Legislature(2015 - 2016)BARNES 124

04/14/2016 09:00 AM LABOR & COMMERCE

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Audio Topic
09:13:15 AM Start
09:13:56 AM SB158
09:46:43 AM SB165
09:52:21 AM Confirmation Hearing(s)|| Confirmation Hearing(s)|| Marijuana Control Board
10:11:06 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to 4/15/16 at 10:00 a.m. --
+= SB 165 ALCOHOL: BOARD;MINORS;MARIJUANA CHECKS TELECONFERENCED
Moved HCS CSSB 165(L&C) Out of Committee
-- Public Testimony <Time Limit May Be Set> --
+= SB 158 REAL ESTATE COMMISSION;BROKER LICENSING TELECONFERENCED
Moved HCS SB 158(L&C) Out of Committee
-- Public Testimony <Time Limit May Be Set> --
+= SB 126 SMALL SECURITY OFFERINGS TELECONFERENCED
Scheduled but Not Heard
-- Public Testimony <Time Limit May Be Set> --
+ SB 206 REINSURANCE PROGRAM; HEALTH INS. WAIVERS TELECONFERENCED
<Pending Referral>
-- Public Testimony <Time Limit May Be Set> --
+ Confirmation hearing: Marijuana Control Board TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                         April 14, 2016                                                                                         
                           9:13 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Kurt Olson, Chair                                                                                                
Representative Shelley Hughes, Vice Chair                                                                                       
Representative Gabrielle LeDoux                                                                                                 
Representative Cathy Tilton                                                                                                     
Representative Andy Josephson                                                                                                   
Representative Sam Kito                                                                                                         
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Jim Colver                                                                                                       
Representative Mike Chenault (alternate)                                                                                        
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 158                                                                                                             
"An Act  relating to  real estate  broker licensure;  relating to                                                               
the  real  estate  commission; and  providing  for  an  effective                                                               
date."                                                                                                                          
                                                                                                                                
     - MOVED HCS SB 158(L&C) OUT OF COMMITTEE                                                                                   
                                                                                                                                
CS FOR SENATE BILL NO. 165(JUD) AM                                                                                              
"An  Act relating  to  the  presence of  minors  in the  licensed                                                               
premises   of  manufacturers,   wholesalers,  and   retailers  of                                                               
alcoholic beverages;  relating to the Alcoholic  Beverage Control                                                               
Board;  relating to  background  checks for  persons applying  to                                                               
operate  marijuana establishments;  relating  to  the offense  of                                                               
minor  consuming; relating  to revocation  of a  driver's license                                                               
for  a minor  consuming offense;  relating to  the effect  of the                                                               
revocation of  a driver's license  for a minor  consuming offense                                                               
on a motor vehicle liability  insurance policy; and amending Rule                                                               
17, Alaska Rules of Minor Offense Procedure."                                                                                   
                                                                                                                                
     - MOVED HCS CSSB 165(L&C) OUT OF COMMITTEE                                                                                 
                                                                                                                                
CONFIRMATION HEARING(S)                                                                                                         
                                                                                                                                
Marijuana Control Board                                                                                                       
                                                                                                                                
     Bruce Schulte                                                                                                              
                                                                                                                                
     - CONFIRMATION(S) ADVANCED                                                                                                 
                                                                                                                                
COMMITTEE SUBSTITUTE FOR SENATE BILL NO. 126(L&C)                                                                               
"An Act establishing an exemption for the offering and sale of                                                                  
certain securities."                                                                                                            
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
SENATE BILL NO. 206                                                                                                             
"An Act relating  to a reinsurance program for  residents who are                                                               
high  risks and  insurer assessments  to cover  the costs  of the                                                               
reinsurance   program;   relating   to  application   for   state                                                               
innovation  waivers  for  health   care  insurance;  relating  to                                                               
definitions  of  'residents  who  are high  risks'  and  'covered                                                               
lives'; and providing for an effective date."                                                                                   
                                                                                                                                
     - PENDING REFERRAL                                                                                                         
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 158                                                                                                                  
SHORT TITLE: REAL ESTATE COMMISSION;BROKER LICENSING                                                                            
SPONSOR(s): LABOR & COMMERCE                                                                                                    
                                                                                                                                
