Legislature(2017 - 2018)SENATE FINANCE 532

04/04/2017 09:00 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 6 INDUSTRIAL HEMP PRODUCTION TELECONFERENCED
Heard & Held
+ HB 16 DRIV. LICENSE REQ;DISABILITY:ID &TRAINING TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled: TELECONFERENCED
+= SB 97 PENSION OBLIGATION BONDS TELECONFERENCED
Moved SB 97 Out of Committee
                 SENATE FINANCE COMMITTEE                                                                                       
                       April 4, 2017                                                                                            
                         9:05 a.m.                                                                                              
                                                                                                                                
9:05:51 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  MacKinnon  called  the  Senate  Finance  Committee                                                                    
meeting to order at 9:05 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Anna MacKinnon, Co-Chair                                                                                                
Senator Click Bishop, Vice-Chair                                                                                                
Senator Mike Dunleavy                                                                                                           
Senator Peter Micciche                                                                                                          
Senator Donny Olson                                                                                                             
Senator Natasha von Imhof                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative  Steve  Thompson,   Sponsor;  Lynette  Bergh,                                                                    
Staff, Representative Steve  Thompson; Larry Johanson, Self,                                                                    
Juneau;  Senator  Shelley   Hughes,  Sponsor;  Buddy  Whitt,                                                                    
Staff, Senator Shelley Hughes.                                                                                                  
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Juanita   Webb,   Wallbusters,   Fairbanks;   Art   Delaune,                                                                    
Wallbusters,    Fairbanks;   Rob    Carter,   Division    of                                                                    
Agriculture,   Palmer;  Courtney   Moran,  Earth   Law  LLC,                                                                    
Portland;  Steve  St.  Clair, Self,  Mat-Su;  Ember  Haynes,                                                                    
Self,   Talkeetna;  Steve   Albers,  Kenai   Soil  &   Water                                                                    
Conservation District, Kenai; Abigail  St. Clair, Self, Mat-                                                                    
Su.                                                                                                                             
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 6      INDUSTRIAL HEMP PRODUCTION                                                                                            
                                                                                                                                
          SB 6 was HEARD and HELD in committee for further                                                                      
          consideration.                                                                                                        
                                                                                                                                
SB 97     PENSION OBLIGATION BONDS                                                                                              
                                                                                                                                
          SB 97 was REPORTED out of committee with a "do                                                                        
          pass" recommendation and with one new zero fiscal                                                                     
          note from the Department of Revenue.                                                                                  
                                                                                                                                
HB 16     DRIV. LICENSE REQ; DISABILITY: ID &TRAINING                                                                           
                                                                                                                                
          HB 16 was HEARD and HELD in committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
Co-Chair MacKinnon discussed the agenda.                                                                                        
                                                                                                                                
SENATE BILL NO. 97                                                                                                            
                                                                                                                                
     "An Act relating to pension obligation bonds."                                                                             
                                                                                                                                
9:06:35 AM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon noted that the bill had been heard                                                                           
previously. She CLOSED public testimony.                                                                                        
                                                                                                                                
Senator von Imhof MOVED to ADOPT Amendment 1, 30-LS0486\D.1                                                                     
(Wallace, 3/30/17) (copy on file):                                                                                              
                                                                                                                                
     Page 2, line 3, following "Committee":                                                                                     
     Insert "or obtaining legislative approval by law"                                                                          
     Page 2, lines 15 - 18:                                                                                                     
     Delete  "shall again  review the  proposal and,  if the                                                                    
     subsidiary corporation decides to  issue the bonds, the                                                                    
     subsidiary  corporation shall  provide the  Legislative                                                                    
     Budget  and Audit  Committee with  a  statement of  the                                                                    
     subsidiary  corporation's reasons  for doing  so before                                                                    
     issuance under this section"                                                                                               
     Insert  "may not  issue bonds  without first  obtaining                                                                    
     legislative approval by law"                                                                                               
                                                                                                                                
     Page 2, line 25, following "Committee":                                                                                    
     Insert "or obtaining legislative approval by law" 13                                                                       
                                                                                                                                
     Page 3, lines 8 - 11:                                                                                                      
     Delete  "shall again  review the  proposal and,  if the                                                                    
     committee  decides to  issue and  sell  the bonds,  the                                                                    
     committee  shall  provide  the Legislative  Budget  and                                                                    
     Audit  Committee with  a statement  of the  committee's                                                                    
     reasons  for  doing  so   before  issuance  under  this                                                                    
     section"                                                                                                                   
     Insert  "may not  issue bonds  without first  obtaining                                                                    
     legislative approval by law"                                                                                               
                                                                                                                                
     Page 3, line 24, following "Committee":                                                                                    
     Insert "or obtaining legislative approval by law"                                                                          
                                                                                                                                
     Page 4, lines 6 - 9:                                                                                                       
     Delete  "shall again  review the  proposal and,  if the                                                                    
     corporation decides  to issue  and sell the  bonds, the                                                                    
     corporation  shall provide  the Legislative  Budget and                                                                    
     Audit Committee  with a statement of  the corporation's                                                                    
     reasons  for  doing  so   before  issuance  under  this                                                                    
     section"                                                                                                                   
     Insert  "may not  issue bonds  without first  obtaining                                                                    
     legislative approval by law"                                                                                               
                                                                                                                                
     Page 5, line 7, following "Committee":                                                                                     
     Insert "or obtaining legislative approval by law"                                                                          
                                                                                                                                
     Page 5, line 23, following "Committee":                                                                                    
     Insert "or obtaining legislative approval by law"                                                                          
                                                                                                                                
     Page 6, lines 9 - 13:                                                                                                      
     Delete  "shall again  review the  proposal and,  if the                                                                    
     subsidiary corporation decides to  issue the bonds, the                                                                    
     subsidiary  corporation shall  provide the  Legislative                                                                    
     Budget  and Audit  Committee with  a  statement of  the                                                                    
     subsidiary  corporation's reasons  for doing  so before                                                                    
     issuance under this section"                                                                                               
     Insert  "may not  issue bonds  without first  obtaining                                                                    
     legislative approval by law"                                                                                               
                                                                                                                                
     Page 6, line 23, following "Committee":                                                                                    
     Insert "or obtaining legislative approval by law" 21                                                                       
                                                                                                                                
     Page 7, line 21, following "Committee":                                                                                    
     Insert "or obtaining legislative approval by law" 24                                                                       
                                                                                                                                
     Page 7, line 31, through page 8, line 3:                                                                                   
     Delete  "shall again  review the  proposal and,  if the                                                                    
     bond  bank authority  decides to  issue the  bonds, the                                                                    
     bond  bank  authority  shall  provide  the  Legislative                                                                    
     Budget  and Audit  Committee with  a  statement of  the                                                                    
     bond bank authority's reasons for doing so before                                                                          
     issuance under this section"                                                                                               
     Insert "may not issue bonds without first obtaining                                                                        
     legislative approval by law"                                                                                               
                                                                                                                                
Co-Chair MacKinnon OBJECTED for discussion.                                                                                     
                                                                                                                                
9:07:20 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:07:49 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Senator  von  Imhof  explained   that  the  purpose  of  the                                                                    
amendment was to provide oversight  by the legislature prior                                                                    
to the issuance of the  bonds. The amendment provided a last                                                                    
course of action  - a stop gap measure.  Generally, when the                                                                    
administration  brought forward  a  pension obligation  bond                                                                    
issuance,  it was  presented to  the Legislative  Budget and                                                                    
Audit Committee  (LB&A). If the  committee did  not approve,                                                                    
it could  request additional information  and could  write a                                                                    
letter,  which   was  public   record.  She   detailed  that                                                                    
typically, the  public document triggered a  market reaction                                                                    
causing rates to  rise to cover the  risk associated, making                                                                    
the  arbitrage ineffective.  Under  normal circumstances  it                                                                    
meant  the administration  would not  move forward  with the                                                                    
deal  and would  not issue  the bonds  because the  interest                                                                    
rate spread would close.                                                                                                        
                                                                                                                                
Senator  von Imhof  elaborated  that  if the  administration                                                                    
decided to  continue forward  against the  recommendation of                                                                    
LB&A  or if  the  market did  not  respond, the  legislature                                                                    
would have a  fallback option to meet as an  entire body and                                                                    
vote  on  the proposal.  She  continued  that if  the  issue                                                                    
occurred  during  the interim  it  would  trigger a  special                                                                    
session, which was costly and problematic.                                                                                      
                                                                                                                                
Senator  Micciche wanted  the committee  to understand  that                                                                    
existing law did  not require the governor to go  to LB&A to                                                                    
move forward with  a GO [general obligation]  bond. The bill                                                                    
would change that process. He  explained that the bill would                                                                    
reduce the $5 billion authority  in half to $2.5 billion. He                                                                    
stated that he would normally  support the amendment, but he                                                                    
was concerned there  was a good chance it  would prevent the                                                                    
legislation from moving forward.                                                                                                
                                                                                                                                
9:10:27 AM                                                                                                                    
                                                                                                                                
Senator Dunleavy was supportive  of the amendment. He stated                                                                    
that his  concerns were on  the record in  past discussions.                                                                    
He  continued that  GO bonds  had  to go  to a  vote of  the                                                                    
people. He remarked that it was  a large sum of money and he                                                                    
appreciated efforts to whittle it down  and box it in a bit.                                                                    
He  thought legislators  should all  be concerned  about the                                                                    
state's debt  load. He reasoned that  the amendment provided                                                                    
another  check and  left the  door open  if legislators  all                                                                    
agreed  they  needed  to  move   forward  on  something.  He                                                                    
believed the  amendment would require the  administration to                                                                    
have a conversation with the  legislature to determine where                                                                    
the representatives of the public were on a future bond.                                                                        
                                                                                                                                
Senator Olson asked if the  amendment allowed another avenue                                                                    
to get approval  for a bond to go through.  He surmised that                                                                    
if LB&A  was not there,  the legislature could have  its own                                                                    
hearings and approve the bonds.                                                                                                 
                                                                                                                                
