SB 16-ALCOHOL LIC:FAIRS,THEATRES,CONCERTS;BONDS  3:09:07 PM CHAIR WOOL announced that the first order of business would be HOUSE CS FOR CS FOR SENATE BILL NO. 16(L&C), "An Act relating to certain alcoholic beverage licenses and permits; relating to the bond requirement for certain alcoholic beverage license holders; and providing for an effective date." 3:09:26 PM REPRESENTATIVE TALERICO moved to adopt Amendment 1, [labeled 31- LS0283\O.1, Bruce, 5/9/19], which read: Page 2, line 17, following "license": Insert "; (25) music festival permit" Page 5, following line 19: Insert a new bill section to read:  "* Sec. 10. AS 04.11 is amended by adding a new section to read: Sec. 04.11.245. Music festival permit. (a) A music festival permit authorizes the holder of a restaurant or eating place license to sell or dispense beer and wine for consumption at a festival with multiple live music performances held off the holder's licensed premises. (b) The board may issue a music festival permit only for (1) a designated premises and for a limited period, not to exceed four calendar days; and (2) a music festival that has existed for a period of at least 10 years before the application for the permit is filed. (c) The board may not issue more than one music festival permit to the holder of a restaurant or eating place license in a calendar year. (d) A music festival permit may not be transferred or renewed. (e) An applicant for a music festival permit under this section shall obtain the written approval of a law enforcement agency having jurisdiction over the site of the event for which the music festival permit is sought and provide the written approval to the board with the application. (f) The fee for a music festival permit is $50 for each day of the event and must accompany the application for the permit." Renumber the following bill sections accordingly. Page 5, line 27, following "04.11.240(b),": Insert "04.11.245(e)" Page 7, line 18, following "(16)": Insert "music festival permit;  (17)" CHAIR WOOL objected for the purpose of discussion. 3:10:02 PM REPRESENTATIVE TALERICO explained that Amendment 1 would reinsert the music festival permit with the following stipulations: The permit could not exceed four calendar days; the festival must have existed for a period of at least 10 years before the application is filed; the board may not issue more than one music festival permit to the holder of a restaurant or eating place license (REPL) in a calendar year; and the permit may not be transferred or renewed. CHAIR WOOL asked if Amendment 1 is intended for Chickenstock Music festival. REPRESENTATIVE TALERICO answered yes. He said the biggest difficulty for Chickenstock is that a precedence was set seven or eight years ago when they were given a permit to operate and now that permit is no longer available to them due to a change in personnel at the Alcohol and Marijuana Control Office (AMCO). CHAIR WOOL asked how many years Chickenstock had been operating with a beverage dispensary license (BDL). REPRESENTATIVE TALERICO answered, "three years." CHAIR WOOL asked Ms. McConnell when Chickenstock Music Festival started operating with a BDL instead of a REPL. 3:13:49 PM ERIKA MCCONNELL, Director, Alcohol and Marijuana Control Office, Department of Commerce, Community & Economic Development, said that happened in 2016. CHAIR WOOL noted that he was hesitant to make a change for one specific business, especially since [Chickenstock] has been functioning with a BDL for several years. 3:15:14 PM REPRESENTATIVE STUTES agreed. Nonetheless, she pointed out that Chicken, Alaska is remote and there is only one BDL in the area. She said there's a lot of liability involved with lending a license to be used for a caterer's permit. She added that Chicken is a small, remote community interested in having one event. She said she's leaning towards voting in a positive manner. CHAIR WOOL said he understands that Chickenstock would like to sell alcohol; however, he disagreed that distance or geography is a barrier. He pointed out that it's standard for people to cater festivals or concerts. 3:18:22 PM REPRESENTATIVE FIELDS said he would not support Amendment 1 if it was unlimited or allowed restaurant owners in an urban area to have a festival at their location when there are dozens of BDL permit holders in the same area. However, given Chickenstock's limited circumstance and the fact that this bill is a package of one-off's, he said he would support Amendment 1. He added that given the remote nature of this festival it is highly unlikely to negatively impact BDL holders elsewhere. 3:19:39 PM REPRESENTATIVE HANNAN asked if there were any REPLs aside from Chickenstock's that were revoked in 2016. 3:20:25 PM MS. MCCONNELL said not that she is aware of. 3:20:52 PM SARAH OATES, President/CEO, Alaska Cabaret, Hotel, Restaurant, and Retailers Association, in response to Representative Hannan, said there were permits issued in the past that did not meet the necessary qualifications because they weren't providing banquet or dinner events. Those permits are no longer issued because a change in AMCO staff brought in someone who paid closer attention to the statutes. 