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CSHB 123(JUD): "An Act establishing the Marijuana Control Board; relating to the powers and duties of the Marijuana Control Board; relating to the appointment, removal, and duties of the director of the Marijuana Control Board; relating to the Alcoholic Beverage Control Board; and providing for an effective date."

00                       CS FOR HOUSE BILL NO. 123(JUD)                                                                    
01 "An Act establishing the Marijuana Control Board; relating to the powers and duties of                                  
02 the Marijuana Control Board; relating to the appointment, removal, and duties of the                                    
03 director of the Marijuana Control Board; relating to the Alcoholic Beverage Control                                     
04 Board; and providing for an effective date."                                                                            
05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
06    * Section 1. AS 04.06.070 is amended to read:                                                                      
07            Sec. 04.06.070. Appointment and removal of director. The governor shall                                    
08       appoint a director to serve as the executive officer of the board and the Marijuana                           
09       Control Board created under AS 17.38.080. The director may be removed by a                                    
10       majority vote of the full membership of the board and a majority vote of the full                             
11       membership of the Marijuana Control Board. The [BOARD MAY REMOVE THE                                          
12       DIRECTOR AT ITS PLEASURE, AND THE] governor may remove the director for                                           
13       misconduct, misfeasance, or malfeasance in office. The governor may not remove the                                
14       director unless the director is given a copy of the charges and afforded an opportunity                           
01       to be publicly heard, in person or by counsel, in defense against the charges upon at                             
02       least 10 days' notice. If the director is removed for cause, the governor shall file with                         
03       the lieutenant governor a complete statement of all charges made against the director                             
04       and the findings based on the charges, together with a complete record of any hearing.                            
05    * Sec. 2. AS 17.38.080 is repealed and reenacted to read:                                                        
06            Sec. 17.38.080. Marijuana Control Board; appointment and qualifications.                                   
07       (a) The Marijuana Control Board is established in the Department of Commerce,                                     
08       Community, and Economic Development as a regulatory and quasi-judicial agency.                                    
09       The board is in the Department of Commerce, Community, and Economic                                               
10       Development for administrative purposes only.                                                                     
11            (b)  The board members shall be appointed by the governor and confirmed by a                                 
12       majority of the members of the legislature in joint session. A member of the board                                
13       may not hold any other state or federal office, either elective or appointive. The board                          
14       consists of five voting members as follows:                                                                       
15                 (1)  one person from the public safety sector;                                                          
16                 (2)  one person from the public health sector;                                                          
17                 (3)  one person currently residing in a rural area;                                                     
18                 (4)  one person actively engaged in the marijuana industry; and                                         
19                 (5)  one person who is either from the general public or actively                                       
20       engaged in the marijuana industry.                                                                                
21            (c)  Notwithstanding (b) of this section, if the director is currently or was a                              
22       person actively engaged in the marijuana industry within the five years preceding                                 
23       appointment, not more than one member of the board may also be actively engaged in                                
24       the marijuana industry.                                                                                           
25            (d)  Notwithstanding (b) of this section, if the director currently is or was                                
26       employed in the public safety sector or the public health sector within the five years                            
27       preceding appointment, the requirement that one member of the board be from that                                  
28       sector is met, and the board position that would otherwise have been filled by a person                           
29       from that sector shall be filled by a person from the general public.                                             
30            (e)  Not more than two members of the board may be engaged in the same                                       
31       business, occupation, or profession.                                                                              
01            (f)  A board member representing the general public, the public safety sector,                               
02       the public health sector, or a rural area, or the member's immediate family member                                
03       may not have a financial interest in the marijuana industry.                                                      
04            (g)  In this section,                                                                                        
05                 (1)  "financial interest" means holding, directly or indirectly, a legal or                             
06       equitable interest in the operation of a business licensed under this chapter;                                    
07                 (2)  "immediate family member" means a spouse, child, or parent;                                        
08                 (3)  "marijuana industry" means a business or profession related to                                     
09       marijuana in which the person is lawfully engaged and that is in compliance with the                              
10       provisions of state law, including this chapter and regulations adopted under this                                
11       chapter;                                                                                                          
12                 (4)  "public health sector" means a state, federal, or local entity that                                
13       works to ensure the health and safety of persons and communities through education,                               
14       policymaking, treatment and prevention of injury and disease, and promotion of                                    
15       wellness;                                                                                                         
16                 (5)  "public safety sector" means a state, federal, or local law                                        
17       enforcement authority that provides for the welfare and protection of the general                                 
18       public through the enforcement of applicable laws;                                                                
19                 (6)  "rural area" means a community with a population of 7,000 or less                                  
20       that is not connected by road or rail to Anchorage or Fairbanks, or with a population of                          
21       2,000 or less that is connected by road or rail to Anchorage or Fairbanks.                                        
22    * Sec. 3. AS 17.38 is amended by adding new sections to read:                                                      
23            Sec. 17.38.081. Terms of office; chair. (a) Members of the board serve                                     
24       staggered three-year terms.                                                                                       
25            (b)  Except as provided in AS 39.05.080(4), a member of the board serves until                               
26       a successor is appointed.                                                                                         
27            (c)  A vacancy occurring in the membership of the board shall be filled within                               
28       30 days by appointment of the governor for the unexpired portion of the vacated term.                             