01/25/16       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/25/16       (S)       L&C                                                                                                    
02/04/16       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
02/04/16       (S)       Scheduled but Not Heard                                                                                
02/18/16       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
02/18/16       (S)       Heard & Held                                                                                           
02/18/16       (S)       MINUTE(L&C)                                                                                            
03/03/16       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/03/16       (S)       Moved  SB 158 Out of Committee                                                                         
03/03/16       (S)       MINUTE(L&C)                                                                                            
03/04/16       (S)       L&C RPT 3DP                                                                                            
03/04/16       (S)       DP: COSTELLO, GIESSEL, MEYER                                                                           
04/01/16       (S)       TRANSMITTED TO (H)                                                                                     
04/01/16       (S)       VERSION: SB 158                                                                                        
04/04/16       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/04/16       (H)       L&C                                                                                                    
04/13/16       (H)       L&C AT 3:15 PM BARNES 124                                                                              
04/13/16       (H)       Heard & Held                                                                                           
04/13/16       (H)       MINUTE(L&C)                                                                                            
04/14/16       (H)       L&C AT 9:00 AM BARNES 124                                                                              
                                                                                                                                
BILL: SB 165                                                                                                                  
SHORT TITLE: ALCOHOL: BOARD;MINORS;MARIJUANA CHECKS                                                                             
SPONSOR(s): MICCICHE                                                                                                            
                                                                                                                                
02/01/16       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/01/16       (S)       L&C, JUD                                                                                               
02/11/16       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
02/11/16       (S)       Scheduled but Not Heard                                                                                
02/23/16       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
02/23/16       (S)       Heard & Held                                                                                           
02/23/16       (S)       MINUTE(L&C)                                                                                            
03/08/16       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/08/16       (S)       Moved  CSSB 165(L&C) Out of Committee                                                                  
03/08/16       (S)       MINUTE(L&C)                                                                                            
03/09/16       (S)       L&C RPT CS  5DP  SAME TITLE                                                                            
03/09/16       (S)       DP: COSTELLO, GIESSEL, MEYER, STEVENS,                                                                 
                         ELLIS                                                                                                  
03/23/16       (S)       JUD AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/23/16       (S)       <Bill Hearing Canceled>                                                                                
03/28/16       (S)       JUD AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/28/16       (S)       Heard & Held                                                                                           
03/28/16       (S)       MINUTE(JUD)                                                                                            
03/30/16       (S)       JUD AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/30/16       (S)       Moved  CSSB 165(JUD) Out of Committee                                                                  
03/30/16       (S)       MINUTE(JUD)                                                                                            
04/01/16       (S)       JUD RPT CS  2DP 3NR  NEW TITLE                                                                         
04/01/16       (S)       DP: MCGUIRE, MICCICHE                                                                                  
04/01/16       (S)       NR: COGHILL, WIELECHOWSKI, COSTELLO                                                                    
04/08/16       (S)       TRANSMITTED TO (H)                                                                                     
04/08/16       (S)       VERSION: CSSB 165(JUD) AM                                                                              
04/09/16       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/09/16       (H)       L&C, JUD                                                                                               
04/13/16       (H)       L&C AT 3:15 PM BARNES 124                                                                              
04/13/16       (H)       Heard & Held                                                                                           
04/13/16       (H)       MINUTE(L&C)                                                                                            
04/14/16       (H)       L&C AT 9:00 AM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
WESTON EILER, Staff                                                                                                             
Senator Mia Costello                                                                                                            
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  On behalf of Senator Costello, chair,                                                                    
Senate Labor and Commerce Standing Committee, sponsor, reviewed                                                                 
SB 158.                                                                                                                         
                                                                                                                                
KONRAD JACKSON, Staff                                                                                                           
Representative Kurt Olson                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  On behalf of Representative Olson, chair,                                                                
House Labor and Commerce Standing Committee, reviewed the                                                                       
proposed House committee substitute for SB 158.                                                                                 
                                                                                                                                
ERROL CHAMPION, Chair                                                                                                           
Legislative Issues Committee                                                                                                    
Alaska Association of Realtors                                                                                                  
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions and testified in support                                                            
of HCS SB 158.                                                                                                                  
                                                                                                                                
TRACI BARICKMAN, Commissioner                                                                                                   
Alaska Real Estate Commission                                                                                                   
Sutton, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of SB 158.                                                                          
                                                                                                                                
MATTHEW STEELE, Real Estate Licensee                                                                                            
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT:  Testified in support of the House committee                                                              
substitute for SB 158.                                                                                                          
                                                                                                                                
ELIJAH WAUGH                                                                                                                    
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in opposition to SB 158.                                                                       
                                                                                                                                
