Legislature(2015 - 2016)BELTZ 105 (TSBldg)

03/30/2016 01:30 PM Senate JUDICIARY

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Audio Topic
01:32:13 PM Start
01:32:44 PM SB8
01:33:36 PM Overview: U.s. Supreme Court Decision Sturgeon Vs. Frost
01:56:42 PM SB165
03:02:07 PM SB103
03:29:36 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Public Testimony --
+ Overview of the U.S. Supreme Court Decision in TELECONFERENCED
Sturgeon v. Frost Case
Attorney General Craig Richards
Moved CSSSSB 103(JUD) Out of Committee
+ Bills Previously Heard/Scheduled: TELECONFERENCED
Moved CSSB 165(JUD) Out of Committee
Moved CSSB 8(JUD) Out of Committee
**Streamed live on AKL.tv**
         SB 165-ALCO. BEV. CONT. BOARD; MINORS; ALCOHOL                                                                     
1:56:42 PM                                                                                                                    
CHAIR MCGUIRE  announced the  consideration of SB  165. She noted                                                               
this is the second hearing  and the committee substitute, version                                                               
W, is before the committee.                                                                                                     
1:57:03 PM                                                                                                                    
SENATOR MICCICHE moved Amendment 1, labeled 29-LS1384\W.1.                                                                      
                          AMENDMENT 1                                                                                       
     OFFERED IN THE SENATE                                                                                                      
          TO:  CSSB 165(L&C)                                                                                                    
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CHAIR MCGUIRE objected for an explanation.                                                                                      
1:57:21 PM                                                                                                                    
CHUCK   KOPP  Staff,   Senator  Peter   Micciche,  Alaska   State                                                               
Legislature, explained that Amendment  1 for SB 165 distinguishes                                                               
between  the  Alcohol  Safety  Action   Program  (ASAP)  and  the                                                               
Juvenile Safety  Action Program (JSAP)  that are approved  by the                                                               
Department  of Health  and Social  Services (DHSS)  and community                                                               
diversion  panels  that are  used  by  tribal circles  and  youth                                                               
courts. These are the treatment  options a person has for getting                                                               
a fine reduced from $500 to $50.                                                                                                
2:01:49 PM                                                                                                                    
CHAIR MCGUIRE removed her objection and Amendment 1 was adopted.                                                                
CHAIR MCGUIRE opened public testimony.                                                                                          
2:02:34 PM                                                                                                                    
KIRSTEN  MYLES,   Director,  Cook   Inlet  CHARR,   testified  in                                                               
opposition to SB  165. She expressed concern that SB  165 will do                                                               
away with  the balanced decision-making of  the current Alcoholic                                                               
Beverage Control  (ABC) Board and  turn it  into a group  with an                                                               
anti-alcohol  agenda.  As  currently written,  the  potential  is                                                               
great that three of the  five board members will have backgrounds                                                               
from rural,  public safety, and  health and social  services, all                                                               
of  which  are  traditionally  anti-alcohol. A  board  with  this                                                               
perspective  could  differ  greatly from  the  interpretation  of                                                               
business that recognizes the economic  and social benefits of the                                                               
hospitality industry. She urged the committee to hold SB 165.                                                                   
2:04:00 PM                                                                                                                    
DALE  FOX,   President  and  CEO,  Alaska   CHARR,  testified  in                                                               
opposition to  SB 165.  He stated that  the board  and government                                                               
affairs committee voted unanimously to  oppose SB 165. He said he                                                               
attended  the  meetings  in  good   faith  for  three  years  and                                                               
consensus was  not reached  in the  committee process.  Claims to                                                               
the contrary  are simply  not true. Research  on other  boards in                                                               
Alaska shows they  are made up of a majority  of industry members                                                               
with a few public members.  As currently drafted, the composition                                                               
of  the ABC  Board  will  be anti-alcohol,  which  will not  lend                                                               
itself  to a  reasonably regulated  industry. He  reiterated that                                                               
Alaska  CHARR does  not support  SB 165  and doesn't  believe the                                                               
industry supports it.                                                                                                           
2:06:39 PM                                                                                                                    
SENATOR WIELECHOWSKI joined the committee.                                                                                      
ELIZABETH RIPLEY,  Executive Director, Mat-Su  Health Foundation,                                                               
testified in  support of  SB 165. She  reported that  that Mat-Su                                                               
Health Foundation  conducted a community health  needs assessment                                                               
in 2013 and alcohol and substance  abuse was ranked as the number                                                               
one  health   issue.  When  asked,  the   local  police  captains                                                               
