Legislature(2015 - 2016)BARNES 124
03/27/2015 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB123 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 123 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 27, 2015
3:22 p.m.
MEMBERS PRESENT
Representative Kurt Olson, Chair
Representative Shelley Hughes, Vice Chair
Representative Jim Colver
Representative Gabrielle LeDoux
Representative Cathy Tilton
Representative Andy Josephson
Representative Sam Kito
MEMBERS ABSENT
Representative Mike Chenault (alternate)
COMMITTEE CALENDAR
HOUSE BILL NO. 123
"An Act establishing the Marijuana Control Board; relating to
the powers and duties of the Marijuana Control Board; relating
to the appointment, removal, and duties of the director of the
Marijuana Control Board; relating to the Alcoholic Beverage
Control Board; and providing for an effective date."
- MOVED CSHB 123(L&C) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 123
SHORT TITLE: ESTABLISH MARIJUANA CONTROL BOARD
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
02/23/15 (H) READ THE FIRST TIME - REFERRALS
02/23/15 (H) L&C, JUD, FIN
03/04/15 (H) L&C AT 3:15 PM BARNES 124
03/04/15 (H) Heard & Held
03/04/15 (H) MINUTE(L&C)
03/11/15 (H) L&C AT 3:15 PM BARNES 124
03/11/15 (H) Heard & Held
03/11/15 (H) MINUTE(L&C)
03/16/15 (H) L&C AT 3:15 PM BARNES 124
03/16/15 (H) Heard & Held
03/16/15 (H) MINUTE(L&C)
03/20/15 (H) L&C AT 3:15 PM BARNES 124
03/20/15 (H) Heard & Held
03/20/15 (H) MINUTE(L&C)
03/23/15 (H) JUD AT 1:00 PM CAPITOL 120
03/23/15 (H) Scheduled but Not Heard
03/23/15 (H) L&C AT 3:15 PM BARNES 124
03/23/15 (H) Heard & Held
03/23/15 (H) MINUTE(L&C)
03/27/15 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
KONRAD JACKSON, Staff
Representative Kurt Olson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Explained amendments to HB 123 on behalf of
the House Labor and Commerce Standing Committee, Representative
Kurt Olson, Chair.
CYNTHIA FRANKLIN, Executive Director
Alcoholic Beverage Control Board (ABC Board)
Department of Commerce, Community & Economic Development (DCCED)
Anchorage, Alaska
POSITION STATEMENT: Testified and answered questions during the
discussion of HB 123.
KATHLEEN FREDERICK
Chief Administrative Law Judge
Office of Administrative Hearings (OAH)
Anchorage, Alaska
POSITION STATEMENT: Testified with respect to the fiscal note
for HB 123.
ACTION NARRATIVE
3:22:38 PM
CHAIR KURT OLSON called the House Labor and Commerce Standing
Committee meeting to order at 3:22 p.m. Representatives LeDoux,
Tilton, Kito, Colver, Josephson, Hughes, and Olson were present
at the call to order.
HB 123-ESTABLISH MARIJUANA CONTROL BOARD
3:22:52 PM
CHAIR OLSON announced that the only order of business would be
HOUSE BILL NO. 123, "An Act establishing the Marijuana Control
Board; relating to the powers and duties of the Marijuana
Control Board; relating to the appointment, removal, and duties
of the director of the Marijuana Control Board; relating to the
Alcoholic Beverage Control Board; and providing for an effective
date."
3:23:12 PM
CHAIR OLSON directed attention to three pending amendments. He
stated that an objection to adopting the proposed committee
substitute (CS) for HB 123 was pending.
3:23:48 PM
REPRESENTATIVE HUGHES removed her objection. There being no
further objection, Version W was before the committee.
3:24:12 PM
REPRESENTATIVE HUGHES moved to adopt Amendment 1, labeled,
29GH1110\W.1, Martin, 3/17/15, which read:
Page 5, line 20, following "chapter":
Insert "and AS 11.71"
Page 7, following line 15:
Insert a new subsection to read:
"(c) The Alcoholic Beverage Control Board may
carry out the functions of the board under AS 17.38 as
they existed on the day before the effective date of
this Act and continue and complete the process for
adoption of regulations proposed but not adopted
before the effective date of this Act until members of
the Marijuana Control Board are appointed by the
governor under AS 17.38.080(b), as repealed and
reenacted by sec. 2 of this Act."
Page 5, line 20, following "chapter":
Insert "and AS 11.71"
CHAIR OLSON objected for the purpose of discussion.
3:24:35 PM
KONRAD JACKSON, Staff, Representative Kurt Olson, Alaska State
Legislature, on behalf of the committee, stated Amendment 1
would make two changes to the bill. Amendment 1 would add "AS
11.71" to page 5, line 20, to allow for prosecution of
controlled substance statutes. On page 7, subsection (c) would
add language to allow the Alcoholic Beverage Control Board (ABC
Board) to carry out the functions of the proposed Marijuana
Control Board (MCB) to avoid a gap in service prior to the new
board being established.
3:26:04 PM
REPRESENTATIVE LEDOUX asked for further clarification of the
reason this was needed since the initiative indicated the
Alcoholic Beverage Control Board (ABC Board) will adopt
regulations.
