House Rules

All right well let's start with house bill eleven sixty two representative right you're welcome to join us at the table introduce yourself and you may begin. Thank you madam chair representative David Wright District sixty nine with your permission I'd like to ask Mr Robert Brown fish to join me at the table please introduce yourself to the record. This is a I'm our Brown fish and one of the co owners of lost forty brewing. Okay thank you madam chair and committee house bill eleven sixty two deals with by microbreweries and ready to drink beverage products so what the bill would do is it would simply authorized Arkansas so Arkansas microbrewery restaurants to manufacture and sell what are known as ready to drink products there's no other substantive changes in the bill I'm sure many of you are familiar with ready to drink products they're defined in our in our law as Beverages containing spirits liquor with a final finished product of no more than fifteen percent so these are sometimes referred to as canned cocktails so I got a Margarita in a can or familiar with ranch water like a tequila soda or a vodka soda those are common examples. these products are already on the shelves in Arkansas package stores all across the state the reason for the bill is because the there the big national breweries like Anheuser Busch they can already manufacture these products as well as the the medium sized breweries as well but our small Arkansas microbreweries are prohibited from doing that and so this would just level the playing field. It would give um Arkansas package stores and our consumers more options and choices and variety particularly Arkansas made products so that's the benefit of the bill as well and it would have positive economic benefits for our small Arkansas microbreweries because they would be able to increase employment improve production efficiency I know that some people have asked me does this bill expand out hall in Arkansas it does not as I mentioned these products are already made and sold in Arkansas and it just simply. That's them compete in a rapidly growing popular category that their competitors can already participate in. But that I'll be happy to try to answer any questions. Representative for law you're recognized for a question. Thank you madam chair read your bill go to page three line thirty. You inserted it looked like you change the language authored a bill just to be clear where I'm going to issue change that operated during I don't think I have a problem with that but. On line thirty it goes to is on premises consumption ready to drink products problem line it talks about portions of cities and counties is that referring to the entertainment districts or what what what are you getting out there and how does that practically work. I think what we wanted to ensure with that provision because you just explained is all those inserts a ready to drink all through there I don't. Know that you explain what this means sure that particular portion of the bill I if I remember correctly was recommended by Mr Chandler at ABC okay we entertain. Saturday's yourself for the record and you may begin. Doorly Chandler director of the alcoholic beverage control there are when these counties go with they're going wet for the alcohol the beer and wine consumption many counties have not elected have liquor by the glass and so they cannot sell the cocktails without having a restaurant makes a private club permit would allow them to sell them many cities have not plastic county has vote has elected to have liquor by the glass here so you can have a restaurant mixed drink permit that would allow you to have the beverages such as the margaritas and stuff without having to have a private club permit but there are areas across the state in fact we only have four counties I believe that have liquor by the glass there are local ordinances that are passed in various counties that allow it but it is not across the state as a whole so this would allow them to sell their beverages on premises rtds in those areas that have elected or have passed an ordinance to allow such beverages. And yes she refresh my memory we wanted to make sure that we work in IT burden only Adding areas where liquor could be served by the bill so that was just clarify that it's only allowed where it's already allowed. Okay so we're these entertainment districts are that would be allowed by liquor by the glasses and I correct it and those are now allowed to the previous bill representative ray run believe was the one boards private clubs are in a dry area is that not right so the entertainment districts allow you to leave the on premise permitted location with that beverage it doesn't expand what is served at that permitted location And so with that area has liquor by the glass then they we can remove those beverages from the on premise into the entertainment district and if the area does not have a a liquor by the glass they may be removing them from private clubs it will not impact the impact entertainment district okay. Thank you manager I think I think I understand maybe are there any other questions. Thank you ma'am. We have a. Mr Danny Bradley signed up to speak again. Yeah. If you're recognized entities or self ours that. By saying thank you for giving me this opportunity to speak in opposition to this bill I will try to be as brief as possible and to the point as to why I oppose this bill however does take a little that explanation shall live with the appreciate a little bit leniency here I'm a PhD scientist and a former employee of the top five animal health care company in the world that is important because I'm considered to be an industry leader in the area of animal gut health and more importantly how fermentation probiotics used. And enzymes aid in the animal gut health I'm also a small business owner my wife and I are co owners of crystal ridge distillery in hot springs I'm also serving my second term as president of the Arkansas distiller's guild and I'm here on behalf of the distillers in the State. I'll give a brief description all hell ethanol the alcohol is produced in the art of producing ethanol alcohol and it's simple form is very elementary use date sugar produce alcohol and give off a by product of carbon dioxide. Beer is manufactured in a brewery where they take your any combination with water and cook it to extract carbohydrates