Legislature(2017 - 2018)HOUSE FINANCE 519

05/12/2017 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 6 INDUSTRIAL HEMP PRODUCTION TELECONFERENCED
Heard & Held
+= SB 28 MUNICIPAL LAND SELECTIONS: PETERSBURG TELECONFERENCED
Moved SB 28 Out of Committee
+= SB 107 ALASKA CAPITAL INCOME FUND TELECONFERENCED
Scheduled but Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
*+ HJR 23 CONST AM: PERMANENT FUND; POMV; DIVIDEND; TELECONFERENCED
<Bill Hearing Canceled>
-- Public Testimony <Time Limit 2 Minutes> --
+= HB 25 INSURANCE COVERAGE FOR CONTRACEPTIVES TELECONFERENCED
Moved CSHB 25(FIN) Out of Committee
                  HOUSE FINANCE COMMITTEE                                                                                       
                       May 12, 2017                                                                                             
                         1:35 p.m.                                                                                              
                                                                                                                                
1:35:43 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Foster  called the House Finance  Committee meeting                                                                    
to order at 1:35 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Neal Foster, Co-Chair                                                                                            
Representative Paul Seaton, Co-Chair                                                                                            
Representative Les Gara, Vice-Chair                                                                                             
Representative Jason Grenn                                                                                                      
Representative David Guttenberg                                                                                                 
Representative Scott Kawasaki                                                                                                   
Representative Mark Neuman (alternate)                                                                                          
Representative Dan Ortiz                                                                                                        
Representative Lance Pruitt                                                                                                     
Representative Cathy Tilton                                                                                                     
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Steve Thompson                                                                                                   
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative  Matt Claman,  Sponsor;  Randy Ruaro,  Staff,                                                                    
Senator Bert  Stedman; Buddy  Whitt, Staff,  Senator Shelley                                                                    
Hughes;   Kaci   Schroeder,  Assistant   Attorney   General,                                                                    
Criminal Division, Department of Law.                                                                                           
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Lizzie   Kubitz,  Staff   to  Representative   Matt  Claman,                                                                    
Anchorage;  Margaret Brodie,  Division Director  Health Care                                                                    
Services,   Anchorage;   Mark  Jensen,   Mayor,   Petersburg                                                                    
Borough,  Petersburg;  Bob   Lynn,  Self,  Petersburg;  Mara                                                                    
Lutomski,  Administrator,  Petersburg Chamber  of  Commerce,                                                                    
Petersburg;  Liz Cabrera,  Director, Community  Development,                                                                    
Petersburg  Borough,   Petersburg;  Marty   Parsons,  Deputy                                                                    
Director, Division  of Mining Land and  Water, Department of                                                                    
Natural  Resources;  John  Buadiug, Self,  Fairbanks;  Ember                                                                    
Haynes, Self, Talkeetna;  Courtney Moran, Attorney, Earthlaw                                                                    
LLC,   Portland,   Oregon;   Regina   Manteufel,   Executive                                                                    
Director, Back To Work, Anchorage;  Steve Albers, Kenai Soil                                                                    
and  Water Conservation  District,  Kenai; Erika  McConnell,                                                                    
Director, Alcohol  and Marijuana Control  Office, Department                                                                    
of Commerce, Community and Economic Development.                                                                                
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 25     INSURANCE COVERAGE FOR CONTRACEPTIVES                                                                                 
                                                                                                                                
          CSHB 25(FIN) was REPORTED out  of committee with a                                                                    
          "do  pass" recommendation  and with  one new  zero                                                                    
          fiscal    note    from     the    Department    of                                                                    
          Administration;  one   previously  published  zero                                                                    
          fiscal  note:   FN1  (CED);  and   one  previously                                                                    
         published fiscal impact note: FN3 (DHS).                                                                               
                                                                                                                                
SB 6      INDUSTRIAL HEMP PRODUCTION                                                                                            
                                                                                                                                
          SB 6 was  HEARD and HELD in  committee for further                                                                    
          consideration.                                                                                                        
                                                                                                                                
SB 28     MUNICIPAL LAND SELECTIONS: PETERSBURG                                                                                 
                                                                                                                                
          SB 28  was REPORTED  out of  committee with  a "no                                                                    
          recommendation"   recommendation   and  with   two                                                                    
          previously published zero  fiscal notes: FN1 (CED)                                                                    
          and FN2 (DNR).                                                                                                        
                                                                                                                                
SB 107    ALASKA CAPITAL INCOME FUND                                                                                            
                                                                                                                                
          SB 107 was SCHEDULED but not HEARD.                                                                                   
                                                                                                                                
Co-Chair Foster reviewed the meeting agenda.                                                                                    
                                                                                                                                
HOUSE BILL NO. 25                                                                                                             
                                                                                                                                
     "An   Act   relating    to   insurance   coverage   for                                                                    
     contraceptives  and   related  services;   relating  to                                                                    
     medical  assistance  coverage  for  contraceptives  and                                                                    
     related  services;  and   providing  for  an  effective                                                                    
     date."                                                                                                                     
                                                                                                                                
1:36:32 PM                                                                                                                    
                                                                                                                                
LIZZIE KUBITZ, STAFF TO REPRESENTATIVE MATT CLAMAN,                                                                             
ANCHORAGE (via teleconference), relayed that she was                                                                            
available for questions regarding the amendments.                                                                               
                                                                                                                                
1:38:35 PM                                                                                                                    
                                                                                                                                
Representative Kawasaki MOVED to ADOPT Amendment 1, 30-                                                                         
LS0261\0.1 (Wallace, 4/18/17) (copy on file):                                                                                   
                                                                                                                                
     Page 3, following line 13:                                                                                                 
                                                                                                                                
     Insert new bill sections to read:                                                                                          
                                                                                                                                
     "*Sec.  2. AS  29.10.200  is amended  by  adding a  new                                                                    
     paragraph to read:                                                                                                         
                                                                                                                                
     (66)  AS 29.20.420 (health care insurance plans).                                                                          
                                                                                                                                
     *Sec. 3.  AS 29.20 is  amended by adding a  new section                                                                    
     to article 5 to read:                                                                                                      
                                                                                                                                
     Sec. 29.20.420.  Health care insurance plans.  (a) If a                                                                    
     municipality offers a group  health care insurance plan                                                                    
     covering  municipal employees,  including  by means  of                                                                    
     self-insurance,  the  municipal health  care  insurance                                                                    
     plan is subject to the requirements of AS 21.42.427.                                                                       
                                                                                                                                
     (b) This section  applies to home rule  and general law                                                                    
     municipalities.                                                                                                            
                                                                                                                                
     (c) In  this section, "health care  insurance plan" has                                                                    
     the meaning given in 12 AS 21.54.500."                                                                                     
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 6, line 30:                                                                                                           
                                                                                                                                
     Delete "sec. 4"                                                                                                            
                                                                                                                                
