Legislature(2021 - 2022)BARNES 124

04/01/2021 08:00 AM COMMUNITY & REGIONAL AFFAIRS

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Audio Topic
08:01:34 AM Start
08:02:26 AM Confirmation Hearing(s): Regulatory Commission of Alaska
09:01:08 AM HJR14
10:00:07 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Consideration of Governor's Appointees: TELECONFERENCED
- Regulatory Commission of Alaska: Robert
Pickett & Keith Kurber
-- Invited & Public Testimony --
*+ HJR 14 RESOLUTION: FED SAFE BANKING ACT/CANNABIS TELECONFERENCED
Heard & Held
-- Invited & Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
**Streamed live on AKL.tv**
                    ALASKA STATE LEGISLATURE                                                                                  
    HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                   
                         April 1, 2021                                                                                          
                           8:01 a.m.                                                                                            
                                                                                                                                
                             DRAFT                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Sara Hannan, Co-Chair                                                                                            
Representative Calvin Schrage, Co-Chair                                                                                         
Representative Harriet Drummond                                                                                                 
Representative Mike Prax                                                                                                        
Representative Ken McCarty                                                                                                      
Representative Kevin McCabe                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Josiah Patkotak, Vice Chair                                                                                      
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CONFIRMATION HEARING(S):                                                                                                        
                                                                                                                                
Regulatory Commission of Alaska                                                                                               
                                                                                                                                
     Bob Pickett - Anchorage, Alaska                                                                                            
     Keith Kurber II - Fairbanks, Alaska                                                                                        
                                                                                                                                
     - CONFIRMATION(S) ADVANCED                                                                                                 
                                                                                                                                
HOUSE JOINT RESOLUTION NO. 14                                                                                                   
Supporting the passage by the  United States Congress of the SAFE                                                               
Banking Act  of 2019, sec. 110606  of the Heroes Act,  or similar                                                               
legislation relating  to cannabis-related  legitimate businesses'                                                               
access to financial services.                                                                                                   
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HJR 14                                                                                                                  
SHORT TITLE: RESOLUTION: FED SAFE BANKING ACT/CANNABIS                                                                          
SPONSOR(s): REPRESENTATIVE(s) RASMUSSEN                                                                                         
                                                                                                                                
03/05/21       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/05/21       (H)       CRA                                                                                                    
04/01/21       (H)       CRA AT 8:00 AM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
BOB PICKETT, Appointee                                                                                                          
Regulatory Commission of Alaska                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified as appointee to the Regulatory                                                                 
Commission of Alaska.                                                                                                           
                                                                                                                                
KEITH KURBER                                                                                                                    
Appointee, Regulatory Commission of Alaska                                                                                      
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified as appointee to the Regulatory                                                                 
Commission of Alaska.                                                                                                           
                                                                                                                                
JIMI CASH                                                                                                                       
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of the appointment of                                                               
Keith Kurber to the Regulatory Commission of Alaska.                                                                            
                                                                                                                                
ALYSSA SAPPENFIELD, Energy Analyst                                                                                              
Alaska Public Interest Research Group (AKPIRG)                                                                                  
Anchorage, Alaska                                                                                                               
POSITION   STATEMENT:      Expressed   concerns   regarding   the                                                             
appointment of Keith Kurber to the Regulatory Commission of                                                                     
Alaska.                                                                                                                         
                                                                                                                                
REPRESENTATIVE RASMUSSEN                                                                                                        
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  As prime sponsor, presented HJR 14.                                                                      
                                                                                                                                
MICHAEL BRONSTEIN, President                                                                                                    
American Trade Association for Cannabis and Hemp                                                                                
Washington, D.C.                                                                                                                
POSITION STATEMENT:  Testified in support of HJR 14.                                                                          
                                                                                                                                
SCOTT BERGMANN, Staff                                                                                                           
Representative Sara Rasmussen                                                                                                   
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented the sponsor statement to HJR 14                                                                
on behalf of Representative Rasmussen, prime sponsor.                                                                           
                                                                                                                                
LACY WILCOX, President                                                                                                          
Alaska Marijuana Industry Association                                                                                           
No address provided                                                                                                             
POSITION STATEMENT:  Testified in support of HJR 14.                                                                          
                                                                                                                                
MICHAEL MARTIN, President                                                                                                       
Alaska Bankers Association                                                                                                      
No address provided                                                                                                             
POSITION STATEMENT:  Testified in support of HJR 14.                                                                          
                                                                                                                                
JANA WELGZIN, Owner                                                                                                             
JDW Counsel                                                                                                                     
No address provided                                                                                                             
POSITION STATEMENT:  Testified in support of HJR 14.                                                                          
                                                                                                                                
RYAN TUNSETH, Owner                                                                                                             
East Rip Dispensary                                                                                                             
Kenai, Alaska                                                                                                                   
POSITION STATEMENT:  Testified in support of HJR 14.                                                                          
                                                                                                                                
PAUL V. DISDIER, General Manager                                                                                                
The Fireweed Factory                                                                                                            
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HJR 14.                                                                          
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
8:01:34 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  SARA HANNAN  called the  House  Community and  Regional                                                             
Affairs  Standing  Committee  meeting   to  order  at  8:01  a.m.                                                               
Representatives  Drummond,  McCabe,   Schrage,  and  Hannan  were                                                               
present at the  call to order.  Representatives  Prax and McCarty                                                               
arrived as the meeting was in progress.                                                                                         
                                                                                                                                
^CONFIRMATION HEARING(S): REGULATORY COMMISSION OF ALASKA                                                                       
    CONFIRMATION HEARING(S): REGULATORY COMMISSION OF ALASKA                                                                
                                                                                                                              
