Legislature(2017 - 2018)BELTZ 105 (TSBldg)

03/13/2017 01:30 PM JUDICIARY

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved HB 104 Out of Committee
Moved HB 77 AM Out of Committee
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
               SB   6-INDUSTRIAL HEMP PRODUCTION                                                                            
1:53:47 PM                                                                                                                    
CHAIR COGHILL reconvened the meeting and announced the                                                                          
consideration of SB 6. He solicited a motion to adopt the                                                                       
proposed committee substitute (CS).                                                                                             
1:54:16 PM                                                                                                                    
SENATOR COSTELLO moved to adopt the CS for SB 6, labeled 30-                                                                    
LS0173\I, as the working document.                                                                                              
CHAIR COGHILL objected for an explanation of the changes.                                                                       
1:54:34 PM                                                                                                                    
JORDAN SHILLING, Staff to Senator John Coghill, Alaska State                                                                    
Legislature, reviewed the changes in SB 6, version I, speaking                                                                  
to the following document:                                                                                                      
     Page 2, line 20 through page 3, line 8:                                                                                  
     A new section  is added to the bill  under AS 03.05.010                                                                    
     regarding the powers and duties  of the commissioner of                                                                    
     natural resources.  To this list  of powers  and duties                                                                    
     is  added,  regulating  industrial  hemp.  Under  these                                                                    
     duties, the  commissioner will  be required  to specify                                                                    
     approved  sources  and  varieties  of  industrial  hemp                                                                    
     seed,  require  registered  growers  to  test  for  THC                                                                    
     content  at  the  time of  harvest,  be  authorized  to                                                                    
     conduct random  testing of industrial hemp  and provide                                                                    
     information  regarding   general  production  practices                                                                    
     including the establishment of isolation distances.                                                                        
     This section  also requires that the  department submit                                                                    
     a list of registered growers  of industrial hemp to the                                                                    
     marijuana control  board and  the department  of public                                                                    
     safety. The  list also includes the  expiration date of                                                                    
     the registration.                                                                                                          
     Page 3, lines 20 through 26:                                                                                             
     A stop sale order shall be  issued for any plant with a                                                                    
     THC level  over .3  percent and the  commissioner shall                                                                    
     notify the  marijuana control board and  the department                                                                    
     of public safety when a stop sale order if issued.                                                                         
     Page 5, lines 13 through 15                                                                                              
     Industrial hemp  produced under this section  cannot be                                                                    
     used  to  produce  hashish, hashish  oil  or  marijuana                                                                    
     Page 5, lines 16 and 17                                                                                                  
     Producing Industrial  Hemp without a registration  is a                                                                    
     violation with a penalty of $500.                                                                                          
     Page 5, lines 26 through 31:                                                                                             
     Registrants  must  possess  proof  of  industrial  hemp                                                                    
     registration while transporting.                                                                                           
     Page 7, lines 20 through 23:                                                                                             
     Establishes a  sunset date  for this  bill of  June 30,                                                                    
1:58:06 PM                                                                                                                    
SENATOR  WIELECHOWSKI asked  if the  entire bill  is repealed  in                                                               
MR.  SHILLING directed  attention  to Section  10 that  basically                                                               
repeals  SB 6  in five  years. It  lists the  [nine] sections  in                                                               
Title  3 and  [one] section  in Title  17 that  will be  entirely                                                               
repealed in 2020. He noted  that [AS 17.20.020(e)] relates to the                                                               
definition of marijuana.                                                                                                        
CHAIR COGHILL added that the provisions  is Sections 6 and 9 will                                                               
automatically be repealed if the pilot program isn't reinstated.                                                                
SENATOR WIELECHOWSKI asked where  the definition for marijuana is                                                               
MR. SHILLING explained that Sections  6 and 9 put brackets around                                                               
the additional  language regarding  hemp and that  language isn't                                                               
deleted  until   2022.  He  clarified  that   the  definition  of                                                               