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     Delete "sec. 4"                                                                                                            
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     Page 7, line 12:                                                                                                           
     Delete "sec. 4"                                                                                                            
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     Delete "sees. 5 and 6"                                                                                                     
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     Delete "sec. 7"                                                                                                            
     Insert "sec. 9                                                                                                             
                                                                                                                                
Representative Wilson OBJECTED.                                                                                                 
                                                                                                                                
Representative   Kawasaki  explained   the  amendment.   The                                                                    
amendment safeguarded  that municipalities  who self-insured                                                                    
were also covered within the  twelve month period. He shared                                                                    
that  he contacted  the "top  three" municipalities  and was                                                                    
informed that they  already had a similar  provision. He did                                                                    
not feel the legislation impacted municipalities.                                                                               
                                                                                                                                
Representative Wilson did not  support the amendment without                                                                    
knowing  how the  bill impacted  municipalities. She  stated                                                                    
that  how   the  legislation  impacted   municipalities  was                                                                    
unknown.   The   bill   mandated  insurance   coverage   for                                                                    
contraceptives;  it  was  not  merely  about  extending  the                                                                    
prescription to 12 months.                                                                                                      
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Guttenberg, Kawasaki, Ortiz,  Gara, Grenn, Foster,                                                                    
Seaton                                                                                                                          
OPPOSED: Pruitt, Neuman, Tilton, Wilson                                                                                         
                                                                                                                                
The MOTION to Adopt Amendment 1 PASSED (7/4).                                                                                   
                                                                                                                                
1:40:49 PM                                                                                                                    
                                                                                                                                
Representative  Wilson  MOVED  to  ADOPT  Amendment  2,  30-                                                                    
LS0261\0.4 (Wallace, 4/18/17):                                                                                                  
                                                                                                                                
     Page 1, line 8, following "market":                                                                                        
                                                                                                                                
     Insert "that provides coverage for prescription                                                                            
     contraceptives"                                                                                                            
                                                                                                                                
Co-Chair Seaton OBJECTED.                                                                                                       
                                                                                                                                
Representative  Wilson  explained  the  amendment.  She  was                                                                    
concerned    that   the    bill   mandated    coverage   for                                                                    
contraceptives. She  felt that some people  purchased health                                                                    
insurance  policies  based  on  their  needs  and  that  the                                                                    
mandate  would increase  premium costs  to individuals  that                                                                    
did not  need contraceptives.  The amendment  clarified that                                                                    
the  bill  only applied  to  insurers  who already  provided                                                                    
coverage for contraceptives.                                                                                                    
                                                                                                                                
Co-Chair  Seaton asked  whether the  bill sponsor  wanted to                                                                    
speak to the amendment.                                                                                                         
                                                                                                                                
REPRESENTATIVE  MATT CLAMAN,  SPONSOR, did  not support  the                                                                    
amendment. He  commented that the amendment  was contrary to                                                                    
the point of the bill.                                                                                                          
                                                                                                                                
Representative  Kawasaki  asked  whether there  were  health                                                                    
insurance policies  and "individual  market plans"  that did                                                                    
not currently cover contraceptives.                                                                                             
                                                                                                                                
Representative  Wilson  responded  that she  did  not  know,                                                                    
which characterized  the point  of her amendment.  She spoke                                                                    
to her  understanding of the  bill. She reiterated  that the                                                                    
bill required every plan to  provide the coverage even if it                                                                    
currently did not.  Ms. Kubitz replied that HB  25 was about                                                                    
expanding  access to  contraceptives. She  pointed out  that                                                                    
the  amendment would  not allow  the expansion  of coverage.                                                                    
She believed coverage for contraceptives  was a "standard of                                                                    
care"  Alaskan women  were entitled  to  unless an  employer                                                                    
upheld a religious exemption.                                                                                                   
                                                                                                                                
1:45:39 PM                                                                                                                    
                                                                                                                                
Representative Ortiz asked whether  the sponsor's intent was                                                                    
to  force  insurers to  provide  contraceptives  as part  of                                                                    
their  plan. Representative  Claman believed  that the  only                                                                    
plans  that  did  not  allow  coverage  were  policies  with                                                                    
religious exemptions.  He did  not believe  HB 25  created a                                                                    
mandate and  that contraceptive coverage was  required under                                                                    
the Affordable Care Act (ACA).                                                                                                  
                                                                                                                                
Representative Wilson believed the  amendment would not harm                                                                    
existing  practices.  She   maintained  that  the  amendment                                                                    
clarified that  the bill did  not create a mandate  that had                                                                    
unintended negative consequences.                                                                                               
                                                                                                                                
Representative  Neuman asked  how the  12 month  requirement                                                                    
pertained to  the amendment. Representative  Wilson answered                                                                    
that the  12 month language  was in the bill.  She explained                                                                    
that  the bill  dealt with  other contraceptive  methods but                                                                    
extending prescriptions  for pills was a  major provision to                                                                    
prevent  the inconvenience  for women  having to  obtain the                                                                    
prescription from  a pharmacy multiple times  each year. She                                                                    
restated  that  her  amendment  ensured  that  contraceptive                                                                    
coverage was already included in  the policy before the rest                                                                    
of the bill's provisions were applied.                                                                                          
                                                                                                                                
Representative Guttenberg  asked whether there would  be any                                                                    
other impacts  from the  bill and if  the sponsor  had heard                                                                    
from   anyone   who   was    concerned   by   the   mandate.                                                                    
Representative  Claman replied  that he  had not  heard from                                                                    
anyone  whose policies  did not  provide  coverage and  were                                                                    
apprehensive over the requirement.                                                                                              
                                                                                                                                
Co-Chair  Seaton   asked  whether   Representative  Wilson's                                                                    
intention was  to provide  contraceptive coverage  in Alaska                                                                    
regardless of whether  or not the ACA  mandated the coverage                                                                    
or was repealed.                                                                                                                
                                                                                                                                
1:51:33 PM                                                                                                                    
                                                                                                                                
Representative Wilson answered that  was not her intent. She                                                                    
cited a  letter from the National Federation  of Independent                                                                    
Business  (NFIB) (copy  on file)  that opposed  the mandate.                                                                    
She offered  that every  time more  mandates were  placed on                                                                    
private   companies   to   cover  conditions   their   costs                                                                    
increased. She reiterated the intent of the amendment.                                                                          
                                                                                                                                
1:53:26 PM                                                                                                                    
                                                                                                                                
Representative Wilson provided  final comments regarding the                                                                    
intent of the amendment.                                                                                                        
                                                                                                                                
Co-Chair Seaton MAINTAINED his OBJECTION.                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Ortiz, Pruitt, Neuman, Tilton, Wilson                                                                                 
OPPOSED: Kawasaki, Gara, Grenn, Guttenberg, Seaton, Foster                                                                      
                                                                                                                                
The MOTION to adopt Amendment 2 FAILED (5/6).                                                                                   
                                                                                                                                
Representative  Wilson WITHDREW  Amendment 3,  30-LS0261\0.2                                                                    
(Wallace, 4/18/17) (copy on file).                                                                                              
                                                                                                                                
