Legislature(2017 - 2018)BELTZ 105 (TSBldg)

04/14/2018 09:00 AM JUDICIARY

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSHB 20(JUD) Out of Committee
Moved CSSSSB 76(JUD) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
         SB  76-ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG                                                                     
9:10:18 AM                                                                                                                    
CHAIR COGHILL announced the consideration  of SB 76 and noted the                                                               
proposed committee substitute (CS).                                                                                             
9:10:49 AM                                                                                                                    
SENATOR  COSTELLO  moved  to  adopt   the  work  draft  committee                                                               
substitute (CS)  for SB 76,  version 30-LS0015\Y, as  the working                                                               
CHAIR COGHILL objected to hear an explanation of the changes.                                                                   
9:12:14 AM                                                                                                                    
SENATOR WIELECHOWSKI joined the committee.                                                                                      
JORDAN  SHILLING,  Staff,  Senator  John  Coghill,  Alaska  State                                                               
Legislature,  Juneau,  Alaska,  reviewed  the  following  changes                                                               
between version M and version Y of SB 76:                                                                                       
         1. Page 13, line 14: Lower $2,500 biennial club                                                                        
           license fee to $1,500.                                                                                               
         2. Page 18, line 24: Amends the sporting event                                                                         
           license by inserting "at multiple noncontiguous                                                                      
           locations" after "wine".                                                                                             
         3. Page 20, line 22: Amends the destination resort                                                                     
           license by inserting "at multiple noncontiguous                                                                      
           locations" after "beverages".                                                                                        
9:13:43 AM                                                                                                                    
At ease                                                                                                                         
9:19:17 AM                                                                                                                    
CHAIR COGHILL  reconvened the meeting  and asked Mr.  Shilling to                                                               
supplement   the    explanation   of    "multiple   noncontiguous                                                               
Mr.  Shilling  pointed  to  the   Chena  Hot  Springs  Resort  in                                                               
Fairbanks as  an example of multiple  noncontiguous locations. It                                                               
has multiple serving locations on a single site.                                                                                
CHAIR COGHILL asked Ms. Brawley if she had anything to add.                                                                     
9:20:56 AM                                                                                                                    
ANNA BRAWLEY,  Project Coordinator,  Title IV Review  Project and                                                               
Senior Associate, Agnew Beck  Consulting, Anchorage, Alaska, said                                                               
the proposed language allows both  the destination resort and the                                                               
sporting event license  types to designate multiple  areas on the                                                               
same property  as a licensed  premises. She cited the  example of                                                               
two beer gardens on the same property.                                                                                          
MR. SHILLING continued  to discuss the changes  between version M                                                               
and version Y of SB 76.                                                                                                         
         4. Page 27, line 27: Insert "with a zip code"                                                                          
           following "address".                                                                                                 
         5. Page 28, lines 21-22: Insert "zip codes that are                                                                    
           located within" following "public inspection                                                                         
           of". [He noted that this allows wine shippers                                                                        
           from out-of-state to understand to which                                                                             
           locations they can and cannot ship. For example,                                                                     
           they should not be shipping to a local option                                                                        
         6. Page 48, lines 26-31 through page 50, line 3: Creates                                                               
           new  Article 7. Common  Carrier Approval in  section 9                                                               
           using  subsections  AS  04.16.125(a)-(f)  and  (i)-(l)                                                               
           from section 105.  This makes an important distinction                                                               
           between  administrative  violations  against a  common                                                               
           carrier   licensee  and  the  crime   of  unauthorized                                                               
           transportation  of  alcoholic  beverages by  a  common                                                               
           carrier into a local option area by a person.                                                                        
MR. SHILLING deferred further explanation to Ms. Brawley.                                                                       
9:23:15 AM                                                                                                                    
MS. BRAWLEY explained that the  original bill put the new concept                                                               
of shipping  alcohol by an  approved common carrier from  an out-                                                               
of-state source such  as a winery to an Alaskan  customer in with                                                               
the  existing  law that  restricts  the  shipment of  alcohol  by                                                               
