Legislature(2017 - 2018)BELTZ 105 (TSBldg)

04/11/2018 01:30 PM JUDICIARY

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
<Bill Hearing Canceled>
<Bill Hearing Canceled>
<Bill Hearing Canceled>
Heard & Held
Scheduled but Not Heard
Heard & Held
Scheduled but Not Heard
Heard & Held
Uniform Rule 23 Waived
Scheduled but Not Heard
Uniform Rule 23 Waived
         SB  76-ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG                                                                     
1:38:47 PM                                                                                                                    
CHAIR  COGHILL  announced the  consideration  of  SB 76.  [CSSSSB
76(L&C) was before the committee.]                                                                                              
1:39:02 PM                                                                                                                    
SENATOR  PETER   MICCICHE,  Alaska  State   Legislature,  Juneau,                                                               
Alaska, sponsor  of SB 76,  stated that the  bill is the  Title 4                                                               
rewrite.  SB  76  modernizes the  state's  35-year-old  alcoholic                                                               
beverage statutes  to allow the Alcoholic  Beverage Control Board                                                               
to operate  more efficiently  as it regulates  the industry  in a                                                               
manner that  promotes public safety  and health  while supporting                                                               
the industry's viability. The bill  is the product of a five-year                                                               
collaboration  of  over  100  stakeholders.  This  diverse  group                                                               
includes representatives of the  alcohol industry, public health,                                                               
public safety, local governments, and advocates for youth.                                                                      
Five shared  goals served  as the  foundation for  developing the                                                               
   1. Promoting a fair business climate while protecting public                                                                 
     safety and health                                                                                                          
   2. Creating rational regulations for all tiers of the state's                                                                
     alcohol industry                                                                                                           
   3. Limiting youth access to alcohol                                                                                          
 4. Promoting responsible alcohol use and reducing the harms of                                                                 
    5. Implementing without negative impacts on business and                                                                    
SENATOR  MICCICHE  said SB  76  is  largely a  reorganization  of                                                               
existing statutes. It clearly defines  the rights and obligations                                                               
of licensees,  restructures penalties  for Title 4  offenses, and                                                               
organizes the statutes in a logical manner for all the users.                                                                   
1:41:30 PM                                                                                                                    
ANNA  BRAWLEY,  Title 4  Project  Review  Coordinator and  Senior                                                               
Associate, Agnew Beck Consulting,  Anchorage, Alaska, thanked the                                                               
committee for hearing  SB 76 and invited questions at  the end of                                                               
each  section of  the presentation.  She  said she  would give  a                                                               
brief overview  of the Title  4 review project and  highlight the                                                               
recommendations in SB 76. She  would also clarify the substantive                                                               
portions that are not changing but being reorganized.                                                                           
She said the title has not  been updated since 1980 and piecemeal                                                               
changes have created confusion in  the law. Looking at the entire                                                               
title to see  what is and is  not working and how  the pieces fit                                                               
together  was the  goal of  the project.  The Alcoholic  Beverage                                                               
Control (ABC) Board initiated the  project in 2012 in recognition                                                               
of the issues with the statutes  that needed to be addressed. The                                                               
board and others brought together  over 100 stakeholders and have                                                               
put  in at  least 12,000  hours on  the project  since 2012.  The                                                               
result is SB 76.                                                                                                                
MS. BRAWLEY displayed  slide 4, which is a  sectional overview of                                                               
SB  76 that  helps  show how  the bill  is  organized. There  are                                                               
several chapters  of Title  4 that  deal with  different subjects                                                               
and that's  the way the  bill is organized. For  example, Chapter                                                               
11 is  licensing, Chapter 6  is powers  and duties of  the board.                                                               
The Title 4 Review Stakeholder  Report has a more thorough review                                                               
of   each  recommendation   and  what   was  considered   by  the                                                               
stakeholder group.                                                                                                              
She listed  the following  six categories of  the Title  4 review                                                               
   1. Alcohol licenses, permits and trade practices                                                                             
    2. Role and functions of the ABC Board and staff of the                                                                     
     Alcohol and Marijuana Control Office                                                                                       
   3. Recommendations relating to underage drinking and youth                                                                   
     access to alcohol                                                                                                          
   4. Regulation of internet sales of alcohol                                                                                   
   5. Technical  or   administrative    law   changes   such   as                                                               
     reorganizing the statutes                                                                                                  
   6. Discussion about local option communities                                                                                 
MS. BRAWLEY  noted that  the stakeholder  group is  interested in                                                               
continuing the discussions with  local option communities but the                                                               
bill doesn't  have many recommendations  about this  because more                                                               
discussion and participation from rural communities is needed.                                                                  
She reviewed the following key concepts in Title 4:                                                                             
   • Licenses and permits:                                                                                                      
     - License: Allows a business to sell, serve, distribute                                                                    
        and/or manufacture alcohol for the term of the license (2                                                               
     - Permit: Allows time-limited alcohol sales or service by a                                                                
        licensee or non-licensed organization.                                                                                  
   • The 3-tier system: The separation of manufacturers,                                                                        
     wholesalers and retailers to prevent monopolies.                                                                           
   • Population limits: This statute regulates the number of                                                                    
     licenses available in each community by type.                                                                              
   • Proposed new concept: Endorsements are license add-ons that                                                                
     allow an expanded physical presence or expanded activities                                                                 
     on a license.                                                                                                              
MS.   BRAWLEY  displayed   slide  7,   the  3-tier   system  that                                                               
illustrates that  alcohol must be manufactured,  distributed, and                                                               
sold  to the  public  by different  businesses.  This system  was                                                               
established  after  prohibition  and   was  designed  to  prevent                                                               
monopolies.  The laws  have changed  over the  years, and  a main                                                               
theme  of the  discussion is  how much  of the  3-tier system  to                                                               
preserve  and  how much  to  change,  given  the changes  in  the                                                               
She advised  that population limits  is another key  concept that                                                               
is addressed in current statute.  Each license type is limited by                                                               
the  number of  permanent residents  in the  community. For  most                                                               
licenses it is one per 3,000  residents and for restaurants it is                                                               
one license per  1,500 residents. A few license  types are exempt                                                               
from population limits,  most of which are  for serving tourists.                                                               
Retail outlets  primarily have raised health  and safety concerns                                                               
regarding  the  population  limits  because  a  large  number  of                                                               
different license types can result  in a high density of licenses                                                               
in a community even though the statute seems very restrictive.                                                                  
MS. BRAWLEY  said the  first recommendation in  SB 76  relates to                                                               
population limits.                                                                                                              
     P-1. Population Limits Apply to Retail Licenses Only                                                                     
       • Apply population limitations on the number of                                                                          
          licenses only to retail-tier licenses (excluding                                                                      
          tourism-focused   licenses   and   Winery   Direct                                                                    
          Shipment License).                                                                                                    
      • Wholesale licenses, manufacturer licenses who do                                                                        
          not directly serve the public, and some licenses                                                                      
          designed to serve tourists would be exempt from                                                                       
     SB 76: Section 43, 04.11.400(a); Section 44,                                                                               
1:48:50 PM                                                                                                                    
SENATOR  WIELECHOWSKI  noted  that  slide 8  indicates  that  one                                                               
package store is  allowed for every 3,000  people and restaurants                                                               
are one  for every 1,500  people but the  numbers on slide  9 are                                                               
much lower.  He asked how  that happened and if  those businesses                                                               
are grandfathered or operating illegally.                                                                                       
MS. BRAWLEY said it's not  licenses that are operating illegally.                                                               
One reason that  there are more licenses than  the statute allows                                                               
is that  some were probably  issued before the  population limits                                                               
were  put in  place.  Also, slide  9 shows  the  total number  of                                                               
retail licenses  in those communities,  not just bars  or package                                                               
store.  Depending  on  the  number of  types  of  licenses  being                                                               
operated in the community, the numbers can get very high.                                                                       
SENATOR  WIELECHOWSKI asked  if she  knew the  number of  package                                                               
stores  or  restaurants  per  residents   in  Juneau,  Nome,  and                                                               
Fairbanks  to  get an  apples  to  apples comparison  versus  the                                                               
MS.  BRAWLEY said  she would  get  the numbers  from the  Alcohol                                                               
Marijuana  Control  Office (AMCO).  They  publish  the number  of                                                               
licenses operating in each community.                                                                                           
SENATOR  WIELECHOWSKI  asked  how  the rewrite  will  change  the                                                               
overall density of licenses based on population.                                                                                
MS. BRAWLEY  replied the rewrite  will not change  the underlying                                                               
population limit  formulas. It keeps  any retail license  that is                                                               
currently under population limits at  the same level. Part of the                                                               
rewrite is  a recommendation to  not create new license  types or                                                               