Senator von  Imhof provided  a scenario  where LB&A  wrote a                                                                    
public letter [that disagreed with  a bond issuance proposal                                                                    
by  the administration]  and it  impacted  the markets.  The                                                                    
amendment would  enable the legislature  to meet as  a whole                                                                    
and draft a bill to stop the issuance of the bond.                                                                              
                                                                                                                                
Senator Olson asked if the  legislature could approve moving                                                                    
forward with the bond.                                                                                                          
                                                                                                                                
Senator von  Imhof replied in the  affirmative. However, she                                                                    
assumed that  if LB&A  approved the bond  there would  be no                                                                    
need  for  the entire  legislature  to  meet on  the  issue,                                                                    
unless the majority disagreed with LB&A.                                                                                        
                                                                                                                                
Senator  Olson  noted  it  had  happened  in  the  past.  He                                                                    
supported the amendment.                                                                                                        
                                                                                                                                
9:12:38 AM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon  MAINTAINED her OBJECTION.  She explained                                                                    
that  all of  the  options provided  by  the amendment  were                                                                    
currently  open  to the  legislature.  The  amendment was  a                                                                    
compromise  between a  $5 billion  potential liability  that                                                                    
had already  been provided  to the  governor. The  issue was                                                                    
about power  distribution - she  believed supporters  of the                                                                    
amendment would  like the legislature to  regain that power.                                                                    
She  believed  there  was  a   greater  risk  and  that  the                                                                    
legislature  already  had  that  power.  She  reasoned  that                                                                    
committee  members  understood  that the  legislature  could                                                                    
call  itself  into  special  session any  time  to  take  up                                                                    
legislation  to  approve  or  disapprove  of  anything  that                                                                    
happened within state government.  The bill would reduce the                                                                    
administration's ability  to go  out for  a $5  billion bond                                                                    
issuance to $2.5 billion. The  amendment took away authority                                                                    
that the governor would have  to agree to. She believed half                                                                    
of   the  authority   was  reasonable.   She  recalled   the                                                                    
governor's proposal the previous  fall had been $2.1 billion                                                                    
to  $2.3 billion.  She  stated that  the  legislation was  a                                                                    
balance.  There were  members in  both bodies  that believed                                                                    
the option should be eliminated.                                                                                                
                                                                                                                                
Co-Chair  MacKinnon continued  that if  the bill  eliminated                                                                    
the funding  entirely the legislature  could send it  to the                                                                    
governor's desk.  She communicated that she  was not opposed                                                                    
to the discussion.  She pointed to the  risk associated with                                                                    
arbitrage.  She had  heard opposition  to the  proposal from                                                                    
constituents  during the  administration's  last cycle.  She                                                                    
reiterated that  the bill represented  a balance,  which she                                                                    
believed was a step in  the right direction. She requested a                                                                    
withdrawal of the amendment.                                                                                                    
                                                                                                                                
9:14:58 AM                                                                                                                    
                                                                                                                                
Senator  Micciche reiterated  his earlier  comments that  he                                                                    
would  strongly support  the amendment  if  he believed  the                                                                    
bill  would pass  with it  included. He  thought giving  the                                                                    
governor the  authority to move  forward with $5  billion in                                                                    
pension obligation  bonds had been  a mistake.  He recounted                                                                    
that the previous  summer the governor had  a team dispersed                                                                    
around the  world, actively setting  up for a bond  sale. In                                                                    
response, the Senate Finance Committee  had written a letter                                                                    
to the  governor and he appreciated  that the administration                                                                    
had  pulled back  and had  not  gone through  with the  bond                                                                    
sale.                                                                                                                           
                                                                                                                                
Senator  Micciche  explained that  the  bill  would cut  the                                                                    
governor's authority in half [to  $2.5 billion], which would                                                                    
protect the state by $2.5  billion in potential exposure for                                                                    
a  pension obligation  bond that  may  or may  not be  under                                                                    
water  in the  future. The  bill would  also require  a bond                                                                    
proposal to go  to LB&A, which had not been  the case in the                                                                    
past. He  believed the  bill was  a balance  and had  a high                                                                    
probability    of   passing,    whereas   eliminating    the                                                                    
[administration's]  authority had  a  higher probability  of                                                                    
being vetoed [by the governor].  He supported the concept of                                                                    
the amendment  but believed it  would reduce the  chance the                                                                    
bill   would  pass.   He  clarified   that  without   formal                                                                    
intervention the  committee had been  able to turn  back the                                                                    
bond issuance the past summer.                                                                                                  
                                                                                                                                
9:17:01 AM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon   acknowledged  that  there   were  many                                                                    
members of the legislature  that had been uncomfortable with                                                                    
the administration  moving forward  [with a  bond issuance].                                                                    
She had a conversation with  the governor and the Department                                                                    
of Revenue  (DOR). She believed if  pension obligation bonds                                                                    
had  been passed  in  2007, according  to  some people,  the                                                                    
state could  potentially have had  billions more  dollars in                                                                    
the  system   to  help  buy  down   the  pension  obligation                                                                    
liability. It had been noted  in the current session that if                                                                    
the administration  would have  advanced forward  with bonds                                                                    
under  current market  conditions, for  the short  period of                                                                    
time, there  would have been  additional money to  help with                                                                    
the cash  flow of  the unfunded liability.  However, pension                                                                    
obligation bonds  were a debt  against the state  for longer                                                                    
periods of  time than experienced  thus far. She  noted they                                                                    
had seen a positive for ten years and one year.                                                                                 
                                                                                                                                
Co-Chair MacKinnon  detailed that Deven  Mitchell [Executive                                                                    
Director, Alaska  Municipal Bond Bank  Authority, Department                                                                    
of  Revenue] had  communicated that  the administration  had                                                                    
brought forward a much  more conservative pension obligation                                                                    
bond  than  other  cities   that  had  experienced  negative                                                                    
arbitrage over a  bond period. She explained  that under the                                                                    
administration's proposal  the state  would not  realize the                                                                    
benefits during  current financial  struggles, but  later on                                                                    
in the  life of the loan.  She continued that it  had been a                                                                    
much  more conservative  approach,  but  Alaskans had  still                                                                    
been  very  uncomfortable.   Therefore,  the  committee  had                                                                    
entered  into a  conversation with  the governor  and asking                                                                    
them  not to  proceed.  She  had been  asked  to reduce  the                                                                    
authority  to  zero. The  bill  was  a compromise.  She  had                                                                    
communicated  to  the  governor there  were  legislators  in                                                                    
opposition to  pension obligation  bonds and  the associated                                                                    
risk.  The  amendment  proposed  to  strike  a  balance  for                                                                    
Alaskans who  opposed pension obligation bonds.  She relayed                                                                    
the amendment  could be  offered as  a standalone  bill. She                                                                    
had proposed a  bill she believed would make  it through the                                                                    
current legislative process.                                                                                                    
                                                                                                                                
9:20:11 AM                                                                                                                    
                                                                                                                                
Senator von Imhof thanked the  committee for considering her                                                                    
amendment. She  stated that pension obligation  bonds were a                                                                    
risky venture  and hindsight was always  20/20. She detailed                                                                    
that  it  was possible  to  look  back and  identify  market                                                                    
trends that  may work;  however, over  the long-term  it was                                                                    
proven to be nonperforming. She  believed those who tried to                                                                    
time the  market ended up  getting burned. She  thought that                                                                    
Co-Chair MacKinnon had made a  good point that amendment was                                                                    
somewhat redundant  because the legislature already  had the                                                                    
ability to  convene a  special session at  any time  for any                                                                    
purpose. She agreed  with Senator Micciche on  the desire to                                                                    
see the legislation  pass the other body.  She supported the                                                                    
bill's  stopgap measure  requiring proposals  to go  to LB&A                                                                    
for review.                                                                                                                     
                                                                                                                                
Senator  von  Imhof WITHDREW  Amendment  1.  There being  NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
Vice-Chair  Bishop   was  amenable   to  the   $2.5  billion                                                                    
compromise.  He remarked  that when  there was  cash in  the                                                                    
bank, he supported  taking the cash and  getting 100 percent                                                                    
value on  buying down the  debt instead of taking  the 50/50                                                                    
option. He supported the bill.                                                                                                  
                                                                                                                                
Vice-Chair Bishop  MOVED to  report SB  97 out  of Committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note. There being NO OBJECTION, it was so ordered.                                                                              
                                                                                                                                
SB  97  was REPORTED  out  of  committee  with a  "do  pass"                                                                    
recommendation and  with one new  zero fiscal note  from the                                                                    
Department of Revenue.                                                                                                          
                                                                                                                                
9:22:38 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:24:48 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 16                                                                                                             
                                                                                                                                
     "An  Act relating  to  training regarding  disabilities                                                                    
     for   police  officers,   probation  officers,   parole                                                                    
     officers,  correctional  officers, and  village  public                                                                    
     safety  officers; relating  to  guidelines for  drivers                                                                    
     when encountering or being stopped  by a peace officer;                                                                    
     relating to driver's license examinations; and                                                                             
     relating to a voluntary disability designation on a                                                                        
    state identification card and a driver's license."                                                                          
                                                                                                                                
9:24:53 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   STEVE   THOMPSON,  SPONSOR,   thanked   the                                                                    
committee for hearing the bill.  He introduced his staff. He                                                                    
detailed  that the  bill had  come to  him about  five years                                                                    
earlier  when  the  disability  community  had  shared  that                                                                    
individuals  with nonapparent  disabilities had  encountered                                                                    
adverse  outcomes with  law enforcement.  He detailed  there                                                                    
had  been   circumstances  where  people   with  nonapparent                                                                    
disabilities had  been misunderstood  by officers.  The bill                                                                    
would mandate  training for officers  on what to do  if they                                                                    
encounter someone with a  nonapparent disability. His office                                                                    
had  worked  with  police  departments  and  state  troopers                                                                    
across  the state.  The  training was  now  included in  the                                                                    
state  trooper   training  academy   in  Sitka   and  police                                                                    
departments  and the  Department  of  Corrections (DOC)  had                                                                    
agreed they could do the training online.                                                                                       
                                                                                                                                
