Legislature(2015 - 2016)BARNES 124

02/07/2015 08:00 AM House COMMUNITY & REGIONAL AFFAIRS



Audio Topic
08:04:25 AM Start
08:06:01 AM Presentation(s): Municipal Regulation of Marijuana
09:58:52 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Municipal Regulation of Marijuana: TELECONFERENCED
- Rural Municipal Representatives - TBD
- Alaska Municipal League - Kathie Wasserman
-- Testimony <Invitation Only> --
                    ALASKA STATE LEGISLATURE                                                                                  
    HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                   
                        February 7, 2015                                                                                        
                           8:04 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Cathy Tilton, Chair                                                                                              
Representative Paul Seaton, Vice Chair                                                                                          
Representative Benjamin Nageak                                                                                                  
Representative Harriet Drummond                                                                                                 
Representative Dan Ortiz                                                                                                        
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Shelley Hughes                                                                                                   
Representative Lora Reinbold                                                                                                    
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PRESENTATION(S): MUNICIPAL REGULATION OF MARIJUANA                                                                              
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
DENISE MICHELS, Mayor                                                                                                           
City of Nome                                                                                                                    
Nome, Alaska                                                                                                                    
POSITION STATEMENT:  Testified on the municipal regulation of                                                                 
marijuana.                                                                                                                      
                                                                                                                                
SHIRLEY MARQUARDT, Mayor                                                                                                        
City of Unalaska                                                                                                                
Unalaska, Alaska                                                                                                                
POSITION STATEMENT:  Testified on the municipal regulation of                                                                 
marijuana.                                                                                                                      
                                                                                                                                
HEATH HILYARD, Staff                                                                                                            
Representative Tilton                                                                                                           
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   During  discussion of  municipal regulation                                                             
of marijuana, provided information.                                                                                             
                                                                                                                                
KATHIE WASSERMAN, Executive Director                                                                                            
Alaska Municipal League (AML)                                                                                                   
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   Testified on  the municipal  regulation of                                                             
marijuana.                                                                                                                      
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
8:04:25 AM                                                                                                                    
                                                                                                                                
CHAIR  CATHY  TILTON  called the  House  Community  and  Regional                                                             
Affairs  Standing  Committee  meeting   to  order  at  8:04  a.m.                                                               
Representatives  Seaton,  Hughes,  Nageak, Ortiz,  Drummond,  and                                                               
Tilton were present at the call to order.                                                                                       
                                                                                                                                
^PRESENTATION(S): Municipal Regulation of Marijuana                                                                             
       PRESENTATION(S): Municipal Regulation of Marijuana                                                                   
                                                                                                                              
8:06:01 AM                                                                                                                    
                                                                                                                                
CHAIR TILTON announced  that the only order of  business would be                                                               
presentations regarding the municipal regulation of marijuana.                                                                  
                                                                                                                                
8:06:51 AM                                                                                                                    
                                                                                                                                
DENISE MICHELS, Mayor,  City of Nome, began by  pointing out that                                                               
the  marijuana law  poses some  challenges and  opportunities for                                                               
municipalities.  The City of  Nome's chief of police and attorney                                                               
have been  hard at  work coordinating  with the  Alaska Municipal                                                               
League  (AML)   on  the  regulations   that  will   impact  local                                                               
government, profit,  and commerce.   The city looks to  the state                                                               
for reasonable regulations that  comply with the federal mandate.                                                               
As  a local  government, the  City of  Nome is  dealing with  the                                                               
personal  use and  commercialization issues.   The  City of  Nome                                                               
wants  an  open   public  process  to  comply   with  the  public                                                               
initiative.   The city is  considering the definition  of "public                                                               
use,"  the creation  of an  advisory board,  and a  fine schedule                                                               
with  regard  to  personal  use.   The  city  will  look  to  the                                                               
legislature [for  guidance] in  terms of  commercial use.   Mayor                                                               
Michels then expressed  concern that many cities  in rural Alaska                                                               
don't have access to running water,  and thus the threat of fires                                                               
from  oils  is  of  concern.     Furthermore,  the  lack  of  law                                                               
enforcement in  many rural areas  is of  concern in terms  of how                                                               
communities will regulate  the new laws.  She  expressed the hope                                                               
that  the state's  local government  specialists  will work  with                                                               
communities  to update  their ordinances  and fine  schedules now                                                               
rather than  waiting until the legislature  is done, particularly                                                               
since the personal  use goes into effect this month.   The impact                                                               
on taxation  powers is also of  concern.  Therefore, the  city is                                                               
reviewing  what can  be done  to  offset the  expenses that  will                                                               
arise for  law enforcement for  inspections.  She  questioned how                                                               
the [duties  of the state  health inspector] will be  carried out                                                               
in rural communities.  The City  of Nome, she related, has a drug                                                               
dog that  will now have  to be  retrained and the  entire process                                                               
will have  to be revamped.   Mayor Michels, in response  to Chair                                                               
Tilton, informed the  committee that the City of Nome  is a first                                                               
class city in an unorganized borough  and all the villages in the                                                               
region are second class cities.                                                                                                 
                                                                                                                                
8:11:22 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  reminded  the committee  that  there  are                                                               
different [views] with regard to  the local option and whether it                                                               
should be an areawide or nonareawide  power.  He then inquired as                                                               
to whether the City of Nome is located in a borough.                                                                            
                                                                                                                                
