04/12/2024 01:30 PM Senate LABOR & COMMERCE

            SB 211-AGRICULTURAL PRODUCTS/LOANS/SALES                                                                        
                                                                                                                                
2:31:08 PM                                                                                                                    
CHAIR  BJORKMAN   reconvened  the   meeting  and   announced  the                                                               
consideration  of SENATE  BILL NO.  211 "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."                                                                
                                                                                                                                
2:31:44 PM                                                                                                                    
BRENT  GOODRUM,   Deputy  Commissioner,  Department   of  Natural                                                               
Resources, Anchorage,  Alaska, gave a  brief recap of SB  211. He                                                               
said  SB 211  was  a  series of  immediate  steps boosting  state                                                               
policies already  in statute. These  steps are working  on short,                                                               
medium and  long-term recommendations and actions  with regard to                                                               
food security  with the  overall goal  of reaching  food security                                                               
within  the State  of  Alaska  and to  expand  and grow  Alaska's                                                               
agriculture   sector.  He   said  there   are  essentially   four                                                               
components within  the bill.  First would  change the  quorum for                                                               
the Board of Agriculture from  five members to four, statutorily.                                                               
Second,  it   would  expand  various  types   of  activities  the                                                               
agricultural revolving  loan fund could  issue loans for  as well                                                               
as  replace  some statutory  loan  caps  which  would be  set  by                                                               
regulation by the  board. [Third], He said it  institutes a state                                                               
contribution  towards farmers'  federal  crop insurance  premiums                                                               
and would allow the Division  of Agriculture to write regulations                                                               
for contributions to  that program. Lastly, he said  it would put                                                               
forth a reporting  provision to allow gathering  data with regard                                                               
to the  state's institutional buying  power for  agricultural and                                                               
fish products.                                                                                                                  
                                                                                                                                
2:33:50 PM                                                                                                                    
CHAIR BJORKMAN opened public testimony on SB 211.                                                                               
                                                                                                                                
2:34:17 PM                                                                                                                    
SCOTT  DAHLMAN, Director,  State  Government  Affairs, Crop  Life                                                               
America -  Western Region,  Priest River,  Idaho, said  Crop Life                                                               
America is a national  association representing the manufacturers                                                               
and distributors of pesticides  and other agricultural chemicals.                                                               
He  offered support  for SB  211 and  was enthusiastic  about the                                                               
Governor's transmittal  letter to  the senate stating  the intent                                                               
of the  bill: to  grow and  support Alaska's  agricultural sector                                                               
and to  strengthen overall  food security in  the state.  He said                                                               
Crop Life  America is supportive of  growing agriculture industry                                                               
within Alaska  and a key  thing to  remember as Alaska  grows its                                                               
agriculture economy  is for growers  to have a  stable regulatory                                                               
environment.  He  noted existing  language  in  HB 113  currently                                                               
under consideration  in Alaska's  house of  representatives which                                                               
he advocated adopting for SB  211 to provide regulatory stability                                                               
for growers seeking to expand their operations.                                                                                 
                                                                                                                                
2:36:15 PM                                                                                                                    
CHAIR BJORKMAN closed public testimony on SB 211.                                                                               
                                                                                                                                
2:36:42 PM                                                                                                                    
CHAIR BJORKMAN solicited a motion.                                                                                              
                                                                                                                                
2:36:51 PM                                                                                                                    
SENATOR  GRAY-JACKSON moved  to  adopt  the committee  substitute                                                               
(CS)  for  SB  211  work  order  33-GS  2386\B,  as  the  working                                                               
document.                                                                                                                       
                                                                                                                                
2:37:04 PM                                                                                                                    
CHAIR BJORKMAN objected for purposes of explanation.                                                                            
                                                                                                                                
2:37:20 PM                                                                                                                    
RENA   MILLER,   Special    Assistant,   Commissioner's   Office,                                                               
Department of  Natural Resources (DNR), explained  the changes to                                                               
SB 211.  She said  overall this  version B  was identical  to the                                                               
version that passed  out from the House  Resources Committee. She                                                               
said   DNR   supported   the   changes   made   and   appreciated                                                               
consideration by  Senate Labor  and Commerce  Standing Committee.                                                               
She said  version B adopts  revisions recommended  by legislative                                                               
legal services to conform the  bill with their drafting standards                                                               
as  is  typical when  the  administration  first drafts  a  bill.                                                               
Significantly,  the CS  removes 13  sections that  deal with  the                                                               
expanded   procurement  preference   for  in-state   agricultural                                                               
products  and fisheries  products. Originally  a five-year  pilot                                                               
was proposed  to expand  that preference.  She said  the response                                                               
from that had  been that legislators would like  to see rationale                                                               
and data to  make that expanded procurement  preference, so those                                                               
sections  have  been  removed,   but  the  recording  requirement                                                               
remains  so  that  the  Department   of  Administration  and  the                                                               
Department of  Community and Economic Development  will prepare a                                                               
report  for the  legislature  at the  beginning  of next  session                                                               
reviewing  the procurement  preference that  is in  statute today                                                               
and  making  recommendations on  how  that  might be  adapted  to                                                               
better serve  the needs  of growing  the agricultural  sector and                                                               
increasing food security.  She said DNR would stand  by to assist                                                               
those departments as they prepare that report.                                                                                  
                                                                                                                                