at least  to consider  the implications  of creating  new license                                                               
1:51:02 PM                                                                                                                    
MS. BRAWLEY  directed attention  to slide  11 and  explained that                                                               
another primary  recommendation of SB  76 is to  increase license                                                               
fees. Most license  fees have not been increased  since the 1980s                                                               
or when the license type was created in statute.                                                                                
         F-1 Adjust License Fees to Reflect Current ABC                                                                       
     Budgetary Needs.                                                                                                         
        • Update license fees according to privileges and                                                                       
          administrative costs of each, and collect                                                                             
          sufficient revenue to cover the ABC Board's                                                                           
          required activities:                                                                                                  
            Administration of licenses & permits                                                                                
            Education about Title 4 and related regulations                                                                     
            Enforcement of Title 4 and related regulations                                                                      
        • ABC Board required to review license fees at                                                                          
          least every 10 years.                                                                                                 
        • (see also RB-3: Revise ABC Board Budget to                                                                            
          Adequately Fund Necessary Activities).                                                                                
      • See Appendix, Table 2 on page 66 of the report.                                                                         
      SB 76: Section 5, 04.06.090; License fees throughout                                                                      
     Section 9                                                                                                                  
CHAIR COGHILL asked if this will  help relieve some of the stress                                                               
the  board   is  under  regarding  licensing,   enforcement,  and                                                               
MS.  BRAWLEY  deferred  the  question  to  Erika  McConnell,  the                                                               
director of AMCO.                                                                                                               
1:53:33 PM                                                                                                                    
MS.  BRAWLEY directed  attention to  the recommendation  in slide                                                               
12.  Under current  statute, municipal  governments receive  half                                                               
the  license fee  revenue  collected  by the  ABC  Board for  the                                                               
purpose  of enforcing  Title 4.  SB 76  strengthens the  existing                                                               
requirement that municipalities report  how those funds are being                                                               
     RB-1. Strengthen Reporting Requirements for Municipal                                                                    
        • 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.                                                                                      
Slide  13, Proposed  in SB  76: Accountability  for License  Fees                                                               
Allocated to  Local Governments,  illustrates the  current system                                                               
and  notes that  the  report would  be required  as  part of  the                                                               
revenue allocation.                                                                                                             
Slide 14 illustrates the reorganization of existing statutes.                                                                   
     Proposed Changes to licenses, endorsements and permits                                                                   
     SB 76, Section 9: proposed new Chapter 9 in Title 4                                                                        
          04.09.010: Types of Licenses                                                                                        
          04.09.020 - .040: Manufacturing Tier Licenses                                                                         
          04.09.100 - .110: Wholesale Tier Licenses                                                                             
          04.09.200  .360: Retail Tier Licenses                                                                                 
          04.09.400: Definition of Endorsements                                                                               
          04.09.410 - .520: Types of Endorsements                                                                               
          04.09.600: Definition of Permits                                                                                    
          04.09.610 - .690: Types of Permits                                                                                    
MS. BRAWLEY displayed slide 15,  License Types by Tier. She noted                                                               
that  more information  about  each tier  is  in the  stakeholder                                                               
report  and that  most  of  the license  types  are not  changing                                                               
        • Manufacturing Tier                                                                                                    
            Brewery, Winery, Distillery                                                                                         
        • Wholesale Tier                                                                                                        
            General Wholesale, Beer & Wine Wholesale                                                                            
        • Retail Tier                                                                                                           
              Subject   to   population   limits:   Beverage                                                                    
          Dispensary,  Restaurant  or  Eating  Place,  Club,                                                                    
          Package  Store,   Pub,  Theater,   Common  Carrier                                                                    
          Dispensary, Sporting  Event, Golf  Course, Brewery                                                                    
          Retail, Winery Retail, Distillery Retail                                                                              
              Exempt   from   population   limits:   Outdoor                                                                    
          Recreation  Lodge,  Destination  Resort,  Beverage                                                                    
          Dispensary Tourism, Seasonal  Restaurant or Eating                                                                    
         Place Tourism, Winery Direct Shipment License                                                                          
     [SB 76: Section 9, defined in 04.09.020           040;                                                                     
     04.09.100  110; 04.09.200  360.]                                                                                           
1:55:58 PM                                                                                                                    
SENATOR  SHOWER asked  how the  population limits  and exemptions                                                               
would apply to a summertime tourist town like Talkeetna.                                                                        
MS. BRAWLEY  said Talkeetna's situation  would not be  changed in                                                               
the  sense   that  certain  license  types   are  issued  without                                                               
consideration   of   population   limits.  Also,   the   existing                                                               
population  limits set  within a  borough or  community within  a                                                               
borough are not changed by SB 76.                                                                                               
SENATOR SHOWER  asked for confirmation that  Talkeetna and Denali                                                               
with the  Princess lodges are  in the Unincorporated  Borough and                                                               
would not change.                                                                                                               
MS. BRAWLEY said that's correct.                                                                                                
MS.  BRAWLEY  displayed  slide  16,  M-2&3.  Manufacturer  Retail                                                               
Operations  +  Sampling. It  lists  the  following proposals  for                                                               
breweries, wineries, and distilleries:                                                                                          
        • Allow small manufacturers, with the threshold defined                                                                 
          in the  bill, to  obtain a retail  license (restaurant,                                                               
          package store,  etc.) Currently, with the  exception of                                                               
          brewpubs,  a manufacturer  cannot get  a package  store                                                               
          license or a restaurant license.                                                                                      
        • Add-on retail licenses specifically for manufacturers                                                                 
          to allow limited onsite consumption and offsite sales.                                                                
            Existing licenses converted                                                                                         
            New retail licenses have 1:9,000 population limit                                                                   
        • A separate endorsement for free samples.                                                                              
      SB 76: Section 9, 04.09.310, .320, .330; 04.09.410;                                                                       
     Section 43, 04.11.400(a).                                                                                                  
She  said the  1:9,000 population  limit recognizes  the possible                                                               
unintended consequence of creating three new license types.                                                                     
CHAIR COGHILL said he's heard  some tension about the differences                                                               
in fees and licenses.                                                                                                           
MS.  BRAWLEY  said   her  understanding  is  that   there  is  an                                                               
application  fee  for  all  licenses and  each  has  a  different                                                               
license fee set in statute.                                                                                                     
CHAIR COGHILL commented  that the population limits  are based on                                                               
an arcane formula that he needs to become familiar with.                                                                        
2:00:08 PM                                                                                                                    
SENATOR SHOWER  asked if the town  of Valdez could have  a second                                                               
manufacturer. It currently has one and a population of 4,000.                                                                   
MS.  BRAWLEY said  the limit  currently is  1:3,000. The  statute                                                               
says 3,000 or part of 3,000 so  a town of 4,000 people could have                                                               
two  brewery licenses.  SB 76  grandfathers any  existing brewery                                                               
and any new applicant would be  subject to the 1:9,000 limit. The                                                               
existing brewery in Valdez could  open a new manufacturing space,                                                               
which is not  subject to population limits. A  tasting room would                                                               
not be available unless the population increases.                                                                               
SENATOR SHOWER  asked if that could  be appealed to the  board or                                                               
MS. BRAWLEY  deferred the question  to the Alcohol  and Marijuana                                                               
Control Office.                                                                                                                 
MS. BRAWLEY said that slide 17,  Proposed in SB 76: Volume Limits                                                               
for  Free Samples  from  Manufacturers,  demonstrates the  volume                                                               
limits  for free  samples.  Currently the  ounce  limit for  free                                                               
samples is not defined in  statute. The proposed ounce limits are                                                               
generally  specific to  the alcohol  equivalent for  each product                                                               
2:02:31 PM                                                                                                                    
MS.  BRAWLEY said  that slide  18,  Proposed in  SB 76:  Multiple                                                               
Retail   License  Options   for  Manufacturers   illustrates  the                                                               
different retail  options for  the manufacturing  licensees. They                                                               
could either get  a specific manufacturer retail  license or they                                                               
could obtain  an existing retail  license. The slide  provides an                                                               
example  for breweries  but the  same would  apply for  all three                                                               
license types.                                                                                                                  
MS. BRAWLEY said slide 19,  Proposed in SB 76: Onsite Consumption                                                               
Limits for  Manufacturers, in Standard  Product Units,  shows the                                                               
proposed  sales  limits  for on-site  and  off-site  consumption.                                                               
These are  by product type  and license  type. The bill  does not                                                               
