Legislature(2017 - 2018)BELTZ 105 (TSBldg)

03/15/2018 01:30 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Bills Previously Heard/Scheduled: TELECONFERENCED
Moved CSSB 62(L&C) Out of Committee
Heard & Held
         SB  76-ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG                                                                     
2:03:44 PM                                                                                                                    
CHAIR  COSTELLO   reconvened  the   meeting  and   announced  the                                                               
consideration of  SB 76. This  is the Title 4  rewrite introduced                                                               
by  Senator   Micciche.  She  asked   Ms.  Brawley   to  continue                                                               
presenting the sectional analysis  that began during the previous                                                               
2:04:24 PM                                                                                                                    
ANNA  BRAWLEY,  Consultant,  Agnew  Beck  Consulting,  Anchorage,                                                               
Alaska, advised that  she would briefly go  through the sectional                                                               
analysis  for  the  chapters presented  on  Tuesday.  Those  were                                                               
Chapters 06,  16, and  21 in  Title 4 and  in the  sectional. She                                                               
said  she would  reference the  larger recommendations  that were                                                               
presented  on  Tuesday.  She   paraphrased  and  supplemented  as                                                               
          Chapter 06. Alcoholic Beverage Control Board                                                                        
                           Pages 1-5                                                                                            
     Section 1  Authority of the director                                                                                   
     AS  04.06.075 is  a new  subsection that  provides that                                                                
     the  director  of  the  ABC  Board  shall  prepare  the                                                                    
     budgets  for  administration,  enforcement,  education,                                                                    
     training, and prevention activities  under Title 4. The                                                                    
     main change being education and prevention.                                                                                
     Section 2  Delegation of authority                                                                                     
     AS  04.06.080   adds  endorsements   to  the   list  of                                                                  
     delegated powers. It also edits cross references.                                                                          
     Section 3 - Powers and duties                                                                                        
     AS  04.06.090(b) relocates  language  from existing  AS                                                                  
     04.11.070  stating that  the board  is the  entity that                                                                    
     issues, renews, and transfers licenses.                                                                                    
     Section 4  Powers and duties                                                                                         
     AS 04.06.090(e) also adds endorsements.                                                                                  
     Section 5  Powers and duties                                                                                         
     AS  04.06.090 adds  a new  subsection that  directs the                                                                  
     board to  prepare a Title  4 education plan  for public                                                                    
     safety,  industry,   youth,  municipalities,   and  the                                                                    
     public with annual revision.                                                                                               
     Adds new  subsections which direct the  board to review                                                                    
     the license fees in the  statute every 10 years, allows                                                                    
     the  board  to  give opinions  on  pending  legislation                                                                    
     amending Title 4, requires the  board to provide notice                                                                    
     of   violations  to   licensees   and   to  post   FASD                                                                    
     information  online   for  package  store   and  winery                                                                    
     licensees  to  include  with shipped  orders.  This  is                                                                    
     something that's done now but not electronically.                                                                          
2:07:10 PM                                                                                                                    
SENATOR GARDNER asked if the board isn't already allowed to                                                                     
provide opinions on pending legislation.                                                                                        
MS. BRAWLEY confirmed the board can do that now, but it's not                                                                   
explicitly stated in statute.                                                                                                   
SENATOR  MICCICHE added  that statute  clearly states  that other                                                               
boards and commissions  have this ability. The idea  here is that                                                               
the  board should  not only  have the  opportunity to  comment on                                                               
legislation,  it   should  also  be   clear  that  there   is  an                                                               
expectation  that the  board  would  speak up,  so  they are  not                                                               
politically engaged in an issue.                                                                                                
2:08:10 PM                                                                                                                    
MS. BRAWLEY continued the sectional analysis.                                                                                   
     Section 6  Statewide database                                                                                          
     AS 04.06.095  allows for certain information  stored in                                                                  
     the statewide  database for local  option orders  to be                                                                    
     retained up to  10 years [currently it's  kept just one                                                                    
     year].  Only  identifying  information will  be  purged                                                                    
     annually. It also adds reference to endorsement.                                                                           
     Section 7  Statewide database                                                                                        
     AS  04.06.095(c) adds  a new  subsection which  directs                                                                    
     the  board to  produce a  report of  aggregate regional                                                                    
     sales  of  alcohol  in local  option  areas,  based  on                                                                    
     information retained in the  database and not including                                                                    
     identifying  data  about  an  individual  purchaser  or                                                                    
     Section 8  Regulations                                                                                                 
     AS 04.06.100(b) adds endorsements  to the board's power                                                                  
     to  create regulations,  removes the  board's power  to                                                                    
     create additional  licenses and permits  in regulation,                                                                    
     and   adds  the   power   to  restrict   manufacturing,                                                                    
     packaging,   sale,   and   distribution   of   products                                                                    
     containing alcohol for consumption.                                                                                        
     Section 9    Proposed new  chapter AS 04.09  to replace                                                                
     sections  defining  license   types  and  permit  types                                                                    
     currently in AS 04.11 and regulation.                                                                                      
2:09:01 PM                                                                                                                    
SENATOR  GARDNER  asked  if  there was  any  concern  that  under                                                               
Section 6 the  information collected and retained  in a statewide                                                               
database  could track  back to  just one  person or  household in                                                               
communities that are very small.                                                                                                
MS. BRAWLEY  said that  would certainly be  a concern  and should                                                               
probably  be addressed  in regulation  before the  board releases                                                               
that information.                                                                                                               
MS. BRAWLEY advised that she would  skip the portions of the bill                                                               
that  have  not been  introduced  to  regulation. She  asked  the                                                               
members to  turn to page  13 of  the sectional analysis  which is                                                               
page 79 of the bill.                                                                                                            
       Chapter 16. Regulation of Sales and Distribution.                                                                      
                          Pages 79-97                                                                                           