8:02:26 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HANNAN announced that the  first order of business would                                                               
be the confirmation hearings on  the governor's appointees to the                                                               
Regulatory Commission of Alaska.                                                                                                
                                                                                                                                
8:05:05 AM                                                                                                                    
                                                                                                                                
BOB   PICKETT,  Appointee,   Regulatory  Commission   of  Alaska,                                                               
testified  as appointee  to the  Regulatory Commission  of Alaska                                                               
(RCA).   He noted that  he has served as  chair of the  RCA since                                                               
March  2008.   He  offered his  educational  and work  experience                                                               
available on his resume [included in the committee packet].                                                                     
                                                                                                                                
8:07:25 AM                                                                                                                    
                                                                                                                                
MR. PICKETT, in  response to a question  from Representative Prax                                                               
regarding the  workload of  the RCA, confirmed  that the  RCA has                                                               
been  busy.   He said  the legislature  has established  a strict                                                               
statutory regime  of deadlines.   He related  that the  past year                                                               
has been challenging with acquisition  of the Anchorage Municipal                                                               
Light and Power  Electric Utility assess by  Chugach Electric and                                                               
Harvest BP pipeline transactions.   Additionally, Senate Bill 123                                                               
was  passed  last  year [during  the  Thirty-First  Alaska  State                                                               
Legislature], which  tasked the commission to  establish a system                                                               
of  regulations for  an  electric  reliability organization,  and                                                               
focus  has been  on the  railbelt.   In response  to a  follow-up                                                               
question, he said  with passage of the  telecom deregulation bill                                                               
and once  regulatory activities  related to  Senate Bill  123 are                                                               
complete, the RCA will be "in  fairly good shape."  He said there                                                               
have  been  a  tremendous  amount   of  capital  expenditures  in                                                               
electric utilities,  particularly in the railbelt,  but also with                                                               
natural gas storage on the Kenai  Peninsula.  He said he does not                                                               
anticipate anything  close to that.   He said the idea  of Senate                                                               
Bill 123 was  to have an electrical liability  organization - yet                                                               
to  be  established  - oversee  systemwide,  integrated  resource                                                               
planning.                                                                                                                       
                                                                                                                                
8:10:38 AM                                                                                                                    
                                                                                                                                
MR.  PICKETT, in  response to  a question  from Co-Chair  Schrage                                                               
regarding what  is required in order  to carry out the  duties of                                                               
the  RCA   commissioner,  indicated   there  are  a   variety  of                                                               
backgrounds suited  to the job,  and statute lists  several areas                                                               
of expertise required  in order to serve as a  commissioner.  One                                                               
area he  advised is underemphasized is  having experience working                                                               
in  a   group  setting  and   making  decisions   collegially  on                                                               
controversial and technical  issues.  He said this  is his third,                                                               
six-year term,  so he  has undergone  the confirmation  process a                                                               
number  of  times and  interacted  with  various governors,  thus                                                               
having experience [with collaboration and compromise].                                                                          
                                                                                                                                
8:12:15 AM                                                                                                                    
                                                                                                                                
MR.  PICKETT,  in  response to  a  question  from  Representative                                                               
McCarty regarding the  hours spent by a  commissioner, said works                                                               
between 10.5  and 12.5 hours  per day,  driven by the  work flow.                                                               
As state  employees, the  commissioners are  paid for  37.5 hours                                                               
per week, but he rarely  sees commissioners work only 37.5 hours.                                                               
In response  to a follow-up  question, he confirmed that  the RCA                                                               
has technical  staff in the  areas of engineering,  finances, and                                                               
law.   He said commissioners  must come to conclusions  about the                                                               
information they read, but they do have staff to help them.                                                                     
                                                                                                                                
8:14:40 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND  noted that the position  of commissioner                                                               
on the  RCA is a highly  paid one quite different  from any other                                                               
boards and commissions.                                                                                                         
                                                                                                                                
MR.  PICKETT  confirmed  that  is  correct.   In  response  to  a                                                               
question from Representative Drummond,  he agreed that experience                                                               
in local  government is  beneficial to  serving on  the RCA.   He                                                               
said he has  worked with local governments statewide  in terms of                                                               
housing,  technical, and  infrastructure  programs.   He  related                                                               
there are local  governments that are holders  of certificates of                                                               
public convenience and necessity.                                                                                               
                                                                                                                                
8:16:33 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HANNAN  opened public testimony  on the  confirmation of                                                               
Mr.  Pickett,  governor's  appointee  to  the  Alaska  Regulatory                                                               
Commission.  After ascertaining that  there was no one who wished                                                               
to testify, she closed public testimony.                                                                                        
                                                                                                                                
CO-CHAIR  HANNAN  related some  of  the  requisites to  serve  as                                                               
commissioner,  as found  within  AS 42.04.020(a),  which read  as                                                               
follows:                                                                                                                        
                                                                                                                                
          (a) The commission  consists of five commissioners                                                                    
     appointed  by   the  governor  and  confirmed   by  the                                                                    
     legislature   in   joint   session.  To   qualify   for                                                                    
     appointment  as  a commissioner,  a  person  must be  a                                                                    
     member in  good standing of the  Alaska Bar Association                                                                    
     or  have  a  degree   from  an  accredited  college  or                                                                    
     university  with  a   major  in  engineering,  finance,                                                                    
     economics,  accounting,   business  administration,  or                                                                    
     public administration.  Actual experience for  a period                                                                    
     of five  years in the practice  of law or in  the field                                                                    
     of   engineering,   finance,   economics,   accounting,                                                                    
     business  administration, or  public administration  is                                                                    
     equivalent to a degree.                                                                                                    
                                                                                                                                