MAYOR  MICHELS  clarified the  City  of  Nome  is located  in  an                                                               
unorganized borough.                                                                                                            
                                                                                                                                
8:12:21 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON inquired  as to  what Mayor  Michels meant                                                               
when  she expressed  the  need for  help  clarifying the  federal                                                               
mandate as related to the law.                                                                                                  
                                                                                                                                
MAYOR  MICHELS explained  that under  the  Drug Free  Act in  the                                                               
Workplace federal funds are received  when in compliance with the                                                               
act.  Many local villages in  the area receive federal funds, and                                                               
therefore  local government  specialists from  the Department  of                                                               
Commerce,  Community  &  Economic Development  (DCCED)  would  be                                                               
helpful to update the personnel policies and ordinances.                                                                        
                                                                                                                                
8:13:18 AM                                                                                                                    
                                                                                                                                
MAYOR MICHELS,  in response to  Chair Tilton, clarified  that the                                                               
city is a  subsidiary of the state and within  the city limits it                                                               
has the power to define its ordinances, rules, and regulations.                                                                 
                                                                                                                                
8:14:34 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON recalled testimony  from boroughs that were                                                               
concerned  with cities  having control  within their  city limits                                                               
because  there could  be different  regulations  within the  city                                                               
limits  and the  borough lands.   He  asked whether  the City  of                                                               
Nome, an  unorganized borough,  or the  second class  cities have                                                               
expressed   concern    regarding   whether    [having   different                                                               
regulations  within city  and  borough land]  would  be any  more                                                               
problematic that it already is with alcohol.                                                                                    
                                                                                                                                
MAYOR MICHELS  confirmed that the  City of Nome has  been holding                                                               
discussions on  the aforementioned,  which is  of concern.   With                                                               
regard to commercialization, one  suggestion being discussed with                                                               
Representative Foster  is to  create a  25-mile buffer  zone from                                                               
the city  boundary with regard to  the local option.   In further                                                               
response  to  Representative  Seaton,  Mayor  Michels  agreed  to                                                               
provide the committee with the aforementioned proposal.                                                                         
                                                                                                                                
8:17:08 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NAGEAK  recalled that  outside the city  limits of                                                               
an   unorganized   borough,    the   state   is   responsible/has                                                               
jurisdiction.                                                                                                                   
                                                                                                                                
8:17:48 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON,  recalling the  mention of  commercial use                                                               
and lack  of law enforcement,  asked whether the  marijuana local                                                               
option  creates  anything  different  than what  exists  for  the                                                               
alcohol local option.                                                                                                           
                                                                                                                                
MAYOR MICHELS  confirmed the concern  is that  the responsibility                                                               
for law enforcement  in an unorganized borough would  fall to the                                                               
Alaska  State Troopers.    She informed  the  committee that  the                                                               
Bering  Straits region  is  the size  of West  Virginia.   The  8                                                               
Alaska State  Troopers who serve the  [unorganized borough] can't                                                               
be   present  in   all  17   communities   [of  the   unorganized                                                               
borough/region] at once.                                                                                                        
                                                                                                                                
8:19:01 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON turned  attention to  the consequence  for                                                               
violating  a  commercial  [marijuana]  license, such  as  with  a                                                               
liquor license.   He asked if the possibility of  a revocation of                                                               
license  rather  than  a  fine   would  address  the  problem  of                                                               
immediate law enforcement.                                                                                                      
                                                                                                                                
MAYOR MICHELS  opined that  consistent enforcement  could address                                                               
that.   However, she opined  that the  [difficulties surrounding]                                                               
enforcement  and   regulations  would  likely  cause   people  to                                                               
continue to work until they are caught.                                                                                         
                                                                                                                                
8:20:37 AM                                                                                                                    
                                                                                                                                
MAYOR MICHELS, in response  to Representative Drummond, clarified                                                               
that there  are 17  villages in the  unorganized borough  some of                                                               
which are dry, damp, and wet.                                                                                                   
                                                                                                                                
REPRESENTATIVE DRUMMOND  asked if Mayor Michels  expected the dry                                                               
villages  to  forbid  commercial marijuana  operations  in  their                                                               
boundaries.                                                                                                                     
                                                                                                                                
MAYOR MICHELS replied yes, noting that  she has heard many of the                                                               
leaders   in  the   region  oppose   any  commercialization   [of                                                               
marijuana].    She  reiterated  the  need  for  local  government                                                               
specialists to  help the villages  [implement] a vote,  create an                                                               
ordinance,   or    move   through    the   procedures    to   ban                                                               
[commercialization of marijuana].                                                                                               
                                                                                                                                
REPRESENTATIVE  DRUMMOND  pointed out  that  per  the Act,  after                                                               
February  24, 2015,  personal use  in  one's home  will be  legal                                                               
throughout the state.                                                                                                           
                                                                                                                                
MAYOR MICHELS acknowledged that is  the case, but reiterated that                                                               
many  of the  local communities  haven't had  the opportunity  to                                                               
update their ordinances to define public use.                                                                                   
                                                                                                                                