MARGARET NELSON, Real Estate Licensee                                                                                           
Alaska Real Estate Alliance                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in opposition to SB 158.                                                                       
                                                                                                                                
KELSI PULCZINSKI                                                                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in opposition to SB 158.                                                                       
                                                                                                                                
JEREMY PRICE, State Director                                                                                                    
Alaska Chapter                                                                                                                  
Americans for Prosperity                                                                                                        
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in opposition to SB 158.                                                                       
                                                                                                                                
KONRAD JACKSON, Staff                                                                                                           
Representative Kurt Olson                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:     On   behalf  of   Representative  Olson,                                                           
introduced the proposed House committee  substitute for CSSB 165,                                                               
Version E.                                                                                                                      
                                                                                                                                
CHUCK KOPP, Staff                                                                                                               
Senator Peter Micciche                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   On  behalf  of  Senator Micciche,  member,                                                             
Senate  Judiciary  Standing  Committee,  sponsor,  expressed  the                                                               
sponsor's support of the proposed amendment to CSSB 165(JUD)am.                                                                 
                                                                                                                                
BRUCE SCHULTE, Appointee                                                                                                        
Marijuana Control Board                                                                                                         
Alcohol & Marijuana Office                                                                                                      
Department of Commerce, Community & Economic Development                                                                        
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:   Testified  as appointee  to the  Marijuana                                                             
Control Board.                                                                                                                  
                                                                                                                                
KONRAD JACKSON, Staff                                                                                                           
Representative Kurt Olson                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   On behalf  of Representative  Olson, chair,                                                             
House  Labor  and  Commerce  Standing  Committee,  presented  the                                                               
governor's appointee to the Marijuana Control Board.                                                                            
                                                                                                                                
MICHAELA FOWLER, Legislative Liaison                                                                                            
Office of the Commissioner                                                                                                      
Department of Commerce, Community & Economic Development                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   Provided information  related to  the delay                                                             
of  Bruce Schulte's  application  as appointee  to the  Marijuana                                                               
Control Board.                                                                                                                  
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
9:13:15 AM                                                                                                                    
                                                                                                                                
CHAIR KURT  OLSON called  the House  Labor and  Commerce Standing                                                             
Committee meeting  back to  order at  9:13 a.m.   Representatives                                                               
Olson, Tilton,  Kito, Josephson, and  Hughes were present  at the                                                               
call back to order.                                                                                                             
                                                                                                                                
[The meeting was  a continuation of the meeting  recessed at 5:55                                                               
p.m. on 4/13/16.]                                                                                                               
                                                                                                                                
         SB 158-REAL ESTATE COMMISSION;BROKER LICENSING                                                                     
                                                                                                                                
9:13:56 AM                                                                                                                    
                                                                                                                                
CHAIR OLSON announced  that the first order of  business would be                                                               
SENATE  BILL NO.  158, "An  Act  relating to  real estate  broker                                                               
licensure; relating to the real  estate commission; and providing                                                               
for an effective date."                                                                                                         
                                                                                                                                
9:14:40 AM                                                                                                                    
                                                                                                                                
WESTON EILER,  Staff, Senator  Mia Costello,  stated that  SB 158                                                               
was  brought  forward and  introduced  by  the Senate  Labor  and                                                               
Commerce Standing  Committee at  the request  of the  Alaska Real                                                               
Estate Commission and the real estate industry.                                                                                 
                                                                                                                                
9:14:57 AM                                                                                                                    
                                                                                                                                
KONRAD JACKSON, Staff, Representative  Kurt Olson, stated that on                                                               
4/13/16, the  committee moved,  but did  not adopt,  the proposed                                                               
House  committee  substitute  for SB  158,  Version  29-LS1303\H,                                                               
Bruce, 4/5/16,  which repeals AS 08.88.172(e),  and thereby would                                                               
require real estate brokers and  salespersons to carry errors and                                                               
omissions  insurance.    In  addition,   Version  H  changes  the                                                               
effective date of  Section 4 of the bill to  1/1/18, which allows                                                               
a  broker  applicant  currently   processing  an  application  to                                                               
complete that process.                                                                                                          
                                                                                                                                
9:16:20 AM                                                                                                                    
                                                                                                                                
CHAIR OLSON removed his objection  stated on 4/13/16, and Version                                                               
H was before the committee.                                                                                                     
                                                                                                                                
