Legislature(2017 - 2018)BELTZ 105 (TSBldg)

04/03/2018 01:30 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 76 ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG TELECONFERENCED
Moved CSSSSB 76(L&C) Out of Committee
-- Public Testimony --
+ Bills Previously Heard/Scheduled: TELECONFERENCED
+= SB 205 TELECOMMUNICATIONS REGULATION/EXEMPTIONS TELECONFERENCED
Moved CSSB 205(L&C) Out of Committee
         SB  76-ALCOHOLIC BEVERAGE CONTROL; ALCOHOL REG                                                                     
                                                                                                                                
1:46:42 PM                                                                                                                    
CHAIR  COSTELLO   reconvened  the   meeting  and   announced  the                                                               
consideration  of SB  76. She  noted  that the  intention was  to                                                               
consider two proposed amendments and continue public testimony.                                                                 
                                                                                                                                
1:47:24 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
1:48:18 PM                                                                                                                    
CHAIR COSTELLO  reconvened the meeting  and invited Ms.  Hanke to                                                               
present the amendments.                                                                                                         
                                                                                                                                
1:48:30 PM                                                                                                                    
RACHEL  HANKE,  Staff,  Senator   Peter  Micciche,  Alaska  State                                                               
Legislature,   Juneau,   Alaska,    paraphrased   the   following                                                               
explanation of Amendment 1 for SB 76. :                                                                                         
                                                                                                                                
     This amendment proposes removal  of subsections (g) and                                                                    
     (h)  from  all   three  manufacturer  retail  licenses.                                                                    
     Subsection (g) requires manufacturers  to sell not more                                                                    
     than 20  percent of  their total  volume to  the public                                                                    
     after  four  license  renewal periods.  Subsection  (h)                                                                    
     grandfathers current manufacturer retail licensees.                                                                        
                                                                                                                                
1:49:01 PM                                                                                                                    
SENATOR MICCICHE moved to adopt Amendment 1, labeled 30-                                                                        
LS0015\T.4.                                                                                                                     
                                                                                                                                
                          AMENDMENT 1                                                                                       
                                                                                                                                
                                                                                                                                
     OFFERED IN THE SENATE                  BY SENATOR MICCICHE                                                                 
         TO: CSSSSB 76(  ), Draft Version "T"                                                                                   
                                                                                                                                
                                                                                                                                
     Page 22, lines 2 - 14:                                                                                                     
          Delete all material.                                                                                                  
                                                                                                                                
     Reletter the following subsections accordingly.                                                                            
                                                                                                                                
     Page 22, line 17:                                                                                                          
          Delete "(d), (e), (f), or (g)"                                                                                        
          Insert "(d), (e), or (f)"                                                                                             
                                                                                                                                
     Page 23, lines 18 - 30:                                                                                                    
          Delete all material.                                                                                                  
                                                                                                                                
     Reletter the following subsections accordingly.                                                                            
                                                                                                                                
     Page 24, line 2:                                                                                                           
          Delete "(d), (e), (f), or (g)"                                                                                        
          Insert "(d), (e), or (f)"                                                                                             
                                                                                                                                
     Page 25, lines 3 - 15:                                                                                                     
          Delete all material.                                                                                                  
                                                                                                                                
     Reletter the following subsections accordingly.                                                                            
                                                                                                                                
CHAIR COSTELLO objected for continued explanation.                                                                              
                                                                                                                                
SENATOR  MICCICHE explained  that  Amendment 1  removes both  the                                                               
80/20 and  the grandfather provisions.  He said he has  agreed to                                                               
chat  about a  path  forward in  the future,  but  he felt  those                                                               
provisions were outside the consensus spirit of the bill.                                                                       
                                                                                                                                
CHAIR COSTELLO removed her objection. Finding no further                                                                        
objection, Amendment 1 was adopted.                                                                                             
                                                                                                                                
1:50:49 PM                                                                                                                    
MS. HANKE paraphrased the following explanation of Amendment 2:                                                                 
                                                                                                                                
     This amendment  clarifies that a common  carrier is not                                                                    
     subject to  board approved alcohol server  education by                                                                    
     referencing the exception  in existing [subsection] (e)                                                                    
     in subsection  (a). The  sections are  restructured for                                                                    
     further  clarity. This  amendment  also  makes a  minor                                                                    
     correction  to  the  penalty provision  of  failure  to                                                                    
     comply  with alcohol  server education  requirements by                                                                    
     referencing existing [subsection] (e).                                                                                     
                                                                                                                                
