Legislature(2017 - 2018)BARNES 124

04/15/2018 10:00 AM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to 15 Minutes After Adjournment --
+= HB 357 ALCOHOLIC BEVERAGE CONTROL/REGULATION TELECONFERENCED
Heard & Held
-- Public Testimony --
+= HB 193 HEALTH CARE; BALANCE BILLING TELECONFERENCED
Heard & Held
-- Public Testimony --
+= HB 376 ESTABLISH THE ALASKA STATE BANK TELECONFERENCED
Moved HB 376 Out of Committee
-- Public Testimony --
                                                                                                                                
          HB 357-ALCOHOLIC BEVERAGE CONTROL/REGULATION                                                                      
                                                                                                                                
10:03:28 AM                                                                                                                   
                                                                                                                                
CHAIR KITO  announced that the  first order of business  would be                                                               
HOUSE  BILL NO.  357, "An  Act relating  to alcoholic  beverages;                                                               
relating  to   the  regulation  of   manufacturers,  wholesalers,                                                               
retailers, and  common carriers of alcoholic  beverages; relating                                                               
to  licenses,  endorsements,   and  permits  involving  alcoholic                                                               
beverages;  relating to  the  Alcoholic  Beverage Control  Board;                                                               
relating  to  offenses  involving alcoholic  beverages;  amending                                                               
Rule 17, Alaska  Rules of Minor Offense  Procedure; and providing                                                               
for an effective date."                                                                                                         
                                                                                                                                
CHAIR  KITO stated  the committee  would continue  to review  the                                                               
presentation from the previous hearing.                                                                                         
                                                                                                                              
10:04:02 AM                                                                                                                   
                                                                                                                                
ANNA  BRAWLEY, Project  Coordinator  for Title  4, continued  the                                                               
presentation of  Alcoholic Beverage Control (ABC)  Board, Title 4                                                               
from the  previous hearing. She  stated she would begin  on slide                                                               
52 of the PowerPoint.  She  said the recommendation was to create                                                               
endorsements, defined in the slide as follows:                                                                                  
                                                                                                                                
        • Create endorsements as add-ons to licenses in                                                                         
          Title 4                                                                                                               
        • Endorsements must be   issued  with  a  license,                                                                      
          renewed biannually with the license, and cannot                                                                       
          be transferred to a new location                                                                                      
        • Endorsements are not population limited                                                                               
        • Convert some existing sections or activities into                                                                     
          endorsements; create new endorsements                                                                                 
                                                                                                                                
MS.   BRAWLEY  briefly   spoke   to  a   list  of   proposed                                                                    
endorsements  on  slide 53.    These  would include  bowling                                                                    
alleys, shipping endorsements  for package stores, sampling,                                                                    
hotel/motel,   large    resort,   and    brewery   repacking                                                                    
endorsements.                                                                                                                   
                                                                                                                                
MS.   BRAWLEY   elaborated   on   package   store   shipping                                                                    
endorsements on slide 54.                                                                                                       
                                                                                                                                
        • Allow orders under   a  Package  Store  Shipping                                                                      
          endorsement to be received in formats other than                                                                      
          a written order from a known customer.                                                                                
        • This allows online ordering from in-state package                                                                     
          stores, including customers in Local Option                                                                           
          areas.                                                                                                                
        • Existing requirements in AS 04.11.150(a) for ID,                                                                      
          shipping and delivery still apply. Package stores                                                                     
          would still be required to report all orders to                                                                       
         Local Option areas in Written Order Database.                                                                          
                                                                                                                                
MS. BRAWLEY addressed the endorsement for onsite product                                                                        
sampling for package stores in slide 55:                                                                                        
                                                                                                                                
        • Create a separate  endorsement to  allow  onsite                                                                      
          sampling at Package Stores.                                                                                           
        • Limits volume per  customer per  day,  hours  of                                                                      
          sampling, public advertising of sampling.                                                                             
        • Providing free samples  of products  at  package                                                                      
          stores is a common practice in several other                                                                          
          cities and states.                                                                                                    
                                                                                                                                
MS. BRAWLEY progressed to slide 56 illustrating the allowable                                                                   
quantities and types of samples recommended in the endorsement.                                                                 
                                                                                                                                
10:07:59 AM                                                                                                                   
                                                                                                                                
MS. BRAWLEY spoke to the proposal to standardize permits on                                                                     
slide 57:                                                                                                                       
                                                                                                                                
        • Define all permit types in statute, not just in                                                                       
          regulation                                                                                                            
        • Fee for all permits is $50 per event day                                                                              
        • Most permits listed are already in statute or                                                                         
          regulation                                                                                                            
        • New permit: Tasting Event Permit, allowing a                                                                          
          Package Store or Manufacturer to host an event on                                                                     
          premises, in partnership with a BDL                                                                                   
                                                                                                                                
MS. BRAWLEY  said slide 58  displays a list of  proposed permits.                                                               
She  said  that  like  endorsements,  most  exist  in  regulation                                                               
already.  The proposal is to reorganize them into one section.                                                                  
                                                                                                                                
MS. BRAWLEY moved to slide  59 illustrating the new tasting event                                                               
permit.  She specified  the  permit would  be  separate from  the                                                               
sampling endorsement.   She said  it would allow a  package store                                                               
or manufacturer to work with a  BDL to showcase the products they                                                               
sell or  manufacture.  She  said the  permit includes a  limit on                                                               
the number of  hours and specifies the entity must  serve food at                                                               
the event.                                                                                                                      
                                                                                                                                
10:09:36 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE STUTES  remarked that  she found the  sample sizes                                                               
large.  She asked how they were determined.                                                                                     
                                                                                                                                
MS. BRAWLEY answered  the sample sizes are  consistent with those                                                               
proposed   for  manufacturing   sampling.   She  specified   that                                                               
consumers would choose between wine and beer.                                                                                   
                                                                                                                                