29            (d)  A member who has served all or part of two successive terms on the board                                
30       may not be reappointed to the board unless three years have elapsed since the person                              
31       has last served on the board.                                                                                     
01            (e)  The board shall select a chair from among its members.                                                  
02            Sec. 17.38.082. Per diem and expenses. Members of the board do not receive                                 
03       a salary but are entitled to per diem and travel expenses authorized for boards and                               
04       commissions under AS 39.20.180.                                                                                   
05            Sec. 17.38.083. Meetings. (a) The board shall meet at the call of the chair. The                           
06       board shall also meet at least once each year in each judicial district of the state to                           
07       study this chapter and existing board regulations in light of statewide and local issues.                         
08       Unless impracticable, the board shall hold its regular meetings at the same location as                           
09       and within 24 hours of the regular meetings of the Alcoholic Beverage Control Board.                              
10            (b)  Three members of the board constitute a quorum for the conduct of                                       
11       business. A majority of the whole membership of the board must approve applications                               
12       for new licenses, renewals, transfers, suspensions, and revocations of existing licenses,                         
13       and product approvals as provided in regulations adopted by the board.                                            
14            Sec. 17.38.084. Powers and duties of the board. (a) The board shall control                                
15       the cultivation, manufacture, and sale of marijuana in the state. The board is vested                             
16       with the powers and duties necessary to enforce this chapter.                                                     
17            (b)  The board shall                                                                                         
18                 (1)  propose and adopt regulations;                                                                     
19                 (2)  establish by regulation the qualifications for licensure including                                 
20       fees and factors related to the applicant's experience, criminal justice history, and                             
21       financial interests;                                                                                              
22                 (3)  review applications for licensure made under this chapter and may                                  
23       order the executive director to issue, renew, suspend, or revoke a license authorized                             
24       under this chapter; and                                                                                           
25                 (4)  hear appeals from actions of the director and from actions of                                      
26       officers and employees charged with enforcing this chapter and the regulations                                    
27       adopted under this chapter.                                                                                       
28            (c)  When considering an application for licensure, the board may reduce the                                 
29       area to be designated as the licensed premises from the area applied for if the board                             
30       determines that a reduction in area is necessary to ensure control over the sale and                              
31       consumption of marijuana on the premises or is otherwise in the public interest.                                  
01            (d)  The board shall adopt regulations under this chapter in accordance with                                 
02       AS 44.62 (Administrative Procedure Act).                                                                          
03            (e)  The board may employ, directly or through contracts with other                                          
04       departments and agencies of the state, enforcement agents and staff it considers                                  
05       necessary to carry out the purposes of this chapter. The salaries of personnel of the                             
06       board in the exempt service shall be set by the Department of Administration.                                     
07            (f)  The board shall promptly notify all licensees and municipalities of major                               
08       changes to this chapter and to regulations adopted under this chapter. However, if                                
09       changes affect only specific classifications of licenses and permits, the board need                              
10       only notify those licensees and municipalities directly affected by the changes. Current                          
11       copies of this chapter and current copies of the regulations adopted under this chapter                           
12       shall be made available at all offices in the state of the Department of Commerce,                                
13       Community, and Economic Development and the detachment headquarters and posts                                     
14       maintained by the division of Alaska state troopers in the Department of Public Safety.                           