Representative Thompson  provided a scenario where  a person                                                                    
[driving]  was  stopped by  a  police  officer and  had  red                                                                    
lights flashing in their rear  window. He explained that the                                                                    
situation  could   exacerbate  a  person's   disability.  He                                                                    
considered how  to solve the  problem. He reported  that the                                                                    
Division of  Motor Vehicles (DMV)  agreed there should  be a                                                                    
section  in  its driver's  manual  outlining  what a  driver                                                                    
should do  when stopped by  a police officer.  He elaborated                                                                    
that   many   states   (e.g.  Pennsylvania,   Montana,   and                                                                    
California) included  the information  in their  manuals. He                                                                    
shared that  the bill had  passed the House  unanimously the                                                                    
previous year but had been held up in session-end politics.                                                                     
                                                                                                                                
9:28:40 AM                                                                                                                    
                                                                                                                                
Representative  Thompson shared  that  the  bill was  nearly                                                                    
identical  to  its  past  form  but  included  a  couple  of                                                                    
changes.  He reported  that some  letters had  come in  from                                                                    
neuropaths where  they were the  only ones  treating someone                                                                    
with a  traumatic brain injury  - subsequently,  a provision                                                                    
had been added to the bill  in the Senate. He continued that                                                                    
the  original bill  specified that  the driver's  test would                                                                    
include  questions on  what to  do  when pulled  over by  an                                                                    
officer.  The  current  version of  the  bill  removed  that                                                                    
provision. Otherwise, the bill  was essentially the same [as                                                                    
a  bill  offered the  previous  session].  The goal  was  to                                                                    
protect   individuals   with   imperceptible   disabilities.                                                                    
Officers  would  also  be protected  given  their  increased                                                                    
understanding of  how to handle  a situation.  He emphasized                                                                    
that  the  designation  on   people's  driver's  license  or                                                                    
identification was voluntary and  needed to be requested and                                                                    
verified  by  a medical  professional.  He  noted that  many                                                                    
people did not want to  be identified as having a disability                                                                    
and did  not want  the designation.  He reiterated  that the                                                                    
designation was voluntary.                                                                                                      
                                                                                                                                
9:30:06 AM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon  noted  that   the  sponsor  had  listed                                                                    
multiple medical or licensed professionals  in the state who                                                                    
could  identify  a  disability.   She  elaborated  that  the                                                                    
legislation  specified the  medical  professionals would  be                                                                    
responsible  for approving  a  designation for  a card.  She                                                                    
wondered if there was any  liability for the individuals who                                                                    
designated the disability.                                                                                                      
                                                                                                                                
LYNETTE  BERGH, STAFF,  REPRESENTATIVE  THOMPSON, asked  Co-                                                                    
Chair MacKinnon to repeat the question.                                                                                         
                                                                                                                                
Co-Chair MacKinnon  wondered if there was  any liability for                                                                    
the    individuals    who   designated    the    disability.                                                                    
Additionally,   she    asked   what   happened    with   the                                                                    
documentation  at  DMV  to  support  the  designation  on  a                                                                    
license or identification card.                                                                                                 
                                                                                                                                
Ms.  Bergh thought  it was  probably the  same process  that                                                                    
occurred when  a person  applied for  a handicap  placard or                                                                    
license plate. She detailed that  a doctor had to verify the                                                                    
person  had a  disability. The  voluntary designation  would                                                                    
happen  the  same  way.  A   person's  disability  would  be                                                                    
verified by a doctor -  the specific disability would not be                                                                    
named. There was not a  liability to the state. She reasoned                                                                    
that if there was a liability  to the state, the issue would                                                                    
have  arisen  with  people  getting  handicap  placards  and                                                                    
plates.   The   disability   designator   would   serve   as                                                                    
notification  to  a  police  officer that  a  person  had  a                                                                    
disability;  unless a  person  wanted  to share  information                                                                    
about  their disability  with a  police officer,  they would                                                                    
not have  to divulge any information.  The designation would                                                                    
operate  as a  red  flag  to indicate  to  the officer  that                                                                    
perhaps something  else was  going on in  the event  that an                                                                    
interaction became unique.                                                                                                      
                                                                                                                                
Co-Chair MacKinnon handed the gavel to Vice-Chair Bishop.                                                                       
                                                                                                                                
9:33:18 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:33:43 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Ms.  Bergh  continued to  answer  the  question by  Co-Chair                                                                    
MacKinnon  related   to  liability.  She  relayed   that  by                                                                    
statute, there were only several  cases where a person could                                                                    
bring  a  suit  against   the  state.  The  information  was                                                                    
included  in a  legal memo  from the  Division of  Legal and                                                                    
Research Services dated  March 28, 2017 (copy  on file). She                                                                    
detailed that  if an  issue came before  a court,  the court                                                                    
would  have  to determine  whether  the  police officer  was                                                                    
following training; it could be  a liability to the state if                                                                    
it was  determined the officer  was not  following training.                                                                    
The designator itself would not cause any liability.                                                                            
                                                                                                                                
Senator Micciche  highlighted a  case in his  district where                                                                    
an  individual  with  an   anxiety  disorder  experienced  a                                                                    
negative outcome with law enforcement.  He detailed that the                                                                    
person had  a taillight out  and had a panicked  reaction to                                                                    
being pulled  over. He supported  the bill because  of that.                                                                    
He  asked  why  digestive   issues  had  been  included.  He                                                                    
believed  it  was a  catchall  for  hidden disabilities.  He                                                                    
continued  that  about  half  of  hidden  disabilities  were                                                                    
unlikely  to have  a negative  outcome with  an officer.  He                                                                    
asked why the  bill did not differentiate  between the types                                                                    
of disabilities.                                                                                                                
                                                                                                                                
Representative  Thompson stated  that  his  office had  been                                                                    
provided with a  lengthy list of disabilities  that could be                                                                    
considered  nonapparent. He  agreed there  were many  on the                                                                    
list  that should  probably not  be  considered. He  assumed                                                                    
that the  DMV may reduce  the list because the  current list                                                                    
included disabilities  that were not qualified  or pertinent                                                                    
to the situation.                                                                                                               
                                                                                                                                
9:36:25 AM                                                                                                                    
                                                                                                                                
Vice-Chair Bishop  asked whether DMV would  have the ability                                                                    
to  pick and  choose from  the list  of hidden  disabilities                                                                    
titled  "Appendix A"  in members'  packets  (copy on  file).                                                                    
Alternatively,  he  wondered  whether there  would  be  firm                                                                    
rules on which disabilities would be included.                                                                                  
                                                                                                                                
Representative Thompson deferred to Ms. Bergh.                                                                                  
                                                                                                                                
Ms. Bergh replied that "hidden  disabilities" was a new term                                                                    
set  by the  World Health  Organization (WHO)  in 2001.  The                                                                    
organization    had   determined    there   were    numerous                                                                    
disabilities, some  were visible,  and others were  not. She                                                                    
elaborated  that  WHO  had  created   a  list  of  invisible                                                                    
disabilities that could cause  individuals to have a medical                                                                    
issue.  The list  in Appendix  A  was derived  from the  WHO                                                                    
list, which continued to grow  as the term hidden disability                                                                    
evolved.  She  explained  that  a  medical  physician  would                                                                    
specify  whether  a  person was  eligible  for  a  voluntary                                                                    
designator  on their  identification.  She  detailed that  a                                                                    
physician  be able  to determine  whether something  did not                                                                    
qualify for  the designation.  She believed  most physicians                                                                    
would  be   realistic  about  what  disabilities   would  be                                                                    
eligible for a designator.                                                                                                      
                                                                                                                                
9:38:43 AM                                                                                                                    
                                                                                                                                
Senator von Imhof  believed it was beneficial  that the bill                                                                    
would provide sensitivity training  for police officers, but                                                                    
she hoped it would not be  used against a police officer who                                                                    
had to  use force when they  deemed it to be  necessary. She                                                                    
spoke   to  a   circumstance  where   an  individual   acted                                                                    
aggressively and  force by the police  officer was required.                                                                    
She hoped an  officer would not be  reprimanded unfairly for                                                                    
using the normal course of response.                                                                                            
                                                                                                                                
Representative Thompson thought the  bill was something that                                                                    
would help  officers communicate with people.  He emphasized                                                                    
that  the  designation did  not  provide  any privileges  or                                                                    
extended  rights.  The purpose  of  the  designation was  to                                                                    
alert an  officer that an  individual had a  disability. The                                                                    
officer  could  then ask  the  individual  a question  about                                                                    
their disability to  work towards a good  outcome. He stated                                                                    
that if a person acted  physically or badly, they should not                                                                    
be treated any differently  than another person. The purpose                                                                    
was to  encourage communication  and to  avoid overreactions                                                                    
to situations.                                                                                                                  
                                                                                                                                
9:40:37 AM                                                                                                                    
                                                                                                                                
Senator  Olson   wondered  if   other  states   had  similar                                                                    
designations on driver's licenses.                                                                                              
                                                                                                                                
Ms.  Bergh  responded that  other  states  had trainings  on                                                                    
hidden  disabilities  and   information  was  available  for                                                                    
individuals to  know what happens  when a person  is stopped                                                                    
by  an  officer. To  her  knowledge  no  other state  had  a                                                                    
designator.                                                                                                                     
                                                                                                                                
Senator  Olson  asked  if  the   training  used  a  list  of                                                                    
disabilities.                                                                                                                   
                                                                                                                                
Ms.  Bergh  replied that  they  had  not researched  whether                                                                    
other states were using certain lists.                                                                                          
                                                                                                                                