REPRESENTATIVE  STUTES asked  for confirmation  that the  amounts                                                               
are the same as for a tasting event.                                                                                            
                                                                                                                                
CHAIR  KITO corrected  that the  size would  be the  same as  the                                                               
manufacturing sample.                                                                                                           
                                                                                                                                
MS. BRAWLEY clarified there is  a proposed manufacturers sampling                                                               
endorsement,  which  is  separate  from  manufacturers,  to  sell                                                               
product onsite through a tasting room.                                                                                          
                                                                                                                                
10:11:19 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  WOOL asked  for  confirmation  that free  samples                                                               
from the  manufacturer are the  same as  for free samples  from a                                                               
package store.                                                                                                                  
                                                                                                                                
MS. BRAWLEY answered that is correct.                                                                                           
                                                                                                                                
REPRESENTATIVE WOOL asked  whether that is in addition  to what a                                                               
customer can buy onsite.                                                                                                        
                                                                                                                                
MS. BRAWLEY answered that is correct.                                                                                           
                                                                                                                                
REPRESENTATIVE WOOL  stated his agreement with  the comments made                                                               
by  Representative Stutes  regarding amounts.   He  spoke to  the                                                               
statement that a  BDL can cater an  event in a tasting  room.  He                                                               
asked why that would be required.                                                                                               
                                                                                                                                
MS. BRAWLEY  clarified the proposed  tasting event  permit allows                                                               
manufactures  to have  the  event on  their  production site  and                                                               
would  not require  an additional  tasting  room license.   If  a                                                               
manufacturer  does not  have a  tasting  room, they  can use  the                                                               
license  to  showcase  their products  without  having  a  retail                                                               
license.                                                                                                                        
                                                                                                                                
REPRESENTATIVE WOOL  asked whether  a retail license  is separate                                                               
from a manufacturing license or is included within it.                                                                          
                                                                                                                                
MS. BRAWLEY  answered that currently  all the  manufacture retail                                                               
activities are  under the manufacture  license.  The  proposal is                                                               
for  splitting them  out so  a manufacturer  with a  tasting room                                                               
would  have to  have  a  production license  and  a tasting  room                                                               
license.                                                                                                                        
                                                                                                                                
10:13:29 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE WOOL asked whether  an endorsement would be needed                                                               
to sell single bottles of beer.                                                                                                 
                                                                                                                                
MS.  BRAWLEY  answered  in  that  affirmative.    She  said  it's                                                               
currently allowed  in regulation.  She  said repackaging includes                                                               
filling growlers and selling single bottles.                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL asked  why a storeowner cannot  take a bottle                                                               
out of a box.                                                                                                                   
                                                                                                                                
MS.  BRAWLEY shared  her understanding  that the  current license                                                               
doesn't allow subdivision of packages.  She deferred to AMCO.                                                                   
                                                                                                                                
10:14:54 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  BIRCH  asked  whether the  proposal  would  allow                                                               
samples at Costco.                                                                                                              
                                                                                                                                
MS. BRAWLEY  answered it would if  Costco opted to get  this type                                                               
of endorsement.                                                                                                                 
                                                                                                                                
10:15:38 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE KNOPP  commented it seems the  interpretations for                                                               
quantities  for sampling  were  "getting really  liberal."     He                                                               
asked why package stores would need sampling privileges.                                                                        
                                                                                                                                
MS.  BRAWLEY  answered  currently   samples  are  allowed  to  be                                                               
provided by  manufacturers with no  limit on size and  there does                                                               
seem  to be  a public  safety  consideration. She  added that  in                                                               
terms of package store sampling,  it does happen in other states.                                                               
She stated a number of  package store stakeholders are interested                                                               
in offering samples.                                                                                                            
                                                                                                                                
10:17:18 AM                                                                                                                   
                                                                                                                                
CHAIR KITO asked about shipping  alcohol and asked Ms. Brawley to                                                               
describe  the process  of protecting  communities who  have opted                                                               
out of allowing alcohol products.                                                                                               
                                                                                                                                
MS.  BRAWLEY answered  that  in  a local  option  area there  are                                                               
several local options,  including the ability to  order a product                                                               
to be  shipped in.   She said other options  prohibit importation                                                               
or  possession.   She  said  that in  current  statute there  are                                                               
monthly  limits to  what a  customer can  order.   She stated  it                                                               
would be  up to the individual  customer in an area  to decide to                                                               
participate.                                                                                                                    
                                                                                                                                
CHAIR  KITO mentioned  the database  and asked  whether it  would                                                               
identify the areas for shippers.                                                                                                
                                                                                                                                
MS. BRAWLEY answered in the affirmative.                                                                                        
                                                                                                                                
10:18:52 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE JOSEPHSON  asked whether  the database  would also                                                               
highlight an individual in a particular area.                                                                                   
                                                                                                                                
MS. BRAWLEY answered she was not sure.                                                                                          
                                                                                                                                
10:19:25 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  CHUCK KOPP,  Alaska State  Legislature, presented                                                               
HB  357 as  prime  sponsor.   He  answered  that  nothing in  the                                                               
proposed  law  does  away  with  the  requirement  to  positively                                                               
identify  the customer,  so  if there  is a  red  strip on  their                                                               
license, a copy would be required.                                                                                              
                                                                                                                                
MS.  BRAWLEY  advanced to  slide  61  regarding the  proposal  to                                                               
improve   the  license,   endorsement,  and   permit  application                                                               
process:                                                                                                                        
                                                                                                                                
        • Several technical changes to statutes for                                                                             
          applications for a license, endorsement or                                                                            
          permit.                                                                                                               
        • Examples:                                                                                                             
               Endorsement renewal part of license renewal                                                                      
               Required items in application process:                                                                           
                       labeled premises diagram, e-mail                                                                         
                     address for licensees                                                                                      
               Simpler signature requirements for multiple                                                                      
                       owners and nonprofit organizations                                                                       
               Simpler operating requirements (number of                                                                        
                       hours) for licenses up for renewal                                                                       
                                                                                                                                
