Legislature(2015 - 2016)BELTZ 105 (TSBldg)
03/10/2015 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB60 | |
| SB53 | |
| SB44 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 60 | TELECONFERENCED | |
| *+ | SB 53 | TELECONFERENCED | |
| *+ | SB 44 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 60-ESTABLISH MARIJUANA CONTROL BOARD
1:31:06 PM
CHAIR COSTELLO announced the consideration of SB 60. "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."
1:31:50 PM
JOHN BITTNER, Deputy Commissioner, Department of Commerce,
Community and Economic Development (DCCED), introduced SB 60 on
behalf of the administration. He explained that following the
passage of Ballot Measure 2, DCCED explored a variety of
regulatory structures for regulating marijuana in Alaska and
settled on a hybrid of a stand-alone entity.
SB 60 creates a stand-alone Marijuana Control Board that is
housed within the ABC agency in order to take advantage of the
existing Alcoholic Beverage Control (ABC) Board executive
director and staff. He acknowledged that alcohol is a distinct
substance from marijuana and posited that a lot of the issues
and difficulties that will arise are likely to be the same. This
structure will reduce the costs associated with standing up a
stand-alone entity while still achieving the intent of the
initiative and meeting the deadlines within the proposition.
1:34:58 PM
MR. BITTNER provided the following sectional analysis:
Section 1: Amends Title 4 naming the director of the
Alcoholic Beverage Control Board as the director of
the Marijuana Control Board. It also establishes the
process for appointment and removal of the director,
requiring a majority vote from both boards.
Section 2: Establishes the five-member Marijuana
Control Board in Title 17 with designated seats for
public health, rural representation, public safety,
and industry members. This section reflects the way
DCCED wishes alcohol was regulated, not the current
structure. Subsections (d) and (e) provide that in
certain circumstances the director may fulfill the
obligation of a public safety or public health member.
That person would then be replaced with a general
public member.
Section 3: Establishes the terms of office for board
members and the chair, sets out requirements for board
meetings, and provides for board members' per diem. It
also outlines the powers and duties of the board to
propose and adopt regulations, establish
qualifications for licensure, review applications for
licensure, hear appeals from the actions of the
director, reduce the area of a licensed premise, and
adopt regulations according to AS 44.63. It also
establishes the board's enforcement powers as
mirroring those of the Alcoholic Beverage Control
Board outlined in AS 04.06.110. And it provides for
appointment and removal of the director and
establishes the duties of the director.
Section 4: Defines the board in AS 17.38.900(1) to
mean the Marijuana Control Board created by this Act
to reflect the changes made in Ballot Measure 2.
Section 5: Defines the term "director" as the director
of the Alcoholic Beverage Control Board and the
Marijuana Control Board. It also defines
"registration" to mean registration or licensure as
determined by regulation
Section 6: Amends the duties of the Department of
Commerce, Community, and Economic Development to
include providing clerical and administrative support
for the Marijuana Control Board, similar to the way
DCCED provides support to the ABC Board.
Section 7: Amends the uncodified law for initial
appointment of board members.
Section 8: Provides for the transition of regulations
such that if the Alcoholic Beverage Control Board
adopts any regulations before the Marijuana Control
Board is created, those regulations can be
implemented, enforced, amended or repealed by the
Marijuana Control Board, and provides that regulations
adopted by the board in any transition period take
effect after the effective date of the Act.
Section 9: Provides for an immediate effective date.
1:38:37 PM
SENATOR MEYER asked how the makeup of this new board compares to
the makeup of the ABC Board.
1:38:59 PM
CYNTHIA FRANKLIN, Director, Alcoholic Beverage Control (ABC)
Board, Department of Commerce, Community and Economic
Development (DCCED), explained that the ABC Board is a five-
member volunteer board; two seats are designated for industry,
two seats are public, and one seat is designated as rural. The
proposed Marijuana Control Board also consists of five members;
not more than two members may be involved in the marijuana
industry, one member shall be from public safety, one member
shall be from public health, and one member shall be from a
rural area. She noted that the stakeholder group that has been
working for several years on revisions to Title 4 recommended
changing the composition of the ABC Board to include public
safety and public health designations similar to the new
marijuana board. That group also recommended that the background
of the agency director be taken into account when determining
the designated seats. For example, if the agency is led by a
director who has a background in the alcohol industry, that
would reduce the industry seat on the board by one.