reinforced that alcohol  was the number one  problem. She related                                                               
that  the foundation  is  a funding  partner  of Recover  Alaska,                                                               
which  aims to  reduce the  harm done  by alcohol  throughout the                                                               
state  by  employing   environmental  strategies.  This  includes                                                               
uniform enforcement  which SB 165  provides for  minor consuming.                                                               
They also  support the  change in composition  of the  ABC Board.                                                               
She  pointed out  that alcohol  isn't an  ordinary commodity;  it                                                               
brings in revenue  but it has enormous costs  associated with its                                                               
use.  She highlighted  that Alaska  is  the only  state that  has                                                               
given  the  alcohol  industry  such  a  prominent  voice  on  its                                                               
regulatory board,  and insisted that  the board instead  needs to                                                               
more fairly represent the interests  of all Alaskans. This can be                                                               
accomplished by  designating seats  for public safety  and public                                                               
health and  ensuring that they clearly  outnumber industry seats.                                                               
She urged the committee to pass SB 165.                                                                                         
CHAIR MCGUIRE asked for an example  of the laws that she hopes to                                                               
change as a result of the change in composition of the board.                                                                   
MS. RIPLEY  clarified that the  foundation is not  advocating for                                                               
policies that  eliminate the sale  of alcohol but  would advocate                                                               
for higher alcohol  taxes and policies that  restrict the density                                                               
of  alcohol  outlets,  create  an  environment  where  youth  are                                                               
prevented  from  having access  to  alcohol  and where  they  see                                                               
social norms that do not promote heavy use and abuse of alcohol.                                                                
2:10:33 PM                                                                                                                    
KATIE  KRAMARSYCK,  Juneau  Youth Services  (JYS),  testified  in                                                               
support of SB  165. She informed the committee  that JYS provides                                                               
outpatient  substance  abuse treatment  to  youth.  She said  JYS                                                               
supports the new  composition of the ABC Board. The  hope is that                                                               
it  will provide  a more  balanced representation  from community                                                               
members and  be more  consistent with  the new  Marijuana Control                                                               
Board. JYS  also supports the  change in the minor  consuming law                                                               
from a class  A misdemeanor to a violation with  a $500 fine. The                                                               
existing  minor consuming  laws are  enforced inconsistently  and                                                               
have  led  to few  referrals  for  treatment.  The hope  is  that                                                               
changing to a  $500 citation will lead to  better enforcement and                                                               
more  referrals for  treatment.  JYS also  supports reducing  the                                                               
fine  to  $50  upon  proof  of participation  in  ASAP,  JSAP  or                                                               
community  treatment  programs   because  it  provides  excellent                                                               
incentive for youth to go to treatment.                                                                                         
2:13:22 PM                                                                                                                    
JACK  MANNING, President,  Juneau  CHARR and  owner  of the  Duck                                                               
Creek Market, testified  in opposition to SB 165.  He stated that                                                               
CHARR  doesn't object  to the  youth portion  of SB  165, but  he                                                               
doesn't understand the urgency of  pulling the composition of the                                                               
ABC Board  out of the original  SB 99. He questioned  whether the                                                               
board would  function properly and  result in  litigation because                                                               
the people  wouldn't have business backgrounds.  The 1,800 liquor                                                               
license holders  in the  state ought  to be  made aware  of these                                                               
changes and  be factored into  the formula  of the makeup  of the                                                               
board, he said.                                                                                                                 
CHAIR  MCGUIRE  said she,  too,  was  concerned about  the  board                                                               
composition and didn't  necessarily support it, but  it's part of                                                               
a package  that has good  provisions for young people.  She asked                                                               
if he  anticipates similar problems  as those that  occurred when                                                               
the Murkowski  Administration put the board  under the Department                                                               
of Public Safety.  It became an agenda-driven  mission to perform                                                               
stings  and  she and  Senator  Meyer  felt compelled  to  sponsor                                                               
legislation to move the agency back to DCCED.                                                                                   
MR. MANNING said DPS at  the time focused its enforcement efforts                                                               
entirely on alcohol licenses and  doing stings. Nothing was spent                                                               
on any  other prevention methods  despite the fact that  the most                                                               
