Legislature(2017 - 2018)BUTROVICH 205

02/15/2017 03:30 PM RESOURCES

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Audio Topic
03:30:42 PM Start
03:31:21 PM SB6
04:00:24 PM Overview: State Legal Efforts Related to the Alaska National Interest Lands Conservation Act
04:55:36 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSSB 6(RES) Out of Committee
-- Public Testimony --
+ Overview: State Legal Efforts Related to the TELECONFERENCED
Alaska National Interest Lands Conservation Act
Department of Law
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
               SB   6-INDUSTRIAL HEMP PRODUCTION                                                                            
3:31:21 PM                                                                                                                    
CHAIR  GIESSEL  announced  consideration  of  SB  6,  sponsor  by                                                               
Senator  Hughes. [CSSB  6, labeled  30-LS0173\U,  was before  the                                                               
committee.] Public testimony was open.                                                                                          
JONATHAN  SCHUMACHER,  representing himself,  Anchorage,  Alaska,                                                               
said  the industrial  hemp industry  would bring  in much  needed                                                               
revenue for the state.                                                                                                          
EMBER HAYNES,  Denali Hemp Company, Talkeetna,  Alaska, supported                                                               
SB 6. She and her husband  own a business in Talkeetna that grows                                                               
and harvests Alaska  plants to create herbal  sundries. She looks                                                               
forward to  the day  she can  incorporate Alaska-grown  hemp seed                                                               
oil  into her  Alaskan Devil's  Club  Balm. Her  family and  many                                                               
others across Alaska are currently  adding protein to their diets                                                               
with  hemp seed,  powder, and  meal.  She personally  supplements                                                               
their  animals' feed  with high-protein,  non-viable hemp  seeds,                                                               
and right now she  has a new litter of pigs  nestled in some Dove                                                               
Tree Hemp Herd Bedding, a product  she uses on a daily basis that                                                               
she wished could be all-Alaskan grown.                                                                                          
She  asked  if  there  might  be  further  clarification  on  the                                                               
language in Section  1 (l) and (n) where it  asks a registrant to                                                               
keep  three years  of records,  and  to add  that the  department                                                               
shall provide at  least three days' notice  before inspecting the                                                               
records. She  said these could  be working  days and that  is why                                                               
further time  should be  allowed. Other than  that, she  hopes to                                                               
see this industry flourish in Alaska and be exported worldwide.                                                                 
3:36:33 PM                                                                                                                    
DON  HART,  Professional  Paralegal  Services,  Wasilla,  Alaska,                                                               
supported SB 6 and said  it's extremely important for cultivation                                                               
of hemp to  be legalized in Alaska, because Canada  has made such                                                               
a success after legalizing it there;  they ship all of their hemp                                                               
products into the United States.                                                                                                
He said  that hemp grows  very well  in the northern  climate and                                                               
Alaska has a lot of land to grow  it on. Instead of saying it can                                                               
be raised as an affirmative  defense or using the definition only                                                               
in the criminal statutes, to  really benefit the farmers it would                                                               
be better  to remove  it entirely  from AS  17.38. The  reason is                                                               
that the definition of marijuana  includes all parts of the plant                                                               
of  genus  cannabis. If  it's  not  removed  it will  be  illegal                                                               
Secondly, AS  17.38.210 (a) allows  hemp growing in Alaska  to be                                                               
excluded by  initiative. Two Alaska  Supreme Court  cases, Carmen                                                               
v.  McKechnie and  Griswold  v.  the City  of  Homer, state  that                                                               
zoning  by   initiative  or  the  municipality   is  invalid  and                                                               
unconstitutional, because it creates a taking action.                                                                           
3:40:57 PM                                                                                                                    
RHONDA MARCY, Alaska Hemp  Industries, Wasilla, Alaska, supported                                                               
SB  6. She  said  she  has an  undergraduate  degree, a  Master's                                                               
degree, and along  the way she studied industrial  hemp at Oregon                                                               
State  University. She  supports the  industry in  Alaska and  to                                                               
that end  her business is trying  to help the people  who want to                                                               
have an industry  in Alaska to process and have  end products for                                                               