MR. JACKSON said she was absolutely correct; however, assuming
that HB 123 passes the legislature, the ABC Board's authority
will cease and the Marijuana Control Board (MCB) will gain the
authority. In further response to Representative LeDoux, he
explained that Amendment 1 would add AS 11.71, controlled
substances to allow for prosecutions to occur.
3:29:03 PM
CYNTHIA FRANKLIN, Executive Director, Alcoholic Beverage Control
Board (ABC Board), Department of Commerce, Community & Economic
Development (DCCED), stated the provisions for enforcement of
the criminally punishable provisions of this chapter were
written into HB 123 at the time when the crime bill contemplated
criminally punishable offenses for marijuana crimes in AS 17.
These provisions would be similar to the criminally punishable
offenses for alcohol crimes reflected in [AS] 04. However, the
crime bill reverted back to a structure in which the marijuana
offenses remain in the controlled substances act. She described
the lawful activities around commercial marijuana as a "carve
out" to the marijuana crimes. She said it was imperative that
the enforcement staff of the boards have full authority to
enforcement marijuana crimes. Without this provision, the
enforcement officer would be limited to enforcing rules for
licensees, but it would not have authority for those violating
the law by starting commercial marijuana activities without the
appropriate licenses. She emphasized that it's important that
enforcement officers have authority over anyone who purports to
start a commercial establishment but has not obtained the
license to do so.
3:31:04 PM
REPRESENTATIVE LEDOUX asked what would happen if the direction
changed again.
MS. FRANKLIN said the language being added to this bill provides
specific authority to enforce marijuana crimes in AS 11.71. She
suggested that if the crime bill, HB 79/SB 30, reverted to one
of its previous forms and marijuana was removed from the
Controlled Substances Act, this language would not harm
anything. She suggested that it would provide extra authority
for enforcement officers to enforce Controlled Substances Act
crimes. Further, enforcement officers were given special
commissions by the Department of Public Safety's commissioner
that typically match the statutory authority and purpose. No
matter which bill passes, this attempts to ensure that the
officers have the necessary authority to work enforcement
against the marijuana black market. She offered her belief that
this will be fine, that it will be great if the crimes are as
easily understandable as the crimes surrounding alcohol are.
She explained that the Alcoholic Beverage Control Board (ABC
Board) released a "preliminary considerations" document on
February 12, 2015, specifying that the board supports having all
the crimes listed in one Act. The ABC Board would favor that
approach; however, the language in Amendment 1 will not cause
problems.
3:33:57 PM
REPRESENTATIVE COLVER expressed concern that the language in
Amendment 1 that adds AS 11.71 was too broad. He said that this
would turn the board and its enforcement officer into a quasi-
law enforcement agency with "super powers." Further, he was
concerned about the cost and would much prefer to have troopers
and other law enforcement pursue crimes. He suggested that the
agency could do the investigation, but allow police officers to
pursue the crimes. He suggested that the committee delete this
portion of Amendment 1 and allow the House Judiciary Standing
Committee an opportunity to consider it. He was not sure that
it would be relevant as the bill moves to different committees.
3:35:28 PM
REPRESENTATIVE COLVER made a motion to adopt Amendment 1 to
Amendment 1 to strike "Insert "and AS 11.71".
CHAIR OLSON suggested the next bill moves to the House Judiciary
Standing Committee.
3:36:03 PM
REPRESENTATIVE LEDOUX clarified that a vote to support Amendment
1 doesn't mean the House Judiciary Standing Committee will not
reach a different conclusion.
3:36:31 PM
REPRESENTATIVE JOSEPHSON offered his recollection that the
purpose of Amendment 1 was to have parity and a parallel between
the alcohol provisions and enforcement powers for marijuana
control.
MS. FRANKLIN answered yes.
3:37:28 PM
REPRESENTATIVE JOSEPHSON recalled one approach was to take the
Alcoholic Beverage Control Board statutes, "scrub out" and
rebuild the framework to apply to marijuana. Another approach
would be to leave everything in place, and "carve out" what the
initiative called for. He asked whether that was basically
correct.
MS. FRANKLIN answered rather than use the rather the term "scrub
out" she suggested that SB 30/HB 79 was identifying every
section where alcohol appears and adding "marijuana" so a
significant number of titles were affected. Further, it removed
marijuana from the controlled substances and instead the
proposed statutes treated marijuana as a regulated substance.
This parallels the regulation of alcohol, such that the crimes
around alcohol are in AS 04, as well as having regulations and
commercialized activities. She recalled that Representative
LeDoux referred to a previous version of SB 30/HB 79 that
creates a series of crimes in AS 17 that identify misconduct
involving marijuana. She reiterated that the Alcoholic Beverage
Control Board (ABC Board) had expressed its approval for the
foregoing approach.
3:39:07 PM
REPRESENTATIVE JOSEPHSON referred to page 5, line 18, and said
that whatever was left in terms of marijuana criminality would
be enforceable by the Alcoholic Beverage Control Board (ABC
Board). He offered his belief that including AS 11.71 will mean
that the legislature is adopting the controlled substance
language rather than regulated language. He asked whether this
would fall more on the criminal side than the non-criminal
infraction side.