9:41:51 AM                                                                                                                    
                                                                                                                                
Ms. Bergh  reviewed the sectional  analysis for HB  16 (copy                                                                    
on file):                                                                                                                       
                                                                                                                                
     Section  1. Amends  AS 18.65.220  to include  statutory                                                                    
     language  that   expands  the  duties  of   the  police                                                                    
     standards   council's  training   program  to   include                                                                    
     training in  recognizing and interacting with  a person                                                                    
     with  disabilities,  as  well as  familiarization  with                                                                    
     resources  that  are  available to  those  with  hidden                                                                    
     disabilities.                                                                                                              
                                                                                                                                
     Section  2.  Adds a  new  subsection  to AS  18.65.310.                                                                    
     Providing that a person may voluntarily                                                                                    
     designate on  their state identification card  that the                                                                    
     person has a disability and the proof required for the                                                                     
     designation.                                                                                                               
                                                                                                                                
     Section   3.   Amends   AS  18.65.670(c)   to   include                                                                    
     disability training to village public safety officers.                                                                     
                                                                                                                                
     Section  4.  Amends  AS  28.05.011   by  adding  a  new                                                                    
     subsection to  include the duties  and responsibilities                                                                    
     of  drivers when  encountering or  being  stopped by  a                                                                    
     peace officer and that this  information be included in                                                                    
     the driver's manual.                                                                                                       
                                                                                                                                
     Section  5. AS  28.15.111 is  amended by  adding a  new                                                                    
     subsection   (d),   providing   that   a   person   may                                                                    
     voluntarily designate on  their Alaska Driver's License                                                                    
     a  disability  designation,   proof  required  for  the                                                                    
     designation and fees that may be charged. Adds                                                                             
     naturopath to the list of licensed individuals who can                                                                     
     provide proof of a disability.                                                                                             
                                                                                                                                
9:43:42 AM                                                                                                                    
                                                                                                                                
Senator Micciche  asked if a  $50 fee  would be paid  by the                                                                    
applicant requesting the designation on their license.                                                                          
                                                                                                                                
Ms. Bergh answered in the affirmative.                                                                                          
                                                                                                                                
Senator  Micciche  wondered  how the  Department  of  Public                                                                    
Safety  (DPS) could  have a  zero  fiscal note  if the  bill                                                                    
would require  training. He asked about  the hourly training                                                                    
requirement.                                                                                                                    
                                                                                                                                
Ms. Bergh shared that the  training had already taken place;                                                                    
therefore,  the fiscal  note was  zero.  The department  had                                                                    
learned the benefits of the  training while working with the                                                                    
bill   sponsor's   office   over   the   past   few   years.                                                                    
Subsequently,  the training  created  by  the Alaska  Police                                                                    
Standards Council had been implemented.                                                                                         
                                                                                                                                
9:44:52 AM                                                                                                                    
                                                                                                                                
Vice-Chair Bishop OPENED public testimony.                                                                                      
                                                                                                                                
JUANITA WEBB,  WALLBUSTERS, FAIRBANKS  (via teleconference),                                                                    
testified  in   support  of  the  bill.   She  relayed  that                                                                    
Wallbusters  was a  local advocacy  group in  Fairbanks. She                                                                    
thanked  the bill  sponsors for  bringing the  bill forward.                                                                    
She referred to  written testimony that she had  sent to the                                                                    
committee  sharing her  personal story  (copy on  file). She                                                                    
detailed  that  for  her,  the bill  was  about  safety  and                                                                    
standardized education  that would give new  officers a more                                                                    
complete  understanding  of disabilities  with  standardized                                                                    
training about visible and hidden disabilities.                                                                                 
                                                                                                                                
Ms. Webb believed the bill  would give officers another tool                                                                    
to help  guide their  interactions accordingly.  A discrete,                                                                    
voluntary icon  on a driver's license  would give additional                                                                    
information  to alert  officers  to potential  communication                                                                    
needs for a better outcome.  Throughout the bill process she                                                                    
had  learned that  people with  disabilities  and people  in                                                                    
general were unsure of  their responsibility when approached                                                                    
by   an  officer.   She  thought   that  adding   additional                                                                    
information to the  DMV manual would help  support the need.                                                                    
She reasoned that  the zero fiscal note was  an added bonus,                                                                    
especially  given  the  current economic  climate.  She  was                                                                    
proud to be part of a  bill that would help educate officers                                                                    
in their  approach to Alaskan  citizens and help  their jobs                                                                    
become  safer.  She  concluded  that  the  bill  would  make                                                                    
Alaskans  lives  safer  and more  informed.  She  asked  the                                                                    
committee to support the legislation.                                                                                           
                                                                                                                                
9:47:23 AM                                                                                                                    
                                                                                                                                
ART  DELAUNE, WALLBUSTERS,  FAIRBANKS (via  teleconference),                                                                    
spoke in support  of the bill. He relayed that  he worked at                                                                    
Access Alaska and was a  member of the Governor's Council on                                                                    
Disabilities and  Special Education.  He shared that  he had                                                                    
two sons with  hidden disabilities. He stated  that the bill                                                                    
was   about  better   communications,  accommodations,   and                                                                    
inclusion.  The  bill  would  reinforce  individual  choice,                                                                    
rights,  and  responsibilities.  The primary  focus  of  the                                                                    
legislation was on education and  training. He stressed that                                                                    
training  of law  enforcement  and  correction officers  was                                                                    
critical because often  recognizing a nonapparent disability                                                                    
was challenging. The bill called  for a minimum of an eight-                                                                    
hour training that would make  officers more aware that some                                                                    
individuals   may  present   with   a   behavior  that   was                                                                    
unintentional   or   may    be   viewed   as   noncompliant.                                                                    
Additionally,   the  training   would   teach  officers   to                                                                    
effectively  and  appropriately  interact  with  people  who                                                                    
experience  an   apparent  or  nonapparent   disability.  He                                                                    
underscored that the  most important aspect of  the bill was                                                                    
safety.  The intent  of  the bill  was  for law  enforcement                                                                    
officers  to discuss  information  about  a disability  only                                                                    
when a situation was secure and diffused.                                                                                       
                                                                                                                                
Mr.  Delaune  relayed  that Wallbusters  and  Representative                                                                    
Thompson had been  working on the bill for  over four years.                                                                    
He detailed that  over the past few years they  had met with                                                                    
many community  members, organizations, and  law enforcement                                                                    
and  corrections  academies.  The  goal  was  to  create  an                                                                    
effective bill  at no cost  that would improve the  lives of                                                                    
all  Alaskans. He  believed the  icon  the driver's  license                                                                    
would  enhance communication.  The bill  would also  educate                                                                    
the general  public. He stressed the  importance of Alaskans                                                                    
understanding   their  responsibilities   for  appropriately                                                                    
interacting with law enforcement.  He thought the bill would                                                                    
reduce potential conflicts between  Alaskans with or without                                                                    
disabilities. He relayed that an  identical bill (HB 77) had                                                                    
passed  the   House  the   previous  year   unanimously.  He                                                                    
explained  that the  bill had  stalled in  the Senate  Rules                                                                    
Committee. He urged the committee to pass the bill.                                                                             
                                                                                                                                
9:50:25 AM                                                                                                                    
                                                                                                                                
LARRY JOHANSON,  SELF, JUNEAU, testified  in support  of the                                                                    
bill. He relayed that he  had Parkinson's disease, which was                                                                    
often  misinterpreted  by people.  He  shared  that when  he                                                                    
walked by  the building  security it made  him wonder  if he                                                                    
would be  intercepted because of a  misinterpretation of his                                                                    
symptoms. He  stressed that  he lived  with the  issue every                                                                    
day. He  thought the  intent of  a symbol  [on a  license or                                                                    
identification  card] was  extremely positive.  He explained                                                                    
that the  discussion about  confrontation with  officers was                                                                    
an  escalated version  of evaluation  he  received daily  in                                                                    
particular  situations. He  believed a  symbol on  a license                                                                    
would  provide  a  third-party   indication  that  a  person                                                                    
experienced  a  disability and  it  would  prevent him  from                                                                    
having  to   prove  through  articulating  that   he  had  a                                                                    
disability. He thought  it would be helpful  even beyond the                                                                    
original intent of  the bill. For example,  the symbol could                                                                    
be useful when entering the capitol building.                                                                                   
                                                                                                                                
Mr.  Johanson   shared  a   personal  experience   of  being                                                                    
approached by  security in a  mall in Portland.  He detailed                                                                    
prior  to  his  condition  he   had  been  the  director  of                                                                    
operations for a cruise line  and part of his responsibility                                                                    
had  been  administering  Department of  Transportation  and                                                                    
Public Facilities regulations to  over 50 buses and drivers.                                                                    
He  was  very  familiar   with  the  regulatory  aspect.  He                                                                    
stressed the  importance of the  bill and offered  to answer                                                                    
any  regulatory  questions.  He thanked  the  committee  for                                                                    
considering the bill.                                                                                                           
                                                                                                                                
Senator von Imhof thanked Mr. Johansen for his testimony.                                                                       
                                                                                                                                
Vice-Chair Bishop returned the gavel to Co-Chair MacKinnon.                                                                     
                                                                                                                                
9:54:18 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:54:51 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
Vice-Chair  Bishop highlighted  existing  zero fiscal  notes                                                                    
including  one from  the Department  of Administration,  two                                                                    
from  the  Department  of  Corrections,  and  one  from  the                                                                    
Department of Public Safety. He  noted that the training was                                                                    
already being completed, hence the zero fiscal notes.                                                                           
                                                                                                                                
Co-Chair MacKinnon relayed that  amendments on the bill were                                                                    
due by Wednesday at 5:00 p.m.                                                                                                   
                                                                                                                                
HB  16  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
9:56:19 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:57:05 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 6                                                                                                             
                                                                                                                                
     "An Act relating to industrial hemp; and relating to                                                                       
     controlled substances."                                                                                                    
                                                                                                                                
