02/06/2025 11:00 AM House FISHERIES

          HB  60-PROCURE PREF: AGRIC. & FISH PRODUCTS                                                                       
                                                                                                                                
11:06:35 AM                                                                                                                   
                                                                                                                                
CHAIR STUTES announced  that the first order of  business would be                                                              
HOUSE  BILL  NO. 60,  "An  Act  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."                                                                                    
                                                                                                                                
11:07:10 AM                                                                                                                   
                                                                                                                                
PAULA   VRANA,   Commissioner,   Department   of   Administration,                                                              
introduced HB  60 on behalf  of the bill  sponsor, House  Rules by                                                              
request  of  the  governor.    She  explained  that  HB  60  would                                                              
strengthen  Alaska's commitment  to  supporting local  agriculture                                                              
and  fisheries  industries by  enhancing  procurement  preferences                                                              
for  state  agencies, municipalities  and  school  districts  that                                                              
receive  state  funding.    This  would be  done  by  raising  the                                                              
required  in-state  purchase  preference  from  7  percent  to  10                                                              
percent  and expanding  discretionary purchasing  from 15  percent                                                              
to  25  percent.    This  bill  ensures  that  more  Alaska  grown                                                              
products  are prioritized  in  procurement  decisions.   She  said                                                              
that  HB 60  aligns  with the  recommendations  of the  governor's                                                              
Food Security  and Independence  Taskforce and has  received broad                                                              
support   from   industry   stakeholders.     By   enabling   more                                                              
flexibility to  support Alaska-grown  products, the bill  seeks to                                                              
bolster  the state  economy,  increase  food security,  and  would                                                              
ensure a more self-reliant Alaska.                                                                                              
                                                                                                                                
11:08:40 AM                                                                                                                   
                                                                                                                                
ANNA  LATHAM,   Deputy  Commissioner,   Department  of   Commerce,                                                              
Community &  Economic Development (DCCED),  on behalf of  the bill                                                              
sponsor,  House Rules  by request  of the governor,  gave  a short                                                              
presentation   describing   HB    60   and   current   procurement                                                              
operations.   She  noted  that  the pandemic  caused  supply-chain                                                              
disruptions on  the West Coast and  impacted the delivery  of food                                                              
and essential  goods to Alaska.   She noted how  slow supply-chain                                                              
operations  were during  this time  and how  it limited  available                                                              
supplies in Alaska  grocery outlets.  She said that  it forced the                                                              
state  to take a  hard look  at Alaska  food security  and how  to                                                              
improve  it.    She  remarked  that   the  2022  establishment  of                                                              
Administrative Order  331 and the  creation of the  governors Food                                                              
Security  and  Independence  Taskforce  was  a  response  to  food                                                              
security concerns.                                                                                                              
                                                                                                                                
11:09:41 AM                                                                                                                   
                                                                                                                                
MS. LATHAM  remarked  that one of  the findings  of the  taskforce                                                              
was  that Alaska  imports 95  percent  of its  food at  a cost  of                                                              
around $2  billion.   She said  that the  taskforce has  made many                                                              
recommendations on  how to bolster food production  and harvesting                                                              
in  Alaska.   She  said  this  effort also  aligns  with  Governor                                                              
Dunleavy's Executive  Order 136 which was introduced  this session                                                              
and would create a Department of Agriculture.                                                                                   
                                                                                                                                
MS.  LATHAM  then   proceeded  to  describe   current  procurement                                                              
procedures  for  Alaska products.    She  noted that  the  current                                                              
statutes  require  municipalities,  school  districts,  and  state                                                              
agencies  that receive  state funds  to  procure Alaskan  products                                                              
within certain price  thresholds.  She explained  that the current                                                              
purchasing  model  is similar  to  mobile  markets such  as  Full-                                                              
Circle.   She said vendors  can select Alaska-grown  products from                                                              
everything  that is displayed  for purchase.   Currently  the main                                                              
vendor for  the Department of  Administration (DOA) is  U.S. Foods                                                              
and any interested  Alaska growers can  apply to be a  vendor with                                                              
U.S.  Foods.    State  agencies   can  select  these  Alaska-grown                                                              
products from this vendor list.                                                                                                 
                                                                                                                                
MS.  LATHAM  noted that  the  DOA  Chief Procurement  Officer  was                                                              
available to answer  any committee questions pertaining  to vendor                                                              
purchases.  She  echoed MS. VRANA's previous summary  of HB 60 and                                                              
that  it  would  increase the  price  differentials  currently  in                                                              
statute for preferential procurements.                                                                                          
                                                                                                                                
11:11:53 AM                                                                                                                   
                                                                                                                                
MS. LATHAM  remarked that DOA conducted  a survey in fall  2024 to                                                              
assess  how  much  was currently  being  purchased.    The  survey                                                              
determined  that out  of the $17  million dollars  that the  state                                                              
spends on  food, only $236,000 is  on Alaska-grown products.   She                                                              
noted that  there was  room for  improvement and Alaska  purchases                                                              
constituted  only  .014  percent  of current  procurements.    She                                                              
reiterated that  the intent  of HB 60  is to bolster  pre-existing                                                              
markets and address food security in the state.                                                                                 
                                                                                                                                
