Legislature(2017 - 2018)BELTZ 105 (TSBldg)

03/13/2018 01:30 PM LABOR & COMMERCE

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01:34:29 PM Start
01:35:26 PM Presentation: Update of the 2020 Census Operations
01:59:46 PM SB76
03:18:57 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentation: Update of the 2020 Census TELECONFERENCED
Jamey Christy, Regional Director & Julie Lam
Assistant Regional Director, US Census Bureau
-- Testimony <Invitation Only> --
Heard & Held
-- Public Testimony on Chapters 6, 16 and 21--
Overview of Chapter 6, pages 1-5
Chapter 16, pages 79-97
and Chapter 21, pages 97-104
         SB  76-ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG                                                                     
1:59:46 PM                                                                                                                    
CHAIR  COSTELLO   reconvened  the   meeting  and   announced  the                                                               
consideration  of  SB 76.  She  noted  that  this was  the  first                                                               
hearing of Senator Micciche's Title 4 rewrite.                                                                                  
2:00:29 PM                                                                                                                    
ANNA  BRAWLEY,  Consultant,  Agnew  Beck  Consulting,  Anchorage,                                                               
Alaska,  thanked the  committee  for hearing  SB  76 and  invited                                                               
questions  during  the  presentation.   She  explained  that  the                                                               
Alcoholic Beverage  Control (ABC)  Board started this  process in                                                               
2012 when stakeholders  recognized that the Title  4 laws weren't                                                               
working.  Many things  are outdated  and confusing  and have  not                                                               
been  updated since  1980. The  ABC  Board realized  that it  was                                                               
important  to  bring the  stakeholders  together  to address  the                                                               
MS. BRAWLEY said the goals of  the process were to promote a fair                                                               
business  climate  and  protect  public health  and  safety.  The                                                               
stakeholders   included  the   manufacturing,  wholesaling,   and                                                               
retailing  tiers from  the alcohol  industry;  members of  public                                                               
health   and   advocacy;   members  of   public   safety;   local                                                               
governments; and  youth advocates. It  was a delicate  process to                                                               
find consensus on the issues.                                                                                                   
MS. BRAWLEY  said the following  broad goals were applied  to the                                                               
individual discussions:                                                                                                         
   • Create rational regulation for all tiers of the state's                                                                    
     alcohol industry.                                                                                                          
   • Limit youth access to alcohol, while ensuring youth are not                                                                
   • Promote responsible alcohol use and reduce the harms of                                                                    
   • Make Title 4 a clear and consistent legal framework.                                                                       
MS. BRAWLEY  said many things in  Title 4 worked once  and do not                                                               
work now  or have  created a  lot of  confusion. They  are making                                                               
sure the laws are being  enforced effectively, making the penalty                                                               
fit the level of the  offense, holding licensees accountable, and                                                               
helping local law understand and effectively use Title 4.                                                                       
2:03:26 PM                                                                                                                    
MS.   BRAWLEY   encouraged   the   members  to   focus   on   the                                                               
recommendations, which fall into six general categories.                                                                        
        1. Alcohol Licenses, Permits and Trade Practices                                                                        
        2. Role and Functions of the ABC Board and Staff                                                                        
        3. Underage Drinking and Youth Access to Alcohol                                                                        
        4. Regulation of Internet Sales of Alcohol                                                                              
        5. Technical or Administrative Law Changes                                                                              
        6. Local  Option   Communities    (Note:   Local   Option                                                               
          recommendations are  documented in the report,  but not                                                               
          included  in  SB  76.  More  comprehensive  review  and                                                               
          discussion  of  Local  Option laws  is  needed  in  the                                                               
2:04:52 PM                                                                                                                    
SENATOR  STEVENS   asked  for  a   definition  of   local  option                                                               
MS. BRAWLEY  explained that the  designation is part of  Title 4.                                                               
It gives  communities the ability  to hold an election  and limit                                                               
the  manufacture, sale,  importation, or  possession of  alcohol.                                                               
The  options range  from  no alcohol  possession  at all  through                                                               
certain businesses can operate but  others cannot. Over the years                                                               
many communities have voted to enact a local option.                                                                            
MS. BRAWLEY gave the overview of the presentation.                                                                              
     Today's Overview of SB 76 Chapter 6: sections 1 - 8, pp. 1 - 5                                                                                
        • Chapter 16: sections 73 - 121, pp. 79 - 97                                                                          
        • Chapter 21: sections 122 - 136, pp. 97 - 104                                                                        
        • Changes in other titles: sections 137  148, pp. 104 -                                                               
     Chapter 11 (Licensing and Permits), proposed new Chapter 9,                                                            
     and transition sections related to licenses in the bill                                                                    
     will be covered in a separate presentation.                                                                                
2:06:01 PM                                                                                                                    
MS. BRAWLEY noted that the title  on slide 6 begins with the code                                                               
RB-4. Recommendations  have codes  that refer to  the stakeholder                                                               
group  report [Alaska  Title 4  Review for  the Alaska  Alcoholic                                                               
Beverage Control Board: Recommendations for Statutory Change].                                                                  
     RB-4. ABC Board as Lead Agency for Alcohol Education                                                                     
        • Designate the ABC Board and AMCO [Alcohol and                                                                         
          Marijuana  Control  Office] as  the  lead  agency in  a                                                               
          multi-department,   public  private   sector  education                                                               
          effort  about responsible  alcohol  use and  applicable                                                               
        • Coordinate with Department of Health and Social                                                                       
          Services and other agencies tasked with alcohol-                                                                      