10:19:59 AM                                                                                                                   
                                                                                                                                
MS. BRAWLEY spoke  to Chapter 11 of  Title 4.  She said  a lot of                                                               
those  sections would  not  change or  may  merely contain  minor                                                               
renumbering proposals.   She stated  she would not  highlight the                                                               
details but  would be pointing  out some of the  technical issues                                                               
in statute.   She added that endorsements would have  to be added                                                               
to the application process.                                                                                                     
                                                                                                                                
MS. BRAWLEY  spoke to slides  62-65 regarding  public convenience                                                               
licenses.   She stated the  first proposal is to  repeal existing                                                               
statute  and   create  a  replacement   to  convert   all  public                                                               
convenience restaurants  to fully operating  restaurant licenses.                                                               
She added  there is  a proposal to  create a  seasonal restaurant                                                               
tourism license.   She  said there  is a  proposal to  allow some                                                               
cities  to petition  the  ABC  Board to  increase  the number  of                                                               
restaurant licenses in their cities.                                                                                            
                                                                                                                                
MS.  BRAWLEY  explained  the  process  for  converting  a  public                                                               
convenience license to a restaurant  eating place license (REPL),                                                               
illustrated on slide 64.                                                                                                        
                                                                                                                                
MS. BRAWLEY  explained the process of  local government petitions                                                               
for additional restaurant licenses.                                                                                             
                                                                                                                                
10:25:25 AM                                                                                                                   
                                                                                                                                
MS. BRAWLEY  moved to  slide 66 regarding  the proposal  to allow                                                               
relocation of a package store from a borough to a city:                                                                         
                                                                                                                                
        • Amend AS 04.11.400(k) to allow transfers of both                                                                      
          BDL and  Package Store licenses from  a borough to                                                                    
          a city within the borough.                                                                                            
        • Currently, BDL relocations are allowed in                                                                             
          boroughs with at least 60,000 population.                                                                             
        • HB 357 would make relocation available in                                                                             
          boroughs  with  at  least  50,000  population  and                                                                    
          currently    operating   licenses    that   exceed                                                                    
          population limits.                                                                                                    
                                                                                                                                
10:26:40 AM                                                                                                                   
                                                                                                                                
MS.  BRAWLEY  said  that  slide  68  shows  that  currently  most                                                               
communities have  more operating licenses than  are allowed under                                                               
the statute  limits.  She  said the purpose  is not to  take away                                                               
all the  licenses in the borough.   The bill would  allow for the                                                               
transfer  of the  extra licenses,  so the  borough does  not fall                                                               
below the  number of licenses  that it is  allowed to have.   The                                                               
slide  listed   Fairbanks  North   Star,  Kenai   Peninsula,  and                                                               
Matanuska-Susitna boroughs as those which qualify.                                                                              
                                                                                                                                
10:27:15 AM                                                                                                                   
                                                                                                                                
MS.  BRAWLEY  progressed  to   slide  69,   Strengthen  Reporting                                                               
Requirements for Municipal Enforcement:                                                                                         
                                                                                                                                
        • Include in statutory requirements (AS 04.11.610)                                                                      
          that  municipalities submit  quarterly reports  on                                                                    
          Title  4 enforcement  and education  activities to                                                                    
          the    ABC    Board:    violations,    educational                                                                    
          presentations,   other   activities   related   to                                                                    
          alcohol control.                                                                                                      
        • Municipalities with local law enforcement receive                                                                     
          a matching  allocation ("refund") of  license fees                                                                    
          collected   within   their   jurisdiction.   Funds                                                                    
          intended to be used for Title 4 enforcement.                                                                          
                                                                                                                                
REPRESENTATIVE  SULLIVAN-LEONARD gave  an example  of a  petition                                                               
for liquor  licenses in  her district.   She said  the signatures                                                               
had  been submitted  and then  were  gathered again.   She  asked                                                               
whether there  is a  proposal to ensure  the signatures  stay "on                                                               
the docket" for a few months.                                                                                                   
                                                                                                                                
MS. BRAWLEY answered that illustrates  one of the issues with the                                                               
current system.   She said the proposal would give  the city more                                                               
restaurant licenses.                                                                                                            
                                                                                                                                
10:30:30 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE STUTES asked  whether one of the  objectives is to                                                               
devalue the BDL.                                                                                                                
                                                                                                                                
MS.  BRAWLEY answered  the purpose  of  this project  was not  to                                                               
negatively impact  existing businesses.   She said the  intent is                                                               
to  rationalize the  licensing system  and  give businesses  more                                                               
options.                                                                                                                        
                                                                                                                                
REPRESENTATIVE   STUTES  shared   her  interpretation   that  the                                                               
proposal  would be  allowing endorsements  which would  devalue a                                                               
BDL.                                                                                                                            
                                                                                                                                
MS. BRAWLEY answered  that many of the endorsement  apply to BDLs                                                               
as well.   She explained  that many  of the retail  activities of                                                               
manufacturers are allowed in current  law.  She said the proposal                                                               
would  give  manufacturers  the  opportunity  to  purchase  other                                                               
retail licenses.                                                                                                                
                                                                                                                                
REPRESENTATIVE  STUTES asked  for examples  of endorsements  that                                                               
would affect BDLs.                                                                                                              
                                                                                                                                
MS. BRAWLEY gave the example of bowling alleys and golf courses.                                                                
                                                                                                                                
REPRESENTATIVE  STUTES   asked  whether  those   entities  cannot                                                               
currently achieve that by way of a caterer's permit.                                                                            
                                                                                                                                
