Legislature(2015 - 2016)CAPITOL 120

04/08/2015 01:00 PM House JUDICIARY

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to 2:00 p.m. Today --
Moved CSHJR 14(STA) Out of Committee
-- Public Testimony --
Moved CSHCR 4(STA) Out of Committee
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
Scheduled but Not Heard
-- Public Testimony --
Moved CSHB 123(JUD) Out of Committee
            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                                                               
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                                                                          
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                                                               
       (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                                                               
2:15:33 PM                                                                                                                    
REPRESENTATIVE  LYNN  moved to  adopt  Amendment  1, labeled  29-                                                               
GH1110\E.1,  Martin,  4/2/15,  which read  [original  punctuation                                                               
     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                                                               
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                                                               
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                                                               
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                                                               
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                                                               
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.                                                                            

Document Name Date/Time Subjects
HCR4 Fiscal Note, LAA.pdf HJUD 4/8/2015 1:00:00 PM
HCR4 Sectional Analysis.pdf HJUD 4/8/2015 1:00:00 PM
HCR4 Sponsor Statement.pdf HJUD 4/8/2015 1:00:00 PM
HCR4 Support Document Charles Kacprowicz Commentary.pdf HJUD 4/8/2015 1:00:00 PM
HCR4 Support Document, Natelson Report.pdf HJUD 4/8/2015 1:00:00 PM
HCR4 Support Document, New Mexico Rep. Herrell.pdf HJUD 4/8/2015 1:00:00 PM
HCR4 Ver N.pdf HJUD 4/8/2015 1:00:00 PM
HCR4, HJR14 Support Document - emails.pdf HJUD 4/8/2015 1:00:00 PM
HJR 14
HJR14 Fiscal Note, LAA.pdf HJUD 4/8/2015 1:00:00 PM
HJR 14
HJR14 Sponsor Statement.pdf HJUD 4/8/2015 1:00:00 PM
HJR 14
HJR14 Support Document, Countermand Amendment Text.pdf HJUD 4/8/2015 1:00:00 PM
HJR 14
HJR14 Support Document, Louisiana.pdf HJUD 4/8/2015 1:00:00 PM
HJR 14
HJR14 Support Document, New Hampshire.pdf HJUD 4/8/2015 1:00:00 PM
HJR 14
HJR14 Support Document, New Mexico Rep. Herrell.pdf HJUD 4/8/2015 1:00:00 PM
HJR 14
HJR14 Support Document, New Mexico.pdf HJUD 4/8/2015 1:00:00 PM
HJR 14
HJR14 Support Document, North Dakota Rep. Fehr.pdf HJUD 4/8/2015 1:00:00 PM
HJR 14
HJR14 ver N.pdf HJUD 4/8/2015 1:00:00 PM
HJR 14