MS. FRANKLIN responded that there are many crimes related to
alcohol that are misdemeanors and felonies, which are located in
AS 04. When the ABC Board's enforcement officers, who are peace
officers commissioned by DPS, are enforcing crimes, they are
acting as law enforcement officers. This helps to ensure that
no commercial alcohol establishments crop up that are not
regulated by the board. She stated that AS 17.38 [the
initiative] as passed by the voters, it grants the Alcoholic
Beverage Control Board (ABC Board) or Marijuana Control Board
(MCB) the authority to make rules, but it doesn't grant any
enforcement powers. She said the aforementioned language
doesn't reference AS 04, but the language is "lifted" directly
from AS 04, and it attempts to mirror the enforcement powers for
marijuana that the ABC Board has for alcohol.
MS. FRANKLIN elaborated that the reason to request this language
was because the board could only enforce rules on those licensed
by the board, but not for businesses who avoid licensure and
simply open a business. She advised that the board already
receives calls on operating marijuana businesses, but the ABC
Board does not have the ability to have officers investigate
potential violations of marijuana per AS 17.38. However, the
ABC Board has the authority to make the rules. Therefore
Amendment 1 attempts to acknowledge that not all crimes related
to marijuana pertain to AS 17. In fact, in CSSB 30(FIN) none of
the crimes around marijuana were in AS 17, but pertained to
civil penalties for licensee violations, or those already
licensed not following the rules, yet none of the crimes for
opening a business without a license would be reflected in AS
17. Therefore the enforcement officers who may be the logical
first choice to begin an investigation would not have the
statutory authority to do so.
3:43:02 PM
The committee took an at-ease from 3:43 p.m. to 3:50 p.m.
3:50:18 PM
MR. JACKSON read Conceptual Amendment 1 to Amendment 1 offered
by Representative Colver, to delete lines 1 and 2 from Amendment
1.
3:50:40 PM
CHAIR OLSON asked for the ABC Board's comments.
MS. FRANKLIN responded that the absence of the ability to
enforce crime related to marijuana in the Controlled Substances
Act in AS 11.71 could result in board enforcement that cannot
effectively control and regulate the black market. She said
this was one of provisions in the mission statement in
implementing the voter's initiative, which is to limit
commercial marijuana operations. She offered that the board
would be concerned that if there were not any [references"] in
AS 17, it will not give enforcement officers the ability to shut
down black market operators.
3:52:09 PM
CHAIR OLSON related his understanding that [Conceptual]
Amendment to Amendment 1 would gut the amendment and the bill.
He asked whether that would be an oversimplification.
REPRESENTATIVE COLVER interjected yes.
MS. FRANKLIN answered that the amendment would severely curtail
the ability of the board to effectively regulate the [marijuana]
substance and would makes the law completely different from the
way that alcohol is regulated by not allowing enforcement of
illegal operators.
3:52:38 PM
REPRESENTATIVE LEDOUX said the committee does not know the final
provisions of the marijuana crime bill [SB 30/HB 79] in its
final permutation. She suggested that at some point [language
might be added to HB 123 that allows] enforcement for criminally
punishable provisions of this chapter or of any other chapter
which criminalizes marijuana. She asked what effect the
foregoing language would do.
MS. FRANKLIN answered that would have the same effect as
referencing AS 11.71.
3:53:37 PM
REPRESENTATIVE LEDOUX suggested it may have the same effect, but
it would not allow the board to enforce against anything else.
MS. FRANKLIN agreed it would limit enforcement to marijuana
crimes.
3:54:00 PM
REPRESENTATIVE LEDOUX asked whether it makes any difference if a
person is charged with a crime if marijuana was listed as a
controlled substance or not, as long as crimes are associated
with the activity. In other words, the language of the
initiative that states "notwithstanding" anything else, but
"else" could amended so that marijuana is still considered a
controlled substance but the penalties are reduced or
eliminated. She suggested that alcohol was regulated yet the
agency is called the Alcoholic Beverage Control Board (ABC
Board).
MS. FRANKLIN answered that it does make a big difference. She
stated that as a controlled substance, the substance itself is
declared to be illegal. The Controlled Substances Act defines
illegal substances in Alaska; however, regulated substance with
crimes defines the conduct around the substance that illegal.
For example, alcohol is not considered an illegal substance, but
it is illegal to furnish alcohol to a minor. Thus the crime is
the conduct surrounding the substance, not the substance itself.
She offered her belief that by taking marijuana out of the
Controlled Substances Act, it becomes a regulated substance like
alcohol and it ceases to be an illegal substance.
MS. FRANKLIN stated that the practical differences were not in
the person charged with the crime, since what matters most to
individuals is the level of crime the person is being charged
with. By reducing the penalties, it would have the same effect
for the person charged; however, what makes it difficult is to
have one substance, marijuana, be controlled and regulated, and
legal and illegal, since it will create confusion for law
enforcement and the public in terms of what is allowed regarding
the substance. For example, not everyone knows what is illegal,
but people know they can't do whatever they want to do. The
crimes for alcohol are found in one place and the Alcoholic
Beverage Control Board (ABC Board) and its staff become de facto
experts on what is and isn't allowed with regard to alcohol.