make  substantive changes  to the  brewery and  distillery retail                                                               
licenses. It does add ounce  equivalents for winery retail, which                                                               
are not currently defined.                                                                                                      
She asked if  thee were any questions on  the highlighted changes                                                               
to licenses.                                                                                                                    
CHAIR COGHILL  said he's  heard some  pushback on  the Distillery                                                               
Retail 3-ounce  equivalent. He asked  if that was  debated during                                                               
the process.                                                                                                                    
MS. BRAWLEY  said there was  some debate  and the group  opted to                                                               
maintain the limits in current statute.                                                                                         
SENATOR  WIELECHOWSKI  asked  if  the bill  fixes  the  issue  of                                                               
distilleries being able to serve mixed drinks.                                                                                  
MS. BRAWLEY said  no; the issue came up after  the review process                                                               
was completed.                                                                                                                  
SENATOR  WIELECHOWSKI asked  if  she would  support amending  the                                                               
bill to include a fix for that issue.                                                                                           
MS. BRAWLEY deferred to the sponsor.                                                                                            
CHAIR COGHILL said he received  a negative response when he asked                                                               
the question but the committee should still ask him about that.                                                                 
SENATOR  COSTELLO asked  how the  ounce  equivalents allowed  for                                                               
Distillery Retail place relative to other states.                                                                               
MS. BRAWLEY  said her recollection  is that  3 ounces is  high in                                                               
the states that define an ounce  limit. Some states do not define                                                               
a limit other than a small, free sample.                                                                                        
2:06:08 PM                                                                                                                    
MS. BRAWLEY said slide 20, Proposed  in SB 76: Endorsements, is a                                                               
new concept. The  idea is to provide more  options for businesses                                                               
in terms  of the area  they are able  to serve or  the activities                                                               
they  engage in.  They are  an add-on  to existing  licenses that                                                               
could only  be transferred with  a license  and would need  to be                                                               
renewed every two years. This  also provides the legislature more                                                               
options  to  address  new business  concepts  without  having  to                                                               
create a new license type.                                                                                                      
CHAIR  COGHILL  asked  if  the  ABC  Board  would  authorize  the                                                               
MS. BRAWLEY said the ABC  Board would review applications for the                                                               
endorsements, but they would not  create endorsements. They would                                                               
be defined in statute.                                                                                                          
She said that slide 21, R-7  Create Endorsements, is a summary of                                                               
endorsements. The  concept was used  to reorganize and  make more                                                               
logical activities that businesses can currently do.                                                                            
        • 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 said  that slide 22 lists  the proposed endorsements.                                                               
The  package  store  sampling  is   new.  The  sectional  summary                                                               
provides  information about  whether or  not they  are new  or in                                                               
current   law.  For   example,  [R-3]   Package  Store   Sampling                                                               
Endorsement is new.                                                                                                             
Slide  23,  Proposed  in  SB  76:  Package  Store  Sample  Limits                                                               
illustrates the  sample amounts allowed  by product  type. Alaska                                                               
law currently does not allow  package stores to offer consumption                                                               
on premises. This  proposal would allow a package  store to apply                                                               
for  an  endorsement to  provide  small,  free samples  on  their                                                               
premises. The  samples would be  subject to ounce  limits defined                                                               
as:  "Any combination  of  products, not  to  exceed the  alcohol                                                               
equivalent of  any single  product type."   The sample  limits by                                                               
product are: beer or cider - 12  ounces; wine or mead   6 ounces;                                                               
and spirits    1.5 ounces.  The business would decide  whether to                                                               
operate this through a ticket system or menu.                                                                                   
2:09:52 PM                                                                                                                    
MS. BRAWLEY  said that  slide 24,  R-7 Standardize  Permits, does                                                               
not  propose  major  changes for  permits  currently  defined  in                                                               
statute  or   regulation.  A  standard  application   process  is                                                               
proposed for permits:                                                                                                           
        • Define all permit types in statute, not only in                                                                       
        • Fee for all permits is $50 per event day                                                                              
        • Most permits listed are already in statute or                                                                         
        • New permit: Tasting Event Permit, allowing a Package                                                                  
          Store or Manufacturer to host an event on premises, in                                                                
          partnership with a BDL [Beverage Dispensary License]                                                                  
SENATOR SHOWER asked if a town  could apply for a one-day Tasting                                                               
Event Permit for a July 4   celebration or if an existing license                                                               
would be required.                                                                                                              
MS.  BRAWLEY  said  it  is  defined  by  permit  type.  Some  are                                                               
available  only to  current license  holders of  a specific  type                                                               
while others  are available to  nonprofit organizations  or other                                                               
MS.  BRAWLEY  said slide  25,  Proposed  Permits, shows  proposed                                                               
permits and whether they are currently in regulation or statute:                                                                
        • R-7F | Beverage Dispensary Caterer's Permit (AS                                                                       
          04.11.230; 3 AAC 304.685)                                                                                             
        • R-7G | Restaurant Caterer's Dining Permit (3 AAC                                                                      
        • R-7H | Club Caterer's Permit (3 AAC 304.690)                                                                          
        • R-7I | Nonprofit Event Permit (AS 04.11.240)                                                                          
        • R-7J | Art Exhibit Permit (3 AAC 304.697)                                                                             
        • R-7K | Alcoholic Beverage Auction Permit (3 AAC                                                                       
        • R-7L | Inventory Resale Permit (Retail Stock Sale                                                                     
          License, AS 04.11.200)                                                                                                
      • R-7M | Tasting Event Permit (proposed in SB 76)                                                                         
MS. BRAWLEY  highlighted that the  Tasting Event Permit  allows a                                                               
package store or manufacturer to  host a special tasting event on                                                               
its premises  in partnership with a  beverage dispensary licensee                                                               
to showcase  their products. Six  of these events per  license is                                                               
allowed each year.                                                                                                              
CHAIR  COGHILL commented  that passage  of the  bill will  have a                                                               
huge impact on the existing codes.                                                                                              
MS.  BRAWLEY  agreed  and  added   that  she  would  address  the                                                               
implementation period later in the presentation.                                                                                
She said that is the end of the permit recommendations.                                                                         
2:12:13 PM                                                                                                                    
MS.  BRAWLEY said  slide 27,  Proposed in  SB 76:  Regulate Trade                                                               
Practices,  illustrates   another  recommendation   that  impacts                                                               
licenses.   Federal  laws   governing  trade   practices  protect                                                               
retailers from manufacturers  or wholesalers unfairly influencing                                                               
purchase decisions.  Most states have implemented  parallel state                                                               
laws   because  the   federal  government   lacks  capacity   for                                                               
enforcement. Also, federal law does  not regulate trade practices                                                               
for breweries.  That regulation is  left to the  states. Examples                                                               
of trade practices are:                                                                                                         
   • Tied House  Partial ownership of retail license by a                                                                       
      manufacturer or wholesaler to control what products are                                                                   
      sold or exclude competitors. This does not apply to 100                                                                   
      percent manufacturer-owned licenses.                                                                                      
   • Exclusive Outlet  An agreement between a supplier and                                                                      
      retailer to exclude other retailers or suppliers.                                                                         
   • Commercial Bribery  The supplier pays a bonus or provides                                                                  
      merchandise in exchange for exclusive arrangement or                                                                      
      agreement not to purchase other products.                                                                                 
   • Consignment Sales  A supplier and retailer make deals to                                                                   
      take back unsold products .                                                                                               
     SB 76: section 77, 04.16.017                                                                                               
2:13:46 PM                                                                                                                    
MS. BRAWLEY  said that slide  28, P-3. Retire  Public Convenience                                                               
Process;  New Options  for REPLs,  lists the  recommendations for                                                               
Public Convenience Licenses:                                                                                                    
   • Repeal Public Convenience statute.                                                                                         
• Convert all existing Public Convenience restaurant licenses                                                                   
     to   standard   restaurant    licenses.   They   are   fully                                                               
     transferrable and subject to population limits with                                                                        
   • Create a Seasonal Restaurant Tourism License.                                                                              
  • Allow qualifying municipalities, first class cities, or                                                                     
     unified municipalities to petition the ABC Board to                                                                        
   increase the number of REPLs available in their community.                                                                   
     SB 76: Section 9, 04.09.210, .350; Sections 46-48,                                                                         
     04.11.405; Transition                                                                                                      
MS. BRAWLEY  said slide 29, Public  Convenience Petition Process:                                                               
Current  Title  4,  illustrates the  current  Public  Convenience                                                               
process in Title 4. The  process involves gathering signatures on                                                               