8:18:00 AM                                                                                                                    
                                                                                                                                
KEITH  KURBER II,  Appointee,  Regulatory  Commission of  Alaska,                                                               
gave  his biographical  information  [included  in the  committee                                                               
packet].   He stated that serving  on the RCA would  allow him to                                                               
use his  training and life  experiences to  serve the state.   He                                                               
imparted that his experience has  prepared him to analyze complex                                                               
issues and  make critical  decisions, often  under pressure.   He                                                               
opined that  being from  Fairbanks and having  spent time  in the                                                               
Matanuska-Susitna ("Mat-Su")  Valley and rural Alaska  during his                                                               
military career would be beneficial in serving on the RCA.                                                                      
                                                                                                                                
8:21:14 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MCCABE  expressed thanks for Mr.  Kurber's service                                                               
and support for his appointment.                                                                                                
                                                                                                                                
8:21:48 AM                                                                                                                    
                                                                                                                                
MR.  KURBER,  in  response  to  a  question  from  Representative                                                               
Drummond  as   to  whether  he   meets  the   qualifications  for                                                               
commissioner as listed in [previously  cited] statute, listed the                                                               
following as  meeting that  standard:   Bachelor of  Science from                                                               
West Point, to meet the  Engineering expectation; and 30 years of                                                               
military service and  6 years of public safety work,  to meet the                                                               
5 years  of actual experience.   He  said the curriculum  at West                                                               
Point was very  proscribed.  At the time he  attended, there were                                                               
no majors;  instead, there were concentrations.   His transcripts                                                               
show that out  of the 145 credits he earned  while at West Point,                                                               
75  were in  science, engineering,  or mathematics.   He  further                                                               
noted  that during  his brigade  command  experience, he  "became                                                               
aware  of the  needs of  essentially  running a  small city,"  in                                                               
terms of maintenance of sewage and electricity, for example.                                                                    
                                                                                                                                
8:26:47 AM                                                                                                                    
                                                                                                                                
MR.   KURBER,  in   response  to   a   follow-up  question   from                                                               
Representative Drummond  as to whether  Mr. Kurber is  willing to                                                               
move  from  Fairbanks  to Anchorage  to  serve  as  commissioner,                                                               
stated that as  has been done by former commissioners,  it is his                                                               
understanding  that he  could serve  from Fairbanks;  however, he                                                               
emphasized  that  he  is  willing  to do  whatever  it  takes  to                                                               
complete his mission.                                                                                                           
                                                                                                                                
8:29:10 AM                                                                                                                    
                                                                                                                                
MR. KURBER,  in response to  a question from Co-Chair  Schrage as                                                               
to what  experience he had  in regulatory, legal,  or engineering                                                               
matters  more recent  than 30  years  ago, said  his most  recent                                                               
experience was  as commander at  Fort Richardson  from 2004-2007,                                                               
and his last  appointment was in 2009.   He said as  a citizen of                                                               
Alaska,  he is  "acutely interested  in utility  issues," because                                                               
Alaska's extreme  weather conditions  can disrupt  power sources.                                                               
He mentioned calls  being dropped for no other  reason than being                                                               
placed in Alaska.  He pointed  to his experience at West Point as                                                               
teaching  him to  have the  ability  to "speak  the language"  in                                                               
terms of being able to  interact with subject matter experts with                                                               
enough  understanding   to  ask  pertinent  questions   and  make                                                               
informed decisions.                                                                                                             
                                                                                                                                
8:32:48 AM                                                                                                                    
                                                                                                                                
MR.  KURBER,  in  response  to a  follow-up  question,  said  his                                                               
interest in utilities to date has  been in having enough power to                                                               
power  a  base  camp  in other  countries  and  attending  annual                                                               
meetings  of local  electric utilities  to have  at least  a base                                                               
knowledge.   He said while  he has  less experience than  some on                                                               
the RCA,  he is  no less  caring, because he  is a  resident, who                                                               
wants to "keep the lights on."                                                                                                  
                                                                                                                                
8:33:59 AM                                                                                                                    
                                                                                                                                
MR. KURBER,  in response to  a question from  Representative Prax                                                               
about similarities between Mr. Kurber's  role in the military and                                                               
in  the RCA,  said he  brings to  the commission  the ability  to                                                               
engage  with  subject matter  experts,  ask  questions, and  make                                                               
decisions based on  the information gained.  He  talked about the                                                               
need  for collaboration  and  the rule  to  work one-on-one  with                                                               
commissioners  to  avoid  creating  a quorum.    He  described  a                                                               
willingness  by veteran  RCA commissioners  to share  information                                                               
while  respecting  the  unique  abilities  brought  by  each  new                                                               
commissioner, who may cycle in to serve a six-year term.                                                                        
                                                                                                                                
8:36:35 AM                                                                                                                    
                                                                                                                                
MR. KURBER, in  response to a request  from Representative McCabe                                                               
to speak  about military commander  experience with  legal issues                                                               
and  regulations,  said  typically   a  battalion  commander  has                                                               
responsibility   for   300-600    people,   while   brigade-level                                                               
commanders  oversee   up  to   5,000.     A  commander   has  the                                                               
responsibility not only for nonjudicial  punishment, but also the                                                               
execution of  court martial, which  requires engagement  in areas                                                               
of law.   He  said his  primary experience  in legal  matters has                                                               
been  in purchasing  a house,  being  a commander,  working as  a                                                               
public  safety officer  at the  Fairbanks International  Airport,                                                               
and pointing people to the right  legal support when he served as                                                               
a  pastor.   In response  to a  follow-up question,  he confirmed                                                               
that regulations and statute have been  part of his work, both in                                                               
military and civilian vocations.   He said he attended the Alaska                                                               
Police  Academy in  Sitka,  where  he took  part  in an  exercise                                                               
designed to give him an  understanding of the Constitution of the                                                               
State  of  Alaska.     In  response  to   another  question  from                                                               
Representative McCabe, he  said he started with the  RCA on March                                                               
1, 2021.                                                                                                                        
                                                                                                                                