the hemp they are growing.                                                                                                      
She visited  a University  of Kentucky hemp  field two  years ago                                                               
and  found that  the nutritional  contents of  the green  part of                                                               
plant is higher than in alfalfa and  when the meat of the seed is                                                               
added it is  100 percent complete nutrition with Omegas  3, 6 and                                                               
9. One  of the reasons  hemp will be such  an asset to  Alaska is                                                               
that it  can be food  for fish/salmon fry. Currently,  last years                                                               
fry  are ground  up and  fed  back to  the current  years fry,  a                                                               
decreasing nutritional cycle. Hemp  is a perfect fish/salmon food                                                               
that  Alaskans could  grow,  and that  would  also contribute  to                                                               
having a stronger salmon industry in Alaska.                                                                                    
She  suggested  making a  tribute  to  Senator Johnny  Ellis  for                                                               
starting this issue last year.                                                                                                  
3:43:25 PM                                                                                                                    
CARRIE  HARRIS,  representing   herself,  Anchor  Point,  Alaska,                                                               
supported SB  6. She believes  industrial hemp should  be allowed                                                               
as well as  cannabis. "The benefits are amazing."  She feels that                                                               
in voting  to legalize cannabis  people set aside the  issues the                                                               
federal government has with it.                                                                                                 
3:44:10 PM                                                                                                                    
KAREN BERGER,  representing herself, Homer, Alaska,  supported SB
6.  She said  she  was also  testifying in  the  spirit of  Julie                                                               
Suzerini, another  hemp advocate. Thirty other  states favor this                                                               
type of  legislation and she would  like to see Alaska  as number                                                               
31.  Agriculture  is  a  big  part of  Homer's  economy  and  the                                                               
economic base of our state needs all the help it can get.                                                                       
3:45:08 PM                                                                                                                    
FRANCINE  BENNIS, representing  herself,  Trapper Creek,  Alaska,                                                               
supported SB  6. She also wanted  to thank Senator Ellis  for his                                                               
work on  this issue. She said  hemp is an amazing  substance that                                                               
can  be   used  for   many  things.   The  U.S.   Declaration  of                                                               
Independence  was   written  on  hemp  paper,   and  both  Thomas                                                               
Jefferson and George Washington  had hemp plantations. Alaska can                                                               
really use another viable industry,  and it will be well received                                                               
here.  It is  easy to  grow here;  Canada is  begging the  United                                                               
States to  develop an infrastructure  for growing  hemp products,                                                               
because they can barely keep  up with U.S. demand. Canada started                                                               
growing legally  in 1998 and by  2010 they had over  25,000 acres                                                               
in cultivation.  China is also  producing hemp, but is  buying it                                                               
from Canada, as  well.  Right now this country  is importing over                                                               
$1 billion worth of hemp  products from Canada including food and                                                               
3:48:07 PM                                                                                                                    
AARON RALPH,  representing himself, Anchorage,  Alaska, supported                                                               
SB  6. Hemp  has  over 50,000  uses.  It is  great  as a  dietary                                                               
supplement  and many  food products  can be  made out  of it.  It                                                               
produces a  higher amount of  cannabidiol, which is a  great tool                                                               
in treating most neurological disorders.                                                                                        
3:48:51 PM                                                                                                                    
LARRY DEVILBISS,  representing himself,  Palmer, Alaska,  said he                                                               
doesn't use  marijuana, but  supported SB  6. He  is a  farmer in                                                               
Palmer and  has been in many  places around the world  where hemp                                                               
is  grown.  It is  unfortunate  that  it  happens  to be  in  the                                                               
cannabis family. Hemp has a  lot of practical benefits that could                                                               
become an economic  driver in Alaska. He mentioned  that a Palmer                                                               
initiative banned  marijuana products but exempted  hemp, because                                                               