SENATOR MEYER asked if there were other options to bring down
the cost of this new board.
MS. FRANKLIN answered that DCCED looked at options such as
adding additional members to the ABC Board, but that would upset
the balance between the public and industry. To maintain the
balance while not giving industry a majority vote it would be
necessary to add two public and two industry members. Based on
the current travel costs for the five-member ABC Board,
extending the membership to nine members would yield little
savings and increase the difficulty of getting nine members
together five times a year for required meetings. The balance
that was struck was to keep the agency staffing the same to
serve the two boards.
1:45:39 PM
SENATOR MEYER asked how SB 30 the criminal bill, SB 62 the
regulatory civil law bill, and SB 60 that creates the Marijuana
Control Board interrelate.
MS. FRANKLIN opined that the regulatory bill doesn't have to
pass in order for this bill to have an effect. SB 60 is stand-
alone legislation for fleshing out the regulatory authority
contained in AS 17.38. If SB 60 or similar legislation doesn't
pass, the ABC Board will undertake the responsibility of
regulating marijuana. However, AS 17.38 only gives the agency
the authority to control licensees, not unlicensed marijuana
businesses. She said that's a problem.
1:49:41 PM
SENATOR MEYER asked if the silver lining of legalizing marijuana
is that spice and bath salts will be used less.
MS. FRANKLIN opined that the legislation on spice and bath salts
made a big difference in terms of retail sales, and that the
demand for other types of "legal" highs will fall as marijuana
licenses are issued.
SENATOR MEYER asked if spice could still be sold in a licensed
marijuana establishment.
MS. FRANKLIN stated that the intention is to have marijuana
tracking software similar to what's used in Colorado and
Washington so the plant can be tracked from cultivation to the
retail outlet. This is to ensure that the marijuana was grown by
a licensed grower, processed by a licensed processor, tested by
a licensed testing facility, and sold by a licensed retailer.
1:52:22 PM
CHAIR COSTELLO asked if a person with industry experience leaves
the position of director, would preference be given to an
applicant whose background fulfills the missing designation.
MS. FRANKLIN answered that is her understanding.
CHAIR COSTELLO expressed concern that this approach might be
adopted by other boards and commissions. She also asked why some
of the restrictions on board members extends to family members.
MS. FRANKLIN explained that the language is in Title 4 with
regard to the industry designation. It's intended to avoid the
potential circumstance of a public member essentially acting on
behalf of the industry because he/she has such a vested
interest.
CHAIR COSTELLO asked if the intention is to set up a board that
registers participants in the marijuana industry or licenses
participants like is done with alcohol, because the bill uses
the terms interchangeably.
MS. FRANKLIN replied the intention is to use the terms "license"
and "licensure." The word "registration" appears in AS 17.38,
which is the reason for the definition that equates the two
terms.
1:56:51 PM
CHAIR COSTELLO asked about the lack of a sunset provision.
MS. FRANKLIN responded that an amendment is being drafted to add
a sunset; the omission was an oversight.
CHAIR COSTELLO asked her to speak to the fiscal note.
MS. FRANKLIN explained that the costs of the separate board are
the per diem and travel for the additional five board members.
She said the fiscal note reflects higher costs than for the ABC
Board in 2014 because the new board might need to meet more
often the first year to work on regulations. The staffing costs
reflect six additional agency staff over the FY2015 supplemental
and the FY2016 budget cycles. The fiscal note also reflects
startup costs, the majority of which was $500,000 for software
in FY2016. There is also some cost associated with moving the
current staff to accommodate the additional people, which is
included in the FY2015 supplemental budget.
1:58:57 PM
SENATOR GIESSEL joined the committee.
2:00:50 PM
At ease.
2:02:29 PM
CHAIR COSTELLO reconvened the meeting.
MS. FRANKLIN delivered a PowerPoint titled "State Regulation of
Recreational Marijuana - Structures of Government Agencies."
She explained that Colorado does not have a regulatory board
structure. Marijuana, alcohol, and gaming are overseen by state
employees in three divisions in the Colorado Department of
Revenue. The Marijuana Enforcement Division has four offices
statewide with 55 full-time employees, many of which are
criminal investigators and compliance investigators. There are
also 13 licensing employees and a few administrative employees.
