Legislature(2015 - 2016)BARNES 124

03/27/2015 03:15 PM LABOR & COMMERCE

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Audio Topic
03:22:38 PM Start
03:22:52 PM HB123
05:00:36 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 123 ESTABLISH MARIJUANA CONTROL BOARD TELECONFERENCED
Moved CSHB 123(L&C) Out of Committee
                    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