Legislature(2015 - 2016)BARNES 124

02/05/2015 08:00 AM House COMMUNITY & REGIONAL AFFAIRS



Audio Topic
08:03:17 AM Start
08:04:21 AM Presentation(s): Municipal Regulation of Marijuana
09:35:06 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Municipal Regulation of Marijuana: TELECONFERENCED
- Fairbanks North Star Borough - Mayor Luke
Hopkins & Assemblyman Lance Roberts
- Kenai Peninsula Borough - Paul Ostrander for
Mayor Navarre & Assemblyman Kelly Wolf
-- Testimony <Invitation Only> --
                    ALASKA STATE LEGISLATURE                                                                                  
    HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                   
                        February 5, 2015                                                                                        
                           8:03 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Cathy Tilton, Chair                                                                                              
Representative Paul Seaton, Vice Chair                                                                                          
Representative Shelley Hughes                                                                                                   
Representative Benjamin Nageak                                                                                                  
Representative Harriet Drummond                                                                                                 
Representative Dan Ortiz                                                                                                        
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Lora Reinbold                                                                                                    
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PRESENTATION(S): MUNICIPAL REGULATION OF MARIJUANA                                                                              
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
LUKE HOPKINS, Mayor                                                                                                             
Fairbanks North Star Borough                                                                                                    
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified as to the importance of local                                                                  
level regulation of marijuana.                                                                                                  
                                                                                                                                
WENDY DOXEY, Assistant Borough Attorney                                                                                         
Fairbanks North Star Borough                                                                                                    
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified on the municipal regulation of                                                                 
marijuana.                                                                                                                      
                                                                                                                                
BRYCE WARD, Mayor                                                                                                               
City of North Pole                                                                                                              
North Pole, Alaska                                                                                                              
POSITION STATEMENT:  Testified on the municipal regulation of                                                                 
marijuana.                                                                                                                      
                                                                                                                                
LANCE ROBERTS                                                                                                                   
Fairbanks, Alaska                                                                                                               
POSITION  STATEMENT:   Testified on  the municipal  regulation of                                                             
marijuana.                                                                                                                      
                                                                                                                                
KELLY WOLF, Member                                                                                                              
Kenai Peninsula Borough Assembly                                                                                                
Kenai, Alaska                                                                                                                   
POSITION  STATEMENT:   Testified on  the municipal  regulation of                                                             
marijuana.                                                                                                                      
                                                                                                                                
PAUL OSTRANDER, Chief of Staff                                                                                                  
Office of the Mayor                                                                                                             
Kenai Peninsula Borough                                                                                                         
Kenai, Alaska                                                                                                                   
POSITION  STATEMENT:    During   the  hearing  on  the  municipal                                                             
regulation of marijuana, answered questions.                                                                                    
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
8:03:17 AM                                                                                                                    
                                                                                                                                
CHAIR  CATHY  TILTON  called the  House  Community  and  Regional                                                             
Affairs  Standing  Committee  meeting   to  order  at  8:03  a.m.                                                               
Representatives Ortiz, Drummond, Seaton,  Hughes, and Tilton were                                                               
present at the  call to order.  Representative  Nageak arrived as                                                               
the meeting was in progress.                                                                                                    
                                                                                                                                
^PRESENTATION(S): Municipal Regulation of Marijuana                                                                             
       PRESENTATION(S): Municipal Regulation of Marijuana                                                                   
                                                                                                                              
8:04:21 AM                                                                                                                    
                                                                                                                                
CHAIR TILTON announced  that the only order of  business would be                                                               
presentations regarding the municipal regulation of marijuana.                                                                  
                                                                                                                                
8:05:37 AM                                                                                                                    
                                                                                                                                
LUKE HOPKINS,  Mayor, Fairbanks North Star  Borough, informed the                                                               
committee that in the Fairbanks  North Star Borough there are 5.5                                                               
House  districts and  56 percent  of registered  voters voted  on                                                               
Ballot Measure  2 of which there  were 18,000 more in  favor than                                                               
in  opposition.    He  further  informed  the  committee  that  7                                                               
precincts  voted against  the legalization  of  marijuana and  26                                                               
precincts  voted in  support of  the  legalization of  marijuana.                                                               
Therefore, he characterized  it as a strong message  that most in                                                               
Fairbanks  want  marijuana  to  be  legalized.    [Following  the                                                               
initiative results],  the City  of Fairbanks,  the City  of North                                                               
Pole, and the  Fairbanks North Star Borough as  well as attorneys                                                               
and  mayors  held  a  town  hall meeting  on  December  3,  2014,                                                               
regarding the  pros and  cons of  the legalization  of marijuana.                                                               
The  meeting had  very  good  turnout.   The  following week  the                                                               
mayors  met to  ensure  that there  was  legislation that  worked                                                               
together, to the maximum extent  possible [between the cities and                                                               
the  borough].   Further  discussion  was  held with  the  police                                                               
chiefs, state troopers,  and other members of the  community.  On                                                               
January 28, 2014,  a Mayors' Marijuana Working Group  of about 30                                                               
people met.   The meeting  was open to  the public and  there was                                                               
discussion  of  concerns,  particularly  from  school  districts,                                                               
military  bases, law  enforcement  officers, and  representatives                                                               
from  the Coalition  for Cannabis  Legislation,  and an  assembly                                                               
member.   Another  meeting will  be  held February  13, 2015,  to                                                               
continue  the discussion.   Mayor  Hopkins stressed  that to  his                                                               
community the  most important  language is  in relation  to local                                                               
zoning,  permitting, and  boards  legislation.   He informed  the                                                               
committee  that the  borough's  community  planning director  was                                                               
sent  to the  Colorado conference  last  month.   The borough  is                                                               
delving into zoning regulations  to establish where marijuana can                                                               
be  sold   and  grown.     There  are  also   issues  surrounding                                                               
manufacturing,  testing, and  retail.   The Fairbanks  North Star                                                               
Borough is a second class borough  with zoning powers.  Since the                                                               
borough  has  a  planning  commission and  an  assembly  to  hear                                                               
possible appeals on  conditional use permits, he  opined that the                                                               
borough has  a good setup that  works well and allows  the public                                                               
to  have  a lot  of  input  into  the  borough's decisions.    He                                                               
expressed  his   support,  to  the   extent  possible,   for  the                                                               
municipality  to maintain  the  aforementioned structure  because                                                               
basically [these decisions] are best made at the local level.                                                                   
                                                                                                                                
