. The MOTION to adopt Amendment 10 FAILED (3/6). 2:59:40 PM Representative Wool MOVED to ADOPT Amendment 19, 32- LS0124\W.22 (Dunmire, 3/30/22) (copy on file): Page 49, line 14: Delete "10" Insert "four" Co-Chair Merrick OBJECTED for discussion. Representative Wool explained that the amendment addressed the number of events a nonprofit could hold to sell its own alcohol. Current law allowed for five events per year, and he realized that he meant to propose "five" instead of "four." Representative Wool MOVED to ADOPT conceptual Amendment 1 to Amendment 19. Co-Chair Merrick clarified that conceptual Amendment 1 would change line 3 of Amendment 19 from "four" to "five." Co-Chair Merrick OBJECTED for discussion. Representative Wool spoke to the original amendment. He reiterated that the current law allowed for five events but was raised in the Senate Finance Committee in 2020 to ten events. He wanted to reduce the number back to five. If a nonprofit wanted to have more than five events, it would have to get a catering permit. He explained that a catering permit would allow there to be alcohol sold at an event through a third party that had an alcohol license. He reiterated that the bill proposed raising the number of events to ten per year and the amendment would reduce it back to five, which was what was in current law. Co-Chair Merrick WITHDREW her OBJECTION. There being NO further OBJECTION, conceptual Amendment 1 to Amendment 19 was ADOPTED. Representative Wool reviewed Amendment 19 as amended. He thought five events per year was acceptable but ten would be excessive. 3:06:01 PM Representative LeBon asked Representative Wool if a nonprofit would be responsible for liability if it overserved alcohol to an individual at an event at a venue like the Juneau City Museum, or would the museum be responsible. Representative Wool was confident that the person serving the alcohol would be responsible. He assumed the servers at nonprofit events would have met the requirements to serve alcohol. 3:08:05 PM SENATOR PETER MICCICHE, SPONSOR, indicated the venue would not take on the liability. The nonprofit would be responsible. Representative LeBon asked if the nonprofit would be required to have an insurance policy for the event. Senator Micciche thought that liability issues that typically arose concerning large organizations did not usually involve alcohol. It was usually an issue of someone falling and hurting themselves or something similar. He was unaware of any problems in the past related to liability. He thought liability was covered at every event, whether alcohol was present or not. Representative Wool responded that when he had to buy a liquor license, he had to buy liability insurance for "slipping and falling." He had to buy liquor liability insurance separately, which was not simple to obtain. 3:10:48 PM Representative Rasmussen asked if the maker of the amendment was aware of any nonprofits that were exceeding the ten events per year limit. Representative Wool was unaware of anyone holding more than five fundraising events. If they were, they were breaking the current law. Representative Rasmussen asked why the limit of ten events per year was chosen. Senator Micciche offered the example that First Friday events would involve more than five events per year. He clarified that no one in Alaska was required to have liability insurance under state law for alcohol. However, one-time alcohol liability insurance was easy to purchase, and organizations would typically purchase this insurance for an event. Representative LeBon thought the nonprofit community would want to default to a professional when alcohol was involved. He though the amendment was reasonable. Representative Wool provided wrap-up comments on the amendment. He thought it was sufficient to permit five events per year. He understood that First Friday events also needed special event permits. 3:15:08 PM AT EASE 3:16:56 PM RECONVENED Co-Chair Merrick WITHDREW the OBJECTION. There being NO further OBJECTION, Amendment 19 as amended was ADOPTED. 3:17:15 PM Representative Wool withdrew Amendments 3, 4, 5, 6, 7, 8, 9, 11, 12, 13, 14, 15, 16, 17, 18, 20, 21, and 24. Co-Chair Merrick indicated the next amendment would be Amendment 26A. 3:18:33 PM AT EASE 3:20:22 PM RECONVENED Representative Carpenter MOVED to ADOPT Amendment 26A, 32- LS0124\W.37 (Dunmire, 4/7/22) (copy on file): Page 73, line 23: Delete "or of" Page 73, line 24, following "AS 04.11.150,": Insert "an existing brewery retail license under AS 04.09.320, an existing winery retail license under AS 04.09.330, or an existing distillery retail license under AS 04.09.340" Co-Chair Merrick OBJECTED for discussion. Representative Carpenter reviewed the amendment. The amendment would modify the language in the bill on page 73. The amendment would add winery, distillery, and brewery license types into the language of the bill. Representative Josephson provided a hypothetical scenario. He asked if a business in an outer borough did not have a liquor license if the license could be relocated back to the city of origin, thereby freeing up that license for purchase. Senator Micciche responded that the