these carbohydrates are then exposed to an enzyme found and malt called alpha amylase these enzymes break down the poly soccer I agenda individual molecules of sugar small enough for the used to eat and then fermentation takes place in ethanol is produced historically beer has been produced a low HBV or alcohol by volume usually less than five percent but can be found higher. Wineries produce one the sugar source for the one aspect in is found to be in the crushed grapes but the ethanol alcohol is produced largely in the same fashion the state the sugar produce alcohol and carbon dioxide historically one is also contained in low HBV usually eleven to thirteen percent what is commonly failed up to twenty percent Spirituous liquors such as whiskey or vodka are produced in a distillery. Introducing the spirits we use the same process is beer wine but we had another step distillation. Distillation is where we take the beer if producing whisky or wine of producing a fruit. Branding. And he needed to produce separation in the liquids in the match the separation occurs because different liquids bowl at a different temperature ethanol bowls at a hundred and seventy three degrees why water bowls at two hundred and twelve. What it boils it turns to vapor and rises divide vapor is then cooled below a hundred seventy three degrees it turns back into a liquid at a higher percentage of alcohol the more times it is distilled more pure it becomes in vodka is the purest and most dangerous form of alcohol distillation by federal definition vodka has to be produced at greater than a hundred ninety proof or ninety five percent ethanol alcohol it is the most dangerous form because the liquids and vapors produced are very explosive in fact ethanol alcohol is what we add a nurse yeah absolutely. Of on December fifth nineteen thirty three alcohol prohibition ended in the United States and bear with me a little bit on this coming out of the prohibition era the for federal government and state governments decided the best way to break up the mob control over the alcohol industry and reduce the likelihood of the law regaining control would be to fracture the industry and the cat or different categories as a result of beer wine and spirits are male licensed permitted regulated and taxed very differently. For example. All the ready to drink cocktails can reduce can be produced using one malt beverage or Spirituous liquors up to fifteen percent as this laws calling for the R. T. D. containing spiritus liquor cannot be sold in convenience stores retail outlets such as Walmart or grocery stores. One more example when the United States you can make beer wine in your garage but making Spirituous liquors against the law and you're required to have a federal DST or distillery permit it is against the law in part due to safety during the prohibition many people fell ill or even died due to the under educated producers of moonshine who did not understand the spirits distillation it did not cut out toxic concentrations of methanol or acetone. That are usually concentrated as well as the alcohol in the distillation process. Many producers also pairs due to explosions and volatility in the alcohol production or a greater than fifty percent concentration where ethanol liquid and vipers become flammable. In order to apply for the federal D. S. P. permit like I have. One is required already have in possession a building and all the equipment in place for crystal ridge distillery this was over a two million dollar investment before I could even apply for the federal permit. Allowing breweries to create beer to manufacture and sale sale ready to drink sodas containing spiritus liquor would be unprecedented in that it was in our state and that it would allow for alcohol categories to be crossed. Harmful to native distilleries business in our state increasing competition in already crowded market and potentially very dangerous and allowing breweries to manufacture products containing potentially explosive properties without proper order or a commitment or building codes. In summary I'm opposed to H. B. eleven sixty two because one it would be unprecedented because it would allow for the breweries in our state to cross categories and produce ready to drinks with Spirituous liquors but remain as a brewery. Admittedly I don't understand all the laws or income implications of this. A bill to this point however I do know that one cannot produce spirits without a federal D. S. P. permit or even by such spirits without a DSP permit or a Rectifier's license that will allow them to produce these products. But not manufacture the spirits. Number two this change in law would also be detrimental to our navy native distilleries and employees by creating competition in a already very crowded market as you know the population of Arkansas's approximately three million and more than fifty percent of our small state is dry. Ruiz would likely not be able to produce the rtds or the spirit going into the R. TD and would have to contract with large bulk suppliers of spiritus liquor and drive the prices down also hurting Christian craft distilleries ability to manufacture. Produce at competitive prices lastly most important safety of the manufacturers and consumers spiritus liquor is potentially dangerous for two reasons. Different equipment and building requirements are required for this high proof alcohol and everything in the distillery has to be explosion proof not only the equipment but every plugin. Spiritus letter to stop you are but we have got to recess and then come back so I'm gonna have to stop you right there and we're going to recess this committee we have a press conference that a bunch of us have to be act and then we'll come back after after the press conference all right I pull. I wasn't aware that but we're going to recess at this moment and we'll come back there and session thank you. Your presentation you're welcome to do so just please introduce yourself again for the record since were back on now. Okay thank you very much and again I apologize for taking so long I'm on my last point number three lastly most important safety of the manufacturers and consumer spirits liquor is potentially dangerous for two different reasons different equipment building requirements everything is required to be explosion proof in a distillery but not in a hurry. just liquor is produced at a higher