common way  for youth to  access alcohol  is at home.  He related                                                               
that during that time he could go  to court and get $1,000 from a                                                               
minor  who came  into  his store  and tried  to  buy alcohol.  He                                                               
always thought it  would be better to give the  youth a choice of                                                               
going to court or going to  a school assembly to talk about minor                                                               
consuming from their personal perspective.                                                                                      
CHAIR MCGUIRE said  her concern about changing the  makeup of the                                                               
board  is that  rural, health,  or public  safety representatives                                                               
may come in with an agenda.                                                                                                     
2:23:28 PM                                                                                                                    
PAUL THOMAS, Treasurer, Juneau Lynn  Canal CHARR and owner of the                                                               
Alaska Cache Liquor,  testified in opposition to SB  165. He said                                                               
he  was a  member of  two of  the ABC  committees that  have been                                                               
working on  Title 4  since 2012,  and he believes  the bill  is a                                                               
step  backwards  and  will  have   the  effect  of  damaging  the                                                               
cooperative  environment that  the industry  and board  have been                                                               
building.  The  diverse  group working  under  the  ABC  steering                                                               
committee did talk  about the composition of the  board, but this                                                               
concept was  not considered  and would  not have  been supported.                                                               
The current composition works well  and should not be changed. He                                                               
urged  the  committee to  hold  the  bill  and instead  pass  the                                                               
complete  package   that  reflects  the  cooperative   work  from                                                               
stakeholders and the board.                                                                                                     
2:26:12 PM                                                                                                                    
LEEANN THOMAS, CHARR  member and owner of the  Triangle Club Bar,                                                               
testified in  opposition to SB 165.  She said that for  two years                                                               
she actively participated  in the Title 4 rewrite  and is totally                                                               
against pulling elements from  that comprehensive legislation and                                                               
placing it  in a separate  bill. She emphasized the  advantage of                                                               
bringing Title  4 forward in  one piece  to ensure that  it works                                                               
together. She  pointed out  that it doesn't  work now  because of                                                               
the  piecemeal  approach.  In particular,  she  objected  to  the                                                               
composition  of  the  board.  She  said  two  industry  seats  is                                                               
insufficient, and that number could  potentially drop to one. She                                                               
maintained   that  the   non-industry   members   would  not   be                                                               
knowledgeable enough to make decisions about licenses.                                                                          
2:30:40 PM                                                                                                                    
JEFF JESSEE, Chief Executive Officer,  Alaska Mental Health Trust                                                               
Authority, expressed dismay  at some of the  testimony he'd heard                                                               
today  on SB  165. He  directed attention  to the  letter in  the                                                               
packets from the co-chair of  the Title 4 revision committee that                                                               
clearly sets out that the  composition of the board was discussed                                                               
and  consensus was  gained  on adding  public  health and  public                                                               
safety  seats to  the board.  To  claim otherwise  is simply  not                                                               
true,  he   said.  He   also  stated   that  the   argument  that                                                               
professional licensing  boards are  primarily made up  of members                                                               
of  that  profession  is  irrelevant because  the  ABC  Board  is                                                               
regulatory and  not a  professional licensing  board. Just  as it                                                               
wouldn't  be appropriate  to weight  the Oil  and Gas  Commission                                                               
with members from the oil  and gas industry, it isn't appropriate                                                               
for a  majority of the  ABC Board to  be actively engaged  in the                                                               
industry  that  is  being  regulated.  He  agreed  with  previous                                                               
testimony  that  the  current   composition  of  the  board  that                                                               
includes two  members from the alcohol  industry is unprecedented                                                               
nationwide. He said he'd be  happy to discuss, in public meetings                                                               
or  with members  separately,  the kinds  of  problems that  have                                                               
occurred because of the industry domination of this board.                                                                      
CHAIR MCGUIRE requested he give examples for the record.                                                                        
MR.  JESSEE said  one example  is that  the ABC  Board devised  a                                                               
scheme that allowed a Fairbanks  bar to continue to operate after                                                               
it failed  to renew its  liquor license.  The ABC Board  issued a                                                               