     Section 73    Hours  of sale  and presence  on licensed                                                                
     premises (standard closing hours)                                                                                        
     AS 04.16.010(c) is  amended to allow a person  to be on                                                                
     the licensed premises  outside of the hours  of sale to                                                                    
     conduct  business with  the  licensee, maintenance,  or                                                                    
     improvements,  common   carrier  licensees,   and  adds                                                                    
     restaurant endorsement reference.                                                                                          
     Section 74                                                                                                             
     AS 04.16.010 adds a penalty for violating the section.                                                                   
     Section  75     Pricing   and  marketing  of  alcoholic                                                                
     AS  04.16.015(a)  issues   an  exemption  for  sampling                                                                  
     endorsements  and  defines  a   week  of  an  alcoholic                                                                    
     beverage price as seven days,  as opposed to a calendar                                                                    
     Section 76                                                                                                             
     AS 04.16.015 adds a penalty for violating the section.                                                                   
     Section 77  Trade practices                                                                                            
     AS 04.16.017  new section that specifies  which illegal                                                                  
     trade  practices cannot  be practiced  by manufacturers                                                                    
     or  wholesalers   and  directs   the  board   to  adopt                                                                    
     regulations defining exceptions to  those rules as well                                                                    
     as administrative penalties for violations.                                                                                
     Section  78     Solicitation  of  alcoholic  beverages;                                                                
     purchase on behalf of another                                                                                            
     AS    04.16.020   sets    penalty   for    unauthorized                                                                  
     solicitation or purchase of alcoholic beverages.                                                                         
     Section  79    Online  sale and  purchase of  alcoholic                                                                
     AS04.16.022  new  section prohibiting  online  purchase                                                                  
     and sale  in Alaska  unless the  licensee has  a winery                                                                    
     direct  shipment  license  or  package  store  shipping                                                                    
     endorsement. It also defines the penalties.                                                                              
     Section  80    Illegal presence  on premises  involving                                                                
     alcoholic beverages                                                                                                      
     AS  04.16.025(a)  adds   statutory  references  to  all                                                                  
     penalties  involving   sale  without  a   license.  [As                                                                    
     discussed,   there  were   changes  to   that  original                                                                    
     Section  81    Prohibited conduct  relating to  drunken                                                                
     AS   04.16.030  changes   the   existing  penalty   for                                                                  
     prohibited conduct  relating to a drunken  person, adds                                                                    
     an  administrative  penalty  to  the  licensee  if  the                                                                    
     employee is  convicted of a violation  of this section,                                                                    
     and  adds  misdemeanor  penalty for  the  licensee  who                                                                    
     knowingly  allows employees  to  violate this  section.                                                                    
     [Ms. Brawley  said that  last piece  is a  provision in                                                                    
     the existing AS 04.16.150.]                                                                                                
     Section 82 - Possession  of ingredients for homebrew in                                                                
     certain areas                                                                                                            
     AS 04.16.035  changes the statutory reference  from one                                                                  
     specific local  option area to all  local option areas,                                                                    
     consistent  with   AS  04.21.025   restricting  private                                                                    
     manufacture of alcohol in all local option areas.                                                                        
2:12:26 PM                                                                                                                    
     Section 83                                                                                                             
     AS   04.16.035  maintains   the  current   penalty  for                                                                  
     possession of ingredients for homebrew.                                                                                    
     Section  84 -  Access  of drunken  persons to  licensed                                                                
     AS  04.16.040  rewords  language relating  to  licensed                                                                  
     Section 85                                                                                                             
     AS   04.16.040  relocates   and  changes   penalty  for                                                                  
     prohibited  access  by  a drunken  person  to  licensed                                                                    
     Section  86    Obligation  to enforce  restrictions  in                                                              
     licensed premises                                                                                                        
     AS   04.16.045  relocates   and  changes   penalty  for                                                                  
     permitting consumption not authorized under a license.                                                                     
     Section  87   Access  of  persons  with restriction  on                                                              
     purchasing alcohol                                                                                                       
     AS  04.16.047  adds  a  reference   to  a  penalty  for                                                                  
     entering and remaining on  licensed premises defined in                                                                    
     AS  04.16.160.  [She  noted  it  does  not  change  the                                                                    
2:13:06 PM                                                                                                                    
SENATOR MICCICHE  reminded the committee  of the color  coding in                                                               
the  sectional. Existing  in  Statute;  Existing in  Regulations;                                                               
Penalty or Fee  Change; New Concept. [For  example, language that                                                               
is  highlighted  in yellow  is  existing  statute that  has  been                                                               
relocated in this legislation.]                                                                                                 
SENATOR GARDNER asked why Section  83 is highlighted in yellow if                                                               
it's not relocating.                                                                                                            
SENATOR MICCICHE reiterated that  anything that is highlighted in                                                               
yellow  is in  current  statute  but has  been  relocated in  the                                                               
statute, so it makes more sense.                                                                                                
MS. BRAWLEY continued the sectional analysis.                                                                                   
     Section 88    Access to persons under the age  of 21 to                                                              
     licensed premises                                                                                                        
     AS  04.16.049(a)  amends   a  reference  to  restaurant                                                                  
     endorsement and club license.                                                                                              
     Section 89                                                                                                             
     AS 04.16.049(c) adds additional  license types to those                                                                  
     allowed  to  have  underage   persons  on  premises  as                                                                    
     employees,  ages  16  and 17,  provided  they  are  not                                                                    
     serving alcohol.                                                                                                           
     Section 90                                                                                                             
     AS 04.16.049(d)  adds additional license  types allowed                                                                  
     to  have underage  persons  on  premises as  employees,                                                                    
     ages 18-20, provided they are not serving alcohol.                                                                         
     Section 91                                                                                                             