          related education.                                                                                                    
       SB 76: section 1, 04.06.075; section 5, 04.06.090                                                                        
MS. BRAWLEY said this recommendation  was identified as something                                                               
that  would help  the ABC  Board more  effectively carry  out its                                                               
mission. The  ABC Board's niche  is that they understand  Title 4                                                               
and  they have  a role  to  play in  educating licensees,  people                                                               
applying  for licenses,  local government,  law enforcement,  and                                                               
the  general public  about how  to responsibly  use Title  4. The                                                               
recommendation  is not  that they  duplicate  other efforts,  but                                                               
that they focus on what they know best.                                                                                         
2:07:55 PM                                                                                                                    
SENATOR   STEVENS  asked   if  this   was   different  than   the                                                               
responsibility of the  board in the past. If it  is different, he                                                               
asked, how  is education of  the public and other  entities being                                                               
MS. BRAWLEY  said education  hasn't been  explicitly part  of the                                                               
board  or agency's  mission. They  do outreach  to licensees  and                                                               
answer  questions  for  applicants,  so  it's  something  they're                                                               
already doing.  Putting it in the  statute elevates it to  a core                                                               
part of  their mission.  The more  education a  licensee receives                                                               
regarding complying  with the  law, the less  likely they  are to                                                               
receive a violation.                                                                                                            
SENATOR STEVENS commented  that this seems to be a  new and large                                                               
responsibility for  the board. He  again asked how  the education                                                               
is funded.                                                                                                                      
MS. BRAWLEY said she'd address that later in the presentation.                                                                  
CHAIR  COSTELLO asked  if the  legislation contemplates  specific                                                               
expertise in messaging or if it would be left to the board.                                                                     
MS. BRAWLEY  replied part of  it would be  left to the  board. It                                                               
could be  a messaging campaign,  but it could also  be dedicating                                                               
staff to  answer questions. Another  way to make  those resources                                                               
available  is through  the local  government specialist  that the                                                               
agency recently added. She noted  that he is currently working on                                                               
one community's local option election.                                                                                          
2:09:49 PM                                                                                                                    
MS.   BRAWLEY  noted   that  for   the  next   recommendation  is                                                               
technically allowed  now, but  it's not  something the  ABC Board                                                               
generally does.  The thinking  is that they  are the  agency that                                                               
looks most closely at the licensing system.                                                                                     
    P-2. ABC Board Advisory Opinion on Proposed Legislation                                                                   
        • Enable the ABC Board to issue a formal advisory                                                                       
          opinion on any proposed legislation regarding Title 4.                                                                
        • This would include potential creation of a new license                                                                
          type in statute.                                                                                                      
     SB 76: section 5, 04.06.090                                                                                                
SENATOR  GARDNER asked  if the  ABC  Board can  already issue  an                                                               
opinion  on proposed  legislation. She  asked  if this  is a  new                                                               
MS. BRAWLEY said they are not  prohibited from doing that now but                                                               
putting it in  statute makes the duty clearer. This  is an effort                                                               
to make  it more user friendly,  including for the board  and the                                                               
2:11:48 PM                                                                                                                    
MS. BRAWLEY said recommendation F-1  spans most of the title. The                                                               
general proposal  is to adjust  license fees.  A lot of  the fees                                                               
have not  been raised in many  years and some license  types have                                                               
much lower fees  even though they do similar  activities as other                                                               
licenses.  The stakeholder  group wanted  to be  consistent about                                                               
     F-1. Adjust License Fees to Reflect Current ABC Budgetary                                                                
        • Update license fees according to privileges and                                                                       
          administrative costs of each, and collect sufficient                                                                  
          revenue to cover the ABC Board's required activities:                                                                 
             o Administration of licenses & permits                                                                             
             o Education about Title 4 and related regulations                                                                  
             o 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                                                                                                                  
2:12:41 PM                                                                                                                    
CHAIR  COSTELLO noted  that Representative  Wool  had joined  the                                                               
SENATOR MICCICHE  informed the committee  that the  sectional for                                                               
SB  76  is color  coded.  Yellow  signifies existing  in  statute                                                               
today;  green is  existing in  regulations today;  pink is  a new                                                               
concept; and white is carrying on the language of the section.                                                                  
He asked his staff if Section 5 is new.                                                                                         
2:13:23 PM                                                                                                                    
RACHEL  HANKE,  Staff,  Senator   Peter  Micciche,  Alaska  State                                                               
Legislature,  Juneau, Alaska,  explained  that  it's an  existing                                                               
statute  but  subsections are  added  describing  the powers  and                                                               
duties of the ABC Board.                                                                                                        
CHAIR  COSTELLO referenced  the  first bullet  on  slide 8  about                                                               
updating license  fees according  to privileges  and the  need of                                                               
the  board  to  cover  the required  activities.  She  asked  Ms.                                                               
Brawley  to  talk about  whether  the  stakeholders disagreed  or                                                               