marijuana isn't deleted, just the extra reference to hemp.                                                                      
SENATOR  WIELECHOWSKI   asked  if   anyone  who  wants   to  grow                                                               
industrial hemp in  the next five years would have  to go through                                                               
this pilot program.                                                                                                             
MR. SHILLING answered yes.                                                                                                      
SENATOR  COSTELLO asked  if businesses  that  participate in  the                                                               
pilot program will need a business license.                                                                                     
MR. SHILLING deferred the question to Buddy Whitt.                                                                              
2:01:48 PM                                                                                                                    
BUDDY WHITT, Staff, Senator Shelly  Hughes, advised that business                                                               
licensing requirements  would be the  same as any  other business                                                               
that operates in the state.                                                                                                     
SENATOR COSTELLO pointed out that  business licenses are good for                                                               
two years,  so a business owner  could have a license  to conduct                                                               
business for an additional year after the pilot program sunsets.                                                                
MR.  WHITT  agree   that  could  happen  if   the  statute  isn't                                                               
SENATOR  COSTELLO  suggested  the  bill  should  anticipate  that                                                               
potential circumstance.                                                                                                         
MR.  WHITT  acknowledged  the  oversight  and  suggested  further                                                               
CHAIR  COGHILL  commented  that  a business  license  can  be  so                                                               
general that a certification may not be useful.                                                                                 
SENATOR COSTELLO observed that the  language on page 2, lines 28-                                                               
29, seems broad.                                                                                                                
MR. WHITT  responded that  the language  could be  tightened with                                                               
the chair's permission.                                                                                                         
2:04:20 PM                                                                                                                    
SENATOR WIELECHOWSKI  said the language  on page 4,  lines 10-14,                                                               
talks about fees that will be  collected but he assumes none will                                                               
be collected because the fiscal note is zero.                                                                                   
MR. WHITT said he would have  a revised fiscal note and an answer                                                               
to the question before the next hearing.                                                                                        
SENATOR WIELECHOWSKI  pointed out the conflict  in the admittedly                                                               
old  fiscal  note. It  shows  zero  costs  through 2023  but  the                                                               
narrative  says  the  cost   of  administering  the  registration                                                               
program will be determined after the regulations are drafted.                                                                   
He also  expressed interest in  what is being authorized  on page                                                               
2, lines 28-29.                                                                                                                 
2:06:26 PM                                                                                                                    
MR.  SHILLING said  it was  the  chair's intent  that the  random                                                               
testing   be   specific   to   delta-9-tetrahydrocannabinol.   He                                                               
acknowledged the benefit of tightening that language.                                                                           
SENATOR   WIELECHOWSKI  directed   attention   to  the   language                                                               
regarding isolation distance on page  3, lines 3-5, and asked the                                                               
intent on determining isolation distance.                                                                                       
MR. WHITT noted that the chair's  request in drafting this CS was                                                               
to  put  the  distances  in statute  instead  of  regulation.  He                                                               
deferred further explanation to Mr. Carter.                                                                                     
CHAIR COGHILL asked Mr. Carter to address the question.                                                                         
2:08:10 PM                                                                                                                    
ROB  CARTER, Division  of  Agriculture,  Plant Materials  Center,                                                               
Palmer,  Alaska, explained  that isolation  distances are  set to                                                               
maintain true type and quality for  any crop that is produced for                                                               
seed.  In  this  context  the   isolation  distance  is  to  keep                                                               
pollination  solely within  the  industrial hemp  crop to  ensure                                                               
that the  progeny or  seed that  is produced  stays below  the .3                                                               
percent THC threshold.                                                                                                          
SENATOR WIELECHOWSKI  asked what  would happen if  someone's home                                                               
marijuana crop fell inside the isolation zone.                                                                                  
MR.  CARTER said  it wouldn't  create a  problem and  it wouldn't                                                               
void  the isolation  distance  because the  crop  wouldn't be  to                                                               