     AS 04.16.049  adds additional license types  allowed to                                                                  
     have  underage   persons  on  premises   if  traveling,                                                                    
     provided they  are not served or  consume alcohol. That                                                                    
     would   include   common  carrier   dispensaries   like                                                                    
     Section  92     Furnishing  or  delivery  of  alcoholic                                                                
     beverages to persons under the age of 21                                                                                 
     AS 04.16.051(d)  defines the  offense of  furnishing or                                                                  
     delivering to  a minor. [She  noted it does  not change                                                                    
     the penalty.]                                                                                                              
     Section 93                                                                                                             
     AS  04.16.051  changes   penalties  for  furnishing  or                                                                  
     delivering  to a  minor by  a person,  maintains one  C                                                                    
     felony  charge for  situations where  a minor  is given                                                                    
     alcohol and  causes serious injury or  harm but removes                                                                    
     C felony for the offense of  serving a minor in a Local                                                                    
     Option area, consistent with change in Section 61.                                                                         
     Section  94     Furnishing of  alcoholic  beverages  to                                                                
     person under the age of 21 by licensees                                                                                  
     AS  04.16.052  changes   penalties  for  furnishing  or                                                                  
     delivering to a  minor by a licensee  or employee, adds                                                                    
     administrative  penalty  to  licensee  if  employee  is                                                                    
     convicted  of a  violation of  this section  and shifts                                                                    
     misdemeanor  penalty in  AS 04.16.150  to licensee  who                                                                    
     knowingly allows employees to violate this section.                                                                        
     Section  95  -Room  rental for  purposes  of  consuming                                                                
     alcoholic beverages                                                                                                      
     AS  04.16.055 changes  the penalty  for renting  a room                                                                  
     for the  purpose of providing alcoholic  beverages to a                                                                    
     person under 21 years of age.                                                                                              
     Section  96    Permitting  minor  to illegally  possess                                                                
     liquor in a dwelling                                                                                                     
     AS   04.16.057(b)  maintains   current  violation   for                                                                  
     allowing a minor  to possess alcohol in  a dwelling and                                                                    
     adds a $500 fine.                                                                                                          
     Section 97    Purchase by or delivery  to persons under                                                                
     the age of 21                                                                                                            
     AS 04.16.060(e)  relocates the requirement  for persons                                                                  
     under the  age of 16 to  be accompanied by a  person 21                                                                    
     years of age  and have parental consent to  remain in a                                                                    
     restaurant  that serves  alcohol,  now  in proposed  AS                                                                    
     04.09.450 in Section 9.                                                                                                    
     Section 98                                                                                                             
     AS  04.16.060  defines  penalties  for  purchase  by  a                                                                  
     person under 21  years of age and delivery  to a person                                                                    
     under  21 years  of  age. For  persons  under 21,  adds                                                                    
     similar penalty structure as those  in AS 04.16.049 and                                                                    
     AS 04.16.050,  $500 fine for  violation with  option to                                                                    
     reduce  fine to  $50  if youth  completes treatment  or                                                                    
     community diversion panel.                                                                                                 
     Section 99  Sales or consumption at school events                                                                      
     AS 04.16.080 edits title for the section.                                                                                
     Section 100                                                                                                            
     AS  04.16.080  sets  the penalty  for  consuming  at  a                                                                  
     school event.                                                                                                              
     Section 101  Prohibition of bottle clubs                                                                               
     AS  04.16.090(c)  makes  the list  exclusive  and  adds                                                                  
     cover charge  and other  services or  products provided                                                                    
     on the premises.                                                                                                           
     Section 102                                                                                                            
     AS 04.16.090 defines the crime  of maintaining a bottle                                                                  
     club, relocates and maintains current penalty.                                                                             
     Section  103     Sale of  certain  alcoholic  beverages                                                                
     AS  04.16.110 defines  sale of  a prohibited  alcoholic                                                                  
     beverage, relocates and maintains current penalty.                                                                         
     Section  104    Removal  or  introduction of  alcoholic                                                                
     AS  04.16.120   defines  removal  or   introduction  of                                                                  
     alcoholic beverages, sets penalty and exemptions.                                                                          
2:18:13 PM                                                                                                                    
SENATOR GARDNER asked for the definition of a bottle club.                                                                      
MS. BRAWLEY  said her  understanding is  that it's  an unlicensed                                                               
premise  that  imposes  a  cover  charge or  offers  to  store  a                                                               
person's bottle on  the premises for consumption  there. It looks                                                               
like  a  bar  but  does  not sell  alcohol  directly.  These  are                                                               
currently illegal in statute.                                                                                                   
2:18:46 PM                                                                                                                    
     Section  105      Alcoholic  beverages  transported  by                                                                
     common carrier                                                                                                           
     AS 04.16.125  repeals and reenacts the  section. Allows                                                                  
     for delivery of alcohol to a  person over the age of 21                                                                    
     with signature from an order  filled by a package store                                                                    
     or winery direct shipment licensee  only by an approved                                                                    
     carrier, requires board to  review carrier policies and                                                                    
     publish a  list of approved carriers,  and removes some                                                                    
     detailed language for delivery  to a local option area.                                                                    
     Maintains  penalty for  unauthorized transportation  of                                                                    
     alcoholic  beverages by  common  carrier  into a  local                                                                    
     option area and makes noncompliance a violation.                                                                           
     Section 106  Stock confined to licensed premises                                                                       
     AS 04.16.130  sets a  penalty for  unauthorized storage                                                                  
     of alcoholic beverages.                                                                                                    
     Section  107   -  Sale  or  consumption   of  alcoholic                                                                
     beverages in a warehouse                                                                                                 
     AS 04.16.140 sets a penalty  for consumption or sale of                                                                  
     alcoholic beverages in a warehouse.                                                                                        