needed to negotiate the fees.                                                                                                   
MS.  BRAWLEY said  she can't  speak for  every licensee,  but she                                                               
didn't recall  any specific  disagreement on  a license  type. If                                                               
the fees were  adjusted for inflation since 1980 or  based on the                                                               
consumer  price index,  the fees  would  be higher  than what  is                                                               
proposed.  The  fees  were instead  increased  to  be  consistent                                                               
across the board.                                                                                                               
SENATOR  GARDNER  referenced paragraph  (17)  in  Section 8,  the                                                               
board can  do restrictions on  the manufacture,  packaging, sale,                                                               
and  distribution   of  products  containing  alcohol   that  are                                                               
intended  for human  consumption. She  asked  if that  is new  or                                                               
already in statute.                                                                                                             
MS. BRAWLEY  said the  current law says  the ABC  Board regulates                                                               
alcoholic beverages. A current market  trend is to have ice cream                                                               
and other products infused with  alcohol at a sufficient quantity                                                               
that they  could be  considered a  beverage, but  they are  not a                                                               
drink. Paragraph  (17) gives  the board  the ability  to regulate                                                               
those products.                                                                                                                 
2:15:51 PM                                                                                                                    
MS. BRAWLEY turned  to the next recommendation and  noted that it                                                               
is something the  board and AMCO do now, but  they are limited in                                                               
their ability to provide good data to communities.                                                                              
     RB-2. Community Analysis of Written Order Database                                                                       
        • 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.                                                                              
        • SB 76 would retain privacy for individual information,                                                                
          but allow publication of aggregated data for a region                                                                 
          or Local Option community.                                                                                            
     SB 76: sections 6-7, 04.06.095                                                                                             
MS.  BRAWLEY displayed  slide  10 to  show  how tracking  alcohol                                                               
orders in local option areas works.                                                                                             
CHAIR COSTELLO  offered her understanding  that this  changes how                                                               
long the data is kept.                                                                                                          
MS. BRAWLEY  agreed. She  explained that by  statute none  of the                                                               
data can  be released, whether  it is identifying  information or                                                               
not. It's all purged after one  year. The proposal is to keep the                                                               
data for  10 years,  but not  release any of  the data  about the                                                               
individual order or  the business that filled the  order. The ABC                                                               
Board  would publish  an aggregated  annual report  of the  total                                                               
sales by community or region.                                                                                                   
SENATOR  GARDNER asked  if  the limitation  is  by individual  or                                                               
MS. BRAWLEY said she believes it is by individual.                                                                              
2:18:08 PM                                                                                                                    
MS.  BRAWLEY said  this  would give  communities  the ability  to                                                               
understand  how  much alcohol  is  being  shipped into  the  area                                                               
SENATOR STEVENS said  he hopes that the public  realizes that the                                                               
fee increases  are substantial.  For example,  a golf  course fee                                                               
increases by $850, a destination  resort increases by $1,250, and                                                               
an outdoor recreation lodge increases by $1,250.                                                                                
SENATOR MICCICHE directed attention to  page 4 to illustrate that                                                               
this  was  a stakeholder-driven  process  that  has been  ongoing                                                               
since 2012.  He said there  may be some  folks who want  to amend                                                               
the bill and that is not a surprise.                                                                                            
SENATOR STEVENS said  he was pointing out that  the public should                                                               
be looking at the proposed increases.                                                                                           
2:19:32 PM                                                                                                                    
MS. BRAWLEY said the next  recommendation jumped ahead to Chapter                                                               
16. Again, this  is not a major change to  statute, but something                                                               
that has been  challenging for licensees to deal  with because no                                                               
one  has  been  allowed  on  premises,  which  could  be  someone                                                               
replacing light fixtures.                                                                                                       
     N-8. Allow Business Activities on Licensed Premises During                                                               
     Off Hours                                                                                                                
        • Retain required closing hours (5:00 to 8:00 a.m.) for                                                                 
          service and sales of alcohol to consumers but allow                                                                   
          other non-serving business activities on the premises.                                                                
        • Local communities are already allowed to set stricter                                                                 
          hours by ordinance.                                                                                                   
     SB 76: section 73, 04.16.010                                                                                               
MS. BRAWLEY  noted the  next recommendation is  in Section  77 in                                                               
Chapter 16.  This is something the  manufacturers and wholesalers                                                               
brought to the group's attention.                                                                                               
     W-2. Align State Statute with Federal Law Regarding Trade                                                                
        • Add provisions in Title 4 to match current federal law                                                                
          regarding trade practices and agreements between                                                                      
          retailers and wholesalers or manufacturers.                                                                           
        • Alaska is the only state without any laws regarding                                                                   
          trade practices, and federal enforcement of existing                                                                  
          laws is limited.                                                                                                      