9:16:34 AM                                                                                                                    
                                                                                                                                
CHAIR OLSON opened public testimony.                                                                                            
                                                                                                                                
9:16:47 AM                                                                                                                    
                                                                                                                                
ERROL  CHAMPION,  Chair,  Legislative  Issues  Committee,  Alaska                                                               
Association  of Realtors,  expressed  his organization's  support                                                               
for the proposed House committee substitute for SB 158.                                                                         
                                                                                                                                
REPRESENTATIVE HUGHES  asked how  long the Alaska  Association of                                                               
Realtors has  been working to  support the  proposed legislation,                                                               
and whether support was found throughout its membership.                                                                        
                                                                                                                                
MR. CHAMPION responded  that the legislation has been  a topic of                                                               
discussion  for the  last  3-4  years.   In  further response  to                                                               
Representative  Hughes,   he  said   the  association   does  not                                                               
represent every real estate licensee,  however, it does represent                                                               
about  1,600 of  2,400  real  estate licensees,  and  all of  the                                                               
members  of  the association  have  been  well informed  in  this                                                               
regard.                                                                                                                         
                                                                                                                                
9:19:40 AM                                                                                                                    
                                                                                                                                
TRACI  BARICKMAN, Commissioner,  Alaska  Real Estate  Commission,                                                               
informed  the committee  she has  been a  real estate  broker for                                                               
over  23 years,  and  has reviewed  and  supervised thousands  of                                                               
transactions and hundreds  of licensees.  She  clarified that not                                                               
all  real  estate licensees  are  Realtors,  and the  upgrade  to                                                               
education as referred to in the  bill should not be confused with                                                               
continuing education;  the bill addresses 15  hours of additional                                                               
broker  education.   Ms. Barickman  described the  differences in                                                               
the industry  between transactions of  25 years ago and  those in                                                               
recent years, and  also the differences between what  is taught a                                                               
new  licensee and  what understanding  is required  of a  broker,                                                               
such  as business  recovery funds,  opening a  new office,  trust                                                               
accounts, operating accounts, supervision,  and local, state, and                                                               
federal law.   She advised that the duties of  a broker cannot be                                                               
taught in 15 hours, or in 24 months of real estate sales.                                                                       
                                                                                                                                
9:22:14 AM                                                                                                                    
                                                                                                                                
MATTHEW STEELE,  real estate licensee,  expressed his  support of                                                               
the  effective date  change [within  Version H].     He clarified                                                               
that  there are  two  licenses issued  by the  state,  that of  a                                                               
salesperson  and  that  of  a   broker;  however,  to  become  an                                                               
associate broker, one  must obtain a broker's license.   His goal                                                               
is not to  start his own firm, but to  become an associate broker                                                               
working under the supervision of a broker.                                                                                      
                                                                                                                                
9:23:58 AM                                                                                                                    
                                                                                                                                
ELIJAH  WAUGH  stated  that  as   a  lifelong  Alaskan  he  finds                                                               
legislation related to occupational licensing,  such as SB 158, a                                                               
direct infringement on individual liberty.   The bill doubles the                                                               
amount of  time required  to become a  broker, and  he questioned                                                               
why  that  would  provide  safety  to the  general  public.    In                                                               
reality, this policy  helps very few and is an  example of "crony                                                               
capitalism"  because it  creates  barriers to  entry, and  limits                                                               
competition to existing brokers.   Mr. Waugh referred to a recent                                                               
White   House  report   that   showed  unnecessary   occupational                                                               
licensing  negatively  affects low-income  families,  immigrants,                                                               
and military  spouses, and leads  to higher  unemployment [report                                                               
not  provided].   At this  time, Alaska  needs leadership  and he                                                               
expressed his strong opposition to the bill.                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  inquired as to whether  Mr. Waugh would                                                               
attribute to  the real estate  industry any honest  motivation or                                                               
merit in its support for further education for brokers.                                                                         
                                                                                                                                
MR. WAUGH opined  the industry seeks to gain  from requiring more                                                               
education, and there is no problem with the current system.                                                                     
                                                                                                                                