     Section 108  Licensee responsible for violations                                                                       
     AS 04.16.150 changes the penalty  for failure to ensure                                                                  
     compliance by a licensee on their licensed premises.                                                                       
     Section  109     Restriction  on  purchasing  alcoholic                                                                
     AS 04.16.160 maintains the  current penalty for failure                                                                  
     to comply  with a  restriction on  purchasing alcoholic                                                                    
     Section 110 - 111  Source of alcoholic beverages                                                                       
     AS  04.16.170 exempts  winery  direct shipment  license                                                                  
     and  maintains current  penalty for  sale of  alcoholic                                                                    
     beverages from or to an unlicensed person.                                                                                 
     Section 112 -  113   Restrictions on  purchase and sale                                                                
     of alcoholic beverages                                                                                                   
     AS 04.16.172 renumbers  the cross-references to license                                                                  
     types  and  maintains   current  penalty  for  licensee                                                                    
     obtaining  alcoholic   beverages  from   an  unlicensed                                                                    
     Section 114   Furnishing  alcoholic beverages in aid of                                                                
     gambling enterprise                                                                                                      
     AS  04.16.175 maintains  the  current  penalty for  the                                                                  
     crime of furnishing  an alcoholic beverage in  aid of a                                                                    
     gambling  enterprise.  It  defines the  crime  in  that                                                                    
     Section 115  Penalties for violation                                                                                   
     AS   04.16.180(b)   adds    statutory   references   to                                                                  
     prohibited  conduct  related  to  drunken  persons  and                                                                    
     furnishing  alcoholic beverages  to  persons under  the                                                                    
     age of 21 by licensees.                                                                                                    
2:21:00 PM                                                                                                                    
SENATOR GARDNER referred  to Sections 110-111 and  asked what the                                                               
winery direct shipment license was exempt from.                                                                                 
MS. BRAWLEY  explained that  this section is  part of  the three-                                                               
tier  system  which is  intended  to  keep a  separation  between                                                               
businesses that manufacture, distribute,  and sell alcohol to the                                                               
public. Generally, part of the  statute says one must buy certain                                                               
alcoholic  beverages  from  someone  who  is  designated  as  the                                                               
primary  source  of supply.  The  proposal  is to  exempt  winery                                                               
direct shipment licensees because they would primarily be out-                                                                  
of-state  businesses  and  therefore would  be  manufacturing  or                                                               
distributing product outside Alaska.                                                                                            
     Section 116                                                                                                            
     AS 04.16.080(e) adds a definition for "conviction".                                                                      
     Section 117                                                                                                            
     AS 04.16.180  clarifies that  licensees are  subject to                                                                  
     administrative  penalties  imposed  by  the  board  for                                                                    
     violations  of   AS  04.16.030  (Section  81)   and  AS                                                                    
     04.16.052    (Section   94)    and   adds    mitigating                                                                    
     circumstances for licensees.  A mitigating circumstance                                                                    
     would  be  showing  consistent  evidence  of  providing                                                                    
     employee training and no history of violations.                                                                            
     Section 118 - 121  Forfeitures and seizures                                                                            
     AS 04.16.220(a) renumbers cross-references.                                                                              
2:22:40 PM                                                                                                                    
At ease                                                                                                                         
2:23:53 PM                                                                                                                    
CHAIR COSTELLO  reconvened the meeting  and asked Ms.  Brawley to                                                               
continue to review the sectional for SB 76.                                                                                     
2:24:04 PM                                                                                                                    
MS. BRAWLEY  advised that  she was  on page  18 of  the sectional                                                               
starting into Chapter 21 that begins on page 97 of the bill.                                                                    
                Chapter 21. General Provisions.                                                                               
                          Pages 97-104                                                                                          
     Section 122  Keg registration                                                                                          
     AS  04.21.012  adds  new  section  establishing  a  keg                                                                  
     registration   process   including    proof   of   age,                                                                    
     registration  form  requirements, identification  tags,                                                                    
     and establishes the penalty for  possession and sale of                                                                    
     alcoholic beverages in an unregistered keg.                                                                                
CHAIR COSTELLO asked if this language contemplates the                                                                          
circumstance of a wedding where the bride may be paying for the                                                                 
keg but is not the one who picks it up.                                                                                         
MS. BRAWLEY said the language does not specifically address that                                                                
CHAIR COSTELLO asked if it's written such that the person who is                                                                
paying for the keg must pick it up.                                                                                             
MS. BRAWLEY said it doesn't specify that, but the penalties and                                                                 
the language of the statute focus on the purchaser.                                                                             
     Section  123  -  124      Civil  liability  of  persons                                                                
     providing alcoholic beverages                                                                                            
     AS 04.21.020(a) renumbers cross-references.                                                                              
     Section 125  Alcohol server education course                                                                           
     AS  04.21.025(a) repeal  and  reenact  section to  list                                                                  
     license  types that  do  not  require server  education                                                                    
     training:  only licenses  not  serving  the public  are                                                                    
     exempt from the requirement.                                                                                               
     Section 126                                                                                                            
     AS 04.21.025(b)  adds reference  to permit  holders and                                                                  
     individuals listed  on an application as  servers for a                                                                    
     permitted event.                                                                                                           
     Section 127                                                                                                            
     AS 04.21.025(c)  adds reference  to permit  holders and                                                                  
     requires servers  listed on  the permit  application to                                                                    
     have a current alcohol servers  card by the first event                                                                    
     Section 128                                                                                                            
     AS 04.21.025  defines the offense of  failure to comply                                                                  
     with  alcohol server  education  requirements and  sets                                                                    
     Section 129   Proof of  age and of not being restricted                                                                
