02/23/2024 01:00 PM House RESOURCES

            HB 296-AGRICULTURAL PRODUCTS/LOANS/SALES                                                                        
                                                                                                                                
1:48:19 PM                                                                                                                    
                                                                                                                                
CHAIR MCKAY  announced that the  next order of business  would be                                                               
HOUSE BILL NO.  296, "An Act relating to the  powers of the board                                                               
of   agriculture  and   conservation;  relating   to  loans   and                                                               
limitations under  the Alaska Agricultural Loan  Act; relating to                                                               
federal crop  insurance contributions; relating to  municipal and                                                               
state   procurement   preferences   for   agricultural   products                                                               
harvested  in  the  state and  fisheries  products  harvested  or                                                               
processed in the state; and providing for an effective date."                                                                   
                                                                                                                                
1:49:12 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 1:49 p.m. to 1:50 p.m.                                                                       
                                                                                                                                
1:50:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  RAUSCHER moved  to adopt  the proposed  committee                                                               
substitute  (CS)  for  HB   296,  Version  33-GH2386\B,  Bullard,                                                               
2/12/24,  as  a working  document.    There being  no  objection,                                                               
Version B was before the committee.                                                                                             
                                                                                                                                
1:51:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MEARS  moved to  adopt  Amendment  1 to  HB  296,                                                               
Version  B,  labeled 33-GH2386\B.9,  A.Radford/Bullard,  2/21/24,                                                               
which read as follows:                                                                                                          
                                                                                                                                
     Page 1, line 3, following "to":                                                                                          
          Insert "a report to the legislature on"                                                                             
                                                                                                                                
     Page 5, line 19, through page 10, line 5:                                                                                  
          Delete all material.                                                                                                  
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 10, line 14:                                                                                                          
          Delete ", as amended by secs. 11 and 13 of this                                                                       
     Act,"                                                                                                                      
                                                                                                                                
     Page 10, line 15:                                                                                                          
        Delete ", as amended by secs. 17 and 19 of this                                                                         
     Act"                                                                                                                       
                                                                                                                                
     Page 10, line 25:                                                                                                          
         Delete "whether to extend the changes made by                                                                          
     secs. 11, 13, 15, 17, 19, and 21 of this Act"                                                                              
          Insert "potential statutory changes to make                                                                           
     purchase preference programs more effective at                                                                             
     stimulating state agriculture"                                                                                             
                                                                                                                                
     Page 10, line 26, through page 11, line 9:                                                                                 
          Delete all material.                                                                                                  
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 11, line 14:                                                                                                          
          Delete "secs. 2 - 10 and 23"                                                                                          
          Insert "secs. 2 - 11"                                                                                                 
                                                                                                                                
     Page 11, line 17:                                                                                                          
          Delete "26"                                                                                                           
          Insert "13"                                                                                                           
                                                                                                                                
     Page 11, line 18:                                                                                                          
          Delete all material.                                                                                                  
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 11, line 19:                                                                                                          
          Delete "Sections 2 - 10 and 23"                                                                                       
          Insert "Sections 2 - 11"                                                                                              
                                                                                                                                
     Page 11, line 20:                                                                                                          
          Delete all material.                                                                                                  
                                                                                                                                
REPRESENTATIVE SADDLER objected for the purpose of discussion.                                                                  
                                                                                                                                
REPRESENTATIVE MEARS explained that the amendment resulted from                                                                 
working on the Food Strategy Task Force in consultation with the                                                                
Governor's Office and the Department  of Natural Resources (DNR).                                                               
One of the concerns regarded  the purchasing requirements without                                                               
a dollar  limit on some of  those purchases.  The  task force was                                                               
interested  in  meaningful  in-state purchases  of  local  Alaska                                                               
food.   There  is definite  support for  continuing the  purchase                                                               
preference, but more  time is needed to collect data  and work on                                                               
it.                                                                                                                             
                                                                                                                                
1:52:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER  asked  Deputy  Commissioner  Goodrum  to                                                               
speak to the amendment, pointing  out it was a fairly substantial                                                               
deletion from the bill.                                                                                                         
                                                                                                                                
BRENT  GOODRUM,   Deputy  Commissioner,  Department   of  Natural                                                               
Resources (DNR),  responded to Representative  Saddler's question                                                               
about the  amendment.  He  said he understands  members' concerns                                                               
about the  expanded procurement preference  for a period  of five                                                               
years.   The hope is  to keep  the preference for  state agencies                                                               
for  at least  five years.    However, if  the committee  decides                                                               
otherwise, there is  still Section 24 requiring  an annual report                                                               
to  the  legislature.    The data  would  better  support  future                                                               
recommendations  to  the  legislature   and  help  expand  market                                                               
opportunities for Alaska farmers,  including leveraging the state                                                               
institutional buying power.                                                                                                     
                                                                                                                                