SENATOR MICCICHE moved to adopt Amendment 2, labeled 30-                                                                        
LS0015\T.5.                                                                                                                     
                                                                                                                                
                          AMENDMENT 2                                                                                       
                                                                                                                                
                                                                                                                                
     OFFERED IN THE SENATE                  BY SENATOR MICCICHE                                                                 
          TO:  CSSSSB 76(   ), Draft Version "T"                                                                                
                                                                                                                                
                                                                                                                                
     Page 99, line 16:                                                                                                          
          Delete "As"                                                                                                           
          Insert "Except as provided under (e) and (f) of                                                                       
     this section, as"                                                                                                          
                                                                                                                                
     Page 99, lines 21 - 22:                                                                                                    
          Delete "This section does not apply to the                                                                            
     following licenses:"                                                                                                       
                                                                                                                                
     Page 99, line 23, through page 100, line 1:                                                                                
          Delete all material.                                                                                                  
                                                                                                                                
     Page 100, following line 25:                                                                                               
     Insert a new subsection to read:                                                                                           
          "(f)  This section does not apply to the                                                                              
     following licenses:                                                                                                        
               (1)  brewery manufacturer license under                                                                          
     AS 04.09.020, unless the  licensee holds a manufacturer                                                                    
     sampling endorsement;                                                                                                      
               (2)  winery manufacturer license under                                                                           
     AS 04.09.030, unless the  licensee holds a manufacturer                                                                    
     sampling endorsement;                                                                                                      
               (3)  distillery manufacturer license under                                                                       
     AS 04.09.040, unless the  licensee holds a manufacturer                                                                    
     sampling endorsement;                                                                                                      
               (4)  general wholesale license under                                                                             
     AS 04.09.100;                                                                                                              
               (5)  limited wholesale brewed beverage and                                                                       
     wine license under AS 04.09.110;                                                                                           
               (6)  winery direct shipment license under                                                                        
     AS 04.09.360."                                                                                                             
                                                                                                                                
     Reletter the following subsections accordingly.                                                                            
                                                                                                                                
     Page 100, line 26, following "(c)":                                                                                        
          Insert "or (e)"                                                                                                       
                                                                                                                                
CHAIR COSTELLO found no objection and Amendment 2 was adopted.                                                                  
                                                                                                                                
1:51:30 PM                                                                                                                    
CHAIR  COSTELLO  found no  further  amendments  or questions  and                                                               
solicited  a motion  to  adopt  the CS  for  SB  76, version  30-                                                               
LS0015\T as amended.                                                                                                            
                                                                                                                                
1:51:50 PM                                                                                                                    
SENATOR  MEYER moved  to adopt  the CS  for SB  76, version  T as                                                               
amended, as the working document.                                                                                               
                                                                                                                                
CHAIR COSTELLO found  no objection and CSSSSB 76(  ), as amended,                                                               
was adopted. She continued public testimony on SB 76.                                                                           
                                                                                                                                
1:52:19 PM                                                                                                                    
KAREN BERGER,  Homer Brewing Company, Homer,  Alaska, stated that                                                               
the 80/20 provision  does not reflect current  market trends. She                                                               
asked the committee  to consider removing that  provision for all                                                               
licensees.                                                                                                                      
                                                                                                                                
1:54:32 PM                                                                                                                    
SENATOR MICCICHE clarified that  the testimony should address the                                                               
current version of  the bill. The 80/20 provision  and the common                                                               
carrier sections have been removed.                                                                                             
                                                                                                                                
1:55:05 PM                                                                                                                    
DON MCNAMARA, Oceanside  Farms, Homer, Alaska, stated  that SB 76                                                               
works against small entrepreneurs that  are starting up. New York                                                               
State in 2014  helped all their apple growers  get cider licenses                                                               
and it  boosted revenue  to the state.  By comparison,  Alaska is                                                               
trying to  triple the  license fees. He  also stated  support for                                                               
maintaining the grandfather provision.                                                                                          
                                                                                                                                
1:56:25 PM                                                                                                                    
JOSH HEGNA,  Girdwood Brewing Company, Girdwood,  Alaska, said he                                                               
didn't  need  to  testify  now  that  the  80  20  provision  was                                                               
eliminated.                                                                                                                     
                                                                                                                                
1:56:52 PM                                                                                                                    
BEN  MILLSPEIN, Kodiak  Island Brewing  Company, Kodiak,  Alaska,                                                               
said  he appreciates  that the  80/20 provision  was removed.  He                                                               
supports Ms. Berger's comments.                                                                                                 
                                                                                                                                