     from purchasing alcoholic beverages                                                                                      
     AS 04.21.050(a) renumbers cross-reference.                                                                               
     Section 130  Warehousing of alcoholic beverages                                                                        
     AS  04.21.060  defines   the  offense  of  unauthorized                                                                  
     warehousing and establishes penalty.                                                                                       
     Section 131  Posting of warning signs                                                                                  
     AS  04.21.065(a) updates  list  of  license types  that                                                                  
     require warning  signs. She noted that  not all license                                                                    
     types that serve the public  are included the list now.                                                                    
     The intent is to include them.                                                                                             
     Section 132                                                                                                            
     AS 04.21.072.  Fines and other criminal  penalties. New                                                                  
     section  which  sets  penalties for  other  violations,                                                                    
     misdemeanors, or  felonies unless  otherwise specified.                                                                    
     [She noted  that the  default penalty in  Title 4  is a                                                                    
     class  A misdemeanor.  The  bill  would put  individual                                                                    
     penalties in  each section  and if  there is  a penalty                                                                    
     for something that  hasn't been defined, it  would be a                                                                    
     minor offense or a violation with a $250 fine.]                                                                            
     AS  04.21.074. Bail  forfeiture  schedule. Directs  the                                                                  
     supreme  court  to set  a  bail  schedule for  Title  4                                                                    
     AS 04.21.076. Suspension of  fine or sentence. Prevents                                                                  
     the court from suspending  fines or sentences for minor                                                                    
     offenses. [She noted that the  purpose is that they can                                                                    
     be  processed  more   automatically  rather  than  what                                                                    
     happens now, which is a possible court appearance.]                                                                        
     Section 133    Court records of persons  under 21 years                                                                
     of age                                                                                                                   
     AS  04.21.078 adds  additional  statutory reference  to                                                                  
     violations  of AS  04.16.060. She  noted  that this  is                                                                    
     consistent  with Senate  Bill 165  that passed  in 2016                                                                    
     for minor consuming and minor on licensed premises.                                                                        
     Section 134  Definitions                                                                                               
      AS 04.21.080(b)(6) adds reference to permit holders                                                                     
     and license holders.                                                                                                       
     Section 135                                                                                                            
     AS 04.21.080(b)(15) adds endorsements.                                                                                   
     Section 136                                                                                                            
         AS 04.21.080(b) adds definitions for terms not                                                                       
     currently defined in Title 4.                                                                                              
MS.  BRAWLEY asked  if the  committee  wanted her  to review  the                                                               
remainder of the  sectional that covers changes  outside of Title                                                               
2:29:25 PM                                                                                                                    
SENATOR GARDNER  asked her to describe  updating  bar" definition                                                               
in Section 137.                                                                                                                 
MS.  BRAWLEY said  her understanding  is that  there are  several                                                               
other places in statute that  reference specific license types or                                                               
licensed  premises.  These   sections  generally  renumber  those                                                               
references according  to the  changes in  the license  types. She                                                               
offered to look into it further.                                                                                                
2:31:05 PM                                                                                                                    
At ease                                                                                                                         
2:32:59 PM                                                                                                                    
CHAIR  COSTELLO  reconvened  the  meeting and  advised  that  Ms.                                                               
Brawley just  walked through  Chapters 6, 16,  and 21.  She asked                                                               
her to  walk through the  sections that cover changes  outside of                                                               
Title 4.                                                                                                                        
2:33:27 PM                                                                                                                    
MS.  BRAWLEY advised  that she  was starting  on page  19 of  the                                                               
sectional, bill Section 137.                                                                                                    
              Amendments to Various Other Titles.                                                                             
                         Pages 104-109                                                                                          
     Section 137 - Definitions                                                                                          
     AS 05.15.690(48)  renumber beverage  dispensary license                                                                    
     reference and update "bar" definition.                                                                                     
     Section 138  143                                                                                                       
     Amends references  to Title 4  in Titles 9, 11,  12 and                                                                    
     Section 144  - Unlawful  practices in places  of public                                                                
     AS 18.80.230(b) amends reference to chapter 04.11.                                                                         
     Section 145  Definitions                                                                                             
     AS  39.50.200(b) adds  the marijuana  control board  to                                                                    
     the  list  of  state  commissions or  boards.  This  is                                                                    
     requiring the  members of that board  to make financial                                                                    
     disclosures the same as  the Alcoholic Beverage Control                                                                    
     Board and other state boards.                                                                                              
     Section 146    Winery  direct shipment  tax; statement;                                                                
     AS 43.60.060 establishes tax  collection on direct wine                                                                    
     shipments  from out  of state  businesses holding  this                                                                    
     license  and outlines  requirements for  the Department                                                                    
     of Revenue  to collect  that tax.  [She noted  that all                                                                    
     manufacturers and  wholesalers are subject to  this tax                                                                    
     for  sales  of alcohol  within  the  state. This  would                                                                    
     establish  out of  state businesses  with that  license                                                                    
     subject to this tax.]                                                                                                      
     Section 147 - 148                                                                                                      
     AS 43.70.105(a)  amends references to chapter  04.11 in                                                                    
     Titles 43 and 45.                                                                                                          
MS. BRAWLEY asked how to proceed. The remaining sections relate                                                                 
to transition of license types.                                                                                                 
CHAIR COSTELLO thanked Ms. Brawley  and asked members if they had                                                               
2:35:55 PM                                                                                                                    
SENATOR MEYER asked if a small  winery in California will know it                                                               
must charge  tax under Section 146  and pay it to  the Department                                                               
of Revenue (DOR).                                                                                                               