8:43:06 AM                                                                                                                    
                                                                                                                                
MR.  KURBER,  in response  to  a  question from  Co-Chair  Hannan                                                               
regarding Mr.  Kurber's interest in  serving on the RCA,  said he                                                               
was  asked  to  serve  on  the RCA,  and  after  considering  his                                                               
qualifications  and  the  requirements  of  the  appointment,  he                                                               
thought serving  would be make  use of  his past experience.   He                                                               
emphasized the collaboration among all  ranks in the military and                                                               
expressed  that that  mirrors his  experience  on the  commission                                                               
thus far.                                                                                                                       
                                                                                                                                
8:46:00 AM                                                                                                                    
                                                                                                                                
MR.  KURBER,  in  response  to  a  question  from  Representative                                                               
McCarty  as   to  concerns  that  need   addressing,  echoed  the                                                               
statements  of  Mr. Pickett  that  the  issue of  the  regulatory                                                               
demands of Senate Bill 123 is  one of the largest facing the RCA.                                                               
He also mentioned the utilities for the railbelt area.                                                                          
                                                                                                                                
8:48:23 AM                                                                                                                    
                                                                                                                                
MR.  KURBER,  in  response  to  a  question  from  Representative                                                               
Drummond regarding  equity of Internet access  statewide, said he                                                               
just  became  aware  of  the U.S.  Supreme  Court's  ruling  that                                                               
entities such  as the RCA  can regulate broadband utilities.   He                                                               
agreed that broadband  access is a key issue in  Alaska, based on                                                               
the  feedback he  has received  thus far.   He  said he  imagined                                                               
there would  be interaction between  the RCA and  the legislature                                                               
on this issue  going forward.  He mentioned  news about expanding                                                               
5G networks along the Parks Highway.                                                                                            
                                                                                                                                
REPRESENTATIVE  DRUMMOND  said  she  hopes  broadband  remains  a                                                               
priority issue for the RCA.                                                                                                     
                                                                                                                                
8:51:52 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HANNAN  opened public testimony  on the  confirmation of                                                               
Keith  Kurber,  governor's  appointee to  the  Alaska  Regulatory                                                               
Commission.                                                                                                                     
                                                                                                                                
8:52:02 AM                                                                                                                    
                                                                                                                                
JIMI CASH,  noted that although he  is a member of  the Fairbanks                                                               
North Star  Borough Assembly, he  was speaking on  behalf himself                                                               
in  support  of Mr.  Kurber.    He  named  some of  Mr.  Kurber's                                                               
accomplishments listed  in the  submitted materials,  noting that                                                               
the  appointee  got  his  doctorate.   He  highlighted  that  Mr.                                                               
Kurber's time in  the military, public safety,  and ministry were                                                               
all spent  in service of  others.  Mr.  Cash said Mr.  Kurber has                                                               
the heart  for service and a  drive to learn, grow,  achieve, and                                                               
meet challenges.   He opined  that all these attributes  make Mr.                                                               
Kurber a good candidate for commissioner on the RCA.                                                                            
                                                                                                                                
8:54:24 AM                                                                                                                    
                                                                                                                                
ALYSSA  SAPPENFIELD,  Energy   Analyst,  Alaska  Public  Interest                                                               
Research Group  (AKPIRG), offered  her understanding  that AkPIRG                                                               
is  the   only  nongovernmental  entity  focused   on  addressing                                                               
Alaska's  specific  consumer  interest  issues.    She  said  the                                                               
executive director  of AkPIRG serves on  the Railbelt Reliability                                                               
Council  Implementation  Committee.   Ms.  Sappenfield  expressed                                                               
concern with the appointment of Mr.  Kurber to the RCA.  She said                                                               
Mr. Kurber would be one  of only five commissioners, each serving                                                               
a  six-year  term.   She  said,  as  heard previously,  that  the                                                               
qualifications  under  statute to  serve  as  a commissioner  are                                                               
quite  specific, and  she opined  that "the  importance of  these                                                               
appointments cannot  be overstated."   She said the  RCA oversees                                                               
matters  where millions  of  dollars are  at  stake and  critical                                                               
issues of regulatory  policy arise.  She  mentioned AkPIRG's role                                                               
in  overseeing the  aforementioned  utility  BP Hilcorp  transfer                                                               
this  December  and the  entity's  current  work in  establishing                                                               
technical  and   procedural  rules   for  the   state's  Electric                                                               
Reliability  Organization, which  is tasked  with developing  and                                                               
enforcing systemwide  electric utility reliability  standards and                                                               
crafting  an integrative  resource  plan that  is affordable  and                                                               
accessible for all Alaskans.                                                                                                    
                                                                                                                                
MS. SAPPENFIELD  indicated that the  issues addressed by  the RCA                                                               
involve law, economics, accounting,  finance, and engineering and                                                               
can establish  critical legal  precedence for  legal cases.   She                                                               
continued as follows:                                                                                                           
                                                                                                                                
     Reaching  these   decisions  often   means  considering                                                                    
     complex  and  competing   interests  of  the  concerned                                                                    
     parties  in  pursuit  of  outcomes  which  protect  and                                                                    
     promote overall public interest.   Each decision, which                                                                    
     can be appealed  to ... state and federal  court has to                                                                    
     be supported  by an  evidentiary record  and applicable                                                                    
     laws and  regulations.  These  technical qualifications                                                                    
     required by statute for RCA  commissioners are not just                                                                    
     sensible  or superfluous;  we absolutely  need science-                                                                    
     and evidence-based regulators.                                                                                             
                                                                                                                                