a petition  and submitting  the petition  and application  to the                                                               
ABC  Board.  There is  no  definition  of public  convenience  in                                                               
statute,  so there  isn't  clear guidance  on  whether a  license                                                               
would  serve public  convenience.  If the  ABC  Board grants  the                                                               
license, a  new restaurant license  can be issued  without regard                                                               
to population limits.                                                                                                           
MS. BRAWLEY  said slide 30,  Proposed in SB 76:  Local Government                                                               
Petition for Additional  Restaurant Licenses, illustrates another                                                               
Public Convenience  License replacement. Instead of  allowing for                                                               
individual applications  to be  considered outside  of population                                                               
limits, first-class  cities and unified municipalities  will have                                                               
the ability  to petition the  ABC Board for an  additional number                                                               
of restaurant  licenses. They need  to demonstrate they  have the                                                               
enforcement  capability  to  manage any  potential  impacts  from                                                               
those  licenses  and  that   they  have  sufficient  non-resident                                                               
population to support  a market for that type of  license. If the                                                               
ABC  Board approves  the petition  and grants  new licenses,  the                                                               
city cannot petition  again for 10 years. If the  petition is not                                                               
granted, the city can return with a revised petition.                                                                           
SENATOR SHOWER asked how the  five-year limit applies, and if the                                                               
appeal process goes from the board to the commissioner.                                                                         
MS. BRAWLEY  said the language in  the bill says 10  years if the                                                               
restaurant licenses are  granted. If the permit  is denied, there                                                               
is no  limit on  the ability to  repetition. This  system doesn't                                                               
exist in statute  now, so there is no  associated appeal process.                                                               
There is an appeal process for a denied or revoked license.                                                                     
MS. BRAWLEY  said slide  31, N-7. Allow  Relocation of  a Package                                                               
Store from Borough  to City, is about a change  to a mechanism in                                                               
current law  allowing relocation  of an  existing bar  license or                                                               
package store:                                                                                                                  
   • Amend AS 04.11.400(k) to allow transfers of both BDL and                                                                   
     Package Store licenses from a borough to a city within the                                                                 
   • Currently, BDL relocations are allowed in boroughs with at                                                                 
     least 60,000 population.                                                                                                   
   • SB 76 would make relocation available in boroughs with at                                                                  
     least 50,000 population and currently operating licenses                                                                   
     that exceed population limits.                                                                                             
MS. BRAWLEY said slide 32, Proposed  in SB 76: Option to Relocate                                                               
Some  Licenses  from  a  Borough  to  a  City,  illustrates  this                                                               
concept.  Licenses  in a  borough  could  be relocated  from  one                                                               
community to another.                                                                                                           
Slide 33,  Proposed in  SB 76: Option  to Relocate  Some Licenses                                                               
from  a Borough  to  a City,  shows how  many  licenses would  be                                                               
available currently  for each  of the  three boroughs  that would                                                               
qualify under this system. Only  the borough's licenses in excess                                                               
of the population limits would  be eligible for relocation into a                                                               
city. The  purpose of that  is to  ensure that the  population of                                                               
the borough continues to be served by sufficient licenses.                                                                      
She said this concludes the recommendations regarding licensing.                                                                
MS.  BRAWLEY said  the  next few  recommendations  relate to  the                                                               
powers and duties of the ABC Board.                                                                                             
Slide 34,  RB -4 ABC Board  as Key Partner for  Alcohol Education                                                               
Efforts, makes  explicit that part  of the board's  mission would                                                               
be to provide education about Title 4.                                                                                          
• Designate the ABC Board and AMCO as the agency to develop a                                                                   
     multi-department, public-private sector education plan                                                                     
     about responsible alcohol use and applicable laws.                                                                         
 • Coordinate the ABC Board and AMCO as the agency to develop                                                                   
     a multi-department, public-private sector education plan                                                                   
     about responsible alcohol use and applicable laws.                                                                         
     SB 76: section 1, 04.06.075; section 5, 04.06.090                                                                          
MS. BRAWLEY said  slide 35, RB -2. Community  Analysis of Written                                                               
Order Database, lists the duties  and obligations associated with                                                               
the database that is overseen by the ABC Board:                                                                                 
• Allow data about direct shipment orders of alcohol in local                                                                   
     option communities to be made publicly available,                                                                          
     aggregated at the region or community level for analysis                                                                   
     and community planning.                                                                                                    
    • Written order database can only be accessed by AMCO                                                                       
     enforcement staff, other law enforcement, and package store                                                                
     licensees who fill written orders.                                                                                         
   • Personal information would be kept confidential.                                                                           
     SB 76: sections 6-7, 04.06.095                                                                                             
Slide  36, Proposed  in SB  76: Publish  Community-Level Data  in                                                               
Local  Option Order  Database, illustrates  how the  Local Option                                                               
Order Database is treated currently and as proposed in the bill:                                                                
   • In Current Title 4, all data in the Local Option Order                                                                     
     Database is private and is deleted after one year.                                                                         
   • SB 76 would keep individual order information private, but                                                                 
     retain aggregate data for 10 years and allow the ABC Board                                                                 
     to publish annual total sales volumes by region or                                                                         
   • This valuable information would be available to communities                                                                
     and law enforcement to understand the flow of alcohol into                                                                 
     local option communities via legal sales.                                                                                  
     SB 76: sections 6-7, 04.06.095                                                                                             
SENATOR SHOWER asked what is the intended use of that data.                                                                     
MS. BRAWLEY said  it's knowing how much alcohol is  coming into a                                                               
community. The data  is already being collected  and the proposal                                                               
was to make better use of that information.                                                                                     
SENATOR SHOWER said he'd need to think about that.                                                                              
CHAIR  COGHILL  said  there's  been  an  ongoing  debate  in  the                                                               
legislature about local  option and how to have  a dry community.                                                               
It's easier in the rural areas  than in urban areas. He commented                                                               
that   even  the   aggregated   data   could  contain   sensitive                                                               
MS. BRAWLEY said  that the next recommendation is to  look at the                                                               
penalties defined in Title 4.  Currently, almost all of the Title                                                               
4 penalties  are class A  misdemeanors. This ranges  from serious                                                               
offenses  such  as  selling  without  a  license  to  not  filing                                                               
paperwork correctly.                                                                                                            
     RB-6. Revise 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                                                                     
        • Retain existing Misdemeanor and Felony charges for                                                                    
          serious offenses, particularly those causing harm to                                                                  
        • 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                                                                
        • 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.                                                                         
     SB 76: defined throughout; most prohibited acts are defined                                                                
     in chapter 16                                                                                                              
2:24:15 PM                                                                                                                    
CHAIR COGHILL said  the members will be interested  in looking at                                                               
the penalties individually and discerning  the effectiveness of a                                                               
misdemeanor versus a fine that could have an economic impact.                                                                   
MS. BRAWLEY  noted the last bullet  points to the table  with the                                                               
current penalties and proposed changes.                                                                                         
MS. BRAWLEY  said slide 38  addresses the rationale  for reducing                                                               
penalties  in  Title  4.  The stakeholder  group  looked  at  the                                                               
charges from  2009 to  2013 and  found that a  lot of  cases were                                                               
dismissed.  They  also  found  that   the  Title  was  not  being                                                               
consistently enforced.  The rationale was to  improve enforcement                                                               
of  Title 4  by making  lower level  offenses more  automatically                                                               
enforced and keeping more serious  offenses at the current level.                                                               
She  noted that  Minor Consuming  offenses  was dealt  with in  a                                                               
different bill.                                                                                                                 
CHAIR COGHILL said  offenses of minor consuming will  be a future                                                               
topic  of discussion.  His intention  is  to make  sure that  bad                                                               
actors can't easily co-opt children.                                                                                            
MS. BRAWLEY  said slide 39  highlights the general  penalties for                                                               
each offense class. She pointed to the report for the specifics.                                                                
She  said  that  concludes  the recommendations  related  to  the                                                               
powers of  the board. The penalty  recommendations cross multiple                                                               
sections of the bill.                                                                                                           
CHAIR COGHILL  said his  primary focus for  the committee  is the                                                               
2:27:16 PM                                                                                                                    
MS.  BRAWLEY said  the next  recommendations related  to underage                                                               
drinking and  internet sales  of alcohol. Slide  40 looks  at the                                                               
effectiveness of current penalties and alternatives.                                                                            
