Legislature(2021 - 2022)BELTZ 105 (TSBldg)
03/08/2021 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearing(s) | |
| SB27 | |
| SB87 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 27 | TELECONFERENCED | |
| *+ | SB 87 | TELECONFERENCED | |
SB 27-INDUSTRIAL HEMP PROGRAM; MANUFACTURING
1:46:55 PM
CHAIR COSTELLO reconvened the meeting and announced the
consideration of SENATE BILL NO. 27, "An Act relating to
industrial hemp; and providing for an effective date."
She noted that this was the first hearing, and the intention was
to hear invited testimony and hold the bill for further
consideration.
She noted the friendly amendment and asked for a motion.
1:47:24 PM
SENATOR HOLLAND moved Amendment 1, work order 32-LS0249\A.1, to
SB 27.
32-LS0249\A.1
Dunmire
3/4/21
AMENDMENT 1
OFFERED IN THE SENATE
TO: SB 27
Page 3, following line 8:
Insert a new bill section to read:
"* Sec. 2. AS 03.05.010(c) is amended to read:
(c) The commissioner of natural
resources may [SHALL] issue a stop order to any
person who is found to be producing a plant
product with delta-9-tetrahydrocannabinol over
0.3 percent, regardless of whether the person is
registered under AS 03.05.076. The commissioner
of natural resources shall notify the Marijuana
Control Board and the Department of Public Safety
when the commissioner issues a stop order."
Renumber the following bill sections accordingly.
Page 4, line 19:
Delete "Section 7"
Insert "Section 8"
Page 4, line 25:
Delete "sec. 8"
Insert "sec. 9"
Delete "sec. 7"
Insert "sec. 8"
Page 4, line 27:
Delete "sec. 8"
Insert "sec. 9"
CHAIR COSTELLO objected for discussion purposes.
SENATOR HOLLAND explained that the US Department of Agriculture
allows a 0.5 percent to 1.0 percent standard of negligence for
the levels of delta-9-tetrahydrocannabinol in plant products.
This amendment changes the term "shall" to "may" issue a stop
order to provide the commissioner of the Department of Natural
Resources (DNR) latitude in the seed stock that hemp growers are
allowed to purchase.
1:48:57 PM
CHAIR COSTELLO removed her objection to Amendment 1 to SB 27.
1:49:18 PM
SENATOR STEVENS objected to say he thought there was no
connection between marijuana and hemp, yet the amendment talks
about notifying the Marijuana Control Board.
1:49:29 PM
BUDDY WHITT, Staff, Senator Shelley Hughes, sponsor, Alaska
State Legislature, Juneau, Alaska, explained that hemp and
marijuana are both the same species but the small amount of THC
in hemp is not an intoxicant. The amendment gives the Division
of Agriculture the latitude to allow a hemp grower who is acting
in good faith the opportunity to recondition their crop if the
THC level tests above the allowed limit.
MR. WHITT advised that the existing language, which was added to
Senate Bill 6, is prohibitive. The department must issue a stop
order if the crop tests above the allowed limit and send their
name to the Marijuana Control Board and the Department of Public
Safety. The amendment allows the division more latitude in
managing the program. He said the sponsor believes this is a
middle ground on the path towards a long-lasting program. He
deferred further explanation to Rob Carter.
SENATOR STEVENS remarked that one would have to smoke a lot of
industrial hemp to have any affect.
SENATOR HOLLAND advised that hemp is used to make products such
as hemp-concrete and animal food stock. It has just a fraction
of the active ingredient found in marijuana.
1:52:14 PM
SENATOR SHELLEY HUGHES, Alaska State Legislature, Juneau,
Alaska, sponsor of SB 27, added that reconditioning a crop by
mixing seed with a level of THC that is above the limit with a
crop that has a lower level of THC allows a grower who is not a
bad actor the opportunity to remedy the situation.
1:52:54 PM
SENATOR STEVENS removed his objection.
CHAIR COSTELLO found no further objection and Amendment 1 to SB
27 was adopted. She asked the sponsor and staff to walk through
the amended bill.
1:53:18 PM
SENATOR HUGHES recounted the history of the bill. A federal farm
bill passed in 2014 that allowed states to start an industrial
hemp pilot program. Former Senator Johnny Ellis subsequently
introduced legislation to remove hemp from the criminal statutes
and identify it as a crop.
She related that late in the 2016 session one of her most
conservative constituents said he wanted to try industrial hemp
as food stock for his cattle. She committed to carry the bill
after Senator Ellis retired and the US Department of Agriculture
(USDA) established a path for states to have an industrial hemp
program that would comply with the law. In 2017, she filed
Senate Bill 6 and it passed in April 2018. In December 2018,
Congress passed the Hemp Farming Act as part of the 2018 Farm
Act, which removed industrial hemp from the Schedule I
Controlled Substance list. In 2019, the USDA released new
regulations that allowed states to continue their pilot programs
until October 2020. The USDA subsequently extended the date to
October 2021.