9:27:14 AM                                                                                                                    
                                                                                                                                
MARGARET  NELSON,  real  estate   licensee,  Alaska  Real  Estate                                                               
Alliance,  said she  works for  a  very small  brokerage and  has                                                               
worked in  the industry for 12  years.  She acknowledged  that SB                                                               
158 has support of the  "Alaska boards of Realtors"; however, she                                                               
is not a Realtor,  and was unaware of the bill.   She said she is                                                               
opposed  to  SB  158  because  the  real  estate  industry  is  a                                                               
professional  service   industry,  and   individuals  distinguish                                                               
themselves  by  providing  customer  service  to  their  clients.                                                               
Large  brokerage  houses  support  this  bill  as  it  eliminates                                                               
competition from  new brokerages.   Ms.  Nelson pointed  out that                                                               
all licensees are independent contractors  who are small business                                                               
owners and thus  are subject to taxes as a  small business.  More                                                               
time spent on unnecessary training  restricts time to earn money,                                                               
and every  two years repetitive continuing  education courses are                                                               
required.  She noted that  some real estate licensees who provide                                                               
property    management   services,    and   manage    homeowner's                                                               
associations, will pass the cost  of additional training along to                                                               
homeowners, and  brokers who work for  engineering companies will                                                               
also pass costs  along to consumers.  Another point  is that some                                                               
brokers already  have undergraduate  degrees.  Most  important is                                                               
the impact  of the  bill on rural  Alaska, where  applicants will                                                               
have  to  travel  for  training   and  not  all  are  suited  for                                                               
correspondence classes.  Ms. Nelson  opined that present-day real                                                               
estate  is not  more complex  if one  seriously wishes  to assist                                                               
one's  client.    She  urged  for more  review  of  the  proposed                                                               
legislation.                                                                                                                    
                                                                                                                                
9:32:38 AM                                                                                                                    
                                                                                                                                
KELSI PULCZINSKI said  she is strongly opposed to  SB 158 because                                                               
the bill  doubles the amount  of experience required to  become a                                                               
licensed real estate  broker, and doubles the  amount of training                                                               
required.    She  stated  that  the  increased  requirements  are                                                               
unnecessary  and create  barriers  to enter  into  the field;  in                                                               
fact,  unnecessary occupational  licensure requirements  infringe                                                               
on individual liberties, cripple  the free market, and perpetuate                                                               
crony  capitalism.     Ms.  Pulczinski  opined   the  legislation                                                               
addresses a  problem that does  not exist, and supporters  of the                                                               
bill   will   directly   benefit  by   eliminating   competition.                                                               
Additionally,  supporters  are  the  only  sources  offering  the                                                               
training.  The proposed legislation  hurts small business owners,                                                               
low-income individuals, and others.   She urged for the committee                                                               
to   better   the  lives   of   Alaskans   by  protecting   their                                                               
opportunities.                                                                                                                  
                                                                                                                                
9:34:57 AM                                                                                                                    
                                                                                                                                
JEREMY  PRICE,  State  Director, Alaska  Chapter,  Americans  for                                                               
Prosperity,  said he  was  speaking on  behalf  of "thousands  of                                                               
grass-roots activists  across the state"  to oppose SB 158.   The                                                               
legislation  reduces  competition  for big  brokerage  firms  and                                                               
creates  barriers and  unnecessary hurdles  for those  wishing to                                                               
become  a broker,  by  those  who will  benefit.    He noted  the                                                               
demographics of  those most  negatively affected  are low-income,                                                               
immigrants,  military spouses,  and rural  individuals.   He read                                                               
from a  report [report not  provided].   Mr. Price read  from the                                                               
public record of  the 9/2[/16] minutes of the  Alaska Real Estate                                                               
Commission [document  not provided].   He concluded  that members                                                               
of  the industry,  who  are trainers,  have  put the  legislation                                                               
forward, which is a conflict of  interest that has not been given                                                               
full attention.   Large brokerage firms support  the bill because                                                               
it  suppresses competition;  however,  the  public benefits  from                                                               
greater competition,  and there  is legal  recourse to  deal with                                                               
bad actors.                                                                                                                     
                                                                                                                                
9:37:56 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON opined that  fifteen hours of additional                                                               
education is not  very much to ask of brokers.   He asked whether                                                               
one more  year of experience  would be satisfactory,  rather than                                                               
two more years.                                                                                                                 
                                                                                                                                
MR. PRICE stated that legislation is  not the best way to prevent                                                               
bad  actors   from  becoming   licensed  brokers.   He  supported                                                               
Representative Josephson's foregoing proposal.                                                                                  
                                                                                                                                
REPRESENTATIVE JOSEPHSON  surmised the intent of  the legislation                                                               
is to strive for improvement in the industry.                                                                                   
                                                                                                                                
