SB 9-ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG  2:16:59 PM CHAIR REINBOLD reconvened the meeting and announced the consideration of SENATE BILL NO. 9, "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." [SB 9 was heard on 3/29/21 and 4/7/21. This is the third hearing.] 2:17:15 PM CHAIR REINBOLD opened public testimony on SB 9. She asked the sponsor's staff to give a brief summary of SB 9 for the public's benefit. 2:17:51 PM KONRAD JACKSON, Staff, Senator Peter Micciche, Alaska State Legislature, Juneau, Alaska, on behalf of the sponsor, stated that SB 9 is a comprehensive rewrite and reorganization of Title 4. It would streamline the process and make it easier for licensees, the Alcoholic Beverage and Control Board (ABC Board) staff and the general public to understand. 2:18:52 PM NICK SPIROPOULOS, Borough Attorney, Mat-Su Borough, Wasilla, Alaska, spoke in support of local control for alcoholic beverage licenses. He said he previously sent a letter and resolution on behalf of the Mat-Su Borough supporting SB 9. He stated that municipalities hold a wide diversity of views with differing local concerns, growth patterns, and attitudes on the development of retailers, lodging and restaurants serving alcohol. He emphasized that there is no mechanism under current state law or in the proposed changes in SB 9 to allow municipalities to determine whether additional alcohol licenses would be appropriate. Only 20 percent of the Mat-Su Borough's 110,000 residents live within the cities. More local control would allow for the increased economic development of businesses where alcohol is part of the business model. The larger populations in the Mat-Su Borough reside along the Knik Goose Bay Road and at Meadow Lakes and Big Lake. In addition, people live in the core area between Wasilla and Palmer. 2:20:05 PM MR. SPIROPOULOS said the Mat-Su Borough also has smaller population centers clustered in Butte, Sutton, Willow and Talkeetna. The Mat-Su Borough believes it should decide whether additional alcohol licensing might be appropriate in these areas. He suggested that with planning and land use regulations, local governments such as the Mat-Su Borough could coregulate these activities with the state in a manner similar to how the coregulation of marijuana activities currently happens. The Alcohol & Marijuana Control Office has its rules, but local government also establishes rules and regulations on the number of allowable businesses. MR. SPIROPOULOS offered his view that the state already has mechanisms in state law to restrict licenses and address specific bad actors. He said that the local government could effectively regulate businesses serving alcohol even if the number of licenses were to increase. He offered the Mat-Su Borough's support for increased local control and for Senator Hughes's Amendment 3 to SB 9 [labeled B.15, adopted on 4/7/21]. 2:21:32 PM JESSICA VIERA, Executive Director, Greater Wasilla Chamber of Commerce, Wasilla, Alaska, expressed concerns about liquor license population limits in SB 9. The Greater Wasilla Chamber of Commerce has long listed local control on its legislative priority list. She emphasized that these decisions should rest with the home rule or first class municipalities. The state's population limits on alcohol licenses act as a barrier to business in the Mat-Su Borough. The Mat-Su Borough's population sprawls over 25,000 square miles, but people gather in city centers. Establishing license limits based on population within the City of Wasilla when the area's population is five times that doesn't make sense and restricts the free market. MS. VIERA highlighted that some licensees purchase a liquor license and sell it on the secondary market for hundreds of thousands of dollars. Limiting the number of liquor licenses increases the value of liquor licenses in the secondary market. The Mat-Su Borough needs to continue to expand the amenities it offers in breweries, pubs, restaurants, and Costco, or the region will lose its appeal. The Chamber of Commerce wants the area to thrive and not struggle under arbitrary restrictions designed to manage the worst bad actors without considering other license holders. She suggested members consider an amendment to allow first-class and home rule municipalities to control the number of licenses issued within their jurisdictions. 