She emphasized this was the key to keeping the public safe, such
as keeping marijuana out of the hands of minors and to keep the
public informed on rules pertaining to alcohol. The ABC Board
and staff can help educate everyone else in the state.
Certainly she appreciated the sentiment that it would be nice
for law enforcement officers to lead the charge on marijuana,
but the simple fact is that those law enforcement officers have
rapes, murders and domestic violence crimes to investigate and
pursue and must develop priorities, but enforcement of the rules
for marijuana would be the priority of Marijuana Control Board
(MCB).
3:58:51 PM
REPRESENTATIVE LEDOUX asked whether the ABC Board has authority
to make criminal laws with respect to alcohol or if it only
enforces criminal laws that the legislature has enacted.
MS. FRANKLIN answered that the crimes are defined in statutes
and the regulations help interpret the conduct around licensed
activities. She said that crimes for alcohol apply to licensees
and some to unlicensed persons, under AS 04.16.051, which
pertains to furnishing alcohol to a minor by a person who is not
licensed. The ABC enforcement officers have the authority to
write tickets to meet the mission of preventing diversion of
alcohol to underage persons. She reiterated that the authority
to cite unlicensed activities was missing in AS 17.38.
4:00:38 PM
REPRESENTATIVE JOSEPHSON said there are felonies and
misdemeanors in AS 04. He asked for further clarification on
whether she was saying that the committee should be comfortable
with a comparable subsection in HB 123 that references AS 11.71
due to the parallel.
MS. FRANKLIN answered yes; that the board would be working in AS
11.71 to enforce marijuana in the black market whereas in AS 04
all the crimes related to alcohol are located within the same
title.
4:01:47 PM
REPRESENTATIVE JOSEPHSON asked whether Amendment 1 would open
the door to controlled language under AS 11.71; yet he
understood that the ABC board would prefer marijuana not be both
a controlled substance and a regulated substance.
MS. FRANKLIN answered that the portion of Amendment 1 related to
AS 11.71 was in response to the concern that the session would
end with marijuana crimes only being included in AS 11.71. She
said she was equally comfortable with Representative LeDoux's
language that the board would have enforcement authority over
any criminally punishable provisions of this chapter or any
other criminally punishable provisions of crimes involving
marijuana. This would be different than the language in
Amendment 1 adding the reference to AS 11.71, since that statute
refers to the entire Controlled Substances Act. The idea was
not to expand the board's authority over any other substances,
but to encompass all marijuana crimes in the board's authority
so when marijuana activity is encountered that the enforcement
staff have the ability work on that activity. She offered her
belief that inserting AS 11.71 language is the response to
ensure that the authority exists to diminish the market for
marijuana and does not represent a preference.
4:03:59 PM
REPRESENTATIVE JOSEPHSON expressed concern that referencing AS
11.71 creates flags since some things will be legal under the
initiative.
4:04:41 PM
MS. FRANKLIN shared the same concern. She related a scenario in
which HB 123 passed the legislature, but the crime bill did not.
The current statutory framework for anyone engaged in marijuana
activities but not licensed by the board would exist in AS
11.71. She reiterated that her concern was to ensure that if
the legislature creates a Marijuana Control Board (MCB), it has
enforcement authority comparable to the enforcement authority
for alcohol. The purpose of Amendment 1 was to help accomplish
that, but she understood the concern about overreach; however,
if the Marijuana Control Board (MCB)'s enforcement activities
are limited to AS 17.38 and no crimes are listed in AS 17, then
questions arise as to whether the enforcement officers have
authority to enforce any marijuana crimes.
4:06:40 PM
KATHLEEN FREDERICK, Chief Administrative Law Judge, Office of
Administrative Hearings (OAH), discussed the Office of
Administrative Hearings' (OAH) involvement. She stated that one
of the formulations was for OAH to conduct hearings on licensing
denials and appeals. The OAH subsequently submitted a fiscal
note and depending upon the bill's outcome, if the OAH conducts
hearings, it charges for that service. She explained the fiscal
note was based on the current charges to the Alcoholic Beverage
Control Board (ABC Board) and an estimate of hearings based on
Washington State's experiences with its marijuana program.
CHAIR OLSON asked to return to consider [Conceptual Amendment 1
to Amendment 1.
4:07:51 PM
REPRESENTATIVE COLVER said he thought the debate was helpful to
focus in on the controlled substance under AS 11.71. He felt
the committee needed to decide the duties and function of the
board. He offered his belief that their function is to issue
licenses and enforce licensees. He asked whether this function
was so broad that the Marijuana Control Board (MCB) enforcement
officers should take on the role of another law enforcement
agency similar to a Bureau of Alcohol, Tobacco, Firearms and
Explosive. He was unsure of the costs, but he offered that the
state has a good criminal justice system in place. His
impression was that the state was replicating the ABC Board, but
in referencing the controlled substances [under AS 11.71] with
broad undefined powers, he was unsure of the breadth of the
MCB's enforcement powers. He expressed concern about how many
plants were legal for residences or if residential activity
would be investigated and prosecuted for commercial activity if
the individuals had 13 plants growing. He suggested members
should have a policy discussion to determine the role and
enforcement aspects. He suggested the House Judiciary Standing
Committee can look at these issues and the ramifications of
referencing AS 11.71, or if the approach should be to
decriminalize marijuana. He had further concerns about growing
a bigger agency that the state cannot afford and duplicating law
enforcement. He suggested that the [MCB] agency could conduct
the investigation, develop the finding of fact and have existing
law enforcement enforce the activities to avoid duplication of
services.
