Legislature(2021 - 2022)BARNES 124
04/07/2021 01:00 PM House RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| SJR8 | |
| HB156 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SJR 8 | TELECONFERENCED | |
| *+ | HB 156 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 156-INDUSTRIAL HEMP PROGRAM;MANUFACTURING
1:38:16 PM
CHAIR PATKOTAK announced that the final order of business would
be HOUSE BILL NO. 156 "An Act relating to industrial hemp; and
providing for an effective date."
1:39:15 PM
The committee took a brief at-ease at 1:39 p.m.
1:39:56 PM
REPRESENTATIVE GRIER HOPKINS, Alaska State Legislature, as prime
sponsor presented HB 156. He noted his partnership with Senator
Shelly Hughes in advancing the proposed legislations. He read a
statement as follows:
As my staff will elaborate later, there are federal
timelines which require action by the Alaska State
Legislature this year in order to keep our fledgling
industrial hemp industry alive, progressing, and in
compliance with federal law. Today, Alaskan farmers
are growing industrial hemp for animal feed;
nutriceuticals, which are nutritional supplements;
manufacturing; and other uses. Farmers in Alaska have
been growing hemp for several years, since our pilot
project went into place. I would note for the
committee that industrial hemp, as governed by federal
law, is a different industry entirely than Alaska's
state-licensed, recreational marijuana program. In
2018, the Thirtieth Alaska [State] Legislature saw the
unanimous passage of Senate Bill 6, which established
a pilot industrial hemp program in Alaska. With the
passage, then, of the federal 2018 Farm Bill, the
United States Congress changed federal requirements
for state industrial hemp programs. HB 156 will
empower the Alaska Division of Agriculture to work
constructively with Alaskan farmers, both small- and
large-scale, and the federal government, to create a
new industrial hemp program compliant with federal
guidelines. It is my hope that these changes will
result in the continued development of a new and
thriving industry for Alaska's farmers and
manufacturers, diversify our economy, and increase
state revenues.
1:42:02 PM
JOE HARDENBROOK, Staff, Representative Grier Hopkins, Alaska
State Legislature, on behalf of Representative Hopkins, prime
sponsor, detailed the Sectional Analysis of HB 156 [included in
the committee packet], which read as follows [original
punctuation provided]:
Section 1 Two subsections added to this section
authorizing the commissioner of the Department of
Natural Resources to include the manufacturing and
retail sales of products made from industrial hemp, as
well as registration and renewal procedures, in the
regulations for the industrial hemp program.
Section 2 Gives the DNR Commissioner the ability to
work constructively with a grower if their crop tests
above .3% but below 1.0% THC.
Section 3 Adds language that a registrant for the
industrial hemp program is not eligible if they had
been convicted of a felony involving a controlled
substance within the last ten years. This section is
added to comply with provisions of the 2018 Farm Bill.
Section 4 Adds that the department may develop an
industrial hemp program that complies with federal
requirements and submit a plan for the program to USDA
for approval.
Section 5 A grower may retain and recondition their
crop if it tests above .3% but below 1.0% THC.
Section 6 A new subsection adds that a person who
retains but fails to recondition is guilty of a
violation.
Section 7 Changes the statutory definition of
industrial hemp to match the federal definition which
was changed in the 2018 Farm Bill.
Section 8 Repeals AS 03.05.077 the Industrial Hemp
Pilot Program
Section 9 Conditional effect for Section 7 of the
bill, in that the Pilot Program statute is repealed
when the Industrial Hemp Program developed by the
department is approved by the USDA.
Section 10 Effective date language stating that if
section 7 is repealed under the conditions of section
8, the effective date of section 7 is the day after
notice is received by the revisor of statutes by the
Commissioner of Natural Resources.
1:50:15 PM
REPRESENTATIVE SCHRAGE asked what "reconditioning" means.
MR. HARDENBROOK explained that a farmer with a crop showing
tetrahydrocannabinol (THC) levels above the legal limit could
work with another farmer whose crop's THC concentration is below
the legal limit, intermingling the crops and resulting in
acceptable THC levels.
1:50:58 PM
CHAIR PATKOTAK asked whether there are examples in the pilot
program of the DNR commissioner either exercising his authority
to issue citations, or working with growers who have a crop over
the THC concentration limit.
MR. HARDENBROOK responded that he does not know of any examples.
He explained that current law states that if a hemp crop is
above .3 percent THC, the DNR commissioner "shall" cite the
grower as being in violation; however, provisions in HB 156
would allow a farmer who is acting in good faith to address the
issue instead of being automatically cited and reported to the
Department of Public Safety and Marijuana Control Board.