2:25:16 PM SARAH OATES, President; Chief Executive Officer, Alaska Cabaret, Hotel, Restaurant, and Retailers Association (CHARR), Anchorage, Alaska, spoke in support of SB 9, which represents a consensus of the stakeholders. CHARR is the state's nonprofit association for the hospitality industry, representing many of the nearly 2,000 statewide liquor license holders. MS. OATES stated that the rewrite of Title 4 is in its 10th year. She stated that in 2019, the public health and public safety state and municipal regulatory bodies and all three industry tiers reached consensus. She urged members to pass SB 9 to provide long-term regulatory certainty and desperately needed financial stability for the industry. During COVID-19, liquor license holders suffered devastating blows. The liquor license industry represents $2 billion in annual revenue in Alaska and over 32,000 employees. SB 9 will provide a better regulatory system containing many changes that will benefit all sectors and stakeholders. She urged members to pass the bill as soon as possible. 2:26:54 PM JEROME HERTEL, Chief Executive Officer, Alaska State Fair, Palmer, Alaska, spoke in support of SB 9, as amended by Amendment 3, labeled B.13 adopted by the committee on April 7, 2021. As many members know, in 2016, the Alaska State Fair's recreational site license was in jeopardy because the fair did not meet the established criteria. Senate Bill 16 grandfathered the fair until new licenses were developed in the Title 4 rewrite. However, the Title 4 rewrite did not create a license category that would allow the fair to operate as it has in the past but would limit its operations to the annual state fair. Currently, the fair hosts over 70 interim events each year. Using other license categories for interim events, as was suggested, would drastically limit the number of special events and adversely affect the fair's revenue. He spoke in support of Amendment 3 to SB 9 [labeled B.15, adopted on 4/7/21]. Amendment 3 will allow the fair to operate as it has for the past 39 years by serving beer and wine at non- fair events. This will allow the fair to be self-sustaining, without government subsidies, and give back to the community and state. He highlighted that the Alaska State Fair's economic impact is over $26 million in the state. 2:30:45 PM CRYSTAL NYGARD, Deputy Administrator, City of Wasilla, Wasilla, Alaska, spoke in support of SB 9. She stated that she has been a strong supporter of Mat-Su's private sector for over 17 years. The private sector seeks consistency and predictability. She has talked to local businesses that want to serve wine or beer at their establishments. She urged members to pass SB 9. She asked members to support local control. 2:32:52 PM TIFFANY HALL, Executive Director, Recover Alaska, Anchorage, Alaska, spoke in support of SB 9 because of the health and safety provisions included in the bill, which are largely evidence-based practices to reduce underage drinking, increase public safety by reducing alcohol-related violence and crime and alcohol-related deaths. She stated that Recover Alaska works to reduce excessive alcohol use and harm across the state. The organization has worked with over 120 stakeholders on the Title 4 rewrite for over nine years. She said that alcohol-related problems in Alaska cost the state $2.4 billion every year, including costs for criminal justice, health care, lost productivity, traffic collisions, and social services. MS. HALL said SB 9 will make the statutes easier to understand and easier for the Alcohol & Marijuana Control Office to enforce. She characterized SB 9 as a huge win for Alaskans. She expressed concern about Amendment [1] labeled B.13 and Amendment [3], labeled B.15 because these amendments do not enforce population limits, which are proven to reduce alcohol-related crime, violence, deaths, and underage alcohol use. She stated that overall, Recover Alaska is very supportive of SB 9. 2:35:08 PM ROBIN MINARD, Chief Communications Officer, Mat-Su Health Foundation, Wasilla, Alaska, spoke in support of SB 9 in its original form. The foundation does not support Amendment 1 or Amendment 3, previously adopted. She said the foundation shares ownership with Mat-Su Regional Medical Center. It invests its share of the profits into the community to achieve its mission of improving Mat-Su residents' health and wellness. The foundation has participated in the Title 4 rewrite. MS. MINARD stated that Alaska's alcohol laws need to be updated. The community ranks alcohol and substance abuse as the number one health issue in the region. The police chief and medical personnel identify alcohol issues as creating prevalent problems in the community, including domestic violence and child maltreatment. The foundation engages in many strategies to reduce the harm of alcohol misuse, including preventing underage drinking and promoting resilient youth in families and communities. SB 9 results from a partnership with the industry and stakeholders who have worked together to design a bill that promotes responsible alcohol use by adults, reduces underage consumption and supports better enforcement of Alaska's alcohol laws. While the foundation's interest is primarily health, it recognizes that SB 9 benefits local businesses and that a sound economy is an important aspect of a healthy economy. 