SB 165-ALCO. BEV. CONT. BOARD; MINORS; ALCOHOL  2:08:31 PM CHAIR COSTELLO reconvened the meeting and announced the consideration of SB 165. 2:09:26 PM CHUCK KOPP, Staff, Senator Peter Micciche, Alaska State Legislature, presented SB 165 on behalf of the sponsor, speaking to the following sponsor statement: Senate Bill 165 is the product of an ongoing comprehensive, multiyear modernization process for Title 4, Alaska's statutes that govern the regulation and control of alcoholic beverages in the state. Title 4 is largely unchanged since enactment in 1980. It is widely recognized to be outdated, and ineffectual in carrying out the intent of the statutes, which directly impact Alaska residents, public safety, public health, and the alcoholic beverage industry. Following a 3-year review and update by stakeholders, SB 99 was introduced in April 2015, a large body of work spanning nearly 100 pages. The complexity of the bill and the need for additional stakeholder work to gain consensus on several licensing issues, prompted the ABC Board Title 4 Review Steering Committee in December 2015 to recommend a new, two-track process for Title 4 rewrite - 1) streamline elements of SB 99 into SB 165 that focuses on the areas where broad consensus currently exists, particularly those items that impact youth; and, 2) hold the remaining provisions for further refinement and introduction as a second package in 2017. SB 165 focuses on a discrete set of consensus recommendations which includes ABC Board member Composition and Qualifications (04.16.020); consideration of Executive Director experience and background when filling vacant seats; clarifying that minors are allowed to play and work on golf courses that serve alcoholic beverages; establish the offenses of Minor on Licensed Premises (04.16.049) and Minors in Possession or Consuming (04.16.050) to be violations; provides that such violations may not be published on CourtView, nor be cause for a driver's license cancellation or revocation; and encourages alcohol education or treatment upon conviction of minor consuming and possession offenses. He noted the letters of support in the packets. 2:10:12 PM CHAIR COSTELLO welcomed Senator Micciche to the hearing. 2:10:59 PM SENATOR PETER MICCICHE, Alaska State Legislature, sponsor of SB 165, thanked the committee for hearing the bill. He described the measure as important to all Alaskans and youth in particular. 2:11:39 PM At ease 2:11:59 PM CHAIR COSTELLO reconvened the meeting and welcomed Cynthia Franklin. 2:12:21 PM CYNTHIA FRANKLIN, Executive Director, Alcoholic Beverage Control (ABC) Board, summarized the Title 4 review process and provided an overview of SB 165. She explained that SB 165 is part of the Title 4 rewrite that particularly works on increasing swiftness, proportionality and consistency of penalties; increasing local law enforcement of Title 4; and increasing licensee accountability for Title 4 violations. The provisions in SB 165 reflect many hours of work by the Underage Drinking Subcommittee and the Role of the Board Subcommittee, she said. 2:14:34 PM MR. KOPP explained that over the Interim the steering committee worked with the Alaska CHARR Government Affairs Committee to flag language in the comprehensive SB 99 that would benefit from refinement. In December 2015 the steering committee recommended placing certain elements from SB 99 into a new bill for implementation in 2016. He maintained that the elements in SB 165 enjoy a broad consensus of support. He emphasized that the steering committee would continue to engage with stakeholders and the five subcommittees to refine the comprehensive package so a new bill could be introduced in 2017. MR. KOPP and Ms. Franklin discussed the consensus elements in SB 165: 1) ABC Board composition and qualifications; 2) minor on licensed premises, which would be reduced to a violation; and 3) minor consuming alcohol, which would be reduced to a pure violation. 2:17:04 PM MS. FRANKLIN described the work on the board composition as a true compromise, explaining that the revised composition is 2 industry members, 1 public health member, 1 public safety member, and 1 rural public member. An additional compromise was to factor in the director's expertise and background when filling vacant seats in order to maintain a balanced perspective. Thus, if the director has a background in any of the designated seats, that seat will be filled by a public member. She noted that the director is a non-voting member but he/she has quite a bit of influence on the board and its work. She said the work on underage drinking and access to alcohol was done by the Underage Drinking Subcommittee, relying on data from the Court System. One aspect in the bill concerns minor on licensed premises and another concerns minor consuming or possessing alcohol. The idea is to restore minor consuming to a true violation. 