MS. BRAWLEY answered those apply only to an event.                                                                              
                                                                                                                                
10:34:10 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE   WOOL  asked   about  the   proposal  to   repeal                                                               
convenience licenses.  He asked  whether there is a public safety                                                               
issue with restaurants serving beer and wine.                                                                                   
                                                                                                                                
MS.  BRAWLEY  answered  public  convenience  licenses  involve  a                                                               
number  of  administrative issues.    She  said the  benefit  for                                                               
cities  is   having  more   restaurant  licenses   available  for                                                               
businesses to  grow and  be transferable,  unlike in  the current                                                               
system.                                                                                                                         
                                                                                                                                
REPRESENTATIVE  WOOL  asked  about   the  funds  being  used  for                                                               
education and enforcement.                                                                                                      
                                                                                                                                
MS. BRAWLEY answered that license  fees are currently distributed                                                               
to communities.  She said reports  have not be submitted to date,                                                               
so it is hard to say how the funds are being used.                                                                              
                                                                                                                                
REPRESENTATIVE  KOPP added  that any  application for  additional                                                               
restaurant licenses  has to be  submitted by a  local legislative                                                               
body.  He  said it is a safeguard before  the application goes to                                                               
the ABC Board.   He said local government is  responsive to local                                                               
business.   He added  that many  local governments  had expressed                                                               
there is a lack of any  avenue to pursue additional licenses.  He                                                               
stated the pause  on the request would allow time  for data to be                                                               
collected  regarding   public  safety   issues.    He   said  law                                                               
enforcement has  been required for  decades to report  on alcohol                                                               
licenses.                                                                                                                       
                                                                                                                                
REPRESENTATIVE SULLIVAN-LEONARD  stated she  thinks ten  years to                                                               
request a new license is not realistic.                                                                                         
                                                                                                                                
10:41:47 AM                                                                                                                   
                                                                                                                                
CHAIR  KITO   asked  for  more   information  on   the  ten-years                                                               
provision.                                                                                                                      
                                                                                                                                
MS.  BRAWLEY stated  the current  system  requires an  individual                                                               
applicant   to  seek   out  signatures   for   support  for   the                                                               
application.   She said  the proposal  is for  a city  to request                                                               
more licenses.   She gave the example of asking  for six licenses                                                               
even if six licenses were not currently being sought.                                                                           
                                                                                                                                
CHAIR KITO suggested the city  would have the ability to approach                                                               
the ABC Board regarding the number of licenses it can hold.                                                                     
                                                                                                                                
MS. BRAWLEY answered  that is correct.  She  added that regarding                                                               
the determination of  the licenses, AMCO does it  annually and is                                                               
a separate process.                                                                                                             
                                                                                                                                
10:44:29 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE STUTES asked about  Ms. Brawley's affiliation with                                                               
the industry.                                                                                                                   
                                                                                                                                
MS. BRAWLEY  answered she  is not  affiliated with  the industry.                                                               
She informed she has been asked  to be project coordinator and to                                                               
speak for the stakeholders as a whole.                                                                                          
                                                                                                                                
REPRESENTATIVE   STUTES  asked   whether   Ms.   Brawley  was   a                                                               
participant in the rewrite of Title 4.                                                                                          
                                                                                                                                
MS.  BRAWLEY answered  in  the affirmative.  She  stated she  was                                                               
presented  at the  first meeting  in  2012 and  in most  meetings                                                               
since then.                                                                                                                     
                                                                                                                                
10:45:16 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  WOOL asked  whether other  stakeholders would  be                                                               
presenting to the committee.                                                                                                    
                                                                                                                                
REPRESENTATIVE  KOPP  answered  that anyone  can  participate  in                                                               
public testimony.   He underlined  that Ms. Brawley  has approval                                                               
from the  stakeholder group and she  is not authorized to  take a                                                               
position outside the consensus of the  group.  He said she has to                                                               
speak to the consensus points.                                                                                                  
                                                                                                                                
REPRESENTATIVE  WOOL spoke  to convenience  licenses.   He  asked                                                               
about an issue of consistency with public health concerns.                                                                      
                                                                                                                                
REPRESENTATIVE KOPP  answered there  is nothing  in the  law that                                                               
prevents someone  from going bar  to bar  in Juneau, Alaska.   He                                                               
said bars  are not allowed to  overserve.  He added  that outside                                                               
Alaska many  package stores  offer beer and  wine samplings.   He                                                               
said all  this does  is recognizes how  the industry  has evolved                                                               
over time.   He  reiterated it  is not  aimed at  devaluing other                                                               
licenses.                                                                                                                       
                                                                                                                                
REPRESENTATIVE WOOL  said it  seems to  him that  limiting places                                                               
where  wine can  be  consumed  with a  meal  yet expanding  those                                                               
without food seems inconsistent with the public safety issue.                                                                   
                                                                                                                                
10:50:16 AM                                                                                                                   
                                                                                                                                
CHAIR KITO  suggested there is  confusion about  distilleries and                                                               
breweries.  He said the proposal  is for changing the process for                                                               
adding   restaurant  licenses   independent  from   accommodating                                                               
economic development of new industries.                                                                                         
                                                                                                                                
REPRESENTATIVE KOPP answered that is accurate.                                                                                  
                                                                                                                                
10:51:13 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  WOOL  stated   that  by  eliminating  convenience                                                               
licenses  while  making  it  more  difficult  to  add  restaurant                                                               
licenses seems contradictory.                                                                                                   
                                                                                                                                
REPRESENTATIVE KOPP answered the  proposal is not eliminating any                                                               
restaurant  licenses  but  adding   more.    He  said  individual                                                               
businesses  can  come  to  the  board  whenever  necessary.    He                                                               
underlined  that the  ten-year provision  regards municipalities.                                                               
He  said regarding  public  health and  the  tastings, there  are                                                               
currently no limits on amounts.                                                                                                 
                                                                                                                                