common carrier  into a  local option  area. Those  are completely                                                               
separate  issues  and the  proposed  language  separates the  new                                                               
concept from the original section.                                                                                              
SENATOR WIELECHOWSKI read  the language on page  48, lines 27-29,                                                               
regarding common  carrier approval and the  definition of "common                                                               
carrier" on page  50, lines 1-2. He asked if  this would create a                                                               
legal liability  for someone  driving an Uber,  Lyft, or  taxi it                                                               
they picked up someone carrying a six pack of beer.                                                                             
MS. BRAWLEY opined that the  sections relating to approved common                                                               
carrier are  contemplating shippers like  FEDEX and UPS  that are                                                               
sending  alcohol from  a business  to  a customer.  She said  the                                                               
statute relating to  local option in AS 04.16.125  is current law                                                               
and she didn't believe that the  liability is on the carrier, but                                                               
she would defer to the Department of Law.                                                                                       
9:25:51 AM                                                                                                                    
GUSTAF  OLSON,  District   Attorney,  Criminal  Division,  Kodiak                                                               
District  Attorney Office,  Department  of  Law, Kodiak,  Alaska,                                                               
advised  that  between  2011  and   2013  he  was  the  statewide                                                               
prosecutor for  Title IV violations  and he did  prosecute common                                                               
carriers. His understanding of the  proposed modification is that                                                               
it clarifies  the liability  and the  expectations of  the common                                                               
carrier  that  is  providing  the   service  as  opposed  to  the                                                               
individual who  is utilizing that  service to  transport alcohol.                                                               
In the two  years that he was the statewide  prosecutor, he never                                                               
charged a  common carrier with  a common carrier  violation. Each                                                               
time he  brought a charge  under this  title, it was  against the                                                               
person who  was trying to subvert  the will of the  people in the                                                               
local  option  community  by not  properly  marking  the  alcohol                                                               
9:27:07 AM                                                                                                                    
SENATOR WIELECHOWSKI  described the  proposed language  as broad.                                                               
He posed a  hypothetical of someone calling an Uber  or Lyft from                                                               
a  liquor store  and climbing  into the  car with  a six  pack of                                                               
beer. He asked if that violates Sec. 04.09.750.                                                                                 
MR. OLSON said  he had never seen that type  of scenario in rural                                                               
Alaska. The  crimes that are  charged relating to  common carrier                                                               
are generally  in areas that  do not  allow the sale  of alcohol,                                                               
but  people are  allowed to  bring  in alcohol  that is  properly                                                               
marked. The  common carrier  provisions are  in Title  IV because                                                               
alcohol  can  sometimes  be delivered  through  a  packing  store                                                               
CHAIR COGHILL  asked if it  would be a  violation for an  Uber or                                                               
Lyft driver in Anchorage or Fairbanks  to pick up and transport a                                                               
bottle of wine or spirits without a passenger.                                                                                  
MR. OLSON said  he didn't believe so based on  his reading of the                                                               
bill and prior enforcement of Title IV.                                                                                         
9:29:10 AM                                                                                                                    
SENATOR  WIELECHOWSKI commented  that  the language  on page  48,                                                               
lines  27-29,  doesn't  seem  to   limit  this  to  local  option                                                               
communities. He  added, "If you're  saying that you're  not going                                                               
to prosecute  people for that scenario,  I just wanted to  have a                                                               
record of that."                                                                                                                
MR.  OLSON referenced  AS 04.16.125(a)  and  offered his  reading                                                               
that it  applies to  a person  who is using  a common  carrier to                                                               
transport alcoholic  beverages into  an area that  has restricted                                                               
the sale  of alcoholic  beverages per  AS 04.11.491  regarding to                                                               
local options.                                                                                                                  
CHAIR COGHILL  asked Ms. Brawley  what she contemplated  with the                                                               
new Article 7 regarding common carrier approval.                                                                                
MS. BRAWLEY said  the idea is to ensure that  the people that are                                                               
transporting  and delivering  alcohol to  customers are  checking                                                               
IDs  and making  sure they  are following  safe alcohol  handling                                                               
policy. The  new section covers  both non-local option  areas and                                                               
local option areas  and addresses a business such as  a winery or                                                               
package store shipping alcohol to  an individual. A business with                                                               
