Econ 919: Alcohol overhaul bill passes Senate

Feb 28, 2020

A bill overhauling Alaska’s alcohol laws made it to the halfway point in the Legislature on Wednesday. Senate Bill 52, sponsored by Kenai Peninsula Sen. Peter Micciche, was voted out of the Senate and sent over to the House.

Micciche calls it a grand compromise hashed out by the factions that have been at odds over the state’s existing alcohol regulations.

“This bill a true compromise. All stakeholders got something but no stakeholder group got everything,” Micciche said. “The bill modernizes the reorganizes the 35-year old hodgepodge of alcohol statutes in Alaska into a comprehensive, reorganized Title 4 Rewrite. The primary focus is on public health and safety. It provides clarity for licensees, local governments, law enforcement and the public and will result in a common-sense, consistent and less unnecessarily burdensome regulation of the alcohol beverage industry.”

Traditional bars and other alcohol-serving establishments have bristled against the growing craft brewing industry. Tasting rooms have been an important source of income for breweries, especially for new breweries that don’t have the up-front money necessary to set up a system of distribution for their product. But tasting rooms have been limited under state code, with regulations over how late they can stay open, how much they can serve and on what other activities can happen in a tasting room — which is pretty much none. Existing statutes prohibit everything from live music to pool tables.

Under SB52, brewery tasting rooms can be open until 10 p.m., instead of 8 p.m., they can host activities like brewery tours, art shows and fundraisers and they can host up to four concerts a year.

The compromise was hashed out between the two big stakeholder groups, Alaska CHARR, the biggest trade association representing bars, and the Brewers Guild of Alaska. On the Senate floor, Micciche said the bill balances the interests of these two groups, while still putting safety first. 

“Remember that alcohol is the number-one substance of choice that is abused in the state of Alaska. It is about 95 percent of our substance abuse problem,” Micciche said. “It also happens to be a very important industry in our state. This bill balances those considerations into what you see before you.”

Now for the compromise. The rules for how many breweries can open in an area will change. Existing breweries will be grandfathered in, but new breweries will only be allowed on a basis of one per 12,000 people.

Juneau Sen. Jesse Kiehl voiced objection to idea of per-capita licenses. 

“The problem we have is that the per-capita quotes don’t work. They haven’t worked, they’re not going to state working,” Kiehl said. “… Density is an issue. When we talk about something like a zoning law — how many alcohol sales establishments in an area of blocks. That can have a real effect on public safety. But the number of retailers, be they package stores or bars, just doesn’t impact alcohol-related crime, alcoholism, or the scourge that alcohol abuse causes in our families.”

Kiehl says this bill is not the time or place to overhaul the per-capita system but said the rules regarding new brewery licenses got worse through the legislative process.

“When the bill left the Judiciary Committee, it raised the per-capita quote on those from one per 3,000 people to one per 9,000 people. The bill we have in front of us is one per 12,000. That really doesn’t leave opportunities for new entrance into this business, pretty much anywhere in our state,” Kiehl said.

He didn’t propose a change on the Senate floor but said he hopes the House addresses the issue when they take up the bill.

Sen. David Wilson, of Wasilla, proposed reducing the wait time on municipalities asking for new licenses. The bill says three years between the state Alcoholic Beverage Control Board denying a request for a license and a re-application. Wilson’s successful amendment lowered that timeframe to one year. 

Senate Bill then passed the Senate with a unanimous vote.