10:53:25 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  STUTES  said  the   brewery  does  tastings  with                                                               
limits.                                                                                                                         
                                                                                                                                
CHAIR  KITO  corrected  that  right now  anyone  can  offer  free                                                               
tastings and  there is no  quantity limit on free  tastings, only                                                               
on the amount which can be sold in a tasting room.                                                                              
                                                                                                                                
REPRESENTATIVE STUTES said that is incorrect.                                                                                   
                                                                                                                                
CHAIR KITO asked Ms. Brawley whether  it is correct that there is                                                               
no limit on free  samples but there is a limit  on amount sold in                                                               
a tasting room.                                                                                                                 
                                                                                                                                
MS. BRAWLEY stated that is correct.                                                                                             
                                                                                                                                
10:54:53 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE WOOL  asked why  Alaska would  have both  free and                                                               
paid samples.                                                                                                                   
                                                                                                                                
REPRESENTATIVE KOPP answered  it has been part  of the discussion                                                               
on enabling breweries and startups  to market their products.  He                                                               
said  those  businesses  are  currently  a  significant  economic                                                               
engine in  Alaska.  He  added those products ultimately  are sold                                                               
by BDLs.                                                                                                                        
                                                                                                                                
10:57:09 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  JOSEPHSON asked  whether  the  bill affords  free                                                               
tasting for all  licenses or whether it is  restricted to certain                                                               
licenses.                                                                                                                       
                                                                                                                                
REPRESENTATIVE KOPP  said he believes  it is true [that  the bill                                                               
allows free tastings for all licenses.]                                                                                         
                                                                                                                                
REPRESENTATIVE JOSEPHSON asked  about the policy reason  if it is                                                               
not universal.                                                                                                                  
                                                                                                                                
REPRESENTATIVE KOPP deferred to Ms. Brawley.                                                                                    
                                                                                                                                
MS.  BRAWLEY answered  currently manufacturers  and brewpubs  can                                                               
offer free  samples.  The only  change would be to  allow package                                                               
stores to offer them as well.                                                                                                   
                                                                                                                                
10:58:49 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE STUTES  asked whether  dispensary licenses  do not                                                               
currently allow free samples.                                                                                                   
                                                                                                                                
MS. BRAWLEY answered that is her understanding.                                                                                 
                                                                                                                                
10:59:07 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  KNOPP asked  who  owns the  licenses for  package                                                               
stores.                                                                                                                         
                                                                                                                                
MS.  BRAWLEY  answered there  is  two  types of  alcohol  control                                                               
systems.  She  said in one the state itself  owns and distributes                                                               
alcohol through ABC  stores.  The rest of the  states are license                                                               
states   in  which   the  private   sector  does   manufacturing,                                                               
wholesaling, and retail of alcohol, and Alaska is one.                                                                          
                                                                                                                                
REPRESENTATIVE  KNOPP asked  what other  state governments  do in                                                               
regard   to    licensing   based   on   population    and   other                                                               
considerations.                                                                                                                 
                                                                                                                                
MS. BRAWLEY  answered there are many  different variations across                                                               
states.    She  said  some  have quotas  and  others  have  local                                                               
licensing.  She  stated it is hard to  compare universally across                                                               
each state.                                                                                                                     
                                                                                                                                
11:01:46 AM                                                                                                                   
                                                                                                                                
MS. BRAWLEY moved  to slides 72-74 regarding revision  of Title 4                                                               
penalties.                                                                                                                      
                                                                                                                                
        • Review penalties for all Title 4 sections, and                                                                        
          revise as needed to make penalties proportionate                                                                      
        to the offense, and more consistently enforced.                                                                         
        • Reduce most current Class A Misdemeanors to Minor                                                                     
          Offenses.                                                                                                             
        • Retain existing Misdemeanor and  Felony  charges                                                                      
          for serious  offenses, particularly  those causing                                                                    
          harm to children.                                                                                                     
        • Ensure that the  ABC   Board,  and  licensee  if                                                                      
          applicable, is informed  about Title 4 convictions                                                                    
          by requiring  the court to  send records  to AMCO,                                                                    
          and AMCO to send to the licensee.                                                                                     
        • ABC Board  retains   its  authority   to  impose                                                                      
          conditions  or   additional  penalties,  including                                                                    
          suspending or revoking license.                                                                                       
        • See Appendix, Table 3, pp.  67-72 in  Report for                                                                      
          table  of  all   current  penalties  and  proposed                                                                    
          changes.                                                                                                              
                                                                                                                                
11:03:12 AM                                                                                                                   
                                                                                                                                
MS. BRAWLEY moved on to  slide 74 showing the differences between                                                               
classes of offenses.   She said most were proposed  to be reduced                                                               
to a minor  offense with a fine.  She  underlined the proposal is                                                               
not  to reduce  enforcement, but  to improve  enforcement and  to                                                               
focus  on major  offenses.   She  added that  the penalties  with                                                               
changes are listed in the sectional summary and in the report.                                                                  
                                                                                                                                
MS. BRAWLEY progressed to slide  75 showing the proposal to allow                                                               
business activities on licensed premises during off hours.                                                                      
                                                                                                                                
        • Retain required closing hours (5:00 to 8:00 a.m.)                                                                     
          for  service and  sales of  alcohol to  consumers,                                                                    
          but  allow other  non-serving business  activities                                                                    
          on the premises.                                                                                                      
        • Local communities are  already  allowed  to  set                                                                      
          stricter hours by ordinance.                                                                                          
                                                                                                                                
MS. BRAWLEY addressed  slide 76 regarding the aim  to align state                                                               
statutes with federal law regarding trade practices.                                                                            
                                                                                                                                