She noted that any commercial establishment is required to hold
both a state and local license to sell marijuana.
MS. FRANKLIN reviewed data for the Marijuana Licensing Division
for the City and County of Denver, noting that the population is
similar to that of the state of Alaska. The division initially
requested 16 new employees in the 2014 budget and then 21.5 more
in the supplemental budget to cover the additional work created
by licensing. The revenue from the commercialization of
marijuana more than covers the cost of these employees.
2:07:14 PM
She highlighted that Washington State uses the Washington Liquor
Control Board to issue and enforce marijuana licenses, which is
a more similar structure to Alaska's. The board consists of
three full-time state employees who meet three times a week.
There is a director and 297 employees statewide. She noted that
some of the employees were hired short-term with the expectation
that they wouldn't be needed later on.
2:08:36 PM
MS. FRANKLIN noted that Oregon legalized recreational marijuana
at the same time as Alaska and the Oregon Liquor Control
Commission is the regulatory authority. For alcohol, there are
five citizen commissioners appointed by the governor who meet
monthly for 1-2 days. One commissioner is a representative of
the alcohol/food industry. The commission has an alcohol
director with 211 employees to oversee about 15,000 liquor
licenses. A marijuana director was hired and 1 marijuana
industry representative was added to the citizen commission. At
this time it isn't clear how many full-time employees will be
needed for the regulation and licensure of marijuana statewide.
She offered to follow-up with the data as it becomes available.
She highlighted that unlike Alaska, Oregon has no local option;
the rules the state adopts for marijuana will apply for the
entire state.
MS. FRANKLIN reviewed the current data for the Alcoholic
Beverage Control (ABC) Board for comparison purposes. The five-
member volunteer board meets five times per year in each of the
jurisdictions. The current employees include a director, an
enforcement supervisor, 4 enforcement officers - 2 in Anchorage
and 1 each in Fairbanks and Juneau, a licensing supervisor, 2
licensing specialists, 1 administrative assistant, and 1 clerk.
She noted that the FY2015 supplemental budget request is not
included in the fiscal note, but would add 1 administrative
officer and 1 additional business registration examiner. The
FY2016 budget request is for 1 additional business registration
examiner and 3 additional enforcement officers for a total of 17
employees. She said the board and staff has done quite a bit of
work on marijuana since the initiative passed and more staff
will likely be needed going forward if the board regulates both
alcohol and marijuana long term.
CHAIR COSTELLO noted that the revised fiscal note includes the
supplemental request.
She stated that SB 60 would be held in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 60 - DCCED Comp. Marijuana Regulatory Institutions.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 60 |
| SB 60 - Sectional Analysis.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 60 |
| SB 60 - Gov. Transmittal Letter.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 60 |
| SB 60 - Sen. L&C Hearing Request.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 60 |
| SB 60 - Version A.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 60 |
| SB 60 - Fiscal Note.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 60 |
| SB 53 - APRN Title Change Chart.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 53 |
| SB 53 - Fiscal Note.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 53 |
| SB 53 - Sectional Analysis.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 53 |
| SB 53 - Sen. L&C Hearing Request.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 53 |
| SB 53 - Sponsor Statement.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 53 |
| SB 53 - Version N.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 53 |
| SB53 - Myers.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 53 |
| SB53 - AaNA.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 53 |
| SB53 - AARP.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 53 |
| SB53 - AK Affiliate ACNM.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 53 |
| SB53 - AKANA.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 53 |
| SB53 - ANPA.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 53 |
| SB53 - APRN Alliance.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 53 |
| SB53 - ASHNHA.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 53 |
| SB53 - Bd of Nursing.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 53 |
| SB53 - Dooley.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 53 |
| SB53 - FASDx Services.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 53 |
| SB53 - Hartz.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 53 |
| SB53 - Rader.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 53 |
| SB 44 - Fiscal Note AKRR.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 44 |
| SB 44 - Fiscal Note DOLW&D.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 44 |
| SB 44 - Hearing Request.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 44 |
| SB 44 - Overview of Union Dues in Alaska.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 44 |
| SB 44 - Sponsor Statement.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 44 |
| SB 44 - Teamsters Dues Information.pdf |
SL&C 3/10/2015 1:30:00 PM |
SB 44 |
| SB 44 - Version W.PDF |
SL&C 3/10/2015 1:30:00 PM |
SB 44 |