Legislature(2017 - 2018)BUTROVICH 205
02/13/2017 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| SB6 | |
| Overview: Alaska National Interest Lands Conservation Act | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 6 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
SB 6-INDUSTRIAL HEMP PRODUCTION
3:30:42 PM
CHAIR GIESSEL announced consideration of SB 6, sponsored by
Senator Hughes. In the last meeting the sponsor and her staff
pointed out that the bill would need some changes in order to
more formally comply with recent changes in federal law.
3:31:27 PM
SENATOR COGHILL moved to adopt CSSB 6, labeled 30\LS0173\U, as
the working document.
CHAIR GIESSEL objected for purposes of explanation and
discussion.
3:31:54 PM
AKIS GIALOPSOS, staff to Senator Giessel and the Senate
Resources Committee, Alaska State Legislature, Juneau, Alaska,
said he would review the explanation of changes in Committee
Substitute (CS) for SB 6 from version A to version U.
3:32:34 PM
The first change is in the title on page 1, lines 1-4:
The bill title is revised to more clearly define the
intent and the subject matter addressed in the
previous hearing that includes adding in the titles
for the appropriate sections that are discussed by Mr.
Whitt, particularly those related to the establishment
of pilot programs, separating the definition and
change in statutes for industrial hemp from marijuana,
and also clarifying that adding industrial hemp to
food does not adulterate that food.
The second change is still on page 1, lines 6-14, and all of
page 2:
Adds industrial hemp as an agricultural product to
Title 3. It further establishes the Division of
Agriculture within the DNR as the regulatory authority
for industrial hemp, lays out minimum registration
guidelines, and establishes guidelines for seed, plant
and record retention by registered growers.
3:33:43 PM
The third change is found on page 3, lines 1-8:
Adds language establishing industrial hemp growth as a
pilot program that only those who have registered at
an institution of higher learning may participate in
(federal statutes Mr. Whitt referenced in the February
8th hearing). This additional language is added in
order to be in line with Section 7606 of the
Agricultural Act of 2014.
3:34:13 PM
The next change on version U is found on page 3, lines 9-11:
Places the definition of industrial hemp under Title 3
instead of under Title 11 as it was in the original
bill (version A). The definition itself is unchanged
and matches the definition in Section 7606 of the
Agricultural Act of 2014.
Page 3, lines 12-21:
Language added to the bill specifies that under AS
11.71.900, industrial hemp is not marijuana, thereby
removing industrial hemp from the list of controlled
substances.
The next change is also on page 3, lines 22-24:
Adds language to exclude food containing industrial
hemp from adulterated foods under Title 17.
3:34:54 PM
The final explanation for the changes can be found on page 3,
lines 25-31, and on page 4, lines 1-2:
At an earlier explanation of changes he forgot a line:
language is added to further to exclude industrial
hemp from marijuana definitions under Title 17.
3:35:57 PM
BUDDY WHITT, Staff to Senator Hughes, Alaska State Legislature,
Juneau, Alaska, recapped that in an earlier hearing the first
version of the bill needed to be changed in order to comply with
federal law and that has been done with the CS.
SENATOR WIELECHOWSKI said this is a "pretty dramatic change"
from the first version and that Alaska doesn't comply with
federal law on marijuana now, and asked why we are worried about
doing it with hemp.
MR. WHITT answered that there is a federal law and it is pretty
clear what actually has to be in statute in order to comply with
it. That is the blueprint he followed in order to develop this
piece of legislation. The sponsor tried to draft legislation
that will be successful while complying with federal law.
SENATOR WIELECHOWSKI said it is pretty onerous to have to
register, list global positioning coordinates, and pay fees
every year to cover the regulatory costs. This entire industry
could be killed by setting the costs so high that it would drive
these small businesses out of business. It requires them to keep
records of hemp transfers for three years, which sounds like big
government to him. He asked what it will cost the Division of
Agriculture to administer it.
3:38:45 PM
MR. WHITT answered that a lot of the information that is within
this CS and the reason it was put together has to do with
Federal Register, Volume 81, 156, which was produced on August
12, 2016 by the U.S. Department of Agriculture, which
specifically laid out the items that any state would have to do
in order to comply with federal law. It's not for him to judge
how onerous the legislation is, but it is very clear that the
Division of Agriculture would have to be the regulatory
authority and have the powers to set those regulations in order
to keep tabs on this new growth industry. He deferred the second
part of Senator Wielechowski's question to Mr. Carter.