SENATOR HUGHES said that because of the federal changes since
2018, Alaska has to change its statutes. SB 27 is the response,
and it primarily removes the industrial hemp pilot program and
directs the Department of Natural Resources (DNR) to develop a
compliant program and submit it to the USDA for approval. The
bill also gives DNR the authority to permit the manufacture of
hemp products and to set up a registration and renewal process
to participate in the program. It also says that registrants
cannot have a controlled substance felony conviction in the last
10 years.
She shared that her preference would have been that growing
industrial hemp required no bureaucracy, but the extra framework
is necessary because of concerns at the federal level that the
plant looks like marijuana. Nevertheless, she said it is still
worth doing because hemp is a multibillion-dollar industry.
Canada is the second largest hemp producer in the world and
Alaska's climate is similar so this could help Alaska businesses
and the economy. She advocated for updating the statute and
opening the door for this opportunity.
1:59:06 PM
SENATOR GRAY-JACKSON asked if a hemp plant is the same as a
marijuana plant.
SENATOR HUGHES said Rob Carter can explain in detail, but hemp
has less THC and is not psychoactive.
SENATOR GRAY-JACKSON questioned whether they were the same
species.
SENATOR HUGHES suggested that Rob Carter could provide the
botanist's explanation.
CHAIR COSTELLO solicited the will of the committee to hear the
sectional analysis of SB 27 or a botanical analysis of the
difference between industrial hemp and recreational cannabis.
SENATOR STEVENS asked to hear from Rob Carter.
2:00:53 PM
ROB CARTER, Chief Agronomist, Division of Agriculture,
Department of Natural Resources (DNR) Palmer, Alaska, explained
that industrial hemp is Cannabis sativa, which is the same genus
and species as recreational cannabis/marijuana. The two plants
can look similar but industrial hemp traditionally grows in a
solid stand like a barley or wheat. Industrial hemp that is
grown for cannabinoid production may look more similar to
marijuana, whereas it will look more like an extremely tall
stand of corn, barley, or wheat when grown for fiber, grain or
biomass for feed or fuel. The leaves look the same but there is
significantly more fibrous material inside the hemp plant. The
methodology to produce the hemp plant creates an upright leaner
look than in the typical marijuana plant that is grown indoors.
Marijuana plants are grown specifically for the floral material
whereas plants grown for fiber or biomass production are
harvested before the flower appears.
SENATOR STEVENS asked if it is legal to grow marijuana in
Alaska.
MR. CARTER replied that the Alcohol & Marijuana Control Board
regulates all aspects of the growth and production of
recreational marijuana. The 2014 Farm Bill identified industrial
hemp or cannabis that tests below 0.3 percent delta-9-THC as an
industrial agriculture crop. He said the Division of Agriculture
treats these crops much like regulated potato or barley crops,
which are called certified non-grass grain seeds.
SENATOR STEVENS summarized his understanding that industrial
hemp and marijuana are not the same thing and not controlled in
the same way.
CHAIR COSTELLO asked Mr. Whitt to go through the sectional
analysis for SB 27. She also listed the individuals available to
answer questions.
2:05:22 PM
MR. WHITT presented the following sectional analysis for SB 27:
Section 1 AS 03.05.010(a) Page 1, Line 3 through
Page 3, Line 8
Two subsections added to this section authorizing the
commissioner of the Department of Natural Resources to
include the manufacturing and retail sales of products
made from industrial hemp, as well as registration and
renewal procedures, in the regulations for the
industrial hemp program.
2:06:02 PM
Section 2 AS 03.05.076(a) Page 3, Lines 9 through
24
Adds language that a registrant for the industrial
hemp program is not eligible if they had been
convicted of a felony involving a controlled substance
within the last ten years. This section is added to
comply with provisions of the 2018 Farm Bill.
MR. WHITT noted that the 2018 Farm Bill and subsequent
regulations gave grandfather rights to those growing industrial
hemp before the federal requirement. He offered to provide the
code of federal regulations (CFR) reference.
Section 3 AS 03.05.076(i) Page 3, Lines 25 through
28
Adds that the department may develop an industrial
hemp program that complies with federal requirements
and submit a plan for the program to USDA for
approval.
MR. WHITT added that the state is able to continue running the
pilot program until the permanent hemp production program is in
place.
Section 4 AS 03.05.079 Page 3, Line 29 through
Page 4, Line 4
A grower may retain and recondition their crop if it
tests above .3% but below 1.0% THC.