     SB 76: section 77, 04.16.017                                                                                               
2:21:26 PM                                                                                                                    
MS.  BRAWLEY displayed  slide 14  to illustrate  the proposal  to                                                               
regulate trade practices. The language  in the bill was taken and                                                               
adapted  from federal  law. One  reason  why it  is advisable  to                                                               
include it  in state law is  that there is very  limited, if any,                                                               
federal enforcement  of these laws  in Alaska. The  second reason                                                               
is that there are no federal laws that apply to beer.                                                                           
MS. BRAWLEY said that the  next recommendation applied to most of                                                               
Title  4  because  the  group  took a  hard  look  at  penalties.                                                               
Currently,  almost  all   of  Title  4  penalties   are  Class  A                                                               
misdemeanors.  That   ranges  from   serious  offenses   such  as                                                               
committing felony-level  service to  a minor  to not  filling out                                                               
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                                                               
     SB 76: defined throughout; most prohibited acts are defined                                                                
     in chapter 16                                                                                                              
MS.  BRAWLEY explained  that  prosecutors  were dismissing  Minor                                                               
Consuming  Alcohol charges  or tickets  were not  written in  the                                                               
first place; the penalties were seen  as too high for the offense                                                               
or not worth  the resources. The idea is  to increase enforcement                                                               
of Title 4 by making the penalties proportional to the offenses.                                                                
2:24:29 PM                                                                                                                    
MS.  BRAWLEY said  the next  recommendations deal  with penalties                                                               
for employers  and employees. The  goal is  to make Title  4 more                                                               
enforceable by  not requiring  court appearances,  legal counsel,                                                               
     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                                                                        
MS.  BRAWLEY   said  SB  76   provides  licensees   more  instant                                                               
information about  employee violations, holding  them accountable                                                               
for  what  happened   on  their  premises  and   giving  them  an                                                               
opportunity to correct it before the next renewal cycle.                                                                        
2:26:29 PM                                                                                                                    
MS.  BRAWLEY said  minors are  already allowed  on some  licensed                                                               
premised,  but  the group  discussed  other  situations where  it                                                               
should be allowed.                                                                                                              
     N-10. Allow Minors on Some Licensed Premises for Employment                                                              
     or Travel                                                                                                                
        • Allow limited employment of minors by Wholesalers,                                                                    
          Common Carriers, and Outdoor Recreation Lodges.                                                                       
      • Consistent with existing rules for Restaurants.                                                                         
        • Clarify that minors are allowed at certain licensed                                                                   
          businesses, in some circumstances: ex. restaurants,                                                                   
          common carriers (SB 165)                                                                                              
     SB 76: sections 88, 89, 90, 91; 04.16.049                                                                                  
SENATOR  MEYER  asked if  this  would  pertain to  underage  band                                                               
members who  play in a nightclub;  they would be allowed  to play                                                               
but not be served alcohol.                                                                                                      
MS. BRAWLEY  said she wasn't  sure that situation is  covered. It                                                               
would probably  depend on whether  the business has  a restaurant                                                               
designation permit.  She offered to  do some research  and follow                                                               
up with a more complete answer.                                                                                                 
SENATOR  MEYER  said he  was  thinking  about a  full  dispensary                                                               
license. He  shared that constituents have  complained that their                                                               
kids cannot  play in their band  at a nightclub because  they are                                                               
MS.  BRAWLEY said  another similar  situation that  was discussed                                                               
was common carrier dispensaries, such as airplanes.                                                                             
MS.  BRAWLEY   said  the  next   recommendation  came   from  the                                                               
stakeholder group. Parts of it were enacted in 2016 with SB 165.                                                                
2:28:35 PM                                                                                                                    
     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                                                                                               
2:29:49 PM                                                                                                                    
MS.  BRAWLEY  said  the  next  recommendation  was  to  apply  an                                                               
existing law in Anchorage and Juneau statewide.                                                                                 
     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  this  is   a  best  practice  that  says  the                                                               
purchaser's information  is included  on the  keg and  is removed                                                               
when the  keg is returned  to the licensee.  The idea is  that if                                                               
the  keg is  confiscated  at an  underage  party, the  purchasing                                                               
adult would be held responsible.                                                                                                
CHAIR  COSTELLO  asked  what  the  penalties  are  for  providing                                                               
alcohol to minors.                                                                                                              
2:30:50 PM                                                                                                                    
MS. BRAWLEY advised  that for somebody who is not  a licensee, it                                                               
is a  Class A misdemeanor. That  is AS 04.16.051, page  70 of the                                                               
report. The bill  proposes changing that to a  minor offense with                                                               
a  $500 fine.  Similarly,  it  is a  Class  A  misdemeanor for  a                                                               
licensee  to furnish  alcohol  to  a minor.  The  proposal is  to                                                               
change that to a minor  offense with an administrative penalty to                                                               
the licensee.                                                                                                                   
CHAIR  COSTELLO  asked  if  that would  be  the  highest  penalty                                                               