MS. BRAWLEY clarified  that state law cannot  regulate sales made                                                               
in  person or  on  premises  outside the  state.  Section 146  is                                                               
specific to  businesses that  have signed up  to have  the winery                                                               
direct shipment license and are  serving Alaska customers through                                                               
online sales. She understands that  many states have this type of                                                               
system so wineries  that participate are familiar  with this type                                                               
of requirement and having this license.                                                                                         
SENATOR MEYER asked  how the wineries will be  notified that they                                                               
need to start collecting tax on Alaska sales.                                                                                   
SENATOR MICCICHE said  those wineries will be  notified when they                                                               
become licensed.  His office worked  with companies that  do mail                                                               
order internet  wine sales to  standardize the process  that most                                                               
other states follow for licensing and notification.                                                                             
SENATOR MEYER asked  if wine is the only  alcoholic beverage that                                                               
can be ordered online.                                                                                                          
SENATOR MICCICHE confirmed that other  sales are not allowed over                                                               
the internet.                                                                                                                   
CHAIR COSTELLO turned to public testimony on SB 76.                                                                             
2:39:24 PM                                                                                                                    
JOEL  KADARAUCH,   Alaska  Beer,   Wine  &   Spirits  Wholesalers                                                               
Association, Anchorage, Alaska, said  he was testifying in strong                                                               
support  of SB  76 although  the association  had concerns  about                                                               
unregulated  e-commerce and  the fact  that Alaska  is silent  on                                                               
unfair trade practices.                                                                                                         
2:40:31 PM                                                                                                                    
MICHAEL BALDWIN,  Senior Evaluation and Planning  Officer, Grants                                                               
& Administration,  Alaska Mental Health Trust  Authority (AMHTA),                                                               
Department of  Revenue (DOR), testified  in strong support  of SB
76. He said compromise was  reached with many stakeholders at the                                                               
table. It was a systematic redraft  of Title 4 that will help the                                                               
ABC Board carry  out its mission, fairly  represent the interests                                                               
of all  Alaskans, promote  a fair  business climate,  and protect                                                               
the public health and safety.                                                                                                   
2:43:14 PM                                                                                                                    
SENATOR STEVENS asked Mr. Kadarauch  if he represents just Alaska                                                               
businesses or out-of-state suppliers as well.                                                                                   
MR. KADARAUCH  said the association represents  both out-of-state                                                               
and  instate manufacturers,  but  his testimony  related only  to                                                               
business conducted within the state.                                                                                            
CHAIR  COSTELLO asked  Senator Stevens  if he  wanted to  ask Ms.                                                               
McConnell about  the scope of  responsibility for  education that                                                               
the bill ascribes to the ABC Board.                                                                                             
SENATOR STEVENS  said it  seems that  the ABC  Board is  not only                                                               
responsible for  the education  of license  holders but  also the                                                               
general  public.   He  asked   if  it   was  prepared   for  that                                                               
2:45:17 PM                                                                                                                    
ERIKA MCCONNELL, Director, Alcohol  and Marijuana Control Office,                                                               
Department  of  Commerce,   Community  and  Economic  Development                                                               
(DCCED), Anchorage,  Alaska, said her understanding  was that the                                                               
staff's efforts would  be focused on education  and the licensing                                                               
and enforcement provisions regarding Title  4. She noted that the                                                               
office added  a local government  specialist about 18  months ago                                                               
and that person was solely  focused on education and outreach for                                                               
alcohol   and  marijuana.   Her   understanding   was  that   the                                                               
discussions in  the steering  committee were  that the  ABC Board                                                               
would be  responsible for adding additional  education components                                                               
to the website and collaborating with other agencies.                                                                           
SENATOR  STEVENS  said  he  was  referring  to  slide  6  of  the                                                               
presentation the  committee heard on  3/13/18 that says  that the                                                               
ABC Board will be the  lead agency for alcohol education efforts.                                                               
"That seems like a big job."                                                                                                    
MS.  MCCONNELL  agreed  that  a  comprehensive  plan  to  educate                                                               
constituents on  the responsible  use of alcoholic  beverages and                                                               
the relevant state statutes, regulations,  and policies was a big                                                               
CHAIR  COSTELLO said  Senator  Stevens  was probably  envisioning                                                               
public  education  campaigns. She  asked  Ms.  McConnell how  she                                                               
interprets  that role  and  if  there would  be  a fiscal  impact                                                               
associated with that expanded role.                                                                                             
MS. MCCONNELL  said the department  submitted a fiscal  note that                                                               
included  travel  costs  and printing,  design,  and  publication                                                               
costs  for   educational  materials  for  the   local  government                                                               
specialist.  With the  regulations process,  there would  also be                                                               
extra days of board meeting in the first few years.                                                                             
CHAIR  COSTELLO asked  if  the members  wanted  Ms. McConnell  to                                                               
explain the fiscal impact related to the education question.                                                                    
SENATOR GARDNER asked if the fiscal note was in the packet.                                                                     
2:48:56 PM                                                                                                                    
At ease                                                                                                                         
2:49:39 PM                                                                                                                    
CHAIR  COSTELLO  reconvened  the  meeting and  advised  that  the                                                               
committee would return to the fiscal note later in the meeting.                                                                 
SENATOR MICCICHE  clarified that  SB 76  simply requires  the ABC                                                               
Board  to develop  a comprehensive  plan for  education. Agencies                                                               
that the legislature already funds  would deliver the educational                                                               
SENATOR STEVENS  said he was  uncomfortable making the  ABC Board                                                               
the lead  agency. That designation has  tremendous responsibility                                                               
and if it's not funded it won't happen.                                                                                         
SENATOR MICCICHE read  the language in subsection (f)  on page 2,                                                               
lines 23-27, and emphasized that  the board would not deliver the                                                               
education.  However, it  is  important that  there  is a  central                                                               
clearing  house  for  the material  that  entities  like  Recover                                                               
Alaska would deliver to the public.                                                                                             
2:53:07 PM                                                                                                                    