1:55:21 PM                                                                                                                    
                                                                                                                                
Vice-Chair Gara reviewed  the fiscal notes: FN  1 (CED) zero                                                                    
from  the Department  of  Commerce,  Community and  Economic                                                                    
Development, one  new zero fiscal  note from  the Department                                                                    
of  Administration, and  FN 3  (DHS)  showing fiscal  impact                                                                    
from the Department of Health  and Social Services, Medicaid                                                                    
Services that  reported an anticipated cost  savings of $678                                                                    
thousand in FY 18 and $1.3  million in the out years through                                                                    
the reduction in unintended pregnancies.                                                                                        
                                                                                                                                
Representative  Wilson  was  trying  to  determine  how  the                                                                    
savings was  derived. She wondered  how many women  were not                                                                    
currently "taking  the pill that should  be." She understood                                                                    
that the  department already could provide  the prescription                                                                    
for twelve  months but do not  because a women might  not be                                                                    
eligible for  Medicaid for the  entire twelve  month period.                                                                    
She was  uncertain the  bill would  allow the  department to                                                                    
change its prescribing practices.                                                                                               
                                                                                                                                
1:57:55 PM                                                                                                                    
                                                                                                                                
MARGARET  BRODIE, DIVISION  DIRECTOR  HEALTH CARE  SERVICES,                                                                    
ANCHORAGE  (via  teleconference),  answered  that  based  on                                                                    
national  studies  there  was   a  6  percent  contraceptive                                                                    
failure rate  utilizing a  twelve month  prescription period                                                                    
as opposed  to a  9 percent  failure rate  based on  3 month                                                                    
prescriptions.  She  added that  the  department  chose a  7                                                                    
percent  failure rate.  The  fiscal note  was  based on  the                                                                    
difference  between  the  lower  and  higher  failure  rate.                                                                    
Representative  Wilson  countered  that the  department  had                                                                    
testified    that   it    could   have    been   prescribing                                                                    
contraceptives for  12 months  without the  legislation. She                                                                    
wondered  why  the  extended   prescriptions  had  not  been                                                                    
implemented. Ms.  Brodie answered that the  Medicaid program                                                                    
was  "under constant  pressure to  contain costs"  and often                                                                    
the  contraceptive prescriptions  were  not  issued at  all.                                                                    
She related  that the contraceptive  failure rate  study was                                                                    
new.  In addition,  savings would  be realized  from reduced                                                                    
dispensing  fees  the department  was  required  to pay  for                                                                    
prescriptions. Representative Wilson  cited the $1.4 million                                                                    
in  savings and  wondered  how many  individuals the  figure                                                                    
represented.  She  asked  why  DHSS  used  national  figures                                                                    
versus   Alaskan  numbers   because  the   state's  Medicaid                                                                    
standards were  much higher than  the federal  poverty rate.                                                                    
Ms.  Brodie  responded  that   the  national  averages  were                                                                    
employed  to determine  the contraceptive  failure rate  but                                                                    
Alaskan data was used to  determine the number of unintended                                                                    
pregnancies   (120).   Representative  Wilson   asked   what                                                                    
happened if  a woman became  ineligible within the  year but                                                                    
was  issued a  12  month prescription.  Ms. Brodie  answered                                                                    
that  initially   the  situation   was  factored   into  the                                                                    
analysis. However,  after further research,  DHSS discovered                                                                    
that the state did not  have to repay the ineligible portion                                                                    
as long as  the individual was eligible for  Medicaid at the                                                                    
time  of dispensing  the  medication. Representative  Wilson                                                                    
still  believed the  numbers in  the DHSS  fiscal note  were                                                                    
"skewed"  but did  not  have  access to  data  to prove  her                                                                    
assumption.                                                                                                                     
                                                                                                                                
Vice-Chair Gara remarked that the  all of the data discussed                                                                    
was located on  page 2 of the DHSS fiscal  note analysis. He                                                                    
relayed the following:                                                                                                          
                                                                                                                                
     A report by  Foster et. al. (2011)  projects a decrease                                                                    
     in failure  rate of approximately 30  percent when oral                                                                    
     contraceptives  are dispensed  in  12month  quantities,                                                                    
     which  would result  in an  oral contraceptive  failure                                                                    
     rate of 6 percent.                                                                                                         
     … Applying this differential, we estimate that                                                                             
     approximately 5.28 of the avoided 120 unintended                                                                           
     pregnancies would have been complicated births …                                                                           
                                                                                                                                
Vice-Chair Gara  noted that the  data was the basis  for the                                                                    
projected  savings. He  wanted  to  help prevent  unintended                                                                    
pregnancies.                                                                                                                    
                                                                                                                                
Co-Chair  Seaton  addressed  the  question  of  whether  the                                                                    
state's  Medicaid  program  currently  had  the  ability  to                                                                    
provide  12 month  prescriptions. He  related that  the bill                                                                    
contained  conditional  language   that  was  not  effective                                                                    
unless  the federal  Medicaid program  approved the  state's                                                                    
plan amendment adopting the 12 month requirement.                                                                               
                                                                                                                                
2:04:38 PM                                                                                                                    
                                                                                                                                
Representative  Wilson asked  whether Ms.  Brodie's previous                                                                    
testimony  regarding  the  issue  had  been  incorrect.  Ms.                                                                    
Brodie responded that regulations  allowed it, but the state                                                                    
had to  file a state  plan amendment that  required approval                                                                    
from  the federal  government.  Representative Wilson  asked                                                                    
whether legislation  was required  to amend the  state plan.                                                                    
Ms.  Brodie answered  that the  commissioner  of DHSS  could                                                                    
make the determination and  request the federal government's                                                                    
approval.                                                                                                                       
                                                                                                                                
2:05:54 PM                                                                                                                    
                                                                                                                                
Co-Chair  Seaton  MOVED  to  REPORT   CSHB  25(FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes.                                                                                                      
                                                                                                                                
Representative Wilson  OBJECTED. She  remarked on  the usage                                                                    
of  the  words  "unintended  and  unwanted"  in  a  negative                                                                    
context.  She  reasoned that  "everything  in  life was  not                                                                    
always  intended"  but  could  be  welcomed.  She  expressed                                                                    
concern that the  bill carried a mandate in  addition to the                                                                    
12-month coverage.  She opposed additional mandates  and the                                                                    
problems  she felt  they created  for small  businesses. She                                                                    
appreciated  that Co-Chair  Seaton mentioned  issues due  to                                                                    
Medicaid expansion. She did not  know what the overall costs                                                                    
to  the  state  were  due  to the  uncertainty  of  ACA  and                                                                    
Medicaid  expansion.   She  reiterated  her   opposition  to                                                                    
mandates  because of  the "pressure"  they  placed on  small                                                                    
businesses.                                                                                                                     
                                                                                                                                
2:08:22 PM                                                                                                                    
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Ortiz, Gara, Grenn,  Guttenberg, Kawasaki, Foster,                                                                    
Seaton                                                                                                                          
OPPOSED: Pruitt, Neuman, Tilton, Wilson                                                                                         
                                                                                                                                
