Legislature(2019 - 2020)BUTROVICH 205
02/21/2020 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| SB171 | |
| SB150 | |
| SB161 | |
| SB155 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 171 | TELECONFERENCED | |
| += | SB 161 | TELECONFERENCED | |
| *+ | SB 150 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 155 | TELECONFERENCED | |
SB 171-INDUSTRIAL HEMP PROGRAM; MANUFACTURING
3:31:52 PM
CHAIR MICCICHE announced that the first order of business would
be SENATE BILL NO. 171, "An Act relating to industrial hemp."
3:32:14 PM
SENATOR COGHILL moved to adopt the committee substitute (CS) for
SB 171, work order 31-LS1431\M, as the working document.
CHAIR MICCICHE objected for purposes of discussion.
3:33:03 PM
SENATOR SHELLEY HUGHES, Alaska State Legislature, Juneau,
Alaska, sponsor of SB 171, stated that the CS makes necessary
changes to keep an opportunity alive for Alaskans based on the
2018 U. S. Farm Bill. The bill will continue the program beyond
October 2020. She added that the Division of Agriculture
supports the bill moving forward.
She said industrial hemp has generated great interest due to the
multitude of hemp-made products that can be produced. She noted
that Lower 48 farmers are experiencing high yields from growing
hemp for oil or fiber use. She said Canada is the world's second
largest producer of hemp with a climate like Alaska's.
She summarized that everyone wants to diversify the state's
economy and SB 171 will pave a way for the industrial hemp
opportunity.
3:35:07 PM
SENATOR BISHOP said he supports the bill, especially after
speaking with Alaska Farm Bureau members regarding the use of
hemp fiber in concrete due to its resiliency to earthquakes.
SENATOR HUGHES said she concurs, especially having experienced
the recent earthquake. She added that oil spill cleanup is
another use for hemp that is particularly relevant to Alaska.
SENATOR GIESSEL said she did not want to throw cold water on
hemp uses, but a civil engineer told her that it is not possible
to make flexible concrete. She added that hemp is an organic
product that would rot. She suggested that the use of hemp in
concrete should not be a selling point.
SENATOR KIEHL noted that the fiscal note strictly reflects fee
registration for every retailer of hemp, cannabidiol (CBD), and
non-marijuana products even though registration is not in the
text of the bill. He asked Senator Hughes if she is comfortable
with the notion of registering, with a fee, every retailer,
whether it be the farm supply store or the people selling hand
cream.
SENATOR HUGHES explained that the Division of Agriculture
brought the registration requirement to her office. She said
Buddy Whitt, her staff member, will address the registration
question. She surmised that retailer registration may be part of
the 2018 Farm Bill.
3:38:16 PM
BUDDY WHITT, Staff, Senator Hughes, Alaska State Legislature,
Juneau, Alaska, explained that the committee and the Division of
Agriculture brought up two major areas of concern during the
first hearing for SB 171. First, how to balance the regulation
requirements in the 2018 Farm Bill, specifically the thresholds
of tetrahydrocannabinol (THC) for hemp. The U.S Department of
Agriculture (USDA) does not allow THC above 0.3 percent.
However, Senate Bill 6 from the 30th Alaska State Legislature
gave growers some grace to correct crops tested above 0.3
percent. The intent of the CS is to find a balance for the
state's industrial hemp program regulations and the USDA
regulations.
He explained that Senator Coghill brought up the second area of
concern of someone having a crop over a certain THC threshold.
He said his CS overview will address Senator Coghill's threshold
concern in finding the right balance working with the division.
He explained the changes in the CS for SB 171 from version A to
version M, "An Act relating to Industrial Hemp,as follows:
• Page 2, lines 30 through 31:
o Goes directly to the retail question.
He said the added language allows the department to
establish regulations to permit manufacturing and retail
sales of hemp and products made from industrial hemp.
• Page 3, lines 25 through 28:
o A new subsection has been added to the bill
that the department "may" develop an
industrial hemp program that complies with
federal requirements.
MR. WHITT said the previous version of the bill stated that
the department "shall" develop that program, the CS added
the "may" language for a specific purpose.
• Page 3, line 29 through page 4, line 4
o The CS removes the repeal of AS 03.05.079,
and instead revises this subsection so that
if someone produces industrial hemp with THC
between .3 percent and 1.0 percent, they may
retain and recondition it.
• Page 4, lines 5 through 7
o A new subsection stating that if a person
retains and fails to recondition, they are
guilty of a violation.
MR. WITT explained that the CS adds a new subsection to
provide a little bit of grace. Someone in good faith can
try to correct their crop. However, if a producer retains
the crop and makes no reconditioning attempt, the producer
is in violation of the statute.
• Page 4, lines 8 through 14
o Revised the definition of Industrial Hemp to
coincide with the federal definition change
in the 2018 Farm Bill.
He said the definition revision matches the 2018 Farm Bill
definition.
3:42:33 PM
• Page 4, Lines 16 through 24
o Conditional language for the effective date
of the repeal of AS 03.05.077.
o The repeal of the pilot program will take
effect once the Industrial Hemp Program,
developed by the department, is approved by
the USDA.
MR. WHITT said the division and the bill sponsor believe in
keeping the pilot program because the only thing USDA program
approval addresses is interstate commerce. The conditional
effective language allows the pilot program to continue until
the USDA responds to the many states, including Alaska, which
are pushing back to allow farmers a grace period for THC
correction.
CHAIR MICCICHE asked Mr. Carter from the Division of Agriculture
if he is comfortable with the definition change and the pilot
project continuing unless the USDA approves the program.