MS.  SAPPENFIELD said  Mr. Kurber's  testimony  before the  House                                                               
Finance  Committee on  March 30,  2021, exacerbated  her original                                                               
concerns.   She opined  that Mr.  Kurber's qualifications  do not                                                               
meet  the  statutory  requirements   for  commissioners  and  are                                                               
tenuous.  She said he has  only 31 days of regulatory experience,                                                               
those being  the 31  days he has  spent with the  RCA.   She said                                                               
that given the  complexity of the work of the  RCA, the statutory                                                               
requirements are a minimum.                                                                                                     
                                                                                                                                
8:58:27 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HANNAN closed public testimony.                                                                                        
                                                                                                                                
[The confirmations  of Bob Pickett  and Keith  Kurber, governor's                                                               
appointees   to  the   Regulatory  Commission   of  Alaska   were                                                               
advanced.]                                                                                                                      
                                                                                                                                
8:58:36 AM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 8:58 a.m. to 9:01 a.m.                                                                       
                                                                                                                                
        HJR 14-RESOLUTION: FED SAFE BANKING ACT/CANNABIS                                                                    
                                                                                                                                
9:01:08 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HANNAN announced that the  final order of business would                                                               
be HOUSE JOINT  RESOLUTION NO. 14, Supporting the  passage by the                                                               
United  States Congress  of the  SAFE Banking  Act of  2019, sec.                                                               
110606  of the  Heroes Act,  or similar  legislation relating  to                                                               
cannabis-related  legitimate  businesses'   access  to  financial                                                               
services.                                                                                                                       
                                                                                                                                
9:01:43 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  RASMUSSEN,  Alaska  State Legislature,  as  prime                                                               
sponsor, presented  HJR 14.  About  a year ago, she  related, her                                                               
husband,  who is  in the  mortgage industry,  had commented  that                                                               
owners of cannabis  companies cannot qualify for  mortgages.  She                                                               
said  that  seemed odd,  since  Alaska,  with passage  of  Ballot                                                               
Measure  2  in  2013,  had  legalized  the  recreational  use  of                                                               
marijuana.   She said she  assumed that meant  cannabis companies                                                               
were legitimate  businesses.   She said HJR  14 was  created with                                                               
the  idea  of  creating  safety  measures  and  more  traditional                                                               
financing options.   She said,  should HJR 14 pass,  Alaska would                                                               
become  the  first  state  in   the  nation  to  put  forward  "a                                                               
resolution for safe banking."                                                                                                   
                                                                                                                                
9:04:07 AM                                                                                                                    
                                                                                                                                
MICHAEL  BRONSTEIN,  President,  American Trade  Association  for                                                               
Cannabis and Hemp, expressed that  the matter addressed by HJR 14                                                               
is  urgent  and  important;  it  is  not  [only]  about  industry                                                               
accommodation but about  public health and safety  and the people                                                               
working  in  the   industry.    Currently,  40   percent  of  the                                                               
population  lives in  a state  that  has legalized  adult use  of                                                               
cannabis, not  including medical  marijuana use.   He  said there                                                               
are approximately  300,000 employees  that work in  the industry.                                                               
He explained that under federal  law, cannabis businesses are not                                                               
allowed to bank.  Keeping money  in banks allows it to be traced,                                                               
which is  why there  is broad and  bi-partisan support  for "safe                                                               
banking," including  a letter from  Alaska's attorney  general to                                                               
U.S. Congress.                                                                                                                  
                                                                                                                                
9:06:39 AM                                                                                                                    
                                                                                                                                
MR. BRONSTEIN  mentioned the  "Safe Banking  Act," which  he said                                                               
would   "prohibit   penalizing   or   prohibiting   a   financial                                                               
institution from providing services  to a legitimately sanctioned                                                               
and regulated  businesses" or "an associated  cannabis business."                                                               
He  said  most  concerning  is that  employees  of  the  cannabis                                                               
industry are  being denied mortgages  and loans,  which threatens                                                               
"the economic  integrity and the  individual ability  of workers"                                                               
in the  industry.   He said there  are ramifications  well beyond                                                               
the industry  in terms of having  to do payroll on  a cash basis.                                                               
He opined  that Alaska's  leadership on  this issue  is important                                                               
nationally.  He said this is  a simple issue and is separate from                                                               
the issue  of whether or not  cannabis should be legal.   This is                                                               
about  providing  safe  banking   services.    He  concluded  his                                                               
testimony by stating full support for HJR 14.                                                                                   
                                                                                                                                
9:11:36 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MCCARTY said this reminds  him of Elliot Ness, who                                                               
was with  the U.S. Treasury  and was focused  on the issue  of Al                                                               
Capone  and unaccounted  for money  during the  prohibition.   He                                                               
suggested the  federal government  was Al  Capone in  the current                                                               
situation and  "we're trying  to rectify  the situation,"  and he                                                               
asked  Mr. Bronstein  if that  was an  accurate summation  of the                                                               
situation.                                                                                                                      
                                                                                                                                
MR. BRONSTEIN  replied that the  [federal] government "has  a lot                                                               
that they can do on this"  and knows that there is "congressional                                                               
relief."   He said  the cannabis industry  pays taxes,  just like                                                               
other  businesses,  and  it  wants   to  be  treated  like  other                                                               
businesses.   Not having access  to banking  is not tenable.   He                                                               
opined  that having  broad-based statewide  support [for  HJR 14]                                                               
will help  point the federal  government in the  right direction.                                                               
In response to  Representative McCarty, he explained  that HJR 14                                                               
would send  a strong  message to  Congress.   He agreed  that "we                                                               
will  be waiting  on Congress,"  but expressed  his hope  that it                                                               
would not be much longer.                                                                                                       
                                                                                                                                
