Alaska Legislature: House Labor & Commerce, 4/24/26, 3:15pm

I call the House Labor and Commerce Committee to order. It is 3:20 on April 24th. Members present are Representatives Carrick, Freer, Fields, and on the phone Colombe. Thank you, Andrew Magnuson and Renzo Moises, for tech and teleconferencing support. There are 5 bills on the agenda: House Bill 324, House Bill 211, Senate Bill 185, House Bill 325, House Bill 386, um, and we will hold SB 164 for next week.

First up is House Bill 324 by Representative Moore. Thank you, Representative Moore and, and Dee Harbison, for being here. Um, do members have questions for the bill sponsor or her staff before we go to amendments?

Representative Nelson is present at 3:20 as well.

Okay, um, there are only 3 amendments. I introduced all of them. So, um, Representative Freer, do you want to object when I move the amendment and we can discuss them, please? I would be happy to object. Thank you.

Um, I'll move Amendment N.2. I object for the purposes of discussion. Thank you. Um, So this amendment reduces the maximum deposit from $1,000 to $500. This is because we see elderly people making very large deposits, sometimes multiple days in a row.

That's what scammers do. And in listening to the bill discussion from the previous hearing, I just wanted to make it a little harder for the scammers to fleece elderly people quickly. And I just wanted to turn to Representative Moore for her thoughts on the amendment. Thank you, Co-Chair Fields. For the record, Alexi Moore, District 28.

I am—. This is a friendly amendment. Also something that I think more guardrails to this bill for protecting our elderly and more Alaskans is definitely something that we are in support of. So thank you for bringing the amendment. Thank you.

Representative Nelson has a question. Yes. Thank you, Mr. Chair. Um, and if I may ask, uh, I understand your intent behind this, but where did you get the $500 from?

Have you modeled that off of other states or, um, I was actually thinking about it in the context of an elderly person and the amount of savings we frequently see depleted by these scams, which can range from the low tens of thousands of dollars to close to $100,000 and What I've heard from constituents who have been scammed is that the scammers will walk them through multiple visits, either to a cryptocurrency kiosk, or as you mentioned, there have been gift card scams. So the level of $500 is meant to prevent catastrophic losses, recognizing a lot of the time the family member stops the scam. The son or the daughter says, hey, Mom or Dad, oh my goodness, you went to the cryptocurrency kiosk 3 times. So it's really about limiting the losses, and that's what drove the number. Okay, but, uh, real quick, you— so you didn't source it anywhere?

You just said, "They'll just cut it in half," or did you grab this number specifically from like other states, or where? Um, $500 is meant to protect savings for an income-limited senior, so it's more about the raw amount of money versus half. Okay. The only reason I'm asking is just because I have constituents that also utilize this, not in a scamming section, just because they don't like the banking institution, they want to invest in this. So my only concern is limiting that, you know, $1,000 is mainly modeled after other states, if I'm correct, to the bill sponsor.

I do believe so, but I'll rely on Inti to answer that question. Yeah, for the record, Intimaya Harbison through the chair, Representative Nelson. That's correct. Those are the numbers that AARP has given a number of states as a starting point to begin having these discussions.

AARP, in our conversations with them, have not been concerned about lowering that number in other states, but by and large, as these policies have been adopted, Across the nation, that $1,000 has, um, has been that threshold. But as the bill sponsor stated, we do find this amendment friendly. We see, um, you know, with the larger transaction amount, elderly individuals, Alaskans of all ages, are able to be scammed out of more money, um, over, over a shorter period of time. And so this just extends that that amount of time. And just for note, you know, in the banking world, like an ATM, they do have transaction limits that are much lower than the $1,000 or $500 limit.

Okay. Further questions? Yes. And Representatives Sadler and Hall arrived at 3:24, and there were some conflicting bill hearings, so thanks to the members who got here after those. Um, do you maintain your objection, Representative Freer?

I do not. I remove my objection. Is there further objection to Amendment N.2? I'll object. Okay, Representative Nelson objects.

Will the secretary call the roll?

Representative Nelson? No. Representative Colon?

Oh my God, am I unmuted now? You, you are unmuted, uh, Representative Kalem. Oh, okay. I was trying to ask a question before we voted. Is there any way we could—.

I apologize. Um, maybe will the secretary void the roll and let's go to Representative Kalem for a question. Yeah, I just had a question. I don't know if it's for you or for the bill sponsor, but if we limit it to 500, is the number of transactions limited? So let's say the scammers know it's $500.

Can they— they say, well, just pull $500 out and then in an hour pull another $500, or next day pull $500. Does it really limit how much money can get out of there? Um, the intent, Representative Colon, was one transaction per day, and I think that's how the bill was constructed. And I guess I would go to the bill sponsor to make sure that I drafted the amendment correctly. Yeah.

For the record, Alexi Moore, District 28. Yes. It is structured for one transaction a day. Oh, okay. Okay, thank you.

I'm sorry. No problem. And Representative Sadler. Thank you, Mr. Chair.

I apologize for not being— so transaction, I just want to clarify, that means deposits or withdrawals as you would define those using this? Because one of my questions earlier on was, can you actually get money out of them? So this would include that? For the record, Alexi Moore, yes. To Mr. Sadler.

Representative Sadler. Sorry, excuse me. Thank you. All right, further— not seeing further questions, um, I'm guessing the objection is still maintained. So will the secretary call the roll?

Representative Nelson, no. Representative Colon, yes. Representative Sadler, pass. Representative Freer, yes. Representative Carrick?

Yes. Co-chair Fields? Yes. Co-chair Hall? Yes.

Representative Sadler? Yes.

6 Yeas, 1 nay. So by a vote of 6 to 1, N.2 is adopted. At this time, I will move Amendment N.3.

I object for the purposes of discussion. Um, thank you, and I actually am going to take a brief at ease.

Back on the record. Thank you for objecting for discussion. So Amendment N.3 lowers the monthly cap from $10,000 down to $5,000. Again, the purpose here is to protect an elder. We know that scammers take elders to cryptocurrency kiosks multiple times.

I think the concern that Senator Tilton identified in an op-ed is very large volumes of money. My interest is in making sure that elders are able to stay in their homes.

Losing $10,000 could put someone out of their home. $5,000, Hopefully family members and the elders would be able to account for those losses if there was a scam up to $5,000. So that is the purpose of the amendment, and I wanted to go to Representative Moore to discuss this amendment. Thank you, uh, Co-Chair Fields. And for the record, Alexi Moore, District 28.

Again, this is another friendly amendment just like the last one, anything to put guardrails on this bill for to protect our elderly and all of Alaskans that utilize these kiosks and especially the ones that are being brought there to be robbed and— and I'm losing my train of thought— to be Yes, taken advantage of. I'm like, sorry, my mind went blank there for a second. Um, and, you know, and I think, again, to clarify to Representative Sadler and to the whole committee, one transaction a day, whether that is a deposit or a, um, a, um, a transaction to withdraw, is, um, you know, another guardrail that we appreciate about this bill. And so I think that this will be something that will again just be another red flag for anybody that's going to these kiosks, that they cannot just be stripped of all of their savings and, um, and everything they've worked hard for over their lifetime. So we appreciate the amendment.

Okay, um, discussion? Representative Nelson. Yeah, thank you, Mr. Chair. Uh, again, I asked where you came up with the, uh, that cut in half a $10,000 lease, from my research, is what other states have done, uh, set their limits.

So where'd you come up with the $5,000 kind of limit in your mind? Um, thanks, Representative Nelson. You know, uh, about the cheapest apartment you could find, certainly in my community, would be about $1,000 per month. You know, utilities for an elderly person who maybe paid off their home and is looking at utilities of, you know, gas costs several hundred dollars per month, water, electric utilities, and sort of other bare minimum cost of living can reach close to $1,000 per month. So I was looking at this from the perspective of, for an income-limited elderly person who is scraping by on $1,000 a month, or has found an affordable apartment that maybe costs close to $1,000 a month if they're lucky, $5,000 is maybe they can stay in their home even if they get scammed up to $5,000.

$10,000, You're talking about almost a year potentially of bare minimum expenses. So, um, that's the way that I looked at it. And if I may ask again, um, why not limit it down to like $1,500 or $2,000? Why, why set it at the— that rate at $5,000? Yeah, well, I would defer to the bill sponsor on whether— if you want to make a conceptual amendment, if we should lower it further, and I would defer to her on that.

For the record, Alexi Moore. Um, I mean, I, I would, I would lower it absolutely to $1,500. Um, I think that again, I, I personally don't love these kiosks. I would rather see them not exist in our state in any way. We can continue putting guardrails on them for to protect our people is, is I'm, I'm 100% proponent of that.

So if that is a conceptual amendment you would like to make, I would consider it a friendly move. Mr. Chair? Uh, yeah, and then we'll go to Representative Colon. So I really like that, actually.

I like the idea of lowering it. Okay. Um, at the risk of complicating current discussion, I'd like to move conceptual amendment 1 to amendment N.3 to replace on page 1 of the amendment, line 3, where it says insert $5,000, insert $1,500. Okay, um, does anyone object to that? I'll object just for discussion.

Okay, Representative Nelson objects. Um, I think we have discussed this, and next in the queue is Representative Calombe. Representative Calombe, did you have discussion on this concept of lowering it, or did you have a question on the underlying amendment? Well, I guess my question would probably address both. Okay, currently, is there any limit right now in the kiosk Um, go ahead, uh, Mr.