The MOTION PASSED (7/4).                                                                                                        
                                                                                                                                
There being NO further  OBJECTION, CSHB 25(FIN) was REPORTED                                                                    
out of  committee with a  "do pass" recommendation  and with                                                                    
one   new  zero   fiscal  note   from   the  Department   of                                                                    
Administration; one  previously published zero  fiscal note:                                                                    
FN1 (CED); and one  previously published fiscal impact note:                                                                    
FN3 (DHS).                                                                                                                      
                                                                                                                                
SENATE BILL NO. 28                                                                                                            
                                                                                                                                
     "An Act relating to the  general grant land entitlement                                                                    
     for  the  Petersburg  Borough;  and  providing  for  an                                                                    
     effective date."                                                                                                           
                                                                                                                                
2:09:32 PM                                                                                                                    
                                                                                                                                
MARK  JENSEN,  MAYOR,  PETERSBURG BOROUGH,  PETERSBURG  (via                                                                    
teleconference),  testified in  support of  the legislation.                                                                    
He read from a prepared statement:                                                                                              
                                                                                                                                
     I'm speaking to  you today in support of SB  28, a bill                                                                    
     that would  set our  general land grant  entitlement at                                                                    
     just over 14,500 acres.                                                                                                    
                                                                                                                                
     As the borough mayor, a  small business owner and life-                                                                    
     long  Alaskan,  I've  witnessed  many  changes  to  our                                                                    
     community.  Most recently,  our 103  year old  city was                                                                    
     dissolved  in   favor  of  a  home-rule   borough.  Our                                                                    
     decision  to form  a  borough was  not  made in  haste.                                                                    
     Borough  formation  was  not   supported  by  all  area                                                                    
     residents. Nonetheless, the majority  of us felt it was                                                                    
     an  important  step  for  the  future  welfare  of  our                                                                    
     community.                                                                                                                 
                                                                                                                                
     Likewise,  SB 28  is an  important step  in the  future                                                                    
     development  of   our  borough.  As  you've   heard  in                                                                    
     previous testimony, the  Petersburg Borough's land base                                                                    
     is  dominated  by public  lands  -  96 percent  of  the                                                                    
     borough is  in federal ownership. Public  lands are not                                                                    
     taxable  by   the  local   government;  nor   open  for                                                                    
     commercial   development   by   local   business;   nor                                                                    
     available   for  residential   use.  SB   28  makes   a                                                                    
     relatively  small  amount  of  land  available  to  the                                                                    
     borough for these important  uses. These can contribute                                                                    
     in  very  significant and  positive  ways  to grow  our                                                                    
     local tax base, employment, and population.                                                                                
                                                                                                                                
     If you  consider borough formation and  SB 28 together,                                                                    
     it demonstrates  that our community is  taking decisive                                                                    
     steps   toward  the   type  of   local  self-government                                                                    
     envisioned by  the state constitution- and  the type of                                                                    
     self-reliance necessary for us  to succeed for at least                                                                    
     another 103 years.                                                                                                         
                                                                                                                                
     Thank you  for the  opportunity to  speak to  you today                                                                    
     and I ask  for your support to pass SB  28 out of House                                                                    
     Finance this afternoon.                                                                                                    
                                                                                                                                
2:12:11 PM                                                                                                                    
                                                                                                                                
BOB LYNN, SELF, PETERSBURG (via teleconference), spoke in                                                                       
favor of the legislation. He read from a prepared                                                                               
statement:                                                                                                                      
                                                                                                                                
     As  a  Borough  Resident and  Former  Tongass  National                                                                    
     Forest Supervisor  I support SB 28  transferring 14,666                                                                    
     acres  of  State  of  Alaska  land  to  the  Petersburg                                                                    
     Borough.  Over 96%  of the  land within  the Petersburg                                                                    
     Borough is in Tongass  National Forest, State of Alaska                                                                    
     and   Goldbelt   ownership.  That   ownership   pattern                                                                    
     significantly limits  the Petersburg  Borough's ability                                                                    
     to diversity the local economy.                                                                                            
                                                                                                                                
     The  current  economy  is   primarily  related  to  the                                                                    
     fishing industry.  Any annual up  turn or down  turn is                                                                    
     immediately  felt locally,  the  same can  be said  for                                                                    
     policy changes related to the  National Forest since it                                                                    
     is such a dominant owner of lands within the Borough.                                                                      
                                                                                                                                
     SB 28  would significantly  help diversity  and provide                                                                    
    stability to the local economy in a number of ways.                                                                         
                                                                                                                                
     1. It would  provide  for  a  larger  tax base  in  the                                                                    
        borough.                                                                                                                
     2. It would help diversify the economy by providing for                                                                    
        other uses.                                                                                                             
     3. It would provide opportunities for the start of more                                                                    
        small businesses.                                                                                                       
     4. It would  help  in the  development  of the  Borough                                                                    
        infrastructure.                                                                                                         
     5. It would help the Borough in the long term provide a                                                                    
        better services and quality of life to its                                                                              
        residents.                                                                                                              
                                                                                                                                
     As  the  committee  is  aware,  the  municipalities  in                                                                    
     Alaska as  elsewhere are limited  in the ways  they can                                                                    
     generate  revenues.  This  bill  helps  the  Petersburg                                                                    
     Borough provide a long  term, stable, sustainable local                                                                    
     economy that  can better serve  the needs of  the local                                                                    
     residents.                                                                                                                 
                                                                                                                                
2:14:14 PM                                                                                                                    
                                                                                                                                
MARA LUTOMSKI, ADMINISTRATOR, PETERSBURG CHAMBER OF                                                                             
COMMERCE, PETERSBURG (via teleconference), spoke in support                                                                     
of the legislation. She read from prepared remarks:                                                                             
                                                                                                                                
     I am  testifying today in support  of SB 28 to  set the                                                                    
     general land  entitlement to the Borough  of Petersburg                                                                    
     so it will be more  closely aligned with other Boroughs                                                                    
     across the State of Alaska.                                                                                                
                                                                                                                                
     According  to ADNR,  the  Petersburg Borough's  current                                                                    
     land entitlement  is 1,374  acres -  approximately only                                                                    
     .04 percent of the Borough's  total land area.  Through                                                                    
     this  same  legislative  process, other  boroughs  have                                                                    
     received close to .8 percent  of their total land area.                                                                    
     Petersburg's request  would not set a  precedent as the                                                                    
     14,600  acres would  be less  than .79  percent of  the                                                                    
     total lands  within the Borough. It  would however move                                                                    
     the  Petersburg  Borough  towards more  economic  self-                                                                    
     sufficiency.                                                                                                               
                                                                                                                                
     Petersburg  right  in  the boundaries  of  the  Tongass                                                                    
     National Forest  - 96  percent of  the land  within our                                                                    
     borough is federal  land - only 4 percent  is left over                                                                    
     for the State and borough use.                                                                                             
                                                                                                                                
