Legislature(2021 - 2022)BARNES 124

04/07/2021 01:00 PM RESOURCES

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SJR 8 COMPLETION OF UNIVERSITY LAND GRANT TELECONFERENCED
Heard & Held
-- Invited & Public Testimony --
*+ HB 156 INDUSTRIAL HEMP PROGRAM;MANUFACTURING TELECONFERENCED
Heard & Held
-- Invited & Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                         April 7, 2021                                                                                          
                           1:09 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Josiah Patkotak, Chair                                                                                           
Representative Grier Hopkins, Vice Chair                                                                                        
Representative Zack Fields                                                                                                      
Representative Calvin Schrage                                                                                                   
Representative Sara Hannan                                                                                                      
Representative George Rauscher                                                                                                  
Representative Mike Cronk                                                                                                       
Representative Ronald Gillham                                                                                                   
Representative Tom McKay                                                                                                        
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CS FOR SENATE JOINT RESOLUTION NO. 8(RES)                                                                                       
Urging  the  Alaska delegation  in  Congress,  the United  States                                                               
Department  of the  Interior, and  the Governor  to facilitate  a                                                               
land  grant endowment  to the  University of  Alaska; urging  the                                                               
Alaska delegation  in Congress to  reintroduce the  University of                                                               
Alaska  Fiscal  Foundation  Act;  and urging  the  Department  of                                                               
Natural  Resources  to work  with  the  University of  Alaska  to                                                               
identify lands suitable for the land endowment.                                                                                 
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 156                                                                                                              
"An  Act  relating  to  industrial hemp;  and  providing  for  an                                                               
effective date."                                                                                                                
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SJR  8                                                                                                                  
SHORT TITLE: COMPLETION OF UNIVERSITY LAND GRANT                                                                                
SPONSOR(s): SENATOR(s) STEVENS                                                                                                  
                                                                                                                                
02/03/21       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/03/21       (S)       EDC, RES                                                                                               
02/15/21       (S)       EDC AT 9:00 AM BUTROVICH 205                                                                           
02/15/21       (S)       Moved SJR 8 Out of Committee                                                                           
02/15/21       (S)       MINUTE(EDC)                                                                                            
02/17/21       (S)       EDC RPT 5DP                                                                                            
02/17/21       (S)       DP: HOLLAND, HUGHES, STEVENS, MICCICHE,                                                                
                         BEGICH                                                                                                 
03/12/21       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
03/12/21       (S)       -- MEETING CANCELED --                                                                                 
03/15/21       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
03/15/21       (S)       Moved CSSJR 8(RES) Out of Committee                                                                    
03/15/21       (S)       MINUTE(RES)                                                                                            
03/17/21       (S)       RES RPT CS  6DP NEW TITLE                                                                              
03/17/21       (S)       DP: REVAK, STEVENS, MICCICHE, BISHOP,                                                                  
                        VON IMHOF, KIEHL                                                                                        
03/22/21       (S)       TRANSMITTED TO (H)                                                                                     
03/22/21       (S)       VERSION: CSSJR 8(RES)                                                                                  
03/24/21       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/24/21       (H)       RES                                                                                                    
04/07/21       (H)       RES AT 1:00 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 156                                                                                                                  
SHORT TITLE: INDUSTRIAL HEMP PROGRAM;MANUFACTURING                                                                              
SPONSOR(s): REPRESENTATIVE(s) HOPKINS                                                                                           
                                                                                                                                
03/29/21       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/29/21       (H)       L&C, RES                                                                                               
03/31/21       (H)       L&C REFERRAL REMOVED                                                                                   
03/31/21       (H)       FIN REFERRAL ADDED AFTER RES                                                                           
03/31/21       (H)       BILL REPRINTED                                                                                         
04/07/21       (H)       RES AT 1:00 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
TIM LAMKIN, Staff                                                                                                               
Senator Gary Stevens                                                                                                            
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Introduced SJR 8 on behalf of Senator                                                                    
Stevens, prime sponsor.                                                                                                         
                                                                                                                                
ED FOGELS, Partner                                                                                                              
Jade North, LLC                                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Presented a PowerPoint during the hearing                                                                
on SJR 8.                                                                                                                       
                                                                                                                                
TOM BRICE, Vice President                                                                                                       
UAF Alumni Association Board of Directors                                                                                       
Alumni Relations                                                                                                                
University of Alaska, Fairbanks (UAF)                                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of SJR 8.                                                                           
                                                                                                                                
REPRESENTATIVE GRIER HOPKINS                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  As prime sponsor, presented HB 156.                                                                      
                                                                                                                                