Harbison. Uh, for the record, Intamayo Harbison. Um, through the chair, Representative Kellum, there's not currently any limit, uh, on the amount of money that can go into these kiosks, either a daily limit or a monthly limit. Okay, and to the, um, amendment to the amendment, I think from what I've gathered, you know, there are legitimate uses for these kiosks. I think $1,500 sounds pretty low.

I want to protect seniors and others that are getting scammed, but I, I can't remember, but do you have an idea of like what percentage of legitimate users these kiosks have before we bring it down to $1,500? Go ahead, Mr. Harbison. Yes, Representative Colombe, we do. Uh, yeah, through the chair, Representative Colombe, um, in the reporting that we've seen in other states through attorneys general's reports, um, The low end is about 7— or sorry, the high end is about 7% of the transactions that are occurring on these machines are legitimate. And that goes all the way down as low as 2% of the transactions are legitimate on some of these machines, as alleged by some of these attorney generals' reports.

So— In other words, Representative Klim, the testimony from the last hearing was that over 90% of the transactions on these kiosks are scams and fraud.

Okay. Go ahead, Representative Sadler. Thank you, Mr. Chair. I'm going to support this conceptual amendment, but I guess just to show deliberation, I think we all share a desire to limit the possible impact and detriment of scams on older people or younger people.

But it is important we do recognize that there may be somebody who wants to go buy Dogecoin at 3 AM and should have the opportunity to do so. We may be protecting that person as well. I would notice too that there's a secondary effect. There's a 3% transaction fee, or maybe there's more, I didn't read the numbers. So we would be limiting people's cost to do this.

But a question I do want to ask for whomever can answer the question, I don't understand this world. Is there anything to inhibit somebody from going to one cryptocurrency terminal, making a transaction, then going to the next one down the street, and then going to the other one across town? And how do we document— I'm gonna— this is a line of question I'm going to ask. How do you document that and make sure? Um, yeah, maybe the bill sponsor or her staff wants to address that.

Um, yeah, through the chair, Representative Sadler, for the record, NT Harbison again. Um, so this bill does put in place a number of requirements for collection of information on individuals who are using these kiosks. But it also— these kiosks are tracking different wallets systems. And so if an individual uses multiple different wallets, those all get connected together into just a single wallet use. And so it becomes incredibly unlikely or incredibly difficult to, you know, for example, instruct an individual to— the same individual to deposit money into multiple different accounts.

That will get flagged under this bill. So it does create protections to do that. I like that. Thank you. Okay.

And Tracy Reno with Division of Banking and Securities, as well as Dean Fleer with Division of Banking and Securities, are online if we want to go to them for questions too. Any more questions on the conceptual amendment? Representative Nelson. Just to piggyback off of that, so there's no real ban on— I can go from one company to the other to the other, so it doesn't necessarily matter what the monthly or daily limit is because you can go to so many other companies and it won't necessarily stop you from doing so. Am I understanding that correctly?

Through the chair, Representative Nelson, no, I don't, I don't believe so. So as I stated, this does put in place some tracking and monitoring restrictions and requirements for these machines. And so theoretically, they— there will be some enforcement, there's some enforcement mechanism, and maybe the department is a better better source of information for this, but as I understand it, they will be able to track and monitor across these systems those different wallets and the account usages by individuals. And so it would prevent an individual from kiosk hopping, I believe it's called. So can we ask the department then?

Sure. Tracy Reena or Dean Fleer, would you like to weigh in on how the transparency provisions of the bill work and empower you to prevent such kiosk hopping?

Through the Chair, Tracy Reno, Director of Division of Banking and Securities. Can you please repeat the question? The question is, with the transparency in this bill and to the cryptocurrency kiosk transactions, would the Department have the ability to see if, say, an elderly person is being shuttled from one kiosk to another to do multiple transactions within a day or within a longer period that would otherwise violate the provisions of the bill? Can you look across different cryptocurrency kiosks? [FOREIGN LANGUAGE] The Department would not be able to see that.

An individual money transmitter, if it's the same wallet, may be able to identify that, but there should be a customer ID. They should identify the person that is using the wallet.

The machine, the kiosk. And then if it's the same wallet that's having money sent to it with the same company, that would be identified. If they're using a different company, different kiosk, different customer ID, that may not be identified. Okay. But if it's the same company, same wallet, same customer, that should be triggered by that money transmitter using that kiosk.

Okay, does that answer your question? Uh, we'll see. Representative Nelson has a follow-up. Thank you. Uh, through the chair, uh, to Ms. Reno— at least Ms. Reno.

Yeah, Ms. Reno. Um, so, uh, what you're saying is there's some identification that's possible, but there's nothing that could be done to stop, um, say, someone from going another place to another one, you know, multiple, uh, um ATMs, or the— I'm blanking on the name— kiosks. Thank you. Hitting their— at— if this conceptual amendment or the $5,000, $10,000 limit per day, and then going off to the next one, there's nothing that we— in this bill or currently that can be done to stop that. Am I correct on that assessment?

Through the Terra Tracy Reno Division of Banking and Security. If a transaction is conducted on a kiosk with the same money transmitter, they should be able to identify the customer that's using that machine and where that money went. If that person decides to go to a different money transmitter's kiosk, they're not related, different companies, different licensees, then I do not believe there would be any way to track that. Go ahead, Representative Nelson. Thank you, Mr.

Chair, and through the Chair to Ms. Reno. So really having a cap per month almost or per day has some benefit, but overall, because of the multitude of different companies that are out there and the multitude of differing kiosks, it is kind of a step around from this. Am I correct in that assessment? Through the Terra Tracy Reno Division of Banking and Securities, I would not be able to speak specifically today. I think the companies would be better to speak to it, but I do believe that the guardrails in this bill will help reduce scams against Alaskans.

Uh, go ahead, Representative. We still are on the amendment to the amendment. Yeah, um, Mr. Kocher, I just I think that the answers we just got are even more reason to support the amendment to the amendment, because if people are able to kiosk cop, then you want to make sure that their transactions are limited at these different kiosks. So in my mind, it's even more reason to support a lower threshold. And I appreciate that there may be additional protections in place that I think once the bill— theoretically, if it passes and had solidified would also be in place.

But what I'm hearing is if you jump between companies' kiosks, which you'd have to know where they are, the scammer would have to know where to direct the person, and then you'd have to be trying to make those larger transactions. Um, it, it sounds like this bill is going to provide those safeguards. I think this amendment further provides those safeguards, and the testimony is kind of clarifying, I think, why we should support the amendment opponent to the amendment. I agree. Representative Nelson.

Thank you. And I understand where you're coming from, Representative Carrick. My only concern is that, um, we could put it down to a dollar, and with the multitude of different companies and the multitude of avenues, they can still get around that dollar monthly limit by just being able to go to multiple different companies. So that's my only concern, and that's why I wanted to figure out if there was anything in this bill or if there's anything currently in statute that is preventing that different, uh, kiosk hopping. Yeah, Representative Nelson, I think it introduces more friction, which ends up making it harder to perpetuate the scams.

Um, that's just my take on it. Representative Sadler. Thank you. And I'd like to ask Mr. Inti, um, what— how much cryptocurrency can you buy for $50? It's like limiting it.

I'm not sure if a candy bar is a dollar, you can only put in a quarter. Does that get you a fraction of a meme coin? Does it get you— are we tightening it down too much? Uh, yeah, through the chair, uh, to Representative Sadler, for the record, Andy Harbison, um, that depends entirely on which cryptocurrency you're purchasing. So some cryptocurrencies are as cheap as half a cent.

Maybe lower. Some cryptocurrencies are as expensive as hundreds of thousands of dollars in the case of Bitcoin. So it entirely depends on which cryptocurrency you are purchasing. But you can purchase fractions of cryptocurrency. So for example, like I could purchase a fraction of a Bitcoin with that $1,500.

It's not a full Bitcoin, but it's a 100,000th of a Bitcoin or whatever it is. Okay, thanks for that. All right, is there more— we do have a lot of bills today. Um, is there more discussion on the amendment? The amendment— do you maintain your objection, Representative Nelson?

I will remove my objection. Okay, so, um, without further objection, the $5,000 figure and amendment in.3 has been reduced to $1,500. Is, uh, is the objection maintained to the underlying amendment? I remove my objection on N.3. Okay.

Is there further objection to N.3? Not seeing any, Amendment N.3 does pass. Uh, at this time I will move Amendment N.4. As amended, right? As amended, yes.

Object. Okay, so Amendment N.4, um, would change the 48-hour period of holding money to a week, and the intention here is pretty simple. Sometimes when elders go to a cryptocurrency kiosk. They may not talk to their children or other family members for a couple of days. And by the time they've told their family members, you know, they get taken to the kiosk by a scammer on Monday, they don't talk to their family member by Thursday.

I was just thinking about the 48-hour current requirement in the bill, which is definitely a positive step, but see a lot of circumstances where even elders with family and community might not realize they've been scammed until 3 days, 4 days later. So this would just extend the 48 hours in the bill to 1 week, making it a little more likely that family members would be able to intervene and get the elder's money back. With that, I want to turn to the bill sponsor for any discussion on this amendment. Yeah, thank you, uh, Co-Chair Fields. For the record, Alexi Moore, District 28.