MR.  PRICE  inquired as  to  whether  the industry  provided  the                                                               
committee with  evidence of problems  which are addressed  by the                                                               
legislation.                                                                                                                    
                                                                                                                                
9:40:09 AM                                                                                                                    
                                                                                                                                
CHAIR OLSON,  after ascertaining no  one else wished  to testify,                                                               
closed public testimony.                                                                                                        
                                                                                                                                
9:40:52 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KITO  moved  to  report  CS for  SB  158  out  of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal notes.                                                                                                                   
                                                                                                                                
[There  followed discussion  as  to the  correct  version of  the                                                               
bill.]                                                                                                                          
                                                                                                                                
9:41:21 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KITO  restated  the   motion  to  report  [House]                                                               
committee  substitute for  SB  158,  Version 29-LS1303\H,  Bruce,                                                               
4/5/16, out of committee with  individual recommendations and the                                                               
accompanying fiscal notes.                                                                                                      
                                                                                                                                
9:41:38 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON advised  that  he would  not object  to                                                               
fifteen  hours of  additional  education,  however, he  suggested                                                               
that members  may further consider  the extension from  two years                                                               
to four years.                                                                                                                  
                                                                                                                                
9:42:08 AM                                                                                                                    
                                                                                                                                
There being  no objection,  HCS SB 158(L&C)  was reported  out of                                                               
the House Labor and Commerce Standing Committee.                                                                                
                                                                                                                                
9:42:11 AM                                                                                                                    
                                                                                                                                
The committee took an at ease from 9:42 a.m. to 9:46 a.m.                                                                       
                                                                                                                                
         SB 165-ALCOHOL: BOARD;MINORS;MARIJUANA CHECKS                                                                      
                                                                                                                                
9:46:43 AM                                                                                                                    
                                                                                                                                
CHAIR OLSON  announced that the  next order of business  would be                                                               
CS  FOR SENATE  BILL NO.  165(JUD) am,  "An Act  relating to  the                                                               
presence  of minors  in the  licensed premises  of manufacturers,                                                               
wholesalers, and  retailers of  alcoholic beverages;  relating to                                                               
the  Alcoholic Beverage  Control  Board;  relating to  background                                                               
checks for persons applying  to operate marijuana establishments;                                                               
relating  to   the  offense  of  minor   consuming;  relating  to                                                               
revocation of a  driver's license for a  minor consuming offense;                                                               
relating to  the effect of  the revocation of a  driver's license                                                               
for  a  minor consuming  offense  on  a motor  vehicle  liability                                                               
insurance policy;  and amending  Rule 17,  Alaska Rules  of Minor                                                               
Offense Procedure."                                                                                                             
                                                                                                                                
CHAIR OLSON  stated he maintained  his objection to  the proposed                                                               
House  committee  substitute  for CSSB  165(JUD)am,  Version  29-                                                               
LS1384\E,  Bruce, 4/13/16,  made during  the previous  meeting on                                                               
4/13/16.                                                                                                                        
                                                                                                                                
9:46:56 AM                                                                                                                    
                                                                                                                                
KONRAD JACKSON,  Staff, Representative Kurt Olson,  presented the                                                               
proposed House committee substitute  for CSSB 165(JUD)am, Version                                                               
E.   Version  E  makes two  identical changes  found  on page  5,                                                               
beginning  on  lines 3  and  22,  which  insert, after  $50,  the                                                               
following:                                                                                                                      
                                                                                                                                
      ... for a person who has not more than one previous                                                                       
     violation or to $250 for a person who has two or more                                                                      
     previous violations ....                                                                                                   
                                                                                                                                
MR. JACKSON said  the intent is to increase the  minimum fine for                                                               
repeat offenders.                                                                                                               
                                                                                                                                
9:47:47 AM                                                                                                                    
                                                                                                                                
CHUCK KOPP,  Staff, Senator Peter Micciche,  sponsor, in response                                                               
to Chair Olson,  confirmed that the sponsor is in  support of the                                                               
amendment.                                                                                                                      
                                                                                                                                
9:48:05 AM                                                                                                                    
                                                                                                                                
CHAIR  OLSON  removed his  objection.    There being  no  further                                                               
objection, Version E was before the committee.                                                                                  
                                                                                                                                
9:48:17 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HUGHES moved to  report House committee substitute                                                               
(HCS) for CSSB  165, Version 29-LS1384\E, Bruce,  4/13/16, out of                                                               
committee  with individual  recommendations and  the accompanying                                                               
zero fiscal notes.                                                                                                              
                                                                                                                                