JOE HARDENBROOK, Staff                                                                                                          
Representative Grier Hopkins                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered  questions and provided information                                                             
during the  hearing on HB  156 on behalf of  Representative Grier                                                               
Hopkins, prime sponsor.                                                                                                         
                                                                                                                                
DAVE SCHADE, Director                                                                                                           
Division of Agriculture                                                                                                         
Department of Natural Resources                                                                                                 
Palmer, Alaska                                                                                                                  
POSITION STATEMENT:  Provided  information and answered questions                                                             
during the hearing on HB 156.                                                                                                   
                                                                                                                                
ROB CARTER, Manager                                                                                                             
Plant Materials Center                                                                                                          
Division of Agriculture                                                                                                         
Department of Natural Resources                                                                                                 
Palmer, Alaska                                                                                                                  
POSITION STATEMENT:  Provided  information and answered questions                                                             
during the hearing on HB 156.                                                                                                   
                                                                                                                                
EMBER HAYNES                                                                                                                    
Talkeetna, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 156.                                                                          
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:09:48 PM                                                                                                                    
                                                                                                                                
CHAIR  JOSIAH  PATKOTAK  called   the  House  Resources  Standing                                                             
Committee meeting  to order at  1:09 p.m.  Representatives McKay,                                                               
Fields, Cronk,  Hopkins, Rauscher, Hannan, Schrage,  and Patkotak                                                               
were  present  at the  call  to  order.   Representative  Gillham                                                               
arrived as the meeting was in progress.                                                                                         
                                                                                                                                
           SJR 8-COMPLETION OF UNIVERSITY LAND GRANT                                                                        
                                                                                                                                
1:10:34 PM                                                                                                                    
                                                                                                                                
CHAIR PATKOTAK announced  that the first order  of business would                                                               
be CS  FOR SENATE JOINT  RESOLUTION NO. 8(RES) Urging  the Alaska                                                               
delegation  in  Congress, the  United  States  Department of  the                                                               
Interior, and the  Governor to facilitate a  land grant endowment                                                               
to  the University  of Alaska;  urging the  Alaska delegation  in                                                               
Congress  to   reintroduce  the   University  of   Alaska  Fiscal                                                               
Foundation Act;  and urging the  Department of  Natural Resources                                                               
to work with the University  of Alaska to identify lands suitable                                                               
for the land endowment.                                                                                                         
                                                                                                                                
1:11:15 PM                                                                                                                    
                                                                                                                                
TIM   LAMKIN,  Staff,   Senator   Gary   Stevens,  Alaska   State                                                               
Legislature,  introduced  SJR 8  on  behalf  of Senator  Stevens,                                                               
prime sponsor.   He said that  there is a "generally  held belief                                                               
that there  is a land  deficit held  by the University  of Alaska                                                               
(UA)"  and that  SJR  8 is  intended to  give  UA more  financial                                                               
management  options,  thereby  decreasing  its  reliance  on  the                                                               
general fund.   He  explained that SJR  8 requests  the governor,                                                               
Alaska's  congressional delegation,  and the  U.S. Department  of                                                               
the Interior to work together  to complete the federal land grand                                                               
endowment to UA.                                                                                                                
                                                                                                                                
1:12:51 PM                                                                                                                    
                                                                                                                                
ED FOGELS, Partner,  Jade North, LLC, explained that  he had been                                                               
retained by UA  to assist with land grant issues  and presented a                                                               
PowerPoint  on  SJR  8  [hard  copy  included  in  the  committee                                                               
packet], titled  "University of  Alaska Land  Grant Status."   He                                                               
began  with  slide  3,  titled  "University  Land  Grant,"  which                                                               
displayed a map  showing the size of Alaska in  comparison to the                                                               
contiguous   United  States   and  read   as  follows   [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
      ? Only Delaware & Hawaii rank below Alaska in higher                                                                      
     education land grants                                                                                                      
                                                                                                                                
     ? UA only received ~ 110,000 acres of its federal land                                                                     
     grant entitlement                                                                                                          
                                                                                                                                
     ? UA's land grant deficit is 360,000 acres                                                                                 
                                                                                                                                
MR. FOGELS explained that more lands  were expected to come to UA                                                               
through   various  federal   acts,  but   the  acts   "never  did                                                               
materialize  this additional  land grand  entitlement."   He then                                                               
showed  slide 4,  titled "UA  Land Holdings"  which showed  a pie                                                               
chart illustrating that the  currently-held lands include 139,000                                                               
acres of  investment land  representing 27  percent of  the total                                                               
entitlement, as  well as the  missing 360,000  acres representing                                                               
71 percent.                                                                                                                     
                                                                                                                                