REPRESENTATIVE  MCCARTY  noted  that   he  has  constituents  and                                                               
friends in  the industry who  say they are legally  sending money                                                               
out  of  the   country  to  banks  to  secure  the   money.    He                                                               
acknowledged that those  employees in the industry  are not being                                                               
acknowledged for home loans, for  example, because there is not a                                                               
payroll that is  recognized.  He said, "I  appreciate the efforts                                                               
here."                                                                                                                          
                                                                                                                                
9:16:12 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PRAX surmised  that "the  nuts of  the issue"  is                                                               
whether legalizing cannabis has been  detrimental to society.  He                                                               
proffered  that  if  so,  "I  guess  we  wouldn't  want  to  make                                                               
operating the business  easier"; if not, then  "we're driving the                                                               
business  back underground  if we're  not recognizing  the income                                                               
...."  He asked Mr. Bronstein  if he had heard of any detrimental                                                               
effects resulting from the legalization of cannabis.                                                                            
                                                                                                                                
9:17:35 AM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 9:17 a.m. to 9:18 a.m.                                                                       
                                                                                                                                
9:18:11 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RASMUSSEN  said 37  states have  legalized medical                                                               
and/or recreational use of cannabis,  and 53 percent of those who                                                               
voted Ballot  Measure 2 supported legalizing  recreational use in                                                               
of  cannabis  in Alaska.    She  concluded,  "So, this  issue  is                                                               
basically just  to address  the safety  for employees  and owners                                                               
and, honestly, any  support businesses for the  industry.  People                                                               
are dealing  with tens of  thousands to hundreds of  thousands of                                                               
dollars in  cash."  She  noted that  there are only  two drop-off                                                               
points  in the  state  where it  is possible  to  "put the  money                                                               
toward taxes."                                                                                                                  
                                                                                                                                
9:19:38 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PRAX, in response  to Co-Chair Hannan, offered his                                                               
understanding  that the  question  of the  federal government  is                                                               
whether cannabis  is detrimental to  society.  He  indicated that                                                               
since 37 states have said it  is not detrimental then there is no                                                               
argument; therefore,  restricting business by not  allowing those                                                               
in the cannabis industry into the banking system makes no sense.                                                                
                                                                                                                                
9:20:36 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  HANNAN   noted  that  Mr.  Bronstein   had  a  previous                                                               
commitment and was no longer available for questions.                                                                           
                                                                                                                                
9:21:16 AM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 9:21 a.m. to 9:23 a.m.                                                                       
                                                                                                                                
9:23:12 AM                                                                                                                    
                                                                                                                                
SCOTT BERGMANN,  Staff, Representative Sara Rasmussen,  on behalf                                                               
of   Representative  Rasmussen,   prime   sponsor   of  HJR   14,                                                               
paraphrased the sponsor statement, which read as follows:                                                                       
                                                                                                                                
     Since  1996, 33  states  comprising 68  percent of  the                                                                    
     nation's   population  have   legalized  cannabis   for                                                                    
     medical or  adult use. Despite this  ever-growing voter                                                                    
     preference,  current federal  law continues  to prevent                                                                    
     banks  from offering  products  and  services to  these                                                                    
     businesses without  fear of federal  sanctions. Leaving                                                                    
     the cannabis industry without  access to banks presents                                                                    
     serious  public  safety,  revenue  administration,  and                                                                    
     legal compliance concerns.                                                                                                 
                                                                                                                                
     Access to licensed and  reputable financial services is                                                                    
     important for the following reasons:                                                                                       
          ? A  high level of  cash handling in  the cannabis                                                                    
     industry   puts  consumers,   businesses,  and   public                                                                    
     authorities  at  increased   risk  of  contracting  the                                                                    
     coronavirus.                                                                                                               
          ?  Criminals  and   unscrupulous  individuals  are                                                                    
     attracted to  cash heavy businesses; access  to banking                                                                    
     services   would  reduce   criminal  activity   in  the                                                                    
     industry   and   deter    opportunistic   lending   and                                                                    
     investment.                                                                                                                
          ?  Reduced hours  and  drive-through only  deposit                                                                    
     options  (due to  COVID-19) at  banks  create an  undue                                                                    
     burden on industry workers who are paid in cash.                                                                           
          ?  Inspections  and   audits  by  regulators,  tax                                                                    
     collectors,  and state  and federal  agencies would  be                                                                    
     streamlined.                                                                                                               
          ?  Service  providers  that work  with  the  legal                                                                    
     cannabis  industry   would  be  protected   from  being                                                                    
     charged with financial crimes.                                                                                             
                                                                                                                                
     House Joint Resolution 14  urges the Federal Government                                                                    
     to pass  SAFE Banking Act  of 2019, sec. 110606  of the                                                                    
     Heroes Act,  or similar legislation that  would provide                                                                    
     a safe harbor for  depository institutions that provide                                                                    
     financial  products  or  services  to  legal  cannabis-                                                                    
     related businesses or service  providers in states that                                                                    
     have  implemented   laws  and   regulations  legalizing                                                                    
     cannabis for medical or adult use.                                                                                         
                                                                                                                                
9:25:04 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND remarked that alcohol  has been more of a                                                               
problem in  her district than cannabis  has.  She said  the taxes                                                               
paid on  alcohol in  Alaska do  not even  begin to  cover related                                                               
social ills and crime.  She  then talked about a cannabis testing                                                               
company in Fairbanks  having to move to another  city because the                                                               
Wells Fargo business in the  same building threatened to call its                                                               
mortgage.                                                                                                                       
                                                                                                                                