3:21:40 PM REPRESENTATIVE HANNAN asked what the REPLs were being used for before the statute was reinterpreted. MS. OATES pointed out that under the proposed definition of "music festival," any concert with more than one performer would qualify for this permit. She said despite being intended for Chickenstock, because of how it's written this bill would expand upon it more than anticipated. REPRESENTATIVE HANNAN referred to Amendment 1, lines 15-16, "a music festival that has existed for a period of at least 10 years before the application for the permit is filed." She offered her belief that the intention was to stop a new REPL from being used to host a concert if they had not previously done it for a period of 10 years. MS. OATES said if that's the intention the language should be clarified. She opined that it's relatively impossible to determine if a festival has been in existence for 10 years or more, adding that has seen a lot of things get pushed beyond the intent. 3:24:53 PM REPRESENTATIVE STUTES asked if it would be clearer to say, "a music festival that has existed in a specific location for a period of 10 years." MS. OATES said limiting it to a particular licensee or to REPLs that are located in an organized area with no organized government would make it more palatable. CHAIR WOOL questioned whether a band that plays somewhere every year for a weekend could retroactively be considered a festival to gain a REPL music festival permit. MS. OATES confirmed that. CHAIR WOOL offered his understanding that a permit is a one-off deal. He asked if permits can be transferred. 3:26:32 PM MS. MCCONNELL said a permit is issued for one particular event and if another event occurs, the holder will need a new one. MS. MCCONNELL said her understanding of this amendment is that any REPL could apply for a music festival permit, but the music festival itself must have been in existence for at least 10 years. A qualifying music festival, like Chickenstock, could use a different REPL to get their permit each year. They do not have to stick with the same licensee to serve at their festival every year. CHAIR WOOL questioned whether, according to this amendment, a Chinese restaurant in Juneau could cater the REPL for Chickenstock. MS. MCONNELL said yes. 3:28:19 PM REPRESENTATIVE FIELDS asked if the maker of Amendment 1 would consider a friendly conceptual amendment to ensure that music festivals aren't popping up in urban areas. REPRESENTATIVE FIELDS asked if the language could be clarified to say "license" rather than "permit" for consistency. REPRESENTATIVE STUTES turned attention to line 19, subsection (d), and suggested changing the language to "A music festival permit may not be renewed upon transfer for sale of the REPL." CHAIR WOOL objected to "weigh into the legal language." 3:31:37 PM MS. MCCONNELL said permits are not renewed at all - they are discreet and get evaluated on a case by case basis. She addressed the assumption that the REPL serving the festival is somehow tied together in perpetuity, which is not the case. She stated that attempting to create a tie between a particular REPL and a particular festival would require different language on line 19. REPRESENTATIVE STUTES suggested replacing "renewed" with "issued." CHAIR WOOL directed attention back to the "unorganized area" language because of its limiting factors. REPRESENTATIVE TALERICO withdrew Amendment 1. 3:34:28 PM CHAIR WOOL moved to adopt Amendment 2, [labeled 31-LS0283\O.4, Bruce, 5/10/19], which read: Page 4, lines 7 - 8: Delete all material and insert: "(3) a public ski area  (A) where skiing and snowboarding occur;  (B) that sells lift tickets; and  (C) that has a permanent public structure." Page 4, line 20: Delete "fairs and other events" Insert "an annual fair" Page 4, line 26: Delete "fair" Insert "annual fair" REPRESENTATIVE STUTES objected for the purpose of discussion. 3:35:01 PM ASHLEY STRAUCH, Staff, Representative Adam Wool, said that the purpose of Amendment 2 is to clarify that a "public ski area" is a place that has skiing and snowboarding, sells lift tickets, and has a permanent public structure. 3:35:32 PM REPRESENTATIVE FIELDS questioned whether a public structure is one that is used by the public who patronize a facility or if a public structure is one that is owned by the public. MS. STRAUCH said it is used by the public, adding that the intent is to prevent someone with a shed on private property from selling a lift ticket and calling it a public ski area. CHAIR WOOL added that the intent was to more solidly define what a ski area is. 3:36:38 PM REPRESENTATIVE STUTES removed her objection.  3:36:44 PM REPRESENTATIVE HANNAN inquired as to the remaining changes included in Amendment 2. MS. STRAUCH explained that the intent of the changes on page 1, lines 8-14, were to more clearly define the word "fair." REPRESENTATIVE HANNAN surmised that the distinction being drawn is between the sequence of time, "the fair," and the physical location. CHAIR WOOL answered yes. REPRESENTATIVE HANNAN questioned whether the aforementioned changes in Amendment 2 would maintain the original intent of the bill. 3:39:15 PM SENATOR PETER MICCICHE, Alaska State Legislature, prime sponsor of SB 16, deferred the question to Jerome Hertel. CHAIR WOOL, in response to Representative Hannan, said the Alaska State Fair was previously using a recreational site license, which is grandfathered into SB 16 to ensure they don't lose any of the abilities they've had in the past. 3:39:58 PM JEROME HERTEL, Manager, Alaska State Fair, opined that Amendment 2 would restrict the fair's ability to develop off-season events and to generate revenue for such events. He noted that, currently, they use a special events permit, which are limited permits, for their off-season events. He said he is more in favor of keeping the current language that allows them to provide those services to the community. CHAIR WOOL offered his understanding that the fair was using a recreational site license until December 2018, which allowed them to do events there. MR. HERTEL deferred to Erika McConnell. 