Um, we had tossed around a 5-day hold instead of a 48-hour hold, um, you know, for, uh, you know, 5 business days, and that would go over into a week. Week typically. So that was, um, definitely something that we had already talked about. So I'm thankful for the amendment, and it's definitely a friendly amendment. Again, more common sense regulation on this is the goal.

And, um, with 90% fraud on these things, anything we can do to make sure that we're protecting Alaskans, I am all for. And, um, I guess we'll—. Do you have anything else too? For the record, it's you, Harbison, through the chair. I, I don't really have anything else to add.

There was some concern raised, and when the other amendment was adopted, that the 48 hours left some ambiguity. If you made a deposit on Friday, does that 48 hours extend across the weekend? And, you know, a Monday rolls around, you're not able to recoup that transaction before it it's completed and goes off to whatever the wallet is. So a 7-day hold is definitely something that I think will help to alleviate some of those issues, as well as to get Alaskans their money back, hopefully. You know, that 7 days gives them a little grace period to, as you stated, Mr. Co-Chair, to inform their family members that they've done this thing.

And that maybe raises some red flags with their family members or with themselves. So yeah, and getting across the weekend was my specific intent with one week. Representative Sadler had a question. Thank you. I have to comment that my libertarian side is kind of rubbing up against my consumer protection side, so it's a balance.

But again, ask a similar question to what I asked on the previous amendment. When does the clock start? Is there— if you go to a kiosk and make your first attempt or make your transaction, you get a receipt like at a an ATM with a date/time down to the second, and you have to be able to verify that. Maybe it's a QR code. I'm not quite sure how this would be effected.

A week sounds good. I understand the reason for it, but how do you know the week's up or not up? Yeah, it would be a week from the time of the transaction. So 2 PM Monday to 2 PM Monday, the same thing. And those are documented on the, on the kiosks.

So should a regulatory body investigate, there should be a record. Go ahead, Representative. And just to follow up too, if we are changing this, have we authorized the Department of Commerce to write regulations implement these things, or if there's any—. Yeah, great, great question, Representative Sadler. Let's go to Tracy Reno.

Tracy Reno, um, does the bill need further clarification on giving you authority to do necessary regulations?

I'm sorry, can you please repeat the question? Yes, uh, so Miss Reno, Representative Sadler asked, does the underlying bill contain sufficient authority for you to write any and all regulations necessary to carry out this act?

Through the Chair, Tracy Reno, Division of Banking and Securities. Yes, we have authority to draft regulations. Great. Very good. All right.

Is the—. Hi, Chair. Oh, I apologize. Representative Kalem had a question. Yeah, I had a question.

I guess a clarification. So this is going from a 48-hour hold to a week, but this is only for the very first transaction of a person's account? Person does. This doesn't mean every transaction, only the initial one, correct? Um, I believe so, and I want to go to the bill sponsor to check that interpretation with the way the amendment interacts with the bill.

For the record, Alexi Moore. I'm going to give this one to NT because I'm not actually sure either.

Um, for the record, NT Harbison. For the first time, it seems like that would be reasonable because that happens sometimes with banking and whatever, but to have to wait every single time you want to do it for a whole week, I'm not sure about that. But it's on page 7, top of the page, or 2, sorry, page 2, top of the page.

Yeah, for the record, Inti Harbison, um, through the chair, I, I believe that it does only apply to that first transaction. When the, um, original amendment was adopted in the previous committee, it was only applying to that first transaction section. And so I believe this amendment also only applies to that section as well. Okay. Okay, so only the first time they use the kiosk?

I believe so, yes. A new kiosk user opening a new wallet. Yeah. Again, for the record, Alexi Moore. I think when you go to the kiosk and you open a new wallet, a new account, And that will be your first initial transaction, and it'll have the 7-day hold on it if we— if this is adopted.

Another thing to think about, when big checks come into your actual bank or something like that, there always is a hold, and typically you would get an email or some kind of transaction to inform you if, you know, that has been lifted, the hold on it, or something like that. And so that this works similarly to that. And with your wallet, when you are a registered user with Bitcoin or any of these kiosks, companies that use these kiosks, um, that would be the same— the same transaction would, would be filed away within your own personal account and wallet there. So just to clear that up for you, Mr. Representative Settler. Okay, is the objection maintained to N.4?

I remove my objection. Is there further objection to N.4? Not seeing any amendment. N.4 does pass. Um, I think that finishes amendments.

So is there further discussion on the bill at this time? Yes, Representative Sadler. Yeah, Mr. Chair, I want to say that I applaud the sponsor for offering legislation that tries to keep up with the endless and quickly evolving world of technology and the virtual currency. There's a lot of things happening in a lot of different fronts when it comes to technology and as it interplays with our finances and our social life.

So I just want to say I appreciate someone keeping a sharp eye out and bringing important legislation to the floor quickly. Thank you. Uh, Chair, I have a question. Go ahead, Representative. So I just had a question about the section says law enforcement act, so to investigative information.

I guess this is a question for the Department. How are they— are they only going to know that there's fraud if someone calls in, or are they like monitoring these kiosks and looking for trends, or is it just someone calling saying my grandparents got scammed? Go ahead, Ms. Reno.

Through the Chair, Tracy Reno, Division of Banking and Security. I believe you're talking about Section 0655185, law enforcement access to investigative information. Is that correct? That's correct. Through the Terri C. Reno Division of Banking Experience, my understanding is that the kiosk operator will have a dedicated communication line for law enforcement.

We already have a specific person to contact in the company for regulator contact, so that'll be I'm assuming similar to that. And then the statute also says that they may use the dedicated line to communicate with the kiosk operator in the event of a fraud report from a user. And the dedicated line must be regularly monitored. And then upon request from law enforcement agency or regulatory authority, a virtual currency kiosk operator must provide the agency with trace findings and grant the agency assistance with blockchain analysis. So, My understanding is that law enforcement will contact the operator or the licensee and get information.

That's great. I assume that if they don't comply with this, they would have to remove their kiosk.

Through the chair, Tracy Reno, Division of Banking and Securities. If we found out that a licensee was not cooperating with an investigation, we would take action which could include a surrendering— sorry, revoking a license with an option for a hearing, failure to renew their license if they chose not to cooperate. So we have some tools in our toolbox if an operator or a licensee is not cooperative with investigation. Okay, great. Thank you, Chair.

Uh, Representative Nelson had a question. Thank you, Mr. Chair. Uh, through the Chair to the bill sponsor, I, uh, Last time we heard this bill, we had an AARP representative. I don't know if they're on the line at all.

They are not on the line right now, Representative Nelson. Okay. Because I asked a question about percentage-wise, especially for elder abuse and elder scam, how much of scams are conducted through the Bitcoin ATM percentage-wise versus wire transfers or gift card— or gift card uses. Because I just know off of my own family that it was mainly through gift cards that my, um, grandma was scammed out of money. And so I was waiting to see, uh, what the percentage was because I was hoping to actually have an amendment on that.

Do you know, or did the AARP ever get back to you? Because you said she would for some numbers. Uh, through the chair, Representative Nelson, um, the, the AARP, um, member did not get back to our office with those numbers from the IC3 report. The FBI did just come out and update their IC3 data. What we are seeing, though, is, you know, in terms of overall fraud that occurs, cryptocurrency fraud is not, you know, the highest end of fraud that the FBI deals with.

And granted, that's a huge spectrum. In terms of your average everyday citizen, though, this is a very quickly rising issue, and they're seeing it impact people across the United States. With that being said, it is somewhere in, I believe, the 8% range of all fraud that is currently occurring, which again sounds small, but that is a huge spectrum.

Go ahead. And through the Chair, and what would be gift cards, wire transfers, percentage-wise of frauds? Yeah, those, again, through the Chair, for the record, NT Harbisson, those are significantly smaller. We are seeing, you know, down in this extremely low single-digit, 1%, less than 1% of total fraud. So cryptocurrency fraud is, as we are seeing in current data trends, trends, a larger percentage of fraud transactions that are pulling money, as I was saying earlier, from normal individual citizens in the United States like you and me, and not from like a corporate fraud or other types of fraud that the FBI deals with.

And for the record, Representative Alexi Moore, we can get something written up from AARP to distribute to the committee too, for with those numbers, if they have research and data on that. Yeah, that'd be perfect. And I'm mainly concerned just about these kiosks because I know Bitcoin scamming is a big thing, you know, especially when a free Bitcoin or input your credit card information. But how much of that is directly linked back to these kiosks? Yeah.

And then a quick change of point, if it's allowed. Sure. Mr. Chair, thank you. Um, the, the one big question I still had was about, um, the fraud warnings, uh, really directed back to, um, we talked about it last meeting about multiple, uh, interactions saying, hey, this is, uh, if you're being scammed, here's some numbers, or watch out for that.

Has that been traced to, uh, preventing or reducing the amount, or is it just something that someone like just quickly, you know, presses on the button and then it skips past it? What does that kind of look like? Uh, through the chair, Representative Nelson, yeah, uh, it is entirely possible that somebody just very quickly presses through the terms and conditions. We all, all do it when, you know, there's— whenever there's a new update. Um, I, I think what the point of those screens is, is, is the hope that an individual would stop for a second and see, you know, some sort of prompt that says a government agency will not request that you put money into this machine, right?