produce  seed  for further  production.  He  added that  globally                                                               
there is  greater concern that  hemp would  contaminate marijuana                                                               
pollination that the reverse.                                                                                                   
SENATOR MEYER asked  what happens to a crop that  tests above the                                                               
.3 percent THC threshold.                                                                                                       
MR. CARTER explained that the division  issues a stop order if it                                                               
identifies any  crop that  doesn't meet  either state  or federal                                                               
regulations, and the product must  be destroyed or made inviable.                                                               
That is currently  done at the discretion of the  director or the                                                               
commissioner.  For  industrial hemp  it  could  be as  simple  as                                                               
mowing the crop as long as it is made unmarketable and unusable.                                                                
CHAIR COGHILL  asked Mr. Shilling  to review the  provisions that                                                               
address an industrial  hemp crop that tests above  the .3 percent                                                               
THC threshold.                                                                                                                  
MR. SHILLING  directed attention to page  4, lines 25 and  29. An                                                               
individual who  has industrial  hemp that  is between  .3 percent                                                               
and 1  percent THC can  recondition the crop,  but a crop  with a                                                               
THC level above 1 percent must  be destroyed. In any event, it is                                                               
a violation  to grow  a crop  of industrial hemp  that has  a THC                                                               
level above the .3 percent threshold.                                                                                           
CHAIR COGHILL asked Mr. Whitt  to discuss the significance of the                                                               
MR. WHITT explained  that the USDA considers 0.3  percent THC the                                                               
point  at  which there  is  no  measurable  effect on  the  body.                                                               
Scientists consider 1.0  percent THC the point  below which there                                                               
is no chemical effect on the human body.                                                                                        
CHAIR COGHILL  asked if  1 percent is  a recognized  threshold in                                                               
federal law.                                                                                                                    
MR. WHITT  offered to  share the  studies the  federal government                                                               
has conducted.                                                                                                                  
2:15:27 PM                                                                                                                    
SENATOR  MEYER expressed  concern  about  effectively and  safely                                                               
destroying a crop that has a THC level above 1 percent.                                                                         
CHAIR COGHILL observed that it  raises a question about the black                                                               
market value.                                                                                                                   
CHAIR COSTELLO referenced  page 4, lines 21-22, and  asked if the                                                               
department plans to sell hemp seeds.                                                                                            
CHAIR COGHILL asked Mr. Carter if that language has value.                                                                      
MR. CARTER replied the language  does have value. He said because                                                               
it  can   be  very   difficult  to   import  hemp   seeds,  state                                                               
agricultural departments  have assumed a role  in the importation                                                               
to get the material across state lines for pilot programs.                                                                      
SENATOR COSTELLO voiced reservations  about giving the department                                                               
the ability to  sell industrial hemp seed  and questioned whether                                                               
the department would inspect the seed it sells.                                                                                 
MR. CARTER replied  it is well known in  the scientific community                                                               
that the  THC value in hemp  seed is close to  absolute zero. The                                                               
Division  of  Agriculture  Plant Materials  Center  already  does                                                               
certification  and  testing as  it  is  the only  internationally                                                               
certified seed laboratory in Alaska.  One of their missions is to                                                               
support  and promote  agricultural  industries in  the state.  In                                                               
conjunction with the USDA and  the University of Alaska Fairbanks                                                               
they  make  and  maintain  foundation  level  seed  for  Alaska's                                                               
agricultural  industry.  Every year  they  have  a seed  sale  of                                                               
native plants,  grasses and  grains for forage  and feed  that is                                                               
sold  around   the  state   for  agricultural   and  revegetation                                                               
2:20:29 PM                                                                                                                    
CHAIR COGHILL opened public testimony on SB 6.                                                                                  
2:20:41 PM                                                                                                                    
RONDA MARCY,  CEO/Owner, Alaska Hemp Industries,  Mat-Su, Alaska,                                                               
testified  in  support of  SB  6.  She reviewed  her  educational                                                               
accomplishments  and   certifications  and  explained   that  her                                                               