1:54:02 PM                                                                                                                    
                                                                                                                                
MR. GOODRUM  responded to questions by  the committee, explaining                                                               
that the  department has sufficient  staff time and  resources to                                                               
review  the  preference  information.   He  also  said  that  the                                                               
department accepts the Amendment.                                                                                               
                                                                                                                                
1:54:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER  withdrew his  objection.  There  being no                                                               
further objection, Amendment 1 was adopted.                                                                                     
                                                                                                                                
1:54:49 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 1:54 p.m. to 1:55 p.m.                                                                       
                                                                                                                                
1:55:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MEARS  moved to  adopt  Amendment  2 to  HB  296,                                                               
Version B,  labeled 33-GH2386\B.5, Klein/Bullard,  2/18/24, which                                                               
read as follows:                                                                                                                
                                                                                                                                
     Page 3, lines 11 - 15:                                                                                                     
          Delete all material and insert:                                                                                       
               "(3)  shall be secured by a real estate or                                                                       
     chattel  mortgage  of  any priority,  except  that  the                                                                    
     portion of a loan that  exceeds $500,000, when added to                                                                    
     prior  indebtedness   that  is  secured  by   the  same                                                                    
     property, must be secured by a first mortgage;"                                                                            
                                                                                                                                
REPRESENTATIVE RAUSCHER objected for the purpose of discussion.                                                                 
                                                                                                                                
REPRESENTATIVE  MEARS explained  that  Amendment 2  is about  the                                                               
agricultural  revolving  loans  funds.    The  loan  requirements                                                               
outlined in the original language of the bill are unnecessary.                                                                  
                                                                                                                                
1:58:11 PM                                                                                                                    
                                                                                                                                
MR. GOODRUM  responded to a question  from Representative Raucher                                                               
and explained that  the department had no  problem with Amendment                                                               
2.                                                                                                                              
                                                                                                                                
1:58:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER  questioned  how  far  any  priority  can                                                               
extend regarding a loan.                                                                                                        
                                                                                                                                
REPRESENTATIVE MEARS  responded that  the issue can  be addressed                                                               
in underwriting.                                                                                                                
                                                                                                                                
1:59:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAUSCHER  removed his  objection.  There  being no                                                               
objection, Amendment 2 was adopted.                                                                                             
                                                                                                                                
1:59:59 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAUSCHER  moved to  adopt Amendment  3 to  HB 296,                                                               
Version B,  labeled 33-GH2386\B.13, Bullard, 2/23/24,  which read                                                               
as follows:                                                                                                                     
                                                                                                                                
     Page 3, lines 7 - 10:                                                                                                      
          Delete all material and insert:                                                                                       
          "(2)  may not, when added to the outstanding                                                                          
     balance of other loans made  under this chapter, exceed                                                                    
     a  total outstanding  balance  of $3,000,000,  adjusted                                                                
     annually for inflation on July 1  of each year based on                                                                
     the  percentage increase  in the  Consumer Price  Index                                                                
     for  all urban  consumers for  urban Alaska  during the                                                                
     previous  calendar year,  as determined  by the  United                                                                
     States Department of Labor,  Bureau of Labor Statistics                                                                
     [$1,000,000];"                                                                                                             
                                                                                                                                
2:00:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER objected for the purpose of discussion.                                                                  
                                                                                                                                
REPRESENTATIVE   RAUSCHER  explained   that   Amendment  3   sets                                                               
percentages and  other side  bars.  In  addition, it  changes the                                                               
amount of  total outstanding balances  from one million  to three                                                               
million dollars.                                                                                                                
                                                                                                                                
REPRESENTATIVE  SADDLER   commented  that   the  bill   sets  the                                                               
outstanding   amount  at   the   discretion  of   the  board   of                                                               
agriculture, but the amendment sets a hard dollar limit.                                                                        
                                                                                                                                
MR.  GOODRUM  explained  that   DNR  had  originally  recommended                                                               
setting a  new cap, and the  three-million-dollar amount adjusted                                                               
for  inflation should  be sufficient.    However, the  department                                                               
would like to continue to review  the language.  In addition, the                                                               
department would like to see  a conforming amendment changing the                                                               
effective date from July 1, 2025, to July 1, 2024.                                                                              
                                                                                                                                
REPRESENTATIVE  SADDLER  asked  whether  the  committee  needs  a                                                               
conceptual amendment to change the effective date.                                                                              
                                                                                                                                
2:03:30 PM                                                                                                                    
                                                                                                                                
The committee took a brief at-ease at 2:03 p.m.                                                                                 
                                                                                                                                