9:57:05 AM                                                                                                                    
                                                                                                                                
SENATOR SHELLEY  HUGHES, SPONSOR, thanked the  committee for                                                                    
hearing  the bill.  She recounted  that several  farmers who                                                                    
wanted to  grow hemp had  contacted her office  the previous                                                                    
spring.  She  noted  that   the  farmers  were  particularly                                                                    
interested due  to the  privatization of  the meat  plant in                                                                    
Palmer. She highlighted that hemp  was a nutritious, easy to                                                                    
grow,  and  fast  growing  forage that  could  be  used  for                                                                    
livestock. Farmers were  working to build up  their herds in                                                                    
order  to  have locally  grown  beef  and pork  in  Alaska's                                                                    
grocery stores.  She cited Kentucky  as another  state where                                                                    
ranches were growing hemp.                                                                                                      
                                                                                                                                
Senator Hughes  discussed the history  of hemp. Some  of the                                                                    
early  drafts of  the Declaration  of Independence  had been                                                                    
drafted on hemp  paper. Additionally, hemp had  been used to                                                                    
make sails  for boats traveling  to America and  for covered                                                                    
wagons. In  1937, related to  marijuana, hemp had  been made                                                                    
illegal  in  the  U.S.  In recent  decades  and  because  of                                                                    
federal legislation,  hemp was on  the rise in the  U.S. She                                                                    
believed  it was  another economic  opportunity for  farmers                                                                    
and  growers in  Alaska. In  addition to  feed for  animals,                                                                    
there were more  than 25,000 uses for hemp.  She pointed out                                                                    
that because of  federal law, the bill  was more complicated                                                                    
than  one  that was  previously  offered  by former  Senator                                                                    
Johnny Ellis.  She had  begun with  the draft  language from                                                                    
the previous  bill, but once  she had learned of  changes at                                                                    
the federal level the bill  had grown somewhat. She stressed                                                                    
the importance of the economic opportunity for Alaska.                                                                          
                                                                                                                                
10:00:40 AM                                                                                                                   
                                                                                                                                
Senator  Hughes  communicated   there  had  been  tremendous                                                                    
support across  the state for  the bill. She noted  that one                                                                    
person expressed  concern that  the bill  could result  in a                                                                    
money pit and  grow the Division of  Agriculture. She shared                                                                    
that  the  division director  and  other  agency staff  were                                                                    
available online who could assure  the committee the concern                                                                    
would not  come to  fruition. She  reported that  some other                                                                    
states that had  not been in a fiscal  bind had appropriated                                                                    
money to add staff to  their departments of agriculture. She                                                                    
explained  that  it was  not  the  intention  of SB  6.  She                                                                    
believed the issue would be  manageable and highlighted that                                                                    
registration user fees would cover any costs.                                                                                   
                                                                                                                                
10:01:41 AM                                                                                                                   
                                                                                                                                
BUDDY WHITT,  STAFF, SENATOR  SHELLEY HUGHES,  discussed the                                                                    
Sectional Analysis for SB 6 (copy on file):                                                                                     
                                                                                                                                
     Sec. 1  Page 1, Lines 6-9                                                                                                  
     Intent  language that  the legislature  will reevaluate                                                                    
     the regulation of industrial hemp in seven years.                                                                          
                                                                                                                                
     Sec. 2  AS 03.05.010 Pages 1, 2 and 3, lines 1 - 10                                                                        
     Section  one  of  the  bill  amends  Title  3  to  give                                                                    
     additional  powers  and  duties to  the  Department  of                                                                    
     Natural  Resources, Division  of Agriculture,  to adopt                                                                    
     regulations relating  to Industrial Hemp.  This section                                                                    
     also  stipulates that  the prescribed  regulations must                                                                    
     include provisions  for approved  sources of  hemp seed                                                                    
     and testing requirements (paid for by the registrant).                                                                     
     This section also stipulates that  a list of registered                                                                    
     hemp growers must be provided  to the Marijuana Control                                                                    
     Board and the Department of Public Safety.                                                                                 
                                                                                                                                
Co-Chair MacKinnon asked about lines 26  and 27 on page 2 of                                                                    
the  bill.  She  had  read   the  backup  document  entitled                                                                    
"Statement of  Principles on Industrial Hemp"  [published in                                                                    
the  Federal  Register Volume  81,  No.  156, dated  Friday,                                                                    
August  12, 2016]  (copy on  file), which  provided guidance                                                                    
from  the federal  government on  the subject  of industrial                                                                    
hemp. She referred  to the first paragraph of page  2 of the                                                                    
statement:                                                                                                                      
                                                                                                                                
     ?the importation of viable cannabis seeds must be                                                                          
     carried out by persons registered with the DEA to do                                                                       
     so.                                                                                                                        
                                                                                                                                
Co-Chair MacKinnon read from page 2,  lines 26 and 27 of the                                                                    
bill:                                                                                                                           
                                                                                                                                
     (A) specify approved sources or varieties of hemp seed                                                                     
     to be grown, sold, or offered for sale...                                                                                  
                                                                                                                                
Co-Chair  MacKinnon  thought  the  notice  did  not  provide                                                                    
"offer for sale" allowances anywhere.  She noted it provided                                                                    
for research by  a higher education university  or the state                                                                    
agriculture program. She wondered  if the bill would preempt                                                                    
federal  law,  or  whether  the state  had  to  comply  with                                                                    
federal law.  She asked what  was happening with  the seeds.                                                                    
She  remarked that  seeds  were also  discussed  on page  2,                                                                    
lines 14  and 15  of the  bill pertaining  to transportation                                                                    
and movement.  She wondered about  the conflict  between the                                                                    
two documents.                                                                                                                  
                                                                                                                                
10:04:47 AM                                                                                                                   
                                                                                                                                
Mr. Whitt  replied that the document  referenced by Co-Chair                                                                    
MacKinnon was a statement  of principles on industrial hemp.                                                                    
He  explained  that  after  the Farm  Act  of  2014  defined                                                                    
industrial  hemp and  made  it legal  to  create hemp  pilot                                                                    
programs  at  the  state  level,   the  U.S.  Department  of                                                                    
Agriculture  had submitted  the statement  of principals  in                                                                    
August 2016. The issue pertained  more to the regulatory arm                                                                    
of federal law.  He stated that there was a  second act, the                                                                    
Omnibus bill  of 2015 passed  by Congress that  had included                                                                    
additional  provisions for  the transportation  of hemp  and                                                                    
hemp seeds  across state  lines. He  offered to  provide the                                                                    
materials to  the committee. He  explained that  the federal                                                                    
government   would   issue   an  associated   statement   of                                                                    
principles at  some time in  the future. He deferred  to the                                                                    
department  regarding  registration  with the  federal  Drug                                                                    
Enforcement  Administration (DEA).  He had  worked with  the                                                                    
Division  of  Agriculture  and  the  previous  committee  of                                                                    
referral  to   include  language   pertaining  to   idea  of                                                                    
certifying industrial hemp seed.                                                                                                
                                                                                                                                
10:06:46 AM                                                                                                                   
                                                                                                                                
ROB   CARTER,   DIVISION   OF   AGRICULTURE,   PALMER   (via                                                                    
teleconference),   stated  that   federal  guidelines   were                                                                    
guidelines. He  thought the bill  did a good job  at setting                                                                    
the   foundation  and   cornerstone  for   the  growth   and                                                                    
sustainability of  an industrial hemp program  in Alaska. He                                                                    
believed  there  could  be interpretations  of  all  of  the                                                                    
forms,  none   of  it  was  completely   clear.  Within  the                                                                    
agricultural  pilot program  resulting  from  the 2014  farm                                                                    
bill was  a program  to study  the growth,  cultivation, and                                                                    
marketing. He  believed the interpretation of  marketing was                                                                    
the to "offer for sale"  language. The reason for specifying                                                                    
approved  seed sources  was to  ensure the  state maintained                                                                    
the federal  guideline to stay  within 0.3 percent  THC seed                                                                    
sources or lower.                                                                                                               
                                                                                                                                
Co-Chair MacKinnon read from the statement of principles:                                                                       
                                                                                                                                
     Section 7606  specifically authorized  certain entities                                                                    
     to ``grow  or cultivate''  industrial hemp but  did not                                                                    
     eliminate   the   requirement  under   the   Controlled                                                                    
     Substances Import  and Export Act that  the importation                                                                    
     of  viable  cannabis  seeds  must  be  carried  out  by                                                                    
     persons registered with the DEA to do so.                                                                                  
                                                                                                                                
Co-Chair  MacKinnon  explained  that  a  person  had  to  be                                                                    
registered  with  the  DEA.  She asked  if  Mr.  Carter  was                                                                    
stating it was a guideline  when the statement of principles                                                                    
read that it "did not eliminate."                                                                                               
                                                                                                                                
Mr.  Carter affirmed  that the  guideline  and bullet  point                                                                    
were     there.     He     stipulated    that     in     any                                                                    
importation/exportation  or   intra/interstate  commerce  of                                                                    
viable cannabis  seeds would require  a permit from  the DEA                                                                    
(form 225). He elaborated that  a person could not apply for                                                                    
the  permit  through the  DEA  unless  they were  a  program                                                                    
registrant.                                                                                                                     
                                                                                                                                
10:09:14 AM                                                                                                                   
                                                                                                                                
Co-Chair  MacKinnon asked  if other  states had  interpreted                                                                    
marketing as "the sale of."                                                                                                     
                                                                                                                                
Mr.  Carter  believed  Colorado, Oregon,  and  Kentucky  had                                                                    
started using  the pilot program  and marketing  language to                                                                    
make all  parts of industrial  hemp, including seeds,  to be                                                                    
made or offered for sale within their state.                                                                                    
                                                                                                                                
Co-Chair  MacKinnon   read  additional  language   from  the                                                                    
statement of principles:                                                                                                        
                                                                                                                                
