Legislature(2021 - 2022)ADAMS 519
05/04/2021 09:00 AM House FINANCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| HB156 | |
| HB157 | |
| HB182 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 156 | TELECONFERENCED | |
| += | HB 157 | TELECONFERENCED | |
| += | HB 182 | TELECONFERENCED | |
HOUSE BILL NO. 156
"An Act relating to industrial hemp; and providing for
an effective date."
9:05:40 AM
Co-Chair Merrick reported that the committee last heard the
bill on April 30, 2021.
9:06:03 AM
Co-Chair Merrick OPENED Public Testimony.
9:06:24 AM
ED MARTIN, SELF, STERLING (via teleconference), was in
support of HB 156. He believed that the legislation would
benefit the state. He voiced that the legislation would
benefit Alaskan farming families and he felt that much
state and municipal land was available to enhance the
program. He thought the bill would directly and indirectly
benefit the states revenues. He urged for passage of the
bill.
9:08:32 AM
Co-Chair Merrick CLOSED public testimony.
Co-Chair Merrick requested a review of the new fiscal note
for the Department of Natural Resources, Division of
Agriculture.
DAVE SCHADE, DIRECTOR, DIVISION OF AGRICULTURE, DEPARTMENT
OF NATURAL RESOURCES (via teleconference), reported that
the new industry was expected to pay for the program and
the fiscal note reflected the cost of the program in
program receipts.
Representative Thompson recalled a state or federal
regulation mandating the distance between a licensed
marijuana grow and an industrial hemp crop to avoid cross
pollination. He wondered what the distance was.
9:10:54 AM
JOE HARDENBROOK, STAFF, REPRESENTATIVE GRIER HOPKINS,
responded that the distance was maintained in the
regulations. He deferred to Mr. Schade to speak to the
specifics.
9:11:19 AM
Mr. Schade responded that the separation distance was 1000
meters for cannabis to avoid cross pollination and would
continue to be in regulation. He delineated that it was a
state rather than a federal regulation since the federal
government did not recognize recreational marijuana use. He
furthered that the distance would be maintained even under
a USDA industrial hemp program so the state could
internally ensure it avoided problems between both
industries. Representative Thompson asked who would be
monitoring compliance and what it would cost. Mr. Schade
replied that the Division of Agriculture would be
responsible for making sure farmers complied with statute.
The division had access to the Alcohol and Marijuana
Control Office (AMCO) database. He stated that the
enforcement cost would be minimal because maintaining the
distance was a provision in the application. Representative
Thompson thanked Mr. Schade for the clarification.
9:13:44 AM
Representative Wool thought that the taxing structures were
different for marijuana versus hemp growing. He did not
think there was a production tax for hemp. He wondered
about the licensures and whether they were different from
each other and if someone could cultivate both varieties.
Mr. Schade replied that there were no restrictions for
growing both varieties. He expected entrepreneurs would
grow both and that typically cannabis was grown indoors. He
deduced that because industrial hemp was an agricultural
crop, farmers could right off expenses therefore, growing
both could become complicated. He restated that the
division did not restrict someone from registering to grow
both crops. Representative Wool asked if families could
work on an industrial hemp farm. He was aware that there
were age restrictions for family members to be around
marijuana grow facilities. He assumed the restriction did
not apply for industrial hemp. Mr. Schade answered in the
affirmative that the restrictions did not apply to
industrial hemp. He added that the bill increased the
felony provision.
Representative Wool asked for clarifications regarding
felonies.
Mr. Hardenbrook replied that the Federal Farm Act of 2018
mandated that state licensed industrial hemp programs
prohibited the participation of an individual found guilty
of a felony of a controlled substance in the last 10 years.
Representative Wool viewed the provision as a federal
mandate and felt the federal government was treating it as
a drug related crop. Mr. Hardenbrook responded that the
2018 farm bill transitioned industrial hemp away from a
Schedule 1 narcotic to an agricultural commodity. The
inclusion of the felony provision was a result of
negotiations to pass the bill in Congress.
9:18:59 AM
Representative Johnson asked if the bill added two
positions. Mr. Hardenbrook deferred to Mr. Schade for the
answer.
Mr. Schade responded in the affirmative and furthered that
as the program grew it would require additional staffing.
He noted that he initially requested up to four additional
inspectors.
9:19:49 AM
Mr. Hardenbrook interjected that AS 03.05.010 mandated that
the industrial hemp program be self-sustaining through fees
charged to program participants. In the future if
additional staff was required the division would adjust
their scheduled fees.
9:20:21 AM
Representative Johnson asked how many people were currently
employed to oversee the industrial hemp program.
Mr. Schade replied that one person had been hired and
another position was authorized but not yet hired due to
funding. He needed additional inspectors and would hire up
to three more as money became available. Representative
Johnson asked about the funding for the current position.
Mr. Schade replied that the current position was funded
from industrial hemp. He qualified that due to timing of
the inception of the program, he had to use general funds
(GF) to implement the program. He detailed that because the
fees were December and January based there was a period in
July when the position had to be covered by GF until the
division collected enough revenue from the industrial hemp
program to cover the costs.
9:22:00 AM
Representative Johnson asked for a fiscal note that
reflected the amount of GF spend. Mr. Hardenbrook explained
that the industrial hemp pilot program's fees were assessed
on the calendar year, rather than a fiscal year that ended
on June 30 of each year when all the program receipts were
swept into the general fund. Beginning on July 1, until the
division had enough fees, it relied on GF to pay the salary
and operating costs. Representative Johnson guessed that
the GF would be replaced by program receipts. Mr.
Hardenbrook answered in the affirmative. He emphasized that
the statute clearly stated that the program had to be fully
supported through participants fees.
Representative Johnson asked if the second position was
authorized because there were additional fees collected
through the program.
Mr. Schade relayed that as part of the pilot program the
legislature authorized two positions. He indicated that he
assured the legislature that he would not hire staff until
there were sufficient registration fees. He did not hire
the second position because he was unsure there was enough
carryover money cover the cost. He deduced that he would
ultimately, need 6 positions to run the program but wanted
the program to build up enough funding in a set aside
account without worrying about the sweep.
9:25:35 AM
Representative Thompson cited the amount of $106.9 thousand
in the fiscal note for travel per year. He asked for more
detail. Mr. Schade replied that the department had to
inspect product in retail stores located in almost every
village and town in the state. He elaborated that as part
of tracking and registration the division carried out
inspections. He declared that in order to run a good, solid
program, significant travel was necessary, which was
costly.
9:26:54 AM
Representative Thompson assumed that the inspectors also
inspected other areas of agriculture aside from industrial
hemp. Mr. Schade answered in the affirmative. He offered
that over time the division's industrial hemp inspectors
would be trained to do other program inspections as well.
The cost effective approach would lead to different
programs sharing travel expenses.
9:29:26 AM
Vice-Chair Ortiz MOVED to report CSHB 156 (RES) out of
Committee with individual recommendations and the
accompanying fiscal note.
There being NO OBJECTION, it was so ordered.
CSHB 156(RES) was REPORTED out of committee with four "do
pass" recommendations and five "no recommendation"
recommendations and with one new fiscal impact note by the
Department of Natural Resources.
9:29:53 AM
AT EASE
9:31:15 AM
RECONVENNED
| Document Name | Date/Time | Subjects |
|---|