9:48:54 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON observed  that if the bill  comes to the                                                               
House floor,  he will very thoroughly  vet each line in  order to                                                               
be more comfortable about the bill.   He commented, "I agree that                                                               
we have to be reasonable about penalties for minor consuming."                                                                  
                                                                                                                                
CHAIR  OLSON added  that  the House  committee  substitute was  a                                                               
collaborative  effort  to  encourage minor  consumers  to  "think                                                               
twice."                                                                                                                         
                                                                                                                                
9:49:50 AM                                                                                                                    
                                                                                                                                
There being no  objection, HCS CSSB 165(L&C) was  reported out of                                                               
the House Labor and Commerce Standing Committee.                                                                                
                                                                                                                                
9:50:03 AM                                                                                                                    
                                                                                                                                
The committee took an at ease from 9:50 a.m. to 9:52 a.m.                                                                       
                                                                                                                                
^CONFIRMATION HEARING(S)                                                                                                        
                    ^CONFIRMATION HEARING(S)                                                                                  
^Marijuana Control Board                                                                                                        
                    Marijuana Control Board                                                                                 
                                                                                                                                
9:52:21 AM                                                                                                                    
                                                                                                                                
CHAIR OLSON announced  that the final order of  business would be                                                               
a  confirmation  hearing  on  the  governor's  appointee  to  the                                                               
Marijuana Control Board.                                                                                                        
                                                                                                                                
9:53:01 AM                                                                                                                    
                                                                                                                                
BRUCE  SCHULTE, Appointee,  Marijuana  Control  Board, Alcohol  &                                                               
Marijuana Office,  Department of  Commerce, Community  & Economic                                                               
Development,  informed the  committee he  currently serves  as an                                                               
industry representative on the Marijuana Control Board (MCB).                                                                   
                                                                                                                                
REPRESENTATIVE   KITO  asked   about  Mr.   Schulte's  experience                                                               
operating a business,  as MCB will be creating the  rules for the                                                               
operation and  licensing of  the marijuana  businesses, including                                                               
testing products.                                                                                                               
                                                                                                                                
MR.  SCHULTE  responded  that  he  is  a  trained  architect  and                                                               
practiced over  20 years working  for small and large  firms, and                                                               
also worked  as a  commercial pilot.   Both  of these  are highly                                                               
regulated  industries;  in  fact, architecture  involves  merging                                                               
multiple  and   conflicting  regulations  and   complex  problem-                                                               
solving, and is suitable preparation for this task.                                                                             
                                                                                                                                
REPRESENTATIVE  KITO observed  that MCB  board members  represent                                                               
public safety, public health, and  rural areas, and stressed that                                                               
the  two industry  representatives really  need to  have business                                                               
operational  experience.     Although   there  is   no  statutory                                                               
authorization or intent in  [Alaska Marijuana Legalization Ballot                                                               
Measure 2, passed in 2014  (Ballot Measure 2)] to allow marijuana                                                               
bars  or cafes,  but only  for marijuana  use in  the privacy  of                                                               
homes, MCB  made a recommendation  to authorize  marijuana cafes.                                                               
He expressed his concern that this  action by MCB was contrary to                                                               
statute.                                                                                                                        
                                                                                                                                
MR.  SCHULTE  explained  that  there   was  a  desire  from  some                                                               
communities to  have a place  to consume cannabis, other  than in                                                               
homes, in order  to accommodate tourists.   In addition, emerging                                                               
marijuana  clubs were  "threading  a  perceived loophole  through                                                               
statute to create  such a place," and the public  asked the board                                                               
to address this issue.   Initially, MCB requested the legislature                                                               
to   grant   it   authority    to   regulate   marijuana   clubs;                                                               
alternatively, MCB decided  to create an expanded  type of retail                                                               
store to  allow onsite  consumption under  certain circumstances.                                                               
Mr. Schulte acknowledged that the  certain circumstances have not                                                               
yet  been determined,  and  assured the  committee  "it's not  an                                                               
effort  to turn  Alaska  into  Amsterdam."   He  opined that  the                                                               
regulations  that  will apply  to  onsite  consumption at  retail                                                               
stores  will   be  "pretty  strict."     Regarding   whether  the                                                               
recommendation is  consistent with statute, legal  counsel to MCB                                                               
advised  that the  recommendation was  an allowable  expansion of                                                               
the license articulated in Ballot Measure 2.                                                                                    
                                                                                                                                