8:23:16 AM                                                                                                                    
                                                                                                                                
SHIRLEY  MARQUARDT, Mayor,  City  of Unalaska,  began by  opining                                                               
that she didn't  believe those who voted yes on  Ballot Measure 2                                                               
had  any  clue  what  they  were  really  voting  on,  which  she                                                               
characterized as  a Pandora's  box.   She informed  the committee                                                               
that although Unalaska  is located in an  unorganized borough, it                                                               
has  no neighbors.   Therefore,  the ordinance  that Unalaska  is                                                               
considering will only affect it.   Unalaska has chosen to address                                                               
personal use and  define "public", which is  necessary to address                                                               
by  February  24th.   She  opined  that  the City  of  Unalaska's                                                               
nonsmoking  ordinance will  help  because marijuana  can be  tied                                                               
into that and  a decision as to whether the  areas for public use                                                               
should be  increased can be  made.  Mayor Marquardt  informed the                                                               
committee that the  City of Unalaska will  place before residents                                                               
a change to  its housing ordinances such that  personal use isn't                                                               
allowed in city-funded housing inhabited  by city employees.  She                                                               
opined that there are some  small communities and villages within                                                               
the  [unorganized] borough  that  won't have  the wherewithal  to                                                               
perform  enforcement, permitting,  etcetera.   Therefore, it  may                                                               
make sense  in this case for  the borough to establish  the rules                                                               
while  it may  not for  other situations.   Mayor  Marquardt then                                                               
suggested that  the legislature should concentrate  on creating a                                                               
new board or  board through the Alcoholic  Beverage Control (ABC)                                                               
Board that  continues the current  process used by the  ABC Board                                                               
that   provides   for   public   review   of   permits   up   for                                                               
reauthorization.  She then opined  that a permit for a commercial                                                               
establishment  that  sells  edibles   should  be  up  for  review                                                               
annually.   She surmised  that the City  of Unalaska  will choose                                                               
not to allow the cultivation  of marijuana for commercial uses or                                                               
sale  of edibles.    She  expressed the  need  for  the state  to                                                               
address the edibles  issue and to ban butane hash  oil.  She then                                                               
expressed the need for some  sort of quality control process that                                                               
tests  for   pesticides,  other  drugs,  and   additives  in  the                                                               
marijuana sold  in the  state.  She  informed the  committee that                                                               
the City of Unalaska has  already had five folks seeking permits.                                                               
Mayor  Marquardt  related  her  belief  that  proponents  of  the                                                               
legalization of  marijuana are very  loud and forceful,  and thus                                                               
she predicted  they would charge  the legislature with  not doing                                                               
enough or not  doing enough fast enough.  To  which she expressed                                                               
the hope the  legislature would say it takes its  time to perform                                                               
a full  analysis of  the public  policy it  sets to  ensure there                                                               
aren't any unintended consequences.                                                                                             
                                                                                                                                
8:31:15 AM                                                                                                                    
                                                                                                                                
CHAIR  TILTON noted  that there  have been  discussions with  the                                                               
[Marijuana Policy Project] in  Washington, D.C., regarding issues                                                               
specific to Alaska.                                                                                                             
                                                                                                                                
8:31:38 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  ORTIZ  inquired  as  to the  City  of  Unalaska's                                                               
"public use" definition.                                                                                                        
                                                                                                                                
MAYOR MARQUARDT  related that the  City of Unalaska  drafted that                                                               
definition  with  the  help of  the  city's  long-time  attorney,                                                               
Brooks  Chandler,  who  has  also   been  working  on  the  issue                                                               
statewide.  She explained the  City of Unalaska took its existing                                                               
ordinance for public places in  terms of tobacco.  The definition                                                               
of public place  in terms of tobacco  is 20 feet in  front of the                                                               
entrance of a  building.  Furthermore, tobacco cannot  be used on                                                               
city or  school property.   She informed  the committee  that the                                                               
city  is  trying  to  determine  how  far  it  can  go  with  the                                                               
definition  of "public  place."   There has  been the  suggestion                                                               
that  "public  use" is  anywhere  that's  in the  public's  view.                                                               
Someone using a  marijuana product inside their home  but in view                                                               
of those  outside, say  in front  of a  picture window,  can't be                                                               
[considered a public place].   However, using a marijuana product                                                               
in the  front yard, say,  would be problematic.   Mayor Marquardt                                                               
offered  to provide  the committee  with the  draft language  the                                                               
City of Unalaska will be considering.                                                                                           
                                                                                                                                
8:33:51 AM                                                                                                                    
                                                                                                                                
HEATH  HILYARD,   Staff,  Representative  Tilton,   Alaska  State                                                               
Legislature, noted  that [he] participated  in a work  session in                                                               
which Brooks Chandler participated.   Although every municipality                                                               
will be  allowed to  have its  own definition  through ordinance,                                                               
the  work session  determined it  necessary in  AS 17.38  to make                                                               
reference  to   AS  11.81.900,   which  includes   the  following                                                               
definition pertaining to criminal law:                                                                                          
                                                                                                                                
          (53) "public place" means a place to which the                                                                        
     public  or a  substantial group  of persons  has access                                                                    
     and   includes  highways,   transportation  facilities,                                                                    
     schools,  places  of   amusement  or  business,  parks,                                                                    
     playgrounds, prisons, and  hallways, lobbies, and other                                                                    
     portions   of   apartment   houses   and   hotels   not                                                                    
     constituting  rooms or  apartments designed  for actual                                                                    
     residence;                                                                                                                 
                                                                                                                                