9:29:50 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MCCABE commented  that  "the genie's  out of  the                                                               
bottle" as  far as the  legalization of marijuana in  Alaska; now                                                               
the legislature  needs to fix  the banking  issue.  He  noted the                                                               
significant cross  section of those  in support  of HJR 14  - not                                                               
just political  parties, but  in age groups  - and  he encouraged                                                               
taking action to address anything that impedes business.                                                                        
                                                                                                                                
9:31:19 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RASMUSSEN noted that  the co-sponsorship is evenly                                                               
divided among parties.                                                                                                          
                                                                                                                                
9:32:14 AM                                                                                                                    
                                                                                                                                
LACY  WILCOX, President,  Alaska Marijuana  Industry Association,                                                               
testified  in support  of  HJR  14.   She  said  a resolution  in                                                               
support of the  Safe Banking Act sends a message  that the Alaska                                                               
State  Legislature cares  about public  health and  safety.   She                                                               
said regardless of how members  may feel about legalized cannabis                                                               
in  Alaska,  "access  to  financial   services  is  paramount  in                                                               
protecting Alaskans from the risks  associated with large volumes                                                               
of  cash" and  is a  tool  for law  enforcement, tax  collectors,                                                               
regulators,   and  auditors   "to  identify   less-than-honorable                                                               
industry participants."                                                                                                         
                                                                                                                                
MS. WILCOX  reported that currently  there are over  400 business                                                               
entities in Alaska's cannabis  industry; those entities represent                                                               
over   500   cannabis   licenses,  thousands   of   shareholders,                                                               
investors,  and  about 10,000  employees.    Those employees  are                                                               
finding obstacles  when attempting  to buy a  house or  car, take                                                               
out a  loan to  further their  education, or  apply for  most any                                                               
other financial  service.   She pointed  out that  many ancillary                                                               
services,  such as  general contractors,  plumbers, electricians,                                                               
utility companies, and supply vendors  have found it difficult to                                                               
work with the industry because  often large payments for buildout                                                               
services have to  be creatively converted to money  orders to not                                                               
put  in  jeopardy  the financial  situation  of  those  ancillary                                                               
services.  Mr. Wilcox said  some businesses in the industry would                                                               
like to expand  or offer health benefits  and retirement programs                                                               
to  their staff,  but cannot  do so  without access  to financial                                                               
services.                                                                                                                       
                                                                                                                                
MS.  WILCOX imparted  a  message she  has  heard repeatedly  from                                                               
those  who work  in financial  services that  they would  love to                                                               
bank the  cannabis industry's money and  offer merchant services,                                                               
"but the risks associated to  them personally change what reality                                                               
allows."  She said the  Safe Banking Act would provide assurances                                                               
to them  and relief from  criminal liability.   The Act  seeks to                                                               
provide safe harbor to get cash  off the streets and "safely into                                                               
the vault."                                                                                                                     
                                                                                                                                
9:35:31 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND asked  Ms. Wilcox if she is  aware of any                                                               
criminal activity  resulting from  the presence of  large amounts                                                               
of cash.                                                                                                                        
                                                                                                                                
MS.  WILCOX answered  yes, several  people in  the industry  have                                                               
been held  up while  on the  way to  the tax  office or  to their                                                               
cars.   She said luckily  camera surveillance is required,  so it                                                               
makes it  easier to  prosecute; however, she  said it  should not                                                               
happen in the first place.   In response to a follow-up question,                                                               
she said originally Juneau was  planning to offer a cash drop-off                                                               
point but reconsidered  because of safety concerns.   She offered                                                               
her understanding that a cash  depository in an Anchorage parking                                                               
garage is  the only one  of which she is  aware.  In  response to                                                               
another question,  she offered more  details about  getting money                                                               
orders to  send via certified  mail.  A  person may do  that from                                                               
his/her  personal  account,  but  many have  had  their  personal                                                               
accounts closed by the bank.                                                                                                    
                                                                                                                                
9:40:36 AM                                                                                                                    
                                                                                                                                
MICHAEL  MARTIN, President,  Alaska  Bankers Association,  stated                                                               
that he is  also the chief operating officer  and general counsel                                                               
for Northrim Bank.  He  said the Alaska Bankers Association (ABA)                                                               
represents seven  banks with operations  in Alaska.  He  said the                                                               
seven banks  include four  state banks  and three  national banks                                                               
that are  chartered by the  federal Office of the  Comptroller of                                                               
the Currency.   He said ABA and all its  member banks support HJR
14, urging the  federal government to adopt the  Safe Banking Act                                                               
to  provide  a  safe  harbor  for  depository  institutions  that                                                               
provide  financial  products  and  services  to  legal  cannabis-                                                               
related businesses.   He noted  that ABA  does not and  has never                                                               
taken a  position on the  legalization of cannabis;  however, all                                                               
the  banks  are  committed  to   serve  the  financial  needs  of                                                               
consumers, businesses, and communities of Alaska.                                                                               
                                                                                                                                
MR.  MARTIN  said all  banks  are  subject  to federal  law,  and                                                               
cannabis  remains illegal  under  federal law.   Currently  banks                                                               
face  substantial risk  if they  offer services  and products  to                                                               
cannabis-related    businesses,    including   extreme    federal                                                               
regulatory scrutiny under  the current regime, loss  to access of                                                               
critical payment systems,  and the loss of  charters from federal                                                               
regulators,  which  affects  the   banks'  abilities  to  conduct                                                               
business with  the rest  of their  customers.   He said  the Safe                                                               
Banking Act  is "a bank-specific  solution that enables  banks to                                                               
serve  cannabis-related  businesses."   He  stated,  "The  Alaska                                                               
Bankers Association  and I definitely appreciate  your leadership                                                               
in bringing forward a resolution."                                                                                              
                                                                                                                                
