Legislature(2017 - 2018)SENATE FINANCE 532
04/04/2017 01:30 PM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB6 | |
| SB31 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 31 | TELECONFERENCED | |
| += | SB 6 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
April 4, 2017
1:49 p.m.
1:49:04 PM
CALL TO ORDER
Co-Chair MacKinnon called the Senate Finance Committee
meeting to order at 1:49 p.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
Buddy Whitt, Staff, Senator Shelley Hughes; Kaci Schroeder,
Assistant Attorney General, Department of Law; Leslie
Ridle, Deputy Commissioner, Department of Administration;
Kate Sheehan, Director, Division of Personnel and Labor
Relations, Department of Administration; Juli Lucky, Staff,
Senator Anna MacKinnon.
PRESENT VIA TELECONFERENCE
Rob Carter, Division of Agriculture, Palmer.
SUMMARY
SB 6 INDUSTRIAL HEMP PRODUCTION
SB 6 was HEARD and HELD in committee for further
consideration.
SB 31 NO ST. EMPLOYEE PAY INCREASE FOR 2 YRS
SB 31 was HEARD and HELD in committee for further
consideration.
SENATE BILL NO. 6
"An Act relating to industrial hemp; and relating to
controlled substances."
1:50:11 PM
Co-Chair MacKinnon wondered why the three-year limit was
chosen to maintain records following the sale of industrial
hemp. She remarked that the federal government typically
maintained a five or ten-year record.
1:51:24 PM
BUDDY WHITT, STAFF, SENATOR SHELLEY HUGHES, replied that it
was modeled after other hemp programs in other states. He
stressed that it was important to keep the records for a
length of time.
Co-Chair MacKinnon wondered whether the GPS location needed
to be included in the bill. Mr. Whitt responded that
Division of Agriculture would have that GPS information in
their records, so it was not included in the piece.
Co-Chair MacKinnon looked at page 4, line 29; and page 5
line 1. These locations referenced to fees collected that
equaled the regulatory costs of the proposed new industry.
She wondered why the word "approximate" was used. She noted
that other licensures were required to pay for the cost of
the program support, and the word "approximate" was not
used for those programs. The legislature normally confines
the program to a fee that supported the costs. Mr. Whitt
replied that "approximate" was used, because it was a new
industry for the state. The fees associated with the
registration would be charged prior to the growth of the
prop. There was no way to know exactly the regulatory
costs, because the crop had not yet grown.
1:56:33 PM
Co-Chair MacKinnon wondered whether the words "may" or
"shall" for inspections would cause an increase to the
fiscal note. She wondered why there was no issued violation
related to a problem in the industry. Mr. Whitt replied
that the Division of Agriculture may want to use some
leniency in the beginning to review the crop at a
violation.
1:57:36 PM
ROB CARTER, DIVISION OF AGRICULTURE, PALMER (via
teleconference), stated that the language was by the bill
sponsor. The interpretation by the division was that the
should the incumbent of the stop-sell order not follow the
order; the violation would be allocated to that individual.
Co-Chair MacKinnon looked at line 19, which said "may
import into the state, and resell industrial hemp seeds."
The guidance said that the Drug Enforcement Agency (DEA)
needed to be involved in that transaction. Mr. Carter
replied that the DEA would need to issue a form that
allowed the transfer of a controlled substance. The
registrant could apply through the DEA to import seeds, and
then recoup the costs to another registrant of the program.
Co-Chair MacKinnon queried the comment on $500, and whether
that was consistent with other places in code for a
violation. Mr. Whitt replied that in AS 03.05.090, it
stated that the Division of Agriculture had the authority
to issue a civil penalty for up to $500 for farmers who
were not following the guidelines. He remarked that there
was an additional provision to increase that fee to a Class
A misdemeanor.
Co-Chair MacKinnon wondered whether the $500 would be a
deterrent, should the chemical content be higher. Mr. Whitt
replied the Division of Agriculture had the authority to
fine $500 as often as was needed. He stressed that the crop
would have a THC content of 0.3. He stated that a THC
content of above 1.0 would be a criminal violation.
2:03:13 PM
Vice-Chair Bishop hoped to have an expert to discuss
industrial hemp versus the "other kind of pot." Mr. Carter
replied that he could answer that question.
Vice-Chair Bishop understood that hemp would grow an excess
of above four feet. The retail marijuana for consumption
did not grow that tall. He understood that the leaves were
the same, but hemp did not have any buds; and the stock and
fibers were different. Mr. Carter replied that the planting
densities determined the trait differences. He stated that
industrial hemp was upright and recreational marijuana was
a larger and wider plant to create flowers. He stated that
the largest difference was that the recreational growers
were growing cannabis sativa for the flowers and the female
byproducts. The industrial hemp industry grew male and
female plants in one setting, resulting in pollination and
seed development.