MR.  HILYARD related  that  the  municipal attorneys  recommended                                                               
making the aforementioned the standard  definition as it pertains                                                               
to marijuana.   He informed the committee that  such a definition                                                               
will likely  be included in  a forthcoming  committee substitute.                                                               
He acknowledged  that the  cities can decide  to take  make their                                                               
own definition more restrictive.                                                                                                
                                                                                                                                
8:36:52 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON   recalled  Mayor  Marquardt   wanting  to                                                               
[prohibit the  use of marijuana] within  residences owned through                                                               
the  state.    He  opined  that   he  isn't  sure  how  far  [the                                                               
definition] can go, particularly  with the [Alaska] Supreme Court                                                               
decision regarding privacy and use  within the home.  He surmised                                                               
the matter will ultimately be a court case.                                                                                     
                                                                                                                                
MAYOR MARQUARDT  explained that  the City of  Unalaska has  an 8-                                                               
plex, a 4-plex,  an 8-unit apartment building,  and two duplexes.                                                               
For City  of Unalaska employees  to live in those  buildings, the                                                               
tenant lease requires  several things.  The City  of Unalaska has                                                               
chosen to include  in its tenant lease  a requirement prohibiting                                                               
the use of marijuana in the publicly owned housing.                                                                             
                                                                                                                                
8:39:34 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DRUMMOND asked  if the  City of  Unalaska forbids                                                               
the consumption of  alcohol or smoking of cigarettes  in the city                                                               
owned housing.                                                                                                                  
                                                                                                                                
MAYOR  MARQUARDT  replied   that  the  use  of   alcohol  is  not                                                               
forbidden,  but  smoking  is  not  allowed  in  [the  city  owned                                                               
housing].                                                                                                                       
                                                                                                                                
8:40:19 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   SEATON  recalled   the  City   of  Unalaska   is                                                               
considering the  prohibition of  the sale  of edibles  within its                                                               
boundaries,  which seems  to  be  at odds  with  the ABC  Board's                                                               
consideration  of   licenses.     The  definition   of  marijuana                                                               
basically     includes     every    product     that     includes                                                               
Tetrahydrocannabinol  (THC).    He  then asked  if  the  City  of                                                               
Unalaska  has  had  discussions  with  the  ABC  Board  regarding                                                               
whether a  community can prohibit  specific products if  the city                                                               
doesn't entirely opt out of commercialization.                                                                                  
                                                                                                                                
MAYOR MARQUARDT  responded that  she wasn't  aware that  any such                                                               
discussions  directly with  the ABC  Board  had been  held.   The                                                               
notion  with  regard  to  permitting   for  commercial  use,  she                                                               
relayed, would  require obtaining a permit  from the municipality                                                               
to sell either marijuana to be  inhaled or THC in an edible form.                                                               
The City of Unalaska doesn't want  to issue a permit for the sale                                                               
of  edibles.   Although she  acknowledged that  marijuana in  any                                                               
form could come  into the community, those who  smoke wouldn't be                                                               
able to do so  in a public place whereas she  didn't know how one                                                               
could enforce  the consumption of  edibles.  Therefore,  the City                                                               
of  Unalaska  would rather  not  permit  such.   She  then  asked                                                               
whether the level of THC  in edible or inhaled marijuana products                                                               
could be  regulated.   She reiterated that  the City  of Unalaska                                                               
will  try not  to permit  the sale  of edibles  or marijuana  for                                                               
commercial use.                                                                                                                 
                                                                                                                                
8:44:27 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  offered  that   currently  it  appears  a                                                               
license would  allow any of  the aspects of  marijuana, including                                                               
the  ability to  manufacture, create,  and refine  products.   He                                                               
related his  understanding that other committees  are considering                                                               
the serving size, the amount of  milligrams of THC, and amount of                                                               
servings  in  a  package  including  the  child  proof  packaging                                                               
aspect.                                                                                                                         
                                                                                                                                
8:46:16 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE ORTIZ  related his understanding that  the City of                                                               
Unalaska will move toward not  permitting any commercial activity                                                               
and  the  concerns regarding  edibles  are  in terms  of  private                                                               
possession.                                                                                                                     
                                                                                                                                
MAYOR MARQUARDT (indisc.)                                                                                                       
                                                                                                                                
8:47:22 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NAGEAK  opined the interaction between  the cities                                                               
and boroughs  vary.   However, the  unorganized boroughs  have to                                                               
follow the state's lead.                                                                                                        
                                                                                                                                
MAYOR MARQUARDT  noted her agreement.   The regions of  the state                                                               
can be extremely  different such that even  within boroughs there                                                               
are communities  with different ideas  as to what's  important to                                                               
them or how  to provide services to their communities.   In terms                                                               
of the  City of  Unalaska, the  property outside  of the  city is                                                               
owned  by  Alaska Native  corporations  and  require the  use  of                                                               
permits.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  NAGEAK  pointed  out  that  not  only  are  there                                                               
regional corporations,  there are also village  corporations with                                                               
jurisdiction on their lands.                                                                                                    
                                                                                                                                
8:50:17 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  recalled  a discussion  from  an  earlier                                                               
hearing regarding the  possibility of a 25-mile buffer  zone.  He                                                               
asked if the City of Unalaska  has discussed the expansion of the                                                               
city limits  in order that  the city's ordinances cover  a buffer                                                               
zone.                                                                                                                           
                                                                                                                                