     In  recent years,  State land  within  our Borough  has                                                                    
     been designated to the Alaska  Mental Health Trust, The                                                                    
     University  of  Alaska,  and  Southeast  State  Forest;                                                                    
     leaving  very  little for  the  Borough  to select  for                                                                    
     future economic development and planning.                                                                                  
                                                                                                                                
     The  land entitlement  was created  for the  purpose in                                                                    
     which the  Municipality is asking:  the lands  would be                                                                    
     used to  address the economic, cultural,  and resource-                                                                    
     based goals of the Borough and its residents.                                                                              
                                                                                                                                
     We understand  that in the near  future, Municipalities                                                                    
     will  be   responsible  to  fund  more   of  their  own                                                                    
     operations, relying  less on state and  Federal monies.                                                                    
     The Borough's request is moving  them toward being more                                                                    
     self-sufficient   and  an   increased   land  base   is                                                                    
    essential in moving the Borough in that direction.                                                                          
                                                                                                                                
     The Petersburg  Chamber of  Commerce fully  supports SB                                                                    
     28 and  we ask that  you vote to pass  this legislation                                                                    
     forward today.                                                                                                             
                                                                                                                                
2:16:49 PM                                                                                                                    
                                                                                                                                
LIZ  CABRERA,  DIRECTOR, COMMUNITY  DEVELOPMENT,  PETERSBURG                                                                    
BOROUGH, PETERSBURG (via  teleconference), was available for                                                                    
questions.                                                                                                                      
                                                                                                                                
Vice-Chair Gara discussed that when  the state conveyed land                                                                    
to a  municipality or  borough easements  to or  along water                                                                    
bodies  were retained.  He asked  for verification  that the                                                                    
borough would  maintain access. Ms.  Cabrera replied  in the                                                                    
affirmative  and added  that the  borough  did not  restrict                                                                    
access to any of its land.                                                                                                      
                                                                                                                                
Co-Chair Foster CLOSED public testimony.                                                                                        
                                                                                                                                
2:18:25 PM                                                                                                                    
                                                                                                                                
RANDY  RUARO, STAFF,  SENATOR BERT  STEDMAN, had  no further                                                                    
comments.                                                                                                                       
                                                                                                                                
Representative  Kawasaki mentioned  that there  had been  no                                                                    
opposition to  the bill. He  asked whether a  property owner                                                                    
adjacent to the municipal  land selections would be notified                                                                    
of the entitlement.                                                                                                             
                                                                                                                                
Mr. Ruaro  deferred to the  Department of  Natural Resources                                                                    
(DNR).                                                                                                                          
                                                                                                                                
MARTY PARSONS, DEPUTY DIRECTOR,  DIVISION OF MINING LAND AND                                                                    
WATER,    DEPARTMENT     OF    NATURAL     RESOURCES    (via                                                                    
teleconference), responded  that the conveyance  process was                                                                    
public   and  included   information  specifying   the  land                                                                    
proposed for transfer.                                                                                                          
2:20:24 PM                                                                                                                    
                                                                                                                                
Representative  Kawasaki asked  for  more clarity  regarding                                                                    
what information  was conveyed to residents.  He exemplified                                                                    
a  potential land  conveyance in  the  Fairbanks North  Star                                                                    
Borough that  was closely aligned  with the Fort  Knox mine.                                                                    
Residents of  the borough  involved in  a running  club were                                                                    
concerned that  if the  land was  annexed within  the mining                                                                    
claim  the  mine  would prevent  access.  He  requested  the                                                                    
specific  types of  information  the  Department of  Natural                                                                    
Resources (DNR) conveyed to the  public. Mr. Parsons replied                                                                    
that DNR  was statutorily mandated to  relay the information                                                                    
to  the public  via  newspapers, websites,  and post  office                                                                    
notices. The public would be alerted  via email of any out -                                                                    
of  - state  ownership  conveyance. Representative  Kawasaki                                                                    
asked whether  the department would be  statutorily required                                                                    
to  contact   adjacent  property  owners  of   any  type  of                                                                    
conveyance.  Mr. Parsons  believed that  through the  public                                                                    
process the  department would not necessarily  contact every                                                                    
nearby  owner,  but  they  would  publish  notifications  in                                                                    
newspapers and online.                                                                                                          
                                                                                                                                
Vice-Chair  Gara asked  for  assurance  that DNR  maintained                                                                    
easements along and to a water  body in order for the public                                                                    
to access it for  recreational purposes and whether easement                                                                    
locations   were   shared   with  the   public.   He   spoke                                                                    
specifically  to  the  conveyance  in  SB  28.  Mr.  Parsons                                                                    
answered that  all of the statutory  required easements were                                                                    
maintained  as  part  of the  conveyance  process  and  were                                                                    
identified in conjunction with the borough.                                                                                     
                                                                                                                                
2:24:12 PM                                                                                                                    
                                                                                                                                
Representative Pruitt queried whether  there was a precedent                                                                    
for conveying additional land to  a borough or municipality.                                                                    
Mr. Parsons responded that  Southeast Alaska's situation was                                                                    
unique due  to the fact  that so much  land was part  of the                                                                    
Tongass  National Forest.  He explained  that the  amount of                                                                    
"vacant   unappropriated   unreserved    land"   (VUU)   was                                                                    
relatively  small.  The   Petersburg  Borough  requested  95                                                                    
percent  of the  state's  VUU land,  similar  to a  Wrangell                                                                    
Borough request for an additional  conveyance of 9,600 acres                                                                    
or  approximately 48  percent VUU  land,  subsequent to  its                                                                    
first   relatively   small   entitlement.   The   Petersburg                                                                    
conveyance encompassed  almost all  of the state's  VUU land                                                                    
inside  of  the  borough boundaries.  Representative  Pruitt                                                                    
wondered whether  requesting a second land  conveyance after                                                                    
an  initial  conveyance  had happened  before.  Mr.  Parsons                                                                    
replied  in the  affirmative but  he would  not characterize                                                                    
the situation as commonplace. He  related that in the recent                                                                    
past the Haines Borough  requested an additional entitlement                                                                    
subsequent  to  the  formation   of  the  Wrangell  Borough.                                                                    
Representative   Pruitt   asked   whether  the   state   was                                                                    
comfortable  with  the amount  of  VUU  land the  Petersburg                                                                    
Borough had  requested. He  appreciated that  Petersburg was                                                                    
trying  to  find  a  way   to  be  self-sustaining  and  was                                                                    
supportive but  wondered whether  a large conveyance  of VUU                                                                    
land set a precedent that concerned the department.                                                                             
                                                                                                                                
2:28:21 PM                                                                                                                    
                                                                                                                                
Mr. Parsons responded that a  large conveyance was a concern                                                                    
when the  state received revenue  from land, timber,  and or                                                                    
material sales, easements, and  right-of-ways. He noted that                                                                    
the department's  ability to generate revenues  from program                                                                    
receipts versus  unrestricted general  funds (UGF)  would be                                                                    
diminished if the  state conveyed a large  amount of revenue                                                                    
producing  VUU  land   to  boroughs.  Representative  Pruitt                                                                    
recognized the concern. He asked  whether the department was                                                                    
satisfied with  the particular allotment for  the Petersburg                                                                    
Borough.  Mr. Parsons  replied that  the administration  had                                                                    
not  taken  a position;  it  relied  on the  legislature  to                                                                    
determine the best course of action for the state.                                                                              
                                                                                                                                