MAYOR HOPKINS  expressed concern with regard  to [the definition]                                                               
of "personal  use".   Currently, there  is an  ordinance [before]                                                               
the public.   He then indicated there would  be another component                                                               
that defined "public  use."  The borough, he  related, will bring                                                               
more  ordinances  before  the  assembly by  March  12,  2015,  to                                                               
address/define possession, processing, and  other components.  He                                                               
expressed the  desire to develop  a public input process  as well                                                               
as permitting  at the local level.   He indicated the  desire for                                                               
the  state,  to   the  extent  possible,  to   specify  that  the                                                               
permitting  process   [is  under  the  purview]   of  the  [local                                                               
borough].   He  explained  the  need to  have  the parameters  of                                                               
marijuana regulations  in terms  of zoning well  understood prior                                                               
to  people   investing  in   buildings,  leases,   property,  and                                                               
equipment.    The  aforementioned is  particularly  important  in                                                               
terms  of  the  already  existing sensitive  receptors,  such  as                                                               
schools,  daycare  centers,  rehab institutions,  etcetera.    He                                                               
noted that the  committee should have a letter  from Wendy Doxey,                                                               
Assistant Borough  Attorney, which  is very detailed  in relating                                                               
the borough administration's direction.                                                                                         
                                                                                                                                
8:15:23 AM                                                                                                                    
                                                                                                                                
WENDY  DOXEY, Assistant  Borough Attorney,  Fairbanks North  Star                                                               
Borough, highlighted some of the  points of her January 30, 2015,                                                               
letter.    Most importantly,  the  Fairbanks  North Star  Borough                                                               
wants local control  to the maximum ability  possible, with broad                                                               
regulatory strokes  from the  state.   The borough,  she related,                                                               
also wants  municipalities to be  allowed to be  more restrictive                                                               
if they so  choose.  With respect to the  initiative and the Act,                                                               
Ms. Doxey  opined that  some portions of  the Act  are unartfully                                                               
drafted, such  as the use of  the term "public."   Using the term                                                               
"public"  in  various ways  throughout  the  initiative makes  it                                                               
difficult to  develop a  definition of  "public" that  applies to                                                               
every  way in  which it's  used in  the personal  use provisions.                                                               
Therefore, she  suggested, as  the letter  recommends, redrafting                                                               
the  Act  such that  the  term  "public"  is  only used  for  the                                                               
prohibition of personal use in  public provision.  The state, she                                                               
suggested, could  provide a  definition of  "public" in  terms of                                                               
the ban on public consumption.   She noted that in the letter she                                                               
addresses other concerns with the  personal use provisions of the                                                               
Act.   For instance,  the language in  several provisions  of the                                                               
Act  give rise  to  concern that  there will  be  a personal  use                                                               
market in which  trading of one ounce of  marijuana for something                                                               
other  than  money could  occur.    The aforementioned  might  be                                                               
curbed if  possession of marijuana,  including the  possession of                                                               
six  plants, could  be defined  restrictively.   Further, if  the                                                               
term "remuneration" was changed  to "benefit" that might restrict                                                               
the personal use  trade market that is of concern.   She recalled                                                               
testimony  from   the  Matanuska-Susitna  Borough   attorney  was                                                               
concerned with the term "assist"  in the personal use provisions.                                                               
There was [the  suggestion] to define the term "assist"  in a way                                                               
that  doesn't allow  proxy grows.   She  then expressed  concerns                                                               
with regard  to the dangerous  extraction methods and  the desire                                                               
to avoid the  problems that Colorado has experienced.   Ms. Doxey                                                               
said that the  aforementioned could be addressed  by defining the                                                               
term  "processing"  for  personal  use such  that  flammable  and                                                               
combustible  extraction  methods  can  be  excluded.    She  then                                                               
related concerns with  regard to stock piling  marijuana as there                                                               
is no  restriction as  to how much  [harvested] marijuana  can be                                                               
kept in  the home.  She  then turned to AS  17.38.110 that refers                                                               
to the Administrative Procedures Act  (APA), which in a situation                                                               
in which the  state misses the deadline and the  borough wants to                                                               
step in  requires the borough to  meet the standards of  the APA.                                                               
However, Ms. Doxey opined it  would be impossible for the borough                                                               
to meet the  APA provisions, and thus she expressed  the need for                                                               
the state  to change that  language early  on.  Ms.  Doxey echoed                                                               
earlier testimony regarding  the desire for the  state to address                                                               
the broader  issues and allow  local regulation.   She identified                                                               
the  following  broad issues  as  appropriate  for the  state  to                                                               
address:   security,  testing, keeping  the state's  marijuana in                                                               
the  state,  keeping marijuana  out  of  the hands  of  children,                                                               
driving under the influence (DUI), and public education.                                                                        
                                                                                                                                