MAYOR MARQUARDT  answered no,  adding that  it would  require the                                                               
City  of Unalaska  to  come into  agreement  with the  Ounalashka                                                               
Corporation to purchase or take  property.  The City of Unalaska,                                                               
she  opined,  doesn't  believe the  aforementioned  is  necessary                                                               
because   the   entire   community,   business   community,   and                                                               
residential  community  are  incorporated   within  the  City  of                                                               
Unalaska's  city   limits  and  directly  outside   that  is  the                                                               
Ounalashka  Corporation  land,  which   is  considering  its  own                                                               
protections.                                                                                                                    
                                                                                                                                
8:53:19 AM                                                                                                                    
                                                                                                                                
The committee took an at ease from 8:53 a.m. to 8:57 a.m.                                                                       
                                                                                                                                
8:58:01 AM                                                                                                                    
                                                                                                                                
KATHIE  WASSERMAN, Executive  Director,  Alaska Municipal  League                                                               
(AML),  provided   the  committee  with  the   "Local  Government                                                               
Primer,"  which provides  the basic  tenets of  government.   She                                                               
highlighted  that pages  4-5  specify all  the  powers of  cities                                                               
according to  their status.   The map on  page 6 shows  the large                                                               
area of the  state that makes up the unorganized  borough.  Pages                                                               
8-9  are a  chart of  the  powers and  duties of  boroughs.   Ms.                                                               
Wasserman  emphasized  that   AML  simply  offers  municipalities                                                               
information  and  helps  municipalities coordinate  between  each                                                               
other.   In fact, AML  will hold  a marijuana summit  on February                                                               
17th  during which  there will  be  speakers from  the states  of                                                               
Washington, Colorado, and Alaska.   She specified that AML's main                                                               
interest is  protecting municipalities and ensuring  that a local                                                               
option is  one of the  top tenets of  anything coming out  of the                                                               
legislature.                                                                                                                    
                                                                                                                                
MS. WASSERMAN  opined that local governments  need flexibility in                                                               
terms  of   dealing  with  the  positive   and  negative  aspects                                                               
resulting from  the legalization of  marijuana.  She  then turned                                                               
to the  borough and  city issue, pointing  out that  the assembly                                                               
for  the  unorganized borough  is  the  sitting assembly  of  the                                                               
unorganized  borough.  She then  posed  a  scenario in  which  an                                                               
individual  wants to  permit a  growing  facility in  Glennallen,                                                               
which is not an organized city  nor is it located in an organized                                                               
borough.  Therefore, the legislature is  going to be in charge of                                                               
establishing the rules  for a place such as  Glennallen and there                                                               
are many such  places throughout the state.  The  majority of the                                                               
state's  second  class  cities,   as  well  as  many  unorganized                                                               
communities,  are  located  in  the  unorganized  borough.    The                                                               
legislature,  she opined,  is going  to find  that what  works in                                                               
Glennallen  may not  work  elsewhere.   She  further opined  that                                                               
there will  be a large  jurisdictional issue [with regard  to the                                                               
Alaska Native  corporation lands].  Not  only will municipalities                                                               
be responsible  for establishing some  rules and laws  to address                                                               
the legalization  of marijuana,  the state  will as  well because                                                               
the  state  will likely  have  to  sit  as  the assembly  of  the                                                               
unorganized borough.  To date,  the legislature hasn't sat as the                                                               
assembly for the unorganized borough.                                                                                           
                                                                                                                                
MS.  WASSERMAN recalled  testimony  from  boroughs relating  that                                                               
public meetings and open houses  on the legalization of marijuana                                                               
were packed,  which she opined  illustrates that  local residents                                                               
rely  on local  government  to make  laws and  rules.   She  then                                                               
recalled  Representative Nageak  mentioning jurisdictional  lines                                                               
and the  confusion that  could be created.   However,  she opined                                                               
it's clear that  municipalities can only opt out of  the sale and                                                               
retail aspect  of marijuana.   She said  she didn't  consider the                                                               
jurisdiction to  be confusing as  people will merely go  to where                                                               
marijuana is  sold, particularly since use  is allowed throughout                                                               
the  state.   The law  refers  to local  governments; it  doesn't                                                               
specify what kind  of local government.   Furthermore, opening up                                                               
Title 29  could open a  Pandora's Box on everything  else because                                                               
each  borough treats  cities differently.    Again, the  decision                                                               
should be  left to the local  option.  She then  pointed out that                                                               
many  communities  receive  federal  grants, which  could  be  in                                                               
danger  according to  what regulations  the [federal  government]                                                               
choses.                                                                                                                         
                                                                                                                                
MS.  WASSERMAN  then  moved  on  to edibles  and  hash  oils  and                                                               
Governor Walker's  memorandum to  Senator Stoltze  outlining that                                                               
he  believes  the  legislature   should  address  the  following:                                                               
keeping marijuana  away from underage persons;  protecting public                                                               
health and safety; respecting  privacy and constitutional rights;                                                               
and  preventing  illegal  sales   and  export  of  marijuana  and                                                               
marijuana  products.   She opined  that the  state needs  to help                                                               
[local governments]  with those  items, particularly  since local                                                               
governments don't have the capacity  to test and inspect edibles.                                                               
With regard  to the  situation in  which an  individual processes                                                               
[marijuana]  without   a  permit  in  a   community  without  law                                                               
enforcement,  she opined  that it  would  be a  civil offense  to                                                               
which  Alaska   State  Troopers   won't  respond  in   the  small                                                               
communities.  She emphasized her  concern with regard to how this                                                               
will  impact small  communities,  which have  little capacity  to                                                               
follow  through and  make  things work.    She expressed  further                                                               
concern   that  things   would   be  tailored   for  the   larger                                                               
communities.  There  needs to be discussion as to  how to provide                                                               
residents of small communities the protection they deserve.                                                                     
                                                                                                                                