        • Add provisions in  Title   4  to  match  current                                                                      
          federal   law   regarding  trade   practices   and                                                                    
          agreements  between retailers  and wholesalers  or                                                                    
          manufacturers.                                                                                                        
        • Alaska is  the  only  state  without   any  laws                                                                      
          regarding    trade    practices,    and    federal                                                                    
          enforcement of existing laws is limited.                                                                              
                                                                                                                                
11:05:36 AM                                                                                                                   
                                                                                                                                
MS.  BRAWLEY  spoke  to  slide  77  showing  examples  of  trades                                                               
practices which are prohibited in federal law.                                                                                  
                                                                                                                                
MS. BRAWLEY  said slide 78  highlights changes to  the penalties.                                                               
She said the  proposal is to reduce penalties  regarding sales to                                                               
a minor  (Class A  misdemeanor to Minor  Offence with  $500 fine)                                                               
and over service  to an employee (administrative  penalty of $250                                                               
to licensee).                                                                                                                   
                                                                                                                                
MS.  BRAWLEY   advanced  to  slide   79  which   illustrates  the                                                               
administrative penalties  for overserving  an adult or  serving a                                                               
minor.                                                                                                                          
                                                                                                                                
11:07:51 AM                                                                                                                   
                                                                                                                                
MS. BRAWLEY advanced to slide  80 regarding the proposal to allow                                                               
minors on some premises for employment or travel.                                                                               
                                                                                                                                
        • Allow  limited   employment    of   minors    by                                                                      
          Wholesalers,   Common    Carriers,   and   Outdoor                                                                    
          Recreation Lodges.                                                                                                    
        • Consistent with existing rules for Restaurants.                                                                       
        • Clarify that minors are allowed at certain                                                                            
          licensed businesses, in some circumstances: ex.                                                                       
          restaurants, common carriers.                                                                                         
                                                                                                                                
11:08:30 AM                                                                                                                   
                                                                                                                                
MS.  BRAWLEY  moved on  to  slide  81  detailing to  proposal  to                                                               
require board approval of common carriers for alcohol delivery.                                                                 
                                                                                                                                
        • Require all common carriers who transport deliver                                                                     
          alcohol directly to consumers in Alaska to be                                                                         
          approved by the ABC Board.                                                                                            
        • Carriers must   maintain    policies   for   age                                                                      
          verification, safe handling of alcohol, and in                                                                        
          person delivery to an adult customer.                                                                                 
        • Does not apply to shipments of alcohol from                                                                           
          business to business, only customer orders.                                                                           
                                                                                                                                
11:09:36 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE JOSEPHSON  spoke to his concerns  about changes in                                                               
Sections 93  and 95.   He asked  why the legislature  should make                                                               
policy expressing  less concerned with  an adult renting  a hotel                                                               
room with the purpose of providing alcohol to minors.                                                                           
                                                                                                                                
MS. BRAWLEY  shared her general understanding  that the rationale                                                               
is that there  are different circumstances in  which the scenario                                                               
can occur.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  asked  whether the  statute  could  be                                                               
written to include some scenarios and exclude others.                                                                           
                                                                                                                                
MS. BRAWLEY said she thinks that it does make sense.                                                                            
                                                                                                                                
REPRESENTATIVE KOPP  said it  is hard  to accurately  reflect all                                                               
scenarios  in  law.   He  agreed  that  Representative  Josephson                                                               
brings up good points.                                                                                                          
                                                                                                                                
11:13:12 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE WOOL  asked whether  hours for  BDLs are  the same                                                               
for package stores.                                                                                                             
                                                                                                                                
MS. BRAWLEY said it is  her understanding that the hour provision                                                               
applies to all license types.                                                                                                   
                                                                                                                                
REPRESENTATIVE WOOL  asked about addressing how  late someone can                                                               
buy alcohol.                                                                                                                    
                                                                                                                                
MS. BRAWLEY answered  it was discussed in  the stakeholder group.                                                               
She  said the  group did  not make  a recommendation  on a  state                                                               
level since many municipalities address the issue.                                                                              
                                                                                                                                
11:14:52 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  JOSEPHSON asked  why  the  requirement to  impose                                                               
Alcohol Safety  Action Program participation for  offenders under                                                               
age 21 would be repealed.                                                                                                       
                                                                                                                                
MS.  BRAWLEY  asked  Representative  Josephson  to  indicate  the                                                               
section.                                                                                                                        
                                                                                                                                
REPRESENTATIVE JOSEPHSON answered it is AS 14.16 180d.                                                                          
                                                                                                                                
MS. BRAWLEY  answered that was  due to  changes made a  couple of                                                               
years ago to minor consuming laws.                                                                                              
                                                                                                                                
REPRESENTATIVE KOPP  added that  in 2015, the  legislature passed                                                               
Senate Bill 165,  which moved the offense  into violation status.                                                               
He  said  that   disconnected  part  of  the   statute  from  the                                                               
previously criminal offense.                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  clarified the  program was taken  up in                                                               
that bill.                                                                                                                      
                                                                                                                                
REPRESENTATIVE KOPP answered that is correct.                                                                                   
                                                                                                                                
11:16:45 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  WOOL asked  whether it  is a  misdemeanor offense                                                               
for a spouse under 21 to be found drinking alcohol.                                                                             
                                                                                                                                
REPRESENTATIVE  KOPP answered  that it  is  not.   He added  that                                                               
currently  a  child  may  drink  with a  parent.    He  said  the                                                               
legislative intent is that it be a parental oversight decision.                                                                 
                                                                                                                                
11:17:47 AM                                                                                                                   
                                                                                                                                
MS.  BRAWLEY moved  to  slide 84  regarding  proposed changes  in                                                               
Chapter  21.     She  specified  that  the   chapter  deals  with                                                               
protecting  minors.       She  said  one  of   the  proposals  is                                                               
registration of kegs.                                                                                                           
                                                                                                                                