And, you know, if you're on the phone with somebody who's claiming to be a government agent, hopefully that triggers some sort of response where you question this, this transaction that you're about to make. Really, it is just a— it's an additional step that we're trying to put in place to safeguard individuals who are being scammed by these machines. And some of them do include these disclaimers, but some of them don't. And so this would mandate those disclaimers across all machines, not just on the screen, but on the outside of the machines as well. Okay, I think we should actually move on because there's a Senate companion from Senator Tilton.

I think the plan is let that one come on over here. And we will process it efficiently. If for some reason it gets delayed, we can change course and pass this bill. In the meantime, we'll have lots of time to do more research, but we do have more time, or we have more bills in front of us. Any closing comments, Representative?

Uh, no, I thank you so much for the committee for hearing the bill today and all the great questions. Um, appreciate you guys having us here today. Thanks. Thank you for introducing a great bill. Okay, next up on the agenda Senate Bill 185, Insurance Rebates Advertising, by the Senate Labor and Commerce Committee.

Thank you, Senator Bjorkman, for your patience. Um, would you mind just briefly summarizing what this bill does?

Thank you very much. For the record, my name is Senator Jesse Bjorkman, and I represent the northern and central portions of the Kenai Peninsula. Very briefly, Senate Bill 185, as we discussed in our last meeting, modernizes our insurance statutes, allowing for insurance companies to provide benefits to consumers to encourage innovation, mitigating risk, and reducing loss of their insured. Thank you, Senator Bjorkman. Um, so we did advertise an amendment deadline We have one amendment.

It is Amendment I.3, and at this time I will move that amendment so we can discuss it. I move Amendment I.3. Check. Thank you, Co-Chair Hall. So Amendment I.3 proposes a fix for insurance gaps in prosthetic devices that we heard about from a compelling young man named Justice who visited Juneau from Seward.

And I think for members who may not have had a chance to meet Justice, Justice right now has one prosthetic leg. It has a little foot on it, and it is not appropriate for running. And for those of you who didn't get a chance to meet Justice, Justice is very interested in being able to run. And he and his classmates have gone to the track, and he has tried to run on his existing prosthetic. It simply does not work for this prosthetic to run.

Justice had a very reasonable request for us that is embedded in House Bill 272 by Representative Josephson, and that is that insurance coverage, whether for Title 21 or Medicaid, allow an additional device sufficient for basic activities of daily living, including exercise.

I thought that was a reasonable request. So we worked with the Division of Insurance, Senator Bjorkman, Representative Josephson, on language that would ensure insurance cover one additional device. And I want to direct members' attention to the language on page 1 of the amendment, starting on line 19. The coverage must include one additional device necessary for any of the activities listed above and all device materials and components and instruction to the covered person on use of the devices. What are these activities?

Um, showering and bathing. There are some prosthetic devices, particularly that cover multiple joints, that may be electronic. There's currently an insurance gap for someone who has, say, a prosthetic leg that is electronic. Current insurance may not cover a non-electronic prosthetic such that that person could take a shower. I think that's a very reasonable thing that people with a prosthetic device be able to take a shower without shorting out their primary, their primary prosthetic device.

At the same time, there are children like Justice who have a below-the-knee amputation, and Justice simply wants a prosthetic that would allow him to run. I think we should give Justice a prosthetic that would allow him to run and play with his friends. That is what the amendment does. Heather Carpenter is available if members wish to ask Heather Carpenter. Senator Bjorkman, any discussion on this amendment?

Yeah, Chair, I have a question. Uh, sure, go ahead, Representative Glow. Uh, is there a fiscal note on this amendment? Um, like what's the insurance coverage? I want to bring, uh, Ms. Carpenter forward to address that because that was something that we talked about carefully in crafting this amendment.

For the record, Heather Carpenter, Director of the Division of Insurance.

Through the chair to Representative Colom, the current underlying Senate Bill 185 has a zero fiscal note. However, if this amendment is adopted and the bill passes passes out, the division will quickly update our fiscal note to reflect the fiscal note in HB 272, and that is because we would have to defray the cost for these added benefits that are above the state's EHB essential benefit— essential health benefits that are required. So the first year cost would be $225,600, and we estimated that increasing 5% each year for inflation. Yeah, and, and Miss Carpenter, if I recall, um, the federal government, um, in the past has been maybe not particularly aggressive on making us defray the cost. We have to guard against the eventuality that they might become more aggressive, as they have indicated they may.

But this is— the cost could come in lower if the federal government is, um, civilized in their approach to this policy, right? Chair Fields, it is correct that different federal administrations have taken different stances on the interpretation of the Affordable Care Act. I think it is fair to say a plain read of the Affordable Care Act says you— the states need to defray anything in the individual and small group market above the state's essential health benefit plan. We would certainly do our best to look at this, and the other thing to remember is that the insurance companies have to actually then go ahead and bill the division. And so some of them may choose to just absorb that cost and not actually ask the division to defray it.

And I guess the additional thing I would add for Representative Klim, when you look at this issue of, quote, additional prosthetic devices or second prosthetic devices, um, Ms. Carpenter gave us some good counsel on writing in such a way that we are not inadvertently creating an environment where we're buying more of the same prosthetic devices, which could add to the fiscal note. So constraint of this fiscal note really drove the crafting of the amendment. And I did want to give Senator Bjorkman the opportunity to talk about this amendment, the prosthetics policy, if he wished.

Thank you very much, Chair Fields. I appreciate the amendment very much.

As we look at this piece of policy, it's important. Justice is a constituent of mine. I've gotten to know him over the years in visiting Moose Pass, and their, their family is pretty important to that, that community. And living far away from a prosthetist, a person who makes prosthetics, it's difficult, and it would be beneficial if he had an additional prosthesis that he could use as a spare at times, or as adaptive nature in this amendment suggests, so that he can engage in all the activities that a young boy would want to do. So I appreciate the amendment and working with all of the, the stakeholders and policy experts in crafting it in a way that works.

Thank you. Thank you, Senator Bjorkman. Go ahead, Representative Sadler. Thank you, Mr. Chair.

On Amendment 1.3, we are now in day 93 of 120-day session, and as we know, this is kind of the time of year when the legislature begins to see one bill amended into another bill, kind of late in the process. This is allowed under legislative rules, and it does happen, but I just want the public to understand why this bill is taking up a different flavor. The sponsor may like it, that's true. But I just kind of want the public to know that this process has begun and it raises some issues. I do notice— well, actually, I had not seen this amendment before today.

I noticed that Amendment I.3 is dated 4/24/26, today. First time I'm seeing it. I'm not sure if this came in according to amendment deadline. I'll ask that question and look for a response. So if we do want to consider this amendment.

We'll vote on it probably, but then I'd appreciate if we had time to look at the entire bill. I don't know if I'm going to be able— if I want to support the bill as amended this substantially. So I just want not to rush things through quite yet. Um, thanks, Representative Sadler. It was, um, the amendment was submitted under the amendment deadline.

We did do a small tweak to one sentence per Director Carpenter's advice, um, just to make sure again we're constrained that fiscal note. Um, so there was an update to it. And you are correct, as you probably know, there's quite a backlog in House Finance. The committee is working as quickly as possible. When you look at the queue in House Finance, unfortunately, House Bill 272 simply does not have a path to becoming law this year if we do not find another vehicle for Justice's bill.

And, you know, having met with Justice and, you know, seen the video of him and his classmates running and them encouraging Justice to run. Yeah, I want to, I want to deliver for Justice this year, and that does require bundling bills. Is there further discussion?

The chair, this is, uh, yeah, yeah, just, uh, what, um, Ms. Carpenter was talking about. So because I'm, I'm running a bill also that mandates insurance, I just know that I And my assumption is on the federal level, they may, you know, these— all these state mandates, they may have us cover everything and not— they may not help on any of this. And so that's why I was asking about fiscal note. I don't deny that there's a need here. I just think we need to make sure we know what we're getting into.

$225,000, 5% Increase per year, I think it's just important information for us to know so we know what —yeah, I agree. And, you know, one thing that we didn't talk about— so, Justice and a young woman named, I think, Justine, actually, testified in House Health and Social Services. One of the things they talked about is having a prosthetic device that allows people to run or hike is really important for health, getting exercise. So, I think, yes, a prosthetic device is a cost. Having a prosthetic device that works does avoid chronic health costs.

So we— I would look at both sides of the equation. All right, well, thank you, Senator Bjorkman. Representative Hall, do you have a motion? I did not realize we had not yet adopted the amendment. Representative Hall, do you maintain your objection to I.3?

I remove my objection. Okay, Representative Sadler objects. Thank you, Mr. Chairman. I'm kind of concerned, as I say, about the late arrival of the amendment, but I want to make sure and get the record that you had— you said the amendment did come in by the amendment deadline. Yep.

But that after that deadline, you, with Ms. Carpenter's advice, did change that? That's correct. So is that the precedent that we're going to be allowed to change amendments even though they don't come in on the deadline? Yes, Representative Sadler. I think if you submit an amendment on an insurance issue, just to name one example, and the department has some clarifying language to make it work better, absolutely.

Absolutely. So is it contingent on a department input, or can I come up with my own amendment to my amendment after the deadline?

Well, I mean, the committees have done amendments to amendments, certainly. So? I think it's pretty normal, actually, when we get a correction to an amendment, that we correct them after the amendment deadline. That's always been the practice as far as I recall. Okay.

Glad to have that clarified. And I'm okay with that. Great. Thank you very much. Appreciate it.

Yeah. I will remove my objection to the amendment. Okay, um, is there further objection? Seeing none, Amendment I.3 does pass, bringing us back to the underlying bill.

