Legislature(2017 - 2018)HOUSE FINANCE 519
05/12/2017 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB25 | |
| SB28 | |
| SB6 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 6 | TELECONFERENCED | |
| += | SB 28 | TELECONFERENCED | |
| += | SB 107 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| *+ | HJR 23 | TELECONFERENCED | |
| += | HB 25 | TELECONFERENCED | |
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"
Insert "sec. 6"
Page 7, line 1:
Delete "sec. 4
Insert "sec. 6"
Page 7, line 4:
Delete "sec. 4"
Insert "sec. 6"
Page 7, line 7:
Delete "sec. 4"
Insert "sec. 6"
Page 7, line 9:
Delete "sec. 5"
Insert "sec. 7"
Page 7, line 10:
Delete "sec. 4"
Insert "sec. 6"
Page 7, line 12:
Delete "sec. 4"
Insert "sec. 6"
Page 7, line 14:
Delete "sees. 5 and 6"
Insert "sees. 7 and 8"
Page 7, line 15:
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 |