8:21:58 AM                                                                                                                    
                                                                                                                                
MAYOR  HOPKINS   related  that  he   has  received   very  strong                                                               
statements  expressing  concern   from  [constituents]  regarding                                                               
edibles   and  the   ability  to   determine   the  potency   and                                                               
authenticity of  the product.   He suggested marking  the product                                                               
in some manner  to identify [the potency and  authenticity of the                                                               
product].                                                                                                                       
                                                                                                                                
CHAIR TILTON agreed that edibles are of concern for many.                                                                       
                                                                                                                                
8:23:57 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON pointed out  that the language [prohibiting                                                               
the] public  use/view of  marijuana doesn't  reference commercial                                                               
agriculture or growing.  He  asked whether the aforementioned was                                                               
intentional  or  an oversight.    He  noted that  the  initiative                                                               
itself  doesn't seem  to require  [commercial] cultivation  to be                                                               
performed out of public view.                                                                                                   
                                                                                                                                
MAYOR HOPKINS remarked that  restrictions [for commercial growing                                                               
and cultivation] could  be discussed at the local  level in terms                                                               
of zoning.                                                                                                                      
                                                                                                                                
MS.  DOXEY surmised  that perhaps  [the initiative]  contemplated                                                               
that  commercial operations  would  be  addressed in  regulation.                                                               
She related  her understanding that high  quality marijuana grows                                                               
would  be in  warehouses, which  she expected  would be  the case                                                               
with commercial  grows, and  thus there  would likely  be minimal                                                               
risk of  being in  public view.   However,  commercial operations                                                               
could be  addressed through  zoning, conditional  use permitting,                                                               
signage requirements, or setback requirements.                                                                                  
                                                                                                                                
8:28:34 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HUGHES related that  some of her constituents have                                                               
expressed  the desire  for agricultural  land currently  used for                                                               
food  production not  to be  used for  marijuana production.   If                                                               
such is  the case, then  new land  would be needed  for marijuana                                                               
production.   She  then inquired  as to  whether there  have been                                                               
conversations about the aforementioned.                                                                                         
                                                                                                                                
MAYOR HOPKINS  confirmed that there  are have  been conversations                                                               
about  agricultural land  and commercial  operations.   He opined                                                               
that  local  governments  have   the  authority,  through  zoning                                                               
regulations, to  establish what the  community wants in  terms of                                                               
how much agricultural  land could be planted with  marijuana.  He                                                               
related  his  understanding   that  zoning  requirements  through                                                               
permitting, conditional  use permitting,  could be used  in order                                                               
to maintain "food security."                                                                                                    
                                                                                                                                
8:30:29 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  inquired as  to whether Fairbanks  has had                                                               
discussions  regarding  whether  the  [regulation  of  marijuana]                                                               
should be  an areawide  power versus [under  the purview]  of the                                                               
smallest dimension of the municipality.                                                                                         
                                                                                                                                
MAYOR  HOPKINS confirmed  that the  Fairbanks North  Star Borough                                                               
has had discussions on that  matter.  He acknowledged that cities                                                               
may  have a  more restrictive  implementation of  enforcement and                                                               
other  requirements  regarding  public  and  personal  use.    He                                                               
reminded the  committee that zoning requirements  overlay the two                                                               
cities.   Per state code, the  City of Fairbanks and  the City of                                                               
North  Pole have  representatives  on the  [Fairbanks North  Star                                                               
Borough's]  planning commission.     Mayor  Hopkins opined  there                                                               
should  be a  board that  can  address the  conflicts that  might                                                               
arise  between the  boundary of  the city  and the  borough rules                                                               
that overlay the  cities.  He noted that the  cities are bringing                                                               
forward  personal use  ordinances, while  the borough  ordinances                                                               
are coming  February 26th.  The  goal, he remarked, is  to ensure                                                               
that   [there  isn't   a  tremendous   amount  of   contradictory                                                               
overlaying of regulations].                                                                                                     
                                                                                                                                
MS.  DOXEY added  that the  Act clearly  designates power  to the                                                               
municipalities through  AS 17.38.110.   The Fairbanks  North Star                                                               
Borough,  she  informed the  committee,  has  been treating  that                                                               
statute as if  it's an areawide delegation of power.   She opined                                                               
that it  may behoove  the state  to clarify  that language.   She                                                               
offered that  it would proper  to add that  power to Title  29 as                                                               
that's where municipalities receive their power from the state.                                                                 
                                                                                                                                