MS. WASSERMAN  pointed out that although  municipalities have the                                                               
ability to create a local  regulatory board, the financial crisis                                                               
in the state lends itself for  utilizing the ABC Board, which has                                                               
expertise  with substance  use.   Most  of the  impacts from  the                                                               
legalization of  marijuana will be  felt at the  municipal level.                                                               
Therefore,  there will  be  discussion as  to  how the  municipal                                                               
level will  pay in terms of  police, EMS, fire, and  health care.                                                               
Sales  taxes  are already  levied  by  boroughs and  first  class                                                               
cities and few second class cities  levy taxes.  An excise tax is                                                               
a possibility.  Municipalities, she  noted, could seek a share of                                                               
the $50 per ounce charge that  goes to the Department of Revenue.                                                               
She  questioned  who would  pay  for  the  blood test  to  detect                                                               
marijuana.   With  regard to  the expansion  of city  limits, she                                                               
informed  the committee  that annexation  is a  long process  and                                                               
marijuana likely won't  figure into it.   Recalling discussion of                                                               
the  possibility of  a buffer  zone, Ms.  Wasserman informed  the                                                               
committee there is no legal means  for such, and thus such action                                                               
would  require  a new  legal  term  in  statute or  the  existing                                                               
annexation option would have to be used.                                                                                        
                                                                                                                                
9:17:06 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DRUMMOND,  recalling  that  Dillingham  tried  to                                                               
annex nearby  land in relation  to fish taxes, asked  whether the                                                               
annexation was approved.                                                                                                        
                                                                                                                                
MS.  WASSERMAN answered  that  she didn't  know,  but noted  that                                                               
almost every annexation is about taxation in some form.                                                                         
                                                                                                                                
9:18:34 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND then asked whether  the cash basis of the                                                               
marijuana business has been discussed.                                                                                          
                                                                                                                                
MS. WASSERMAN expressed her concern  that a cash business denotes                                                               
a "black  market."   She expressed further  concern with  how the                                                               
Department of  Revenue (DOR)  will perform  taxation with  a cash                                                               
business.                                                                                                                       
                                                                                                                                
CHAIR TILTON  related her  understanding that  Colorado estimated                                                               
that  in  the first  year  marijuana  sales would  generate  $139                                                               
million,  and  in  nine  months  marijuana  sales  generated  $20                                                               
million.   Therefore, she acknowledged  that [taxation]  could be                                                               
challenging.                                                                                                                    
                                                                                                                                
9:19:41 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND  reminded the committee that  she visited                                                               
a   marijuana   dispensary   in   Seattle,   Washington.      She                                                               
characterized the  dispensary as  a very high-tech  business with                                                               
each marijuana  bud sealed with  a serial  number.  In  fact, the                                                               
store doesn't  even smell of  marijuana.  Furthermore,  the point                                                               
of  sale (POS)  system required  by the  State of  Washington for                                                               
every store allows the state the  ability to look at sales, which                                                               
does  not include  customer  names as  it's  a cash  transaction.                                                               
Moreover, they don't accept credit  cards and may not even accept                                                               
checks.  Payroll is also paid in cash.                                                                                          
                                                                                                                                
MS. WASSERMAN opined  that the state probably  couldn't make that                                                               
work in communities other than  Juneau, Fairbanks, and Anchorage,                                                               
which is of concern.                                                                                                            
                                                                                                                                
REPRESENTATIVE  DRUMMOND interjected  that the  state's inability                                                               
[to look  at marijuana sales]  illustrates the state's lack  of a                                                               
robust  Internet   service  as  well   as  the  fact   that  many                                                               
communities don't function on a cash basis.                                                                                     
                                                                                                                                
9:21:49 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NAGEAK  suggested that  the tribal  government may                                                               
become involved in some fashion.                                                                                                
                                                                                                                                
MS.  WASSERMAN opined  that one  of the  positive aspects  of the                                                               
initiative  is that  it  may  bring to  light  the municipal  and                                                               
tribal issues that have long existed, but have been ignored.                                                                    
                                                                                                                                
9:23:22 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   SEATON,   addressing   the  concern   that   law                                                               
enforcement won't  take place, pointed  out that there  are often                                                               
busts  of the  importation of  alcohol  in dry  communities.   If                                                               
marijuana  is  regulated as  alcohol,  [he  assumed it  would  be                                                               
enforced]  as  would  any  of  the  local  options  available  to                                                               
communities.                                                                                                                    
                                                                                                                                