the winery direct  shipment license would not be able  to ship to                                                               
a local  option community because  they would not have  access to                                                               
the  written order  database that  the  ABC Board  uses to  track                                                               
monthly order  limits. An  Alaska package store  could ship  to a                                                               
local option area because they have access to the database.                                                                     
9:31:48 AM                                                                                                                    
MR. SHILLING continued  to discuss the changes  between version M                                                               
and version Y of SB 76.                                                                                                         
        7.Page 70, line 1: Lower the waiting period between board                                                               
          petitions from 10 years to 5 years.                                                                                   
CHAIR COGHILL  asked Ms. Brawley  to discuss the history  of this                                                               
issue and why the reductions gives some comfort to communities.                                                                 
MS. BRAWLEY  explained that  this relates  to a  city petitioning                                                               
the ABC Board  to get additional restaurant  licenses outside the                                                               
population limits  for that city.  The bill proposes that  a city                                                               
could revise their denied petition  and essentially submit it the                                                               
next day.  If the petition  is approved, the board  can authorize                                                               
additional  licenses  for  the  municipality  after  five  years.                                                               
Previously it was after 10 years.                                                                                               
CHAIR  COGHILL  offered his  understanding  that  this became  an                                                               
issue for cities that saw 10 years  as too long to wait when they                                                               
were growing so rapidly.                                                                                                        
MS. BRAWLEY said that's correct.                                                                                                
9:33:40 AM                                                                                                                    
SENATOR  SHOWER said  he'd  check  with the  four  cities in  his                                                               
district  that would  like the  timeframe  to be  three years  as                                                               
opposed to  five years. Those  cities also requested a  change in                                                               
the appeal  process to potentially include  the commissioner. His                                                               
understanding  was  that  the sponsor  worked  to  address  those                                                               
9:34:20 AM                                                                                                                    
RACHEL  HANKE,  Staff,  Senator   Peter  Micciche,  Alaska  State                                                               
Legislature, Juneau,  Alaska, said her understanding  was that an                                                               
appeal process that includes the  commissioner is not allowed for                                                               
the  ABC  Board, but  there  is  an  existing appeal  process  to                                                               
[superior]  court.  She  deferred further  explanation  to  Erika                                                               
ERIKA MCCONNELL, Director, Alcohol  and Marijuana Control Office,                                                               
Anchorage,   Alaska,  explained   that  the   ABC  Board   is  an                                                               
independent quasi-judicial  and regulatory board  whose decisions                                                               
can be  appealed to the  Office of Administrative  Hearings where                                                               
an administrative law  judge holds a hearing. The  judge offers a                                                               
recommended decision  and the ABC  Board makes a  final decision.                                                               
An unsatisfied appellant may appeal to superior court.                                                                          
9:35:56 AM                                                                                                                    
MR. SHILLING continued  to discuss the changes  between version M                                                               
and version Y of SB 76.                                                                                                         
         8. Page 86: Deletes previous sections 92 and 93                                                                        
           which amended the charges for furnishing or                                                                          
           delivering to a minor. Statute will remain                                                                           
MR.  SHILLING  explained  that the  deleted  sections  relate  to                                                               
furnishing or  delivering alcohol to  a minor. The  conduct would                                                               
remain a class A misdemeanor or a class C felony.                                                                               
CHAIR COGHILL said  this change was at his request.  He asked Ms.                                                               
Henke if the sponsor had an issue with it.                                                                                      
MS. HENKE said no.                                                                                                              
CHAIR COGHILL asked Mr. Olson to discuss the felony penalty.                                                                    
9:37:06 AM                                                                                                                    
MR. OLSON said  he was a career prosecutor who  has been involved                                                               
in enforcement  of the crimes  of furnishing alcohol  to underage                                                               
individuals  and he  believed that  the  criminal penalties  were                                                               
MR. SHILLING continued  to discuss the changes  between version M                                                               
and version Y of SB 76.                                                                                                         
        9. Page 87, lines 12-18: Renumbers previous section                                                                     
          95  as  section  93 and  renumbers  the  following                                                                    