available  if an  adult furnished  alcohol  to a  minor who  then                                                               
injured someone with a car.                                                                                                     
MS. BRAWLEY replied  AS 04.16.051 also says that for  a minor who                                                               
causes serious injury  or death, the adult is liable  for a Class                                                               
C felony. That is existing law and is not proposed to change.                                                                   
She directed attention  to slide 23 that illustrates  how the keg                                                               
registration process  would work.  Penalties apply if  a licensee                                                               
sells untagged  kegs and  if someone  tears the  tag off  the keg                                                               
after purchase.                                                                                                                 
2:32:27 PM                                                                                                                    
MS. BRAWLEY continued the presentation.                                                                                         
     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                                                                                   
2:33:50 PM                                                                                                                    
MS. BRAWLEY said Alaska is one of the few states without rules                                                                  
about internet sales of alcohol. Most states have restrictions                                                                  
on internet sales.                                                                                                              
     Current Title 4: 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  the  first  proposal is  a  new license  type.                                                               
Although this  is included in Section  9 of the bill,  which will                                                               
be covered  later, she brought  it up because  it is part  of the                                                               
internet-related recommendations.                                                                                               
     INT-1. Winery Direct Shipment License                                                                                    
        • 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,                                                                       
2:35:21 PM                                                                                                                    
SENATOR MEYER asked  what the current law is  for purchasing wine                                                               
from  Napa Valley,  for  example. He  specifically  asked if  the                                                               
licensee checks the age of the  purchaser and if the company that                                                               
delivers the wine does a similar check.                                                                                         
MS.  BRAWLEY said  right now  there  is no  state law  regulating                                                               
whether the business has to check  ID. Many states have a form of                                                               
this winery  direct shipment license, so  businesses are probably                                                               
accustomed to checking ID and  using age verification. Nothing in                                                               
current law regulates  shipping, but UPS and  FedEx have internal                                                               
policies for the shipment of  alcohol. They only allow commercial                                                               
shipment of wine, no beer or spirit deliveries.                                                                                 
SENATOR MEYER  asked how the  state knows how to  collect alcohol                                                               
tax on the purchase.                                                                                                            
MS.  BRAWLEY said  the state  isn't currently  collecting alcohol                                                               
tax for online sales.                                                                                                           
SENATOR  MEYER asked  if  he can  assume that  he  is paying  the                                                               
California alcohol  tax if  he buys  wine from  a winery  in that                                                               
MS. BRAWLEY replied it would depend on the laws in that state.                                                                  
SENATOR MICCICHE  asked Ms. Brawley  to talk about the  idea that                                                               
Alaska businesses  are disadvantaged because of  current taxation                                                               
and the fact  that any underage person can  make online purchases                                                               
of alcohol. He said he  believes those are more important changes                                                               
on internet sales.                                                                                                              
2:37:55 PM                                                                                                                    
MS.  BRAWLEY  said instate  businesses  are  required to  collect                                                               
excise  tax on  alcohol sales  but out-of-state  don't have  that                                                               
requirement. Both pay  the federal excise tax but  nothing to the                                                               
state  from out-of-state  sales. Without  anything in  state law,                                                               
it's difficult for the state to address underage online sales.                                                                  
2:38:51 PM                                                                                                                    
MS. BRAWLEY  said the  intent of the  common carrier  proposal is                                                               
not  to create  a new  license but  to ensure  that the  carriers                                                               
follow Alaska  law by getting  board approval. This  would signal                                                               
to  businesses, especially  out-of-state businesses,  with winery                                                               
direct shipping licenses what carrier to use.                                                                                   
     INT-3. Board Approval of Common Carriers for Alcohol                                                                     
        • Require all common carriers who transport deliver                                                                     
          alcohol directly to consumers in Alaska to be approved                                                                
          by the ABC Board.                                                                                                     
        • Carriers must maintain policies for age verification,                                                                 
          safe handling of alcohol, and in-person delivery to an                                                                
          adult customer.                                                                                                       
        • Does not apply to shipments of alcohol from business                                                                  
          to business, only customer orders.                                                                                    
     SB 76: section 105, 04.16.125                                                                                              
2:39:21 PM                                                                                                                    
MS. BRAWLEY  showed slide 30  to show how internet  alcohol sales                                                               
would be regulated.                                                                                                             
2:39:31 PM                                                                                                                    
SENATOR GARDNER  asked how common  carriers would know  they need                                                               
approval from the ABC Board to ship alcohol.                                                                                    
MS. BRAWLEY  said there isn't a  mechanism to do that  right now.                                                               
Going forward, it  would be an education process to  reach out to                                                               
carriers to  ensure they  are aware  of the  changes in  law. The                                                               
internal policies  that FedEx  and UPS  have are  consistent with                                                               