     For purposes  of marketing research by  institutions of                                                                    
     higher  education or  State departments  of agriculture                                                                    
     (including  distribution of  marketing materials),  but                                                                    
     not  for the  purpose of  general commercial  activity,                                                                    
    industrial hemp products may be sold in a State...                                                                          
                                                                                                                                
Co-Chair MacKinnon thought the  language specified that hemp                                                                    
could not be sold. She asked for clarification.                                                                                 
                                                                                                                                
Mr. Carter  replied that  he did not  have the  document and                                                                    
wanted  to  review it.  He  reported  that everyone  he  had                                                                    
spoken  with   in  other  states  with   hemp  programs  had                                                                    
communicated  that   the  sales   of  industrial   hemp  and                                                                    
marketing had  been occurring through their  industrial hemp                                                                    
pilot programs.  He offered to  look into the  issue further                                                                    
and follow up with the committee.                                                                                               
                                                                                                                                
Co-Chair MacKinnon read another bullet point:                                                                                   
                                                                                                                                
     Only the  State Department  of Agriculture  and persons                                                                    
     licensed,  registered,   or  otherwise   authorized  to                                                                    
     conduct  research under  an agricultural  pilot program                                                                    
     in accordance with this section.                                                                                           
                                                                                                                                
Co-Chair MacKinnon  wanted to understand how  research could                                                                    
be taken into  an economic activity that  would be available                                                                    
for Alaskans  as an income  generator. She asked  Mr. Carter                                                                    
to follow up with clarification.                                                                                                
                                                                                                                                
10:11:35 AM                                                                                                                   
                                                                                                                                
Mr.  Whitt notified  that committee  that attorney  Courtney                                                                    
Moran had  been working with  the sponsor's office.  She was                                                                    
familiar with  the industrial hemp programs  in other states                                                                    
and  with how  federal and  state laws  had intertwined.  He                                                                    
believed she may be able to provide additional information.                                                                     
                                                                                                                                
COURTNEY    MORAN,   EARTH    LAW    LLC,   PORTLAND    (via                                                                    
teleconference),   pointed  out   that   the  statement   of                                                                    
principles was  a general guidance document.  She elaborated                                                                    
it was important  to note that subsection 2  of the document                                                                    
read that  "This Statement of Principles  does not establish                                                                    
any   binding  legal   requirements."   She  detailed   that                                                                    
marketing research  was being conducted  in the  majority of                                                                    
states implementing industrial  hemp programs. She expounded                                                                    
that marketing required sales of  products. The bullet point                                                                    
specifically stated  that the  product may  not be  used for                                                                    
the  purpose  of  general commercial  activity;  it  further                                                                    
stated that  the products  may not be  sold in  states where                                                                    
such sale was prohibited.                                                                                                       
                                                                                                                                
Ms.  Moran  explained  that  if  a state  did  not  have  an                                                                    
established  program   or  was  otherwise   prohibiting  the                                                                    
particular products, the products  should not be sold there.                                                                    
The  language  was  not  an   outright  prohibition  on  the                                                                    
research  that Congress  had  specifically  provided for  in                                                                    
Section  7606 of  the Agricultural  Act, which  specifically                                                                    
provided  for marketing  research. The  legislation provided                                                                    
for the development of an  agricultural pilot program in the                                                                    
state. Therefore,  registrants registered with  the Division                                                                    
of Agriculture would be able to engage in market research.                                                                      
                                                                                                                                
10:13:51 AM                                                                                                                   
                                                                                                                                
Co-Chair  MacKinnon  asked  if someone  engaging  in  market                                                                    
research  normally sold  the product  for profit.  Ms. Moran                                                                    
answered that some people were doing that.                                                                                      
                                                                                                                                
Co-Chair MacKinnon  understood that  some people  were doing                                                                    
that. She asked if that qualified as research.                                                                                  
                                                                                                                                
Ms. Moran replied  in the affirmative. She  questioned how a                                                                    
market  could be  developed or  studied if  people were  not                                                                    
engaging in  sales within the  market. She confirmed  it was                                                                    
the  practice   in  Oregon,  Colorado,  and   Kentucky  (and                                                                    
potentially other states).                                                                                                      
                                                                                                                                
10:14:27 AM                                                                                                                   
                                                                                                                                
Co-Chair   MacKinnon   referred   to  Section   2   of   the                                                                    
legislation. She pointed to page  2, line 24 through page 3,                                                                    
line  10 outlining  regulations for  the industry  to adopt.                                                                    
She  noted that  under  the guidance  [in  the statement  of                                                                    
principles] there was language related  to a GPS location of                                                                    
all crops.  She saw  the language  later in  the legislation                                                                    
and  wondered why  it was  not  included in  Section 2.  She                                                                    
clarified that one of the  bullet points in the statement of                                                                    
principles included  criteria to  include in  legislation in                                                                    
order  to be  consistent  with the  federal guidelines.  She                                                                    
read an excerpt of the bullet point:                                                                                            
                                                                                                                                
     ...it  is  recommended  that such  registration  should                                                                    
     include the  name of  the authorized  manufacturer, the                                                                    
     period of  licensure or other time  period during which                                                                    
     such person  is authorized by the  State to manufacture                                                                    
     industrial  hemp, and  the  location, including  Global                                                                    
     Positioning System coordinates...                                                                                          
                                                                                                                                
Co-Chair  MacKinnon asked  if the  reference should  also be                                                                    
included in Section 2.                                                                                                          
                                                                                                                                
Mr. Whitt stated  that the bill's provision  on GPS location                                                                    
was a direction from  the federal government. The additional                                                                    
regulatory requirements  were added after the  GPS provision                                                                    
had already  been included.  The sponsor  had no  issue with                                                                    
requiring  it under  regulation and  the provision  included                                                                    
was sufficient  to meet federal  guidelines. The  intent was                                                                    
that a  grower would  disclose the  location of  their crop.                                                                    
Where the provision  appeared in the bill should  not make a                                                                    
huge difference, but  the bill sponsor would  be amenable to                                                                    
a  change if  the committee  deemed it  important enough  to                                                                    
include it under regulatory requirements.                                                                                       
                                                                                                                                
10:17:37 AM                                                                                                                   
                                                                                                                                
Co-Chair  MacKinnon   understood  that  the   provision  was                                                                    
included in  another section of  the bill. She did  not know                                                                    
whether there  was a differentiation for  including it under                                                                    
the powers and duties of  the commissioner of the Department                                                                    
of Natural Resources.                                                                                                           
                                                                                                                                
Mr. Whitt  clarified that  it made  no difference  where the                                                                    
provision appeared  in the bill;  wherever its  location, it                                                                    
would still be a requirement.                                                                                                   
                                                                                                                                
Co-Chair MacKinnon surmised the  issue was important because                                                                    
[hemp]  leaves  looked  exactly like  higher  producing  THC                                                                    
plants. She asked if her statement was accurate.                                                                                
                                                                                                                                
Mr. Whitt replied in the affirmative.                                                                                           
                                                                                                                                
Co-Chair  MacKinnon wanted  law  enforcement to  be able  to                                                                    
recognize a crop  that would be for other  purposes than THC                                                                    
content.                                                                                                                        
                                                                                                                                
Mr. Whitt agreed.                                                                                                               
                                                                                                                                
10:18:33 AM                                                                                                                   
                                                                                                                                
Senator von Imhof stated that she  had heard the bill in the                                                                    
Senate Resources Committee. She  detailed that the committee                                                                    
had  been concerned  with how  to handle  the fact  that the                                                                    
[hemp and  marijuana] leaves looked identical.  She recalled                                                                    
testimony that  [hemp] plants had to  be registered, spacing                                                                    
was  tighter (one  foot apart  as opposed  to three  to four                                                                    
feet  apart as  with marijuana  plants), GPS  was used,  and                                                                    
pictures  were taken  on  a daily  basis.  She had  wondered                                                                    
about  cloudy days  and times  when  there was  snow on  the                                                                    
ground. She  believed the sponsor  and her staff had  done a                                                                    
good  job  answering  questions   in  the  Senate  Resources                                                                    
Committee as well.                                                                                                              
                                                                                                                                
Co-Chair  MacKinnon spoke  to the  importance  of the  issue                                                                    
addressed  by the  bill and  explained it  could provide  an                                                                    
economic   opportunity,   particularly   in   the   district                                                                    
represented by Senator Hughes where  farming was common. She                                                                    
added that  the community  also grew marijuana  and carrots.                                                                    
She  stated  that  the  district  was  a  good  agricultural                                                                    
community that was wanting another product to invest in.                                                                        
                                                                                                                                
10:20:31 AM                                                                                                                   
                                                                                                                                
Mr. Whitt continued to address the Sectional Analysis:                                                                          
                                                                                                                                
     Sec. 3  AS 03.05.010 Page 3, lines 22-28                                                                                   
     This section  instructs the department to  issue a stop                                                                    
     order to  any person growing  a plant with a  THC level                                                                    
     over  .3 percent  and to  notify the  Marijuana Control                                                                    
     Board  and the  Department  of Public  Safety when  any                                                                    
     stop sale order is issued.                                                                                                 
                                                                                                                                
     Sec. 4    AS 03.05.076 Page 3, lines 29-31,  Page 4 and                                                                    
     Page 5, lines 1-27                                                                                                         
     Title 3, Chapter  5 is amended by adding  a new section                                                                    
     for  Industrial  Hemp  and  guidelines  for  registered                                                                    
     producers and the  department. This section establishes                                                                    
     that:                                                                                                                      
     (a)Industrial   Hemp   will   be   classified   as   an                                                                    
     agricultural  crop  in  the   state  of  Alaska.  Those                                                                    
     wishing to  produce industrial hemp must  register with                                                                    
     the Division of Agriculture  with information that must                                                                    
     include  but  is not  limited  to;  name, address,  and                                                                    
     global positioning  coordinates of the area  to be used                                                                    
     for production.                                                                                                            
                                                                                                                                