CHAIR PATKOTAK noted the importance of recognizing when someone
is acting in good faith.
1:52:20 PM
REPRESENTATIVE CRONK asked why there is language in the bill
referencing the farming of elk.
REPRESENTATIVE HOPKINS replied that it is legislative drafting
style to amend AS 03.05.010(a) to include the sections relating
to industrial hemp.
1:53:24 PM
REPRESENTATIVE HANNAN asked whether there would be a
presentation from Division of Agriculture Director Dave Schade.
MR. HARDENBROOK replied that a presentation would be possible
when HB 156 comes back up before the committee.
REPRESENTATIVE HANNAN noted that this industry could be
successful in Alaska and asked how the pilot programs have gone.
MR. HARDENBROOK deferred to Mr. Schade.
1:55:39 PM
DAVE SCHADE, Director, Division of Agriculture, Department of
Natural Resources (DNR), said that things have gone well this
growing season. He introduced Rob Carter, the state agronomist,
to provide more information.
1:56:06 PM
ROB CARTER, Manager, Plant Materials Center, Division of
Agriculture, Department of Natural Resources, said that there
were 70 acres registered for hemp production in 2020 with 9,000
square feet of indoor growing space in the pilot program. No
grower tested over .2 percent, he said, and the Division of
Agriculture, in testing 25 varieties of industrial hemp, has not
yet experienced a variety that tests above the legal limit. He
noted that applications for the 2021 season total 11 growers
representing 200 acres.
1:57:40 PM
CHAIR PATKOTAK asked for a table outlining the industry
performance in 2020.
1:57:57 PM
REPRESENTATIVE HANNAN asked whether cannabidiol (CBD) levels
would be tested, or if testing is only to determine THC content.
MR. CARTER answered that the industry is very open with business
processes and THC concentration is tested to ensure that a crop
is truly industrial hemp instead of recreational cannabis. In
2020, he said, all of the growers shared with the Division of
Agriculture the array of uses of their crops including feed and
biomass production, bioplastics, pelletized fuel, and wellness
products.
2:00:20 PM
REPRESENTATIVE RAUSCHER asked Mr. Carter about the efficiency of
indoor versus outdoor growing operations. He also asked whether
the market for industrial hemp is local, nationwide or
international.
MR. CARTER explained that indoor production follows a different
methodology than outdoor production; industrial hemp for fiber
and biomass, when grown on acreage, follows the same planting
tactics as barley or corn, with some varieties flowering only
because of the long periods of daylight. Indoor production, he
said, is more focused on the floral production for CBD wellness
products. The market for industrial hemp within Alaska is
significant, he said, but in-state production hasn't caught up
with the national average; the Division of Agriculture is
evaluating the possibilities for large-scale production of
bioplastic to be sold and used within the state. He noted that
due to the overall clean environment in Alaska, international
interest is growing.
REPRESENTATIVE RAUSCHER asked whether manufacturing is catching
up to agricultural production.
MR. CARTER responded that in 2020 the growers largely switched
to growing food instead of industrial hemp; however, in 2021
there is much more activity in processing and development.
2:03:50 PM
REPRESENTATIVE GILLHAM asked how the THC percentage in the crops
can be controlled, and who does the testing for THC levels.
MR. CARTER replied that the Division of Agriculture maintains
the chain of custody from pulling the samples to testing, and
the crop can't leave the farm until test results are finalized
and provided to the grower.
REPRESENTATIVE GILLHAM noted that recreational marijuana is
highly regulated and asked how regulations work with industrial
hemp.
MR. CARTER answered that the 2018 Farm Bill identified
industrial hemp as an agricultural commodity, and the genetics
of the plant keep the THC concentration low.
2:06:09 PM
REPRESENTATIVE CRONK asked about the best geographic locations
for growing industrial hemp.
MR. CARTER replied that in 2020 there were producers on the
Kenai Peninsula, in the Matanuska-Susitna Borough, and north of
Talkeetna. In 2021, he said, there are producers from Delta
Junction and Fairbanks down to Homer, with interest from
potential growers in Southeast Alaska. From a biomass
perspective, he said, greatest production is expected from just
north of the Alaska Range.
2:07:44 PM
CHAIR PATKOTAK asked about the finances of the pilot program.
MR. HARDENBROOK said that the state is anticipating new state
revenues of $750,000 annually, with potential for growth.