          accordingly.   Removes   violation   penalty   for                                                                    
          renting  a  room  for  the  purpose  of  providing                                                                    
          alcoholic beverages to a person  under 21 years of                                                                    
         age and makes the crime a class A misdemeanor.                                                                         
      10. Page 88, lines 19, 22: Amends sections by                                                                             
          specifying that a person 21 years of age or older                                                                     
          is subject to the $100 fine for consumption at a                                                                      
          school event.                                                                                                         
MR. SHILLING  explained that  the bill  previously was  silent on                                                               
age,  which  was  problematic  because  it  conflicted  with  the                                                               
existing crime  of consuming alcohol  as a minor.  This clarifies                                                               
that this fine only applies to individuals over 21 years of age.                                                                
CHAIR  COGHILL  asked  if  the   Catholic  school  fundraiser  in                                                               
Fairbanks would be  considered a school event. The  event is held                                                               
at the school and alcohol is served.                                                                                            
MS.  BRAWLEY  suggested  Erika   McConnell  answer  the  question                                                               
because the event had been held  for several years and would have                                                               
received a permit.                                                                                                              
9:40:17 AM                                                                                                                    
MS. MCCONNELL said AMCO issues  permits for events that happen at                                                               
schools, but  she was  unsure if the  definition of  school event                                                               
would be an event that happens at  the school or an event such as                                                               
a fundraiser  that is  related to  a school  event. She  said she                                                               
would look into that.                                                                                                           
CHAIR COGHILL  said the  question should  be answered  before the                                                               
bill leaves  this body.  He offered  his understanding  that this                                                               
was a new section in the law.                                                                                                   
MR.  SHILLING offered  his understanding  that this  was existing                                                               
law. The  bill establishes a fine  that previously was a  class A                                                               
CHAIR COGHILL asked Mr. Olson if he had anything to add.                                                                        
9:41:47 AM                                                                                                                    
MR. OLSON deferred  the question saying the  scenario needed more                                                               
CHAIR COGHILL  said he would  follow the question and  would like                                                               
the sponsor to do the same.                                                                                                     
MR. SHILLING  discussed the  final change  between version  M and                                                               
version Y of SB 76.                                                                                                             
     11. Page 89, lines 26-31 through page 90, lines 1-21:                                                                      
          Adds  reference to  new  approved common  carriers                                                                    
          section  [see change  6].  Simplifies existing  AS                                                                    
          04.16.125   and   relocates   existing   class   A                                                                    
          misdemeanor into  new subsections (d) and  (e) for                                                                    
He deferred the explanation to Anna Brawley.                                                                                    
9:42:53 AM                                                                                                                    
MS.  BRAWLEY  said  this  was  a  modification  of  existing  law                                                               
relating to  the transport of  alcohol into a local  option area.                                                               
The  language in  the  original bill  was  appropriate for  other                                                               
common carrier  regulations regarding  shipping to  customers but                                                               
this would  cover multiple scenarios  in which an  individual may                                                               
accompany  the   alcohol  rather  than  shipping   it  through  a                                                               
commercial carrier.                                                                                                             
9:43:52 AM                                                                                                                    
CHAIR COGHILL removed his objection and version Y was adopted.                                                                  
CHAIR COGHILL opened public testimony on SB 76.                                                                                 
9:44:55 AM                                                                                                                    
SASSAN MOSSANEN,  representing the  Brewers Guild of  Alaska, and                                                               
founding partner  of Denali  Brewing Company,  Talkeetna, Alaska,                                                               
stated  support for  SB  76 as  currently  drafted. He  expressed                                                               
gratitude  for  the steering  committee  and  the sponsor's  work                                                               
throughout the long process.                                                                                                    
9:45:51 AM                                                                                                                    
MICHAEL  CERVANTES, owner,  Banks Ale  House, Fairbanks,  Alaska,                                                               
stated  support for  SB 76.  He opined  that the  current version                                                               
provided an  even playing field  for all the licensees  and would                                                               