I don't think we— um, oh, we need to open public testimony. Let's open public testimony. Does anyone in the room wish to testify on Senate Bill 185?

Um, okay. Does anyone online wish to testify on Senate Bill 185. It looks like there's a Christian Rataj from Fort Collins, Colorado. Mr. Rataj, are you calling to testify on Senate Bill 185?

Yes, sir. Can you hear? We can. Go ahead. Yes, sir.

Can you hear me? Go ahead and please limit your testimony in 2 minutes. Thank you.

Uh, thank you, Co-Chair Fields, honorable members of the committee. My name is Christian Rataj with the National Association Association of Mutual Insurance Companies. We're a property and casualty insurance trade association. We're pleased to support Senate Bill 185 because it's an exceptional example of effective regulator, policymaker, and insurance industry collaboration to promote consumer legislation designed to assist insurers and their policyholders in addressing risk prevention and mitigation activities. We'd like to specifically I want to thank Senator Bjorkman and the Division of Insurance for working with us for 2 years on this bill.

A lot of hard work has gone into making sure this legislation is reasonable and balanced and provides consumers with appropriate consumer protections while helping facilitate cooperation between the insurers and policyholders in risk management. Now, the bill has a number of consumer protections in place. The bill makes it clear that the consumer is The insurer is not charged for the risk mitigation good or service. The policyholder gets to keep the device or service whether or not they continue their professional relationship with the insurer. And the bill is practical in that it requires that the value of the risk mitigation good or service be reasonable in reference to the scope of the insurance policy and the premium paid for the policy.

Allows insurers the flexibility to be able to address evolving consumer risk mitigation needs and compete in the insurance marketplace. And finally, the bill allows broad discretion to the Director of Insurance to evaluate the regulation and the activities being done by the insurer and make sure that the underlying public policy objective of anti-rebidding law is well maintained. Availability and affordability of insurance insurance are understandably of paramount importance to consumers, insurers, and policyholders. So this bill is important. It's, it basically is essential to help bend down the curve on frequency and severity of losses, especially risk of losses that can be addressed and prevented or mitigated by technology.

It's good public policy, it's good for personal risk management, and it's business practice. So we ask you to vote yes on the bill because it's what consumers need, deserve, and will benefit from. I thank you very much for my time and will answer any questions. Okay, thank you, Mr. Rutaj. Uh, not seeing anyone else online on my closed public testimony, that brings us to conclusion of the bill.

Um, further questions for the bill sponsor? Uh, seeing none— I have a question. Oh, okay, go ahead, Representative Plumb. Yeah, thank you, Chair. So I'd asked— I brought something up before, and I just didn't know if maybe the bill sponsor had found out or the Division of Insurance had found out.

I had asked before whether the insurance companies couldn't put logos or marketing on the devices that they're giving away.

Looks like, uh— oh, go ahead, Senator Bjorkman. Through the Chair to Senator— I'm sorry, Representative The Division of Insurance did respond to the committee's questions in a letter. I believe the committee has that letter. We also have live and in person the Division of Insurance director herself sitting right next to me who will be happy to answer this question if you don't wish to see the letter or you would like to see the letter and hear from Director Carpenter. As well.

Well, since she's live, go ahead, Director Carpenter. For the record, Heather Carpenter, Director of the Division of Insurance. Uh, through the chair, Representative Colom, we did respond in writing, um, this week that there is no prohibition on, um, branding per se of any of these devices. Um, it's not something we asked the American Property and Casualty Insurance Association if any of their members do this in other states. They're not aware of it.

They did offer a nice little, hey, if this is put on, you know, a device that's telling you about a water issue in your home, you might remember who to call when you have a home claim. But short answer, no prohibition.

Okay, thank you. All right, nothing for discussion. Representative Hall, do you have a motion? Mr. Co-chair, I move to to report SB 185, Work Order 34-LS0721/i, out of committee as amended with individual recommendations and forthcoming fiscal notes.

Okay, uh, I don't see any objection, so Senate Bill 185 is reported from committee as amended, maybe with a forthcoming fiscal note. We'll take a brief at ease to transition the next bill.

Back on the record. Thank you, Representative Jimmy, for being here. So we are on, I think, the third hearing of House Bill 211, Insurance Prepaid Legal Plans.

Representative Jimmy, do you have any comments before we go to amendments? Thank you, Co-Chair Fields. Hello, for the record, Nellie Jimmy, Representative for House District 38. Just to give a recap on House Bill 211, prepaid legal plans makes it easier to access by removing insurance regulation requirements. So Yes.

All right, thank you. Um, not seeing questions, we can get through amendments at this time. I will move Amendment N.1. Object. Um, this amendment is pretty simple.

It allows an enrollee in a prepaid legal plan to withdraw from said plan and, uh, They would have to pay for the month that they're in, but not be required to pay for further months. And it would also not allow a penalty for disenrolling from a plan. And this amendment is based on essentially consumer protection best practices for subscription services. When you look at— I would say maybe more abusive practices in subscription services. Some of the common ones are people get locked into a plan of many, many months without realizing it, or there's a very large fee to withdrawal.

So I think the bill sponsor is correct. These prepaid legal plans are not insurance. This to me is kind of a baseline protection, certainly not a judgment of the firms that might offer these plans. I don't know that they do these things anyway. I think this would be a, a good basic consumer protection.

So I want to turn to the bill sponsor, number 1, and see if she's okay with this amendment. Uh, thank you, Co-Chair Fields. I see this as a friendly amendment and approve of it. Okay, thank you. Are there questions on this amendment?

Um, is the objection maintained? I remove my objection. Okay, so with that amendment, N.1 passes. Are there further amendments on House Bill 211? Um, not seeing any.

I believe that— oh, Representative Sadler, did you have an amendment? Yes, Mr. Chair. Um, I'm not going to offer that. Not on— okay.

At this time, just, just want to check. Thank you. Yeah, um, I believe that concludes our work on the bill. Um, Representative Hall. Mr. Co-chair, I move to report HB 211, work order 34-LS0848/n, out of committee as amended with individual recommendations and accompanying fiscal notes.

Um, okay, I don't see objection, so House Bill 211 is reported from Committee, as amended. At this time, we'll take a brief at ease and transition to the next bill.

Representative McCabe, thank you for being here to present House Bill 325. Thank you, Co-Chair Fields and Hall and members of the committee. I appreciate you hearing this bill. For the record, my name is Representative Kevin McCabe. I represent House District 30.

Today I'm presenting House Bill 325 relating to industrial hemp. Industrial hemp is a non-toxic, intoxicating agricultural crop used for fiber, grain, insulation, animal bedding, CBD, and other products. It is not marijuana. Federal law defines legal hemp as containing 0.3% or less Delta-9 THC. Since the 2018 Farm Bill, states have been responsible for hemp programs that comply with federal standards.

Alaska currently regulates hemp through the Department of Natural Resources, and while the current program is functional, it has become overly rigid, one-size-fits-all, duplicative requirements, expensive testing, and barriers that especially hurt small producers. HB 325 updates our industrial hemp statutes to to ensure our regulatory framework is clear, predictable, and aligned with federal law while protecting small agricultural producers from unnecessary red tape. This bill will benefit Alaska by making hemp more viable crop for our farmers, lowering costs, reducing risk, and helping grow a new agricultural industry in our state. The bill explicitly allows manufacturing and retail sale of industrial hemp and hemp products while keeping the export protections of the 0.3% THC legal limit and the 1% destruction threshold and requires federally compliant testing methods. It does change the standards in 5 ways.

First, for crops testing between 0.3% and 1% THC, HB 325 gives growers a realistic chance to remediate, recondition, or repurpose the crop instead of forcing automatic destruction. This saves farmers from losing entire crops over minor variances or testing variables. Second, it established— it establishes tiered grower categories including a micro grower category for small operations with scaled fees reporting, inspection, and testing. Third, it eliminates duplicative in-state transport permits when proper documentation is provided. Fourth, it accepts federally approved seed sources without requiring to duplicative state grow-out trials, and finally it removes the previous felony conviction disqualification for registration.

In sum, this bill makes it so, makes it so that instead of immediate penalties, there is an opportunity to correct problems and clear criteria before fines or revocation. Importantly, HB 325 does not expand THC limits. It does not weaken enforcement authority against illegal high THC activity, and it does not reduce oversight. It simply strengthens clarity and ensures hemp is regulated as a— agriculture, not as a controlled substance. By supporting Alaska farmers, reducing regulatory burdens, and promoting a practical hemp industry, HB 325 will help diversify our agricultural economy, create new economic opportunities in rural and urban areas alike, and treat industrial hemp as the legit— legitimate agricultural crop it is.

So at this time, Co-Chair Fields and Hall, my staff is here to read the sectional if you want, but I understand that you're time-crunched and we don't necessarily need to do that. Yeah, I'd actually like to go to the invited testimony because you have some invited testifiers here in person, right? I do. I have two here in person. I think there should be one on the phone, and I just— for our our straw discussion earlier this week.

This is a hemp straw, just saying. All right, is it the last one though? This is the last straw. I'm hip, I'm hip. Well, thank you for being here.

Please introduce yourself to the committee and provide your invited testimony. Perfect. Thank you, honorable chairs and distinguished members of the committee. Uh, thank you for hearing House Bill 3:25. My name is Sarah Williams.