2:20:21 PM CHAIR COSTELLO asked her to describe the problem this provision seeks to address. MS. FRANKLIN explained that the existing AS 04.16.050 says a first offense is a violation, but the Court of Appeals has said it looks like a crime because it contains mandatory provisions that aren't normally associated with a violation. The mandatory court appearances and requirements attach to all levels of minor consuming and have led to a substantial number of arrests of minors, which implicates federal status offense policies. She directed attention to the current penalty scheme for minors consuming alcohol and pointed out that the federal government has warned states not to put young people in jail for something that is legal except for their age. She noted that Court System data indicates that the treatment of MCA offenses vary widely throughout the state. Additionally, officers have said that they often chose not to write a ticket at all because of the escalating penalties of the offense. This, too, leads to inconsistency among jurisdictions. By contrast, SB 165 provides the same penalty for every MCA violation. There is a $500 fine that, if unpaid, could be deducted from the permanent fund dividend (PFD). The fine can be reduced to $50 by voluntary participation in alcohol treatment or education or any community diversion activity that's offered in the community or statewide. Also, because the offense is a true violation, a young person will never be in jail for a status offense. 2:24:37 PM MR. KOPP added that minor consuming alcohol offenses are true violations and will never appear on the minor's CourtView record. He clarified that they are not driving offenses. 2:25:51 PM MR. KOPP began to read through the sectional analysis for SB 165. Section 1 - Repeals and reenacts AS 04.06.020, relating to the appointment, reappointment and qualifications of members of the Alcoholic Beverage Control Board; Governor consideration of executive director experience when making board appointments; and establishing definitions. 2:28:00 PM CHAIR COSTELLO asked if the bill could upend the traditional process where executive directors work at the discretion of the board. MR. KOPP replied the executive director serves at the pleasure of the board and can be removed for cause by the governor. CHAIR COSTELLO asked if the executive director has a vote. MR. KOPP replied the executive director of the ABC Board does not have a vote, but he/she has significant influence over the board. The consensus was that the healthy tension on the board is balanced if none of the sectors are weighted. He didn't know how that would apply to other boards. MS. FRANKLIN added that nothing in the bill is intended to change the structure of the director's appointment or how he/she serves the board. The only aspect of the bill that is unique is the idea of considering the director's background in the governor appointments. CHAIR COSTELLO recalled the pushback when the board was moved from public safety to commerce and admitted to having some concern about politicizing the personality of the executive director. MR. KOPP continued the sectional analysis of SB 165. Section 2 - In AS 04.06.030, Terms of office; chair changes "chairman" to "chair". Section 3 - In AS 04.06.050, Meetings - changes "chairman" to "chair". Section 4 - Amends AS 04.16.049(a), relating to access by minors to licensed premises; adds a reference to 04.11.110 permitting access to club premises by a person under 21 years of age if no alcoholic beverages are present or if the person has an active duty military card; changes "age of 21 years" to "21 years of age" to conform to current drafting style, and; identifies circumstances under which minors may be employed on licensed premises. 2:35:52 PM Section 5 - Amends AS 04.16.049(b), changing "age of 21 years" to "21 years of age" to conform to current drafting style. Section 6 - Amends AS 04.16.049(c), allowing juveniles, 16 & 17 years of age, to be employed on golf course licensed premises as long as they have written consent of guardian or parent, and an exemption granted by the Department of Labor. Section 7 - Amends AS 04.16.049(d), to allow minors, 18-20 years of age, to be employed within the licensed premises of a golf course as long as they do not sell, serve, deliver, or dispense alcoholic beverages. 