what  is drafted  in the  bill. The  U.S. Mail  does not  ship or                                                               
deliver alcohol currently.                                                                                                      
CHAIR COSTELLO  referred to  the revision  of penalties  on slide                                                               
17. SB  91 required  the Department of  Corrections to  develop a                                                               
risk assessment  tool and promulgate  regulations. They  just put                                                               
the program out  without any public input. She  asked Ms. Brawley                                                               
if  she  has  cross  referenced   the  penalties  with  the  risk                                                               
assessment tool  that would  not line up  with, for  example, the                                                               
prison  terms in  the proposed  penalties. She  asked if  she had                                                               
looked at the assessment tool.                                                                                                  
MS. BRAWLEY said they had not done that analysis.                                                                               
SENATOR MICCICHE said  now almost all these offenses  are Class A                                                               
misdemeanors. Some were  moved to Class C and some  were moved to                                                               
a minor offense. Nothing changes  how they'll be addressed by the                                                               
courts. If it's not working today, this doesn't change that.                                                                    
SENATOR  MEYER  said  some businesses  pride  themselves  in  the                                                               
number of patrons  they turn away who maybe didn't  have a proper                                                               
license or  was already  intoxicated. If  a store  did sell  to a                                                               
minor now the fine would be $500, under this proposal.                                                                          
MS. BRAWLEY answered yes.                                                                                                       
SENATOR  MEYER said  he sponsored  some  bills in  the past  that                                                               
would allow a  retail outfit or a nightclub to  take civil action                                                               
against a patron  who tried to come  in with a fake  ID. He asked                                                               
if this would impact the civil penalties.                                                                                       
MS. BRAWLEY said it would not.                                                                                                  
2:43:39 PM                                                                                                                    
CHAIR COSTELLO opened public testimony on SB 76.                                                                                
2:44:05 PM                                                                                                                    
AMANDA  RANDLES, Southeast  Alaska  State  Fair, Haines,  Alaska,                                                               
asked the committee  to consider a rural  exemption for nonprofit                                                               
special event  permitees. Section  127 would require  all servers                                                               
and carders  at nonprofit special  events be cardholders,  and it                                                               
would  be very  difficult  in  small areas.  It  would limit  the                                                               
volunteer  pool and  impact their  ability to  hold events.  They                                                               
host brewers  during the  Great Alaska Craft  Beer and  Home Brew                                                               
Festival. Some  are from Outside  and some from Canada.  She does                                                               
not want to have to ask them  to get licensed for a one-day event                                                               
once a year when they donate their time to them.                                                                                
2:45:29 PM                                                                                                                    
ELIZABETH  RIPLEY,   CEO,  Mat-Su  Health   Foundation,  Wasilla,                                                               
Alaska, testified  in support of  SB 76.  She said that  in their                                                               
surveys, residents  have ranked alcohol  and drug abuse  as their                                                               
number one  health issue. Police  have identified alcohol  as the                                                               
number one substance  problem. The systematic redraft  of Title 4                                                               
in SB 76 will  help the ABC Board carry out  its mission and will                                                               
benefit organizations  and individuals whose work,  community, or                                                               
business are  affected by alcohol.  The Mat-Su  Health Foundation                                                               
is particularly  interested in  the evidence-based  public health                                                               
policy  of Title  4 reform,  which  will preserve  limits on  the                                                               
density  of alcohol  outlets  (density  correlates with  negative                                                               
health  and safety  impacts),  promotes  responsible service  and                                                               
consumption  of alcohol  at licensed  establishments and  special                                                               
events,  increases   accountability  of  alcohol   licensees  and                                                               
employees to  comply with Title  4, and regulates  Internet sales                                                               
of alcohol. The  registration of kegs is key  to reducing minors'                                                               
social  access to  alcohol.  SB 76  provides  more resources  for                                                               
education and enforcement of Title  4. This represents a big step                                                               
forward  in reducing  Alaska's alcohol  problem.  It's not  often                                                               
that so  many stakeholders come  together to tackle a  project as                                                               
large as the Title 4 reform.                                                                                                    
2:48:48 PM                                                                                                                    
MARNY RIVERA,  representing self, Portland, Oregon,  testified in                                                               
support  of   SB  76.  She   served  on  the   underage  drinking                                                               
subcommittee of the  ABC Board and worked closely  with the state                                                               
when  she  was a  faculty  member  in  the University  of  Alaska                                                               
Anchorage  Justice  Center.  The  provisions  in  SB  76  are  an                                                               
important part  of a multipronged  approach to  reducing underage                                                               
drinking. The subcommittee reviewed  extensive evidence on how to                                                               
reduce underage  drinking. One example is  licensee liability. It                                                               
is a best practice to  hold employers immediately accountable for                                                               
their employees.  Keg registration  holds adults  accountable for                                                               
keeping alcohol out of the hands of young people.                                                                               
2:50:43 PM                                                                                                                    
TIFFANY  HALL,  Executive  Director, Recover  Alaska,  Anchorage,                                                               
Alaska, testified  in support of  SB 76. She said  Recover Alaska                                                               
has been one  of the stakeholders working on Title  4 since 2012.                                                               
If this were solely a public  health and safety bill or solely an                                                               
industry  bill,  it would  look  different,  but neither  version                                                               