second bar  week-long catering permits  that allowed it  to cater                                                               
the operations  of the first  bar whose license had  lapsed. This                                                               
went  on week  after week.  Manipulation of  a recreational  site                                                               
license provides  a second example.  That statute  clearly states                                                               
that those licenses  are for seasonal events that  allow the sale                                                               
of beer and wine  an hour before and an hour  after the event. It                                                               
is used  for events like  baseball and hockey games.  A billiards                                                               
parlor applied for and received  a recreational site license, and                                                               
the  justification was  that people  play  pool. Other  billiards                                                               
parlors  then applied  for  licenses  so they  wouldn't  be at  a                                                               
competitive  disadvantage.   At  some  point,  the   Alaska  Club                                                               
received a  recreational site  license that  allowed the  sale of                                                               
beer and  wine during  operating hours seven  days a  week. There                                                               
was  no  event,  no  season,  and   had  nothing  to  do  with  a                                                               
recreational  site as  envisioned by  the legislature.  The board                                                               
expanded  this license  type so  far that  even CHARR  eventually                                                               
objected saying it had the potential to diminish their licenses.                                                                
MR.  JESSEE said  the forgoing  examples are  exactly why  public                                                               
health and public safety should  be represented on the ABC Board.                                                               
That  voice needs  to  be heard  consistently  so other  agencies                                                               
don't  need  to  constantly  birddog  the  board's  activity  and                                                               
interpretation of  the statutes.  The legislature  recognized the                                                               
importance  of  public  health  and safety  when  it  formed  the                                                               
marijuana board and  it's just as appropriate for  this board, he                                                               
2:37:29 PM                                                                                                                    
ELLEN GANLEY, Vice  Chair, ABC Board, related that  she serves as                                                               
a public member of the board  and has a public health background.                                                               
She fully supports  the changes to the composition  of the board,                                                               
and  believes that  it gives  an opportunity  to bring  in voices                                                               
that represent other constituencies.  She also stated support for                                                               
the  changes to  the  minor consuming  statutes, because  issuing                                                               
tickets as opposed  to misdemeanors will help  identify the scope                                                               
of the problem in the state.                                                                                                    
2:39:22 PM                                                                                                                    
CHYSTAL  SCHOENROCK, Business  owner,  Forelands  Bar, and  CHARR                                                               
member,  testified  in  opposition  to  SB  165.  She  questioned                                                               
whether the bill  wasn't a backdoor approach  to return oversight                                                               
of  the  ABC  Board  to  the Department  of  Public  Safety.  She                                                               
stressed that  there is no  reason to  change a fair  system that                                                               
has worked for many years.                                                                                                      
2:40:29 PM                                                                                                                    
LARRY   HACKENMILLER,   representing    himself,   testified   in                                                               
opposition to SB  165. He said the concerns  Mr. Jessee expressed                                                               
have  been addressed  in three  years of  regulation writing.  He                                                               
continued to say  that contrary it the sponsor's  remarks and Mr.                                                               
Klein's  representation,  the  Alaska  CHARR  government  affairs                                                               
committee did not  arrive at a consensus to change  the makeup of                                                               
the  ABC Board.  He said  the existing  composition of  the board                                                               
works  and does  allow  for  someone from  the  fields of  public                                                               
health and  public safety to  be appointed. This  mandated change                                                               
isn't warranted  and the  accompanying education  component isn't                                                               
called  for in  the statute.  He also  questioned the  purpose of                                                               
putting  law  enforcement on  the  board,  because public  safety                                                               
concerns are  not impaired  by having two  public members  on the                                                               
board. The changes to the minor  consuming laws does cut some red                                                               
tape but  would be more  appropriate in the comprehensive  SB 91.                                                               
Finally, he described the ABC Board  as a licensing board that is                                                               
appropriately housed under DCCED.                                                                                               
2:43:30 PM                                                                                                                    
CHAIR MCGUIRE closed public testimony on SB 165.                                                                                
2:43:48 PM                                                                                                                    