9:43:31 AM                                                                                                                    
                                                                                                                                
MR. MARTIN  noted that cannabis-related businesses  cannot:  open                                                               
and maintain deposit accounts;  engage in electronic transactions                                                               
with banks, including  tax payments; and cannot obtain  loans.  A                                                               
cannabis-related business  cannot be  in the  same property  as a                                                               
financial   institution.     He   said   that   is  what   causes                                                               
"substantially  regulated businesses"  to deal  in cash  and find                                                               
money orders  to operate outside the  traditional banking system.                                                               
He further  noted that the American  Banking Association supports                                                               
the Safe Banking Act and submitted  a letter to Congress on March                                                               
17, 2021, signed by the president of the association.                                                                           
                                                                                                                                
9:46:24 AM                                                                                                                    
                                                                                                                                
JANA WELGZIN,  Owner, JDW Counsel,  said her law  firm represents                                                               
over 200  licensed cannabis  businesses.   She said  the industry                                                               
has  generated over  7,000  jobs  in Alaska  and  is 100  percent                                                               
Alaska-owned.  She hears about  her clients keeping large amounts                                                               
of money  in their  homes, which  concerns her.   She  echoed the                                                               
comments about  people in the  industry having to  pay everything                                                               
in cash.   She said these  businesses create a lot  of revenue in                                                               
Alaska.   She said  Alaska needs to  show the  federal government                                                               
that it  supports safe banking  and give  the tools needed  to do                                                               
it.                                                                                                                             
                                                                                                                                
9:50:31 AM                                                                                                                    
                                                                                                                                
RYAN TUNSETH, Owner, East Rip  Dispensary, stated that it is okay                                                               
to admit when  a mistake has been made, and  he related that idea                                                               
to the war  on drugs and ideology surrounding cannabis.   He said                                                               
a detrimental  effect of  the industry has  been that  only those                                                               
with enough money could  get into it.  He said  while he has been                                                               
able to figure  out loopholes, there is a need  for visibility of                                                               
money  rather  than having  it  under  people's mattresses.    He                                                               
talked about safety and the ability  to audit, for people to have                                                               
the ability to get credit and grow their businesses.                                                                            
                                                                                                                                
9:55:33 AM                                                                                                                    
                                                                                                                                
PAUL V.  DISDIER, General Manager,  The Fireweed  Factory, stated                                                               
that one  of the most  worrisome issues is the  accountability of                                                               
the money.  He  said even with a good accountant  it is still not                                                               
possible  to keep  accurate accounting  like is  possible with  a                                                               
bank  account.    He  emphasized the  danger  of  carrying  large                                                               
amounts of  money.  He said  all four members of  his family have                                                               
had their  bank accounts closed;  his employees must  be cautious                                                               
about how  they use their bank  accounts for fear they  will lose                                                               
them.   Mr.  Disdier said  he cannot  get loans  from banks,  and                                                               
employees in the  industry oftentimes do not have  the ability to                                                               
get loans.   He  expressed the difficulty  in getting  a location                                                               
for a business.   Most warehouses require a mortgage.   He stated                                                               
that the  Internal Revenue  Service "electronically  required 941                                                               
employee  withholding,"  and  he  said  that  "everyone  in  this                                                               
business has to figure some workaround about that."                                                                             
                                                                                                                                
9:59:55 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RASMUSSEN expressed appreciation  that most of the                                                               
committee members had signed on to HJR 14 as cosponsors.                                                                        
                                                                                                                                
[HJR 14 was held over.]                                                                                                         
                                                                                                                                
10:00:07 AM                                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Community  and Regional  Affairs Standing  Committee meeting  was                                                               
adjourned at 10:00 a.m.                                                                                                         

Document Name Date/Time Subjects
RCA - Keith Kurber Board Application_Redacted.pdf HCRA 4/1/2021 8:00:00 AM
RCA Appointees
RCA - Robert Pickett Board Application_Redacted.pdf HCRA 4/1/2021 8:00:00 AM
RCA Appointees
RCA - Robert Pickett Resume.pdf HCRA 4/1/2021 8:00:00 AM
RCA Appointees
RCA - Keith Kurber Resume_Redacted.pdf HCRA 4/1/2021 8:00:00 AM
RCA Appointees
HJR014A.PDF HCRA 4/1/2021 8:00:00 AM
HCRA 4/6/2021 8:00:00 AM
HJR 14
HJR14 - Sponsor Statement 3.9.21.pdf HCRA 4/1/2021 8:00:00 AM
HCRA 4/6/2021 8:00:00 AM
HJR 14
HJR 14 - Letter of Support AKBA 3.16.2021.pdf HCRA 4/1/2021 8:00:00 AM
HCRA 4/6/2021 8:00:00 AM
HJR 14
HJR 14 - Letter of Support - Division of Banking & Securities 3.11.21.pdf HCRA 4/1/2021 8:00:00 AM
HCRA 4/6/2021 8:00:00 AM
HJR 14
HJR 14 - Letter of Support - Alaska Marijuana Industry Association 3.23.21.pdf HCRA 4/1/2021 8:00:00 AM
HJR 14
HJR 14 Support Letter - East Rip.pdf HCRA 4/1/2021 8:00:00 AM
HCRA 4/6/2021 8:00:00 AM
HJR 14
HJR 14 - Supporting Documents - New York governor signs bill legalizing recreational marijuana for adults 21 and older - CNN.pdf HCRA 4/1/2021 8:00:00 AM
HCRA 4/6/2021 8:00:00 AM
HJR 14