MR. FOGELS moved ahead to slide  5, titled "UA Land Grant Acreage                                                               
Comparison,"  which  compared UA  and  Mental  Health Trust  Land                                                               
(MHTL) with the University of  Texas land grant, which totals 2.1                                                               
million acres.                                                                                                                  
                                                                                                                                
MR.  FOGELS paraphrased  slides 6,7,  and 8,  titled "Land  Grant                                                               
History," which read as follows [original punctuation provided]:                                                                
                                                                                                                                
     Pre-Statehood Federal Laws for UA Lands                                                                                  
                                                                                                                                
       1862  Morrill Act: Each  state upon admission  was to                                                                  
     receive  30,000  acres  per  each  member  of  Congress                                                                    
     (90,000   acres  for   Alaska)   dedicated  to   higher                                                                    
     education.  Provisions   not  extended  to   Alaska  at                                                                    
     Statehood and so no acreage was conveyed to UA.                                                                            
                                                                                                                                
        1915 "Wickersham"  Land Grant  Statute: Reserved  an                                                                  
     estimated 336,000  acres in  Tanana Valley  area. Lands                                                                    
     remained largely unsurveyed and  less than 5% were ever                                                                    
     conveyed to UA.                                                                                                            
                                                                                                                                
        1929  "Sutherland"   Land  Grant  Statute:  Congress                                                                  
     grants 100,000 acres for UA.  Left intact at Statehood,                                                                    
     and acreage  is (eventually)  conveyed to UA,  where it                                                                    
     makes up most of current land holdings.                                                                                    
                                                                                                                                
       Following Statehood, the  Alaska Legislature tries to                                                                    
     provide UA's land.  In 1959 a bill  reserving 1 million                                                                  
     acres, passes both Houses, but is vetoed                                                                                   
                                                                                                                                
     ? During 60's-80's available  land base become narrower                                                                  
     with  the   Land  Freeze  and  passage   other  federal                                                                    
     legislation                                                                                                                
                                                                                                                                
     ?  Alaska   Legislature  in   2000  passes   bill,  and                                                                  
     overrides  gubernatorial  veto,  to  grant  UA  260,000                                                                    
     acres                                                                                                                      
                                                                                                                                
     ? In  2004, Alaska Supreme Court  rules land conveyance                                                                  
     is  not  an  appropriation,  but  declines  to  address                                                                    
     dedication clause issue 8 Land Grant History                                                                               
                                                                                                                                
        2005:  Legislation  identifies  specific  lands  for                                                                  
     transfer to UA (HB 130)                                                                                                    
                                                                                                                                
       2007: Environmental group  sues arguing land transfer                                                                  
     violates    Constitution's    anti-dedication    clause                                                                    
     (Article 9, Section 7)                                                                                                     
                                                                                                                                
        2009: Alaska  Supreme Court  agrees and  sticks down                                                                  
     the  2000/2005 legislation.  State  can't  make a  land                                                                    
     grant to UA that "would  operate in a manner similar to                                                                    
     the way  that the  University's federal land  grant has                                                                    
     operated since before statehood."                                                                                          
                                                                                                                                
       2010: UA begins transferring land back to the state                                                                    
                                                                                                                                
        Today:  UA  owns  ~151,000  acres,  most  from  1929                                                                  
     Sutherland  Act, private  party donations,  as well  as                                                                    
     from local governments.                                                                                                    
                                                                                                                                
1:18:47 PM                                                                                                                    
                                                                                                                                
MR. FOGELS presented slide 10, "Framework for Solution," which                                                                  
read as follows [original punctuation provided]:                                                                                
                                                                                                                                
       UA's unfulfilled land grant a Statehood Act issue                                                                        
                                                                                                                                
     ? Congress assumed Alaska Legislature  would be able to                                                                    
     fulfill the entitlement                                                                                                    
                                                                                                                                
     ?  Alaska  Delegation,  Governor,   DNR  and  Dept.  of                                                                    
     Interior  are   discussing  other  issues   related  to                                                                    
     Alaska's remaining  5 million  acre Statehood  Act land                                                                    
     selections                                                                                                                 
                                                                                                                                
     ?  Anti-dedication clause  has  an explicit  exemption:                                                                    
     "when  required by  the  federal  government for  state                                                                    
     participation in federal programs"                                                                                         
                                                                                                                                
     ?  Solution may  entail  a  structured federal  program                                                                    
     permissible under the constitution                                                                                         
                                                                                                                                
MR.  FOGELS  presented slide  11,  "University  of Alaska  Fiscal                                                               
Foundation  Act," which  read  as  follows [original  punctuation                                                               
provided]:                                                                                                                      
                                                                                                                                
     ?   Federal  legislation   by  Alaska's   Congressional                                                                    
     Delegation                                                                                                                 
                                                                                                                                