     UAD-1. Employee Penalty for Selling Alcohol to a Minor                                                                   
        • Reduce the penalty for a licensee, agent or employee                                                                  
          selling alcohol to a minor (AS 04.16.052) from a Class                                                                
          A Misdemeanor to a Minor Offense with $500 fine.                                                                      
     UAD-2. Licensee Liability for Employee Sales to Minors N-9.                                                              
     Licensee Liability for Overservice by Employees                                                                          
        • Increase the consistency and certainty of sanctions to                                                                
          licensees for violations of AS 04.16.030 and -052.                                                                    
        • A licensee whose employee incurs either violation                                                                     
          receives an administrative penalty of $250.                                                                           
     SB 76: section 81, 04.16.030; section 94, 04.16.052                                                                        
CHAIR COGHILL  said the level  of the  penalty is one  thing, but                                                               
the mental state  is another. He asked if the  person serving the                                                               
alcohol would  automatically lose their  TAM Card as part  of the                                                               
MS. BRAWLEY said she didn't know.                                                                                               
She said slide 41 illustrates the licensee penalties for                                                                        
overserving an adult or serving a minor.                                                                                        
MS. BRAWLEY said the next recommendation is something that was                                                                  
enacted in 2016 for Minor Consuming Alcohol and Minor on                                                                        
Premises. SB 76 proposes a similar system:                                                                                      
     UAD-5. Minor Consuming Alcohol (MCA) and Related Violations                                                              
        • Enacted in 2016: Restore Minor Consuming Alcohol (AS                                                                  
          04.16.050) to a true violation; same changes to Minor                                                                 
          on Premises (AS 04.16.049), previously Misdemeanor A.                                                                 
        • Proposed in SB 76: similar changes to penalties for                                                                   
          Minor    Purchasing   or    Attempting   to    Purchase                                                               
        • Similar to already enacted changes above, youth                                                                       
          charged with 04.16.060 would not appear in CourtView.                                                                 
     SB 76: section 98, 04.16.060                                                                                               
2:30:25 PM                                                                                                                    
MS. BRAWLEY said slide 43 deals with server education:                                                                          
     Require Server Education Card for All Retail Sales &                                                                     
     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                                                                     
        • 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.                                                                                            
     SB 76: sections 125, 126, 127; 04.21.025                                                                                   
MS.  BRAWLEY   said  the  next  recommendation   applies  to  keg                                                               
     UAD-3. Statewide Keg Registration                                                                                        
        • 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                                                                     
     • 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.                                                                
     SB 76: section 122, 04.21.012                                                                                              
MS. BRAWLEY  said Alaska  is one  of the few  states that  has no                                                               
rules about internet  sales of alcohol. Anyone  can order alcohol                                                               
online from  an out-of-state  business and  have it  delivered to                                                               
their house. It  is up to the business to  check ID. The proposal                                                               
in SB  76 would regulate  these sales. Slide 45  illustrates that                                                               
there  are more  rules on  in-state businesses  than out-of-state                                                               
businesses in this regard.                                                                                                      
     Internet Sales in Alaska: Few Rules                                                                                      
        • Alaska Package Stores cannot sell alcohol online, only                                                                
          via written order to "known" customers with ID on                                                                     
        • Alaska Wineries and Package Stores  can ship  wine to                                                                 
          customers in some circumstances.                                                                                      
        • Without state laws restricting online sales, there are                                                                
          currently no limits on purchases of alcohol online                                                                    
          from out-of-state sellers.                                                                                            
MS. BRAWLEY said slide 46 introduces the Winery Direct Shipment                                                                 
        • Create a license available to  U.S. wineries  to ship                                                                 
          orders of wine to Alaska customers.                                                                                   
        • Prohibit online sales through this  license in  Local                                                                 
          Option areas.                                                                                                         
        • Prohibit other online sales of alcohol not under this                                                                 
          license or the Package Store Shipping endorsement.                                                                    
        • Modeled on similar licenses or  permits for  wineries                                                                 
          that exist in 44 other states.                                                                                        
        • Requires age  verification  and  delivering   to  the                                                                 
          customer in person, including a signature to                                                                          
          acknowledge receipt.                                                                                                  
        • Exempt from Alaska population limits.                                                                                 
     SB 76: (Chapter 9) section 9, 04.09.360; section 79,                                                                       
Slide 47 illustrates how the regulation of internet sales would                                                                 
Slide 48 highlights that the bill would allow collection of                                                                     
excise tax on internet sales.                                                                                                   
     INT-2. Collect Alaska Excise Tax for Internet Sales                                                                      
   • In addition to maintaining current collection of excise tax                                                                
     on sales from in-state wineries, require all out-of-state                                                                  
     holders of a Winery Direct Shipment license to pay the same                                                                
     excise tax on Alaska orders.                                                                                               
   • Currently, no tax is collected from online sales of alcohol                                                                
     to Alaska customers.                                                                                                       
   • Legal precedent for collecting state alcohol tax from out-                                                                 
    of-state alcohol manufacturers: Granholm v. Heald (2005)                                                                    
     SB 76: section 146; 43.60.060                                                                                              
Slide 49 relates to package store shipping options                                                                              
     N-3. Expand Package Store Shipping Order Options                                                                         
 • 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.                                                                                                    
     SB 76: Section 9, 04.09.460; Section 105, 04.16.125                                                                        
     for common carrier rules                                                                                                   
Slide 50,  Proposed in  SB 76:  Regulate Internet  Alcohol Sales,                                                               
illustrates  the ABC  Board's duties  related  to common  carrier                                                               
transport and delivery of alcohol.                                                                                              
   • Common carriers would need to be approved by the ABC Board                                                                 
      to transport and deliver alcohol to consumers throughout                                                                  
      the state.                                                                                                                
   • Carriers must demonstrate that they have policies and train                                                                
      employees to properly handle shipments of alcohol.                                                                        
   • It would be the licensees' responsibility to work with                                                                     
      approved carriers for shipments to Alaska.                                                                                
MS. BRAWLEY said this concludes the presentation.                                                                               
2:35:20 PM                                                                                                                    
CHAIR  COGHILL  said he  appreciates  that  the alcohol  must  be                                                               
delivered to a person He  asked what procedure carriers follow if                                                               
they can't find the person receiving the package.                                                                               
MS. BRAWLEY  suggested FedEx  and UPS  answer the  question; they                                                               
have their own existing policies.                                                                                               
SENATOR  WIELECHOWSKI  commented  that   this  is  a  heavy  lift                                                               
considering this is  day 86 [of the  90-day legislative session].                                                               
He asked how this regulatory  scheme compares to the alcohol laws                                                               
and regulations in other states.                                                                                                
MS. BRAWLEY  said that's  difficult to  answer because  states do                                                               
things differently.                                                                                                             
SENATOR WIELECHOWSKI  asked if she had  a sense for how  the bill                                                               
would impact alcohol abuse in the state.                                                                                        
MS. BRAWLEY replied  a goal of the project is  to address alcohol                                                               
abuse  in  Alaska. Changing  business  laws  alone won't  achieve                                                               
that, but  the more logical  the laws the  easier it will  be for                                                               
businesses and customers to operate  responsibly. The rules about                                                               
service of alcohol are intended to have a beneficial impact.                                                                    
SENATOR WIELECHOWSKI said he wonders  if less regulation might be                                                               
more beneficial; it  doesn't sound like there  is any statistical                                                               
information on  whether the  bill proposes  a heavier  or lighter                                                               
touch than the laws in other states.                                                                                            
MS.  BRAWLEY  said  the  group   looked  at  evidence-based  best                                                               
practices  and several  are incorporated  in the  proposal. These                                                               
include keg registration, holding  licensees responsible for what                                                               
happens on their premises, and population limits.                                                                               
CHAIR  COGHILL   said  the   booklet,  Recommended   Changes  for                                                               
Statutory  Change  is  a  good description  of  the  process  the                                                               
stakeholder  group  went through.  He  recommended  it be  posted                                                               
online.  He  asked  if  the  group discussed  the  benefit  of  a                                                               
monetary penalty  versus a misdemeanor penalty  for an individual                                                               
who furnishes alcohol to a minor.                                                                                               
MS. BRAWLEY  said the  discussion the  stakeholder group  had was                                                               
that  there  would  be  a   significant  monetary  impact  on  an                                                               