MS.  WASSERMAN  clarified that  she  has  looked at  the  illegal                                                               
importation versus little  issues that arise in a  community on a                                                               
daily  basis.    She  suggested that  it's  sometimes  easier  to                                                               
address the illegal importation because  it usually starts from a                                                               
large community  and involves  a carrier.   However, there  is no                                                               
help for  day-to-day small issues  at the small  community level.                                                               
For instance,  when she was the  mayor of a small  community, she                                                               
received a  call at 2:00  a.m. to deal  with a gun  fight between                                                               
large  drunken fishermen.   Those  in the  small communities  are                                                               
left  with  no one  to  help  them and  no  way  to address  such                                                               
problems and  this [Act] adds  another possible avenue  to create                                                               
problems.                                                                                                                       
                                                                                                                                
9:26:07 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON   said  he  appreciated   Ms.  Wasserman's                                                               
points.   However,  he opined  that  illegal operations,  illegal                                                               
importation,  or operating  outside of  a license  is related  to                                                               
bootlegging  rather   than  to   personal  use.     He  expressed                                                               
confidence  that  those who  want  a  license, and  will  operate                                                               
within the  terms if  there is suspension  and revocation  of the                                                               
license, rather than just a fine.                                                                                               
                                                                                                                                
MS. WASSERMAN  opined that the  legislature can iron out  how the                                                               
civil offenses  would be enforced  in small  communities [without                                                               
law enforcement].                                                                                                               
                                                                                                                                
9:29:17 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON questioned  whether municipalities  should                                                               
consider  a standard  [blood test]  for  impaired driving  rather                                                               
than one  related to the  specific substance used  that generated                                                               
the impaired driving.                                                                                                           
                                                                                                                                
MS. WASSERMAN  confirmed there have  been some  discussions about                                                               
the  aforementioned, which  she characterized  as a  great point.                                                               
She  said there  is likely  something already  on the  books that                                                               
addresses  this.    In  fact,  there  are  already  reckless  and                                                               
careless driving statutes.  She  emphasized that impaired driving                                                               
is impaired driving,  no matter the reason.   Furthermore, trying                                                               
to define why  one is driving impaired may  create more problems,                                                               
she opined.                                                                                                                     
                                                                                                                                
9:33:08 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND asked whether  the issue of impairment is                                                               
going to  be addressed  by the House  Health and  Social Services                                                               
Standing Committee.                                                                                                             
                                                                                                                                
REPRESENTATIVE SEATON answered that  he believes the legal aspect                                                               
will be addressed in the  House Judiciary Standing Committee.  He                                                               
reiterated that at this point,  it seems [that the standard could                                                               
be] impairment with field impairment  tests, such that the actual                                                               
actions  of people  are considered  rather than  what might  have                                                               
been the cause of the action.                                                                                                   
                                                                                                                                
9:35:44 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DRUMMOND  related her understanding that  there is                                                               
a  portion  of THC  that  [causes]  the impairment,  and  another                                                               
portion  of the  chemical specifies  that someone  partook of  it                                                               
during  a  certain time  period  in  the  past.   The  impairment                                                               
chemical, she further  related, only remains viable  in the blood                                                               
for a number of hours and  there is a structure for judging that.                                                               
She  agreed with  Representative Seaton  that the  aforementioned                                                               
isn't the purview of this committee.                                                                                            
                                                                                                                                
MS. WASSERMAN related  her belief that's very  important and goes                                                               
along  with Representative  Seaton's comments.   She  opined that                                                               
having separate [impaired] driving tests  might be setting up the                                                               
state for  lawsuits.  At  some point  [the standard] needs  to be                                                               
tight.  She  then noted her agreement  with Representative Seaton                                                               
that the impaired driving offense would be tighter.                                                                             
                                                                                                                                
REPRESENTATIVE DRUMMOND  noted her agreement  with Representative                                                               
Seaton as well regarding having an impaired driving offense.                                                                    
                                                                                                                                
REPRESENTATIVE  NAGEAK  remarked  that someday,  when  there  are                                                               
driverless cars, driving impaired will be moot.                                                                                 
                                                                                                                                
9:39:22 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  recalled  testimony  that  sales  tax  on                                                               
alcohol is limited  by statute to be the same  rate as everything                                                               
else.  He  then asked whether municipalities want  the ability to                                                               
have a  different excise  tax than the  general sales  tax amount                                                               
for marijuana  and alcohol, or do  they want it to  be limited to                                                               
the general sales tax amount for marijuana.                                                                                     
                                                                                                                                
MS.  WASSERMAN pointed  out  the sales  tax  for boroughs,  first                                                               
class cities,  and a few  second class  cities is not  very high.                                                               
Therefore,  communities  will  receive  a small  return  for  the                                                               
predicted  issues  they  will  face.     She  then  reminded  the                                                               
committee that  a sales tax has  to be fair across  the board for                                                               
all purchases.   An  excise tax has  been discussed,  she opined,                                                               
because it  might provide communities  more ability to  cover the                                                               
expenses [related to  the legalization of marijuana].    She said                                                               
there isn't  definite knowledge as  to the costs [related  to the                                                               
legalization of marijuana], there is the need for flexibility.                                                                  
                                                                                                                                
9:42:09 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON asked  whether cities  currently have  the                                                               
ability  to  establish  an  excise  tax on  alcohol  or  is  that                                                               
prevented.   He then asked  what types of local  governments have                                                               
the ability to establish an excise tax.                                                                                         
                                                                                                                                
MS. WASSERMAN said  she would have to review Title  29, but could                                                               
provide that information  to the committee.   In further response                                                               
to Representative Seaton, Ms.  Wasserman mentioned that Anchorage                                                               
just went through an alcohol tax issues                                                                                         
                                                                                                                                
