HB 140-CREATE DEPARTMENT OF AGRICULTURE  1:03:31 PM CO-CHAIR BURKE announced that the first order of business would be HOUSE BILL NO. 140 "An Act establishing the Department of Agriculture; relating to the establishment of the Department of Agriculture; transferring functions of the Department of Natural Resources related to agriculture to the Department of Agriculture; and providing for an effective date." 1:04:02 PM REPRESENTATIVE ZACK FIELDS, Alaska State Legislature, introduced HB 140 and summarized why he supported the formation of a Department of Agriculture using the legislative process rather than an executive order. He explained that there was a lot of support among legislators for creating a Department of Agriculture through legislation. 1:04:51 PM AMY SEITZ, Policy Director, Alaska Farm Bureau, explained that she was speaking from the position of the Alaska Farm Bureau, and represented their support of HB 140. She began her presentation, titled "Alaska Department of Agriculture, Prioritizing a strong industry" [hard copy included in the committee packet]. She moved to slide 2, titled "Mission and Vision," which read as follows [original punctuation provided]: Support, promote and encourage development of an agriculture and mariculture industry in Alaska that is viable, profitable and sustainable. Promote an economically stable agriculture and mariculture industry for Alaska that can enhance the quality of life for its people, create sustainability of its communities and environment, and encourages new business development opportunities for all Alaskans. She emphasized the importance of building the agricultural industries for the betterment of Alaska. 1:06:19 PM MS. SEITZ moved to slide 3, titled "Goals," which read as follows [original punctuation provided]: Increase production Market development - promote buying local at all market levels Increase economic viability in all types and sizes of farm & food businesses Improve transportation system Improve food security Assist with expanding infrastructure Increase access to capital Expand support programs statewide Improve access to and protect lands and waters suitable for farming She explained that these goals were in place with the existing division as well as for the mariculture industry. She referenced the work of the food security task force, the legislative food strategy task force, the mariculture task force, and the 2009 Division of Agriculture strategic plan. She pointed out that a basic framework was in place for building a strong agriculture industry. 1:07:44 PM MS. SEITZ moved to slide 4, titled "Strategic Plan for Moving Forward," which showed a photo of some incredibly adorable goats looking through a barn window. She advanced to slide 5, titled "Department Focus, Focus on in-state production," which read as follows [original punctuation provided]: Department of Agriculture ? Department of Agriculture and Fish ? Department of Food Security ? She pointed out that the name of the new department is not as important as what it accomplishes, but a name would provide focus. She discussed the merits of three possible names, emphasizing the need to focus on the cultivation aspect of the food industry. If the department was named the Department of Agriculture and Fish, the greater emphasis might be on fish rather than agriculture. If the name became the Department of Food Security, it would leave out non-food farms such as peony farms which have a world market. 1:11:17 PM MS. SEITZ proceeded to slide 6, titled "Alaska Department of Agriculture Organization Chart," which showed one possible framework for the new department based on a white paper created ty the Alaska Food Strategy Task Force. She explained that the organizational chart was theoretical at the time, but it provided a basis for discussion. She reiterated the importance of having a commissioner who would be focused on the needs of Alaska agriculture. 1:13:12 PM MS. SEITZ moved to slide 7, titled "Program Expansion," which read as follows [original punctuation provided]: Market Development Grants and Loans Lands and Waters Inspection Services Alaska FFA Mariculture Increased staff capacity & program funding = increased reach, resources and ability to build industry Details in Department of Agriculture White Paper She discussed the proposed program expansion and described the potential positive results. For example, outside funding would become available; education and outreach could be expanded; there would be a broader reach around the state specifically in rural communities; and the focus on land would be increased to include water for mariculture. 1:17:27 PM MS. SEITZ showed slide 8, titled, "Do we really need a Department?" which showed a photo of peonies and proceeded to slide 9, titled "Momentum + Support = Greater Success," which showed census data comparing information on Alaska agriculture from 1982, 2002, and 2022 regarding the number of farms, cropland harvested, the value of crops sold, and cut flowers and floral greens. 1:18:45 PM MS. SEITZ responded to questions from Representative Coulombe and Representative Rauscher regarding whether the numbers included farms which cultivated marijuana or hemp, explaining that it was not listed as one of the crops in the agricultural census report. 1:20:16 PM MS. SEITZ, in response to a question from Representative Elam, said she would provide a line item of what crops were included in the agriculture division's census. 1:21:09 PM6 MS. SEITZ proceeded to slide 10 which continued the topic, titled "Momentum + Support = Greater Success." It showed a chart comparing the operating budgets for the years 2005, 2010, 2015, 2020, 2024, and the funding proposed for 2025. She suggested that Alaska agriculture receives insufficient resources, and it has had a negative effect. She commented that attempts to build a stronger division have not seemed to work and that a department will work better. 1:24:39 PM MS. SEITZ responded to a question from Representative Raucher who referred to the types of funding outlined on slide 9. She moved to slide 11 which read as follows [original punctuation provided]: Division of Agriculture Underfunded = low capacity Low priority in department Efforts to start agriculture not build Department of Agriculture Brings focus and priority Cabinet-level voice Greater opportunity to build industry Pointed out the comparisons on slide 11, highlighting how a department of agriculture would be in a better position to assist with emergencies or disasters. A commissioner of agriculture would help prioritize Alaska agriculture on a state and national level. 