3:40:00 PM
ROB CARTER, Manager, Alaska Plant Material Center, Division of
Agriculture, Anchorage, Alaska, supported SB 6. Even though
there may be fees and the bill may be onerous, he really
supports it professionally, because sticking to federal
guidelines provides longevity and sustainability to the
industrial hemp in Alaska. The fees are $25-50/annually across
the country and there is no intent to hurt industry in terms of
fees. The division plans on making this registration a simple
process, an application that is designed by the industry so a
database can be maintained that is more or less for consumer
protection and protection of the farmers, so that when someone
drives by and sees an industrial hemp field, claims it is a
recreational or medical marijuana grow, and calls law
enforcement, the department has registered industrial hemp
locations.
He believes that the division can take this workload on and
maintain it without any additional money at this time. They
really can't say what the fee will be without knowing how many
individuals are actually going to partake, but probably it will
be somewhere between $25-50, just like grass and grain fees, and
have a certification process very similar to the one for
potatoes. Their goal is to educate before they regulate these
folks and make sure the state can have a sustainable industrial
hemp industry.
SENATOR WIELECHOWSKI asked if he anticipates any new hires as a
result of this legislation.
MR. CARTER answered no; they plan to take this additional
workload on with current staff. They will build an online
application as well as a printable one that can be sent in with
the payment. A database will be built in the first year and be
evaluated on a year by year basis. They want this industry to be
able to take off in the state with a potential for export. A few
things in federal regulation allow hemp products to be exported
to other states and worldwide.
SENATOR WIELECHOWSKI asked the penalty for non-compliance if a
person doesn't register, pay the fee, or keep appropriate
records.
MR. CARTER answered at this time Section 1 (f) says the
department may issue a stop-sell order or a violation notice to
a person who is producing industrial hemp without a current
registration. This is how the division currently responds to
certification issues with potato, grass and grains. They can
issue a stop sell order that has no penalty, because it is a
direct order. If someone does not comply, it is a civil Class 3
misdemeanor and a $500 fine.
3:44:28 PM
SENATOR WIELECHOWSKI asked what if a person growing industrial
hemp keeps records of who he sells it to, then that person
transfers it or sells it, are they allow to do that or do they
have to keep records as well?
MR. CARTER answered at this time they are just looking for the
initial transaction. Normally, agricultural products have one
buyer and after that it is considered a post-harvest, processed
product.
SENATOR WIELECHOWSKI asked how these requirements compare to the
requirements for people who grow marijuana. Are they required to
register and have a GPS and keep track of all the transfers of
their marijuana products?
MR. CARTER answered that industrial hemp regulations are very
burdensome from an agricultural production standpoint; the fees
are high and borough or municipal approval is needed, but this
process is simplified and is pretty standardized for industrial
hemp nationwide.
3:46:23 PM
SENATOR WIELECHOWSKI asked if someone would be able to grow
industrial hemp in their backyard under this legislation.
MR. CARTER answered yes.
SENATOR MEYER agreed with Senator Wielechowski that this
industry has potential and has a lot of good uses, but he
wonders if a pilot program can be done with a zero fiscal note.
It seems that it would cost something. He asked what a fee
structure would look like and if it would be by application or
based on the quantity produced.
MR. WHITT answered the Division of Agriculture can decide how
many registrants it can handle with a zero fiscal note, if they
choose to go that way. In the future, language says they "shall
be able to charge a registration fee." If this becomes a growth
industry, managing it might incur more costs than can be handled
internally.
3:48:54 PM
MR. CARTER said he knows it is very unique for a state agency to
say it can do something without a fiscal note, but the Plant
Material Center works with agricultural industries of all types
and its mission is to support and encourage agricultural
development in Alaska. They could take on a registration process
with current staffing, but if the industry becomes the next
biggest thing out of Alaska years from now that won't be true.
"Hobbling the industry with high fees and lots of regulation is
definitely not the way to get something up and growing."
SENATOR MEYER said Mr. Carter commented that this product could
be exported and asked if federal regulations allow export
currently.
MR. CARTER answered the 2014 Farm Bill, Section 7606, allows the
production and the trial by state agricultural agencies and
universities. It legalized the production but the biggest
difficulty is what to do with the product, and the Farm Bill
didn't authorize the interstate travel of industrial hemp
products. But then there is a little known "slip-through" within
the Omnibus Appropriations Act of 2016, Section 736, that
states:
No federal funds made available by that act or any
other act may be used to prohibit or transfer
processing sales of industrial hemp that is grown or
cultivated in accordance with 7606 of the Agricultural
Act of 2014 within or outside the state in which the
industrial hemp is grown.