REPRESENTATIVE  DRUMMOND informed  the  committee  that when  the                                                               
Anchorage  Assembly discussed  placing an  initiative to  raise a                                                               
small percentage  of taxes from  alcohol in order to  address the                                                               
negative  impacts   of  alcohol  in  Anchorage.     However,  the                                                               
Anchorage   Assembly  couldn't   overcome   the  heavy   industry                                                               
pressure,  which  resulted  in  the assembly  setting  it  aside.                                                               
Therefore, she opined that such a  change would have to come from                                                               
the citizens rather than the governing body.                                                                                    
                                                                                                                                
9:44:54 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   SEATON  recalled   that  Anchorage   is  placing                                                               
something on  the ballot  for approval  by the  voters.   He then                                                               
asked  whether municipalities  have the  ability to  establish an                                                               
excise tax by ordinance or a vote of the people.                                                                                
                                                                                                                                
MS. WASSERMAN  informed the committee that  for almost everything                                                               
taxable  under state  law, municipalities  have different  rules.                                                               
Although for most  [taxes] municipalities have to  go through the                                                               
voters, she clarified that she  needed to review Title 29 because                                                               
some taxes aren't allowable by the state.                                                                                       
                                                                                                                                
9:47:27 AM                                                                                                                    
                                                                                                                                
MS.  WASSERMAN,  in  response  to  Chair  Tilton,  said  that  on                                                               
February 17th,  1:00-5:00 p.m., there  will be an  AML conference                                                               
on marijuana in the Treadwell Room.  The fee to attend is $25.                                                                  
                                                                                                                                
CHAIR TILTON announced that the  committee will not be meeting on                                                               
February 17th so  that members can attend  the aforementioned AML                                                               
conference.                                                                                                                     
                                                                                                                                
9:48:42 AM                                                                                                                    
                                                                                                                                
MAYOR  MICHELS, in  closing,  pointed out  that  the current  law                                                               
doesn't include a provision for tribal  law, and thus it may need                                                               
to be added.                                                                                                                    
                                                                                                                                
9:49:31 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON asked  if Mayor  Michels was  referring to                                                               
the ability to  expand a local option to  village corporations or                                                               
tribal governments.                                                                                                             
                                                                                                                                
MAYOR  MICHELS  informed the  committee  that  under current  law                                                               
there is no  ability for tribal governments  to create ordinances                                                               
to make any laws within  the community; city governments have the                                                               
ability to do so.                                                                                                               
                                                                                                                                
9:50:45 AM                                                                                                                    
                                                                                                                                
MAYOR MARQUARDT noted  her agreement with Mayor  Michels in terms                                                               
of the  complexity of  the issue.   She  opined that  the saying,                                                               
"The devil  is in the  details." has never  been more true.   She                                                               
then reiterated the need for the  legislature to take its time on                                                               
this issue.                                                                                                                     
                                                                                                                                
9:52:25 AM                                                                                                                    
                                                                                                                                
CHAIR TILTON stated  that the goal of the committee  is to listen                                                               
to the local  governments with regard to how  the legislature can                                                               
help them.                                                                                                                      
                                                                                                                                
9:52:43 AM                                                                                                                    
                                                                                                                                
MS. WASSERMAN  related her appreciation for  the committee asking                                                               
the communities  to be  involved, particularly  since one  of her                                                               
main complaints over the years  has been that most decisions made                                                               
about  municipalities has  been done  without much  comment being                                                               
sought from the municipalities.                                                                                                 
                                                                                                                                
9:53:58 AM                                                                                                                    
                                                                                                                                
CHAIR  TILTON  agreed  this  is  a  complex  matter.    She  then                                                               
highlighted the  following points that arose  at today's meeting:                                                               
municipal and  tribal government issues; public  safety issues in                                                               
smaller communities versus larger  communities; and that this may                                                               
be  the  first  time  in  history the  legislature  sits  as  the                                                               
assembly for the unorganized borough.                                                                                           
                                                                                                                                
9:54:39 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON, regarding  the  relationship between  the                                                               
tribal governments and the cities,  said he is totally unprepared                                                               
as to  how to address that  issue.  Therefore, he  suggested that                                                               
the  committee solicit  tribal and  local  communities to  obtain                                                               
suggestions to address the issues.                                                                                              
                                                                                                                                
MS. WASSERMAN characterized the  difficulties [between the tribal                                                               
governments  and the  cities] as  a  larger issue  that could  be                                                               
solved with one or two  decisions.  She related her understanding                                                               
that the current  administration is working on  such matters, and                                                               
thus  she encouraged  the legislature  to  work with  them.   Ms.                                                               
Wasserman noted  that some municipalities and  tribal governments                                                               
have a good  relationship and work together because  they have to                                                               
do so.  She then emphasized  that one of the large looming issues                                                               
the state hasn't  addressed is with regard to who  takes over the                                                               
services that become  unavailable due to the  reductions in state                                                               
funding to municipalities.                                                                                                      
                                                                                                                                
9:58:52 AM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Community  and Regional  Affairs Standing  Committee meeting  was                                                               
adjourned at 9:58 a.m.                                                                                                          

Document Name Date/Time Subjects
LocalGovernmentinAlaska032004.pdf HCRA 2/7/2015 8:00:00 AM
Guide to Local Government in Alaska