company  is  trying  to  establish   an  industry  to  make  hemp                                                               
insulation.  She is  also interested  in turning  industrial hemp                                                               
seed into fish  food as a way of helping  Alaska fisheries become                                                               
stronger  and healthier.  She expressed  disappointment that  the                                                               
bill  this year  establishes a  five-year pilot  program when  10                                                               
years could work  just as well. She emphasized  that Mr. Carter's                                                               
statement  that hemp  growers won't  be  worried about  marijuana                                                               
that is grown  nearby is not true. She  maintained that marijuana                                                               
would affect the THC content in a  hemp crop and that there is no                                                               
scientific distinction between a hemp  seed and a marijuana seed.                                                               
It is  noteworthy that  the green  part of the  hemp plant  has a                                                               
higher nutritional content than alfalfa  and the seeds are packed                                                               
with omega fatty acids.                                                                                                         
2:25:06 PM                                                                                                                    
BRYAN ZAK,  representing himself,  Homer, Alaska, stated  that he                                                               
supports SB  6, but his preference  is to do away  with the pilot                                                               
program,  separate  it  entirely   from  marijuana  and  identify                                                               
industrial hemp  as an agricultural product.  A robust industrial                                                               
hemp industry could help the economy of Alaska.                                                                                 
2:27:04 PM                                                                                                                    
CATHERINE ULMER,  representing herself, Homer,  Alaska, testified                                                               
in support  of SB 6  but stated  her preference for  the original                                                               
bill.  She  emphasized  that  Alaska  needs  an  income-producing                                                               
agricultural product  like industrial hemp.  It could be  used in                                                               
sustainable building projects and to manufacture rope.                                                                          
2:28:09 PM                                                                                                                    
AARON RALPH,  representing himself, Anchorage,  Alaska, testified                                                               
in support  of SB  6. Referring to  earlier testimony,  he opined                                                               
that it  would be more  likely for  hemp to cross  pollinate with                                                               
marijuana  than  the  other  way   around.  He  also  listed  the                                                               
analgesic and medical benefits of hemp. It is non-psychoactive.                                                                 
2:30:12 PM                                                                                                                    
LARRY DEVILBISS, representing  himself, Palmer, Alaska, testified                                                               
in support  of SB  6. He  stated that  he is  not an  advocate of                                                               
marijuana, but  he does  support industrial  hemp. Speaking  as a                                                               
farmer, he opined that hemp will  grow in Alaska but not for seed                                                               
production so the question about  cross pollination should not be                                                               
an issue.  He predicted  that hemp would  be grown  primarily for                                                               
feedstock  for  cattle.  It  shouldn't  be  much  different  than                                                               
growing Timothy grass or Bromegrass.                                                                                            
2:32:48 PM                                                                                                                    
SENATOR WIELECHOWSKI  asked what the  startup costs would  be for                                                               
an industrial hemp farm because that  could be a deterrent if the                                                               
program ends after five years.                                                                                                  
MR.  DEVILBISS replied  it wouldn't  be much  for someone  who is                                                               
already farming.  He added that  he was disappointed to  see that                                                               
this is  just a  pilot program, but  the Division  of Agriculture                                                               
could subcontract to private farmers.                                                                                           
CHAIR COGHILL  said the idea for  the pilot project was  based on                                                               
federal rules, but not necessarily the timeline.                                                                                
2:34:57 PM                                                                                                                    
SUZI TOWSLEY  representing herself, Seward, Alaska,  testified in                                                               
support of  SB 6  in its  original form.  Speaking as  a business                                                               
person and  entrepreneur, she encouraged the  legislature to make                                                               
it  as simple  as possible  to legally  grow hemp.  She expressed                                                               
concern that  the five-year sunset  on the program  makes startup                                                               
costs  prohibitive.   She  also   highlighted  the   benefits  of                                                               
Cannabidiol (CBD) oil.                                                                                                          
CHAIR  COGHILL  explained  that  the bill  is  in  the  Judiciary                                                               
Committee   to   look   at  the   federal   law   and   establish                                                               
accountability measures.  He asked  the sponsor  to speak  to the                                                               