ALISON KULAS,  Executive Director,  Advisory Board  on Alcoholism                                                               
and Drug  Abuse (ABADA)  and Alaska  Mental Health  Board (AMHB),                                                               
Division of  Behavioral Health, Department  of Health  and Social                                                               
Services (DHSS),  Juneau, Alaska,  advised that these  boards are                                                               
the  state agencies  that are  statutorily charged  with advising                                                               
the  governor,  the  legislature,  and the  departments  for  the                                                               
planning and coordination of behavioral  health services that are                                                               
funded by the state.                                                                                                            
She stated that  both boards are in full support  of SB 76, which                                                               
provides a much-needed update to Title  4. It was the result of a                                                               
six-year stakeholder  effort to improve how  alcohol is regulated                                                               
for the health  and safety of Alaskans.  The recommendations have                                                               
been vetted by  over 100 members of the  alcohol industry, public                                                               
health, public  safety, local governments and  other stakeholders                                                               
who  use  Title 4  daily.  She  said  she  sat on  the  licensing                                                               
subcommittee  as a  public health  representative. It  helped her                                                               
understand the  industry perspective and  what it was  willing to                                                               
compromise  on  so  that  public   health  and  safety  could  be                                                               
protected  while allowing  for a  fair business  environment. The                                                               
proposed  regulatory structure  is consistent  for license  types                                                               
and  increases fees  to support  enforcement. They  give the  ABC                                                               
Board consistent information about  violations, which will ensure                                                               
that businesses are operating fairly.                                                                                           
SB   76   protects  youth   by   limiting   access  to   alcohol,                                                               
incentivizing youth  who need  it to  seek alcohol  education and                                                               
treatment, promoting  responsible alcohol  use, and  reducing the                                                               
harms of  over consumption.  The boards believe  that SB  76 will                                                               
fix  current   issues  in  Title   4,  clearly   define  business                                                               
practices, and promote a safer environment for all Alaskans.                                                                    
SENATOR MICCICHE asked  what kind of outreach  the Advisory Board                                                               
on Alcoholism and  Drug Abuse and the Alaska  Mental Health Board                                                               
will  do  to deliver  education  once  the  ABC Board  created  a                                                               
comprehensive plan for education.                                                                                               
MS.  KULAS  said she  anticipates  the  boards will  support  the                                                               
business license  education the  ABC Board is  doing and  work to                                                               
ensure  that the  public education  campaigns by  Recover Alaska,                                                               
the Division of  Behavioral Health, the Mental  Health Trust, and                                                               
other nonprofits are happening.                                                                                                 
2:57:15 PM                                                                                                                    
TREVOR STORRS,  Executive Director, Alaska Children's  Trust, and                                                               
a  member of  the  Recover Alaska  Steering  Committee, said  the                                                               
Alaska  Children's  Trust  supports  SB  76  and  the  components                                                               
related  to  underage  drinking.   This  is  the  statewide  lead                                                               
organization focused on Alaska's children, families, and youths.                                                                
Safe and  healthy children  is a  value everyone  shares. Alcohol                                                               
plays  a  major role  in  the  social, behavioral,  and  physical                                                               
issues that communities address  daily. This includes child abuse                                                               
and neglect.  Prevention is a  key tool  that can be  utilized to                                                               
help address current trends. One  of the components of prevention                                                               
is  to minimize  alcohol consumption  with youth.  Research shows                                                               
that  when  consumption  is reduced  in  youth,  consumption  and                                                               
negative  impacts later  in life  are  also reduced.  SB 76  does                                                               
three  core things  related to  underage drinking:  requiring the                                                               
keg  registration, consistent  but  fair  penalties for  underage                                                               
drinking  will ensure  youth are  not  punished for  the rest  of                                                               
their  lives for  one mistake,  and it  builds resiliency  versus                                                               
adding  on  more  trauma.  Licensees  will  be  held  immediately                                                               
accountable  for what  happens  on their  premises  and given  an                                                               
opportunity to  correct the  issue before  the ABC  Board reviews                                                               
their  license for  renewal.  These are  all  steps that  protect                                                               
youth. SB 76 has been  a collaborative and collective effort that                                                               
has made a strong and fair bill.                                                                                                
CHAIR COSTELLO thanked Mr. Storrs  for providing specifics on why                                                               
he liked the bill.                                                                                                              
She  asked  Ms.  McConnell  to walk  through  the  Department  of                                                               
Commerce,  Community and  Economic Development  fiscal note,  OMB                                                               
Component  3119  related to  the  Alcohol  and Marijuana  Control                                                               
3:00:15 PM                                                                                                                    
ERIKA MCCONNEL,  Director, Alcohol  and Marijuana  Control Office                                                               
(AMCO),   Department   of   Commerce,  Community   and   Economic                                                               
Development (DCCED),  asked if the  committee wanted a  review of                                                               
the full fiscal note or just the educational component.                                                                         
CHAIR COSTELLO  asked her  to walk through  the full  fiscal note                                                               
and comment on the education pieces.                                                                                            
MS. MCCONNEL  advised that AMCO  estimates that under SB  76 fees                                                               
from licenses and endorsements will  bring an additional $500,000                                                               
per year starting  in 2020. The first year looks  a little higher                                                               
than the outlying  years because it reflects  the one-time $1,250                                                               
fee  for   fixed  bar  endorsements  that   replace  the  current                                                               
duplicate license system. Endorsement renewals will be $200.                                                                    
She said  the agency has  identified several issues for  which it                                                               
would need additional  receipt authority. The first is  to hire a                                                               
Range   16  regulations   specialist  for   two  years   for  the                                                               
regulations project  necessitated by SB  76. There would  also be                                                               
additional services  and supplies  associated with  the position.                                                               
The  second is  the  expenditure to  hold  four additional  board                                                               
meetings in FY10-FY20 to consider  and take public comment on the                                                               
regulations package. The  third is to have  AMCO's existing local                                                               
government  specialist take  a 2-day  trip  to each  of the  four                                                               
judicial  districts every  year  for the  first  three years  for                                                               
education.  The estimated  expenditures are  $6,400 per  year and                                                               
$10,000  per year  for printing,  design, and  publication costs.                                                               
The travel expenditure  is in FY19, FY20, and  FY21. The services                                                               