would be as strong  as it is today. All sides  had to find common                                                               
solutions. Things that  they could not come to  agreement on were                                                               
left out of the  bill to be discussed at a  later time. This bill                                                               
exemplifies the importance of diversity  of thought at the table.                                                               
They stand  behind it as  a unified front. Healthy  Alaskans 2020                                                               
identified alcohol as  the number health issue to  the state, and                                                               
it costs $1.84 billion per year.                                                                                                
MS.  HALL  said  her  favorite provisions  include  online  sales                                                               
regulation.  Research  shows  that when  underage  youth  ordered                                                               
alcohol online,  40 percent  of the  time alcohol  was delivered.                                                               
With  the penalties  the bill  will  ensure that  if a  bartender                                                               
serves to a  minor or overintoxicated person,  both the bartender                                                               
and the  licensee will receive  a penalty  and the ABC  Board can                                                               
better  regulate   bad  actors  and  ensure   everyone  gets  the                                                               
appropriate training.  SB 76 will  close the loophole  created by                                                               
public  convenience licenses.  The committee  did not  hear about                                                               
license types today,  but it is set up to  allow places to bypass                                                               
population  limits.  Population  limits are  evidence-based  best                                                               
practice to reduce the harms of alcohol.                                                                                        
2:54:39 PM                                                                                                                    
CHAIR  COSTELLO  listed  the   individuals  available  to  answer                                                               
SENATOR MICCICHE asked  Mr. Fox about the  underage band question                                                               
and the consensus process.                                                                                                      
2:55:49 PM                                                                                                                    
DALE  FOX,  President,  Alaska  Cabaret,  Hotel,  Restaurant  and                                                               
Retailers Association (CHARR),  Anchorage, Alaska, explained that                                                               
the parent needs  to accompany the minor, who can  then play. The                                                               
consensus is  a minor should  not be in  a bar without  a parent.                                                               
Regarding the  consensus process, he  agreed with Ms.  Hall about                                                               
what  the  bill  would  look  like if  either  public  health  or                                                               
industry had written it. Together  they spent almost six years in                                                               
discussion and many concessions were  made by lots of people. The                                                               
CHARR board  has 19 members from  every part of the  industry and                                                               
they unanimously  support SB 76.  This doesn't happen  often, and                                                               
it took  a while  to get  there. He listed  the things  that made                                                               
CHARR  members "gulp,"  such as  license fees  and written  order                                                               
database,  but overall  there are  good reasons  and it's  a good                                                               
2:59:00 PM                                                                                                                    
SENATOR GARDNER asked about  Amanda Randles' testimony suggesting                                                               
an exemption for  rural nonprofits. One part of  Section 127 says                                                               
a  person may  not sell  or serve  alcoholic beverages  without a                                                               
valid [alcohol server education] card issued beforehand.                                                                        
MR. FOX said  the purpose is to make sure  that everyone involved                                                               
in  the service  has the  education so  they can  make the  right                                                               
decisions. One problem they discovered  in these endless meetings                                                               
was that  groups all over  the state had once-a-year  events with                                                               
volunteers. The  groups said they  had a 30-day grace  period and                                                               
so didn't need the cards,  every year. Public health and industry                                                               
want everyone  to do the  right thing. People need  the education                                                               
to do a good  job, even if it's a once a  year event. Results can                                                               
be tragic if they don't do the job right.                                                                                       
SENATOR GARDNER asked  if she as an organizer who  is not serving                                                               
can ask for and check IDs.                                                                                                      
MR. FOX  said they'd  like her  to get  the card.  If she  is the                                                               
supervisor, she  needs the card  even if  she is not  the doorman                                                               
and server.                                                                                                                     
SENATOR GARDNER  said, "It's  a good answer."  She asked  what it                                                               
cost to get a card.                                                                                                             
MR.  FOX said  $35 for  CHARR  members and  $45 for  non-members.                                                               
There  are  classes online  or  in  person. Anchorage  has  three                                                               
classes a week.                                                                                                                 
SENATOR   MICCICHE  asked   if  it   takes  time   to  take   the                                                               
certification or could it be done the day of the event.                                                                         
MR.  FOX  said  with  his   program  for  alcohol  server  cards,                                                               
participants get  the card immediately while  others take several                                                               
3:03:45 PM                                                                                                                    
SENATOR  MEYER  asked  that  now that  there  will  be  penalties                                                               
instead of  criminal charges, which  he supports, will  ABC still                                                               
track the number of times an establishment receives a fine.                                                                     
MR. FOX said yes. These penalties  will be surer. Now, if someone                                                               
doesn't  have the  three required  signs  on the  wall, that's  a                                                               
Class A  misdemeanor. If someone  is cited for that,  that person                                                               
could potentially  go to jail  for a  year and receive  a $10,000                                                               
fine. In  the new system,  someone will get  a ticket and  a $250                                                               
fine. By paying the fine, someone  is admitting the fault. On the                                                               
tally sheet at the ABC they  will track the mistakes. If there is                                                               
a pattern, for underage service,  for example, it will be serious                                                               
when the  next license comes  up. Now everyone lawyers  up. About                                                               