MR. WHITT explained that Sections 4 and 5 work in conjunction
with Amendment 1. Section 4 removes the automatic violation and
allows a grower who tests above 0.3 percent THC but below 1.0
percent THC the opportunity to recondition their crop. Section 5
authorizes the Division of Agriculture to issue a violation if a
bad faith grower fails to recondition their crop that tests
above the 0.3 percent threshold for THC.
2:09:14 PM
SENATOR STEVENS asked what it means to recondition a crop.
MR. WHITT deferred the question to Mr. Carter.
MR. CARTER explained that reconditioning is a commonly used
process in agriculture to allow a farmer to blend crops when the
seed or, in this case, the industrial hemp tests as borderline
in violation of a regulation. Reconditioning prevents a farmer
from having to destroy their crop when it tests too high.
2:10:52 PM
SENATOR REVAK joined the meeting.
SENATOR STEVENS observed that farmers who grow industrial hemp
are subject to many more requirements than a farmer who grows
crops such as wheat or corn. "Aren't we asking a lot more of the
farmers than we would if they were just doing wheat," he asked.
MR. CARTER answered yes; the 2014 and 2018 farm bills have
specific federal requirements that provide a sense of security
to those who do not understand the botanical difference between
industrial hemp and recreational cannabis because they are the
same genus and species. He advised that farmers who produce
certified potatoes or grow certified wheat crops also are
required to meet specific requirements and are subject to
similarly rigorous testing. He added that industrial hemp was
produced in the state last year and the division is committed to
providing a legal avenue for this new industry.
SENATOR STEVENS expressed appreciation for the explanation.
CHAIR COSTELLO asked if the bill has a mechanism to handle
repeat violations or if the assumption is that there are no
intentional violators.
MR. WHITT said the division can speak in detail, but the testing
so far has been positive and there is no evidence to indicate
that bad actors will be a problem. He added that he believes it
is a big help for the state to have the USDA stamp of approval
on the industrial hemp program and it comes at the cost of
specific statutory guidelines.
Responding to Senator Stevens, he agreed that the regulatory and
statutory requirements are greater for a hemp producer than many
other crops, but those do not have the potential for high THC.
He characterized the additional guidelines as appropriate.
2:15:31 PM
CHAIR COSTELLO asked Mr. Carter what industrial hemp products
have been produced and if some of the products will be exported.
MR. CARTER replied that farmers produced 70 acres of industrial
hemp in 2020, 9,000 square feet of which was indoors. To ensure
compliance and safety, the division physically samples each
field lot and all the tests returned values of less than half
the federal legal limit for THC, which was better than any other
state in the country.
MR. CARTER said Alaska is renowned for its clean water and soil
and the expectation is that these products will be exported
worldwide for industrial hemp derivatives. In the trial year the
division has seen interest in grain for human and animal
consumption; fiber for biomass for experimental fuel sources,
hempcrete, insulation, fiber bond, and bioplastics; as well as
extraction for non-psychoactive cannabinoid uses for things like
shampoos, salves, and lotions. In 2020, the industrial hemp
industry totaled about $20 billion. He described industrial hemp
as a unique crop that has generated massive interest for an
endless number of uses.
2:19:35 PM
MR. WHITT continued the sectional analysis for SB 27.
Section 5 AS 03.05.079(b) Page 4, Lines 5 through
7
A new subsection adds that a person who retains but
fails to recondition is guilty of a violation.
Section 6 AS 03.05.100(5) Page 4, Lines 8 through
14
Changes the statutory definition of industrial hemp to
match the federal definition which was changed in the
2018 Farm Bill.
Section 7 Page 4, Line 15
Repeals AS 03.05.077 the Industrial Hemp Pilot Program
Section 8 Page 4, Lines 16 through 21
Conditional effect for Section 7 of the bill, in that
the Pilot Program statute is repealed when the
Industrial Hemp Program developed by the department is
approved by the USDA.
Section 9 Page 4, Lines 25 through 27
Effective date language stating that if section 7 is
repealed under the conditions of section 8, the
effective date of section 7 is the day after notice is
received by the revisor of statutes by the
Commissioner of Natural Resources.
MR. WHITT summarized that Sections 7-9 allow the Division of
Agriculture to continue the Industrial Hemp Pilot Program until
the USDA approves DNR's permanent Industrial Hemp Program.
CHAIR COSTELLO asked Ms. Williams to provide her testimony.
2:22:42 PM
SARA WILLIAMS, Founder, Hemp for Healthcare, Wasilla, Alaska,
stated support for 99 percent of SB 27. She did not support the
new language in Section 2 that prohibits individuals who have a
controlled substance felony conviction within the preceding 10
years from contributing to the economy of Alaska by
participating in the industrial hemp program. She advised that
she submitted language that creates a compromise to this
prohibitive language.