8:34:21 AM                                                                                                                    
                                                                                                                                
CHAIR TILTON inquired  as to the thoughts of  the Fairbanks North                                                               
Star Borough on the creation  of a marijuana control board versus                                                               
utilizing  the Alcoholic  Beverage  Control (ABC)  Board for  the                                                               
control of marijuana.                                                                                                           
                                                                                                                                
MAYOR  HOPKINS  confirmed  that   the  borough  contemplated  the                                                               
aforementioned and  determined that  a local control  board would                                                               
be established as  there are issues to be addressed  at the local                                                               
level.                                                                                                                          
                                                                                                                                
MS.  DOXEY   related  that   the  borough   administration  isn't                                                               
particularly  concerned   with  whether  the   state  establishes                                                               
something through the  ABC Board or a  separate marijuana control                                                               
board so long  as it's effective and adequately staffed.   At the                                                               
local level,  the borough wants  to have  as much control  over a                                                               
local  regulatory agency  that each  municipality may  establish.                                                               
She opined  that each  municipality will  be different,  and thus                                                               
the  makeup   of  each  regulatory   body  would   be  different.                                                               
Therefore, the municipality doesn't want  the state to dictate to                                                               
it what it has to do and have it not work in the municipality.                                                                  
                                                                                                                                
8:37:23 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NAGEAK asked if a  local government can opt-out of                                                               
making  its  own rules  and  regulations  or  can they  take  the                                                               
state's lead.                                                                                                                   
                                                                                                                                
MAYOR  HOPKINS  answered that  there  are  some cities  that  are                                                               
considering opting-out  of certain  aspects of Ballot  Measure 2,                                                               
as  allowed.   The local  board would  be the  entity that  would                                                               
adjudicate situations  with borders  and the differing  rules and                                                               
regulations.   Mayor  Hopkins stressed  that they  are trying  to                                                               
make it work at the community level.                                                                                            
                                                                                                                                
8:39:31 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   SEATON  recalled   that  the   Matanuska-Susitna                                                               
Borough testimony expressed similar  concern, but wanted areawide                                                               
power  so that  if the  borough  decided to  opt-out, then  every                                                               
community  within  the  borough   would  be  opted-out  as  well.                                                               
Therefore,  communities  within a  borough  wouldn't  be able  to                                                               
exercise a  local specific  power to allow  things.   Although he                                                               
understood the notion  of an areawide power  under which entities                                                               
work together, the legislature will  have to decide what a "local                                                               
power" means.   He opined  that a  local board wouldn't  have the                                                               
statutory authority to determine the  powers.  He then encouraged                                                               
the  municipalities to  consider the  aforementioned and  how the                                                               
powers  are  to  be  delegated   from  the  legislature  as  it's                                                               
currently unclear  in current  statute and  the initiative  as to                                                               
whether it  will be the  individual cities within the  borough or                                                               
the borough areawide power.                                                                                                     
                                                                                                                                
8:41:41 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NAGEAK expressed concern  there would be a mixture                                                               
of rules and regulations within a municipality.                                                                                 
                                                                                                                                
8:42:41 AM                                                                                                                    
                                                                                                                                
BRYCE WARD, Mayor, City of  North Pole, explained that North Pole                                                               
is  a city  within a  borough.   He informed  the committee  that                                                               
currently  there are  two readings  of  the following  ordinances                                                               
before  the city:   public  consumption and  hash oil  extraction                                                               
ordinances.    He  related  his  understanding  that  the  ballot                                                               
initiative  deals with  public consumption  and commercialization                                                               
of the marijuana industry.  He  directed attention to the City of                                                               
North Pole's Resolution 15-08, included  in the committee packet,                                                               
which addresses some of the  issues with the commercialization of                                                               
marijuana.    The  City  of  North  Pole,  as  expressed  in  the                                                               
resolution,  is  concerned  with   clarifying  the  term  "public                                                               
place."   The City of  North Pole, he  related, has taken  a very                                                               
conservative approach to  the definition of "public  place."  The                                                               
state  needs to  address import  and export  rules regarding  the                                                               
import of seeds for the start  of manufacturing and the export of                                                               
product.   There is also concern  with regard to edibles  and the                                                               
packaging  that  could be  addressed  at  the  state level.    He                                                               
pointed out that at this  point, there is nothing that identifies                                                               
or differentiates  between cannabis  for recreational  use versus                                                               
medicinal use.   Mayor  Ward highlighted that  the City  of North                                                               
Pole  is also  concerned  with the  potency  standards, which  he                                                               
opined  could be  regulated at  the  state level.   As  mentioned                                                               
earlier, there are agricultural tax  issues as well as visibility                                                               
issues.   He expressed the desire  for the state to  consider the                                                               
funding  that  comes  in  to be  used  for  prevention  treatment                                                               
facilities.   The City  of North Pole,  he related,  recommends a                                                               
new regulatory arm  separate from the ABC Board.   He stated that                                                               
the  state   should  consider   issues  of   licensing,  growing,                                                               
processing,  manufacturing,  and   establishing  regulations  for                                                               
consistency throughout the  state.  There are  also concerns with                                                               
regard  to retail  sales.   He then  expressed the  need for  the                                                               
Alaska  Landlord Tenant  Act  to define  rights  for tenants  and                                                               
landlords.    Also,  there  need   to  be  regulations  regarding                                                               
advertisement of  marijuana in  terms of  what is  acceptable and                                                               
the target market.   He then suggested there be  a strong minimum                                                               
standard for growing, processing,  and manufacturing at the state                                                               
level.    If  a  borough has  different  regulations  than  those                                                               
outside of the  borough, particularly in terms of  the growing or                                                               
manufacturing  of marijuana  and its  products, the  jurisdiction                                                               
with the higher regulatory environment  are null and void because                                                               
industry  can  circumvent the  standards  by  moving outside  the                                                               
boundaries.   Therefore,  Mayor Ward  opined that  it's important                                                               
for  the  state to  set  minimum  standards that  are  consistent                                                               
throughout  the state.   For  instance, the  state has  a minimum                                                               
standard  for  fire, life,  and  safety  that  is enforced  by  a                                                               
division  of the  state,  although a  municipality  can become  a                                                               
deferred jurisdiction such that  they can enforce the regulations                                                               
and  collect   the  associated   fees.     He  opined   that  the                                                               
aforementioned  is  a  good  model  the  state  could  use  going                                                               
forward.   He then related  that there  has been concern,  as has                                                               
been heard  in Colorado, with  regard to the  inconsistency among                                                               
jurisdictions and the inability  of municipalities to effectively                                                               
regulate seed to sale of the  product.  If the municipalities are                                                               
asked  to regulate  like the  U.S. Food  and Drug  Administration                                                               
(FDA),   that  would   be  a   huge  cost   and  burden   to  the                                                               
municipalities.   Furthermore,  such a  situation would  lose the                                                               
economies of  scale the FDA  has because everyone has  to develop                                                               
their  own   method  and   have  their   own  regulators.     The                                                               
aforementioned, he  opined, needs to be  taken into consideration                                                               
by  the   state,  which   should  be  able   to  work   with  the                                                               
municipalities to create minimum standards.                                                                                     
                                                                                                                                
