Public Hearing on Ballot Measure 2: An Act to Tax and Regulate the Production, Sale, and Use of Marijuana Mead Treadwell Lieutenant Governor

Agenda for Public Hearing Lt. Governor Treadwell presents sectional analysis and cost estimate of the bill Pro side presents: 10 minutes Con side presents: 10 minutes Public testimony: 3 minutes per person

Summary of the Proposed Bill Would tax and regulate the production, sale, and use of marijuana in Alaska; Would make use of marijuana legal for persons 21 or older, allowing them to possess, use, display, purchase, or transport up to one ounce of marijuana; Would imposes various restrictions on personal cultivation, public use, and operation of marijuana-related facilities; Would allow legislature to create a Marijuana Control Board in the Dept. of Commerce, Community, and Economic Development; Imposes an excise tax on the sale or transfer of marijuana, and provides for the enforcement and administration of that tax.

Sectional Analysis of the Ballot Initiative Section 1: Adds a new chapter, AS 17.38, Regulation of Marijuana, to the Alaska Statutes The Statute would provide that the production and sale of marijuana should be regulated and taxed such that businesses could sell marijuana and that such sale should be conducted in a manner that protects consumers and promotes public health and safety. The Statute would limit the use, sale, growth, and transport of marijuana to individuals who are 21 years of age or older, and imposed penalties for public consumption. The Statute would allow for the creation of a Marijuana Control Board while still allowing for local government to make decisions regarding its use and regulation.

Sectional Analysis of the Ballot Initiative Section 2: Adds a new chapter, AS 43.61, Excise Tax on Marijuana, to the Alaska Statutes This Statute would impose a $50 per ounce excise tax on the sale or transfer of marijuana from a marijuana cultivation facility (producer) to a retail marijuana store (distributor) or marijuana product manufacturing facility. The producer would be responsible for paying the tax. Monthly tax statements would be required by the Department of Revenue from each marijuana cultivation facility. If these taxes were not paid, the facility would be subject to civil penalties under AS 43.05.220

Duration of a citizen initiative if a majority of votes favor adoption The lieutenant governor shall certify the election returns. An initiated law becomes effective ninety days after certification. It is not subject to veto, and may not be repealed by the legislature within two years of its effective date. (see Alaska Const. art. XI, sec 6) Although the legislature may amend an initiative at any time after it is enacted, any amendments made during the first two years may not operate to effectively repeal the initiative by amendment, or vitiate the intent. (see Warren v. Boucher, 543 P.2d 731,737 [Alaska 1975]; and Warren v. Thomas, 568 P.2d 400 [Alaska 1977])

Cost Estimate of the Bill: Department of Revenue Personnel: The Department of Revenue estimates that it would need to create at least three new positions to oversee the new excise tax. Estimated Reoccurring Annual Costs: $300,000 Contractual Services: The Department of Revenue estimates that it would need a one-time expense of $500,000 for configurations to their Tax Revenue Management Systems. Estimated One-Time Cost Range: $350,000-$500,000 Total Cost Estimates, First Year $650,000-$800,000

Total Cost Estimates, First Year Cost Estimate of the Bill: Department of Commerce, Community, and Economic Development If the initiative passes, the responsibility for controlling marijuana will lie with the ABC Board until or unless a marijuana control board is established by the legislature within DCCED. As was done with Colorado, the department recommends the creation of a Task Force to identify legal, policy, and procedural issues that need to be resolved. From creating a database to purchasing vehicles, the estimated cost to create a Task Force is $1,563,960 for the first year and $1,413,140 for the second year. Total Cost Estimates, First Year $1,563,960

Cost Estimate of the Bill: Other Departments Department of Health & Social Service Estimate: $0 - $2,987,000 Department of Public Safety Estimate: $1,434,700 Department of Environmental Conservation Estimate: $0 - $136,900 University of Alaska Estimate: Indeterminate

Agenda for Public Hearing Lt. Governor Treadwell presents sectional analysis and cost estimate of the bill Pro side presents: 10 minutes Con side presents: 10 minutes Public testimony: 3 minutes per person