2:05:59 PM
Vice-Chair Bishop asked how the THC content was lowered in
hemp production. He wondered whether the seeds were
modified. Mr. Carter responded that industrial hemp seeds
have not been modified in a laboratory.
Co-Chair MacKinnon queried the definition of "cannabidiol
(CBD) oil." Mr. Whitt responded that CBD oil was already
available in stores. He stated that the CBD content would
be high in a low THC content plant.
Co-Chair MacKinnon wondered how CBD oil would be used. Mr.
Whitt responded that CBD oil was the oil content of
industrial hemp that was used in products like lotions,
soaps, and candles.
Co-Chair MacKinnon looked at page 6, line 8, and wondered
why "peace officer" was used instead of law enforcement.
Mr. Whitt replied that it matched current statute.
Mr. Whitt continued to discuss the Sectional Analysis (copy
on file):
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.
Sec. 5 AS 03.05.100 Page 6, Lines 21-23
The definition of industrial hemp, which meets the
definition is federal statute, is the plant Cannabis
Sativa L containing less that 0.3 percent delta-9
tetrahydrocannabinol (THC).
Sec. 6 AS 11.71.900 Page 6, Lines 24-31 and Page 7,
Lines 1and2
Amendment in statute to remove industrial hemp as
defined in AS 03.05.100 from the list of controlled
substances.
Sec. 7 AS 17.20.020 Page 7, Line 3-5
Food containing industrial hemp as defined in AS
03.05.100 is not considered adulterated.
2:11:39 PM
Co-Chair MacKinnon queried the regulation of food and
consumption with the product used in food. Mr. Whitt
replied that the Department of Environmental Conservation
(DEC) regulated food.
Co-Chair MacKinnon looked at Section 7, page 7, and queried
the regulation of industrial hemp in the food supply. Mr.
Carter that food products were regulated by DEC.
Co-Chair MacKinnon queried a fact sheet about the foods
that contained hemp.
Mr. Whitt continued to discuss the Sectional Analysis:
Sec. 8 AS 17.38.900 Page 7, Lines 6-14
Amendment is statute to further remove industrial hemp
as defined in AS 03.05.100 from marijuana definitions.
Sec. 9, Page 7, Lines 15-30
By December 1, 2024 the Department of Natural
Resources will issue a report to the legislature on
the regulation of industrial hemp in the state of
Alaska.
2:17:10 PM
Co-Chair MacKinnon remarked that currently under federal
law, hemp was a controlled substance. She understood that
the bill removed hemp from the controlled substance
schedule. Mr. Whitt deferred to Ms. Schroeder.
2:18:27 PM
KACI SCHROEDER, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF
LAW, explained that marijuana was a schedule 1 controlled
substance under federal law. She stated that the farm bill
specifically addressed hemp production, should the THC
level be below 0.3 percent.
Co-Chair MacKinnon believed that it was still considered a
controlled substance. Ms. Schroeder queried the document
referenced.
Co-Chair MacKinnon stated that she was looking at the
"Notice of Guidance" (copy on file). Ms. Schroeder replied
that following Section 706 would allow that conduct with
industrial hemp.
Co-Chair MacKinnon queried comments on the controlled
substance issue. Mr. Carter responded that Section 706 of
the Farm Bill did not remove industrial hemp from the
National Controlled Substance Act, but it did give legal
by-proxy to the activities authorized under the Industrial
Hemp Pilot Program. The language removing hemp from the
Alaska Controlled Substance list was to protect the
agricultural industry.
Co-Chair MacKinnon remarked that marijuana was still on the
controlled substance list in the state. Therefore, hemp
would now be seen differently. Ms. Schroeder replied that
without the change in the bill, hemp would fall under the
same definition as marijuana.
2:22:00 PM
Senator Dunleavy queried the other restrictions on
marijuana in the state.
Co-Chair MacKinnon felt that it was a circular argument.
Senator Dunleavy felt that hemp was getting more scrutiny
than marijuana. Ms. Schroeder replied that personal use
marijuana allowed for baking into foods, operating with one
ounce or less; or twelve plants within a dwelling.
Senator Dunleavy replied that those were limited under the
state criminal code. Ms. Schroeder agreed.
Mr. Whitt furthered that the bill was under scrutiny. He
stressed that the bill sponsor wanted to ensure that the
public interest was protected.