Representative Guttenberg  referred to the maps  in members'                                                                    
packets (copy on file) of  the Petersburg area. He described                                                                    
the type  of land in  the borough and asked  what percentage                                                                    
of state  VUU land remained available  after the conveyance.                                                                    
Mr. Parsons  responded that approximately  700 acres  of VUU                                                                    
state  land  inside  the  borough  remained.  Representative                                                                    
Guttenberg  remarked  that  when   he  had  been  previously                                                                    
involved  in  land  selection  conveyances  a  hierarchy  of                                                                    
entitlement  existed among  federal,  state, municipal,  and                                                                    
tribal  parties.   He  stated   that  when   land  selection                                                                    
processes were  undertaken conflicts arose  between involved                                                                    
parties.  He wondered  whether the  scenario applied  to the                                                                    
Petersburg  entitlement.  Mr.  Parsons was  unaware  of  any                                                                    
conflicts    associated    with    the    land    selection.                                                                    
Representative  Guttenberg  wanted  clarification  that  700                                                                    
acres of  state VUU  land remained  within the  borough. Mr.                                                                    
Parsons  confirmed that  approximately 700  to 750  acres of                                                                    
state VUU land remained.                                                                                                        
                                                                                                                                
2:33:48 PM                                                                                                                    
Vice-Chair Gara  reviewed the two previously  published zero                                                                    
fiscal notes from the Department  of Commerce, Community and                                                                    
Economic  Development  FN  1 (CED)  and  the  Department  of                                                                    
Natural Resources FN  2 (DNR). He noted that  the DNR fiscal                                                                    
note analysis  on page 2 reported  the value of the  land at                                                                    
$68 million.                                                                                                                    
                                                                                                                                
Representative Wilson asked why the  amount was not shown as                                                                    
a  loss to  the state  on the  fiscal note.  Vice-Chair Gara                                                                    
offered that he recently had  the same question. He answered                                                                    
that  fiscal notes  reflected state  funds and  fund sources                                                                    
and  not assets.  Representative Wilson  asked whether  non-                                                                    
reporting  the  value  of  assets as  a  loss  was  standard                                                                    
practice.  Mr.  Parsons  replied that  Vice-Chair  Gara  was                                                                    
correct  and  the general  practice  was  to report  funding                                                                    
gains,  losses, or  expenses. He  delineated  that the  land                                                                    
value was added at the  request of Senator Anna MacKinnon to                                                                    
show   the  potential   lost  revenue   from  the   sale  or                                                                    
development of the land if retained.                                                                                            
                                                                                                                                
2:36:51 PM                                                                                                                    
                                                                                                                                
Representative Wilson  wondered whether the value  was based                                                                    
on selling  the land  outright or  from mineral  rights. Mr.                                                                    
Parsons answered that  the value was based  on a combination                                                                    
of many factors.  The department assessed the  land for land                                                                    
sale offerings, potential timber  or other material harvest,                                                                    
right-of-ways or easements use.                                                                                                 
                                                                                                                                
Co-Chair Seaton MOVED to REPORT  SB 28 out of committee with                                                                    
individual  recommendations  and   the  accompanying  fiscal                                                                    
notes.                                                                                                                          
                                                                                                                                
Representative   Kawasaki  OBJECTED   for  the   purpose  of                                                                    
discussion. He  appreciated the bill and  the "maximum local                                                                    
self-government"   opportunity   the   entitlement   offered                                                                    
Petersburg. He  spoke about private  owners adjacent  to the                                                                    
land that  he characterized  as "non-contiguous."  He wanted                                                                    
to ensure  that private  landowners understood  the possible                                                                    
ramifications  of  the  conveyance   in  terms  of  negative                                                                    
impacts like timber sales or blocked views.                                                                                     
                                                                                                                                
Representative Kawasaki WITHDREW his OBJECTION.                                                                                 
                                                                                                                                
Representative   Pruitt   recognized   that  much   of   the                                                                    
Petersburg Borough  was located within the  Tongass National                                                                    
Forest and was  out of the borough's  control. He understood                                                                    
the borough's effort for  self-sufficiency and supported the                                                                    
bill.  He  worried about  the  precedent  set by  the  state                                                                    
granting  95 percent  of  its land  to  a municipality,  but                                                                    
maintained his support for the  Petersburg conveyance due to                                                                    
the unique  situation caused by  its location in  a National                                                                    
Forest.                                                                                                                         
                                                                                                                                
There  being  NO  OBJECTION,  SB  28  was  REPORTED  out  of                                                                    
committee  with  a  "no recommendation"  recommendation  and                                                                    
with two  previously published zero fiscal  notes: FN1 (CED)                                                                    
and FN2 (DNR).                                                                                                                  
                                                                                                                                
CS FOR SENATE BILL NO. 6(JUD)                                                                                                 
                                                                                                                                
     "An Act  relating to the  regulation and  production of                                                                    
     industrial  hemp;  relating  to industrial  hemp  pilot                                                                    
     programs;  providing   that  industrial  hemp   is  not                                                                    
     included   in  the   definition  of   'marijuana';  and                                                                    
     clarifying  that adding  industrial hemp  to food  does                                                                    
     not create an adulterated food product."                                                                                   
                                                                                                                                
2:40:32 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster OPENED public testimony.                                                                                        
                                                                                                                                
JOHN   BUADIUG,   SELF,  FAIRBANKS   (via   teleconference),                                                                    
testified in favor  of the legislation. He  reported that it                                                                    
was  possible  to convert  hemp  oil  into biodiesel,  which                                                                    
contained  hydrogen, carbon,  and oxygen  molecules creating                                                                    
cleaner  burning   fuel.  He   cited  statistics   from  the                                                                    
Sequential  Biodiesel Fuels  Company that  claimed emissions                                                                    
reductions    in    carbon   dioxide,    carbon    monoxide,                                                                    
hydrocarbons,   particulate  matter,   and  sulfur   dioxide                                                                    
through its use.                                                                                                                
                                                                                                                                
Representative  Wilson  queried  whether  he  knew  anything                                                                    
about cannabidiol  (CBD) oil. Mr. Bauding  answered that CBD                                                                    
oil  fell under  a "different  category" and  that only  0.3                                                                    
percent  or  less  was  contained  in  industrial  hemp.  He                                                                    
declared  that  an  individual  "could  not  get  high  with                                                                    
industrial hemp."                                                                                                               
                                                                                                                                
