Legislature(2015 - 2016)CAPITOL 120
04/08/2015 01:00 PM House JUDICIARY
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HB 123-ESTABLISH MARIJUANA CONTROL BOARD 2:08:01 PM CHAIR LEDOUX announced that the first order of business would be HOUSE BILL NO. 123, "An Act establishing the Marijuana Control Board; relating to the powers and duties of the Marijuana Control Board; relating to the appointment, removal, and duties of the director of the Marijuana Control Board; relating to the Alcoholic Beverage Control Board; and providing for an effective date." 2:08:30 PM REPRESENTATIVE KELLER moved to adopt CSHB 123, Version 29- GH1110\P, Martin, 4/7/15, as the working document. There being no objection Version P was before the committee. 2:09:02 PM MICAELA FOWLER, Legislative Liaison, Special Assistant to the Commissioner, Office of the Commissioner, Department of Commerce, Community, and Economic Development, said there are two changes in Version P responsive to concerns voiced during the last hearing ... 2:09:22 PM The committee took an at-ease from 2:09 to 2:10 p.m., due to technical difficulties. 2:10:44 PM MS. FOWLER referred to [Sec. 2, AS 17.38.080(b)(3)], page 2, line 17, which read: (3) one person currently residing in a rural area; MS. FOWLER advised that the word "currently" has been added to the rural seat and it is now required that one person currently residing in a rural area serve on the board. She referred to [Sec. 2, AS 17.38.080(g)(6)], page 3, lines 19-21, which read: (6) "rural area" means a community with a population of 7,000 or less that is not connected by road or rail to Anchorage or Fairbanks, or with a population of 2,000 or less that is connected by road or rail to Anchorage or Fairbanks. MS. FOWLER advised that the definition of "rural area" has been changed and it is closely related to a combination of other definitions of "rural area" in existing statute. She referred to [Sec. 3, AS 17.38.084(a)], page 4, lines 14-15, which read: (a) The board shall control the cultivation, manufacture, and sale of marijuana in the state. ... MS. FOWLER explained it removes the word "possession" from control of the board. 2:12:27 PM REPRESENTATIVE GRUENBERG referred to an amendment Representative Foster wanted. CHAIR LEDOUX advised that she believes the CS incorporated Representative Foster's concerns. REPRESENTATIVE FOSTER stated that Chair LeDoux was correct. 2:13:42 PM REPRESENTATIVE GRUENBERG requested a copy of AS 17, and a few minutes to review. 2:13:57 PM The committee took a brief at-ease. 2:14:24 PM MS. FOWLER responded to Representative Gruenberg and referred to [Version N, Sec. 2, AS 17.38.080(e)], page 2, lines 30-31, which read: (e) The rural member of the board shall reside or have resided in a rural area for not fewer than 180 days within the five years preceding appointment. MS. FOWLER pointed out that the section was removed when "currently" was added to [Version P], Sec. 2, line 17. REPRESENTATIVE GRUENBERG confirmed that is yet another change. MS. FOWLER answered yes. 2:14:53 PM CHAIR LEDOUX said the Ms. Fowler indicated that "currently" had been put into the CS. REPRESENTATIVE GRUENBERG offered that he "just wanted to be sure." 2:15:33 PM REPRESENTATIVE LYNN moved to adopt Amendment 1, labeled 29- GH1110\E.1, Martin, 4/2/15, which read [original punctuation provided]: Page 6, following line 8: Insert a new bill section to read: "* Sec. 4. AS 17.38.100 is amended by adding a new subsection to read: (i) A marijuana establishment may not be registered under this chapter if a person who is an owner, officer, agent, or employee of the marijuana establishment has been convicted of (1) a felony and less than five years have elapsed since the person's unconditional discharge from the conviction; or (2) a misdemeanor involving a controlled substance in the last three years." Renumber the following bill sections accordingly. CHAIR LEDOUX objected. 2:15:51 PM REPRESENTATIVE LYNN advised that Amendment 1 proposes that a marijuana establishment may not be registered under this chapter if a person is an owner, officer, agent or employee of a marijuana establishment and has been convicted of a felony and less than five years have elapsed since the person's unconditional discharge from the conviction, or a misdemeanor involving a controlled substance within the last three years. He stated that felonies or misdemeanors involving a controlled substance, which could be marijuana, has demonstrated a predilection not to follow established law. He described it as a state of mind, that the past is too often the predictor of the future, and the committee must be cautious as it is breaking new ground in every aspect of marijuana laws. He stated that the committee must be extremely cautious in how it constructs the laws and urged the committee's approval of the amendment. 2:17:25 PM CHAIR LEDOUX asked Cynthia Franklin, Micaela Fowler, and/or Harriet Milks to explain their view of the amendment and how things are done with respect to the alcohol industry. 