4:10:40 PM
CHAIR OLSON suggested it would have been helpful to have one
bill since it could evolve into a "train wreck" with only half
of the necessary bills passing this session without the other
half. He was unsure about the cohesiveness of the overall
program since several bills exist.
4:11:12 PM
REPRESENTATIVE LEDOUX offered her belief that it was appropriate
for the marijuana control board to conduct enforcement
activities similar to the ABC Board enforces alcohol laws. She
suggested that instead of referencing AS 11.71.
4:11:50 PM
CHAIR OLSON reminded members a motion was on the table.
4:12:08 PM
A roll call vote was taken. Representatives Colver and
Josephson voted in favor of Conceptual Amendment 1 to Amendment
1. Representatives Tilton, Kito, Hughes, LeDoux, and Olson
voted against it. Therefore, Conceptual Amendment to Amendment
1 failed by a vote of 2-5.
4:13:15 PM
The committee took an at-ease from 4:13 p.m. to 4:17 p.m.
4:17:54 PM
REPRESENTATIVE LEDOUX moved to adopt Conceptual Amendment 2 to
Amendment 1.
CHAIR OLSON objected for the purpose of discussion.
4:18:31 PM
REPRESENTATIVE LEDOUX explained Conceptual Amendment 2 to
Amendment 1. Since it was uncertain whether marijuana crimes
would be subject to controlled substances that instead of
referring to AS 11.71, she suggested changing the language to
"or any other chapter referencing marijuana crimes."
4:19:01 PM
CHAIR OLSON commented that it made sense to him.
MS. FRANKLIN agreed it would work better.
4:19:21 PM
CHAIR OLSON removed his objection to Conceptual Amendment 2 to
Amendment 1. There being no further objection, Conceptual
Amendment 2 to Amendment 1 was adopted.
4:19:52 PM
CHAIR OLSON stated that Conceptual Amendment 1 was before the
committee.
4:20:09 PM
REPRESENTATIVE COLVER suggested that additional language could
be added in the House Judiciary Standing Committee. He
suggested adding "under the jurisdiction of this board" to the
language "or any other chapter referencing marijuana crimes"
[just adopted as Conceptual Amendment 1 to Amendment 1].
REPRESENTATIVE LEDOUX responded that [Conceptual Amendment 1 to
Amendment 1] was crafted "on the fly" and the bill will be
considered in the next committee of referral.
4:20:44 PM
CHAIR OLSON removed his objection to Amendment 1.
There being no further objection, Amendment 1, as amended, was
adopted.
4:21:04 PM
REPRESENTATIVE HUGHES moved to adopt Amendment 2, labeled 29-
GH1110\W.2, Martin, 3/17/15, which read:
Page 3, line 21:
Delete "an area of human habitation"
Insert "a community"
CHAIR OLSON objected for the purpose of discussion.
4:21:23 PM
MR. JACKSON explained Amendment 2 was drafted in response to
questions people had on the definition of "an area of human
habitation" and replaced it with "a community" since that seemed
to be more appropriate.
4:22:19 PM
REPRESENTATIVE LEDOUX asked for clarification on the definition
of rural and whether a city of 6,000 or less that falls within a
borough with more than 6,000 would be considered rural.
MS. FRANKLIN answered that under alcohol regulations a
municipality or established village that falls within the
borough would be considered separate for the purpose of defining
population. She said a community under 6,000 with a boundary
would be considered rural.
4:24:22 PM
REPRESENTATIVE LEDOUX asked whether she was aware of any such
communities.
MS. FRANKLIN answered that she did not immediately recall any,
but it doesn't mean these communities don't exist, since she
hasn't been the executive director for a long time. She was
aware of established villages within the boroughs and provisions
in [AS] 4 that allow the community to draw the boundary around
itself to be an established village for purposes of [alcohol
control] under Title 4.
4:25:19 PM
CHAIR OLSON suggested that the City of Houston would apply.
REPRESENTATIVE KITO suggested that the City of Palmer falls
within the Mat-Su Borough, and he was unsure if it constitutes a
rural community. In addition some communities within the Lake
and Peninsula Borough are smaller than 6,000 would be considered
rural.
CHAIR OLSON suggested that the topic could be addressed in the
next committee of referral.
REPRESENTATIVE HUGHES expressed her concern about the
communities that are considered as rural and hoped that the
House Judiciary Standing Committee will further consider it to
fulfill the intent of "rural" and other statutes may address it.
She suggested that the City of Houston and Palmer may be close
to those figures. She reiterated that the definition should be
fixed.