2:45:26 PM                                                                                                                    
                                                                                                                                
EMBER   HAYNES,   SELF,  TALKEETNA   (via   teleconference),                                                                    
testified in favor of the  legislation. She relayed that her                                                                    
business, Denali  Hemp Company,  created salves,  soaps, and                                                                    
body  products with  hemp  seeds  and oil  that  she had  to                                                                    
outsource.  She wanted  to use  Alaskan grown  hemp for  her                                                                    
products.  In   addition,  she  wished  to   supplement  her                                                                    
livestock  with hemp  for greens,  bedding, and  fodder. She                                                                    
offered  that hemp  grew well  in Alaska,  was a  beneficial                                                                    
cover  crop, and  that  commonly  used harvesting  equipment                                                                    
worked for  hemp. Hemp was  successfully harvested  in other                                                                    
parts of  the world  and that specific  harvesting equipment                                                                    
had been invented. She asked for the committees support.                                                                        
                                                                                                                                
Representative Grenn asked how  long the Denali Hemp Company                                                                    
was in  business. Ms. Haynes  answered that the  company had                                                                    
been making products  with hemp seed oil since  2014 and she                                                                    
operated  another   business  that   used  it   since  2008.                                                                    
Representative Grenn asked for  verification that she had to                                                                    
outsource  hemp. Ms.  Haynes  answered  in the  affirmative.                                                                    
Representative  Grenn   asked  how  much  her   costs  would                                                                    
decrease  if  she  could  grow  her  own  hemp.  Ms.  Haynes                                                                    
answered that one acre of  hemp produced approximately 50 to                                                                    
70  gallons  of oil  per  year,  which  was enough  for  her                                                                    
products.   In  addition,   the  harvest   would  feed   her                                                                    
livestock. One  of the challenges  of the hemp  industry was                                                                    
finding the  particular varieties that would  grow in Alaska                                                                    
and produce  oil or  other desired  qualities of  the plant.                                                                    
Representative  Grenn stated  that  Alaska's growing  season                                                                    
for hemp  was challenging  and asked for  clarification. Ms.                                                                    
Haynes answered  in the  affirmative. She  briefly described                                                                    
methods and varieties that would likely work in the state.                                                                      
                                                                                                                                
2:51:17 PM                                                                                                                    
                                                                                                                                
COURTNEY  MORAN, ATTORNEY,  EARTHLAW  LLC, PORTLAND,  OREGON                                                                    
(via teleconference), testified in  support of the bill. She                                                                    
related  that  she  was  an  industrial  hemp  attorney  and                                                                    
advised  the   bill's  sponsors  and  state's   Division  of                                                                    
Agriculture  on how  to design  a regulatory  framework that                                                                    
would  support  a  sustainable industrial  hemp  program  in                                                                    
compliance  with federal  law.   She hoped  the bill  passed                                                                    
unanimously from committee.                                                                                                     
                                                                                                                                
Representative Guttenberg  indicated that an issue  had been                                                                    
raised  about  the  legal  distance between  a  hemp  and  a                                                                    
marijuana farm.  He asked who administered  control over the                                                                    
issue  in  other  jurisdictions.  Ms.  Moran  answered  that                                                                    
Oregon  did  not  currently   have  any  specific  isolation                                                                    
designations. She  detailed that farmers were  encouraged to                                                                    
plant  only  female plants  as  a  prevention to  any  cross                                                                    
pollination. Oregon  encouraged farmers  to talk  with their                                                                    
neighbors  to  limit  the  risk as  much  as  possible.  She                                                                    
suggested the  Canadian system  as a  model for  Alaska. She                                                                    
delineated that Canada had a  certified seed program and the                                                                    
minimum  isolation distance  was 5  kilometers (3.1  miles).                                                                    
She  qualified  that  specific  guidelines  for  Alaska  was                                                                    
necessary  to accommodate  variables  based on  the time  of                                                                    
planting  and   pollinating,  the  geographic   region,  and                                                                    
climate.                                                                                                                        
                                                                                                                                
2:55:07 PM                                                                                                                    
                                                                                                                                
REGINA   MANTEUFEL,  EXECUTIVE   DIRECTOR,  BACK   TO  WORK,                                                                    
ANCHORAGE (via  teleconference), testified  in favor  of the                                                                    
bill. She was currently healing  from stage IV breast cancer                                                                    
and  believed CBD  oil was  assisting in  her recovery.  She                                                                    
listed the health  benefits of CBD oil, juice  from the hemp                                                                    
leaves, and hemp  powder and shared the methods  she used to                                                                    
intake hemp products.  She mentioned that she  was the owner                                                                    
of Regina's Hotel in the  Fairview neighborhood of Anchorage                                                                    
as  well as  the  Executive  Director of  the  Back to  Work                                                                    
Network. She  believed that her clients  and customers would                                                                    
benefit from  taking hemp products  for health.  She related                                                                    
antidotes  and  made  suggestions from  personal  experience                                                                    
regarding the use of hemp products as health supplements.                                                                       
                                                                                                                                
Vice-Chair Gara  was glad Ms.  Manteufel was  recovering and                                                                    
noted his support for the bill.                                                                                                 
                                                                                                                                
3:01:49 PM                                                                                                                    
                                                                                                                                
STEVE ALBERS,  KENAI SOIL  AND WATER  CONSERVATION DISTRICT,                                                                    
KENAI  (via teleconference),  testified  in  support of  the                                                                    
bill. He had researched  the numerous benefits of industrial                                                                    
hemp and endorsed the legislation.                                                                                              
                                                                                                                                
3:02:32 PM                                                                                                                    
                                                                                                                                
Representative  Guttenberg asked  whether the  Department of                                                                    
Commerce,  Community and  Economic  Development (DCCED)  was                                                                    
satisfied  with  DNR   regulations  regarding  the  distance                                                                    
between an industrial hemp and legal marijuana farm.                                                                            
                                                                                                                                
ERIKA  MCCONNELL, DIRECTOR,  ALCOHOL  AND MARIJUANA  CONTROL                                                                    
OFFICE,  DEPARTMENT  OF  COMMERCE,  COMMUNITY  AND  ECONOMIC                                                                    
DEVELOPMENT  (via   teleconference),  felt  that   the  bill                                                                    
"adequately addressed" the  regulatory issues. She indicated                                                                    
that  the Division  of Agriculture  was tasked  with writing                                                                    
the regulations  regarding industrial hemp  farms, including                                                                    
the  distance  issue. She  assured  the  committee that  the                                                                    
Marijuana Control  Board would  "pay close attention  to the                                                                    
regulation's"  development. In  addition, provisions  in the                                                                    
legislation  required   division  communications   with  the                                                                    
board.                                                                                                                          
                                                                                                                                
3:05:07 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:26:44 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Foster CLOSED public testimony.                                                                                        
                                                                                                                                
Representative  Kawasaki  referred   to  provisions  in  the                                                                    
legislation  requiring  that  the fees  for  application  or                                                                    
registration equaled  regulatory costs. He  wondered whether                                                                    
estimates for the regulatory costs were known.                                                                                  
                                                                                                                                