In full disclosure, I do work for the State of Alaska Division of Public Assistance, but my opinions today are my own and I do not represent the state on this topic. So today I am speaking on behalf of Sacred Seeds Foundation, where I am the president and founder. So we are a Matsu-based nonprofit organization working to build Alaska's industrial hemp economy from cultivation to manufacturing and beyond. Sacred Seeds Foundation exists because Alaska does not need another extractive industry or another extractive idea that ships value out of state. Alaska needs industries that lets farmers grow locally, industries lets— oh, I'm sorry— processors add value locally, manufacturers build locally, and workers earn locally.

And that's exactly what HB 325 does. So HB 325 is not radical. It's a practical modernization bill that makes hemp regulation more workable by creating tiered grower categories, including the micro growers, allowing reduced or waived fees for smaller producers, using risk-based testing and inspection, and then allowing hemp that passes— that tests between that 0.3% and 1% THC to be reconditioned, remediated, or converted instead of just automatically being destroyed, because such destruction has a negative impact on the economy of our state. For an emerging agricultural and manufacturing sector, that kind of regulatory clarity is the difference between investment and paralysis. Sacred Seeds Foundation is not speaking about this as spectators.

The organization is advancing green build composites to be located in Huston, Alaska, at the switch where the railway will now advance to Point McKenzie. This will be Alaska's first industrial hemp manufacturing facility dedicated to sustainable building materials. This project is designed to transform raw industrial hemp into high-value composite building materials, vertically integrate local grower partnerships, and create local, high-skilled manufacturing and agricultural support jobs. This is what real economic development looks like. Not theory, but infrastructure.

The labor and commerce case for hemp is straightforward. So according to the National Hemp Association's economic impact summary, the average hemp fiber and grain processing facility employs 117 people. It supports about $6.1 million in annual payroll and generates more than $30 million in total economic output. USDA analysis found that one industrial hemp processing facility in Kentucky, combined with seed activity, could support 303 full-time equivalent jobs and $6.7 million in worker earnings, while 2 facilities could support 537 jobs and $12.1 million in worker earnings. So if paired with additional industrial activity, such as maybe a paper pulp processing, then the modeled impact rose to 771 jobs and $17.6 million in worker earnings.

The matter— that matters here in Alaska because hemp is not just another crop opportunity for us. It's a manufacturing opportunity. Processing is where supply chains deepen, payroll expands, and stable year-round jobs begin to form. A Minnesota Extension analysis of a hemp processing expansion found that production and formulation investments could support dozens to hundreds of jobs and tens of millions of dollars in additional local economic activity, showing how value-added processing multiplies impact beyond farm revenue alone. So Sacred Seeds' long-term plan is to build around that logic.

Step 1 is establishing industrial hemp as a viable Alaska crop and feedstock source through farmer engagement and acreage development. And our current work, which is leading the newly formed Alaska Farm Bureau Hemp Program, is doing just that. Step 2 is green build composites. Right, where that feedstock is decorticated and turned into building material inputs that are located there in Houston. And now our step 3 then was we expand it.

And for some of you, I stopped by your offices today. You got to see the hemp, touch the hemp. We didn't get to taste the hemp, but I have some here. And so you can do that afterwards. But then step 4 is a full economic integration for hemp food sovereignty and for us, plant-based wellness infrastructure, which is our entire 4-phase plan.

And Sacred Seeds is then developing Green Build Composites, Northern Harvest Hydroponics, and Living Waters Wellness Centers. And so this is why HB 325 deserves your support. And this is why I'm asking for it today, because I have a plan, because we've tried hemp for the last 5 years and we've done well. But the problem has been the same that every farmer has said, I love growing it, it's great, but where will I process it? And so now we're coming in with the manufacturing solution, and we're bringing it to rural communities.

We're bringing it across the land because we believe hemp can be self-sustainable industry for Alaska.

Finally, the reason why we're starting with green build composites as building materials is because we have a housing crisis, and HempCrete is a fire-resistant, mold-proof, pest-resistant building material. This is something that you can put a flame against it, up to 572°F for 6 hours and it will not burn. It will not burn. I see your face. Absolutely.

Yes, ma'am. I can't wait. And to go watch the YouTube videos, they're all over the place. And so the point here is that HB 325 will not create a hemp economy by itself. We get that.

That's what Sacred Seeds is here to do, is to help put all of the pieces together. We simply need the release of some of the tighter problems that have been with the regulations to this point. They give a micro grower category because currently, if you're not familiar, currently if you don't have a quarter acre growing or 200 plants growing, you can't grow hemp. So if a homesteader would like to grow 25 plants to produce enough fiber to, I don't know, make some animal bedding or maybe they want to make clothing for their family, they can't do do that without being registered through the industrial hemp program. So this opens it up for all Alaskans to participate in the hemp industry.

So at this point, I can say that we have successfully cultivated relationships with people in the farming sector that are absolutely interested in growing. We have established a list of contractors in the building sector that are interested in building with hempcrete and hemp insulation. And as well as we've established local fiber arts spinners and weavers interested in fiber for textiles. So Alaska wants a thriving hemp industry. Help us give them one.

Sacred Seeds Foundation respectfully urges the committee to move HB 325 forward. Alaska has the land, the agricultural communities, and the need for new value-added community or industries. What it needs now is the regulatory courage to let serious growers grow Builders build and weavers weave. Thank you for your time, and I'm happy to answer any questions. Okay, um, thank you.

Questions at this time? We do have more invited testimony, so let's go. I think Amy Seitz is next up in invited testimony. Let's go to Amy Seitz. Go ahead, Miss Seitz, and thank you for being here online.

Good afternoon, Mr. Chair and members of the committee. For the record, My name is Amy Seitz. I'm policy director for the Alaska Farm Bureau, and I appreciate the opportunity to speak today and give Alaska Farm Bureau's voice on House Bill 325, which provides a more streamlined and less burdensome future for our industrial hemp industry in Alaska. Alaska's agriculture sector is an industry with opportunities.

We have opportunity to help diversify our our economy, contribute to local communities, and expand job opportunities around the state. Industrial hemp is an area we should not overlook and should support the ability to grow the sector. But the lack of infrastructure and minimal funding for the programs and services that really support expansion in agriculture, it's vital that our laws help rather than hinder our producers. Hemp is a legitimate agricultural commodity that deserves a regulatory environment that reflects this. And as you just heard, if we can, if we can have friendly policies in place, we do have opportunities to expand our manufacturing and processing.

House Bill 325 keeps the LACME in line with federal standards while relieving unnecessary and duplicative burdens on our producers, creating an environment that is more supportive to expansion in the sector. It is important to make sure our temp growers are compliant, but we shouldn't be heavy-handed. To assist in having successful operations, it's important to have measures in place that focus on remediation and corrective actions instead of automatic punitive actions. And allowing for a tiered approach to delineate between risk level and size of operations is important. To ensure this industry can grow, We support shifting the regulatory mindset away from one of drug enforcement to one of agricultural development.

This includes things like adjusting how crops are dealt with that test between the 0.3% and 1% to provide our farmers a fair safety margin. Currently, the hot crops can be a financial death sentence for a farmer, and it is a— it's a worry someone looking at getting into industrial hemp. You know, they don't want to lose a crop. So allowing the ability to recondition or find an industrial and non-consumable use such as the, the fiber textiles, animal bedding, fuel, rather than going for a mandatory destruction, will give the farmer an option other than complete loss for that year. By adopting standards like we find in House Bill 325 that treats hemp like the agricultural commodity it is, we can foster that economic development while ensuring consumer safety.

We appreciate the introduction of House Bill 325 and really appreciate the committee taking the time to hear it today, and we hope to see our hemp laws improve through legislation like this. And with that, I know I know you have a lot going on today, so I will thank you for your time. And I have a question. Um, yes, Representative, I was just making sure Ms. Seitz was done. Thank you, Ms. Seitz.

Um, it is late in session, but this is a compelling idea, so we're going to set an amendment deadline for Thursday, April 30th at 5 PM. Um, sorry, you have to read and study offline as well, but that's probably necessary in this case. Representative Sadler, Ms. Lindsey Poole wants to testify? I don't know that I can add anything else that's already been said. Got it.

Just want to check. Okay, go ahead, Representative Sadler with a question. Thank you. I have a question for Amy Seitz. It's good to hear your voice again in the building, Amy.

Give us on the committee a little bit of kind of a primer on the industrial hemp production in Alaska right now. The number of growers, the size and value of crops, and the potential expansion due to the bill.

Yeah, through the chair, thank Thank you, Representative Stadler. And I know Sarah has been working a lot closer than I have recently with the hemp producers. I know we have one currently in production, but I know we have a lot of farmers who are interested and there's just the uncertainties between the laws, the regulations in place, and then that, that lack of the infrastructure growth. So I know there's, there's a lot of interest, and there has been since hemp became reclassified. It's just that, that uncertainty makes it really hard to take that risk.

Okay, um, go ahead. Through the chair, uh, Representative Sadler, thank you so much for— this is Sarah Williams, uh, Sacred United States Foundation. Um, uh, thank you so much for that question. So let me give you a little bit of history. So in 2018, uh, Senator Shelley Hughes at the time was the leading voice in industrial hemp.

It passed. 2020, Thank you COVID, was before we got reg— by the time 2020 came around was when we finally got regulations. So it was in the middle of COVID and, you know, the world was in crisis. So hey, let's launch a hemp industry right in the middle of COVID So that It was a challenge. And, but again, I called at the time, I've been on this game for a long time.