2:17:50 PM CYNTHIA FRANKLIN, Director, Alcoholic Beverage Control Board (ABC Board), Department of Commerce, Community, and Economic Development (DCCED), responded that with regard to alcohol in Title 4, there is 10 year look back period on felonies but no outright prohibition on individuals with felony convictions being licensed for purposes of operating or holding a liquor license. She advised that in the event the person applying for a license has been convicted of a felony within the past 10 years they must appear before the ABC Board to explain their conviction, the board has the discretion to grant the license in spite of the conviction or to deny the license on the basis of the conviction. She noted that it is a bit more open than proposed Amendment 1, but it is a different substance and alcohol has not recently been in the Controlled Substances Act. In fact, she explained, marijuana may remain in the Controlled Substances Act depending upon the fate of bills in the legislature. She stated that a clear prohibition will decrease board time spent on this issue, but she imagines that individuals who plan to apply for licenses might have more to say about it in terms of their opinion. 2:19:24 PM CHAIR LEDOUX asked whether there is anything with respect to misdemeanors in the ABC Board. MS. FRANKLIN responded no. CHAIR LEDOUX questioned whether the look back provision with respect to felonies is in the statute or in regulation. MS. FRANKLIN answered that it is in regulation. 2:19:58 PM CHAIR LEDOUX surmised that since this is offered in the alcohol industry regulations, she would like marijuana regulated the same as alcohol. She said she will not withdraw her objection. 2:20:44 PM MS. FRANKLIN added that there is a prohibition similar to proposed Amendment 1, in SB 62, but she could not recall whether the bill contains a prohibition related to misdemeanor convictions. She reiterated that the five year felony prohibition is present in the current version of SB 62. 2:21:11 PM REPRESENTATIVE CLAMAN agreed that it should be under marijuana regulations, and questioned whether the condition of CSHB 123 adequate to give the Marijuana Control Board regulatory authority to create the same as the ABC Board has or should there be a change to the bill if desiring that the Marijuana Control Board has that authority. MS. FRANKLIN responded that the language is adequate. REPRESENTATIVE CLAMAN advised that he shares Chair LeDoux's objection. 2:22:01 PM REPRESENTATIVE KELLER referred to time saved for the board by having these parameters implies that the 10 year look back period takes a considerable amount of time. He asked whether Ms. Franklin had to make decisions that were controversial in her look back experience. MS. FRANKLIN responded that she has only been to three board meetings, and there was an applicant with a felony conviction. She advised that she wouldn't say it takes a significant amount of time although it does involve the board going into executive session because an individual's criminal history is private. Typically, she offered, because the board discovers the criminal convictions through the Alaska Safety Planning and Empowerment Network (ASPEN) security clearance that the enforcement officers have, and the authority the board has to look at an individual's criminal history who applies for a license. She reiterated that board goes into executive session at the board meeting for the board to discuss that history with the applicant. She further reiterated that it does not take a significant amount of time and that it add a human element to the board process in the particular case she observed. It allowed the board to consider rehabilitation efforts the individual had made and it was a controlled substance conviction and was a long time prior. She advised the individual had circumstances she wanted to explain to the board and the license she was applying for was a beer and wine license at a "hamburger/wings joint," and the board was able to consider the age of the conviction, type of license applied for, and weigh the various determinations as opposed to a bright line scheme where the simple fact of the conviction would automatically preempt the person from holding such a license. 2:24:25 PM REPRESENTATIVE KELLER related that five years and three years is reasonable, wherein comparing five years to ten years is not apples to apples. He remarked that proposed Amendment 1 is good. 2:24:44 PM REPRESENTATIVE GRUENBERG stated that when Chair LeDoux mentioned some things that might be issues for the regulatory authority to consider, he does not want the record to reflect that those would be the only issues. He offered that other issues might include whether a person would have a right to appear before the board, and also whether this activity may have occurred in a different jurisdiction with different laws. He offered a scenario of a person with a little marijuana in a baggie in their car glove compartment charged within the last three years as to whether that person should be disqualified. He said he agrees with taking it to the regulatory authority. 