8:50:02 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  said  he appreciated  the  suggestion  of                                                               
minimum  standards  statewide  and   opined  that  would  be  the                                                               
function of  a regulatory board.   He  then specified that  he is                                                               
more focused  on what  should be done  at the  legislative level.                                                               
He asked,  referring to  Title 29, whether  Mayor Ward  felt that                                                               
the  ability  to regulate  marijuana  should  be an  areawide  or                                                               
nonareawide power.                                                                                                              
                                                                                                                                
MAYOR  WARD  answered that  although  the  City of  North  Pole's                                                               
council  hasn't  specifically  addressed the  issue  of  areawide                                                               
versus nonareawide,  the issues  it has addressed  are supportive                                                               
of a nonareawide  approach.  In fact, the City  of North Pole has                                                               
moved forward  with some  of its own  regulations with  regard to                                                               
the   definitions  of   "public   consumption"   and  "hash   oil                                                               
extraction."   Mayor  Ward opined  that  the City  of North  Pole                                                               
Council would  be in support  of the nonareawide power  such that                                                               
the city has the ability to regulate itself.                                                                                    
                                                                                                                                
8:52:29 AM                                                                                                                    
                                                                                                                                
MAYOR WARD then addressed the  issue of retail sales, and pointed                                                               
out that  the resolution  relates that  the state  should develop                                                               
the regulatory arm with a  minimum standard.  However, the retail                                                               
sales could  be controlled at  the municipal level,  should there                                                               
be  consistent  regulatory standards  at  the  state level.    He                                                               
opined that it would be similar to the alcohol or tobacco model.                                                                
                                                                                                                                
8:53:14 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON, referring to line  29 of the City of North                                                               
Pole's  resolution,  inquired  as  to the  meaning  of  the  term                                                               
"agricultural  farm  use  tax  exemption"  for  locally  produced                                                               
marijuana.                                                                                                                      
                                                                                                                                
MAYOR   WARD   explained   that   currently  there   is   a   tax                                                               
credit/exemption as  agricultural land is  valued as such  not at                                                               
its commercial  value.   Therefore, the  question is  whether the                                                               
agricultural land used for marijuana  production would be in that                                                               
same category.   In further  response, Mayor Ward  confirmed that                                                               
he  was referring  to  the property  tax  valuation for  property                                                               
assessment.                                                                                                                     
                                                                                                                                
8:54:29 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND  asked if  there has been  any discussion                                                               
with regard to the cash basis of marijuana businesses.                                                                          
                                                                                                                                
MAYOR WARD confirmed that is of concern and has been discussed.                                                                 
                                                                                                                                