And so at the time I called the entire Alaskan Grown list and I said, will you grow hemp? And they said, we would love to, but where will we sell it? What will we do with it? Right? Because there's no manufacturing facilities in the state.

And so at the time I was not in a position to be able to say, I'm gonna go open a manufacturing facility. So 6 years later, here we sit and now I am. Um, so the, the currently we have 170 registered hemp licenses in the state of Alaska. We have 169 of those are retailers and producers, and we have one grower currently. Thank you, Ray DePriest in Palmer.

He has been faithful. He has, we have learned a lot by him. So, um, that being said, we also have a hemp program. Of 20 to 25 people that have been attending 3 months now each month regularly. And they— we have an accumulative SOF promise of about 100 acres currently from various farmers that are in the hemp program.

But this is something that we are running simultaneously. It's not a chicken and egg thing. It has to run simultaneously. So we have I told these farmers, hey, if you plant it, I will get out there with a sickle. I will cut it down with scissors.

I don't care. I will chop it up and I will get it into our stores until we get Greenbuild Composites up and running, right? There's lots of technology that is running right now, technology that will take it to where it can actually be cut down, processed, and decorticated right in the field. And so decorticated is stripping the fibers. And again, I have samples here to show you all how it can all work out and make a real product.

But the process is we need manufacturing at the same time that we need farming. And we have people that are ready, willing, they love the idea, they are— we need for Greenbuild Composites, we need 2,000 acres under cultivation annually to be able to produce enough feedstock to run the operations at 8-hour days, 5 days a week, holidays included. So we've done the numbers. We have the business plans. We got the investor pitch.

We need $27 million. That's a lot. But we're there. We're ready and able. We believe in this wholeheartedly.

But we have, again, kind of a simultaneous development need. Good. OK. Thank you. And actually, at this time, I really appreciate you all being here.

We have to transition to the last bill of the day just because, again, we're trying to pass as many good bills as we can. Um, thank you for making the trip and testifying. Last time on the agenda is House Bill 386, gaming electronic pull tabs. What, um, you bet, Kevin. Um, what we're doing here is, uh, Conrad Jackson is going to walk— start walking through the sectional, not just reading, but actually doing a little bit of an analytical section sectional.

And thank you, Senator Bjorkman. This is sufficiently in-depth bill that we wanted to make sure everyone understands it as thoroughly as possible as the Senate vehicle comes across. So thank you, Senator Bjorkman, and, um, and Mr. Jackson, for being here to really start to analyze the bill pretty thoroughly. And we will— I doubt we'll get— we're not going to get through it today, but we will continue. So committee members are comfortable when we receive Senator Bjorkman.

Thank you very much, Mr. Chairman. For the record, my name is Jesse Bjorkman, and I represent the northern and central portions of the Kenai Peninsula in the Alaska State Senate. Just by way of introduction again to the bill and why it's important to so many of our constituents across the state of Alaska, this was an idea that I will be honest, I wasn't like terribly excited to legislate on at first, and I said Well, it could be a good idea, but I'm not sure if it's for me. And then I, I heard from a lot of constituents. I heard from folks in youth sports and Chambers of Commerce and senior centers, and then our Alaska Baseball League team, the Peninsula Oilers, who recently went underwater because they're struggling to maintain their revenues through charitable gaming.

Kids sports are struggling to keep fees and costs down so that all kids can compete and travel and enjoy the things that kids in sports should be able to do because revenues from charitable gaming and pull tabs are down. So that really became the impetus to introduce this bill. We're happy to go through it with you now and talk to you all about what the bill does and why. What policy decisions we've made inside of the bill. Thank you.

Mr. Chairman, thank you. For the record, Conrad Jackson, staff to Senator Bjorkman. Before we get into the sectional, if you will allow, I'd like to address one of the questions, a couple of questions from Representative Nelson at the last meeting. He had asked about what the expected revenue increase would would be for nonprofits, the permittees, should the bill pass. And as I think I went into during the last meeting, it's very tough to say nonprofit A will increase this or nonprofit B.

But going from the Department of Revenue's own fiscal note, they estimate an increase in revenue between $500,000 and I believe $5.5 million. Based on that being a 3% tax on gaming, we can estimate that the additional sales will be between $16.7 million and $183.3 million.

Beyond that, I'm at a loss to, to provide any more accurate numbers. Members should also have seen a 4-page document that was, I believe, distributed that came from Diamond Game. And that's an analysis of the impact on electronic pull tabs in other states, particularly Minnesota, some of the charts in the back. But you can— I think you can see that the numbers are showing when electronic pull tabs are legalized in a state, the sales increase pretty dramatically. Okay.

Mr.

Chair? Yes. May I pose a question, Mr. Johnson? Of course. Mr. Jackson, in the first page of the Diamond Game document, the first 3 lines are lotteries and then ETABS.

Should I ignore the lottery? Because I know that's a different model and a different technology. Or is there a point I should reach about the conflict or the contrast between ETABS and lottery programs? Through the Chair, Representative Sadler, I was not involved in preparing the document, but I read it similarly to you that when it says those last 4 states are the ETABS, that's probably more important for the committee to notice. Great, thank you.

Thanks.

Go ahead. Thank you, Mr. Chairman.

In Section 1 of the bill, you will see it— we're amending 05-15-020, which just sets a permit fee for gaming, charitable gaming, on Marine Highway, our Alaska Marine Highway vessels. The addition of the Marine Highway vessels as a charitable gaming location was put into the bill in Senate Finance and— I'm sorry, was put in the Senate bill in Senate Finance and just a concept that is moving forward. I guess we'll see where that goes. From there. Quick question on that, Mr. Jackson.

Yes, sir. Is it accurate to say there wasn't a lot of committee discussion on that particular provision of the bill, Mr. Chairman? Yes, I would say that's, uh, okay, very accurate. So just flagging that for committee members when, when we get the other one.

Thank you. Yes, to the point. Yeah, thank you. And having not read the all the sectional analysis yet, but is there elsewhere in the, elsewhere in the bill where pull tabs are authorized on ferries or are they already authorized? I don't gamble, don't take too many ferries, I don't know.

Through the chair, Representative Sadler, there are a number of sections in the legislation that would authorize that. Just various conforming and specifically specific to the Alaska Marine Highway System. There are also sections that authorize the Department of Transportation to enter into basically contracts to to provide that service for the marine highway vessels. Yeah, highlight those when you get to them, please. Okay, thank you.

Okay, please proceed. Thank you, Mr. Jacklin. Thank you, Mr. Chairman.

Section 2 deals with the notices of applicant or permittee or licensee. And in that section, we're removing the notice requirements to the nearest municipality by an applicant, permittee, or licensee.

In the past, this has not been an issue, and it was consensus of a number of stakeholders that this was not something that was used, so it was removed. In Section 3, that ties into the same, the same as Section 2, requiring the notice to the local government. Section 4, I'll point out point Representative Sadler to this section is one of the— the second section dealing with Alaska Marine Highway vessels. And these are again granting the department the authority to— Department of Revenue to regulate gaming activities on the Marine Highway. [FOREIGN LANGUAGE] Section 5 is granting authority to the Department of Revenue.

Currently, the Department of Revenue has some authority to investigate gaming activities, but they don't have enough. There are a number of— there have been a number of investigations by the Department of Public Safety and a number of arrests, and I can't say convictions, but there have been some less than upstanding citizens operating gaming operations in the state of Alaska. This section, Section 5, grants the department the authority to investigate both licensed and unlicensed operations. And it also allows them to administer civil penalties. Mm-hmm.

Section 6 is a reporting— deals with amending the reporting requirements in 05-15-080.

And this is a reporting requirement that deals with another section a little farther back, some other changes. And it changes the reporting requirement to include the reporting of marketing or promotional materials that may be provided to a permittee by, by a distributor or a manufacturer.

Section 7— if you don't mind pausing for a second, Mr. Jackson, Representative Sadler has a question. Yeah, there's a lot of sections here and I could not possibly hold my questions to the end. Back to Section 5— Section 6, is there an— why is the issue of marketing or promotional materials an issue that needs to be reported? Is there a whole bunch of marketing materials and freebies going out that— I'm I'm not aware of. Why is that an issue to be addressed in this?

Thank you, Representative Sadler. Through the chair, throughout the bill you will see strong protections in the bill for protecting against inducements or gifts or otherwise entangling arrangements that might try to corner charities and nonprofits to maintaining a relationship that's not financially beneficial to them. Thank you very much. I thought as much. Thanks.

Okay. Thank you.

To continue, Mr. Chairman, Conrad Jackson, staff to Senator Bjorkman. Section 7 deals again with reports to the department, only in this case by operators. And we're removing certain reporting requirements for those reports that are due to the Department of Revenue. If I might ask, what are those reporting requirements? I'm just not familiar with them.

Currently, Mr. Chairman, the operator is required to file reports with the department on the last day of the month during the calendar year on the various activities that are conducted. We are making other changes in the reporting requirements, so this is a bit of a conforming change. Okay, thank you.

Section 8, as I just said, deals with the operator's reports, and this is for two permittees and payment of net proceeds.

We're removing the requirement that the monthly report include a daily sale summary of activity and the requirement that expenses be included in that report. We further add prize payouts to the list of information that is reported and then adds electronic funds transfer as an acceptable method of payment by an operator. Currently, like so many things we see in statute, our current statutes don't deal with a lot of electronic transmission, electronic funds payments. We are trying to update update the statutes at the same time to just make the process go a little smoother. And that's the simplest way to put it.

