AKLEG Recap, Week 15: Bill would allow distilleries to serve cocktails, but cuts serving limits by a third

After the state went after distilleries for serving cocktails in their tasting rooms, distilleries responded with calls to update the law.

The time is ticking down, but significant parts of the Legislature’s adjournment to-do list are coming together, but not without quite a bit of drama in the alcohol world. Here’s what happened in the 15th week of the Alaska legislative session and what to look forward to.

Just 10 days left in session.

Cocktail clash

The House Labor and Commerce Committee finally took up the distillery cocktail issue in a new version of a wider alcohol rewrite released on Friday, but an amendment that slashed serving sizes is cause for a hangover.

The new version of Senate Bill 76 would finally give distilleries the green light to serve their liquor with non-alcoholic mixers, something the Alcohol and Marijuana Control Office decided earlier this year wasn’t allowed under existing law after allowing distilleries to do exactly that since 2014. But it doesn’t make life easy for distillers or breweries.

Alaska’s craft manufacturing industry has faced recent opposition from bar and restaurant owners who argue that the new entrants are undercutting their historic dominance of a shrinking market (Alaskans are generally drinking less booze). To that end, the House Labor and Commerce Committee adopted an amendment that cut the serving limits for distilleries, breweries and wineries by a third. Distilleries go from being able to serve 3 ounces of liquor to two and breweries go from 36 ounces to 24 ounces.

Amalga Distillery owner Brandon Howard said in an interview with The Midnight Sun that the change will be disastrous particularly for the state’s breweries, and said that’s why distillers had asked that the cocktail issue be handled in a separate bill altogether. Even when that separate fix died in committee he said distillers hadn’t asked for it to be taken up in Senate Bill 76, which is a far-ranging update to the state’s alcohol laws that was carefully negotiated between competing interests over years.

“We had let the cocktail issue die and didn’t want to take it up in Senate Bill 76 because it’s such a contentious issue,” he said. “This is a game-changer, especially for the small breweries of the state. … You basically had a third of your tasting room revenue cut off. They built a business model on the existing regulations.”

Howard said he and other distillers are asking that the Legislature just approve the version of Senate Bill 76 that passed the Senate, which doesn’t touch cocktails or the serving sizes.

Session coming together

The 15th week of the legislative session saw two significant pieces of the state’s fiscal plan come into shape. The House approved a bill, House Bill 331, that would pay off the state’s oil tax credit bill with bonds, reducing the state’s operating budget by $150 million (in the first year). The House and Senate are also close to a deal on restructuring the permanent fund so it can pay for government after the introduction of a negotiated deal on Senate Bill 26.

Both pieces are likely requirements to get the state’s operating budget through both the House and Senate so the Legislature can finally pass a funded budget and adjourn.

No action over the weekend

As close at the Legislature appears to be finishing up, it’s apparently not close enough. With no floor sessions or committee meetings over the weekend, there was no official action at all taking place down in Juneau. Many legislators took the opportunity to go home for the weekend. At the very least, hopefully they were using the trip to shuttle things home.

Referendum deadline approaches

State law schedules voter referendums seeking to repeal legislation on the first statewide election that’s 180 days after the date the Legislature adjourns. That day would be Thursday, May 10. Rep. David Eastman, R-Wasilla, has been pretty vocal about this date and has pushed for the Legislature to adjourn by then so voters could bring an initiative against whatever is done on the permanent fund and dividends (that’d be Senate Bill 26).

At this rate, though, the Legislature likely couldn’t be done before Thursday if it tried.

Senate approves Medicaid work requirements

On a party line 14-4 vote, the Senate Republicans approved Senate President Pete Kelly’s Senate Bill 193 to institute work requirements on certain Medicaid recipients last. The legislation, if signed into law, would require most able-bodied Medicaid recipients to work, seek work, volunteer, care for a child or participate in subsistence activities. The legislation is estimated to impact some 22,000 of the state’s Medicaid recipients.

The legislation is pitched as a compassionate program of sorts that would teach people self-reliance and the value of a job, but opponents say it’s a mean-spirited attack on poor people based on wrong assumptions about people who rely on social safety net programs.

The legislation stands almost zero chance in the House or with Gov. Bill Walker (unless, perhaps, it’s part of leverage for tens of millions of dollars of general, required Medicaid spending the Senate has refused to fund so far). Even if it somehow makes it into law, the legislation won’t guarantee the implementation of work requirements because the state would need to apply to the federal government for a waiver for the program.

The state argues such a waiver requires the state satisfy a pretty high bar to prove Medicaid recipients wouldn’t be worse off under the plan. To that end, the state requested about $1,000 per each Medicaid recipient and 49 additional state employees to help those Medicaid recipients find work. The Senate disputes these numbers, but it’s caused some supporters to back away from the proposal.

Here’s how the Senate voted on the bill (Updated with correct votes, the last version grabbed a vote on an amendment):

Yeas: Bishop, Coghill, Costello, Giessel, Hughes, Kelly, MacKinnon, Meyer, Micciche, Shower, Stedman, Stevens, von Imhof, Wilson

Nays: Egan, Gardner, Olson, Wielechowski

Excused: Begich, Hoffman

Monday’s agenda

The House Rules Committee has a 9:30 a.m. meeting to take up Senate Bill 64, which deals with the sale and transfer of contaminated property, and Senate Bill 81, which deals with criminal background checks of health care providers. It appears that the plan for Senate Bill 81 is to inject House Bill 408, which creates a path for people who have had their driver’s license revoked permanently revoked to eventually get it back.

Otherwise, only the House and Senate finance committees have hearings on Monday. The Senate will be taking up the capital budget at its 2 p.m. meeting, and the House is taking up the Senate’s marijuana education bill, SB 128, at its 1:30 p.m. meeting.

Both the House and Senate have floor sessions with non-critical legislation on the day’s calendar.

Is the smoke-free workplaces bill, Senate Bill 63, scheduled for a vote in the House?

No.

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