1:31:45 PM MS. SEITZ responded to a question from Representative Saddler regarding whether the farming community supported the Department of Agriculture being created through an executive order or through the legislative process. She explained that creating the department is more important than how it is created. 1:32:59 PM MS. SEITZ, in response to a question from Representative Elam regarding fish farming, stated that the farm bureau was not taking a position on that issue. 1:34:07 PM REPRESENTATIVE FIELDS addressed the topic of fish farming raised by Representative Elam. He described the primary differences between hatchery fish and fish farming, pointing out the statutory prohibition on fin fish farming. He said that he supported having mariculture in the new department, but he did not see a reason to move some of the functions of the Alaska Department of Fish & Game (ADF&G) to the agriculture department. 1:38:23 PM CO-CHAIR BURKE opened invited testimony on HB 140. 1:38:53 PM JASON LESSARD, Executive Director, Alaska Mariculture Alliance, explained that the mission of the Alaska Maricultural Alliance (AMA) was to develop and support a stable and robust maricultural industry for the long-term benefit of Alaska's economy, environment, and communities. He described how the marine shellfish and aquatic plant industry can diversify the economy, create opportunities, address food security issues, help filter seawater, and create habitat for aquatic species such as shrimp. He also discussed how aquatic plants can be used as fertilizer, replacing reliance on harsher chemicals. He explored the history of support for mariculture and commented on the diverse groups encompassed by AMA. He acknowledged that mariculture is a nascent industry, and developing guidelines and regulations would be an ongoing process. He said that the AMA is interested in a department of agriculture but does not have an official stance. There was a preference for legislation rather than an executive order because AMA could be involved in the process. 1:45:59 PM MR. LESSARD, in response to several questions from Representative Mears, explained that AMA has worked with the Department of Natural Resources (DNR) and ADF&G. He described how mariculture overlaps with those departments. 1:47:57 PM MR. LESSARD responded to a question from Representative Rauscher, explaining that it was his understanding that an executive order was simply an up and down vote which would make it more difficult for AMA to provide input, whereas the legislative process allows groups and individuals to be engaged in the process. 1:49:24 PM MR. LESSARD addressed several questions from Representative Coulombe, acknowledging that mariculture was not mentioned in HB 140 at that time, and that AMA also worked with the Alaska Department of Environmental Conservation. 1:50:50 PM REPRESENTATIVE COULOMBE referenced an apparent shift in the bill to take powers from the Board of Agriculture and give them to the commissioner. REPRESENTATIVE FIELDS explained that eliminating the board is not the intent. He commented that one of the reasons for putting forth the bill was to provide a means for addressing different issues. He gave the example of determining whether mariculture should be included with agriculture. 1:52:16 PM RENA MILLER, Special Assistant to the Commissioner, Department of Natural Resources, explained that HB 140 was not DNR's bill, so she could not address questions of intent. However, she explained that the bill would redirect the communications flow. The bill would direct communications through the commissioner because the commissioner would become the executive director of the Board Of Agriculture & Conservation. 1:53:53 PM MS. MILLER responded to a question from Representative Elam regarding the structure of the proposed department, explaining that neither the executive order (EO) nor HB 140 created a specific structure beyond creating the position of commissioner. The structure would be determined through the fiscal note. 1:55:04 PM REPRESENTATIVE FIELDS addressed several questions posed by Representative Saddler regarding why he supported legislation rather than supporting EO 136. He explained that he supported the creation of a department of agriculture, but he posited that a more robust structure would result from the legislative process because of the opportunity to propose changes. He pointed out the suggested department structure starting on page 13 of the Food Strategy Task Force report. 1:57:54 PM REPRESENTATIVE FIELDS responded to several questions from Representative Coulombe regarding how the department would be paid for. He suggested that the permanent fund dividend (PFD) would be zero dollars within several years, and he would support the permanent fund as a funding source for a department of agriculture. However, he wanted to honor the will of the committee in this matter. 1:59:45 PM MS. MILLER reviewed the fiscal notes, noting that there were three because the current division of agriculture would be moved completely to the new department. One fiscal note was from the agriculture development allocation which would take their budget and their staff and move them to the new department. The second note is from the plant materials center allocation that would also move budget and staff to the new department. The new note would move those budgets into the new department. That fiscal note was indeterminate because it would depend on how the committee and the legislature would staff and resource the new department. 2:01:06 PM MS. MILLER responded to a question from Representative Saddler regarding whether a department created by HB 140 would operate differently than a department created by executive order. She stated her understanding that regardless of how a department was created, once it is in statute, the legislature could amend the statute as it sees fit. 2:01:57 PM REPRESENTATIVE MEARS agreed with Representative Coulombe's concern regarding funding for a new department. She pointed out that the fiscal issues might mean providing additional support within the current division rather than support for a new department. 2:03:09 PM REPRESENTATIVE COULOMBE explained that her previous support for the EO was because the fiscal note was zero. She reiterated her concern regarding using the permanent fund for the agriculture department because using the dividend as a funding source has been presented as a solution for a number of other cases, also. She posited that the size of the fiscal note might cause the bill to fail. She would like to see a smaller fiscal note and potentially a smaller department. 2:04:27 PM REPRESENTATIVE FIELDS stated his belief that there would be more oil revenue within a few years and said he agreed with Representative Coulombe's suggestion for a phased approach. 2:04:45 PM CO-CHAIR BURKE announced HB 140 would be held over.