Co-Chair MacKinnon stressed that the marijuana discussion
over a previous legislature did not remove marijuana from
the controlled substance list. The purpose was that it was
still listed as a controlled substance at the federal
level.
Senator Micciche wondered whether a better analogy might be
the difference between a grape and wine. Ms. Schroeder
replied that she could not comment on that analogy.
Senator Micciche queried the point at which hemp could be
transported across state lines in the form of a product.
Ms. Schroeder deferred to Mr. Carter.
Mr. Carter stated that an inviable hemp seed could be sold
and transported; and any non-raw agricultural product could
be transported worldwide.
Mr. Whitt stated that the Department of Law (DOL) pointed
out one area that he hoped the committee would consider. He
noted that there were numerous issues of confiscating CBD
oil across the state. He looked at page 5, lines 21 through
25, where the bill specifically addressed hashish and
hashish oil as defined in AS 11.71.900; but not to include
CBD oil. He stated that to remove oil from the criminal
code to avoid confiscation of CBD oil in the future, there
needed to be an exclusion of CBD oil from AS 11.71.900.
Co-Chair MacKinnon asked to review the fiscal notes
Vice-Chair Bishop addressed the fiscal notes.
Co-Chair MacKinnon announced that there would be a
discussion about the need for $25,000 to draft the
regulations.
SB 6 was HEARD and HELD in committee for further
consideration.
2:33:38 PM
AT EASE
2:35:19 PM
RECONVENED
Co-Chair MacKinnon handed the gavel to Vice-Chair Bishop.
SENATE BILL NO. 31
"An Act relating to compensation, merit increases, and
pay increments for certain public officials, officers,
and employees not covered by collective bargaining
agreements; and providing for an effective date."
2:35:58 PM
LESLIE RIDLE, DEPUTY COMMISSIONER, DEPARTMENT OF
ADMINISTRATION, introduced herself.
KATE SHEEHAN, DIRECTOR, DIVISION OF PERSONNEL and LABOR
RELATIONS, DEPARTMENT OF ADMINISTRATION, introduced
herself.
Ms. Sheehan discussed the question and answer memo dated
April 4, 2017 (copy on file):
1. Senator Bishop asked how long it would take an
employee to get to the end of the alphabet?
It would take approximately 39 years to get to
the end of the alphabet, assuming that an
employee remained at the same range and on the
same base salary schedule the entire time.
2. Senator Von Imhof asked how long it would take to
double an employee's initial salary?
It would generally take 37-40 years to double the
initial salary (remaining at the same range and
schedule) and assuming no COLAs.
However, assuming an annual COLA of 1 percent,
the employee's initial salary would be doubled in
about 23-24 years. Assuming an annual COLA of
1.33 percent (to somewhat mimic a 1-1-2
agreement), the salary would double in about 20-
21 years. Again, this assumes that the employee
stays at the same range and on the same schedule.
3. Senator Bishop asked what the attrition rate is for
non-covered employees?
Please see the attached report titled "Copy of EX
EE and PX Separation Rates".
4. Senator Bishop asked the total salary cost for non-
covered employees?
The payroll of the non-covered people in the
salary bill is $370 million with the University
(but excluding the Legislature, Courts and AMHS).
5. Senator Dunleavy asked the total of personal
services for the State?
Salaries of employees for which we have budget
position detail is $1.8 billion (excludes
University, Legislature, Courts and AMHS).
Salaries of ALL employees is $2.4 billion
(includes University, Legislature, Courts and
AMHS).
6. Senator Bishop asked the number of employees at
each range and each step?
Please see the attached report titled "Copy of XE
Emp Counts". You will notice on this report that
there are terms such as "inapplicable" and many
employees at a range 0. "Inapplicable" refers to
employees that do not use a standard schedule
(e.g. Governor and commissioners).
There are several instances where PCNs at a range 0 appear
to be filled by multiple employees:
o 07-4550 Sub Teacher AVTEC 35 entries
o 01-501SF, 01-501SA, 01-501SG Election
Translator 18 entries
o 01-505YF, 01-505YJ, 01-505YW, 01-505YN Election
Official 11 entries
o 05-0065 Sub Teacher Mt. Edgecumbe 64 entries
Senator Dunleavy asked for an "At Ease."
2:40:47 PM
AT EASE
2:41:31 PM
RECONVENED
2:41:33 PM
Senator Dunleavy noted that the governor could hire beyond
step F, with the proper written determination of
extraordinary need. He also noticed that there were no
restrictions for hiring between steps A through E. Ms.