     (b)An individual  who is registered  with the  state of                                                                    
     Alaska may                                                                                                                 
          1. Produce industrial hemp                                                                                            
          2. Use  any propagation  method needed  to produce                                                                    
          industrial hemp.                                                                                                      
          3. Retain  hemp seeds  for the purpose  of growing                                                                    
          hemp in the future.                                                                                                   
          4. Retain and recondition  hemp that tests between                                                                    
          .3  percent and  1  percent THC  on  a dry  weight                                                                    
          basis,   but   industrial    hemp   intended   for                                                                    
          consumption  in  any  form   cannot  exceed  a  .3                                                                    
          percent THC level.                                                                                                    
     (c)An individual  who is registered  with the  state of                                                                    
     Alaska shall                                                                                                               
          1.  Comply with  testing standards  and procedures                                                                    
          as established in regulation                                                                                          
          2.  Retain   record  of  sale  for   three  years,                                                                    
          including the  name and address of  the person who                                                                    
          received the  industrial hemp and the  amount sold                                                                    
          or transferred.                                                                                                       
          3.  Make  records   available  to  the  department                                                                    
          during  normal business  hours and  the department                                                                    
          must give three days' notice of inspection.                                                                           
     (d)The Department shall                                                                                                    
          1. Establish fee levels.                                                                                              
          2. Annually review fee levels.                                                                                        
          3. Notify the MCB and  DPS when they have issued a                                                                    
          stop sale order.                                                                                                      
          4.  Require  a  person producing  industrial  hemp                                                                    
          over 1 percent to destroy their crop.                                                                                 
     (e)The Department may                                                                                                      
          1. Issue a stop sale  order or violation for those                                                                    
          growing industrial hemp without a registration.                                                                       
          2.   Adopt  regulations   for  approved   shipping                                                                    
          documents for industrial hemp.                                                                                        
         3. Conduct random tests and inspections.                                                                               
     (f)The Division of  Agriculture, a registered producer,                                                                    
     or  any  institution  of higher  education  may  import                                                                    
     and/or sell industrial hemp seeds.                                                                                         
     (g)Industrial  hemp  intended   for  human  consumption                                                                    
     cannot  exceed  .3  percent THC,  cannot  be  used  for                                                                    
     hashish or  hashish oil and  CBD oil is  not considered                                                                    
     hashish  or  hashish  oil  for  the  purposes  of  this                                                                    
     section.                                                                                                                   
     (h)  Producing Industrial  Hemp without  a registration                                                                    
     is a violation that carries a fine of $500.                                                                                
                                                                                                                                
10:24:12 AM                                                                                                                   
                                                                                                                                
Mr. Whitt continued reviewing the Sectional Analysis:                                                                           
                                                                                                                                
     AS 03.05.077 Page 5, Lines 28-31 and Page 6, Lines 1-4                                                                     
     In  keeping   with  federal  law,  this   section  adds                                                                    
     language  regarding  a  pilot  program  for  industrial                                                                    
     hemp, that  the Division  of Agriculture,  institute of                                                                    
     higher   education   or   a   registered   grower   may                                                                    
     participate in  the pilot program  and the  Division of                                                                    
    Agriculture may adopt regulations for this section.                                                                         
                                                                                                                                
     AS 03.05.078 Page 6, lines 5-15                                                                                            
     Authorized  copy  of  a current  hemp  registration  is                                                                    
     required when  transporting industrial hemp and  a copy                                                                    
     of the  registration must be presented  upon request of                                                                    
     a law  enforcement officer.  Using a  mobile electronic                                                                    
     device  to store  proof of  registration is  acceptable                                                                    
     and displaying proof  is such a way is  not consent for                                                                    
     a peace  officer to access  any other information  on a                                                                    
     person's personal mobile electronic device.                                                                                
                                                                                                                                
     AS 03.05.079 Page 6, lines 16-20                                                                                           
     A registered grower  of industrial hemp is  guilty of a                                                                    
     violation when they produce industrial  hemp with a THC                                                                    
     content of between .3 percent and 1 percent.                                                                               
                                                                                                                                
10:25:45 AM                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon pointed to language  at the top of page 4                                                                    
of the  bill that addressed individuals  would be registered                                                                    
for one  year. She noted  she had asked earlier  whether the                                                                    
GPS language in the section  should be included elsewhere in                                                                    
the  bill.  She referenced  line  14,  item (4)  related  to                                                                    
retaining and reconditioning  [of specific industrial hemp].                                                                    
She thanked  the sponsor's office  for coming to  her office                                                                    
to  review  the  bill.  She  did not  see  a  definition  of                                                                    
"reconditioning" and  asked Mr. Whitt to  provide detail for                                                                    
the public.                                                                                                                     
                                                                                                                                
Mr. Whitt  replied that  Mr. Carter  had provided  a written                                                                    
response (copy on  file). He detailed that  Mr. Carter could                                                                    
speak  to  the standard  practice  of  reconditioning as  it                                                                    
related to agricultural products.                                                                                               
                                                                                                                                
Co-Chair   MacKinnon  asked   Mr.   Carter   to  provide   a                                                                    
recognizable  definition  of  reconditioning  in  regard  to                                                                    
agriculture.                                                                                                                    
                                                                                                                                
Mr.  Carter stated  that reconditioning  was  a widely  used                                                                    
practice  in  agricultural  crops, commodities,  and  seeds.                                                                    
Reconditioning  was done  with most  grains and  grasses and                                                                    
seeds  sold   around  the  world.  He   elaborated  that  if                                                                    
something did not meet a  grade or set tolerance, there were                                                                    
options to try to improve that  lot. The definition of a lot                                                                    
was  a  field  harvested,  a  collection  of  one  that  was                                                                    
contiguous.                                                                                                                     
                                                                                                                                
Mr. Carter provided  an example where an  acre of industrial                                                                    
hemp was grown. At the time  of testing the hemp came out to                                                                    
be 0.35  percent. He  explained that  given a  short growing                                                                    
season and  significant investment by  a farmer, it  was not                                                                    
desirable to put the farmer  in a situation where they could                                                                    
not generate revenue or utilize  the crop. He expounded that                                                                    
if a  crop came  in to be  a bit higher  (between 0.3  and 1                                                                    
percent THC value),  with the approval of  the division, the                                                                    
registrant could  blend the lot that  was a bit over  with a                                                                    
lot that  was under the  minimum requirement to  achieve the                                                                    
appropriate level.  He explained that  if the lot  still did                                                                    
not  meet the  requirement  it would  be  recommended to  be                                                                    
destroyed. He relayed  that the practice was  very unique to                                                                    
the  industrial hemp  industry because  it  depended on  the                                                                    
type and parts  of plants being used. He  furthered that two                                                                    
noncontiguous  fields of  stocks, leaves,  and flowers  used                                                                    
for feed  or fiber could  be blended  at the baling  time at                                                                    
the processing facility to drop  the overall THC value below                                                                    
the 0.3 percent.                                                                                                                
                                                                                                                                
10:29:46 AM                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon  asked whether Alaska statute  included a                                                                    
definition  of  recondition  and whether  a  definition  was                                                                    
needed. She explained that in  other bill sections specified                                                                    
that  a crop  with  1 percent  or more  [THC]  needed to  be                                                                    
burned. She wondered how a  grower would know if they should                                                                    
burn or try  to recondition the crop. She asked  if it was a                                                                    
normal process a grower would undertake.                                                                                        
                                                                                                                                
Mr.  Carter  answered  that  the  threshold  to  retain  and                                                                    
recondition industrial  hemp was  between 0.3 percent  and 1                                                                    
percent (page  4, line 14  of the bill). He  elaborated that                                                                    
if a lot fell between 0.3  and 1 percent, it had the option,                                                                    
under the  direction of the  division, to  be reconditioned.                                                                    
He  explained the  lot  would  have to  be  destroyed if  it                                                                    
tested above 1 percent. The  state did not have a definition                                                                    
of reconditioning  [in statute]. He noted  the division also                                                                    
addressed reconditioning in its other seed regulations.                                                                         
                                                                                                                                
10:31:10 AM                                                                                                                   
                                                                                                                                
Co-Chair  MacKinnon was  interested  in the  section of  the                                                                    
bill that  specified crops  above 1  percent [THC]  would be                                                                    
destroyed. She discussed that within  a field there may be a                                                                    
plant producing  a higher rate  than anticipated.  She asked                                                                    
if a grower would continually mix  a product down or get rid                                                                    
of certain  plants if  a larger group  of plants  produced a                                                                    
higher  content. She  wondered how  a grower  would know  at                                                                    
what point to burn versus recondition.                                                                                          
                                                                                                                                
Mr.  Carter directed  attention to  page 5,  line 5,  of the                                                                    
bill,  which required  an  individual  registered under  the                                                                    
section whose industrial  hemp tested over 1  percent THC to                                                                    
destroy  the  product, so  it  could  not  be used  for  the                                                                    
purpose  of  reconditioning.  The   section  set  the  upper                                                                    
threshold  -   that  anything  over   1  percent   would  be                                                                    
destroyed. He  agreed that a  THC level between  0.3 percent                                                                    
and  1  percent   would  allow  a  producer   to  begin  the                                                                    
reconditioning  process. He  relayed that  regulations would                                                                    
establish the testing requirements  and testing would likely                                                                    
not  occur  until around  harvest  time.  He explained  that                                                                    
industrial hemp  had been outlawed  for over 70 years  so no                                                                    
one was certain what the values  of THC would be through the                                                                    
growing  season.  He  considered  whether  levels  would  be                                                                    
affected  by environmental  conditions (e.g.  if one  grower                                                                    
watered  more than  another). Part  of the  research of  the                                                                    
pilot program was  to gain the information.  He believed the                                                                    
threshold  language provided  growers the  ability to  blend                                                                    
lots to meet the threshold.                                                                                                     
                                                                                                                                