2:38:57 PM                                                                                                                    
MS. MILLER  referred to SB  211, version B,  page 2, lines  9, 10                                                               
and lines  23,24, and  noted that, added  to the  activities that                                                               
Agricultural  Revolving Loan  Fund (ARLF)  can loan  for is:  in-                                                               
state manufacturing  of food  or production  of animal  feed. She                                                               
said this  was included  in specific  support of  increasing food                                                               
security of the  state and should enable people  that are looking                                                               
to manufacture  and add value  to things  grown in the  state and                                                               
turn them  into an  additional product, to  be eligible  for ARLF                                                               
loans for that  activity. She said the  other significant changes                                                               
were on  page 3. The  original version suggested removing  the $1                                                               
million cap on the maximum ARLF loans  that can go out to any one                                                               
buyer at  a time and  letting the  Board of Agriculture  set that                                                               
limit in regulation going forward.  The House version and SB 211,                                                               
Version B increase that $1 million  to a $3 million limit for any                                                               
one  borrower and  then also  adds an  adjustment so  that amount                                                               
will  increase  annually based  on  inflation.  She said  DNR  is                                                               
pleased with  that revision  and noted  that it  brings it  up to                                                               
current standards and allows for continued growth as needed.                                                                    
                                                                                                                                
2:40:20 PM                                                                                                                    
MS.  MILLER  said  the  original  version  of  SB  211  advocated                                                               
requiring  a first  priority security  for ARLF  loans. She  said                                                               
there  had  been feedback  and  discussion  that the  requirement                                                               
could conflict  with other agricultural lenders'  needs and could                                                               
also  be  an  additional  hurdle   for  some  of  the  borrowers.                                                               
Therefore, the provision was removed.                                                                                           
                                                                                                                                
[Original punctuation included.]                                                                                                
                                                                                                                                
                       Summary of Changes                                                                                   
             From SB211 \A to CS for SB211(L&C) \B                                                                              
                                                                                                                                
        The Senate Labor & Commerce Committee changes as                                                                        
     reflected in version \B are:                                                                                               
     Overall:                                                                                                                 
          Adopts revisions recommended  by Legislative Legal                                                                    
          Services  to  conform  the bill  with  legislative                                                                    
          drafting standards;  additional conforming changes                                                                    
          accommodate substantive CS changes.                                                                                   
                                                                                                                                
     Removed:                                                                                                                 
          Removes  a  significant bill  component  expanding                                                                    
          the    procurement    preference   for    in-state                                                                    
          agricultural  and  fisheries  products  bought  by                                                                    
          state  agencies   and  by  school   districts  and                                                                    
          municipalities  that receive  state funding.  This                                                                    
          change removes  13 sections  as the  original bill                                                                    
          expanded the preference for  5 years, reverting to                                                                    
          current statute at the end of that period.                                                                            
                                                                                                                                
     New:                                                                                                                     
          Section 2, page 2,  lines 9-10 and 23-24: Includes                                                                  
          in-state manufacturing  of food or animal  feed to                                                                    
          the activities eligible  for Agriculture Revolving                                                                    
          Loan Fund loans.                                                                                                      
                                                                                                                                
          Section  3,  page  3,   lines  15-19:  Instead  of                                                                  
          eliminating the statutory maximum  in loans to one                                                                    
          person  and having  the Board  of Agriculture  and                                                                    
          Conservation set a  limit in regulation, increases                                                                    
          the statutory  cap from $1  million to  $3 million                                                                    
          and  enables annual  inflation adjustments  to the                                                                    
          cap. Removes  a requirement  for a  first priority                                                                    
          security for  certain loans, reverting  to current                                                                    
          statute  requiring  first priority  security  only                                                                    
          for certain loans.                                                                                                    
                                                                                                                                
2:41:34 PM                                                                                                                    
At ease.                                                                                                                        
                                                                                                                                
2:41:50 PM                                                                                                                    
CHAIR BJORKMAN reconvened the meeting; He removed his objection;                                                                
found no further objection and CSSB 211 was adopted as the                                                                      
working document.                                                                                                               
                                                                                                                                
2:42:07 PM                                                                                                                    
[CHAIR BJORKMAN held SB 211 in committee.]                                                                                      
                                                                                                                                
2:42:33 PM                                                                                                                    
There being no further business to come before the committee,                                                                   
Chair Bjorkman adjourned the Senate Labor and Commerce Standing                                                                 
Committee meeting at 2:42 p.m.