2:36:50 PM Section 8 - Adds a new subsection (g) to AS 04.16.049 to permit access by minors to golf courses for the purpose of playing golf. Adds new subsections making unauthorized presence by a minor on licensed premises a violation, punishable by a fine of $500, which must be charged and filed with the court as a separate case. The fine may be reduced by a court to $50 if the minor supplies proof of completion of an alcohol safety action program. MR. KOPP noted that youth courts and community diversion panels were inadvertently omitted. Section 9 - Repeals and reenacts AS 04. 16.050 to make minor consuming a violation, punishable by a fine of $500, which must be charged and filed with the court as a separate case. The fine may be reduced by a court to $50 if the minor supplies proof of completion of an alcohol safety action program. 2:40:48 PM Section 10 - Amends AS 04.16.180(d) so that the court may not require a person under 21 years of age convicted of a violation under this chapter to pay for and enroll in a juvenile alcohol safety action program. MR. KOPP informed the committee that it became clear just yesterday that the language in current law [AS 04.16.180(d)] does not need to be amended. Thus, Section 10 does not need to be in the bill. 2:41:55 PM SENATOR GIESSEL asked if the intention was to use the term "a crime" on page 5, line 30. 2:42:44 PM At ease 2:43:06 PM CHAIR COSTELLO reconvened the meeting and asked Ms. Meade to address the question. 2:43:12 PM NANCY MEADE, General Counsel, Administrative Staff, Office of the Administrative Director, Alaska Court System, Anchorage, Alaska, agreed with Mr. Kopp that Section 10 does not need to be in SB 165. This statute [AS 04.16.180(d)] makes minor consuming alcohol an offense, not a crime. If the bill were to pass with the language on page 5, lines 30 and 31, minor consuming alcohol would be excluded. "I think Mr. Kopp had determined that leaving the bill as is does allow the court to, in appropriate circumstances, have some discretion to refer some juveniles or minors to the programs that are in that section of the bill," she said. SENATOR GIESSEL asked if Section 10 will stay or be removed. MS. MEADE said she believes that Mr. Kopp will remove all of Section 10. 2:44:53 PM MR. KOPP continued the sectional analysis of SB 165. Section 11 - Modifies the required language for warning signs on licensed or designated premises in AS 04.21065(b). Section 12 - Adds a new provision in 04.21.078 barring the court system from publishing on a publicly available website the record of a violation of AS 04.16,049 or 04.16.050 if the violation was charged separately and was not joined with another minor offense or criminal charge. Section 13 - Amends AS 21.36.210(a) Limits on cancellation, to remove a reference to AS 21.96.027 due to repeal and reenactment of AS 04.16.050. Section 14 - Amends AS 28.15.057(a) Restrictions on driver's license issued to person under 18, to reflect the repeal and reenactment of AS 04.16.050. Section 15 - Amends AS 28.15.191(a) Court and parole board reports to department removes court requirement to forward to DMV a record of a minor consuming alcohol violation conviction within five working days. Section 16 - Amends AS 28.15.211(g) removing reference to DMV not issuing or reissuing a driver's license to a person whose license was revoked for an offense under 04. 16.050. Section 17 - Amends the uncodified law of the State of Alaska, adding a new section describing a Direct Court Rule Amendment to Rule 17(a), Alaska Rules of Minor Offense Procedure. Section 18 - Amends the uncodified law of the State of Alaska, adding a new subsection (g) to Rule 17, Alaska Rules of Minor Offense Procedure, providing that a prosecutor may not join a minor offense for a violation of ASO4.16.049 or AS 04.16.050 with a related criminal offense. Section 19 - Repeals various sections that have to do with denial, cancelation or non-renewal of insurance for minor consuming violations, court revocation of a driver's license for minor consuming alcohol, and Health & Social Services agreements under Delinquent Minor rules to revoke a driver's license for minor consuming alcohol offenses. Section 20 - Applicability provisions. Section 21 - Transition provisions relating to membership on the ABC Board. 2:47:45 PM SENATOR MEYER asked if the penalty for a second or third minor in possession offense would be a $500 fine. MR. KOPP confirmed those would be violations and the penalty would be a $500 fine. Responding to a further question, he agreed that the fine could be reduced to $50 if the youth takes a court approved alcohol safety action program or youth court. He noted that the data shows that 70 percent of youths charged with minor consuming do not commit a second offense. SENATOR MEYER asked Ms. Franklin if the marijuana possession laws will mirror the alcohol possession laws for underage persons. MS. FRANKLIN replied the laws are totally different at this point; legislative reconciliation work is needed to bring marijuana minor offenses in line with AS 04.16.050. 