3:45:14 PM
ROB CARTER, Agronomist, Division of Agriculture, Alaska
Department of Natural Resources, Palmer, Alaska, replied that he
is very comfortable with the proposed process. He said he sees
the USDA evolving in regulating the industrial hemp market. The
bill allows Alaska to continue its pilot program during the
interim testing rule process.
CHAIR MICCICHE asked if reconditioning is simply the blending of
a lower proportion of THC from another crop.
MR. CARTER answered yes. He noted that reconditioning is very
standard in other agricultural industries. He detailed that if
an industrial hemp lot tests above 0.3 percent THC and below 1.0
percent THC, the producer can recondition and certify for
commerce with division approval.
3:48:51 PM
SENATOR KIEHL said he did not recall retail registration
language in SB 6. Industrial hemp regulations are different from
other agricultural products, particularly in registering
everybody that sells hemp products.
3:50:31 PM
At ease.
3:50:52 PM
CHAIR MICCICHE called the committee back to order.
3:51:05 PM
JOAN WILSON, Assistant Attorney General, Civil Division,
Commercial, Fair Business, and Child Support Section, Alaska
Department of Law, Anchorage, Alaska, disclosed that she was
involved with SB 6. She said one of the major changes in the
bill happened when the Marijuana Control Board (MCB) decided
that it no longer wanted jurisdiction over CBD and products from
marijuana plants that have 0.3 percent THC or less. The amended
marijuana definition that reflected the MCB decision left the
marketing, retail, and public safety oversite of hemp
unaddressed. The intent of SB 6 was to have the Division of
Agriculture take jurisdiction over the retail sale of hemp and
hemp parts, including such things as the oil.
SENATOR KIEHL asked if the definition of production includes
retail of the finished product. He remarked that requiring
retail registration sounds like funny definition writing when
the state does not require retailers to register for most
finished products. He said his question goes to the sponsor's
intent and desire for the bill, and the industry in Alaska. He
inquired whether the right move is to register and regulate the
ultimate retailer or if the state will be satisfied once a
product is determined to be safe and not psychoactive.
3:53:20 PM
SENATOR HUGHES replied the hemp industry is a new area and she
does not have a problem with including retail registration. She
said she felt comfortable with the Division of Agriculture
having a sense of what is happening regarding retail sales for
consumer safety purposes. She said she is open to the
committee's discussion on concerns.
MS. WILSON pointed out that a number of the entities that will
be producing CBD oil have had absolutely no objection to
registration because they understand that absent MCB
jurisdiction that someone needs to be guaranteeing the safety of
the product. She noted that selling industrial hemp is currently
against the law.
3:55:07 PM
DAVID SCHADE, Director, Division of Agriculture, Alaska
Department of Natural Resources, Homer, Alaska, clarified that
the retail registration allows the division to go in and test
the products. The division has oversite during growing and
processing to make sure the hemp is a good product. However, the
retail provision provides traceability to deal with
manufacturing problems and products not kept in a safe manner.
He said of concern are THC content, pesticides, and heavy
metals. He pointed out that retail registration is a simple
process.
MR. SCHADE said the other key issue is while the federal
government has said that the cannabinoids in industrial hemp are
legal, the product is still a controlled substance and requires
registration. No one can go out and grow industrial hemp and
sell it. Hemp production must be in a program and part of the
division's process. The division has worked hard in carefully
finding the balance with the federal government, he said.
3:57:22 PM
CHAIR MICCICHE asked where the break occurs between industrial
hemp and current hemp sales.
MR. SCHADE answered that except for a few states with permanent
programs, industrial hemp procured outside of the pilot program
is in the black market. He admitted that there are millions of
dollars in product out on the market.
He said Alaska has the unique ability to say if a product
derived from industrial hemp with THC below 1.0 percent and
conditioned below 0.3 percent is legal; part of that product on
a federal level must stay and remain under 0.3 percent.
MR. SCHADE noted that the registration the division designed for
the growing of non-consumption products is very simple.
Registration allows the division to know who has the product and
to make sure that federal and state police agencies do not
consider it to be marijuana. Manufacturing is a little more of a
process to assure product safety, including following Alaska
Department of Environmental Conservation (DEC) food laws.
3:59:20 PM
CHAIR MICCICHE asked if it's correct that many of the gift shops
around the state that are selling black market hemp products
that the state chooses not to enforce.
MR. SCHADE replied there is currently no legal hemp product on
the market.
4:00:29 PM
CHAIR MICCICHE removed his objection to the CS.
4:00:38 PM
He announced that seeing no objection, the CS for SB 171,
version M, is before the committee as the working document.
He noted that public testimony occurred in a previous meeting
and remains open.
He asked Mr. Schade if he had further comments.
MR. SCHADE said he appreciates the committee working with the
division to get clarification on industrial hemp. He stated that
SB 171 is a great compromise bill and is very supportive of
Alaska's hemp industry.
CHAIR MICCICHE asked if anyone wanted to testify on SB 171.
He inquired if Senator Hughes had any final comments on the
bill.
SENATOR HUGHES said her hope is the bill will pass so that the
industrial hemp program can move forward into the coming years.
4:01:53 PM
CHAIR MICCICHE closed public testimony.
4:02:14 PM
SENATOR COGHILL moved to report CSSB 171 (RES) committee with
individual recommendations and attached fiscal note.
4:02:22 PM
CHAIR MICCICHE said there being no objection, CSSB 171(RES)
moved from the Senate Resources Standing Committee.
4:02:33 PM
At ease.