     ? Establishes program within  Bureau of Land Management                                                                    
     to  identify  and convey  available  lands  to UA  from                                                                    
     lands selected by State of Alaska                                                                                          
                                                                                                                                
     ? Framework for UA and  State to jointly identify up to                                                                    
     360,000 acres                                                                                                              
                                                                                                                                
        U.S.  Dept.  of   Interior  will  provide  technical                                                                    
     assistance identifying lands for inclusion in program                                                                      
                                                                                                                                
     ?  Delegation working  towards reintroduction  in 117th                                                                    
     Congress                                                                                                                   
                                                                                                                                
MR. FOGELS concluded his presentation  by asserting that "there's                                                               
no  question that  a  larger land  endowment  for the  university                                                               
would make  it a much,  much stronger university system,"  and he                                                               
encouraged committee members to support SJR 8.                                                                                  
                                                                                                                                
1:23:55 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 1:24 p.m. to 1:28 p.m.                                                                       
                                                                                                                                
1:28:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HANNAN asked  for  clarification  on Mr.  Fogels'                                                               
position with UA  and the parameters of his  involvement with SJR
8.                                                                                                                              
                                                                                                                                
MR. FOGELS replied  that he is based in Alaska  and that his role                                                               
is to make recommendations to UA regarding the land grant.                                                                      
                                                                                                                                
REPRESENTATIVE HANNAN referred to  Mr. Fogels' assertion that the                                                               
federal  government has  taken the  stance that  UA is  no longer                                                               
owed  land because  the State  of Alaska  already received  land.                                                               
She then asked  Mr. Fogels whether she is correct  in saying that                                                               
UA is asking  for 360,000 acres of land in  Alaska currently held                                                               
by the federal government.                                                                                                      
                                                                                                                                
MR. FOGELS  replied that  the 360,000 acres  UA hopes  to acquire                                                               
would  be  federal  land  which has  already  been  "tagged"  for                                                               
potential  transfer  to the  state;  UA  is  not able  to  select                                                               
federal lands  outside of  the pool  selected by  the state.   He                                                               
said that  the federal government  is giving the state  5 million                                                               
acres, of which 360,000 acres would be diverted to UA.                                                                          
                                                                                                                                
REPRESENTATIVE HANNAN  noted that  there are still  several local                                                               
governments throughout  the state  which either  haven't received                                                               
their full  transfer, or have  yet to form a  first-class borough                                                               
to make land  selections possible.  She asked  Mr. Fogels whether                                                               
he knows  where local  government allocations  stand in  the land                                                               
selection process.                                                                                                              
                                                                                                                                
MR.  FOGELS  said that  he  knows  that most  municipalities  are                                                               
nearing completion  of the municipal entitlements;  however, some                                                               
are not,  and UA is  identifying potential lands  for acquisition                                                               
and submitting them to the  Department of Natural Resources (DNR)                                                               
for review and a best interest  finding.  He explained that there                                                               
would  be  a  public  notice   and  any  potential  conflicts  or                                                               
encumbrances on specific lands would be uncovered.                                                                              
                                                                                                                                
1:35:08 PM                                                                                                                    
                                                                                                                                
CHAIR PATKOTAK opened public testimony on SJR 8.                                                                                
                                                                                                                                
1:35:28 PM                                                                                                                    
                                                                                                                                
TOM  BRICE,  Vice  President, UAF  Alumni  Association  Board  of                                                               
Directors,  Alumni  Relations,  University of  Alaska,  Fairbanks                                                               
(UAF)  testified in  support of  SJR 8  and noted  the letter  of                                                               
support from  the UAF Alumni  Association [hard copy  included in                                                               
committee packet].   He stressed  the importance  of diversifying                                                               
UA's  funding   sources,  which  promotes  economic   growth  and                                                               
stability.                                                                                                                      
                                                                                                                                
1:37:39 PM                                                                                                                    
                                                                                                                                
CHAIR PATKOTAK,  after ascertaining  that no  one else  wished to                                                               
testify, closed public testimony on SJR 8.                                                                                      
                                                                                                                                
[SJR 8 was held over.]                                                                                                          
                                                                                                                                
           HB 156-INDUSTRIAL HEMP PROGRAM;MANUFACTURING                                                                     
                                                                                                                                
1:38:16 PM                                                                                                                    
                                                                                                                                
CHAIR PATKOTAK announced that the final order of business would                                                                 
be HOUSE BILL NO. 156 "An Act relating to industrial hemp; and                                                                  
providing for an effective date."                                                                                               
                                                                                                                                
1:39:15 PM                                                                                                                    
                                                                                                                                
The committee took a brief at-ease at 1:39 p.m.                                                                                 
                                                                                                                                