MS. WILLIAMS described her vision for an Alaskan hemp industry
that fuels the economy. This includes taxing the hemp biomass
sales and selling the hemp products statewide. The proceeds will
go into a healthcare fund that creates a single payer healthcare
system for all Alaska residents.
She also spoke of new partnerships and anticipated projects that
she believes will bring from 20 to 350 new jobs to Alaska that
is in addition to the boost to transportation, farmers, and
laborers that will grow hemp for processing.
2:30:37 PM
SENATOR STEVENS asked Mr. Whitt if the provision in Section 2
that excludes applicants with a controlled substance felony
conviction within the past 10 years is a federal requirement.
MR. WHITT confirmed that it is a federal requirement in 7 CFR
Sec. 990.6(e)(1). The USDA will not approve an industrial hemp
program in states that do not have that law on the books.
SENATOR STEVENS summarized that while it may be offensive to
some people, removing the provision would result in the USDA
withholding approval for a program to grow hemp in Alaska.
MR. WHITT replied that was his understanding, but he would get
that in writing and present it to the committee.
SENATOR STEVENS replied that would be valuable.
SENATOR HUGHES requested the committee hear from David Schade.
2:32:45 PM
DAVID SCHADE, Director, Division of Agriculture, expressed
appreciation for the work that the sponsor and Mr. Whitt had
done to facilitate an industrial hemp program in Alaska. He said
he had worked on this since becoming the director two years ago.
He related that the pilot program has 117 retail registrations,
and it continues to move forward.
Supplementing earlier discussion, he explained that the division
has worked hard to stay within the federal guidelines, so they
are able to operate their hemp program on a national and
international basis. Because the 2018 Farm Bill stipulates that
someone with a controlled substance felony in the last 10 years
cannot participate in the program, the division requested a one-
year delay in the sunset of the pilot program awaiting this
change in state law. In response to the question about what
happens if there is a bad actor, he explained that because
industrial hemp is a regulated crop, applicants must register
under the USDA program or the state program. Someone who fails
to follow the guidelines will lose their registration and be out
of business.
SENATOR STEVENS asked if he agreed that removing Section 2 would
put the state out of compliance with the federal government and
it would not qualify for a hemp program.
MR. SHADE replied that is correct.
2:35:57 PM
CHAIR COSTELLO held SB 27 in committee for future consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SLAC GOV Appointee Connie Dougherty Board Application_Redacted.pdf |
SL&C 3/8/2021 1:30:00 PM |
SLAC GOV APPOINTEE BBH CONNIE DOUGHERTY |
| SLAC GOV Appointee Tina Taylor Board Application_Redacted.pdf |
SL&C 3/8/2021 1:30:00 PM |
SLAC GOV APPOINTEE BBH TINA TAYLOR |
| SLAC GOV Appointee Khitsana Sypakanphay Board Application_Redacted.pdf |
SL&C 3/8/2021 1:30:00 PM |
SLAC GOV APPOINTEE BBH KHITSANA SYPAKANPHAY |
| SB 27 v. A.pdf |
SL&C 3/8/2021 1:30:00 PM |
SB 27 |
| SB 27 Sponsor Statement.pdf |
SL&C 3/8/2021 1:30:00 PM |
SB 27 |
| SB 27 v. A Sectional Analysis.pdf |
SL&C 3/8/2021 1:30:00 PM |
SB 27 |
| SB 27 Written Testimony Denali Hemp Company.pdf |
SL&C 3/8/2021 1:30:00 PM |
SB 27 |
| SB 27 Written Testimony Hemp for Healthcare in AK.pdf |
SL&C 3/8/2021 1:30:00 PM |
SB 27 |
| SB 27 Fiscal Note DNR.pdf |
SL&C 3/8/2021 1:30:00 PM |
SB 27 |
| SB 27 Amendment No. 1.pdf |
SL&C 3/8/2021 1:30:00 PM |
SB 27 |
| SB 87 v. A.PDF |
HL&C 4/12/2021 3:15:00 PM SL&C 3/8/2021 1:30:00 PM |
SB 87 |
| SB 87 Transmittal Letter.pdf |
SL&C 3/8/2021 1:30:00 PM |
SB 87 |
| SB 87 v. A Sectional Analysis.pdf |
HL&C 4/12/2021 3:15:00 PM SL&C 3/8/2021 1:30:00 PM |
SB 87 |
| SB 87 NAIC Credit for Reinsurance Model Law Briefing.pdf |
HL&C 4/12/2021 3:15:00 PM SL&C 3/8/2021 1:30:00 PM |
SB 87 |
| SB 87 Fiscal Note 1.pdf |
HL&C 4/12/2021 3:15:00 PM SL&C 3/8/2021 1:30:00 PM |
SB 87 |