2:25:46 PM REPRESENTATIVE LYNN responded to Representative Gruenberg that prior to this initiative a small baggie of marijuana would have been illegal which showed a predilection to not obeying the law. REPRESENTATIVE GRUENBERG answered that it depends upon the case. 2:26:26 PM CHAIR LEDOUX referred to the alcohol context and questioned whether the prohibition is applied to simple employees of the bar or just someone with a license. MS. FRANKLIN replied that it is the applicant for the license or applicant for the transfer. CHAIR LEDOUX surmised that it would not affect hiring an employee with an Alcohol Education Card (TAM) for example. MS. FRANKLIN answered, correct. 2:27:00 PM REPRESENTATIVE CLAMAN offered a further note in support of the regulatory approach in that the legislature wants people who now may be in the marijuana growing business to register and participate. He stated he would rather have a person, with a misdemeanor conviction for marijuana possession in the last three years, licensed and identified rather than being in the black market. 2:28:04 PM REPRESENTATIVE LYNN referred to Ms. Franklin testimony wherein she stated the board would go into executive session because convictions are private. He questioned whether the convictions are really private in that anyone can go on the internet or courthouse to locate convictions of anything. MS. FRANKLIN answered that it depends on whether it is an Alaska conviction and in Courtview then anyone can see it. In the event it is a federal conviction or out-of-state conviction that is located on ASPIN, it is not viewable by the public. The board is governed by processes created in regulation in terms of how to treat the criminal history during public meetings. She explained that the process is that an applicant applies, the ASPIN history is run, and if there is an item on the history that would cause the applicant to fall under that regulation the information is shared solely with the director, and then the board in executive session versus being on the board's public agenda. 2:29:35 PM REPRESENTATIVE LYNN opined that the state is entering an entirely new ground and in the event there is an error it should be on the side of caution. He offered that instead of five years for felony it could have ten or twenty, but he was attempting to reach a reasonable compromise and the same goes with a misdemeanor as it could have been any number of years and three years was chosen as reasonable for controlled substances only, not for any other misdemeanors. 2:30:33 PM A roll call vote was taken. Representatives Keller and Lynn voted in favor of Amendment 1. Representatives Gruenberg, Foster, Millett, Claman, and LeDoux, voted against it. Therefore, Amendment 1 failed to pass by a vote of 2-5. 2:31:07 PM CHAIR LEDOUX quiered whether this bill gives the board the authority to create whatever license or license type it deems necessary in order to effectively regulate the industry. MS. FRANKLIN advised that it does. 2:31:29 PM REPRESENTATIVE GRUENBERG questioned whether the Marijuana Control Board will have the authority to create crimes. MS. FRANKLIN responded "No," that by regulation the board will not be creating crimes, but if through regulation if criminal activity is identified there can be some penalty work performed by regulation. In terms of creating offenses and putting an individual into jail the answer is no, as obviously AS 17.38 gives whichever regulatory board that has authority over this substance the ability to create civil penalty fines relating to violation of the rules created by the board, she explained. 2:32:48 PM REPRESENTATIVE GRUENBERG paraphrased Ms. Franklin's previous statement that the board may be able to do something with respect to criminal penalties. MS. FRANKLIN replied that the statement is based on a discussion pre-session with the board's attorneys in terms of how far the regulations might go if no amendments to AS 17.38 occurred. She said she would have to refresh her memory on that before putting it on the record. Generally speaking, she offered, with regard to Title 4, the regulations clarify statutes and she knows the board cannot create crimes. 2:33:43 PM REPRESENTATIVE GRUENBERG requested that a written follow-up answer to his question be delivered to the committee and in that manner he could determine if there is a problem. MS. FRANKLIN responded that she is willing to prepare a written follow-up. 2:34:37 PM REPRESENTATIVE KELLER moved to report CSHB 123 out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 123(JUD) was reported from the House Judiciary Standing Committee. 2:34:56 PM The committee took an at-ease from 2:34 to 2:39 p.m.