1:39:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRIER HOPKINS, Alaska  State Legislature, as prime                                                               
sponsor presented HB 156.   He noted his partnership with Senator                                                               
Shelly Hughes in advancing the  proposed legislations.  He read a                                                               
statement as follows:                                                                                                           
                                                                                                                                
     As  my staff  will elaborate  later, there  are federal                                                                    
     timelines  which require  action  by  the Alaska  State                                                                    
     Legislature this  year in order  to keep  our fledgling                                                                    
     industrial  hemp industry  alive,  progressing, and  in                                                                    
     compliance with  federal law.   Today,  Alaskan farmers                                                                    
     are   growing   industrial   hemp  for   animal   feed;                                                                    
     nutriceuticals,  which   are  nutritional  supplements;                                                                    
     manufacturing; and other uses.   Farmers in Alaska have                                                                    
     been growing  hemp for several  years, since  our pilot                                                                    
     project  went  into  place.    I  would  note  for  the                                                                    
     committee that industrial hemp,  as governed by federal                                                                    
     law,  is a  different industry  entirely than  Alaska's                                                                    
     state-licensed,  recreational  marijuana program.    In                                                                    
     2018, the Thirtieth Alaska  [State] Legislature saw the                                                                    
     unanimous passage  of Senate Bill 6,  which established                                                                    
     a pilot  industrial hemp program  in Alaska.   With the                                                                    
     passage,  then,  of the  federal  2018  Farm Bill,  the                                                                    
     United  States  Congress changed  federal  requirements                                                                    
     for  state  industrial  hemp programs.    HB  156  will                                                                    
     empower  the Alaska  Division  of  Agriculture to  work                                                                    
     constructively  with Alaskan  farmers, both  small- and                                                                    
     large-scale, and  the federal  government, to  create a                                                                    
     new  industrial  hemp  program compliant  with  federal                                                                    
     guidelines.   It  is my  hope that  these changes  will                                                                    
     result  in  the  continued  development of  a  new  and                                                                    
     thriving    industry   for    Alaska's   farmers    and                                                                    
     manufacturers,  diversify  our  economy,  and  increase                                                                    
     state revenues.                                                                                                            
                                                                                                                                
1:42:02 PM                                                                                                                    
                                                                                                                                
JOE  HARDENBROOK,  Staff,  Representative Grier  Hopkins,  Alaska                                                               
State  Legislature, on  behalf of  Representative Hopkins,  prime                                                               
sponsor, detailed the  Sectional Analysis of HB  156 [included in                                                               
the   committee  packet],   which  read   as  follows   [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     Section  1  Two  subsections   added  to  this  section                                                                    
     authorizing  the  commissioner  of  the  Department  of                                                                    
     Natural  Resources  to  include the  manufacturing  and                                                                    
     retail sales of products  made from industrial hemp, as                                                                    
     well  as registration  and renewal  procedures, in  the                                                                    
     regulations for the industrial hemp program.                                                                               
                                                                                                                                
     Section  2 Gives  the DNR  Commissioner the  ability to                                                                    
     work constructively  with a grower if  their crop tests                                                                    
     above .3% but below 1.0% THC.                                                                                              
                                                                                                                                
     Section  3  Adds language  that  a  registrant for  the                                                                    
     industrial  hemp program  is not  eligible if  they had                                                                    
     been  convicted  of  a felony  involving  a  controlled                                                                    
     substance within  the last ten  years. This  section is                                                                    
     added to comply with provisions of the 2018 Farm Bill.                                                                     
                                                                                                                                
     Section  4  Adds that  the  department  may develop  an                                                                    
     industrial  hemp  program  that complies  with  federal                                                                    
     requirements and submit a plan  for the program to USDA                                                                    
     for approval.                                                                                                              
                                                                                                                                
     Section  5 A  grower may  retain and  recondition their                                                                    
     crop if it tests above .3% but below 1.0% THC.                                                                             
                                                                                                                                
     Section  6 A  new  subsection adds  that  a person  who                                                                    
     retains  but  fails  to  recondition  is  guilty  of  a                                                                    
     violation.                                                                                                                 
                                                                                                                                
     Section   7  Changes   the   statutory  definition   of                                                                    
     industrial hemp  to match the federal  definition which                                                                    
     was changed in the 2018 Farm Bill.                                                                                         
                                                                                                                                
     Section  8 Repeals  AS  03.05.077  the Industrial  Hemp                                                                    
     Pilot Program                                                                                                              
                                                                                                                                