DANA WALUKIEWICZ, King St Brewing  Co, Anchorage, Alaska, said he                                                               
supports SB 76 now that the 80/20 provision was removed.                                                                        
                                                                                                                                
1:58:11 PM                                                                                                                    
TOIVO  LUICK, Hoarfrost  Distilling,  Fairbanks, Alaska,  thanked                                                               
the committee  for removing  the 80/20 provision  from SB  76. It                                                               
makes sense for the industry.                                                                                                   
                                                                                                                                
1:58:45 PM                                                                                                                    
EDMOND  MINER,  Gakona  Brewing   Co,  Gakona,  Alaska,  said  he                                                               
supports SB 76 now that the 80/20 provision was removed.                                                                        
                                                                                                                                
1:59:05 PM                                                                                                                    
DOUG  HOGUE,  Kenai  River  Brewing  Company,  Soldotna,  Alaska,                                                               
thanked the  committee for its  work and stated full  support for                                                               
SB 76 as it stands today.                                                                                                       
                                                                                                                                
1:59:36 PM                                                                                                                    
BERT COTTLE, Mayor,  City of Wasilla, Alaska, said  he hopes that                                                               
the current CS for SB 76  is not the final product. Local leaders                                                               
and  local communities  would like  more input  to guard  against                                                               
state government overreach into  local government regarding local                                                               
options. Wasilla  currently has seven package  store licenses and                                                               
to add two  more would require a population base  of over 21,000.                                                               
The  current population  is 9,000.  Wasilla is  already over  the                                                               
limit on restaurant  beer/wine licenses and couldn't  bring a new                                                               
one  in if  one of  the existing  businesses lost  their license.                                                               
That  limits the  potential for  economic development.  He opined                                                               
that allowing local communities more  local option will result in                                                               
a better product.                                                                                                               
                                                                                                                                
CHAIR COSTELLO said it's a legitimate concern that she shares.                                                                  
                                                                                                                                
SENATOR  MICCICHE thanked  the City  of Wasilla  and the  City of                                                               
Soldotna for their  active participation in the  process. He said                                                               
the bill increases the ability  to move licenses around but local                                                               
option  wasn't fully  addressed because  there was  no consensus.                                                               
However, he and  other legislators are very  interested in moving                                                               
forward  on  those  local  option   issues  that  did  not  reach                                                               
consensus.                                                                                                                      
                                                                                                                                
2:03:15 PM                                                                                                                    
LYN  CARDEN,  Deputy  Administrator,  City  of  Wasilla,  Alaska,                                                               
stated that the  City of Wasilla agrees that  amendments to Title                                                               
4 that address local option  for alcohol licensing should be done                                                               
independent of  SB 76  due to  the complexity  of the  issue. She                                                               
also highlighted  that a carryover from  the original stakeholder                                                               
recommendations that eliminates the  option for an REPLPC license                                                               
should  be removed  from the  bill. She  noted that  is the  only                                                               
avenue available  for municipalities to get  new restaurants with                                                               
liquor licenses  within their city limits.                                                                                      
                                                                                                                                
CHAIR COSTELLO  said her office  was interested in working  on an                                                               
amendment to address that issue.                                                                                                
                                                                                                                                
2:05:06 PM                                                                                                                    
BRANDON HOWARD,  Amalga Distillery,  Juneau, Alaska,  thanked the                                                               
committee for removing  the 80/20 provision from SB  76 and noted                                                               
that  just 4  or 5  breweries in  the state  could have  met that                                                               
standard. He highlighted  that craft breweries in  the state have                                                               
                                           th                                                                                   
a $232  million economic impact.  That is 6   in the  country per                                                               
capita. Small  businesses are an  economic engine for  the state.                                                               
He  said a  video  he  watched on  the  power  of small  business                                                               
inspired  him to  start  an economic  impact  of distilleries  in                                                               
Alaska. It shows that:                                                                                                          
                                                                                                                                
   • Every job that a distillery produces adds 1.5 more jobs to                                                                 
     the state economy.                                                                                                         
 • Distilleries generate about $2.8 million in labor income.                                                                    
   • Every dollar of income from a distillery yields $2.50 in                                                                   
     income to workers in other industries.                                                                                     
   • Distilleries create almost $26 million in business                                                                         
     revenues; $19.7 million among the distilleries and $6.5                                                                    
     million for other industries.                                                                                              
                                                                                                                                