11:12:41 AM                                                                                                                   
                                                                                                                                
MS.  LATHAM,  at   the  request  of  committee   members  provided                                                              
elaboration   of  some   current   purchases   involved  in   food                                                              
procurement.   She  noted that  currently the  Alaska Seafood  and                                                              
Marketing  Institute (ASMI)  spends  $117,000  on seafood,  canned                                                              
food  and scallops  for  nutritional  testing  and display.    The                                                              
Department of Corrections  (DOC) purchases primarily  potatoes for                                                              
use  at  correction  facilities.   The  Department  of  Labor  and                                                              
Workforce  Development  (DLWD) and  its  culinary  program at  the                                                              
vocational training  school in  Seward spent  $7 on sprouts.   The                                                              
Department  of  Transportation   and  Public  Facilities  (DOT&PF)                                                              
spent  $1,000 on  food  for the  state ferries.    She noted  that                                                              
these were  small amounts, and DCCED  hopes to see  increases with                                                              
HB 60.                                                                                                                          
                                                                                                                                
11:13:36 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  KOPP  mentioned   large  nonprofits  that  receive                                                              
state  funding,  he  inquired  whether  these  entities  would  be                                                              
impacted by HB 60.                                                                                                              
                                                                                                                                
MS. LATHAM  responded that at this  time, the proposed  bill would                                                              
apply only to government units.                                                                                                 
                                                                                                                                
11:14:21 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE   ELAM   asked    about   anticipated   impact   on                                                              
municipalities,  specifically  when   looking  at  the  amount  of                                                              
additional revenues needed to support procurement changes.                                                                      
                                                                                                                                
MS.  LATHAM  responded  to Representative  Elam  that  the  Alaska                                                              
Municipal  League was  contacted prior  to the  hearing and  would                                                              
prepare an  impact statement.  The  league remarked that  the main                                                              
consumers  would be  the  nine municipal  owned  hospitals in  the                                                              
state as well as the jails.                                                                                                     
                                                                                                                                
REPRESENTATIVE ELAM  asked whether  HB 60 would impact  facilities                                                              
owned by municipalities but have private incorporations.                                                                        
                                                                                                                                
MS. LATHAM said  that she would have to get back  to him regarding                                                              
that question.                                                                                                                  
                                                                                                                                
11:15:52 AM                                                                                                                   
                                                                                                                                
CHAIR  STUTES asked  about the  capacity of  money allocations  to                                                              
DOT&PF.                                                                                                                         
                                                                                                                                
MS. LATHAM  responded that  it was for  food purchases on  the M/V                                                              
Aurora  and  M/V  Tustumena  ferries   and  included  sprouts  and                                                              
potatoes.                                                                                                                       
                                                                                                                                
11:16:37 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE   HIMSCHOOT  asked  for   an  example  of   what  a                                                              
political sub-division could be.                                                                                                
                                                                                                                                
MS.  LATHAM responded  that this  could  include school  districts                                                              
and things of this sort.                                                                                                        
                                                                                                                                
11:17:07 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  ELAM mentioned  small  school  districts that  get                                                              
state funding but  are not technically within a  municipality.  He                                                              
asked whether HB 60 would pertain to these entities.                                                                            
                                                                                                                                
MS.  LATHAM responded  that if  they  are not  in a  municipality,                                                              
then they would not be impacted.                                                                                                
                                                                                                                                
11:17:48 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  KOPP  asked  whether  HB  60 would  apply  to  the                                                              
Alaska Railroad Corporation (ARRC).                                                                                             
                                                                                                                                
MS. Latham  responded that she did  not believe it would  apply to                                                              
AARC but  would get  back with an  answer following  the committee                                                              
meeting.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  KOPP  mentioned  the  large  amounts  of  tourists                                                              
associated  with the railroad  and the  sizeable portions  of food                                                              
purchased by them.                                                                                                              
                                                                                                                                
11:18:36 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  EDGMON asked  about any  opposition regarding  the                                                              
addition  of tribes  to  the list  of  bodies  required to  expand                                                              
procurement purchases.   He asked why the state would  not want to                                                              
do this and whether it was a procurement issue.                                                                                 
                                                                                                                                
MS. LATHAM  responded that if it  were the will of  the committee,                                                              
it  could  be considered.    She  remarked,  however, that  HB  60                                                              
consisted of  minor changes to  pre-existing statutes when  it was                                                              
drafted and was not focused on large procurement expansions.                                                                    
                                                                                                                                
REPRESENTATIVE  EDGMON  asked  about  looking  at  any  downstream                                                              
impacts from  including tribes  under the bill  and said  he would                                                              
like  a follow-up  much like  Representative  Kopps inquiry  about                                                              
railroad procurements.                                                                                                          
                                                                                                                                
11:20:24 AM                                                                                                                   
                                                                                                                                
CHAIR  STUTES   opened  public   testimony  on   HB  60.     After                                                              
ascertaining  that no  one wished  to testify,  she closed  public                                                              
testimony.  She  noted that any written testimonies  could be sent                                                              
to [email protected].                                                                                                   
                                                                                                                                
11:21:57 AM                                                                                                                   
                                                                                                                                
CHAIR STUTES announced that HB 60 was held over.