     Section  9  Conditional effect  for  Section  7 of  the                                                                    
     bill,  in that  the Pilot  Program statute  is repealed                                                                    
     when  the  Industrial  Hemp Program  developed  by  the                                                                    
     department is approved by the USDA.                                                                                        
                                                                                                                                
     Section  10 Effective  date  language  stating that  if                                                                    
     section 7  is repealed under the  conditions of section                                                                    
     8, the  effective date  of section 7  is the  day after                                                                    
     notice is  received by the  revisor of statutes  by the                                                                    
     Commissioner of Natural Resources.                                                                                         
                                                                                                                                
1:50:15 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SCHRAGE asked what "reconditioning" means.                                                                       
                                                                                                                                
MR.  HARDENBROOK explained  that  a farmer  with  a crop  showing                                                               
tetrahydrocannabinol  (THC) levels  above the  legal limit  could                                                               
work with another farmer whose  crop's THC concentration is below                                                               
the  legal  limit,  intermingling  the  crops  and  resulting  in                                                               
acceptable THC levels.                                                                                                          
                                                                                                                                
1:50:58 PM                                                                                                                    
                                                                                                                                
CHAIR  PATKOTAK asked  whether there  are examples  in the  pilot                                                               
program of  the DNR commissioner either  exercising his authority                                                               
to issue citations, or working with  growers who have a crop over                                                               
the THC concentration limit.                                                                                                    
                                                                                                                                
MR. HARDENBROOK responded that he  does not know of any examples.                                                               
He  explained that  current law  states that  if a  hemp crop  is                                                               
above  .3 percent  THC,  the DNR  commissioner  "shall" cite  the                                                               
grower  as being  in  violation; however,  provisions  in HB  156                                                               
would allow a  farmer who is acting in good  faith to address the                                                               
issue instead  of being automatically  cited and reported  to the                                                               
Department of Public Safety and Marijuana Control Board.                                                                        
                                                                                                                                
CHAIR PATKOTAK  noted the importance of  recognizing when someone                                                               
is acting in good faith.                                                                                                        
                                                                                                                                
1:52:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CRONK asked  why there  is language  in the  bill                                                               
referencing the farming of elk.                                                                                                 
                                                                                                                                
REPRESENTATIVE HOPKINS  replied that  it is  legislative drafting                                                               
style to amend  AS 03.05.010(a) to include  the sections relating                                                               
to industrial hemp.                                                                                                             
                                                                                                                                
1:53:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   HANNAN   asked   whether  there   would   be   a                                                               
presentation from Division of Agriculture Director Dave Schade.                                                                 
                                                                                                                                
MR.  HARDENBROOK replied  that a  presentation would  be possible                                                               
when HB 156 comes back up before the committee.                                                                                 
                                                                                                                                
REPRESENTATIVE  HANNAN   noted  that   this  industry   could  be                                                               
successful in Alaska and asked how the pilot programs have gone.                                                                
                                                                                                                                
MR. HARDENBROOK deferred to Mr. Schade.                                                                                         
                                                                                                                                
1:55:39 PM                                                                                                                    
                                                                                                                                
DAVE  SCHADE, Director,  Division of  Agriculture, Department  of                                                               
Natural Resources  (DNR), said  that things  have gone  well this                                                               
growing season.  He introduced  Rob Carter, the state agronomist,                                                               
to provide more information.                                                                                                    
                                                                                                                                
1:56:06 PM                                                                                                                    
                                                                                                                                
ROB  CARTER,   Manager,  Plant  Materials  Center,   Division  of                                                               
Agriculture,  Department of  Natural Resources,  said that  there                                                               
were 70 acres  registered for hemp production in  2020 with 9,000                                                               
square feet  of indoor growing  space in  the pilot program.   No                                                               
grower  tested over  .2 percent,  he  said, and  the Division  of                                                               
Agriculture, in testing 25 varieties  of industrial hemp, has not                                                               
yet experienced a  variety that tests above the legal  limit.  He                                                               
noted  that applications  for the  2021 season  total 11  growers                                                               
representing 200 acres.                                                                                                         
                                                                                                                                
1:57:40 PM                                                                                                                    
                                                                                                                                
CHAIR  PATKOTAK   asked  for  a  table   outlining  the  industry                                                               
performance in 2020.                                                                                                            
                                                                                                                                
1:57:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HANNAN  asked  whether cannabidiol  (CBD)  levels                                                               
would be tested, or if testing is only to determine THC content.                                                                
                                                                                                                                
MR. CARTER answered that the  industry is very open with business                                                               
processes and THC  concentration is tested to ensure  that a crop                                                               
is truly  industrial hemp instead  of recreational cannabis.   In                                                               
2020, he  said, all of  the growers  shared with the  Division of                                                               
Agriculture the array  of uses of their crops  including feed and                                                               
biomass  production, bioplastics,  pelletized fuel,  and wellness                                                               
products.                                                                                                                       
                                                                                                                                