4:26:59 PM
CHAIR OLSON removed his objection. There being no further
objection, Amendment 2 was adopted.
4:27:24 PM
REPRESENTATIVE JOSEPHSON moved to adopt Conceptual Amendment 3
labeled 29-GH1110\W.3, Martin, 3/20/15, which read as follows:
Page 7, lines 3 - 5:
Delete "instead appoint two persons with
experience in the alcohol retail or wholesale
business. The governor shall appoint the two
individuals to serve the term of two years under
(a)(2) of this section"
Insert "consider a person's
(1) understanding of the marijuana industry;
(2) business experience; and
(3) background in regulatory compliance or
rulemaking"
4:27:34 PM
REPRESENTATIVE JOSEPHSON began by stating that he was a "no"
vote on the marijuana initiative. He also told voters he would
be voting against it and he would probably vote no again. He
expressed concern with Section 8 [pages 6-7] since it preempts
people knowledgeable about the industry to serve on the board.
He was unsure that the skills derived from working in the
alcohol industry provided skills compatible to the marijuana
industry. Section 8, Version W, turns the Marijuana Control
Board (MCB) into a second ABC Board by requiring the two
industry seats be filled by people from the alcohol industry.
He suggested that this will undermine the entire purpose for
creating a separate MCB. Some would argue that this will be
cured in two to three years, but that cure will happen after
regulations are written, which he found to be problematic.
REPRESENTATIVE JOSEPHSON suggested this would be the only
industry board in Alaska in which no member is required to have
any experience or understanding of the industry, in which some
say will be a competing industry. In addition, not only are the
industries very different from one another, but page 4 states
that "The board shall control the cultivation, manufacture,
possession ...." He suggested that these powers and duties
speak to the need to understand the value added portions. He
found the concept of edibles was something he was unsure he
grasped. He argued that there was nothing inherently valuable
in having experience with the alcohol industry. For example, he
suggested a person could have experience with the alcohol
industry without having any relevant skills for helping develop
good industry regulations. In fact, they could have worked on a
loading dock or wholesale and might not understand anything
about what's happening "on the ground" to customers or how to
keep minors safe. He suggested that Section 8 will limit the
board with the appointments to the Marijuana Control Board
(MCB). The central question was what criteria to use for board
members to ensure they are best suited to assist in the
regulatory process during the formative period since Alaska does
not currently have a legitimate marijuana industry.
4:31:03 PM
REPRESENTATIVE JOSEPHSON turned to Amendment 3 and said that
this amendment has a cumulative test, which would evaluate all
three criteria, including some understanding of the marijuana
industry, business expertise, and a background in regulatory
compliance or rulemaking. He suggested that adding the criteria
would help ensure that the Marijuana Control Board (MCB) will
not consist of members with broad experience in the alcohol
industry. He suggested that Amendment 3 would address the core
concerns, including that someone would have a regulatory
background, it could expand the pool of potential appointees,
and it would also allow the governor to choose someone from the
alcohol industry. It would also give flexibility in appointment
process. He acknowledged that people could learn about the
industry through travel, reading, and the Internet without being
lawbreakers or residents of Colorado or Washington.
4:32:54 PM
REPRESENTATIVE COLVER suggested that everyone has been
struggling with the qualifications for the proposed MCB. He
agreed with the intent. He suggested inserting "agriculture"
after industry as another qualification.
4:33:29 PM
REPRESENTATIVE LEDOUX shared Representative Josephson's
concerns. She acknowledged that the next committee will be
seriously considering this bill and the issues raised.
4:33:58 PM
The committee took an at-ease from 4:33 p.m. to 4:35 p.m.
4:35:40 PM
REPRESENTATIVE COLVER moved Conceptual Amendment 1 to Amendment
3, [labeled Amendment to Amendment, Version W.3], which read,
On line 6 after "marijuana" insert "or agriculture."
CHAIR OLSON objected for purpose of discussion.
REPRESENTATIVE COLVER referred to the qualifications in (a)(2)
of HB 123. He further referred to Amendment 3, lines 6-8, which
read:
(1) understanding of the marijuana industry;
(2) business experience; and
(3) background in regulatory compliance or rulemaking"
REPRESENTATIVE COLVER stated that Conceptual Amendment 1 to
Amendment 3, on line 6, [paragraph] (1), following "marijuana":
insert "or agriculture".
4:36:33 PM
MS. FRANKLIN said some individuals have already identified
themselves as knowledgeable and they could be good candidates
for [the proposed MCB] based on the aforementioned
qualifications. She deferred to the committee. She understood
the concerns Representative Kito raised [earlier] and the reason
for the change in the first place; however, not everyone who has
information on this substance and has business experience is
necessarily a criminal operator. She suggested that was the
original concern.
4:37:38 PM
REPRESENTATIVE HUGHES appreciated the concern. She recalled the
Chair of the House Judiciary Standing Committee has agreed this
needs to be discussed and it needs to be vetted. She
acknowledged that someone with pharmaceutical experience or a
laboratory background might be useful. She appreciated the
importance of a regulatory background or rulemaking since this
process will be intense. She appreciated the discussion;
however, she said she would not support [Conceptual 1 Amendment]
since the House Judiciary Standing Committee Chair plans to work
on it further in the next committee of referral.