Go ahead, Representative Sadler. Thank you, Mr. Chair. I don't know if you intend to have the sponsor's staff get through all these sections. I can truncate my questions.

Is it your intent to get through all of them? Just—. No, we're not going to today. The intent is to start working through them and I think ask questions along the way. Great.

Thank you. Appreciate that. Then to Section 8. What is the justification for not requiring the monthly report to include expenses? I would think there would be some kind of cap on what the overhead expenses could be and that data would be important for the department to know how much is being bled off in expenses if I'm understanding what expenses are properly.

Through the Chair, Representative Sadler, as you saw in Section 8, I think I'm assuming you're looking at the bill as well. We're changing— we're really calling prize payouts as expenses. Those are the expenses dealt with electronic pull tabs. And they had not, okay. It's being more specific as to what those expenses are.

Oh, okay. So, gotcha. Okay. Yep. And further, as you see further down, the requirements for that— for the permittee or the operator to file that report by the 15th day after the end of the month covered, so the previous month's sales, so that there is a record of those transactions for true-up of payments owed to the operator, owed to the permittee by a vendor, for instance.

If we move on to Section 9, and this deals with the persons who are prohibited from involvement. And it— there's a reference to new, uh, subsection C, um, that is added in Section 10.

Okay, so Section 10 adds a new subsection that prohibits the department from issuing a license to a manufacturer or a distributor If the parent company— I'll just read this, Mr. Chairman— sister company or subsidiary of the manufacturer or distributor has been convicted of a violation of a law that would disqualify the parent company. Again, we're trying to make sure that there are protections in place for the entire gaming industry, I guess, A, and for the permittees, the ultimately the charities, as we move forward with with charitable gaming in Alaska.

Section 11 deals with the contracts between permittees and operators. And in this section, you'll see some additional language put in on— starting on line 11 of page 6. And we're allowing an operator to pool together permittees for simplification of payments and then divide the gaming income and payouts among the permittees. It's a simplification process. It just cleans up the overall process.

And this is an option. This is not a mandate. If an operator and a permittee don't agree to this type of an arrangement, No one is forcing them into this type of arrangement. Section 12, uh, again amends the contracts between permittees and operators, um, transferring the requirement of a contract submittal report to the department from the permittee to the operator. So we're just transferring that reporting requirement.

We are also changing the method of submission of those contracts from certified mail to electronic. We are just coming into the current century. Because electronic is good, right? Electronic good, paper bad.

Section 13, Mr. Chairman, amends the operator license statute. Statutes, 015-122, we're adding 2 new subsections. Let me get to the right page here.

And this deals with an operator, allowing an operator licensed under this section to conduct electronic pull tabs on behalf of a municipality or a qualified organization. But that can only happen if the department has issued that electronic pull tab endorsement to the operator's license. So we're trying to be very clear. The electronic pull tabs, I guess, to drill down a little farther on that, electronic pull tabs being a new, a new form of charitable gaming, will require an actual endorsement. Businesses can continue to do what they're doing now if they remain with paper pull tabs, but to add this new electronic format, it does require that endorsement from the department.

And you'll see as we go farther through the requirements that we, that we establish for both permittees— or I'm sorry, manufacturers and operators to qualify for that endorsement. Further in Section 13, the first new subsection, we deal with the requirements that must be met to receive that electronic pull-tab endorsement.

The next section— subsection, I apologize— the new F deals with something that, as we understand it, has been an issue for operators in the state in the past, and that's in the case of an operator after passing away. This would allow for an operator's license to be temporarily transferred to another party for 120 days after the death of an operator for the family, for the business to get back on their feet. It just seemed to be a, a good common sense solution to a problem that some families will be facing.

[FOREIGN LANGUAGE] Yes. And through the Chair, Mr. Jackson, so are there any conditions under which— under limiting to whom those approvals can be issued? Is it family? Is it someone who is similarly situated or meets other similar conditions? How broadly can that transfer on death extend?

Through the chair, Representative Sadler, if you see page 7, looks like on line 5, the bill— the estate operator may designate the temporary responsible party. I expect that the department will further clarify that should they feel that's necessary, but we're not trying to install anyone in the event of an operator's death. We're allowing them to choose whether it be a family member or or a business associate, but they need that option. Otherwise, that permit is gone. That license is gone.

So it is a business protection piece.

Through the Chair, Jesse Bjorkman again for the record. This is a current substantial hole in our laws now. There is not this provision. Now, so it creates a significant disruption if someone were to die and they, they had the business. So it's, it's a, it's a problem.

Mr. Chairman, again, Conrad Jackson for the record. Section 15, we're getting into the section dealing with the revocation of an operator's license. And in that, we're removing the minimum 15% annual gross income requirement as a trigger for license revocation. And then we're adding two new paragraphs relating to multiple beneficiary permit payments and the reporting as an additional trigger for license revocation. Multiple— multiple beneficiary permit payments.

Permits are dealing with— like an operator, they're dealing with multiple charitable permits. So we're just clarifying the requirement that— sorry, I'm losing my place in this silly book.

And we're limiting the— the annual total to— or we're setting the annual total at at least 30% of the adjusted gross income from pull-tab activity, or at least 10% of the adjusted gross income from gaming activity other than pull-tabs. Gaming— charitable gaming in the state of Alaska is not limited to just pull-tabs, would not be limited to just paper and electronic pull-tabs. There are raffles, there are There are bingo games. There are a number of different types of charitable activity that may be undertaken under the umbrella of a gaming permit. Mr.

Chair? Yes. Help me understand, Mr. Jackson. Is this saying that removing the minimum 15%, does that mean someone cannot make less than 15% of their gross income, a person organization. I'm not quite sure.

I don't understand this, actually. So 15% is the max? Is the minimum the floor? How does that operate in the real world?

Through the chair, Representative Sadler, I will need to take a moment to reread this myself. It does get a little bit deep. But we're attempting to clarify how those reporting requirements work in relationship to the potential revocation of a license should that multiple beneficiary fail to meet those requirements. If I may, just in kind of ordinary terms, is this a limit on the individual's income, or is— what's this trigger? What's this limit?

What's this for revocation? A person or an organization would have their license revoked if What happened?

The multiple— well, if you see at the bottom of page 7, multiple beneficiary permit. Well, we have to really start at the top.

Rep. Sadler, we can get back to you specifically on this question. That's not a problem. So we will— for the record, Jesse Bjorkman, we can flag Section 15 and get back to you on that. Okay.

I'm confused, too.

Mr. Chairman, for the record, Conrad Jackson, staff to Senator Bjorkman. It looks like we are on to Section 16, and in Section 16, we're just bringing a mechanism of electronic funds transfer. Payments by operators into the— into the current century. We're just allowing electronic funds transfer. In Section 17, we're allowing a sign to be posted as opposed to— well, a sign posted directing individuals to a website where required information is available in place of the actual informational sign, so a person can go to a website.

For instance, we see upstairs at the lounge, scan this QR code for information, just to simplify things.

Section 18 goes back to the suspension or revocation of a permit, license, or vendor registration. And we're adding that a permit, a license, or vendor registration may be suspended or revoked upon conviction of the owner or manager of a parent company, sister company, subsidiary of the licensee or vendor. I think that's fairly clear. If they've committed a crime, their license is on the line and very likely will be revoked or suspended.

Section 19 amends the suspension or revocation of permit, licensee, vendor registration again, we're adding two new subsections and that the notification by the department to an operator of the suspension or revocation of a permit, license, or vendor registration, and that can be done via electronic mail and it needs to be posted publicly or publicly accessible on a website, for instance, My Alaska website. What we're trying to do here is allow for very clear notification to the public when an establishment and an operator— let me get into D, we're going into a manufacturer— but when that operator has a problem with their license, we want people to be aware of that. It's a public protection. Issue. And the same type of language is in the new subsection D requiring that, that notification by the department to a manufacturer of the suspension or revocation of that distributor license so that they would obviously know not to sell games to the distributor.

Section 20, Mr. Chairman, limits the authorized puts limitations on the authorized activity, and in that we're just adding electronic pull tabs to the authorized gaming activity in the state of Alaska. The whole point of the bill in Section 20—. Jackson, should we declare victory that we're a third of the way through and it's almost 5:15? Up to committee members. I sense fatigue.

Mr. Chairman, at your pleasure. I want more. I think we are not going to finish tonight, and I think we have made admirable progress. So I really appreciate you all walking us through this bill in a lot of detail. We will return to this analysis next week.

And thank you, Senator Bjorkman and Mr. Jackson, for your time. Yes. I would just make a request that as we're considering this bill, I know that we're, we're significantly adding to our current gaming system with e-pull tabs, but I'm guessing that some of these sections are reference sections rather than wholly new policy. And I think one thing that would help as we narrow in is if we could identify items that are wholly new policy as opposed to we're adding current policy provisions as we're adding ePull tabs. That would help because I'm getting a little confused on some of these, if some of it's already what we're doing or if it's— and we're just including ePull tabs in those requirements or what we're doing.

So I think that would help us kind of narrow into. [Speaker:ANDREW] Okay. Thank you, Representative Carrick. All right, any more discussion before we adjourn? Seeing none, at 5:09, Labor and Commerce is adjourned.