10:33:20 AM                                                                                                                   
                                                                                                                                
Vice-Chair Bishop  provided a scenario  where a crop  held a                                                                    
couple of  rogue seeds. He  wondered how random  testing and                                                                    
inspections would  be conducted. He expressed  concern about                                                                    
the  possibility  of  inadvertent   wild  seeds  that  might                                                                    
adversely affect a large acreage of crops.                                                                                      
                                                                                                                                
Mr.  Carter  concurred.  He detailed  that  like  any  other                                                                    
agricultural  crop, there  were set  protocols for  sampling                                                                    
fields or  seed lots, which  would be defined  in regulation                                                                    
based  on  size  and  planting density.  He  expounded  that                                                                    
industrial hemp was planted similarly  to wheat or barley at                                                                    
1 million to  1.2 million seeds per acre.  He explained that                                                                    
hemp crops looked  like an extremely large and  tall crop of                                                                    
cereal grains.  The sampling protocols  would be  defined in                                                                    
regulation.  He  explained  that the  agricultural  industry                                                                    
allowed  the  option  for  roguing   or  to  remove  certain                                                                    
diseased, virus, or  insect plants. He believed  it would be                                                                    
a  bit more  difficult basing  an inspection  on THC  values                                                                    
because  it  would not  be  a  visual inspection  and  would                                                                    
require  testing in  a laboratory.  He furthered  that if  a                                                                    
crop ended up with one or  two "hot" seeds above 0.3 percent                                                                    
or over  1 percent  out of  a field of  1 million  seeds per                                                                    
acre,   the  representative   sample  was   a  process.   He                                                                    
acknowledged that the testing  did not catch everything, but                                                                    
how lots  were tested  nationally and internationally  was a                                                                    
set   standard.  The   testing   would   provide  the   best                                                                    
opportunity  for  the  producer  to  have  a  representative                                                                    
sample for testing.                                                                                                             
                                                                                                                                
10:36:32 AM                                                                                                                   
                                                                                                                                
Vice-Chair  Bishop  thought  it  was  interesting  that  the                                                                    
Alaska agricultural  experimental stations had  been growing                                                                    
hemp in 1916.  He wondered if records were  available at the                                                                    
University  of Alaska  to  learn about  the  THC content  in                                                                    
1916.                                                                                                                           
                                                                                                                                
Co-Chair MacKinnon shared that  she had additional questions                                                                    
in  the regulation  of hemp  oil  being added  to food.  She                                                                    
remarked that Alaska  regulated food only in  the crop form,                                                                    
but  not in  the  content that  may be  put  into food.  She                                                                    
relayed her intent to move to public testimony.                                                                                 
                                                                                                                                
Senator Hughes  commented that it was  helpful to understand                                                                    
that marijuana  growers were aiming  for THC  levels between                                                                    
20 and  30 percent. She  thought the information  was useful                                                                    
as a barometer  when considering THC levels of  1 percent or                                                                    
below.                                                                                                                          
                                                                                                                                
Co-Chair MacKinnon  agreed the point was  important to note.                                                                    
She  added that  individuals growing  marijuana for  medical                                                                    
purposes were looking for a much higher THC level.                                                                              
                                                                                                                                
Co-Chair MacKinnon  OPENED public testimony on  version E of                                                                    
SB 6.                                                                                                                           
                                                                                                                                
10:38:37 AM                                                                                                                   
                                                                                                                                
STEVE   ST.  CLAIR,   SELF,  MAT-SU   (via  teleconference),                                                                    
testified in opposition  to the bill. He was  not opposed to                                                                    
farming of hemp, but he  was opposed to increasing the scope                                                                    
of  government by  creating additional  regulations. He  had                                                                    
examined  Washington, Kentucky,  and Colorado  hemp programs                                                                    
and had  learned they were not  fiscally self-sustaining. He                                                                    
stated that the Colorado  program was almost self-sustaining                                                                    
after  three  years -  fees  had  to  be increased  for  the                                                                    
program to pay  for itself. He referred to a  fiscal note by                                                                    
the   Department  of   Natural   Resources  specifying   the                                                                    
department  would adopt  regulations  and manage  associated                                                                    
registrations through existing staff.  He thought it sounded                                                                    
like  the bill  would  have  to be  passed  to  see what  it                                                                    
entailed. He  thought the budget  had been cut to  the bone.                                                                    
He believed the Division of  Agriculture would have to spend                                                                    
excess  funds that  it should  not  have to  begin with.  He                                                                    
thought  the bill  was fiscally  irresponsible.  He did  not                                                                    
support running  pilot programs during a  fiscal crisis when                                                                    
the  state  was  considering  increasing  taxes  and  taking                                                                    
Permanent Fund Dividends.                                                                                                       
                                                                                                                                
10:40:46 AM                                                                                                                   
                                                                                                                                
EMBER  HAYNES, SELF,  TALKEETNA (via  teleconference), spoke                                                                    
in   support  of   the  bill.   She  supported   the  Alaska                                                                    
agricultural hemp industry. She  encouraged keeping the bill                                                                    
as simple as possible while  complying with the federal farm                                                                    
bill.  She shared  that  she  and her  husband  were in  the                                                                    
business  of  creating  hempseed oil  products  by  infusing                                                                    
Alaskan  wildcrafted herbs  into oil  to make  soaps, balms,                                                                    
and tinctures.  She would love  to incorporate  Alaskan hemp                                                                    
into their  products. She  believed the  bill was  the first                                                                    
step towards the possibility.                                                                                                   
                                                                                                                                
10:41:44 AM                                                                                                                   
                                                                                                                                
STEVE  ALBERS, KENAI  SOIL  &  WATER CONSERVATION  DISTRICT,                                                                    
KENAI (via  teleconference), spoke  in support of  the bill.                                                                    
He stated that according  to the 2015 Congressional research                                                                    
report,  annual sales  of industrial  hemp  products in  the                                                                    
U.S. were about $550 million.  He detailed that the U.S. was                                                                    
the only developed nation that  had not developed industrial                                                                    
hemp  on a  commercial basis;  therefore, the  U.S. imported                                                                    
all of  the products from  China and Canada. He  stated that                                                                    
Kenai Peninsula  farmers were eager to  explore the economic                                                                    
opportunities represented by  the hearty, multipurpose crop,                                                                    
which could be  used for food, forage,  fiber, and thousands                                                                    
of  industrial uses.  Crop trials  conducted decades  ago in                                                                    
Alaska and hemp grown in  Canada demonstrated the crop would                                                                    
grow successfully in Alaska.                                                                                                    
                                                                                                                                
Mr.   Albers  asserted   that   industrial  hemp   presented                                                                    
opportunities  to farmers  and could  help address  problems                                                                    
with affordable housing and energy  in Alaska. He emphasized                                                                    
that the use of hemp  in construction and insulation had the                                                                    
potential   to  significantly   mitigate  waste   in  energy                                                                    
consumption and other. He stated  that industrial hemp fiber                                                                    
provided  an  alternative   to  polypropylene  products  and                                                                    
chemical   dispersants  used   in  oil   spills  and   other                                                                    
bioremediation  efforts.  He  shared  that  each  year  more                                                                    
states were opening the door  to additional research and the                                                                    
application of industrial hemp  by legalizing its commercial                                                                    
cultivation. He  urged the  committee to  add Alaska  to the                                                                    
growing number  of states and  to allow farmers  the ability                                                                    
to pursue hemp as a viable commercial product.                                                                                  
                                                                                                                                
10:44:28 AM                                                                                                                   
                                                                                                                                
ABIGAIL ST. CLAIR, SELF,  MAT-SU (via teleconference), spoke                                                                    
in  opposition to  the  bill. She  had  found evidence  that                                                                    
industrial hemp  in Washington,  Colorado, and  Kentucky was                                                                    
not self-sustaining. She  elaborated that the aforementioned                                                                    
states had  spent hundreds of  thousands of dollars  with no                                                                    
guarantee  that the  investment  would pencil  out. She  had                                                                    
looked  at various  sources including  information from  the                                                                    
University   of   Kentucky   and   Ontario's   Ministry   of                                                                    
Agriculture, Food, and Rural  Affairs website. She discussed                                                                    
the costs of  farming hemp, and thought it  was an expensive                                                                    
process that  the state could  not afford. She  listed costs                                                                    
she  had estimated.  She emphasized  that  the governor  had                                                                    
taken  half of  the Permanent  Fund Dividend  and wanted  to                                                                    
introduce  other taxes.  She  stressed  that many  residents                                                                    
were  leaving  the state  because  the  legislature had  not                                                                    
reduced  spending. She  stated that  hemp would  not support                                                                    
the  legislature's spending  habits. She  thought there  had                                                                    
been enough  government intervention.  She wanted  to reduce                                                                    
the government footprint.                                                                                                       
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
10:47:14 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:48:13 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
SB  6   was  HEARD  and   HELD  in  committee   for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
Co-Chair MacKinnon  shared that  SB 6  would be  heard again                                                                    
during the  afternoon meeting.  She relayed  that amendments                                                                    
were due by  Wednesday at 5:00 p.m.  She provided additional                                                                    
information regarding other legislation.                                                                                        
                                                                                                                                
ADJOURNMENT                                                                                                                   
10:49:06 AM                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:49 a.m.                                                                                         
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
SB97 Sectional Analysis.pdf SFIN 4/4/2017 9:00:00 AM
SB 97
SB97 Sponsor Statement.pdf SFIN 4/4/2017 9:00:00 AM
SB 97
HB 16 Sponsor Response to Concerns of Senate State Affairs Committee from Mtg on 3-23-17.pdf SFIN 4/4/2017 9:00:00 AM
HB 16
SCS HB 16- Legal Memo - Concerns from SSA Committee.pdf SFIN 4/4/2017 9:00:00 AM
HB 16
HB 57 Public Testimony Packet 040317.pdf SFIN 4/4/2017 9:00:00 AM
HB 57
SB 97 Von Imhof Amendment D.1.pdf SFIN 4/4/2017 9:00:00 AM
SB 97
SB 6 Carter Testimony.pdf SFIN 4/4/2017 9:00:00 AM
SB 6