15            Sec. 17.38.085. Enforcement powers. The director and the persons employed                                  
16       for the administration and enforcement of this chapter may, with the concurrence of                               
17       the commissioner of public safety, exercise the powers of peace officers when those                               
18       powers are specifically granted by the board. Powers granted by the board under this                              
19       section may be exercised only when necessary for the enforcement of the criminally                                
20       punishable provisions of this chapter, other criminal statutes relating to substances or                          
21       activities regulated or permitted under this chapter, regulations of the board, and other                         
22       criminally punishable laws and regulations relating to marijuana.                                                 
23            Sec. 17.38.086. Appointment and removal of director; staff. (a) The director                               
24       of the Alcoholic Beverage Control Board appointed under AS 04.06.070 shall serve as                               
25       the director of the board. The board may remove the director by a majority vote of the                            
26       full membership of the board and a majority vote of the full membership of the                                    
27       Alcoholic Beverage Control Board. The governor may remove the executive director                                  
28       as provided in AS 04.06.070.                                                                                      
29            (b)  The paid staff of the Alcoholic Beverage Control Board created in                                       
30       AS 04.06.010 shall also be the staff for the board.                                                               
31            Sec. 17.38.087. Duties of director. The director shall enforce this chapter and                            
01       regulations adopted by the board. The director shall issue, renew, transfer, suspend, or                          
02       revoke all licenses and permits and issue product approvals at the direction of the                               
03       board. The board may delegate to the director the authority to temporarily grant or                               
04       deny the issuance, renewal, or transfer of licenses and permits. The director's                                   
05       temporary grant or denial of the issuance, renewal, or transfer of a license or permit is                         
06       not binding on the board. The board may delegate to the director any duty imposed by                              
07       this chapter except its power to propose and adopt regulations.                                                   
08    * Sec. 4. AS 17.38.900(1) is amended to read:                                                                      
09                 (1)  "board" means the Marijuana Control Board established by                                       
10       AS 17.38.080 [ALCOHOLIC BEVERAGE CONTROL BOARD ESTABLISHED                                                    
11       BY AS 04.06];                                                                                                     
12    * Sec. 5. AS 17.38.900 is amended by adding new paragraphs to read:                                                
13                 (15)  "director" means the director of the Marijuana Control Board and                                  
14       the Alcoholic Beverage Control Board;                                                                             
15                 (16)  "registration" means registration or licensure, as determined by                                  
16       regulation.                                                                                                       
17    * Sec. 6. AS 44.33.020(a)(45) is amended to read:                                                                  
18                 (45)  supply necessary clerical and administrative services for the                                     
19       Alcoholic Beverage Control Board and the Marijuana Control Board.                                             
20    * Sec. 7. AS 44.62.330(a) is amended by adding a new paragraph to read:                                            
21                 (46)  Marijuana Control Board.                                                                          
22    * Sec. 8. AS 44.66.010(a) is amended by adding a new paragraph to read:                                            
23                 (13)  Marijuana Control Board (AS 17.38.080) - June 30, 2018.                                           
24    * Sec. 9. The uncodified law of the State of Alaska is amended by adding a new section to                          
25 read:                                                                                                                   
26       MARIJUANA CONTROL BOARD; STAGGERED TERMS. (a) Notwithstanding                                                     
27 AS 39.05.055, the governor shall appoint the initial members of the Marijuana Control Board                             
28 to staggered terms as follows:                                                                                          
29            (1)  two members shall be appointed to serve three years;                                                    
30            (2)  two members shall be appointed to serve two years; and                                                  
31            (3)  one member shall be appointed to serve one year.                                                        
01       (b)  Notwithstanding AS 17.38.080(b)(4) and (5), the governor, in making the initial                              
02 appointments to the Marijuana Control Board, shall appoint two persons with experience in                               
03 the marijuana industry obtained through lawful participation in the marijuana industry or                               
04 participation in an academic or advocacy role relating to the marijuana industry.                                       
05    * Sec. 10. The uncodified law of the State of Alaska is amended by adding a new section to                         
06 read:                                                                                                                   
07       TRANSITION: REGULATIONS. (a) Regulations adopted by the Alcoholic Beverage                                        
08 Control Board to implement AS 17.38 remain in effect and may continue to be implemented,                                
09 enforced, amended, or repealed by the Marijuana Control Board established under                                         
10 AS 17.38.080, as repealed and reenacted by sec. 2 of this Act.                                                          
11       (b)  The Marijuana Control Board, established under AS 17.38.080, as repealed and                                 
12 reenacted by sec. 2 of this Act, may adopt regulations necessary to implement the changes                               
13 made by this Act. The regulations take effect under AS 44.62 (Administrative Procedure Act),                            
14 but not before the effective date of this Act.                                                                          
15       (c)  The Alcoholic Beverage Control Board may carry out the functions of the board                                
16 under AS 17.38 as they existed on the day before the effective date of this Act and continue                            
17 and complete the process for adoption of regulations proposed but not adopted before the                                
18 effective date of this Act until members of the Marijuana Control Board are appointed by the                            
19 governor under AS 17.38.080(b), as repealed and reenacted by sec. 2 of this Act.                                        
20    * Sec. 11. This Act takes effect immediately under AS 01.10.070(c).