individual. The bill  proposes a minor offense with  a $500 fine.                                                               
It would not impact other related charges.                                                                                      
CHAIR COGHILL said he'll look at  that penalty closely and have a                                                               
conversation with law enforcement on how that is applied.                                                                       
SENATOR SHOWER  asked if  a first-class or  home rule  city could                                                               
opt out of license requirements and do it locally.                                                                              
MS. BRAWLEY  said it  would be  a change  to the  current system.                                                               
Current law says  only the ABC Board can  issue, transfer, renew,                                                               
suspend, and revoke licenses.                                                                                                   
SENATOR  SHOWER asked  her thoughts  on an  amendment to  allow a                                                               
community to ask for more licenses after 3 years versus 5 years.                                                                
MS. BRAWLEY said  the city would primarily be  impacted by making                                                               
more frequent requests.                                                                                                         
SENATOR SHOWER said the MatSu is  growing and there has been some                                                               
concern  about limiting  economic growth  when the  population is                                                               
increasing so rapidly.                                                                                                          
CHAIR COGHILL asked her to review the implementation provisions.                                                                
MS.  BRAWLEY  said  most  of  the bill,  including  most  of  the                                                               
licensing  and  penalty changes,  would  take  effect January  1,                                                               
2020.  The ABC  Board has  the  ability to  draft regulations  to                                                               
implement the  bill provided they  do not take effect  before the                                                               
bill  takes effect.  A  few  provisions, such  as  the repeal  of                                                               
public  convenience   and  the  replacement  aspects   that  were                                                               
discussed, take effect  immediately. There are also  a few sunset                                                               
provisions  for   licenses  that  don't  fit   current  statutory                                                               
2:52:55 PM                                                                                                                    
At ease                                                                                                                         
2:53:59 PM                                                                                                                    
CHAIR COGHILL  reconvened the  meeting and  asked Ms.  Brawley to                                                               
discuss the penalty provisions.                                                                                                 
MS. BRAWLEY  asked members to  turn to  page 13 of  the sectional                                                               
analysis.  She  explained that  most  penalties  in Title  4  are                                                               
currently  class  A  misdemeanors.  The  sections  that  are  not                                                               
clearly defined as  a misdemeanor or felony are  reduced to minor                                                               
offenses with a $250 fine.                                                                                                      
        Chapter 16. Regulation of Sales and Distribution.                                                                     
                           Pages 79-97                                                                                          
     Section 73  Hours of sale and presence on licensed                                                                     
     premises (standard closing hours)                                                                                        
     AS 04.16.010(c) is  amended to allow a person  to be on                                                                
     the licensed premises  outside of the hours  of sale to                                                                    
     conduct  business with  the  licensee, maintenance,  or                                                                    
     improvements,  common   carrier  licensees,   and  adds                                                                    
     restaurant endorsement reference.                                                                                          
     Section 74                                                                                                             
     AS 04.16.010 adds a penalty for violating the section.                                                                   
     Section  75     Pricing   and  marketing  of  alcoholic                                                                  
     AS  04.16.015(a)  exempts   sampling  endorsements  and                                                                  
     defines week as seven days.                                                                                                
     Section 76                                                                                                             
     AS 04.16.015 adds a penalty for violating the section.                                                                   
     Section 77  Trade practices                                                                                            
     AS 04.16.017  new section that specifies  which illegal                                                                  
     trade  practices cannot  be practiced  by manufacturers                                                                    
     or  wholesalers   and  directs   the  board   to  adopt                                                                    
     regulations defining exceptions to  those rules as well                                                                    
     as administrative penalties for violations.                                                                                
CHAIR COGHILL said those regulations would be forthcoming.                                                                      
MS. BRAWLEY said yes.                                                                                                           
She continued to review the penalty provisions.                                                                                 
     Section  78     Solicitation  of  alcoholic  beverages;                                                                
     purchase on behalf of another                                                                                            
     AS    04.16.020   sets    penalty   for    unauthorized                                                                  
     solicitation or purchase of alcoholic beverages.                                                                         
     Section  79    Online  sale and  purchase of  alcoholic                                                                
     AS04.16.022  new  section prohibiting  online  purchase                                                                  
     and sale  in Alaska  unless the  licensee has  a winery                                                                    
     direct  shipment  license  or  package  store  shipping                                                                    
     endorsement. It also defines  the penalties. [She noted                                                                    
     the  penalties are  different  for  a business  selling                                                                    
     versus a person purchasing.]                                                                                             
     Section  80    Illegal presence  on premises  involving                                                                
     alcoholic beverages                                                                                                      
     AS  04.16.025(a)  adds   statutory  references  to  all                                                                  
     penalties  involving  sale  without a  license.  [  She                                                                    
     noted that  current statute has  one penalty  that says                                                                    
     it  is  illegal  to  sell   or  manufacture  without  a                                                                    
     license.  The  bill  breaks   this  out  into  multiple                                                                    
     penalties   that    are   specific    to   unauthorized                                                                    
     manufacture or sale or unauthorized retail or sale.]                                                                       
SENATOR WIELECHOWSKI referenced subsection  (b) in Section 79 and                                                               
questioned how many people would check  to see if the person they                                                               
were  purchasing  from  held  either  a  winery  direct  shipment                                                               
license issued  under AS  04.09.360 or  a package  store shipping                                                               
endorsement  under AS  04.09.460. He  asked if  it was  common to                                                               
punish the purchaser in that situation.                                                                                         
MS.  BRAWLEY said  she  didn't know  about  enforcement in  other                                                               
states,  but she  understands that  out-of-state businesses  that                                                               
operate this  way are  diligent about  checking whether  they can                                                               
serve somebody in another state.                                                                                                
SENATOR  WIELECHOWSKI asked  if the  standard for  guilt in  this                                                               
situation would be a knowing standard.                                                                                          
MS. BRAWLEY deferred the question to the Department of Law.                                                                     
CHAIR COGHILL  said he  wanted to  highlight the  penalties today                                                               
and the Department  of Law could discuss them  more thoroughly at                                                               
a later date.                                                                                                                   
3:00:23 PM                                                                                                                    
MS. BRAWLEY continued to review the penalties in the sectional.                                                                 
     Section  81    Prohibited conduct  relating to  drunken                                                                
     AS   04.16.030  changes   the   existing  penalty   for                                                                  
     prohibited conduct  relating to a drunken  person, adds                                                                    
     an  administrative  penalty  to  the  licensee  if  the                                                                    
     employee is  convicted of a violation  of this section,                                                                    
     and  adds  misdemeanor  penalty for  the  licensee  who                                                                    
     knowingly allows employees to violate this section.                                                                        
CHAIR COGHILL  commented that this  section adds a penalty  for a                                                               
licensee who knowingly violates this section.                                                                                   
MS.  BRAWLEY said  yes. The  concept  in AS  04.16.150 that  says                                                               
licensees  are responsible  if they  knowingly allow  any illegal                                                               
activity on their premises, is added to this section.                                                                           
SENATOR  WIELECHOWSKI read  the  first sentence  in the  proposed                                                               
subsection (e) in Section 81. He  asked if it means the holder of                                                               
the license  is strictly and  vicariously liable for  any damages                                                               
that  may  be  caused  in addition  to  the  $250  administrative                                                               
penalty or if the penalty is limited to just $250.                                                                              
MS. BRAWLEY deferred the question to the Department of Law.                                                                     
CHAIR  COGHILL  said   he  would  flag  that   question  for  the                                                               
Department of Law.                                                                                                              
MS. BRAWLEY continued to review the penalties in the sectional.                                                                 
     Section 82 - Possession of ingredients for homebrew in                                                                 
     certain areas                                                                                                            
     AS 04.16.035  changes the statutory reference  from one                                                                  
     specific local  option area to all  local option areas,                                                                    
     consistent  with   AS  04.21.025   restricting  private                                                                    
     manufacture of alcohol in all local option areas.                                                                        
     Section 83                                                                                                             
         AS 04.16.035 maintains the current penalty for                                                                       
     possession of ingredients for homebrew.                                                                                    
SENATOR WIELECHOWSKI asked what areas this relates to.                                                                          
MS. BRAWLEY  said it's any  local option community that  has held                                                               
an election to either limit  sales or limit sales and importation                                                               
or limit sales, importation, and possession of alcohol.                                                                         
SENATOR  WIELECHOWSKI commented  that the  existing law  seems to                                                               
broadly prohibit the possession of ordinary household items.                                                                    
MS. BRAWLEY said  it is her understanding that,  depending on the                                                               