help clarify  contradictory information. He pointed  out that the                                                               
rewrite  allowed cross  utilization of  licenses, would  help the                                                               
industry going forward, and would bring the title up to date.                                                                   
9:47:52 AM                                                                                                                    
ROBIN   MINARD,  Director   of  Public   Affairs,  Matsu   Health                                                               
Foundation,  Wasilla,  Alaska,  stated  support for  SB  76.  She                                                               
advised  that in  their 2013  community  health needs  assessment                                                               
MatSu residents ranked alcohol and  substance abuse as the number                                                               
one health  issue in  the MatSu.  Police captains  also confirmed                                                               
that alcohol  was the  number one  substance abuse  problem. When                                                               
the  MatSu regional  emergency  department  visits were  analyzed                                                               
from 2013  to 2016,  they found that  alcohol disorders  were the                                                               
number one reason  for behavioral health visits.  She opined that                                                               
the systematic redraft  of Title IV proposed in SB  76 would help                                                               
the  ABC   Board  carry  out   its  mission  and   would  benefit                                                               
organizations and individuals whose  work, community, or business                                                               
is affected by alcohol. She  encouraged the committee to move the                                                               
bill forward for passage this year.                                                                                             
9:49:37 AM                                                                                                                    
MATTHEW  JONES,  Moose's Tooth,  Bear  Tooth,  and Broken  Tooth,                                                               
Anchorage, Alaska,  stated support  for SB  76 and  described the                                                               
long  process as  a once  in  a lifetime  opportunity to  rewrite                                                               
Title IV  in a sensible  way. He opined  that it would  level the                                                               
playing  field between  competitors and  provide AMCO  a sensible                                                               
road map for enforcing the law.                                                                                                 
9:51:09 AM                                                                                                                    
DALE FOX,  President, Alaska CHARR, Anchorage,  Alaska, testified                                                               
in support  of SB  76. He posited  that a  well-regulated alcohol                                                               
industry was good  for public safety, for public  health, and the                                                               
industry. He commented that what  was interesting about this long                                                               
process  was the  coming  together of  people.  The Alaska  CHARR                                                               
Board,  which is  comprised  of every  segment  of the  industry,                                                               
unanimously supports SB 76. They encourage passage of the bill.                                                                 
9:52:28 AM                                                                                                                    
TIFFANY HALL, Executive Director,  Recover Alaska, said her board                                                               
was very  different than the CHARR  Board but it too  was in full                                                               
support  of  SB 76.  Their  primary  funders include  Providence,                                                               
Southcentral Foundation,  MatSu Health Foundation,  Rasmuson, the                                                               
Mental  Health  Trust Authority,  DHSS,  and  many other  tribal,                                                               
nonprofit, and  governmental agencies across the  state. The work                                                               
has been ongoing  for six years and  it took all of  that time to                                                               
reach consensus between health,  public safety, and the industry.                                                               
She said it  was important to pass the bill  this year. These are                                                               
the things on  which there is consensus. She  said Recover Alaska                                                               
was committed  to continue working  on areas where  consensus was                                                               
not achieved.                                                                                                                   
CHAIR COGHILL  asked Ms. Brawley to  give members an idea  of the                                                               
numbers of meetings it took to put this together.                                                                               
MS. BRAWLEY said  she understands that the  project was initiated                                                               
by the ABC  Board in 2012. The board hired  Agnew Beck Consulting                                                               
initially  to facilitate  a  meeting and  it  has shepherded  the                                                               
project  since  then  organizing   meetings,  taking  notes,  and                                                               
tracking  the  discussion  and   decisions.  She  estimated  that                                                               
stakeholders spent 12,000 hours in meetings.                                                                                    
9:56:06 AM                                                                                                                    
CHAIR COGHILL closed public testimony on  SB 76 an asked the will                                                               
of the committee.                                                                                                               
SENATOR SHOWER said he was working on an amendment.                                                                             
9:57:06 AM                                                                                                                    
At ease                                                                                                                         
9:57:52 AM                                                                                                                    
CHAIR COGHILL reconvened the meeting.                                                                                           