2:00:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAUSCHER asked Mr.  Carter about the efficiency of                                                               
indoor versus outdoor growing operations.   He also asked whether                                                               
the  market   for  industrial  hemp   is  local,   nationwide  or                                                               
international.                                                                                                                  
                                                                                                                                
MR. CARTER  explained that indoor production  follows a different                                                               
methodology than  outdoor production;  industrial hemp  for fiber                                                               
and biomass,  when grown  on acreage,  follows the  same planting                                                               
tactics as  barley or  corn, with  some varieties  flowering only                                                               
because of the  long periods of daylight.   Indoor production, he                                                               
said, is more  focused on the floral production  for CBD wellness                                                               
products.    The market  for  industrial  hemp within  Alaska  is                                                               
significant, he  said, but in-state  production hasn't  caught up                                                               
with  the  national  average;  the  Division  of  Agriculture  is                                                               
evaluating  the  possibilities   for  large-scale  production  of                                                               
bioplastic to be  sold and used within the state.   He noted that                                                               
due  to the  overall clean  environment in  Alaska, international                                                               
interest is growing.                                                                                                            
                                                                                                                                
REPRESENTATIVE RAUSCHER  asked whether manufacturing  is catching                                                               
up to agricultural production.                                                                                                  
                                                                                                                                
MR. CARTER  responded that in  2020 the growers  largely switched                                                               
to  growing food  instead of  industrial hemp;  however, in  2021                                                               
there is much more activity in processing and development.                                                                      
                                                                                                                                
2:03:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GILLHAM asked how the  THC percentage in the crops                                                               
can be controlled, and who does the testing for THC levels.                                                                     
                                                                                                                                
MR.  CARTER replied  that the  Division of  Agriculture maintains                                                               
the chain  of custody  from pulling the  samples to  testing, and                                                               
the crop  can't leave the  farm until test results  are finalized                                                               
and provided to the grower.                                                                                                     
                                                                                                                                
REPRESENTATIVE  GILLHAM  noted  that  recreational  marijuana  is                                                               
highly regulated  and asked how regulations  work with industrial                                                               
hemp.                                                                                                                           
                                                                                                                                
MR.  CARTER   answered  that  the   2018  Farm   Bill  identified                                                               
industrial hemp  as an agricultural  commodity, and  the genetics                                                               
of the plant keep the THC concentration low.                                                                                    
                                                                                                                                
2:06:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CRONK  asked about  the best  geographic locations                                                               
for growing industrial hemp.                                                                                                    
                                                                                                                                
MR.  CARTER replied  that in  2020  there were  producers on  the                                                               
Kenai Peninsula,  in the Matanuska-Susitna Borough,  and north of                                                               
Talkeetna.   In  2021, he  said, there  are producers  from Delta                                                               
Junction  and  Fairbanks  down   to  Homer,  with  interest  from                                                               
potential  growers   in  Southeast   Alaska.    From   a  biomass                                                               
perspective, he  said, greatest production is  expected from just                                                               
north of the Alaska Range.                                                                                                      
                                                                                                                                
2:07:44 PM                                                                                                                    
                                                                                                                                
CHAIR PATKOTAK asked about the finances of the pilot program.                                                                   
                                                                                                                                
MR. HARDENBROOK  said that  the state  is anticipating  new state                                                               
revenues of $750,000 annually, with potential for growth.                                                                       
                                                                                                                                
CHAIR  PATKOTAK  asked  whether  that  figure  is  based  on  the                                                               
performance of the pilot program.                                                                                               
                                                                                                                                
MR.  HARDENBROOK answered  yes, based  on the  expected increases                                                               
across all aspects of the industry.                                                                                             
                                                                                                                                
2:08:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HANNAN asked,  "This is  the revenue  to run  the                                                               
program, correct?"                                                                                                              
                                                                                                                                
MR. HARDENBROOK responded  that the costs of the  program will be                                                               
covered through program  receipts and noted that  the fiscal note                                                               
shows the change in revenues.                                                                                                   
                                                                                                                                
REPRESENTATIVE HANNAN asked about the revenue structure.                                                                        
                                                                                                                                
MR. SCHADE explained that in the  pilot program there is a set of                                                               
registration criteria for  growers, manufacturers, and retailers,                                                               
and he  noted that there  are 2,000-3,000 retailers in  the state                                                               
with only 200  registered; as registration grows  and the program                                                               
builds, revenues  will increase.   He said  that the  majority of                                                               
fees are  expected to come from  the retailers as opposed  to the                                                               
growers.   He noted that receipts  are not kept from  one year to                                                               
the  next, so  DNR is  working with  the Office  of Management  &                                                               
Budget (OMB) to  bridge the funding from one year  to the next so                                                               
that staffing can go uninterrupted.                                                                                             
                                                                                                                                