circumstances  of the  case, somebody  who keeps  yeast in  their                                                               
house  would not  necessarily be  considered possessing  with the                                                               
intent to homebrew.                                                                                                             
       Section 84 - Access of drunken persons to licensed                                                                   
     AS  04.16.040  rewords  language relating  to  licensed                                                                  
     Section 85                                                                                                             
     AS   04.16.040  relocates   and  changes   penalty  for                                                                  
     prohibited  access  by  a drunken  person  to  licensed                                                                    
     premises.  [She  clarified  that this  relates  to  the                                                                    
     drunken person, not the licensee.]                                                                                         
     Section  86    Obligation  to enforce  restrictions  in                                                              
     licensed premises                                                                                                        
     AS   04.16.045  relocates   and  changes   penalty  for                                                                  
     permitting consumption not authorized under a license.                                                                     
     Section  87   Access  of  persons  with restriction  on                                                              
     purchasing alcohol                                                                                                       
     AS  04.16.047  adds  a  reference   to  a  penalty  for                                                                  
     entering and remaining on  licensed premises defined in                                                                    
     AS 04.16.160.                                                                                                              
CHAIR COGHILL clarified that he only wanted Ms. Brawley to                                                                      
review the penalty sections.                                                                                                    
     Section 93                                                                                                             
     AS  04.16.051  changes   penalties  for  furnishing  or                                                                  
     delivering  to a  minor by  a person,  maintains one  C                                                                    
     felony  charge for  situations where  a minor  is given                                                                    
     alcohol and  causes serious injury or  harm but removes                                                                    
     C felony for the offense of  serving a minor in a Local                                                                    
     Option area, consistent with change in Section 61.                                                                         
CHAIR COGHILL said he would look at that section closely because                                                                
some people groom minors with alcohol.                                                                                          
MS. BRAWLEY continued to review the penalty sections.                                                                           
     Section  94     Furnishing of  alcoholic  beverages  to                                                                
     person under the age of 21 by licensees                                                                                  
     AS  04.16.052  changes   penalties  for  furnishing  or                                                                  
     delivering to a  minor by a licensee  or employee, adds                                                                    
     administrative  penalty  to  licensee  if  employee  is                                                                    
     convicted  of a  violation of  this section  and shifts                                                                    
     misdemeanor  penalty in  AS 04.16.150  to licensee  who                                                                    
     knowingly allows employees to violate this section.                                                                        
     Section  95  -Room  rental for  purposes  of  consuming                                                                
     alcoholic beverages                                                                                                      
     AS  04.16.055 changes  the penalty  for renting  a room                                                                  
     for the  purpose of providing alcoholic  beverages to a                                                                    
     person under 21 years of age.                                                                                              
     Section  96    Permitting  minor  to illegally  possess                                                                
     liquor in a dwelling                                                                                                     
     AS   04.16.057(b)  maintains   current  violation   for                                                                  
     allowing a minor  to possess alcohol in  a dwelling and                                                                    
     adds a $500 fine.                                                                                                          
     Section 98                                                                                                             
     AS  04.16.060  defines  penalties  for  purchase  by  a                                                                  
     person under 21  years of age and delivery  to a person                                                                    
     under  21 years  of  age. For  persons  under 21,  adds                                                                    
     similar penalty structure as those  in AS 04.16.049 and                                                                    
     AS 04.16.050,  $500 fine for  violation with  option to                                                                    
     reduce  fine to  $50  if youth  completes treatment  or                                                                    
     community  diversion  panel.  [She noted  that  if  the                                                                    
     person  is 21  years  or  older, it  would  be a  minor                                                                    
     offense with a $500 fine.]                                                                                                 
     Section 100                                                                                                            
     AS  04.16.080  sets  the penalty  for  consuming  at  a                                                                  
     school event.                                                                                                              
     Section 102                                                                                                            
     AS 04.16.090 defines the crime  of maintaining a bottle                                                                  
     club, relocates and maintains current penalty.                                                                             
3:07:57 PM                                                                                                                    
SENATOR WIELECHOWSKI asked if the definition of school event in                                                                 
Section 100 would include a school fundraiser at a private                                                                      
MS. BRAWLEY said her understanding is it would be an event that                                                                 
is held on school grounds.                                                                                                      
SENATOR WIELECHOWSKI requested further clarification on that                                                                    
CHAIR COGHILL flagged the question.                                                                                             
MS. BRAWLEY continued to review the penalty sections.                                                                           
     Section  103     Sale of  certain  alcoholic  beverages                                                                
     AS  04.16.110 defines  sale of  a prohibited  alcoholic                                                                  
     beverage,  relocates  and maintains  [the  misdemeanor]                                                                    
     Section  104    Removal  or  introduction of  alcoholic                                                                
     AS  04.16.120   defines  removal  or   introduction  of                                                                  
     alcoholic  beverages,  sets   penalty  and  exemptions.                                                                    
     [This is reduced to a minor offense.]                                                                                      
     Section  105      Alcoholic  beverages  transported  by                                                              
     common carrier                                                                                                           
     AS 04.16.125  repeals and reenacts the  section. Allows                                                                  
     for  delivery to  a  person  over the  age  of 21  with                                                                    
     signature from  an order filled  by a package  store or                                                                    
     winery  direct shipment  licensee only  by an  approved                                                                    
     carrier, requires board to  review carrier policies and                                                                    
     publish  list of  approved carriers,  and removes  some                                                                    
     detailed language for delivery  to a local option area.                                                                    
     Maintains  penalty for  unauthorized transportation  of                                                                    
     alcoholic  beverages by  common  carrier  into a  local                                                                    
     option area  and makes  noncompliance a  violation. [An                                                                    
     unapproved  carrier  who delivers  alcoholic  beverages                                                                    
     would be subject to $500 fine.  It would be a $250 fine                                                                    
     if a carrier is approved but does not comply.]                                                                             
     Section 106  Stock confined to licensed premises                                                                     
     AS 04.16.130  sets penalty for unauthorized  storage of                                                                  
     alcoholic beverages. 17                                                                                                    
     Section  107   -  Sale  or  consumption   of  alcoholic                                                                
     beverages in a warehouse                                                                                                 
     AS 04.16.140  sets penalty for  consumption or  sale of                                                                  
     alcoholic beverages in a warehouse                                                                                         
3:10:06 PM                                                                                                                    
SENATOR WIELECHOWSKI asked  what constitutes unauthorized storage                                                               
in Section 106.                                                                                                                 
MS. BRAWLEY advised  that it is any place that  is not designated                                                               
as  a licensed  premises because  storage of  alcoholic beverages                                                               
must be on a designated licensed premises.                                                                                      
SENATOR  WIELECHOWSKI  referenced  Section  105 and  asked  if  a                                                               
person who is  driving from the Lower 48 to  Alaska would violate                                                               
the  provision of  transporting alcohol  into the  state if  they                                                               
were not registered and had a bottle of beer in their car.                                                                      
MS. BRAWLEY said she didn't believe this covers that situation.                                                                 
SENATOR WIELECHOWSKI asked for  clarification from the Department                                                               
of Law.                                                                                                                         
CHAIR COGHILL flagged the question for the Department of Law.                                                                   
MS. BRAWLEY continued to review the penalty sections.                                                                           
     Section 108  Licensee responsible for violations                                                                       
     AS 04.16.150 changes the penalty  for failure to ensure                                                                  
     compliance [to  a minor offense  with a $250  fine. The                                                                    
     exceptions  would be  the sections  relocated to  those                                                                    
     relating to serving a minor.]                                                                                              
     Section  109     Restriction  on  purchasing  alcoholic                                                                
     AS  04.16.160 maintains  current [misdemeanor]  penalty                                                                  
     for failure to comply  with a restriction on purchasing                                                                    
     alcoholic beverages.                                                                                                       
     Section 110 - 111  Source of alcoholic beverages                                                                       
     AS  04.16.170 exempts  winery  direct shipment  license                                                                  
     and  maintains current  penalty for  sale of  alcoholic                                                                    
     beverages from or to an unlicensed person.                                                                                 
     Section 112 -  113   Restrictions on  purchase and sale                                                                
     of alcoholic beverages                                                                                                   
     AS  04.16.172  renumbers  cross-references  to  license                                                                  
     types  and  maintains   current  penalty  for  licensee                                                                    
     obtaining  alcoholic   beverages  from   an  unlicensed                                                                    