8:56:45 AM                                                                                                                    
                                                                                                                                
LANCE  ROBERTS  noted  that  although  he  is  a  member  of  the                                                               
Fairbanks  North  Star Assembly,  he  is  testifying on  his  own                                                               
behalf  today.    He  further  noted  that  he  hasn't  seen  the                                                               
legislation,  and  thus he  would  only  discuss specific  policy                                                               
matters not  anything in  specific legislation.   He  then opined                                                               
that strong  state regulation is necessary  because the Fairbanks                                                               
North Star Borough  doesn't have a police force  while the cities                                                               
within the borough do have police  forces.  The borough relies on                                                               
the Alaska State Troopers for  [enforcement], and thus state laws                                                               
are critical to provide the  Alaska State Troopers law with which                                                               
to  work and  provide  enforcement  outside of  the  cities.   He                                                               
informed the  committee that he  is going to bring  an ordinance,                                                               
2015-09,  before  the  Fairbanks  North Star  Borough  that  will                                                               
merely  be  a  placeholder  in the  borough's  code  and  doesn't                                                               
actually have any regulation.  He  related his hope that not much                                                               
would  have  to  be  done  at the  local  level  because  of  the                                                               
aforementioned enforcement problem with  the expectation that the                                                               
state  would implement  the regulations.    He characterized  the                                                               
need  for  the  definition  of   "public"  as  critical  for  law                                                               
enforcement.    Drawing  from  his  experience  with  drugs,  Mr.                                                               
Roberts emphasized  that marijuana and alcohol  are different and                                                               
can't be  regulated the  same.  For  instance, he  questioned how                                                               
one would be  able to patronize marijuana smoking  clubs and have                                                               
a  designated driver  without some  major infrastructure  such as                                                               
large fans  and well ventilated separate  rooms for drivers.    A                                                               
larger issue,  he opined, is that  with alcohol there is  a range                                                               
of moderation  in which  one could,  depending upon  body weight,                                                               
have a  drink and drive home  without a problem.   However, there                                                               
isn't  such a  range [of  moderation]  with marijuana  as one  is                                                               
impaired even  with a small  amount of use.   He opined  that one                                                               
who  imbibes  at  a  marijuana  smoking  club  can't  drive  home                                                               
unimpaired.   Furthermore, it's nearly  impossible to  not imbibe                                                               
at a marijuana  smoke club.  Mr. Roberts emphasized  the need for                                                               
the committee  to think about  the differences  between marijuana                                                               
and alcohol  when discussing regulations so  that marijuana isn't                                                               
approached only like alcohol.   He then expressed support for the                                                               
creation  of a  marijuana  control board  separate  from the  ABC                                                               
Board,  though he  also expressed  support for  the concept  of a                                                               
local  [control]  board  if  that's  decided.    With  regard  to                                                               
areawide versus  nonareawide powers,  Mr. Roberts  explained that                                                               
with a  nonareawide power,  separate taxing  must be  created for                                                               
that  power.   He stressed  that  it's a  complicated issue  that                                                               
interweaves  with all  code and  it's difficult  to breakout  the                                                               
cost.   Therefore,  if it  was a  nonareawide power,  a different                                                               
mill rate would  be required so that city  residents wouldn't pay                                                               
the  mill rate.   He  opined  that practically  it has  to be  an                                                               
areawide  power similar  to  planning and  zoning  such that  the                                                               
cities  work  with the  boroughs.    In conclusion,  Mr.  Roberts                                                               
expressed the need  for the state to bring  forward strong limits                                                               
throughout the state in order to avoid border problems.                                                                         
                                                                                                                                
9:04:50 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON, referring  to the  [Fairbanks North  Star                                                               
Borough]  ordinance, pointed  out that  the language  on page  2,                                                               
line   47,  says   "receive  half   of  the   state  registration                                                               
application fee".   He  then asked  if that's  a request  for the                                                               
state to break its registration  fee or taxes and distribute half                                                               
of them  to the borough or  is there something already  in effect                                                               
that specifies half will go to the local municipality.                                                                          
                                                                                                                                
MR. ROBERTS  specified that [the  language in the  ordinance] was                                                               
taken  out of  the  initiative  by the  borough  attorneys.   The                                                               
ordinance, he  said, should completely align  with the initiative                                                               
as it passed.                                                                                                                   
                                                                                                                                
9:07:14 AM                                                                                                                    
                                                                                                                                
KELLY WOLF,  Member, Kenai  Peninsula Borough  Assembly, informed                                                               
the committee  that as  a member of  the Kenai  Peninsula Borough                                                               
Assembly,  he introduced  ordinance  2015-02,  which would  place                                                               
before the voters of the  Kenai Peninsula Borough, outside of the                                                               
incorporated  municipalities, the  question of  whether to  allow                                                               
the  cultivation of  marijuana for  the  intent to  resale.   The                                                               
Kenai  Peninsula is  a  second class  borough  that doesn't  have                                                               
zoning  authority.   During the  November  2014 Alaska  Municipal                                                               
League  conference, there  was discussion  of potential  problems                                                               
due to the  passage of Ballot Measure 2.   There was concern with                                                               
regard to delayed action by  cities and municipalities across the                                                               
state with regard to enacting  legislation that might prevent the                                                               
cultivation,  sale, or  manufacture of  marijuana products  after                                                               
marijuana is  legal and  the state  develops regulations.   There                                                               
was mention that  municipalities may face a  takings lawsuit, and                                                               
thus  the aforementioned  ordinance  was introduced  to slow  the                                                               
process  until  state regulations  are  in  place.   Furthermore,                                                               
since the Kenai Peninsula Borough  doesn't have zoning powers, it                                                               
has no ability to restrict  where a marijuana farm or cultivation                                                               
area  is established.   The  value of  property near  a marijuana                                                               
farm or  cultivation area is impacted  by it.  Mr.  Wolf strongly                                                               
urged the  committee to  consider the  fact that  [the initiative                                                               
places]  a tremendous  burden on  some municipalities  that don't                                                               
have  policing or  zoning  powers, such  as  the Kenai  Peninsula                                                               
Borough.                                                                                                                        
                                                                                                                                