2:50:26 PM SENATOR STEVENS questioned the zero fiscal note when Section 11 calls for new signage. MS. FRANKLIN explained that creating and supplying correct signs is a fixed expense of her office. 2:51:33 PM CHAIR COSTELLO opened public testimony on SB 165. 2:52:08 PM JACK MANNING, owner/operator, Duck Creek Market and President Juneau CHARR, stated that many in the industry do not support SB 165 because of the change in the makeup of the board. He said a lot of work is still going into SB 99 and pulling the board aspect out is viewed as a piecemeal approach and a broken promise based on what the steering committee said earlier. He said all other state boards have a majority of industry membership but, as currently drafted, there could be just one industry member on the ABC Board. 2:54:05 PM LEEANN THOMAS, owner, Triangle Club Bar, Juneau, Alaska, testified in opposition to SB 165. She said that for two years she actively participated in the Title 4 rewrite but she is totally against pulling elements from that comprehensive legislation and placing it in a separate bill. She emphasized the advantage of bringing Title 4 forward in one piece to ensure that it works together. She pointed out that it doesn't work now because of the piecemeal approach. In particular, she objected to the composition of the board. She said two industry seats is insufficient, and that number could potentially drop to one. She maintained that the non-industry members would not be knowledgeable enough to make decisions about licenses. SENATOR GIESSEL asked what the composition of the ABC Board was in the comprehensive SB 99. MS. THOMAS said this composition was suggested, but the alcohol industry didn't support it so there was ongoing work to find a compromise. The reason she doesn't support SB 165 is that it pulls elements out of the comprehensive bill before consensus was reached. The alcohol industry feels left behind, she said. SENATOR GIESSEL summarized that there wasn't a consensus on the board makeup in SB 99. MS. THOMAS said that's correct. 2:57:40 PM SENATOR MEYER asked if there is consensus on minor in possession. MS. THOMAS offered her belief that the industry is "more supportive or that." She added that her personal opinion is that the minors coming on premises provision needs to have teeth, but she supports however the Court System can make it work quickly and efficiently. 2:59:00 PM ELIZABETH RIPLEY, Executive Director, Mat-Su Health Foundation, Wasilla, Alaska, testified in support of SB 165. She stated that the foundation is a funding partner of Recover Alaska, which has been very active in the Title 4 rewrite. She offered a differing perspective from the previous testimony maintaining that there was a commitment to make the changes to the composition of the ABC Board and agreement on minor consuming. She said SB 165 enables swift and uniform enforcement, which sends a very clear message to youth and decreases underage drinking. It provides incentive to attend an alcohol education program and decriminalizes the action. She said the Mat-Su Health Foundation supports the changes to the ABC Board composition. She pointed out that Alaska is the only state that gives industry such a prominent voice on its ABC Board, and insisted that the board instead needs to more fairly represent the interests of all Alaskans. This can be accomplished by designating seats for public safety and public health and ensuring that they clearly outnumber industry seats. 3:02:17 PM KATE BURKHART, Executive Director, Advisory Board on Alcoholism and Drug Abuse, Juneau, Alaska, testified in support of SB 165. She stated that the advisory board participated in the Title 4 rewrite process and had staff that worked on the underage drinking workgroup that arrived at the recommendations embodied in SB 165. The bill is data driven and based on evidence, which is the kind of policy that should be made. SB 165 rectifies the problem of inconsistent enforcement of laws and allows implementation of an effective public health strategy to curb underage drinking. She also stated support for the modification in the ABC Board composition, because it allows for a more diverse conversation about alcohol policy and regulation and aligns with the board that was created for marijuana regulation and control. Speaking as a director of entities that share staff, she said alignment in authority and representation does promote efficient and effective administration. She noted that was one of the reasons for the decision to share staff between the ABC Board and Marijuana Control Board. 