2:37:07 PM LEE ELLIS, President, Brewers Guild of Alaska, Anchorage, Alaska, spoke in support of SB 9 as introduced since it is a critical step for the hospitality industry and the alcohol- manufacturing industry. He said it will clean up regulatory and statutory language, reduce burdens for distilleries and breweries, and address public health concerns. He stated that the Brewers Guild represents 39 breweries, two distilleries and three wineries in Alaska. The guild has participated in the Title 4 rewrite process since the beginning. Everyone has worked very hard to achieve a bill that makes sense for everyone. He urged members to move it forward. 2:38:44 PM CHAIR REINBOLD closed public testimony on SB 9. She stated that the committee will accept emails until 5 p.m. today. [The committee treated it as though public testimony was reopened.] 2:39:43 PM GLENDA LEDFORD, Mayor, City of Wasilla, Wasilla, Alaska, spoke in opposition to SB 9 as currently written because it does not promote a fair business climate. At the same time, it attempts to safeguard public health and safety in an already overburdened system. In 2014, after the legalization of marijuana, the state enacted a strong regulatory framework that tasked local governments with implementing regulations. SB 9 could mirror the marijuana model by creating the same regulatory framework in home rule cities with police powers and zoning invoking local control. However, the current version of SB 9 does not provide for maximum local control. Statewide population restrictions contained in AS 04.11.400 (a) ignore local conditions or preferences, which translates into significantly limited flexibility for innovative new business models and tangible benefits for local governments. MAYOR LEDFORD said the proposed AS 04.11.405 permits a few limited first class and home rule cities and municipalities to petition the board for additional licenses for restaurant licenses only. Further, it contains other requirements a municipality must meet to be granted a license. 2:41:52 PM MAYOR LEDFORD said the City of Wasilla is the sixth largest city in Alaska, representing the economic epicenter of the Mat-Su Borough. Combined statistics from the Department of Transportation & Public Facilities, Mat-Su Convention & Visitors Bureau and the Alaska Visitor Statistics Program identified that over 110,000 individuals and consumers frequent the city. Under SB 9, the city would never offer the community additional fine dining or shopping choices because the numerous companies and restaurants seeking to do business in the Mat-Su Valley cannot acquire the licensing. These businesses include Costco, which could critically enhance food security in an emergency and disaster situation. SB 9, as currently proposed, will adversely affect all first-class and home rule cities in a much greater economic capacity. 2:43:18 PM MAYOR LEDFORD reported that Wasilla currently does not have any bar, package, restaurant, and club licenses available. The city currently licenses one brewery, three wineries, with one pending winery license, three distilleries, and one recreational site license. The City of Wasilla opposes SB 9, she said. 2:43:51 PM CHAIR REINBOLD closed public testimony on SB 9. 2:44:30 PM SENATOR MICCICHE, Alaska State Legislature, Juneau, Alaska, sponsor of SB 9, said he appreciated all the work on the bill. 2:44:58 PM SENATOR KIEHL said he hopes the bill will pass out of committee. However, he questioned the validity of population limits. He stated that he received a number of research studies from a previous testifier, which he read. However, he did not find the studies provided proof that per capita quotas limiting the number of alcohol establishments protects public health and safety. These studies make a compelling case for density limits, which is the number of alcohol establishments in a physical area. Density limits work from large urban centers to rural South Africa. He acknowledged that basing licenses on density limits is not part of Alaska's current alcohol law, which does not significantly change the bill. One amendment the committee passed provides a valuable locally-initiated release valve. He offered his view that the committee improves the public policy in SB 9. CHAIR REINBOLD asked if he was referring to Amendment [3] B.15. SENATOR KIEHL answered that he did not recall the number of the amendment. 2:46:37 PM SENATOR HUGHES said she was unsure if Mayor Ledford was aware that the bill was amended beyond restaurant licenses to all types of licenses. 2:46:54 PM SENATOR SHOWER moved to report SB 9, Version B, as amended, from committee with individual recommendations and attached fiscal note(s). There being no objection CSSB 9(JUD) was reported from the Senate Judiciary Standing Committee. 2:47:27 PM At ease