MR. HOWARD  said this small  industry that is comprised  of small                                                               
businesses is surprisingly impactful. SB  76 has the full support                                                               
of the Distillers Guild of Alaska.                                                                                              
                                                                                                                                
2:07:44 PM                                                                                                                    
RYAN LINDSAY, Devils Club Brewing,  Juneau, Alaska, said he fully                                                               
supports SB 76  now that the 80/20 provision was  removed. It was                                                               
an impossible threshold for small brewers to meet.                                                                              
                                                                                                                                
2:08:18 PM                                                                                                                    
MATT BARNABY,  Barnaby Brewing Company,  Juneau, Alaska,  said he                                                               
no longer needed to testify  against the 80/20 provision since it                                                               
was removed, but he wanted to  share his story to demonstrate the                                                               
positive  impact of  small businesses.  He and  his wife  own and                                                               
operate Barnaby Brewing in downtown  Juneau. This is the smallest                                                               
brewery  in Southeast  Alaska. They  currently employ  four year-                                                               
around staff and seven in the  summer. They have been in business                                                               
almost a  year and have won  gold for their California  Common at                                                               
the U.S. Open Championship. It  is the second largest competition                                                               
in  the country.  They also  participated in  the Great  American                                                               
Beer Fest  in Denver, Colorado  that was attended by  over 60,000                                                               
people. They  talked to people  who had visited Alaska  and their                                                               
brewery  and to  others who  were  planning to  visit Alaska.  He                                                               
urged  the committee  to continue  to be  sensitive to  potential                                                               
impacts on small businesses.                                                                                                    
                                                                                                                                
2:10:56 PM                                                                                                                    
MARK STAPLES, Midnight Sun Brewing  Co, Anchorage, Alaska, stated                                                               
full support for SB 76. The bill  solves a lot of the problems in                                                               
Title 4 that make doing business as a brewery very difficult.                                                                   
                                                                                                                                
2:11:57 PM                                                                                                                    
STEW GRAHAM, City  Council Member, City of  Wasilla, Alaska, said                                                               
the  committee is  to be  congratulated for  solving some  of the                                                               
problems for brewers,  but SB 76 does not do  justice for Wasilla                                                               
and other  small towns. The  City of  Wasilla is 13  square miles                                                               
and  has about  9,000  residents, but  about  75,000 people  live                                                               
within  10 miles  and  they come  to Wasilla  to  shop and  dine.                                                               
Wasilla currently has  41 or 42 establishments where  one can get                                                               
a meal and a  drink. He said the citizens voted  for the level of                                                               
government of  a first  class city and  the state  should respect                                                               
the right of the city to  control its own destiny. They should be                                                               
able  to decide  how  many liquor  licenses  are appropriate  and                                                               
forward their decisions to the Board for consideration.                                                                         
                                                                                                                                
SENATOR MICCICHE  said he gets it  but that amendment to  Title 4                                                               
is  not ready  for  prime time  in  the bill,  but  he and  other                                                               
legislators  are  willing  to  work on  that  going  forward.  He                                                               
believes it should be a separate effort.                                                                                        
                                                                                                                                
2:17:05 PM                                                                                                                    
CHAIR COSTELLO closed public testimony on SB 76.                                                                                
                                                                                                                                
2:17:15 PM                                                                                                                    
SENATOR MEYER  moved to report  CSSSSB 76, version T  as amended,                                                               
from  committee  with  individual  recommendations  and  attached                                                               
fiscal note(s).                                                                                                                 
                                                                                                                                
2:17:31 PM                                                                                                                    
CHAIR COSTELLO announced that without objection, CSSSSB 76(L&C)                                                                 
moved from the Senate Labor and Commerce Standing Committee.                                                                    

Document Name Date/Time Subjects
SB76 Comparison of Other States Brewery and Sampling Laws.pdf SL&C 4/3/2018 1:30:00 PM
SB 76
SB76 Distillery Tasting Rooms State Comaprison.pdf SL&C 4/3/2018 1:30:00 PM
SB 76
SB76 Existing AS 04.21.025(e) .pdf SL&C 4/3/2018 1:30:00 PM
SB 76
SB 76 Amendment T.4.pdf SL&C 4/3/2018 1:30:00 PM
SB 76
SB 76 Amendment T.5.pdf SL&C 4/3/2018 1:30:00 PM
SB 76
SB76 Explanation of Amendments 4.2.2018.pdf SL&C 4/3/2018 1:30:00 PM
SB 76