BUDDY  WHITT, STAFF,  SENATOR SHELLEY  HUGHES, deferred  the                                                                    
question to the Department of Natural Resources.                                                                                
                                                                                                                                
Representative Kawasaki  indicated that he would  obtain the                                                                    
answer at a later time.                                                                                                         
                                                                                                                                
Co-Chair Foster  MOVED to  ADOPT Amendment  1, 30-LS0173\E.1                                                                    
(Bruce, 5/3/17) (copy on file):                                                                                                 
                                                                                                                                
Page 1, line 3, following "marijuana;":                                                                                         
                                                                                                                                
     Insert "providing that cannabidiol oil is not included                                                                     
     in the definition of 'hashish oil';"                                                                                       
                                                                                                                                
     Page 5, line 25:                                                                                                           
     Delete ", but do not include cannabidiol oil"                                                                              
                                                                                                                                
     Page 6, following line 23:                                                                                                 
     Insert new bill sections to read:                                                                                          
                                                                                                                                
     "* Sec. 6. AS 11.71.900(11) is amended to read:                                                                            
     (11) "hashish oil"   means   the   viscous liquid                                                                          
     concentrate    of  tetrahydrocannabinols  extracted                                                                        
     from the plant (genus) Cannabis, but does not                                                                              
     include cannabidiol oil;                                                                                                   
     * Sec. 7. AS 11.71.900 is amended by adding a new                                                                          
     paragraph to read:                                                                                                         
     (31)  "cannabidiol oil" means the viscous liquid                                                                           
     concentrate of cannabidiol extracted from the plant                                                                        
    (genus)   Cannabis   containing   not  more   than   0.3                                                                    
     percent delta-9 tetrahydrocannabinol;"                                                                                     
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
Co-Chair  Foster  explained  that  the  amendment  had  been                                                                    
brought  to  his attention  by  the  Department of  Law.  He                                                                    
detailed   that   the  definition   of   hash   oil  in   AS                                                                    
11.71.900(11)  had  not  been   amended  and  would  include                                                                    
cannabidiol oil (CBD) therefore,  CBD would still fall under                                                                    
the  definition of  hashish oil  in the  criminal code.  The                                                                    
amendment, if  adopted, required the definition  of hash oil                                                                    
in  statute to  be redefined  and necessitated  a Concurrent                                                                    
Resolution due to triggering a title change in the bill.                                                                        
                                                                                                                                
3:30:10 PM                                                                                                                    
                                                                                                                                
Representative  Kawasaki asked  for  the  Department of  Law                                                                    
(DOL) to address the difference  between the CBD oil and the                                                                    
recent confiscation  by the state  of cannabidiol  oils. Mr.                                                                    
Whitt delineated that  the section was added  in response to                                                                    
concerns  that a  method of  concentrating large  amounts of                                                                    
industrial   hemp  to   create  a   THC  product   would  be                                                                    
discovered. He  reminded the committee that  industrial hemp                                                                    
contained    0.3    percent     or    below    of    delta-9                                                                    
tetrahydrocannabinol  (THC).   He  related  that   hash  oil                                                                    
contained the "psycho addictive"  elements of marijuana. Due                                                                    
to the current legal definitions  of hashish oil CBD oil was                                                                    
illegal   in  the   state.   He   acknowledged  that   three                                                                    
confiscations  of CBD  oil took  place  since January  2017,                                                                    
which was a  costly and wasteful endeavor since  CBD oil had                                                                    
no psycho addictive effects. The  amendment ensured that CBD                                                                    
oil was removed from the criminal statute.                                                                                      
                                                                                                                                
Representative   Guttenberg  referred   to  earlier   public                                                                    
testimony regarding  extracting 55 gallons of  hemp oil from                                                                    
an  acre  of  hemp.  He  asked  whether  the  amendment  was                                                                    
designed  to  prevent  the ability  to  concentrate  the  55                                                                    
gallons down to one ounce of  hash oil. Mr. Whitt replied in                                                                    
the  affirmative. Additionally,  he spoke  to the  desire to                                                                    
prevent creating an illegal product out of a legal product.                                                                     
Co-Chair  Seaton  surmised  that  the  percentage  over  0.3                                                                    
percent  was the  part  that made  the  product change  from                                                                    
cannabidoil  to  hashish  oil. Mr.  Whitt  answered  in  the                                                                    
affirmative.  He elaborated  that the  goal of  SB 6  was to                                                                    
create a  program that produced  products that  excluded the                                                                    
possibility of any associated criminal activity.                                                                                
                                                                                                                                
3:36:39 PM                                                                                                                    
                                                                                                                                
Representative  Guttenberg  wondered  at  what  point  -  if                                                                    
someone  had  a 55  gallon  drum  of  hemp oil,  they  could                                                                    
legally turn it  into hash oil. He asked if  there was a way                                                                    
to legally go above 0.3 percent with industrial hemp.                                                                           
                                                                                                                                
KACI   SCHROEDER,  ASSISTANT   ATTORNEY  GENERAL,   CRIMINAL                                                                    
DIVISION, DEPARTMENT OF  LAW, offered that she  did not know                                                                    
the science behind the issue  and whether it was possible to                                                                    
produce hash  oil from CBD oil.  However, producing anything                                                                    
above the 0.3 percent threshold was illegal.                                                                                    
                                                                                                                                
Representative Wilson WITHDREW her OBJECTION.                                                                                   
                                                                                                                                
There being NO OBJECTION, Amendment 1 was ADOPTED.                                                                              
                                                                                                                                
SB  6   was  HEARD  and   HELD  in  committee   for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
Co-Chair  Foster reviewed  the  schedule  for the  following                                                                    
day.                                                                                                                            
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
3:39:59 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 3:39 p.m.                                                                                          
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
SB 28 LOS Petersburg Economic Development Council 1.26.17.pdf HFIN 5/12/2017 1:30:00 PM
SB 28
HJR23 Additional Documents-Ak Perm Fund financial history and projections 5.9.17.pdf HFIN 5/12/2017 1:30:00 PM
HJR 23
HJR23 Additional Documents-Presentation AK Perm Fund Corp 5.9.17.pdf HFIN 5/12/2017 1:30:00 PM
HJR 23
HJR23 Sponsor Statement.pdf HFIN 5/12/2017 1:30:00 PM
HJR 23
HJR23 Supporting Document-APRN - PFD cuts 5.9.17.pdf HFIN 5/12/2017 1:30:00 PM
HJR 23
HJR23 Supporting Document-ISER How PFDs reduce poverty 5.9.17.pdf HFIN 5/12/2017 1:30:00 PM
HJR 23
HJR23 Supporting Document-Leg Research Effect of PFD Reductions 5.9.17.pdf HFIN 5/12/2017 1:30:00 PM
HJR 23
SB 6 - Amendment 5.12.17.pdf HFIN 5/12/2017 1:30:00 PM
SB 6
SB6_Support_051217.pdf HFIN 5/12/2017 1:30:00 PM
SB 6
HB25_Support_051217.pdf HFIN 5/12/2017 1:30:00 PM
HB 25