timeline of the pilot program.                                                                                                  
2:37:18 PM                                                                                                                    
SENATOR SHELLY  HUGHES, Alaska State  Legislature, sponsor  of SB
6, stated that  she would like it  to be as easy  as possible for                                                               
people to  grow industrial hemp.  As an agricultural crop  it has                                                               
potential to become livestock feed.  Increasing the size of herds                                                               
provides  an opportunity  increase  the  amount of  Alaskan-grown                                                               
beef and pork in local grocery  stores. She noted that Mr. Carter                                                               
is getting  more calls each  week from farmers who  are seriously                                                               
interested in growing hemp.                                                                                                     
CHAIR COGHILL asked about the timeline for the pilot program.                                                                   
SENATOR  HUGHES  voiced support  for  an  extension and  deferred                                                               
further comment to Rob Carter.                                                                                                  
CHAIR COGHILL asked if the five-year timeline could be modified.                                                                
MR. CARTER  answered yes;  no other states  have a  sunset clause                                                               
for their  pilot programs and the  2014 farm bill did  not have a                                                               
designated timeline.                                                                                                            
2:41:07 PM                                                                                                                    
CHAIR  COGHILL asked  at  what level  a  marijuana plant  becomes                                                               
valuable for its THC effect.                                                                                                    
MR. CARTER advised  that strains of cannabis sativa  can have THC                                                               
levels that range from 15 percent to arguably 30 percent.                                                                       
CHAIR  COGHILL offered  his understanding  that hemp  hasn't been                                                               
grown in Alaska before.                                                                                                         
MR.  CARTER  clarified  that  the  university  had  a  successful                                                               
program  many   years  ago  but   there  has  been   no  research                                                               
identifying the  new cultivars that  have been  specifically bred                                                               
for industrial  hemp worldwide. From  an agronomic  standpoint it                                                               
is  unclear how  the photo  period,  moisture, and  poor soil  in                                                               
Alaska will affect the THC  value or survivability. In any event,                                                               
industrial hemp is  cultivated and bred to keep the  THC value at                                                               
.3 percent  or lower.  The bill clearly  outlines the  process if                                                               
the THC happens to rise above  that level. He concluded, "I would                                                               
think that if  anyone was trying to game the  system and tried to                                                               
pass  off   industrial  hemp  with   a  2  percent  THC   in  the                                                               
recreational  market,  they'd probably  get  laughed  out of  the                                                               
2:43:49 PM                                                                                                                    
SENATOR  KELLY asked  if hemp  has  a higher  calorie count  than                                                               
grass or hay.                                                                                                                   
MR. CARTER said the early  research indicates that the feed value                                                               
of  industrial   hemp  significantly  surpasses   Timothy  grass,                                                               
Bromegrass, and native plants.                                                                                                  
SENATOR  WIELECHOWSKI asked  if  any  other Alaskan  agricultural                                                               
products have  similar requirements  for the farmer:  to register                                                               
the  product,  have a  GPS  location  on  the farm,  have  random                                                               
testing, pay for the testing, pay  a fee to sell the product, and                                                               
list the buyer.                                                                                                                 
MR. CARTER answered no; seeds  that are certified to meet federal                                                               
labeling requirements  have stricter  guidelines but not  to that                                                               
SENATOR  WIELECHOWSKI  asked if  he  knows  whether the  founding                                                               
fathers had similar requirements when they grew and sold hemp.                                                                  
MR. CARTER said he'd be very surprised if they did.                                                                             
2:46:43 PM                                                                                                                    
CHAIR  COGHILL  restated  that  the bill  was  referred  to  this                                                               
committee because  of the longstanding relationship  between hemp                                                               
and marijuana, which is illegal under federal law.                                                                              
He  stated that  he  would hold  SB 6  in  committee with  public                                                               
testimony open.                                                                                                                 

Document Name Date/Time Subjects
HB 104 - Supporting Document - Letter Anchorage Bar Association.pdf SJUD 3/13/2017 1:30:00 PM
HB 104
SB 6 - Sectional Analysis (ver. I).pdf SJUD 3/13/2017 1:30:00 PM
SB 6
SB 6 - Explanation of Changes (ver. I).pdf SJUD 3/13/2017 1:30:00 PM
SB 6
CS for SB 6 - Version I.pdf SJUD 3/13/2017 1:30:00 PM
SB 6