Legislature(2017 - 2018)SENATE FINANCE 532
04/07/2017 09:00 AM FINANCE
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SENATE BILL NO. 6 "An Act relating to industrial hemp; and relating to controlled substances." 9:08:29 AM Co-Chair MacKinnon offered a brief history of previous committee discussions of bill. She listed that available invited testimony. 9:09:47 AM Vice-Chair Bishop discussed the fiscal notes. He noted that the four fiscal notes were from the Department of Public Safety (DPS), Department of Law (DOL), Department of Commerce, Community and Economic Development (DCCED), and the Department of Natural Resources (DNR). He pointed out that there would be one note DNR with fiscal impact of $25 thousand for an RSA with LAW to assist in drafting regulations. Co-Chair MacKinnon observed the lack of support documents to justify the need for $25,000. She read the analysis from FN9 and reiterated that the note was short on backup analysis. 9:11:35 AM ROB CARTER, DIVISION OF AGRICULTURE, PALMER (via teleconference), explained that the estimated $25,000 had been determined by LAW. He said that DNR would draft the regulations, which would then be interpreted and vetted by LAW. He relayed that the money would go to LAW and that any further questions should be directed to that department. 9:12:47 AM Co-Chair MacKinnon asked whether there was anyone from LAW available to speak to the fiscal note. Co-Chair MacKinnon proposed to zero-out the fiscal note. 9:13:12 AM Senator Micciche asked whether there was a way to change the note to receipt authority, at a lower number. Co-Chair MacKinnon stated that $10,000 in designated general fund receipts could be more appropriate proposal. Senator Micciche believed that there would be some cost and that $10,000 would be appropriate. Co-Chair MacKinnon agreed with Senator Micciche. She thought that zeroing out the note altogether might get the department's attention to attend future hearings on the bill. 9:14:13 AM Senator von Imhof said that when the bill was heard in the Senate Resources Committee, there had bee a zero DNR note attached. She understood that the $25,000 had been recently added. BUDDY WHITT, STAFF, SENATOR SHELLEY HUGHES, answered in the affirmative. He stated that the latest iteration of the bill, out of Senate Judiciary Committee, changed wording from "may" to "shall" establish regulations, which resulted in the new fiscal note. Senator von Imhof relayed that the earlier conversation in committee had reflected that the change in regulation could be absorbed by the department. Mr. Whitt understood that there had been some additional regulatory stipulations added to the bill in the Senate Judiciary Committee. He relayed that changing the wording from "may" to "shall" establish regulations, had resulted in the new note. 9:16:03 AM Senator von Imhof wondered about the possible impact in one year's time if the committee changed the fiscal note to zero and then revisited the issue at a later date. Co-Chair MacKinnon explained the path that the fiscal note would travel through the bill hearing process. She shared that LAW was online to defend the note. 9:16:59 AM Vice-Chair Bishop estimated that the fiscal note represented approximately 150 work hours by LAW to draft the regulations. Co-Chair MacKinnon reiterated that there was not much backup available to justify the $25,000 note. 9:17:52 AM JOAN WILSON, DEPARTMENT OF LAW, ANCHORAGE (via teleconference), stated that the issue of separating hemp from marijuana and the issues that stemmed from both, criminal and civil, were new territory for the department. She said that a pilot program would be established by the bill, also the protocol on how seeds and growers would be approved. She added that a way to monitor sees and growers and determining how the Department of Agriculture would be involved in the processes was unchartered territory. She shared that the fiscal note reflected the past cost for the Department of Natural Resources (DNR) for legislative regulatory projects. She explained that it had been a long time since DNR had visited these past costs, that the estimate they gave had not been helpful. She relayed that LAW had looked back 9:20:42 AM Vice-Chair Bishop asked how many other states practiced industrial hemp production. Mr. Whitt recalled that there were 31 states that had some sort of industrial hemp program. Vice-Chair Bishop suggested that the department research what was done in other states. 9:21:26 AM Co-Chair MacKinnon asked whether there were resources available to LAW to assist in the development of the regulations. Ms. Wilson mentioned Colorado, Kentucky, Vermont, and Maine. She relayed that she was unaware whether the laws in those states reflected what Alaska was planning. 9:22:35 AM Mr. Whitt stated that he would like to double check his previous statement that 31 other states had industrial hemp programs. Co-Chair MacKinnon solicited conversation on the fiscal note. She referred to public testimony that had suggested that other states had not been able to pay for the programs with program receipts. She noted that supplemental requests were not ideal and that the department should submit a fiscal note that reflected the maximum amount of money that could be spent to implement any program going forward. 9:24:33 AM Senator Micciche stated that he was amendable to changing the fiscal note to $10,000 in DGF. He did not think that the state could afford to fund the regulations. He thought that the regulations for marijuana could be applied to industrial hemp. 9:25:00 AM Senator von Imhof expressed agreement with the previous two speakers. She added that industrial hemp could provide economic opportunity to the state and that a $10,000 investment seemed reasonable. 9:25:43 AM AT EASE 9:28:16 AM RECONVENED Co-Chair MacKinnon offered further clarification on changing the fiscal note. She amended the note to reflect the $10,000 from DGF. 9:29:19 AM Mr. Whitt clarified that 30 states had legalized industrial hemp and 16 states that had set up pilot programs. 9:30:27 AM AT EASE 9:31:28 AM RECONVENED Co-Chair MacKinnon clarified that the DGF code was 1005 and that a new fiscal note with appropriate classifications would be forthcoming. Vice-Chair Bishop MOVED to report CSSB 6(JUD) out of Committee with individual recommendations and the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CSSB 6(JUD) was REPORTED out of committee with "no recommendation" and with one new fiscal impact note by the Senate Finance Committee for the Department of Natural Resources; and with four previously published zero fiscal notes: FN5(DPS), FN6(LAW), FN7(CED), and FN8(DPS). 9:32:17 AM AT EASE 9:34:45 AM RECONVENED