of  its  beneficial uses  and  none  of  the negatives  that  are                                                               
associated with other cannabis products.                                                                                        
3:50:28 PM                                                                                                                    
BRUCE   SCHULTE,   representing   himself,   Anchorage,   Alaska,                                                               
supported SB  6, but shared some  of the concerns over  the scope                                                               
of regulation and government involvement  as well as the fees. He                                                               
hoped the fees  could be kept to an absolute  minimum. He knew of                                                               
a lot  of large tracts of  land that could benefit  from the hemp                                                               
industry,  but  there are  also  smaller  land owners  who  could                                                               
benefit, and he  would hate to see them left  out because of high                                                               
fees.  He  observed  recent news  about  CBD-containing  products                                                               
around the state  and he hoped that a clear  distinction could be                                                               
made  between hemp-based  CBD products  and its  distance cousin,                                                               
marijuana products,  so it  wouldn't be  open to  challenge later                                                               
3:52:56 PM                                                                                                                    
COURTNEY MORAN,  Earth Law, LLC,  Portland, Oregon,  supported SB
6. She is  an industrial hemp attorney with her  firm, Earth Law,                                                               
LLC, and it has been her  honor and pleasure to work with Senator                                                               
Hughes  and  Buddy Whitt  and  with  all  the comments  from  the                                                               
Division   of  Agriculture   and  this   committee  in   drafting                                                               
legislation that  does conform with federal  law. SB 6 sets  up a                                                               
robust regulatory  framework that  will provide for  a successful                                                               
and  sustainable   industrial  hemp   program  for   farmers  and                                                               
manufacturers throughout  Alaska. She  thanked the  committee for                                                               
their  thoughtful questions  and  discussion on  SB 6  clarifying                                                               
that  industrial  hemp  is an  agricultural  product  subject  to                                                               
regulation by the Division of Agriculture.                                                                                      
MS. MORAN  noted that industrial  hemp products,  themselves, are                                                               
legal  and always  have  been,  but its  cultivation  has been  a                                                               
federal issue for  the past 80 years. The  legality of industrial                                                               
hemp products  was clarified  by the Ninth  Circuit Court  in the                                                               
2004  Hemp  Industries  Association  (HIA)  v.  Drug  Enforcement                                                               
Agency (DEA)  case. Mr. Carter  with the Division  of Agriculture                                                               
mentioned  during  this  committee's   March  13th  hearing  that                                                               
Section  763  of  the Consolidated  Appropriations  Act  of  2016                                                               
provides that:                                                                                                                  
     No funds may be used  by any federal agency to prohibit                                                                    
     the  transportation,   processing,  sale,  or   use  of                                                                    
     industrial  hemp   that  is  grown  or   cultivated  in                                                                    
     accordance with  Section 7606 of the  Agricultural Act,                                                                    
     in or  outside the  state in  which industrial  hemp is                                                                    
     grown or cultivated.                                                                                                       
This language provides clarity for  industrial hemp product sales                                                               
across state lines. Also, as  discussed in the past two hearings,                                                               
Section 7606  of the  U.S. Agriculture Act  of 2014  (the Federal                                                               
Farm  Bill)  provides  a  directive from  Congress  by  not  only                                                               
defining   industrial   hemp   notwithstanding   the   Controlled                                                               
Substances Act and  giving authority for the  State Department of                                                               
Agriculture and  institutions of higher education  in states that                                                               
have already  legalized industrial  hemp to research  the growth,                                                               
cultivation,  and marketing  of it.  This measure  provides clear                                                               
federal authority for the implementation of a state program.                                                                    
She  recalled  comments about  why  Alaska  is following  federal                                                               
guidance  for  industrial hemp  if  the  state is  not  following                                                               
federal guidance for marijuana, and  the rationale was that clear                                                               