     Section 114   Furnishing  alcoholic beverages in aid of                                                                
     gambling enterprise                                                                                                      
     AS  04.16.175 maintains  current [misdemeanor]  penalty                                                                  
     for the  crime of  furnishing an alcoholic  beverage in                                                                    
     aid  of   a  gambling   enterprise.  [She   noted  that                                                                    
     situation is not  on a licensed premises so  it's not a                                                                    
     Section 115  Penalties for violation                                                                                   
     AS   04.16.180(b)   adds    statutory   references   to                                                                  
     prohibited  conduct  related  to  drunken  persons  and                                                                    
     furnishing  alcoholic beverages  to  persons under  the                                                                    
     age of  21 by licensees.  [She noted that  this section                                                                    
     is   the  penalties   the  ABC   Board  can   apply  to                                                                    
3:14:17 PM                                                                                                                    
At ease                                                                                                                         
3:18:03 PM                                                                                                                    
CHAIR COGHILL reconvened the meeting and asked Senator                                                                          
Micciche's staff, Rachael Hankey, to continue the sectional                                                                     
summary of SB 76, starting with Chapter 21 keg registration.                                                                    
3:18:17 PM                                                                                                                    
RACHAEL HANKE, Staff, Senator Peter Micciche, Alaska State                                                                      
Legislature, Juneau, Alaska, reviewed the following sections of                                                                 
SB 75 on behalf of the sponsor.                                                                                                 
                Chapter 21. General Provisions.                                                                               
                           Pages 97-104                                                                                         
     Section 122  Keg registration                                                                                          
     AS  04.21.012  adds  new  section  establishing  a  keg                                                                  
     registration   process   including    proof   of   age,                                                                    
     registration  form  requirements, identification  tags,                                                                    
     and establishes the penalty for  possession and sale of                                                                    
     alcoholic beverages in an  unregistered keg. [She noted                                                                    
     the penalty for  the licensee is a $250  fine. The fine                                                                    
     for a person possessing  an unregistered keg containing                                                                    
     alcohol is $100.]                                                                                                          
     Section  123  -  124      Civil  liability  of  persons                                                                
     providing alcoholic beverages                                                                                            
     AS 04.21.020(a) renumbers cross-references.                                                                              
     Section 125  Alcohol server education course                                                                           
     AS  04.21.025(a) repeal  and  reenact  section to  list                                                                  
     license  types that  do  not  require server  education                                                                    
     training:  only licenses  not  serving  the public  are                                                                    
     exempt  from requirement.  [She  noted  the penalty  is                                                                    
     reduced  from   a  class  A  misdemeanor   to  a  minor                                                                    
     Section 126                                                                                                            
     AS 04.21.025(b)  adds reference  to permit  holders and                                                                  
     individuals listed  on an application as  servers for a                                                                    
     permitted event.                                                                                                           
     Section 127                                                                                                            
     AS 04.21.025(c)  adds reference  to permit  holders and                                                                  
     requires servers  listed on  the permit  application to                                                                    
     have a current alcohol servers  card by the first event                                                                    
CHAIR COGHILL said he understands that those penalties will be                                                                  
followed by regulation.                                                                                                         
MS. HANKE replied it falls under the alcohol server education                                                                   
course in AS 04.21.025.                                                                                                         
     Section 128                                                                                                            
     AS 04.21.025  defines the offense of  failure to comply                                                                  
     with  alcohol server  education  requirements and  sets                                                                    
     Section 129   Proof of  age and of not being restricted                                                                
     from purchasing alcoholic beverages                                                                                      
     AS 04.21.050(a) renumbers cross-reference.                                                                               
     Section 130  Warehousing of alcoholic beverages                                                                        
     AS  04.21.060  defines   the  offense  of  unauthorized                                                                  
     warehousing  and establishes  penalty.  [She noted  the                                                                    
     penalty  is reduced  from a  class A  misdemeanor to  a                                                                    
     minor offense.]                                                                                                            
SENATOR COSTELLO asked if warehousing is defined.                                                                               
MS. HANKE deferred the question to Erika McConnell to say                                                                       
whether or not a definition was in regulation.                                                                                  
     Section 131  Posting of warning signs                                                                                  
     AS  04.21.065(a) updates  list  of  license types  that                                                                  
     require warning signs. [She noted  this remains a minor                                                                    
     offense with  a fine of  $20 to $300 per  day depending                                                                    
     on the situation.]                                                                                                         
     Section 132                                                                                                            
     AS 04.21.072.  Fines and other criminal  penalties. New                                                                  
     section  which  sets  penalties for  other  violations,                                                                    
     misdemeanors, or felonies unless otherwise specified.                                                                      
     AS  04.21.074. Bail  forfeiture  schedule. Directs  the                                                                  
     supreme  court  to set  a  bail  schedule for  Title  4                                                                    
     AS 04.21.076. Suspension of  fine or sentence. Prevents                                                                  
     the court from suspending  fines or sentences for minor                                                                    
     Section 133    Court records of persons  under 21 years                                                                
     of age                                                                                                                   
     AS  04.21.078 adds  additional  statutory reference  to                                                                  
     violations of AS 04.16.060.                                                                                                
     Section 134  Definitions                                                                                               
     AS  04.21.080(b)(6) adds  reference  to permit  holders                                                                  
     and license holders.                                                                                                       
     Section 135                                                                                                            
     AS 04.21.080(b)(15) adds endorsements.                                                                                   
     Section 136                                                                                                            
     AS 04.21.080(b) adds definitions.                                                                                        
MS.  HANKE  said  the  following are  changes  to  other  various                                                               
              Amendments to Various Other Titles.                                                                             
                         Pages 104-109                                                                                          
Section 137  Definitions                                                                                                    
AS 05.15.690(48)  renumber beverage dispensary  license reference                                                             
and update "bar" definition.                                                                                                    
She noted she was moving out of the penalties.                                                                                  
Section 146  Winery direct shipment tax; statement; audit                                                                   
AS 43.60.060 establishes tax collection  on direct wine shipments                                                             
from out  of state businesses  holding this license  and outlines                                                               
requirements for the Department of Revenue.                                                                                     
CHAIR COGHILL observed that the penalty would be in regulation.                                                                 
MS.  HANKE clarified  that this  is a  new concept.  Most of  the                                                               
licensees would be out-of-state and  the penalties would be minor                                                               
SENATOR COSTELLO asked if the bill had a fiscal impact.                                                                         
MS. HANKE  replied new revenue is  generated by the bill  and the                                                               
fiscal notes are posted online.                                                                                                 
SENATOR COSTELLO said  she didn't believe the bill  had a finance                                                               
MS. HANKE agreed.                                                                                                               
CHAIR COGHILL said  he'd think about that. He asked  Ms. Hanke to                                                               
ensure  that the  Department of  Law and  the Alcoholic  Beverage                                                               
Control Board were available for the hearing on Friday.                                                                         
3:25:22 PM                                                                                                                    
CHAIR COGHILL held SB 76 in committee for further consideration.                                                                

Document Name Date/Time Subjects
HB 20 - Sectional Summary (ver. O).pdf SJUD 4/11/2018 1:30:00 PM
HB 20
HB 20 - Sponsor Statement.pdf SJUD 4/11/2018 1:30:00 PM
HB 20
HB 20 - Summary of Changes.pdf SJUD 4/11/2018 1:30:00 PM
HB 20
HB 20 - Letter of Opposition - Alaska Family Action.pdf SJUD 4/11/2018 1:30:00 PM
HB 20
HB 20 - Letter of Support - Alaskans Together for Equality.pdf SJUD 4/11/2018 1:30:00 PM
HB 20
HB 20 - Letter of Support - Alaska Family Council.pdf SJUD 4/11/2018 1:30:00 PM
HB 20
HB 20 - Letter of Support - Martin Eldridge.pdf SJUD 4/11/2018 1:30:00 PM
HB 20
HB 20 - Letters of Support - Various Emails.pdf SJUD 4/11/2018 1:30:00 PM
HB 20
SB 76 - Summary of Changes (ver. T to ver. M).pdf SJUD 4/11/2018 1:30:00 PM
SB 76
SB 76 - Sectional Summary (ver. M).PDF SJUD 4/11/2018 1:30:00 PM
SB 76
SB 76 - Sponsor Statement.pdf SJUD 4/11/2018 1:30:00 PM
SB 76
SB 76 - Supporting Documents - Letters of Support.pdf SJUD 4/11/2018 1:30:00 PM
SB 76
SB 76 - Supporting Document - Population Limits March 2018.pdf SJUD 4/11/2018 1:30:00 PM
SB 76
SB 76 - Support Document - Public Convenience Fact Sheet.pdf SJUD 4/11/2018 1:30:00 PM
SB 76
SB 76 - Presentation - Senate JUD.pdf SJUD 4/11/2018 1:30:00 PM
SB 76
SB 195 - Sectional Summary (ver. A).pdf SJUD 4/11/2018 1:30:00 PM
SB 195
SB 195 - Sponsor Statement.pdf SJUD 4/11/2018 1:30:00 PM
SB 195
SB 195 - Supporting Document - Criminal Fund Use Over the Years With Percentages.pdf SJUD 4/11/2018 1:30:00 PM
SB 195
SB 195 - Supporting Document - Difference Between Restitution and Compensation.pdf SJUD 4/11/2018 1:30:00 PM
SB 195
SB 195 - Supporting Document - FY14 Felons Memo.pdf SJUD 4/11/2018 1:30:00 PM
SB 195
SB 195 - Supporting Document - FY15 Felons Memo.pdf SJUD 4/11/2018 1:30:00 PM
SB 195
SB 195 - Supporting Document - FY16 Felons Memo.pdf SJUD 4/11/2018 1:30:00 PM
SB 195
SB 195 - Supporting Document - FY17 Felons Memo.pdf SJUD 4/11/2018 1:30:00 PM
SB 195
SB 195 - Supporting Document - FY18 Felons Memo.pdf SJUD 4/11/2018 1:30:00 PM
SB 195
SB 195 - Supporting Document - HB 245 from 1988.pdf SJUD 4/11/2018 1:30:00 PM
HB 245
SB 195
SB 195 - Supporting Document - PowerPoint Presentation.pdf SJUD 4/11/2018 1:30:00 PM
SB 195
SB 195 - Supporting Document - Restitution Statistics from ACS.pdf SJUD 4/11/2018 1:30:00 PM
SB 195
SB 195 - Supporting Document - Victim Restitution Funds Update Research.pdf SJUD 4/11/2018 1:30:00 PM
SB 195
SB 195 - Supporting Document - Victim Restitution Reform in Other States Research.pdf SJUD 4/11/2018 1:30:00 PM
SB 195