appear in FY19 and FY20.                                                                                                        
The  last  major  issue  is  to  replace  the  alcohol  licensing                                                               
database  system.  The anticipated  cost  of  the new  system  is                                                               
$500,000 spread  over FY19 and FY20.  The anticipated maintenance                                                               
fee is  $50,000 per year  in the outlying  years. That is  in the                                                               
services line  of the  fiscal note. The  expectation is  that the                                                               
increase  in   revenue  would  more  than   cover  the  increased                                                               
expenditures  for  2020   to  2024.  There  is   no  request  for                                                               
additional  money for  2019 to  implement the  bill because  AMCO                                                               
will use  the $280,000 it  generally returns to the  general fund                                                               
each year. The  ABC Board recently approved  a regulation project                                                               
to increase  the fees  for applications  that are  new, transfer,                                                               
and renewal effective  on July 1, 2018.  The anticipated increase                                                               
in  revenue is  $175,000. "We  anticipate sufficient  receipts to                                                               
support the expenditures from the passage of this bill."                                                                        
3:10:59 PM                                                                                                                    
CHAIR  COSTELLO  asked  Ms.  Meade to  comment  on  the  priority                                                               
legislation  related  to minor  offenses  that  was passed  by  a                                                               
previous  legislature, and  the  proposed  violation and  penalty                                                               
changes that appear in the table in the packet.                                                                                 
3:12:33 PM                                                                                                                    
NANCY  MEADE, General  Counsel, Administrative  Staff, Office  of                                                               
the  Administrative  Director,  Alaska Court  System,  Anchorage,                                                               
Alaska, stated that the Court System  is neutral on the bill, but                                                               
views the penalty provisions as the most important aspect.                                                                      
She said  her reading of the  new Sec. 04.21.074 in  bill Section                                                               
132  is  it  requires  the  supreme court  to  establish  a  bail                                                               
schedule  for  the   63  violations  under  Title   4  and  allow                                                               
disposition without  a mandatory court appearance.  She said it's                                                               
a substantial project  to create these 63 new  codes, ensure that                                                               
they're cited  appropriately, and communicate the  new electronic                                                               
table to  law enforcement  so the appropriate  codes are  used on                                                               
their hand-held  ticketing devices.  Once the codes  are created,                                                               
court administrative staff  will meet with the  Department of Law                                                               
and  others  to  ensure  they are  summarized  appropriately  and                                                               
everybody  agrees that  is how  it should  be handled.  This will                                                               
then be  presented to the  supreme court  to sign and  it becomes                                                               
enacted  into  a  Court  Rule.  She advised  that  the  court  is                                                               
prepared  to  undertake  this   additional  work  without  fiscal                                                               
MS. MEADE  advised that the court  also maintains a table  of all                                                               
crimes and  cleans up  that electronic database  when a  crime is                                                               
changed from one  category to another. That was done  after SB 91                                                               
passed and when other laws changed things to violations.                                                                        
CHAIR COSTELLO said  the committee has heard that  the process to                                                               
bring SB 76  before the legislature was  collaborative, but she'd                                                               
like specific  details on the  philosophy behind the  changes the                                                               
bill makes.                                                                                                                     
MS.  MEADE said  she participated  in meetings  related to  minor                                                               
consuming alcohol which is the  piece that was removed and passed                                                               
as  priority   legislation  (Senate  Bill  165)   by  a  previous                                                               
legislature.  Minor  consuming  was previously  a  semi  criminal                                                               
offense for which  the court had an  entirely separate procedure.                                                               
It was not helpful to kids  to be charged with something that was                                                               
more criminal  than it needed  to be,  and it was  complicated to                                                               
charge.  The thinking  was  that  by lowering  the  offense to  a                                                               
violation would make  it easier for law enforcement  to write the                                                               
ticket  and the  minor  could pled  guilty and  pay  the fine  in                                                               
court. However, for whatever reason  the number of cases of minor                                                               
consuming  has been  lower than  it was  before the  legislation.                                                               
Based on discussions she heard  during the meetings she attended,                                                               
that  probably  wasn't  what people  expected.  Senate  Bill  165                                                               
directed the court  to stop posting those cases  on CourtView and                                                               
SB 76  would extend that to  one more violation, which  the court                                                               
can easily accomplish.                                                                                                          
CHAIR COSTELLO  expressed interest in receiving  the data related                                                               
offenses  of minor  consuming before  and after  Senate Bill  165                                                               
passed. She recalled  that the idea was that  the consequence for                                                               
a mistake would not be life-altering.                                                                                           
MS. MEADE agreed to supply the data.                                                                                            
SENATOR MEYER referenced Sec. 04.16.059  and asked her to comment                                                               
on the  increase in  penalties from  a class  A misdemeanor  to a                                                               
class C  felony for anyone  who is  a registered sex  offender or                                                               
child kidnapper.                                                                                                                
MS. MEADE  said she didn't recall  that was changed in  the bill,                                                               
but she would take another look and provide an answer.                                                                          
SENATOR MEYER said he doubts there  would be many of those cases,                                                               
but  the increase  in penalty  would come  at a  cost. "Like  you                                                               
said, you're saving money elsewhere, so it may be an offset."                                                                   
MS. MEADE clarified that SB 76  neither saves nor costs the court                                                               
money. The  court doesn't  experience an impact  when one  or two                                                               
cases move  from a misdemeanor to  a felony. The reverse  is also                                                               
true; the  court doesn't  experience a  monetary savings  when an                                                               
offense is reclassified from a felony to a misdemeanor.                                                                         
SENATOR MEYER  said he understood  that it cost the  Court System                                                               
more if someone was charged with a felony versus a misdemeanor.                                                                 
MS. MEADE  said she  would classify  any savings  as theoretical.                                                               
There is no outlay of money, but there is a little less work.                                                                   
CHAIR COSTELLO thanked all the participants.                                                                                    
3:23:40 PM                                                                                                                    
CHAIR  COSTELLO held  SB 76  in committee  with public  testimony                                                               

Document Name Date/Time Subjects
CSSB 62 Ver. J.pdf SL&C 3/15/2018 1:30:00 PM
SB 62
CSSB62 Explanation of Changes Ver. D to J.pdf SL&C 3/15/2018 1:30:00 PM
SB 62
CSSB 62 - 03.14.18 Legislative Research Request - Alaska Communities Without Nearby Health Care Facilities.pdf SL&C 3/15/2018 1:30:00 PM
SB 62
CSSB 62 Ver. O.pdf SL&C 3/15/2018 1:30:00 PM
SB 62
CSSB62 Explanation of Changes Ver. J to O.pdf SL&C 3/15/2018 1:30:00 PM
SB 62