A. B. V. in requires all equipment and building electrical plugs to be spark proof in the explosion resistant. Number two. Manufactures are we are unaware of property Nicks on making cuts in cutting the poisons such as methanol or acetone Allen in death could potentially occur this actually happened a lot during the pandemic when out of the country producers of hand sanitizer was leaving the methanol and ethanol of poisoning occurred. So in conclusion I urge to you to consider the potential risk and consequences of passing this bill and vote against H. B. eleven sixty two at this time I'll be glad to take any questions and I really appreciate your time and consideration today Senate body have any questions. Thing no questions thank you for your testimony thank you next we have for the bill. Albert from fish please state your name for the record and then you may begin Sir. Our brunch session co owner of lost forty brewing just like to reiterate representative ray had said about this bill I think it really is nothing more than creating a level playing field for the existing players in the state of Arkansas I look at lost forty brewing where where I spent all my time we work through distributors golden eagle here for example and that same golden eagle facility is bringing and ready to drink product from Anheuser Busch going directly to the retailers and wholesalers so we're taking non Arkansas product putting in front of Arkansas consumers we're simply asking for the opportunity to have a competitive product that's going in front of that same consumer at that same retail location. Representative Wardlaw you're recognized for a question thank you madam chairman I'm not near that old. Yeah but you Do you guys have a disturbed distillery license today that federal license the gentleman mentioned we're in the process of acquiring that I would have to check with our CFO but we would have to before producing this product have that license yes but you don't have it today not to my knowledge but I will double check and get that answer to you later today. Are there any other questions. Seeing no other questions thank you for your testimony and next we have against Logan Nelson. Would you like to close for your bill. Okay. Thank you measure I do want to just address a couple things that were mentioned in the testimony the invoke may not be aware that the the book brewers would have to have a distillery license in order to make this product and brewers do obtain distillery law licenses to create this product the large brewers already do their many medium sized burst it do as well and I would like to add that I have heard from from other distilleries that are in support of this bill rock town distillery in little rock for example contacted me very much in support of the bill excited about the opportunities that they see through this legislation to partner with their local microbreweries I know earlier there were some questions raised and and I had some conversations with members of the committee who still have some lingering questions about the bill and so madam chair with your permission I'd like to just pull the bill back at this time so we can make sure everyone's questions get answered appropriately and perhaps bring it back at a later time I appreciate you being willing to pull it down and bring it back at a later time I think everybody would agree to that so thank you so much okay thank you Committee. Next we have a house bill one one four. And I don't see representative eleven so then we'll go to at. That was Senate bill one one sorry. And I don't see representative eleven. So House Bill one three four four by representative McKenzie you're welcome to join at the table in or does your name for the record and then you may begin. Thank you madam chair of brick McKenzie representative districts seven I'm here today to present house bill one three four four at it's a bill relevant to the minimum container size a spirit of spirit is a little liquids for sailing off premises licensed stores in the state of Arkansas when people come to the the table they often say I've got a really senate bill this is an extraordinarily simple builds twenty four words and it actually affects two characters in the state code the current state law requires consumers who got off premises liquor stores to purchase a hundred milliliters of a spiritist spirits beverage we click we call cloak weekly call a airplane bottle. Mmhm most of those airplane bottles are actually formatted and fifty milliliter containers so for liquor stores to comply with the current law the either have to it themselves co pack it in a in a two pack or sell a multi pack of that product at the end of the day this is a moderation bill we are allowing and the bill would ask that consumers be given the opportunity to purchase less liquor in the State of Arkansas I'm happy to entertain any questions. Are there any questions. Fing no questions is there anyone here to speak against the bill. For the bill. Would you like to close for your bill would like to close the deal thank you madam chair thank you members the committee I hope for a good vote. What's the will of the committee. Motion to pass all in favor say aye. Opposed. Your bill is passed congratulations. I see that representative Evans has made it into the Rame you're welcome to present Senate bill one hundred and fourteen. Recognize yourself and then you may begin. Thank you madam chair members real quick Senate bill one forty is clean up language regarding campaign finance changing the statute show that your final reports are due on the last day of the month rather than thirty days after the month following the election this ran into a little bit of a problem where. If the election was in March. April thirty was fine if it was in may June thirty was fine but when the elections in November the thirty days. Would end on December the thirtieth creating an additional report for you on December thirty first this change the language to the end of the month striking out thirty days are there any questions. Seeing no questions is there anyone here to speak for the bill. Against the bill would you like to close for your bill. I'm close for the bill appreciate a good vote what's the will of the committee. I have a motion do pass all in all in favor say aye. Opposed no. Your bill is passed congradulations and that was all the business for rules thank you.