        • Require all beer kegs purchased in the state to                                                                       
          be registered (and tagged with customer's name).                                                                      
        • Law enforcement who confiscate a keg at an                                                                            
          underage   party   can   determine   who   legally                                                                    
          purchased the keg and hold adults responsible for                                                                     
          furnishing alcohol to minors.                                                                                         
      • Modeled on existing laws in Anchorage and Juneau                                                                        
        • Applies to kegs (containers) 4 gal. or larger.                                                                        
        • Licensee keeps customer information about keg                                                                         
          purchase on file for a period of time.                                                                                
        • Purchaser can be fined for removing tag on a full                                                                     
          keg.                                                                                                                  
                                                                                                                                
11:19:08 AM                                                                                                                   
                                                                                                                                
MS. BRAWLEY  spoke to  slide 86 outlining  the requirement  for a                                                               
server  education  card  for  all retail  sales  and  service  of                                                               
alcohol.                                                                                                                        
                                                                                                                                
        • Server education includes training in verifying                                                                       
          age and identification, responsible alcohol                                                                           
          service, overserving, and applicable penalties                                                                        
          for violations.                                                                                                       
        • Some, but not all, license types are required                                                                         
          that servers (employees) have alcohol server                                                                          
          education cards. Also not required for servers at                                                                     
          permitted events.                                                                                                     
        • Proposed in SB76: Require all license types who                                                                       
          serve the public, including sampling activities,                                                                      
          to maintain server education cards.                                                                                   
        • Require servers for permitted events to be                                                                            
          certified prior to the actual event.                                                                                  
                                                                                                                                
11:20:16 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  WOOL asked  whether  the keg  sales provision  is                                                               
only from a  licensee directly to a consumer and  not business to                                                               
business.                                                                                                                       
                                                                                                                                
MS. BRAWLEY answered in the affirmative.                                                                                        
                                                                                                                                
11:20:34 AM                                                                                                                   
                                                                                                                                
MS.  BRAWLEY said  the last  few sections  of the  bill highlight                                                               
transitions  provisions  for existing  licenses.    She said  the                                                               
effective date would be January  2020, allowing 18 months for the                                                               
boards to educate licensees.                                                                                                    
                                                                                                                                
        • Define process for current licensees of certain                                                                       
          types to be converted to equivalent license(s) in                                                                     
          the new system.                                                                                                       
        • Also define process of converting applications                                                                        
          for repealed or renumbered license types.                                                                             
        • Included in Transition sections of HB 357.                                                                            
        • See table on page 61 of Report for details.                                                                           
                                                                                                                                
MS. BRAWLEY addressed slides 89-91  showing how existing licenses                                                               
would be converted.                                                                                                             
                                                                                                                                
MS. BRAWLEY  described the  effective dates  on the  final slide.                                                               
She  highlighted  that  some  provisions  would  go  into  effect                                                               
immediately, while others would go into effect in 2020.                                                                         
                                                                                                                                
11:23:00 AM                                                                                                                   
                                                                                                                                
CHAIR KITO opened public testimony on HB 357.                                                                                   
                                                                                                                                
11:23:16 AM                                                                                                                   
                                                                                                                                
DALE  FOX,  President,  Alaska  Cabaret,  Hotel,  Restaurant  and                                                               
Retailers Association (Alaska CHARR),  testified in support of HB
357.  He described the six-year  effort in the proposed bill.  He                                                               
described his organization.   He  said the framework is good.  He                                                               
said Alaska CHARR believes in it.                                                                                               
                                                                                                                                
11:25:26 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  WOOL asked  whether Mr.  Fox would  have answered                                                               
any of the questions put to Ms. Brawley differently.                                                                            
                                                                                                                                
MR.  FOX  answered  the  challenge with  compromise  is  to  work                                                               
through  that  compromise.     He  said  there  were   a  lot  of                                                               
compromises  made over  a  long  period of  time.    He said  the                                                               
dividing line  between BDLs  and tasting rooms  is an  issue that                                                               
needs refining.   He stated he wanted to be  loyal to the process                                                               
and to the effort that has gone into the bill.                                                                                  
                                                                                                                                
11:27:15 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  STUTES said  she would  like  to have  a list  of                                                               
stakeholders that were involved in creating the bill.                                                                           
                                                                                                                                
REPRESENTATIVE  KOPP said  he believes  there  is a  list in  the                                                               
committee packet.                                                                                                               
                                                                                                                                
MS. BRAWLEY confirmed that there is a list in the packet.                                                                       
                                                                                                                                
11:28:02 AM                                                                                                                   
                                                                                                                                
TIFFANY HALL,  Executive Director,  Recover Alaska,  testified in                                                               
support of  HB 357.  She  said she had a  number of organizations                                                               
on the  board of her organization.   She described the  work that                                                               
had gone  into the bill.   She underlined  that much of  the bill                                                               
would clean up  parts of the statute that are  not clear or would                                                               
integrate  new  practices.     She  highlighted  that  population                                                               
considerations are backed up by  evidence.  She spoke to research                                                               
showing  that   additional  outlets  for  consuming   do  add  to                                                               
consumption.                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  asked Ms. Hall  whether she thinks  there is                                                               
an  inconsistency with  reducing the  number of  places in  which                                                               
someone can have alcohol with  a meal and increasing those places                                                               
where alcohol can be served without food.                                                                                       
                                                                                                                                
MS. HALL  shared her  understanding that  some of  the additional                                                               
licenses  would   be  restaurants  but  that   for  manufacturing                                                               
licenses  would be  more restricted  by population  limits.   She                                                               
added  that all  of the  other license  types would  be bound  by                                                               
population limits.                                                                                                              
                                                                                                                                
REPRESENTATIVE  WOOL  asking  whether  her  research  shows  that                                                               
Portland,  Oregon, is  more dangerous  due to  the fact  that all                                                               
restaurants seem to be able to serve alcohol.                                                                                   
                                                                                                                                