3:04:44 PM DALE FOX, President and CEO, Alaska CHARR, testified in opposition to SB 165. He stated that claims of consensus are not true and the bill is not supported by the industry. He related that CHARR and other stakeholders have been involved in the three-year process to rewrite Title 4. Everyone has been promised one comprehensive package and many compromises have been made on all sides. He said CHARR did not support the change in composition of the ABC Board but accepted it because of other valuable industry objectives in the comprehensive bill. However, what's happened is that the top two items of the social service community have been stripped out of [SB 99] and put into SB 165 with no sweeteners for the industry. He said CHARR does support the minor in possession suggestions and could support the bill if the board composition provision is removed. 3:08:04 PM DARWIN BIWER, Chair, Alaska CHARR, Anchorage Alaska, testified in opposition to SB 165. He said this bill isn't needed and without it both issues would be in the comprehensive bill. The reason Title 4 needs so much work is because it's been dealt with on a piecemeal basis. 3:10:19 PM BOB WINN representing himself, Anchorage, Alaska, testified in opposition to SB 165. He said he was part of the stakeholder group and the board composition was never brought forward in this format to the entire body. He maintained that the person who is least knowledgeable about alcohol issues would be the swing vote whenever a contentious issue is before the board. 3:11:44 PM LARRY HACKENMILLER, Interior CHARR, Fairbanks, Alaska, testified in opposition to SB 165. He agreed with the testimony from other CHARR members that the composition of the ABC Board was never agreed upon. He suggested that all references to the composition of the board should be removed from the bill. He voiced support for the language about minor consuming. 3:13:51 PM GINNY ESPENSHADE, Executive Director, Kenai Peninsula Youth Court, stated that SB 165 is a great start towards reforming the minor consuming statutes for three primary reasons: 1) it keeps youth names off CourtView, 2) it does not involve probation, and 3) it allows each community to present youth with as many options as possible to address this issue. She urged the committee not to let the disagreement about the board composition delay the changes to AS 04.16.050. 3:16:14 PM TIFFANY HALL, Executive Director, Recover Alaska, testified in support of SB 165. She stated support for the changes in the minor consuming laws because they will help ensure that someone's entire life isn't marred by a childhood mistake. She also stated support for the changes to the composition to the ABC Board. It ensures balanced representation across a variety of sectors that are equally important in alcohol control. ANNA BRAWLEY, Agnew Beck Consulting, Anchorage, Alaska, introduced herself and reported that her company was on contract first with the Rasmuson Foundation and now Recover Alaska to support the Title 4 rewrite. CHAIR COSTELLO asked if it's accurate that not all stakeholders had a chance to consider the composition of the ABC Board. MS. BRAWLEY said a lot of recommendations were brought forth for consideration at the March 2014 meeting of the full stakeholder group. Among those was different options for the board composition. In September 2014 there was a meeting of the steering committee and stakeholders and the recommendations put into SB 99 were put forward. The board composition was part of that. 3:19:59 PM CARMEN GUTIEREZ, Counsel, Alaska Mental Health Trust Authority, said she is on contract to provide legal services for the Title 4 rewrite. She said the purpose of her testimony is to provide information regarding CHARR's involvement and their concern about the composition of the board. She explained that after SB 99 was introduced, CHARR raised concerns with the bill. CHARR provided detailed concerns regarding SB 99 but the composition of the board was not articulated as a concern. Similarly, no issue was raised regarding the rewrite of minor consuming. 3:22:07 PM CHAIR COSTELLO asked if she had a comment on the bill before the committee. MS. GUTIEREZ said the first the steering committee heard about CHARR's concerns regarding the composition of the board was when SB 165 was being drafted. Their concern was that the two issues were pulled from SB 99 and incorporated in SB 165. 3:23:33 PM CHAIR COSTELLO closed public testimony on SB 165 and held the bill in committee.