legal  authority is  lacking federally  for marijuana  except for                                                               
the  Department  of Justice's  Cole  Memo  Guidance of  2013.  In                                                               
contrast, there  is clear federal  statutory authority, and  SB 6                                                               
will  create   the  state  legal   authority  for   Alaska.  That                                                               
institutions of  higher education and universities  can engage in                                                               
industrial  hemp  research  is  also provided  in  Section  7606.                                                               
Approximately 20  universities throughout the U.S.  are currently                                                               
conducting industrial  hemp research and  SB 6 will  provide that                                                               
authority for Alaska institutions of higher education.                                                                          
Another important  provision of  SB 6 provides  that food  is not                                                               
adulterated  solely because  it contains  industrial hemp.  Other                                                               
states, such as Colorado, have had  this issue, because it is not                                                               
clarified,  and SB  6  will  take care  of  this  right away  for                                                               
farmers  and  manufacturers at  the  beginning  of the  program's                                                               
implementation. She  closed thanking  them for their  support and                                                               
encouragement  for agricultural  industrial  hemp development  in                                                               
3:56:09 PM                                                                                                                    
CHAIR GIESSEL,  finding no one  else to  testify on SB  6, closed                                                               
public  testimony.  She said  the  committee  had updated  fiscal                                                               
notes  and asked  Senator Von  Imhof, the  member who  is on  the                                                               
Senate Finance Committee, if she had any comments on them.                                                                      
SENATOR VON IMHOF reviewed the four fiscal notes as follows:                                                                    
     1.  The  DNR  provides  a   zero  value.  The  cost  of                                                                    
     administering   the   registration  program   will   be                                                                    
     determined after  regulations are drafted.  Those costs                                                                    
     will  be recovered  by approximately  25 farms  and the                                                                    
     department anticipates  to register  that in  the first                                                                    
     year.  Additionally, the  department  anticipates a  10                                                                    
     percent  growth  of   interest  from  the  agricultural                                                                    
     community each year after.                                                                                                 
     2. The Department of Law:  does not anticipate a fiscal                                                                    
     impact at this time. Zero value.                                                                                           
     3.  The Department  of Public  Safety: passage  of this                                                                    
     legislation is not expected to  result in a significant                                                                    
     increase  in   the  crime  labs   controlled  substance                                                                    
     analysis workload.  Therefore, no fiscal impact  to the                                                                    
     crime lab is anticipated. Zero fiscal note.                                                                                
     4.  The Department  of Public  Safety: passage  of this                                                                    
     legislation is  not expected to  have an impact  on the                                                                    
     enforcement  efforts  of  the  Alaska  State  Troopers.                                                                    
     Therefore, a zero fiscal note is being submitted.                                                                          
CHAIR GIESSEL  recognized Division  of Agriculture  personnel who                                                               
were ready  to answer  questions. She  invited Senator  Hughes to                                                               
make closing remarks.                                                                                                           
SENATOR HUGHES  thanked the  committee for  hearing the  bill and                                                               
everyone who  testified. She thanked the  Division of Agriculture                                                               
for their  work with  them. She also  recognized Bruce  Bush from                                                               
3:58:20 PM                                                                                                                    
SENATOR  COGHILL  moved  to  report   CSSB  6(RES),  labeled  30-                                                               
LS0173\U,  from  committee  with individual  recommendations  and                                                               
attached fiscal note(s).  There were no objections and  it was so                                                               

Document Name Date/Time Subjects
Agenda-2-15-17 330pm.pdf SRES 2/15/2017 3:30:00 PM
Federal Issues as of January 23 2017.pdf SRES 2/15/2017 3:30:00 PM
FederalLawLitigationReport2017 012317.pdf SRES 2/15/2017 3:30:00 PM
SB 6-Support-Jack Bennett.pdf SRES 2/15/2017 3:30:00 PM
SB 6
SB 6-Updated Fiscal Note-DOL-CGL-2-15-17.pdf SRES 2/15/2017 3:30:00 PM
SB 6
SB 6-Fiscal Note-DNR-AG-NLPMC-2-15-17.pdf SRES 2/15/2017 3:30:00 PM
SB 6
SB 6-Support-Jeremiah Emmerson.pdf SRES 2/15/2017 3:30:00 PM
SB 6
SB 6-Support-Connor Scher.pdf SRES 2/15/2017 3:30:00 PM
SB 6