10:00:23 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE KITO requested  a copy of the  legal opinion given                                                               
to MCB,  and cautioned  against MCB  acting beyond  its statutory                                                               
authority.                                                                                                                      
                                                                                                                                
MR. SCHULTE said he would provide the requested information.                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON asked  for  Mr.  Schulte's position  on                                                               
out-of-state  corporations  using a  post  office  box to  obtain                                                               
licensure.                                                                                                                      
                                                                                                                                
MR. SCHULTE stated the problem  with the participation of outside                                                               
"players" was  MCB's inability  to know who  was engaging  in the                                                               
industry  within the  state.   The board  decided that  one would                                                               
have to qualify  for a permanent fund dividend (PFD)  in order to                                                               
receive a license.                                                                                                              
                                                                                                                                
REPRESENTATIVE JOSEPHSON  asked again for Mr.  Schulte's position                                                               
on the foregoing issue.                                                                                                         
                                                                                                                                
MR. SCHULTE  said at one point  he sought to "allow  some limited                                                               
amount of  outside investment";  however, he  voted for  the PFD-                                                               
only test.                                                                                                                      
                                                                                                                                
REPRESENTATIVE HUGHES  inquired as to whether  Mr. Schulte agreed                                                               
that  farmers  who grow  industrial  hemp  would fall  under  MCB                                                               
regulation and would pay excise tax.                                                                                            
                                                                                                                                
MR. SCHULTE  said he would not  agree it is appropriate  to apply                                                               
the  $50  tax  on  hemp,   which  is  a  different  product  than                                                               
marijuana.                                                                                                                      
                                                                                                                                
REPRESENTATIVE HUGHES asked whether  the present statute requires                                                               
that farmers are taxed and licensed by MCB.                                                                                     
                                                                                                                                
MR.  SCHULTE expressed  his understanding  that Ballot  Measure 2                                                               
specifically spoke  to the  forms of  cannabis that  contain high                                                               
tetrahydrocannabinol  (THC)  or  cannabidiol (CBD)  content,  and                                                               
hemp has  neither.   He  said he welcomed a  "statutory fix" that                                                               
would clarify  this question,  and said  hemp is  grown primarily                                                               
for its fiber, and should be dealt with differently.                                                                            
                                                                                                                                
10:06:22 AM                                                                                                                   
                                                                                                                                
CHAIR OLSON opened public testimony.                                                                                            
                                                                                                                                
10:06:56 AM                                                                                                                   
                                                                                                                                
KONRAD JACKSON,  Staff, Representative  Kurt Olson,  informed the                                                               
committee  of the  computer problems  with  Mr. Schulte's  online                                                               
application, and stated that all  members have had an opportunity                                                               
to speak  to Mr. Schulte and  to review his resume.   Mr. Jackson                                                               
read his name and appointment:                                                                                                  
                                                                                                                                
     Bruce Schulte, to the Marijuana Control Board                                                                              
                                                                                                                                
10:08:25 AM                                                                                                                   
                                                                                                                                
MICHAELA   FOWLER,    Legislative   Liaison,   Office    of   the                                                               
Commissioner,  Department  of   Commerce,  Community  &  Economic                                                               
Development,  explained, and  apologized for,  the errors  in the                                                               
computer  database at  DCCED  that delayed  the  transfer of  Mr.                                                               
Schulte's application to the committee.                                                                                         
                                                                                                                                
10:10:19 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE HUGHES moved to advance  the confirmation of Bruce                                                               
Schulte to  the Marijuana  Control Board,  which was  referred to                                                               
the  House Labor  and  Commerce Standing  Committee,  to a  joint                                                               
session of the House and  Senate for consideration.  She reminded                                                               
the members  that signing the  reports regarding  appointments to                                                               
boards  and commissions  in no  way reflects  individual members'                                                               
approval  or   disapproval  of  the  appointees,   and  that  the                                                               
nominations  are merely  forwarded  to the  full legislature  for                                                               
confirmation  or  rejection.    There  being  no  objection,  the                                                               
confirmation of Bruce Schulte was advanced.                                                                                     
                                                                                                                                
10:11:06 AM                                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The  House  Labor and  Commerce  Standing  Committee meeting  was                                                               
recessed at  10:11 a.m.  to a  call of the  chair.   [The meeting                                                               
reconvened at 10:05 a.m. on 4/15/16.]