MS. HALL  answered that she  does not know the  crime statistics.                                                               
She  said different  states operate  differently  and Alaska  has                                                               
operated under  the population  system for some  time.   She said                                                               
she personally agrees  that the sample sizes are  higher than she                                                               
would like,  she wants  to honor the  process and  the agreements                                                               
that were reached in the  process.  She underlined that currently                                                               
limits are not in statute.                                                                                                      
                                                                                                                                
11:36:23 AM                                                                                                                   
                                                                                                                                
ALISON KULAS,  Executive Director,  Advisory Board  on Alcoholism                                                               
and Drug Abuse, Alaska Mental  Health Board, testified in support                                                               
of HB 357.   She said both boards are in support of  HB 357.  She                                                               
said the  boards appreciate  that the  2013 Alaska  Strategies to                                                               
Prevent  Underage   Drinking  recommendations  were   taken  into                                                               
account.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  KNOPP stated  he was  never supportive  of onsite                                                               
consumption for marijuana stores.   He said the argument had been                                                               
that  package  stores do  not  have  onsite consumption,  so  why                                                               
should marijuana  stores.   He asked  whether there  are concerns                                                               
about allowing onsite consumption in package stores.                                                                            
                                                                                                                                
MS. KULAS  said there is a  focus on the training  aspect for the                                                               
servers of samples.  She said it was part of the agreements.                                                                    
                                                                                                                                
REPRESENTATIVE  KNOPP asked  whether  the training  would be  any                                                               
different from the current training.                                                                                            
                                                                                                                                
MS. KULAS  said it was a  fair point and data  would be collected                                                               
so that other solutions could be developed.                                                                                     
                                                                                                                                
11:43:26 AM                                                                                                                   
                                                                                                                                
CHAIR KITO stated he would recess the meeting.                                                                                  
                                                                                                                                
CHAIR KITO  said there is a  Senate companion bill that  would be                                                               
forthcoming.                                                                                                                    
                                                                                                                                
11:45:09 AM                                                                                                                   
                                                                                                                                
CHAIR  KITO  recessed  the  House  Labor  and  Commerce  Standing                                                               
Committee meeting to a call of the chair.                                                                                       
                                                                                                                                
                                                                                                                                
3:30:55 PM                                                                                                                    
                                                                                                                                
CHAIR  SAM KITO  called  the House  Labor  and Commerce  Standing                                                               
Committee meeting  back to order  at 3:30  p.m.  [Chair  Kito did                                                               
not call roll.]                                                                                                                 
                                                                                                                                
3:30:41 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  advised that  HB 357  is open  and available,  but he                                                               
would work through the next two bills first.                                                                                    
                                                                                                                                
[HB 357 was held over.]                                                                                                         
                                                                                                                                
          HB 357-ALCOHOLIC BEVERAGE CONTROL/REGULATION                                                                      
                                                                                                                                
4:54:39 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that the  final order of business  would be                                                               
HOUSE  BILL NO.  357, "An  Act relating  to alcoholic  beverages;                                                               
relating  to   the  regulation  of   manufacturers,  wholesalers,                                                               
retailers, and  common carriers of alcoholic  beverages; relating                                                               
to  licenses,  endorsements,   and  permits  involving  alcoholic                                                               
beverages;  relating to  the  Alcoholic  Beverage Control  Board;                                                               
relating  to  offenses  involving alcoholic  beverages;  amending                                                               
Rule 17, Alaska  Rules of Minor Offense  Procedure; and providing                                                               
for an effective date."                                                                                                         
                                                                                                                                
4:55:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL  commented  it  seems  like  a  lot  of  the                                                               
training and education in the proposal is already in place.                                                                     
                                                                                                                                
4:56:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CHUCK KOPP,  Alaska  State Legislature,  answered                                                               
questions on HB 357 as prime  sponsor.  He answered that the bill                                                               
standardizes the requirements. He said  it would use a better job                                                               
of using  fees for training  and education.   He deferred  to Ms.                                                               
Brawley.                                                                                                                        
                                                                                                                                
REPRESENTATIVE WOOL asked what is  different in the proposal from                                                               
what is already going on.                                                                                                       
                                                                                                                                
ANNA BRAWLEY,  Project Coordinator  for Title  4, noted  that the                                                               
requirement for TAMS cards is  only subject to some license types                                                               
and do  not apply to  breweries, manufacturer tasting  rooms, and                                                               
other new licenses types.  She  added that a non-profit would now                                                               
be subject to the requirements.                                                                                                 
                                                                                                                                
REPRESENTATIVE WOOL  asked about funding that  comes from license                                                               
fees for enforcement.                                                                                                           
                                                                                                                                
REPRESENTATIVE  KOPP  answered  the  focus is  on  a  cooperative                                                               
effort with public safety.                                                                                                      
                                                                                                                                
MR. FOX  added that he would  like to see more  education through                                                               
the public  safety officers, rather  than the issuing of  Class A                                                               
misdemeanors.   He  recounted  an episode  in  which an  underage                                                               
server was involved in a beer order at a pizzeria.                                                                              
                                                                                                                                
5:05:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  suggested the funding isn't  based on number                                                               
of contacts with licensees.   He asked whether license money goes                                                               
to the state or the local municipality.                                                                                         
                                                                                                                                
REPRESENTATIVE KOPP answered it would depend on the entity that                                                                 
has that enforcement in their job function.                                                                                     
                                                                                                                                
CHAIR KITO held over HB 357.                                                                                                    

Document Name Date/Time Subjects
HB193 Opposition Letters 4.16.18.pdf HL&C 4/15/2018 10:00:00 AM
HB 193
HB 193 Followup HL&C Letter 4.19.18.pdf HL&C 4/15/2018 10:00:00 AM
HB 193