4:38:39 PM
CHAIR OLSON maintained his objection.
A roll call vote was taken. Representative Colver voted in
favor of Conceptual Amendment 1 to Amendment 3. Representatives
LeDoux, Tilton, Kito, Josephson, Hughes, and Olson voted against
it. Therefore, Conceptual Amendment 1 to Amendment 3 failed by
a vote of 1-6.
4:39:38 PM
CHAIR OLSON directed attention to Amendment 3.
REPRESENTATIVE HUGHES remarked that her earlier comments also
applied to Amendment 3.
4:40:01 PM
CHAIR OLSON added that someone truly qualified with marijuana
experience in Alaska would likely have been engaged in illegal
activities or have recently arrived from Washington or Colorado.
He suggested that some board members might be selected for other
reasons that might enhance the industry in ways the legislature
can't envision yet since most members are not knowledgeable
about the industry. He preferred to leave the board
qualifications to the next committee of referral to consider.
REPRESENTATIVE LEDOUX affirmed that the House Judiciary Standing
Committee will consider the issues. She offered her belief that
under the Ravin decision [Ravin v. State, 537 P.2d 494 (Alaska
1975)], people were allowed to grow a certain amount of
marijuana in their homes so experience in growing might not mean
the individuals were involved in felonious activities.
4:41:39 PM
CHAIR OLSON said he stood corrected, but pointed out that
growing marijuana for personal use would not be considered an
industry. In response to a question, he indicated he meant that
people may have other motives the committee wasn't aware of
since members are not familiar with the industry.
4:42:21 PM
REPRESENTATIVE JOSEPHSON, speaking to Amendment 3, stated that a
person could study Swahili in Anchorage, never having been to
East Africa and not know anything about East African culture,
but still have some value. He declared that people can learn
substantial information from books, communications, and
interactions. He suggested that members of the advocacy group
should have a powerful role in this process, which he viewed as
showing respect to the voters.
4:43:34 PM
CHAIR OLSON pointed out that within two years, there will be a
new board that will consist of individuals with a broader
experience.
4:43:54 PM
REPRESENTATIVE COLVER stated that Amendment 3 was an improvement
since it adds business experience and regulatory compliance. He
suggested that college students or people in graduate school
could be learning about the marijuana industry from states who
regulate it such as Colorado. He suggested some could be
Alaskan residents. He viewed Amendment 3 as an improvement.
4:44:50 PM
CHAIR OLSON recalled that the marijuana initiative suggested the
marijuana industry be regulated like the alcohol industry.
4:45:15 PM
REPRESENTATIVE HUGHES suggested as it goes to next committee
it's important to keep in mind how the marijuana industry could
be regulated like alcohol if the potential board members are not
familiar with how the alcohol industry is regulated so it could
be better to have someone who has been under the regulations as
part of the decision-making process.
4:45:40 PM
CHAIR OLSON recalled that several years ago the Alcoholic
Beverage Control Board (ABC Board) was under Department of
Public Safety, but was relocated to the Department of Commerce,
Community & Economic Development (DCCED) to make the agency
"more friendly."
CHAIR OLSON maintained his objection to Amendment 3, as amended.
4:46:25 PM
A roll call vote was taken. Representatives Colver and
Josephson voted in favor of Amendment 3. Representatives
Hughes, LeDoux, Tilton, Kito, and Olson voted against it.
Therefore, Amendment 3 failed by a vote of 2-5.
4:47:11 PM
CHAIR OLSON commented that he appreciated Representative
Josephson bringing the foregoing amendment forward since it has
created an interesting discussion on the issue.
4:47:28 PM
REPRESENTATIVE LEDOUX said she shared some of Representative
Josephson's concerns so she would look forward to his advice and
suggestions as this bill is considered in the next committee of
referral.
4:48:22 PM
REPRESENTATIVE LEDOUX referred to page 5, proposed AS 17.38.085,
and to the long discussion on AS 11.71. She noticed that the
board can enforce criminally-punishable laws and regulations
[page 5, lines 21-24], which read, "investigation of violations
of 23 laws against prostitution and sex trafficking described in
AS 11.66.100 - 11.66.135 24 and laws against gambling, promoting
gambling, and related offenses described in 25 AS 11.66.200 -
11.66.280." She asked for further clarification.
MS. FRANKLIN answered that the language contained in this
provision mirrored provisions in the existing Alcoholic Beverage
Control Board's (ABC Board) statutes. She explained when
enforcement officers are in the field enforcing alcohol
statutes, and are working under limited commission as previously
discussed to enforce alcohol crimes, but encounter other crimes
being committed, such as a gambling or a prostitution den, that
they can take action. Often these types of offenses occur
together. Again, this provision mirrors AS 04, related to
alcohol, as part of the enforcement effort on marijuana, to have
the authority to enforce laws for illegal operations of alcohol,
gambling, and prostitution. Although discussions were held when
this language was added to the bill, the state does not yet know
what the industry looks like or what types of illegal activities
around marijuana might consist of, she said. She acknowledged
that marijuana exists in Alaska and that illegal activities have
occurred. She related a scenario in which an illegal marijuana
club was operating and enforcement officers entered to enforce
marijuana crimes on people illegally running a marijuana club,
observed other crimes being committed specific to AS 11. She
emphasized that the marijuana enforcement officers would need to
have same ability to enforce all criminal activities occurring
in that illegal setting.