9:13:35 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DRUMMOND  related  her understanding  from  Mayor                                                               
Hopkins that the  Fairbanks North Star Borough is  a second class                                                               
borough with strong zoning regulations.   However, she understood                                                               
Mr.  Wolf to  have said  that the  Kenai Peninsula  Borough is  a                                                               
second class borough with no zoning powers.                                                                                     
                                                                                                                                
MR.  WOLF specified  that the  Kenai Peninsula  Borough has  very                                                               
limited zoning.   In fact,  Mr. Wolf  said that to  his knowledge                                                               
the  Kenai  Peninsula  Borough only  has  an  anadromous  habitat                                                               
ordinance,  which is  a zoning  ordinance.   The Kenai  Peninsula                                                               
Borough does have a planning  commission, but doesn't have zoning                                                               
authority per se.                                                                                                               
                                                                                                                                
MAYOR  HOPKINS informed  the committee  that the  Fairbanks North                                                               
Star  Borough has  a  regional comprehensive  land  use plan  and                                                               
probably 22 different zones, the  largest of which is the general                                                               
use zone.   Many of the residential areas have  been developed in                                                               
a  general  use area  that  only  has  two restrictions.    Mayor                                                               
Hopkins opined  that the  Fairbanks North  Star Borough  has very                                                               
thorough  zoning  codes.   In  response  to Chair  Tilton,  Mayor                                                               
Hopkins  confirmed that  the Fairbanks  North Star  Borough is  a                                                               
second  class borough  with a  comprehensive  plan that  contains                                                               
zoning regulations.                                                                                                             
                                                                                                                                
MR. WOLF, in  response to Chair Tilton, confirmed  that the Kenai                                                               
Peninsula Borough  is a  second class  borough, but  with limited                                                               
zoning powers.                                                                                                                  
                                                                                                                                
9:16:21 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND  surmised then  that the  Kenai Peninsula                                                               
Borough has  chosen not to  promulgate zoning regulations  to the                                                               
same degree as the Fairbanks  North Star Borough.  Therefore, she                                                               
inquired as  to how the  Kenai Peninsula Borough,  without zoning                                                               
regulations,  is   preventing  junk  yards  and   oil  processing                                                               
facilities from popping up in residential neighborhoods.                                                                        
                                                                                                                                
MR.  WOLF reiterated  that  the Kenai  Peninsula  Borough has  an                                                               
anadromous habitat ordinance  as well as a  gravel pit ordinance.                                                               
He  indicated  that  the [ordinances]  go  through  the  planning                                                               
commission and an appeals process.   He emphasized that the Kenai                                                               
Peninsula  Borough encompasses  15  million  acres that  traverse                                                               
private,  federal, tribal,  municipal, and  state properties  and                                                               
has a  population of  about 60,000  people.   He opined  that the                                                               
borough  would  face  high revenue  expenses  to  enforce  zoning                                                               
throughout such  a large area.   The Kenai Peninsula  Borough did                                                               
choose to have limited zoning, he confirmed.                                                                                    
                                                                                                                                
9:18:38 AM                                                                                                                    
                                                                                                                                
PAUL  OSTRANDER,  Chief of  Staff,  Office  of the  Mayor,  Kenai                                                               
Peninsula  Borough, informed  the committee  that in  addition to                                                               
the  gravel  pit  and anadromous  habitat  ordinances  the  Kenai                                                               
Peninsula  Borough  does  have  a local  option  zone,  which  is                                                               
essentially spot  zoning.  There  are probably less than  10 such                                                               
local  option zones.   The  Kenai Peninsula  Borough also  has an                                                               
ordinance  limiting  pig  farms.     Mr.  Ostrander  opined  that                                                               
although the  Kenai Peninsula Borough  has zoning  powers similar                                                               
to the  Fairbanks North Star  Borough, they aren't  instituted to                                                               
the level of those of the Fairbanks North Star Borough.                                                                         
                                                                                                                                
9:20:34 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  asked whether the Kenai  Peninsula Borough                                                               
has  discussed  whether  it  wants the  local  option  and  other                                                               
controls to  be an areawide power  so the borough could  make the                                                               
decision  for the  entire borough,  including those  areas within                                                               
the municipalities,  or whether the  borough wants to be  able to                                                               
exercise control outside the other municipalities.                                                                              
                                                                                                                                
MR. WOLF answered  that the Kenai Peninsula  Borough Assembly has                                                               
not  discussed  that.     He  explained  that   he  focused  [the                                                               
resolution]   outside   of   the  municipalities   because   each                                                               
municipality  has its  own elected  council and  should make  the                                                               
decision per Ballot Measure 2.                                                                                                  
                                                                                                                                
REPRESENTATIVE  SEATON  encouraged  all   boroughs  to  have  the                                                               
discussion and  provide feedback as  to whether the  local option                                                               
should be  areawide or nonareawide  because the  legislature will                                                               
have to clarify the aforementioned in Title 29.                                                                                 
                                                                                                                                