2:04:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER  moved to adopt Conceptual  Amendment 1 to                                                               
Amendment 3,  which would advance  the effective date of  the new                                                               
hard cap on the loans as discussed in Amendment 3.                                                                              
                                                                                                                                
2:04:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAUSCHER objected for the purpose of discussion.                                                                 
                                                                                                                                
MR. GOODRUM  said the department  was in favor of  the conceptual                                                               
amendment.                                                                                                                      
                                                                                                                                
2:05:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAUSCHER  removed his  objection.  There  being no                                                               
further  objection, Conceptual  Amendment  1 to  Amendment 3  was                                                               
adopted.                                                                                                                        
                                                                                                                                
2:05:48 PM                                                                                                                    
                                                                                                                                
CHAIR MCKAY announced  there being no objection,  Amendment 3, as                                                               
amended,  was  adopted.   [The  objection  previously  stated  by                                                               
Representative Saddler was treated as withdrawn.]                                                                               
                                                                                                                                
2:06:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAUSCHER  moved to  adopt Amendment  4 to  HB 296,                                                               
Version B,  labeled 33-GH2386\B.10, Bullard, 2/21/24,  which read                                                               
as follows:                                                                                                                     
                                                                                                                                
     Page 2, line 5:                                                                                                            
          Delete "or"                                                                                                           
          Insert "[OR]"                                                                                                         
                                                                                                                                
     Page 2, line 6, following "machinery":                                                                                     
          Insert "; or                                                                                                      
               (v)  the cost of shipping to and within the                                                                  
      state for the purposes listed in (i) - (iv) of this                                                                   
     subparagraph"                                                                                                          
                                                                                                                                
     Page 2, line 17, following "state":                                                                                    
          Insert "for the purposes listed in (i) - (iv) of                                                                  
     this subparagraph"                                                                                                   
                                                                                                                                
CHAIR MCKAY objected for the purpose of discussion.                                                                             
                                                                                                                                
REPRESENTATIVE  RAUSCHER  explained  the amendment  was  for  the                                                               
purpose of consistency.                                                                                                         
                                                                                                                                
MR.  GOODRUM  stated the  department  saw  this  as a  "belt  and                                                               
suspenders amendment" and had no objection.                                                                                     
                                                                                                                                
2:07:16 PM                                                                                                                    
                                                                                                                                
CHAIR MCKAY  removed his  objection.   There being  no objection,                                                               
Amendment 4 to HB 296 was adopted.                                                                                              
                                                                                                                                
2:07:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MEARS explained  that she  would not  be offering                                                               
Amendment 5.                                                                                                                    
                                                                                                                                
2:07:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAUSCHER  moved to adopt Conceptual  Amendment [6]                                                               
to HB  296, to  include provisions that  mandate the  Division of                                                               
Agriculture  and the  State Procurement  Office  to evaluate  and                                                               
enhance the  process of institutional purchases,  so Alaska grown                                                               
products   are  integrated   into  institutional   contracts  and                                                               
procurement processes.                                                                                                          
                                                                                                                                
REPRESENTATIVE SADDLER objected for the purpose of discussion.                                                                  
                                                                                                                                
2:09:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MEARS  expressed her  support for  state purchases                                                               
of local foods.                                                                                                                 
                                                                                                                                
REPRESENATIVE BAKER  objected to  Conceptual Amendment 6  for the                                                               
purpose of discussion.                                                                                                          
                                                                                                                                
REPRESENTATIVE  RAUSCHER  requested information  regarding  DNR's                                                               
perspective on this amendment.                                                                                                  
                                                                                                                                
MR. GOODRUM explained  that this is an area  the department needs                                                               
to do more work  on, and it is willing to do  so.  The department                                                               
is   supportive   of   learning  more   about   procurement   and                                                               
institutional buying  power in the  state to create  more markets                                                               
for agriculture.                                                                                                                
                                                                                                                                
2:10:00 PM                                                                                                                    
                                                                                                                                
The committee took a brief at-ease at 2:10 p.m.                                                                                 
                                                                                                                                
2:10:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  RAUSCHER  asked  if  there  was  more  discussion                                                               
regarding the amendment.                                                                                                        
                                                                                                                                
REPRESENTATIVE  SADDLER  requested   clarification  of  the  date                                                               
stated on the conceptual amendment.                                                                                             
                                                                                                                                
CHAIR  MCKAY   noted  that   Representative  Baker   removed  his                                                               
objection.                                                                                                                      
                                                                                                                                
REPRESENTATIVE   RAUSCHER   withdrew  Conceptual   Amendment   6,                                                               
explaining that it needed more work.                                                                                            
                                                                                                                                
2:11:36 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 2:11 p.m. to 2:14 p.m.                                                                       
                                                                                                                                
2:14:00 PM                                                                                                                    
                                                                                                                                
CHAIR MCKAY announced HB 296, as amended, was held over.