4:52:15 PM
REPRESENTATIVE LEDOUX indicated she had several questions.
First, the language doesn't seem to indicate this activity was
ancillary. Second, she related her understanding that it was
limited to the specific things in AS 11.66, but it seemed to be
broader. She read [page 5, lines 20-21], the phrase " ... other
criminally punishable laws and regulations including ...." She
offered her belief that language doesn't seem limited, but
instead that marijuana enforcement officers could enforce just
about anything. She asked whether this language parallels the
new Title 4 [AS 04], which is not yet law or existing statute.
4:53:21 PM
MS. FRANKLIN explained that this language has been current
language in AS 04 since 1980. She affirmed the law was written
in 1980, and was amended in 1999 and 2012. She acknowledged
that the language was fairly general. She reminded members that
the Alcoholic Beverage Control Board (ABC Board) consists of
five officers statewide who work on all alcoholic crimes
pertaining to the 1,875 liquor licenses. She understood the
committee's concerns that these officers will be granted broad
powers, but the practical matter is that these officers can
barely keep up with duties pertaining to the alcohol industry.
These provisions were intentionally placed in the alcohol
enforcement section to allow enforcement of other activities.
She reported significant problems exist in Anchorage involving
illegal night clubs, which are not licensed to operate, but are
essentially a black market for alcohol. When enforcement
officers enter illegal night clubs, they occasionally find
illegal gambling and prostitution operations. She suggested
that this language allows enforcement officers who are
conducting activities related to their mission to shut down
illegal alcohol operations, that they have authority to take
action on illegal gambling and prostitution.
MS. FRANKLIN indicated there was absolutely no evidence that
this broad power has been abused by the ABC Board's enforcement
officers. Instead, it was designed to prevent law enforcement
officers from ignoring illegal acts because they don't have the
authority to enforce. She emphasized that this provision was
designed to ensure that if enforcement officers are shutting
down illegal marijuana operations, and an enforcement officer
observed other activities then they will have the authority to
address that conduct.
4:56:41 PM
REPRESENTATIVE LEDOUX understood, but she wondered if the
language needs to be tightened up to address those situations in
this provision, but also in AS 04.
4:57:01 PM
REPRESENTATIVE LEDOUX, with respect to this broad language,
asked why it was necessary to discuss AS 11.71 since it seemed
as though the language "other criminally punishable laws and
regulations" should cover the enforcement.
MS. FRANKLIN answered that the reason the board asked for
specific language was to have this discussion about enforcement
authority. She spoke to the Department of Law about the
foregoing language, "other criminally punishable laws and
regulations" and while the agency could argue that it gives the
enforcement officers broader authority over all kinds of
activities, the agency really doesn't want to be in that
position, but to be in the position in which the mission was
clear and the enforcement duties are clear. She suggested that
the board would rather have an express discussion about the
expectation for enforcement duties than to rely on the foregoing
language. She agreed that even though this language has been in
statute for many years, that the enforcement officers have much
broader authority; however, she suggested that it is better for
things to be clearly defined [in statute] and to have
discussions.
4:58:56 PM
CHAIR OLSON removed his objection.
4:59:15 PM
REPRESENTATIVE HUGHES moved to report the proposed committee
substitute (CS) for HB 123, labeled 29-GH1110\W, Martin,
3/14/15, as amended, out of committee with individual
recommendations and the accompanying fiscal notes.
4:59:32 PM
REPRESENTATIVE COLVER asked to comment. He said he hoped the
House Judiciary Standing Committee would fix the loose language.
He offered his belief that this bill moves farther from
regulating marijuana like alcohol to regulating every other
crime. He suggested that the focus should be narrowed.
REPRESENTATIVE LEDOUX said that the House Judiciary Standing
Committee will be considering [law enforcement authority and
scope of duties].
There being no further objection, the CSHB 123(L&C) was reported
from the House Labor and Commerce Standing Committee.
CHAIR OLSON commented that it was the wishes of the people who
drafted the initiative that there be some regulation modeled
after the Alcoholic Beverage Control Board (ABC Board).
5:00:36 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
5:00 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB123 Supporting Documents- Written Testimony-JR Meyers-3-27-15.docx |
HL&C 3/27/2015 3:15:00 PM |
HB 123 |
| HB123 Conceptual Amendment #1 to Amendment W.3-Colver.PDF |
HL&C 3/27/2015 3:15:00 PM |
HB 123 |
| HB123 Conceptual Amendment #2 to Amendment W.1-LeDoux.PDF |
HL&C 3/27/2015 3:15:00 PM |
HB 123 |
| HB123 Conceptual Amendment #1 to Amendment W.1-Colver.PDF |
HL&C 3/27/2015 3:15:00 PM |
HB 123 |