So, without the federal government really stepping in and saying
industrial hemp can be grown; it can be used and processed and
it can be shipped interstate, this really provides legal
protections by proxy for allowing Alaska (and not allowing the
feds to prosecute or use any funds to prosecute) to produce,
process or sell industrial hemp products. That is how the other
states - Kentucky, Colorado, Maine, Vermont, and Idaho - are
using interstate commerce for their industrial hemp products.
3:52:36 PM
SENATOR MEYER said that the industrial hemp producers are
required to have their hemp tested for THC content and asked
where that is to be done. Alaska has only two testing centers.
MR. CARTER answered that is correct and one of the good things
about legalizing recreational marijuana is that that industry
paved the way for testing. So, for a nominal fee through one of
these private agencies any individual that is growing a cannabis
sativa plant can have it tested for multiple cannabinoids
including THC, CVA, CVD, and CVNs.
SENATOR MEYER asked if the state crime lab could be used for
testing, as well, if these other two are busy with the
recreational hemp.
MR. CARTER answered to his knowledge they have the equipment - a
mass spectrometer and a gas chromatographer - that could do the
work, but he didn't know about their workload and the
availability of employees.
SENATOR MEYER asked if the University of Alaska is or could they
be involved.
MR. CARTER replied that he couldn't speak to the University's
motives and practices and didn't have any contact about
industrial hemp, but the 2014 Farm Bill allows them to take
part. However, in the past, some universities have steered clear
of anything with cannabis not wanting to jeopardize the amount
of federal funding that they do get just to help one industry.
3:55:12 PM
SENATOR WIELECHOWSKI said his concern is that the industry would
be so successful in the future that more employees would be
needed and asked if he would be willing to cap fees at $500 to
protect against over-charges and growing government.
MR. WHITT said that the Judiciary Committee would be a great
place for that discussion.
3:56:37 PM
SENATOR COGHILL asked in following federal rules, if people
would be eligible for the federal or state revolving loan funds.
3:57:20 PM
MR. WHITT said he would look into that for him.
MR. CARTER added that the agricultural revolving loan fund that
is administered through the Division of Agriculture has no
limitations at this time. It is administered by the Board of
Agriculture and Conservation, but a cannabis application has not
been submitted.
CHAIR GIESSEL asked Mr. Keyes if he had any comments.
3:58:05 PM
ARTHUR KEYES, Director, Division of Agriculture, Department of
Natural Resources (DNR), Anchorage, Alaska, replied Mr. Carter
has said what needs to be said.
SENATOR HUGHES said the state is required to have a database and
she tried to keep it as simple as possible and pointed out that
charging fees says "may" and she was open to putting in a limit.
She just wants to give farmers one more economic opportunity.
4:00:53 PM
CHAIR GIESSEL removed her objection and CSSB 6 was adopted. She
said she would hold SB 6 in committee with public testimony open
to allow time for the fiscal notes to be updated.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 6-Version U.pdf |
SRES 2/13/2017 3:30:00 PM |
SB 6 |
| SB 6 -Sponsor Statement Version U.pdf |
SRES 2/13/2017 3:30:00 PM |
SB 6 |
| SB 6 - Sectional Analysis Version U.pdf |
SRES 2/13/2017 3:30:00 PM |
SB 6 |
| SB 6- Support- Colorado Dept of Agriculture Hemp Program Overview.pdf |
SRES 2/13/2017 3:30:00 PM |
SB 6 |
| SB 6- Support- Colorado Dept of Agriculture Hemp Regulations.pdf |
SRES 2/13/2017 3:30:00 PM |
SB 6 |
| SB 6- Explanation of Changes-Version U.pdf |
SRES 2/13/2017 3:30:00 PM |
SB 6 |
| SRES-ANILCA Presentation-DNR-DFG-2-13-17.pdf |
SRES 2/13/2017 3:30:00 PM |
ANILCA |
| SB 6- Support-Fredenberg-2-13-17.pdf |
SRES 2/13/2017 3:30:00 PM |
SB 6 |
| SRES-CACFA Memo on ANILCA Sections.pdf |
SRES 2/13/2017 3:30:00 PM |
ANILCA |