Sheehan remarked that the personnel rules governed whether
someone could be hired above step A. She stated that one
could be hired through step F, if there were exceptional
qualifications and/or recruitment difficulties.
Senator Dunleavy wondered whether the governor was required
to make a written determination for hiring between steps A
through E. Ms. Sheehan replied that the governor did not
need to make a written determination for hiring between A
through A. She stated that any hiring at a pay increment
for steps J or higher would need a written determination.
Senator Dunleavy surmised that there would still be a
salary override, but no written explanation was required
for steps A through E. Ms. Sheehan responded that the
appointing authority must show that there were recruitment
difficulties and/or exceptional qualifications.
Ms. Sheehan continued to discuss the document:
7. Senator Dunleavy asked for the number of non-
covered employees on salary overrides and advanced
step placement?
Attached is a report titled "Executive Branch
Employees with Rate Overrides" as well as the
report which shows all non-covered employees
hired above A step. If a job class isn't listed,
then that position did not include anyone hired
above A step.
Regarding the override report, there are many
reasons why an employee may be paid on a rate
override such as commissioner's pay since it is
set by the State Officers Compensation Commission
and doesn't necessarily correlate to a range or
step on the salary schedule.
Regarding the report of non-covered employees
hired above A step, it's also important to note
that some of these employees had earned that step
at that range already so can be appointed back at
that same step under the Personnel Rules.
Therefore, these may not all be due to the
advanced step placement rules.
To provide some clarification, advanced step
placements, for partially-exempt employees, can
be granted in three ways:
o Under the Personnel Rules for recruitment
difficulties (2 AAC 07.320)
o Under the Personnel Rules for exceptional
qualifications (employees can be placed on
the highest merit
step, F step, if both recruitment
difficulties and exceptional qualifications
are found)
o AS 39.27.011(k) allows the Governor to
authorize a step higher than F if the
determination is made that the action serves
a critical governmental interest of the
state, the employee possesses exceptional
qualification, recruitment difficulties
exist, or the action is necessary due to
competitive salaries in the relevant labor
market.
Senator Dunleavy wondered whether the document contained
the salary overrides. Ms. Sheehan replied in the
affirmative.
Senator Dunleavy queried the estimator in the packet. Ms.
Sheehan replied that there were over 2000 salary overrides.
Ms. Sheehan continued:
8. The Committee requested to know the number of
hires since the hiring restriction went into
effect in January, 2016?
Please see the report titled "State Employment
Statistics for 2016".
2:46:35 PM
Vice-Chair Bishop asked for a restatement. Ms. Sheehan
replied that the last report was the State Employee
Statistics for 2016. She noted that the department was down
804 employees, but reduced by 2500 positions.
Vice-Chair Bishop queried the department exemptions of the
hiring freeze. Ms. Sheehan agreed to provide that
information.
Senator Dunleavy wondered whether the discussion was for a
"restriction" or a "freeze." Ms. Sheehan replied that it
was a restriction.
Senator Dunleavy asked whether hiring was occurring. Ms.
Sheehan replied in the affirmative.
Vice-Chair Bishop noted the exempt positions that were not
included in the restriction.
Senator von Imhof asked for more information about the
employee reduction of 804 and the 2500 positions. Ms.
Sheehan agree to provide that information.
Senator Dunleavy queried a definition of "people." Ms.
Sheehan agreed to provide that information.
Vice-Chair Bishop requested a breakdown by department.
Senator Dunleavy agreed.
2:50:09 PM
JULI LUCKY, STAFF, SENATOR ANNA MACKINNON, explained the
fiscal notes.
Vice-Chair Bishop wondered whether the employees had
received a pay freeze or cut before the bill. Ms. Sheehan
replied that there were not any freezes on merit increases
or pay increments. She remarked that the administration did
not give any cost of living allowances.
2:53:53 PM
AT EASE
2:54:04 PM
RECONVENED
SB 31 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
The meeting was adjourned at 2:54 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 31 DOA Response 4.4.17.pdf |
SFIN 4/4/2017 1:30:00 PM |
SB 31 |
| SB 31 Q3 Backup.pdf |
SFIN 4/4/2017 1:30:00 PM |
SB 31 |
| SB 31 Q6 Backup.pdf |
SFIN 4/4/2017 1:30:00 PM |
SB 31 |
| SB 31 Q7.1.pdf |
SFIN 4/4/2017 1:30:00 PM |
SB 31 |
| SB 31 Q7.2.pdf |
SFIN 4/4/2017 1:30:00 PM |
SB 31 |
| SB 31 Q8.pdf |
SFIN 4/4/2017 1:30:00 PM |
SB 31 |