60  percent of  the  cases  get dropped.  For  public health  and                                                               
industry,  the perspective  is that  the industry  gets a  system                                                               
where the fines are more reasonable  and the public health gets a                                                               
better reflection of that operator's  activities. This will allow                                                               
the identification of  bad operators more quickly  than under the                                                               
old system.                                                                                                                     
SENATOR STEVENS asked  if the ABC Board can  handle the education                                                               
MR. FOX said the  idea is to not have the only  tool be a ticket.                                                               
It would  be education in which  an officer provides a  sign that                                                               
isn't  posted. Education  also includes  an officer  working with                                                               
servers to  identify what  constitutes drunk  or overconsumption.                                                               
The  idea that  education  will be  a  massive campaign  probably                                                               
won't  happen, but  training education  needs to  be part  of the                                                               
mission  to   communicate  with  all  the   different  audiences.                                                               
Underage  people need  to understand  how much  they can  mess up                                                               
their lives if  they consume alcohol. He cited an  example of not                                                               
knowing the technicalities of the  law. Good communication is the                                                               
key to the process.                                                                                                             
SENATOR  STEVENS said  he believes  that  educating all  underage                                                               
kids through the ABC Board will be difficult.                                                                                   
MR. FOX  said there are  many organizations working on  that. ABC                                                               
will work with them.                                                                                                            
SENATOR GARDNER  asked if the  student in the story  who violated                                                               
the law  by taking an alcohol  order but not serving  it would be                                                               
in violation if he had said, "Table 2 needs you."                                                                               
MR. FOX said it would have been  proper to tell his boss to go to                                                               
table 2.                                                                                                                        
SENATOR GARDNER commented semantics.                                                                                            
SENATOR  MICCICHE asked  Ms.  McConnell to  talk  about the  work                                                               
Recover Alaska  does to educate  young people so they  don't give                                                               
the impression  that the ABC  Board will  be going to  every high                                                               
school in the state.                                                                                                            
3:12:43 PM                                                                                                                    
ERIKA MCCONNELL, Director, Alcohol  and Marijuana Control Office,                                                               
Anchorage, Alaska,  said her understanding  is that they  will be                                                               
working with those organizations  that work on alcohol education,                                                               
including Recover Alaska and the  Department of Health and Social                                                               
Services.  The  ABC Board  will  focus  on the  laws  surrounding                                                               
alcohol  use and  service  and where  they  can supplement,  they                                                               
will. The thrust of their  educational efforts will be compliance                                                               
with state laws that they enforce.                                                                                              
3:14:12 PM                                                                                                                    
SENATOR  STEVENS said  the committee  could  revisit and  clarify                                                               
what the board  is being asked to  do. SB 76 says  the board will                                                               
be the lead agency for alcohol  education. He does not think that                                                               
is the case. He would appreciate clarification.                                                                                 
CHAIR COSTELLO noted the comment.                                                                                               
3:15:06 PM                                                                                                                    
SENATOR GARDNER  asked what  SB 76 does  as currently  written to                                                               
distilleries  such as  Amalga Distillery  and  the dispute  about                                                               
whether they can serve mixed drinks.                                                                                            
CHAIR COSTELLO said they'll bring that up later.                                                                                
SENATOR  MICCICHE said  all the  shareholders know  they're being                                                               
heard. It's  clear that the  brewers are not thrilled  with every                                                               
aspect  of the  current  bill  and hopefully,  they  will come  a                                                               
little closer on that issue  by working together with the various                                                               
stakeholders.  He  asked   Mr.  Makinster  if  that   is  a  fair                                                               
RYAN  MAKINSTER, Executive  Director,  Brewers  Guild of  Alaska,                                                               
Anchorage,  Alaska, said  that's a  fair statement.  Overall, the                                                               
Brewers  Guild supports  the  bill,  but there  are  a couple  of                                                               
outlying issues that he's discussed and hopes will be addressed.                                                                
3:17:18 PM                                                                                                                    
CHAIR  COSTELLO  found  no  further  question.  She  kept  public                                                               
testimony open on SB 76 and held the bill in committee.                                                                         
SENATOR GARDNER asked if SB 76 would impact Amalga Distillery.                                                                  
CHAIR COSTELLO said yes, but she  would prefer to wait until that                                                               
section is covered.                                                                                                             
SENATOR MICCICHE said it affects  everyone in minor ways. It's an                                                               
amazing  effort.  He referenced  materials  in  the packets  that                                                               
would help members understand SB 76.                                                                                            
[SB 76 was held in committee with public testimony open.]                                                                       

Document Name Date/Time Subjects
Senate Labor and Commerce - AK Update on 2020 Census Operation 03.13.18.pdf SL&C 3/13/2018 1:30:00 PM
2020 Census
SB76 Presentation 3.13.2018.pdf SL&C 3/13/2018 1:30:00 PM
SB 76
CS SB76 Ver. T.pdf SL&C 3/13/2018 1:30:00 PM
SB 76
SB76 Sponsor Statement.pdf SL&C 3/13/2018 1:30:00 PM
SB 76
SB076 Sectional Analysis ver. T 3.9.2018.pdf SL&C 3/13/2018 1:30:00 PM
SB 76
SB076SS-DHSS-PS-3-9-18.pdf SL&C 3/13/2018 1:30:00 PM
SB 76
SB76SS-DCCED-AMCO-03-09-18.pdf SL&C 3/13/2018 1:30:00 PM
SB 76
SB076 Comprehensive Report Summary 3.9.2018.pdf SL&C 3/13/2018 1:30:00 PM
SB 76
SB076 Comprehensive Report 3.9.2018.pdf SL&C 3/13/2018 1:30:00 PM
SB 76
SB76 Support Doc - Current Population Limits 1.24.2018.pdf SL&C 3/13/2018 1:30:00 PM
SB 76
SB76 Support Doc - Eight Page Review 1.24.2018.pdf SL&C 3/13/2018 1:30:00 PM
SB 76
SB76 Support Letters 03.12.18.pdf SL&C 3/13/2018 1:30:00 PM
SB 76