Legislature(2017 - 2018)SENATE FINANCE 532
04/03/2018 09:00 AM FINANCE
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HOUSE BILL NO. 273 "An Act extending the termination date of the Marijuana Control Board; and providing for an effective date." 10:06:42 AM REPRESENTATIVE SAM KITO, SPONSOR, discussed the bill. He stated that the bill was a basic extension of the Marijuana Control Board. He remarked that there was not even a full year of revenue collection for the new board, but there was a sunset in order to have a review to determine whether it was operating in the state's interest. He shared that it was found that the board was operating in the state's interest. He noted the difference between the board and the other professional boards in that if the sunset did not occur, there was no "wind down" period. Therefore, it was stop functioning, if there was no sunset extension. CRYSTAL KOENEMAN, STAFF, REPRESENTATIVE SAM KITO, discussed the bill. She stated that the bill was a six-year board extension. He shared that there were four audit recommendations. The board was created in 2015, and had met over 24 times since July 2015 to establish the new industry. She remarked that the board was created to control the cultivation, manufacture, and sale of marijuana in the state. She stated that since June 2016 the board approved 278 license applications, denied 8 applications, and revoked 2 licenses. She stated that Mx. McConnell could detail the operations of the board. 10:09:48 AM KRIS CURTIS, LEGISLATIVE AUDITOR, ALASKA DIVISION OF LEGISLATIVE AUDIT, discussed the document "A Sunset Review of the Department of Commerce, Community, and Economic Development, Marijuana Control Board (board)," (copy on file). She stated that it was the board's first sunset review. Report conclusions began on page 5, and overall the audit found that the board was serving the public's interest by effectively licensing marijuana establishments by establishing regulations that allowed for the cultivation, manufacture, and sale of marijuana in Alaska. The audit recommended a six-year extension. She explained that in order to help assess the effectiveness of the new board, there was a survey sent to licensees, and a separate survey to local governments. The survey was sent to 101 licensees, and there was a 70 percent response rate. Another survey was sent to 16 local government, and there was an 88 percent response rate. The survey instruments and the responses were summarized in Appendices B and C of the audit. She stated that, overall, the responses were fairly positive. She announced that 100 percent of local government survey respondents, and 75 percent of licensee survey respondents rated the board's overall effectiveness at serving the public's interest as effective or very effective. Additionally, over 93 percent of local government survey respondents rated the board's effectiveness at enforcing marijuana laws in their area as good or excellent. She pointed to exhibit 2 on page 8, which showed that the board issued 122 new licenses form July 2016 through April 2017. She stated that 80 percent of licensee survey respondents rated their overall license experience as good or excellent. She noted that on page 8 it was outlined that the FY 17 operating budget included intent language that stated that the application and licensing fees should cover the cost of regulation and recover the unrestricted general fund appropriations made during the establishment of the program. 10:15:14 AM Co-Chair MacKinnon OPENED public testimony. ERIKA MCCONNELL, DIRECTOR, MARIJUANA AND ALCOHOL CONTROL OFFICE, NOME (via teleconference), asserted that there were enforcement priorities related to health and safety issues. Co-Chair MacKinnon asked if Ms. McConnell was going to comply with the audit's request. Ms. McConnel. answered in the affirmative. Senator von Imhof asked if the board had begun any action to address the complaints. Ms. McConnell replied that the recommendation was already resolved. The board was able to add a criminal justice technician to the staff, who was an administrative assistant to the enforcement unit. That staff member entered every complaint received into the Alaska Records Management System, and documenting any resolution of that complaint. Co-Chair MacKinnon CLOSED public testimony. Vice-Chair Bishop discussed the fiscal note. Senator Micciche asked about the transition. HANNAH LAGER, BUDGET MANAGER, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, explained that, in the FY 19, there were general fund receipts supporting the marijuana program, but there was an expectation to eventually be fully funded by program receipts starting in FY 20. Senator Micciche wondered how the transition would occur, and asked why unrestricted general funds would still be used for the program. Ms. Lager responded that there was carry-forward authorization in the current year. Co-Chair MacKinnon asked if Ms. Lager stated that the department was forward-funding for an anticipated loss. 10:21:46 AM AT EASE 10:23:34 AM RECONVENED Co-Chair MacKinnon informed that there would be an examination of the general fund spend on the fiscal note. HB 273 was HEARD and HELD in committee for further consideration.