3:42:26 PM MS. MCCONNELL offered her understanding that in general, the fair was using a recreational site license to operate a variety of events throughout the year; however, there was an issue involving events on portions of their licensed premises that accommodated unaccompanied minors. She worked with the fair to develop and alternating premises system, which is allowed under regulation. She opined that there was no need for the fair to use permits while using their license for various events year- round. CHAIR WOOL speculated that if they use their grandfathered rec site license they could continue with their events. He asked if that were true. MS. MCCONNELL answered yes. CHAIR WOOL asked Mr. Hertel if he's considered buying BDL for the events he puts on every year. MR. HERTEL asked if the fair would qualify for a BDL. He noted that regarding their annual events, not all 75 utilize alcohol. He said that approximately 15-20 events serve alcohol. 3:45:14 PM SENATOR MICCICHE said he drafted this bill to support an event that all Alaskans enjoy. He acknowledged that it is an expensive event and pointed out that the fair utilizes the earnings from alcohol to provide programs for children and agriculture. He emphasized that it's an important event for Alaskans and taking a step that could potentially negatively impact the fair is dangerous. He stated that he supports the first part of Amendment 1 and expressed concern about the second part. CHAIR WOOL offered his understanding that the grandfathering section alone would keep the fair running as is. He noted that the intent was to help future fairs that want to sell alcohol increase their revenue and sustainability. He reemphasized that the grandfathering section would preserve the Alaska State Fair's successful business model, while the fair license on page 2, line 17, would enable future fairs to join that elite club of fairs that keep their own alcohol revenue. He stated that he likes the language offered in the amendment. 3:47:43 PM REPRESENTATIVE REVAK suggested postponing this discussion to a later date. 3:48:08 PM REPRESENTATIVE STUTES reminded members that the fair won't be impeded by having their events and could continue to operate the same way that they always have. She asked Ms. McConnell if that were true. MS. MCCONNELL affirmed that. 3:48:38 PM SENATOR MICCICHE said if that's the case and this doesn't [negatively] impact the fair then he supports it. He expressed his support for Amendment 3 as well. 3:49:03 PM REPRESENTATIVE STUTES removed her objection to Amendment 2. There being no further objection, Amendment 2 was adopted.  3:49:15 PM CO-CHAIR WOOL moved Amendment 3, [labeled 31-LS0283\O.3, Bruce, 5/11/19], which read: Page 2, lines 23 - 27: Delete all material and insert: "(2) may only provide entertainment on the licensed premises between the hours of 11:00 a.m. and  7:00 p.m. or 3:00 p.m. and 11:00 p.m. as permitted in  (h) of this section, unless approved by the director after written request by the licensee for a specific occasion [; IN THIS PARAGRAPH, "ENTERTAINMENT" INCLUDES DANCING, KARAOKE, LIVE PERFORMANCES, OR SIMILAR ACTIVITIES, BUT DOES NOT INCLUDE RECORDED OR BROADCAST PERFORMANCES WITHOUT LIVE PARTICIPATION]." Page 2, following line 27: Insert a new bill section to read:  "* Sec. 3. AS 04.11.100 is amended by adding new subsections to read: (h) An applicant for initial licensure or renewal of a restaurant or eating place license shall select, at the time of application, whether to permit entertainment on the licensed premises between the hours of 11:00 a.m. and 7:00 p.m. or between the hours of 3:00 p.m. and 11:00 p.m. A licensee may not change the permitted hours of entertainment until the licensee submits an application for renewal of the license. (i) In this section, "entertainment" includes dancing, karaoke, live performances, or similar activities, but does not include recorded or broadcast performances without live participation." Renumber the following bill sections accordingly. Page 8, line 25: Delete "sec. 6" Insert "sec. 7" Page 9, line 2: Delete "Section 6" Insert "Section 7" REPRESENTATIVE STUTES objected for the purpose of discussion. 3:49:25 PM MS. STRAUCH explained that Amendment 3 would allow a business to choose between the 11:00 a.m. to 7:00 p.m. timeframe and the 3:00 p.m. to 11:00 p.m. timeframe to provide entertainment on the licensed premises. After the two-year duration of that business's license they could change their designation; however, for the duration of that two-year license period, whichever timeframe they choose they must abide by. 3:50:23 PM REPRESENTATIVE STUTES expressed her full support for Amendment 3. CHAIR WOOL noted that this amendment allows businesses to have the option of providing entertainment during lunch hour. 3:51:18 PM REPRESENTATIVE STUTES removed her objection to Amendment 3. There being no further objection, Amendment 3 was adopted. 3:52:11 PM REPRESENTATIVE STUTES moved to report HCS CSSB 16, Version LS0283\O, Bruce, 5/4/19, out of committee with individual recommendations and the accompanying fiscal notes. Without objection, HCS CSSB 16(L&C) was moved from the House Labor and Commerce Standing Committee.