REPRESENTATIVE HANNAN  asked whether there are  specific taxes or                                                               
revenue required to be shared.                                                                                                  
                                                                                                                                
MR. SCHADE replied that since  industrial hemp is an agricultural                                                               
product, there are no specific taxes.                                                                                           
                                                                                                                                
2:12:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GILLHAM  asked whether industrial  hemp businesses                                                               
are able to use the banking system.                                                                                             
                                                                                                                                
MR.  SCHADE  said  that  legally, banking  is  allowed,  and  the                                                               
Division  of  Agriculture  is  working  to  educate  the  banking                                                               
industry  on   the  differences   between  industrial   hemp  and                                                               
recreational  marijuana.   He noted  that there  are out-of-state                                                               
banks that service industrial hemp companies.                                                                                   
                                                                                                                                
2:14:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CRONK asked about  possible wildlife damage to the                                                               
crop.                                                                                                                           
                                                                                                                                
MR. CARTER  said that DNR saw  "no predation from any  animal" in                                                               
2020.                                                                                                                           
                                                                                                                                
REPRESENTATIVE CRONK asked how fast the plants grow.                                                                            
                                                                                                                                
MR. CARTER  responded that plantings  in May can be  harvested in                                                               
September.                                                                                                                      
                                                                                                                                
2:16:26 PM                                                                                                                    
                                                                                                                                
CHAIR PATKOTAK opened public testimony on HB 156.                                                                               
                                                                                                                                
2:16:45 PM                                                                                                                    
                                                                                                                                
EMBER HAYNES  testified in support of  HB 156 and noted  that her                                                               
business  is in  its  second  year in  the  pilot  program.   She                                                               
expressed that there  are many small-scale growers  in Alaska who                                                               
would like to grow industrial hemp.                                                                                             
                                                                                                                                
2:18:34 PM                                                                                                                    
                                                                                                                                
CHAIR PATKOTAK,  after ascertaining  that no  one else  wished to                                                               
testify, closed public testimony on HB 156.                                                                                     
                                                                                                                                
2:19:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HOPKINS noted  that there are a  number of growers                                                               
already  operating, and  that  ensuring  compliance with  federal                                                               
regulations will be important in  continuing the momentum of this                                                               
industry.                                                                                                                       
                                                                                                                                
[HB 156 was held over.]                                                                                                         
                                                                                                                                
                                                                                                                                
2:20:19 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Resources Standing Committee meeting was adjourned at 2:20 p.m.                                                                 

Document Name Date/Time Subjects
HB 156 Letter of Support Ember Haynes 4.7.2021.pdf HRES 4/7/2021 1:00:00 PM
HRES 4/12/2021 1:00:00 PM
HB 156
HB 156 Sponsor Statement 3.30.2021.pdf HRES 4/7/2021 1:00:00 PM
HRES 4/12/2021 1:00:00 PM
HB 156
SJR 8 Letter of Support UAF Alumni Association 3.29.2021.pdf HRES 4/7/2021 1:00:00 PM
HRES 4/12/2021 1:00:00 PM
SJR 8
SJR 8 Presentation to HRES 4.7.2021.pdf HRES 4/7/2021 1:00:00 PM
SJR 8
2021 01 15 Support for the UA Land Grant Conveyance.pdf HRES 4/7/2021 1:00:00 PM
HRES 4/12/2021 1:00:00 PM
SEDC 2/15/2021 9:00:00 AM
SJR 8
SJR08_UnivAK_LandGrant_SponsorStatement.pdf HRES 4/7/2021 1:00:00 PM
HRES 4/12/2021 1:00:00 PM
SEDC 2/15/2021 9:00:00 AM
SJR 8
SJR08_UnivAK_LandGrant_Research_Land-Grant-History.pdf HRES 4/7/2021 1:00:00 PM
HRES 4/12/2021 1:00:00 PM
SEDC 2/15/2021 9:00:00 AM
SJR 8
HB 156 Draft Fiscal Note DNR AGR 4.2.2021.pdf HRES 4/7/2021 1:00:00 PM
HB 156
HB 156 Letter of Support Jack Bennet 4.7.2021.pdf HRES 4/7/2021 1:00:00 PM
HRES 4/12/2021 1:00:00 PM
HB 156
HB 156 Sectional Analysis 4.7.2021.pdf HRES 4/7/2021 1:00:00 PM
HRES 4/12/2021 1:00:00 PM
HB 156