At ease                                                                                                                         
2:48:02 PM                                                                                                                    
CHAIR  MCGUIRE  reconvened  the meeting  and  offered  Conceptual                                                               
Amendment 2 to SB 165.                                                                                                          
                     CONCEPTUAL AMENDMENT 2                                                                                 
     OFFERED IN THE SENATE JUDICIARY COMMITTEE                                                                                  
          TO SB 165                                                                                                             
     AS  12.62.400(a)   is  amended   by  inserting   a  new                                                                    
     paragraph (18) that reads:                                                                                                 
          (18) a registration or license to operate a                                                                       
     marijuana establishment 31 under AS 17.38.                                                                             
     AS 17.38.200(a) is amended to read:                                                                                        
          (a) Each application or renewal application for a                                                                     
     registration  to  operate   a  marijuana  establishment                                                                    
     shall be submitted to the  board. A renewal application                                                                    
     may be  submitted up to  90 days before [PRIOR  TO} THE                                                                
     EXPIRATION    OF    THE    MARIJUANA    ESTABLISHMENT'S                                                                    
     REGISTRATION.  When filing  an  application under  this                                                                
     subsection, the applicant  shall submit the applicant's                                                                
     fingerprints and  the fees  required by  the Department                                                                
     of  Public  Safety  under  AS  12.62.160  for  criminal                                                                
     justice  information and  a  national criminal  history                                                                
     record check. The board  shall forward the fingerprints                                                                
     and fees to  the Department of Public  Safety to obtain                                                                
     a  report  of  criminal justice  information  under  AS                                                                
       12.62 and a national criminal history record check                                                                   
     under AS 12.62.400.                                                                                                    
SENATOR COGHILL objected for an explanation.                                                                                    
CHAIR MCGUIRE  explained that  the bill  that gave  the Marijuana                                                               
Control  Board  the  authority  to  issue  licenses,  included  a                                                               
requirement that  all applicants submit to  a criminal background                                                               
check.  This  was to  ensure  that  licenses  are not  issued  to                                                               
felons. In an  oversight, the bill didn't give  the Department of                                                               
Commerce,   Community  and   Economic  Development   (DCCED)  the                                                               
specific  statutory  authority  to request  a  national  criminal                                                               
history  record check.  She said  she is  offering the  amendment                                                               
conceptually so the drafter can comport it to SB 165.                                                                           
2:49:31 PM                                                                                                                    
SENATOR COGHILL removed his objection.                                                                                          
SENATOR  WIELECHOWSKI highlighted  a  clerical error  in the  new                                                               
paragraph (18).                                                                                                                 
2:49:55 PM                                                                                                                    
At ease                                                                                                                         
2:50:48 PM                                                                                                                    
CHAIR   MCGUIRE  reconvened   the  meeting   and  asked   Senator                                                               
Wielechowski to offer an amendment to Conceptual Amendment 2.                                                                   
SENATOR WIELECHOWSKI moved  to strike the number "31"  in the new                                                               
paragraph 18.  [It appears between the  words "establishment" and                                                               
CHAIR MCGUIRE  found no objection  and announced  that Conceptual                                                               
Amendment 2, as amended, is adopted.                                                                                            
2:51:50 PM                                                                                                                    
SENATOR  MICCICHE  spoke of  the  testimony  he heard  today  and                                                               
clarified that he  does not support moving the ABC  Board back to                                                               
the Department of  Public Safety and he does  have documents that                                                               
clearly show  what CHARR  agreed to. He  said his  perspective is                                                               
that after  a great  number of  steering committee  meetings that                                                               
included the industry, they had a  bill that was ready and at the                                                               
last moment CHARR  indicated it wasn't ready. Because  of that he                                                               
introduced SB  165 that  includes two  things that  everybody had                                                               
agreed on.  He read excerpts  from steering committee  minutes on                                                               
10/5/15 regarding composition of the  board and a letter from the                                                               