9:24:00 AM                                                                                                                    
                                                                                                                                
MR. OSTRANDER clarified  that his comments are only  on behalf of                                                               
the administration  of the  borough.   Mr. Ostrander  related his                                                               
opinion  that  generally the  boroughs  should  be provided  with                                                               
nonareawide  powers.   He acknowledged  that municipalities  feel                                                               
the  need to  have  local  control.   Since  the Kenai  Peninsula                                                               
Borough's   municipalities  have   their   own  law   enforcement                                                               
agencies, he opined  that it's appropriate for them  to have many                                                               
of the controls.   Mr. Ostrander expressed concern  with having a                                                               
local regulatory  authority at the  municipal level.   The state,                                                               
he said, needs  to establish a primary structure  and the options                                                               
of the  local regulatory  authority including  an option  for the                                                               
municipalities.  However, the requirement  of having a regulatory                                                               
authority is of concern.  He  expressed the need for marijuana to                                                               
be regulated as closely as  possible to how alcohol is regulated,                                                               
understanding some things  can't be regulated in  the same manner                                                               
and  understanding that  most of  the  regulatory authority  [and                                                               
framework]  for  alcohol  has  been  established  by  the  state.                                                               
Referring  to  the  ability  of  an  individual  to  possess  six                                                               
marijuana  plants  and  to  assist others  with  the  growing  of                                                               
plants,  Mr.   Ostrander  suggested  the  need   to  establish  a                                                               
household  limit.   He then  opined that  although municipalities                                                               
should  be  given  the  option of  establishing  their  own  bail                                                               
schedule, it would  be helpful for the state  itself to establish                                                               
a  bail schedule.   In  the Kenai  Peninsula Borough,  the Alaska                                                               
State Troopers will enforce this  law.  The Alaska State Troopers                                                               
generally  enforce the  state bail  schedules as  it's much  more                                                               
difficult  for  them  to  enforce  the  local  ordinances.    Mr.                                                               
Ostrander  related  that  the Kenai  Peninsula  Borough  attorney                                                               
expressed concern  with AS 17.38.110, which  requires any adopted                                                               
[municipal]  procedures are  subject to  all the  requirements of                                                               
the Administrative Procedures  Act (APA), AS 44.62.   The concern                                                               
is that  AS 44.62 is difficult  and complex as it's  designed for                                                               
use by  the state  rather than  municipalities, which  have their                                                               
own  administrative  procedures,  processes, permits,  and  other                                                               
regulatory matters.   Therefore, the recommendation  is to either                                                               
delete  the  reference  to  the  APA  or  provide  an  option  to                                                               
municipalities  that read,  "unless provided  otherwise by  local                                                               
ordinance."                                                                                                                     
                                                                                                                                
9:29:36 AM                                                                                                                    
                                                                                                                                
CHAIR TILTON reminded everyone that  criminal aspects of law will                                                               
not  be  addressed  in  this  committee,  but  any  such  related                                                               
comments will be passed on to the appropriate committee(s).                                                                     
                                                                                                                                
9:29:57 AM                                                                                                                    
                                                                                                                                
MR. OSTRANDER then expressed the  need for the state to establish                                                               
one  definition of  "public" for  the  entire state  in order  to                                                               
avoid   confusion   with   various   locales   having   different                                                               
definitions.                                                                                                                    
                                                                                                                                
9:31:08 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON asked  if the bail schedule  refers to fine                                                               
amounts for violations not criminal actions.                                                                                    
                                                                                                                                
MR.  OSTRANDER posed  an example  in which  a local  municipality                                                               
gives  a ticket  for public  possession  of marijuana.   At  this                                                               
point, the individual can't pay  the ticket but rather would have                                                               
to  go  to   court  because  there  is  no   set  bail  schedule.                                                               
Therefore, if  the state  established a  bail schedule,  it would                                                               
expedite  the enforcement  process  and  the ticketed  individual                                                               
would be able to pay the fine and not have to go to court.                                                                      
                                                                                                                                
9:32:11 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON   then  asked  whether  the   borough  has                                                               
considered   the  public   consumption  of   nonedible  marijuana                                                               
products, such as lotions,  tinctures, infused toothpicks, breast                                                               
strips, etcetera.                                                                                                               
                                                                                                                                
MR. OSTRANDER replied no, adding  that the borough would look for                                                               
direction  from  the  state  because the  state  would  have  the                                                               
expertise  and structure  to set  up  much of  this, whereas  the                                                               
borough simply does  not.  In further  response to Representative                                                               
Seaton, Mr. Ostrander confirmed  that the Kenai Peninsula Borough                                                               
wants  the term  "public" defined.   Although  the borough  isn't                                                               
providing  specific  suggestions   regarding  the  definition  of                                                               
"public,"  he  related that  the  Kenai  Peninsula Borough  would                                                               
generally  accept  the  comments  of  the  Fairbanks  North  Star                                                               
Borough.                                                                                                                        
                                                                                                                                
9:34:07 AM                                                                                                                    
                                                                                                                                
CHAIR TILTON thanked those who provided comments today.                                                                         
                                                                                                                                
9:35:06 AM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Community  and Regional  Affairs Standing  Committee meeting  was                                                               
adjourned at 9:35 a.m.                                                                                                          

Document Name Date/Time Subjects
CityofNorthPole, Res-15-08.pdf HCRA 2/5/2015 8:00:00 AM
City of North Pole Resolution re: Marijuana