9:58:06 AM                                                                                                                    
SENATOR COSTELLO moved  to report the CS for SSSB  76, version Y,                                                               
from  committee  with  individual  recommendations  and  attached                                                               
fiscal note(s).                                                                                                                 
9:58:18 AM                                                                                                                    
SENATOR  SHOWER  objected.  He  said he  wanted  to  discuss  the                                                               
question of public convenience with Ms. Brawley.                                                                                
CHAIR COGHILL  asked if he wanted  to hold the bill  until Monday                                                               
or follow it to the next committee.                                                                                             
SENATOR SHOWER  said his preference  was to hold it  until Monday                                                               
but would defer to the committee.                                                                                               
9:59:03 AM                                                                                                                    
At ease                                                                                                                         
9:59:51 AM                                                                                                                    
CHAIR COGHILL reconvened the meeting.                                                                                           
10:00:00 AM                                                                                                                   
SENATOR  SHOWER said  his proposed  amendment would  maintain the                                                               
existing statute  and communities  would have the  opportunity to                                                               
apply for additional licenses.                                                                                                  
CHAIR COGHILL  said he would commit  to work on that  as the bill                                                               
moves forward, but it may not need to be added to the bill.                                                                     
SENATOR SHOWER said he preferred not to slow the bill.                                                                          
CHAIR COGHILL asked  if there was objection to moving  SB 76 from                                                               
10:00:30 AM                                                                                                                   
SENATOR WIELECHOWSKI  said a few  issues came up during  the last                                                               
hearing  that  the  committee  asked the  Department  of  Law  to                                                               
clarify. Those have  not been resolved but if  the next committee                                                               
of referral  could address  them he  would be  comfortable moving                                                               
the bill.  He listed  the following questions  that are  based on                                                               
version M:                                                                                                                      
     Section 79,  subsection (b), on  page 81,  lines 28-30.                                                                    
     The question was what the legal standard was.                                                                              
     Section 81,  subsection (e), on  page 82,  lines 20-25,                                                                    
     The  question was  whether the  penalty was  limited to                                                                    
     $250 or if  it was strict and  vicarious liability plus                                                                    
     the penalty of $250.                                                                                                       
     Section 100, subsections  (b) and (c), on  page 87. The                                                                    
     question was the definition of school event.                                                                               
     Section 105,  on page  89. The  question was  about the                                                                    
     liability   for  a   common  carrier   transporting  or                                                                    
     delivering alcoholic beverages.                                                                                            
      Section 106, subsection (c), on page 91, lines 2-3.                                                                       
     The question was about the definition of unauthorized                                                                      
SENATOR WIELECHOWSKI  said his concerns  would be resolved  if he                                                               
received answers  to the forgoing  questions in the  next several                                                               
days and there  was some discussion on the record  in the Finance                                                               
10:03:04 AM                                                                                                                   
SENATOR SHOWER  said he would  also like clarification  about the                                                               
appeal  process  for  a petition  for  additional  restaurant  or                                                               
eating  place licenses  for certain  local governing  bodies. The                                                               
sponsor said there would be  the opportunity for a second appeal.                                                               
He wanted  to verify that  that was the  case and who  would hear                                                               
the appeal.                                                                                                                     
CHAIR COGHILL  advised that Erika  McConnell said the  appeal was                                                               
to the ABC Board and then an administrative law judge.                                                                          
SENATOR  SHOWER   said  he  wanted  clarification   because  he'd                                                               
received two different answers.                                                                                                 
CHAIR COGHILL said  he would depend on the sponsor  to follow the                                                               
bill with the answers.                                                                                                          
10:04:24 AM                                                                                                                   
CHAIR COGHILL  found no objection  and CSSSSB 76(JUD)  moved from                                                               
the Senate Judiciary Standing Committee.                                                                                        

Document Name Date/Time Subjects
SB 76 - Explanation of Changes Ver. M to Ver. Y.pdf SJUD 4/14/2018 9:00:00 AM
SB 76
CS to SB 76 - Version Y.pdf SJUD 4/14/2018 9:00:00 AM
SB 76