CHARR  government  affairs  committee   dated  1/22/16.  In  that                                                               
letter, CHARR said:                                                                                                             
     Alternatively,  the  industry committee  suggests  that                                                                    
     the  composition  of  the  ABC   Board  and  the  minor                                                                    
     consuming sections  could remain  intact if we  added a                                                                    
     section  to   reduce  the  class  A   misdemeanors  for                                                                    
     licensees  in  Title  4  to  violations  with  language                                                                    
     approved by  both the steering committee  and the CHARR                                                                    
     government affairs committee.                                                                                              
SENATOR MICCICHE emphasized that the  Title 4 rewrite effort will                                                               
continue and the remainder of  the original bill will deliver the                                                               
results  that CHARR  wants. But  the  provisions in  SB 165  were                                                               
agreed upon and it's appropriate  to make those changes now, this                                                               
legislative  session.  He  reiterated  support  for  the  alcohol                                                               
industry  as an  important  part of  Alaska's  economy and  again                                                               
emphasized that  the bill does not  have a hidden agenda  and the                                                               
industry  should not  be blamed  for the  social ills  associated                                                               
with over-consumption of  alcohol. The bill is an  effort to help                                                               
the  industry  partner with  communities  to  attain a  healthier                                                               
CHAIR MCGUIRE offered her understanding  that work would continue                                                               
on the larger rewrite of Title 4.                                                                                               
2:57:45 PM                                                                                                                    
SENATOR  WIELECHOWSKI said  he supports  a lot  of things  in the                                                               
bill,  but  it's  moving  a  little  fast.  The  bill  was  heard                                                               
previously in  Senate Labor  and Commerce but  there is  only one                                                               
day of published  minutes available. On Monday  the bill received                                                               
a quick  introduction and  23 people were  signed up  to testify.                                                               
Today  the hearing  has lasted  just 45  minutes to  an hour.  He                                                               
noted there is no other committee  of referral and he'd feel more                                                               
comfortable if there  was more time to study  it before reporting                                                               
it out.                                                                                                                         
SENATOR  COSTELLO, speaking  as  Chair of  the  Senate Labor  and                                                               
Commerce Committee,  clarified that  every bill that  is referred                                                               
to  that committee  receives at  least two  hearings and  all the                                                               
public comment.                                                                                                                 
CHAIR MCGUIRE  said her  inclination is to  move the  bill today,                                                               
but she would take additional amendments.                                                                                       
2:59:18 PM                                                                                                                    
At ease                                                                                                                         
3:00:10 PM                                                                                                                    
CHAIR MCGUIRE reconvened the meeting and solicited a motion.                                                                    
3:00:18 PM                                                                                                                    
SENATOR COGHILL  moved to report the  CS for SB 165,  as amended,                                                               
from committee with individual  recommendations and attached zero                                                               
fiscal note.                                                                                                                    
SENATOR WIELECHOWSKI objected.                                                                                                  
CHAIR MCGUIRE asked for a roll call.                                                                                            
A  roll   call  vote  was  taken.   Senators  Coghill,  Costello,                                                               
Micciche, and  McGuire voted in  favor of  the motion to  move SB
165  from committee  and Senator  Wielechowski voted  against it.                                                               
Therefore, by a  vote of 4:1 CSSB 165(JUD) was  reported from the                                                               
Senate Judiciary Standing Committee.                                                                                            
3:01:05 PM                                                                                                                    
SENATOR  MICCICHE  stated his  intention  to  remain engaged  and                                                               
ensure that members who are appointed  to the board do not have a                                                               
record of opposing the industry.                                                                                                

Document Name Date/Time Subjects
SB 165 Support Klien Jessee.pdf SJUD 3/30/2016 1:30:00 PM
SB 165
SB 165 Opposition Shapiro.pdf SJUD 3/30/2016 1:30:00 PM
SB 165
SB 165 Fiscal Note Courts.pdf SJUD 3/30/2016 1:30:00 PM
SB 165
SB 103 MSBSD Testimony.pdf SJUD 3/30/2016 1:30:00 PM
SB 103
SB 103 Opposition ASD 3.9.16.pdf SJUD 3/30/2016 1:30:00 PM
SB 103
SB 8- CS Version W.pdf SJUD 3/30/2016 1:30:00 PM
SB 8
SB 103 Letter of Support Northstar.pdf SJUD 3/30/2016 1:30:00 PM
SB 103
SB 165 Opposition Stewart.msg SJUD 3/30/2016 1:30:00 PM
SB 165
SB 165 Opposition Matthews.msg SJUD 3/30/2016 1:30:00 PM
SB 165
SB 103 Opposition Gov. Council on Disabilities.pdf SJUD 3/30/2016 1:30:00 PM
SB 103