CHAIR PATKOTAK asked whether that figure is based on the
performance of the pilot program.
MR. HARDENBROOK answered yes, based on the expected increases
across all aspects of the industry.
2:08:43 PM
REPRESENTATIVE HANNAN asked, "This is the revenue to run the
program, correct?"
MR. HARDENBROOK responded that the costs of the program will be
covered through program receipts and noted that the fiscal note
shows the change in revenues.
REPRESENTATIVE HANNAN asked about the revenue structure.
MR. SCHADE explained that in the pilot program there is a set of
registration criteria for growers, manufacturers, and retailers,
and he noted that there are 2,000-3,000 retailers in the state
with only 200 registered; as registration grows and the program
builds, revenues will increase. He said that the majority of
fees are expected to come from the retailers as opposed to the
growers. He noted that receipts are not kept from one year to
the next, so DNR is working with the Office of Management &
Budget (OMB) to bridge the funding from one year to the next so
that staffing can go uninterrupted.
REPRESENTATIVE HANNAN asked whether there are specific taxes or
revenue required to be shared.
MR. SCHADE replied that since industrial hemp is an agricultural
product, there are no specific taxes.
2:12:52 PM
REPRESENTATIVE GILLHAM asked whether industrial hemp businesses
are able to use the banking system.
MR. SCHADE said that legally, banking is allowed, and the
Division of Agriculture is working to educate the banking
industry on the differences between industrial hemp and
recreational marijuana. He noted that there are out-of-state
banks that service industrial hemp companies.
2:14:09 PM
REPRESENTATIVE CRONK asked about possible wildlife damage to the
crop.
MR. CARTER said that DNR saw "no predation from any animal" in
2020.
REPRESENTATIVE CRONK asked how fast the plants grow.
MR. CARTER responded that plantings in May can be harvested in
September.
2:16:26 PM
CHAIR PATKOTAK opened public testimony on HB 156.
2:16:45 PM
EMBER HAYNES testified in support of HB 156 and noted that her
business is in its second year in the pilot program. She
expressed that there are many small-scale growers in Alaska who
would like to grow industrial hemp.
2:18:34 PM
CHAIR PATKOTAK, after ascertaining that no one else wished to
testify, closed public testimony on HB 156.
2:19:04 PM
REPRESENTATIVE HOPKINS noted that there are a number of growers
already operating, and that ensuring compliance with federal
regulations will be important in continuing the momentum of this
industry.
[HB 156 was held over.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 156 Letter of Support Ember Haynes 4.7.2021.pdf |
HRES 4/7/2021 1:00:00 PM HRES 4/12/2021 1:00:00 PM |
HB 156 |
| HB 156 Sponsor Statement 3.30.2021.pdf |
HRES 4/7/2021 1:00:00 PM HRES 4/12/2021 1:00:00 PM |
HB 156 |
| SJR 8 Letter of Support UAF Alumni Association 3.29.2021.pdf |
HRES 4/7/2021 1:00:00 PM HRES 4/12/2021 1:00:00 PM |
SJR 8 |
| SJR 8 Presentation to HRES 4.7.2021.pdf |
HRES 4/7/2021 1:00:00 PM |
SJR 8 |
| 2021 01 15 Support for the UA Land Grant Conveyance.pdf |
HRES 4/7/2021 1:00:00 PM HRES 4/12/2021 1:00:00 PM SEDC 2/15/2021 9:00:00 AM |
SJR 8 |
| SJR08_UnivAK_LandGrant_SponsorStatement.pdf |
HRES 4/7/2021 1:00:00 PM HRES 4/12/2021 1:00:00 PM SEDC 2/15/2021 9:00:00 AM |
SJR 8 |
| SJR08_UnivAK_LandGrant_Research_Land-Grant-History.pdf |
HRES 4/7/2021 1:00:00 PM HRES 4/12/2021 1:00:00 PM SEDC 2/15/2021 9:00:00 AM |
SJR 8 |
| HB 156 Draft Fiscal Note DNR AGR 4.2.2021.pdf |
HRES 4/7/2021 1:00:00 PM |
HB 156 |
| HB 156 Letter of Support Jack Bennet 4.7.2021.pdf |
HRES 4/7/2021 1:00:00 PM HRES 4/12/2021 1:00:00 PM |
HB 156 |
| HB 156 Sectional Analysis 4.7.2021.pdf |
HRES 4/7/2021 1:00:00 PM HRES 4/12/2021 1:00:00 PM |
HB 156 |