amendment was brought forward because someone had brought the issue to his attention. He agreed that if a city wanted another license to be available, but it did not quite reach the population requirement, it could borrow population from an outer borough to reach the required number. It would solve the problem for cities that may eventually cap out but had a large population in a borough that was not in the city. 3:24:44 PM Representative Josephson asked if Senator Micciche approved of the amendment. Senator Micciche responded affirmatively. There may be some potential expansion of the license allowance in another bill. Police groups could be moved between borough and city depending on the need. Representative Josephson asked whether recovery groups would think that this was a loophole around licenses for population limits. Senator Micciche understood the concern. However, it did not add new licenses, it relocated licenses. The population was already present. He noted that recovery groups were worried about a different amendment that would have added new licenses. 3:27:08 PM Representative Johnson provided a scenario where a license was transferred into a city from a borough. She asked whether the license would remain in the city or revert back to the borough once it was sold. She wondered if the licenses would become indistinguishable from each other. Senator Micciche thought members were too focused on the population amounts. He responded that the license could either stay in the city or move back out to the borough. However, there would likely be room in the borough already for another license. He spoke with a tasting room owner earlier that day who planned to purchase a Restaurant or Eating Place License (REPL) should the bill pass, which would free up their current license. Representative Johnson clarified that it would become a whole license within the city. Senator Micciche responded in the affirmative. Representative Carpenter did not read anything in statute that would prescribe that the change would be permanent. However, he thought that in the future the leaders of organizations might treat it as a quota. 3:30:10 PM Representative LeBon commented that in Fairbanks, the Fairbanks North Star Borough had about twice the population of the city. He suggested that any business would want to take advantage of the highest traffic flow, and there was a steady traffic flow from the borough into the city. The amendment would give an option for a license to be located near or within a city if the economics and the business opportunity made sense. He indicated that this was the purpose of the amendment. Senator Micciche corrected himself regarding his response to Representative Johnson's earlier question. He indicated that the license would actually become a license of the city if a business moved to the city, and it would remain a city license instead of belonging to the borough. If a business owner wanted to move their business outside of the city, they would apply under the borough's remaining population cap. Representative Johnson thought the distinction was important. Her comments were in the service of future business owners. Senator Micciche also corrected the record that a Brewery or Distillery License (BDL) could already move into a city from a borough. Representative Wool was going to make the same point as the bill sponsor. He thought that a tasting room already had to be in existence in a borough before it could be transferred to the city. He wondered if the process would be the same for package stores. Senator Micciche responded that his understanding was the opposite, and that one could apply in the borough for a city license. A business owner had to be licensed but did not have to be operating before applying to move a business into the city. He added that language related to package store relocation had been in the bill since 2016. Representative Wool did not believe the language was in current statute but it was in the bill. He thought that if there was a package store in a borough, it could be transferred into a city. Every ten years, a maximum of three stores could be moved and would have to be approved by the Alcohol and Beverage Control Board. Senator Micciche responded in the affirmative. He indicated that he wanted to appease communities that wanted more flexibility and the ability to license their own alcohol. Representative Wool noted that brewery could obtain a REPL under the bill and have a new set of rules to work under. He thought that the existing tasting room license the brewery once operated under would then be available for sale. Senator Micciche responded in the affirmative. The license would either return to the state or the business could choose to sell it. 3:35:16 PM Co-Chair Merrick WITHDREW the OBJECTION. There being NO further OBJECTION, Amendment 26A was ADOPTED. Co-Chair Merrick would have a vote and comments at a future meeting. She reviewed the agenda for the following morning meeting. She also set amendment deadlines for HB 220 and HB 229 which were due by noon on Wednesday, April 29, 2022. CSSB 9(FIN) was HEARD and HELD in committee for further consideration.