HB 217-RAW MILK SALES; FOOD EXEMPT FROM REGS  2:38:21 PM CO-CHAIR TARR announced that the final order of business would be HOUSE BILL NO. 217, "An Act relating to the Alaska Food, Drug, and Cosmetic Act; relating to the sale of milk, milk products, raw milk, and raw milk products; and providing for an effective date." 2:39:06 PM CO-CHAIR JOSEPHSON moved to adopt the committee substitute (CS) for HB 217, 30-LS0593\J, Wayne, 2/6/18, as the working document. CO-CHAIR TARR objected for discussion purposes. 2:39:31 PM DIANA RHOADES, Staff, Representative Geran Tarr, Alaska State Legislature, informed the committee CSHB 217 [Version J] adds provisions from HB 46 - which moved out of the House Resources Standing Committee [3/22/17] - , would allow the commissioner of the Department of Natural Resources (DNR) to sell promotional merchandise related to the Alaska Grown logo, and encourages the state, schools, and municipalities to purchase Alaska Grown agricultural and fisheries products at a required 7 percent preference and up to a 15 percent preference. Another change in HB 217 brought by the committee substitute is the removal of the section related to raw milk sales; however, CSHB 217 maintains the provisions to increase farmers' direct-to-consumer sales by implementing the food freedom movement. MS. RHOADES paraphrased from the following sponsor statement [original punctuation provided]: Section 1 Establishes Short Title as Alaska Food Freedom Act Concerns about states enforcing the federal Food Safety Modernization Act prompted farmers across the country, including Alaska, to pass laws to guarantee the freedom of farmers to sell directly to end consumers without overwhelming government regulations. Section 2 Amends powers of Commissioner of Department of Natural Resources to sell promotional merchandise related to the Alaska Grown logo Allows the Division of Agriculture within the Department of Natural Resources to issue a license and charge a license fee for the sale of promotional merchandise related to the Alaska Grown logo. The commissioner shall price the merchandise in a manner that ensures a reasonable monetary return to the state. It is encouraged that the merchandise be manufactured in the US and is procured from either an Alaska bidder or a person that employs Alaska prison inmates. Section 3 Amends Food, Drugs and Cosmetic Act's Prohibited Acts Section, to allow exemptions from licensing for some in-state food production Allows direct sales from farmers to consumers for certain Alaska Grown food and food products with appropriate labeling; allows online sales of value- added food products; defines farmers' markets. Section 4 Rewrites municipal procurement code preference for Alaska Grown agricultural products If receiving state money, a municipality is currently required to purchase Alaska Grown agriculture products if they are priced not more than seven percent above a similar product harvested outside the state; this would give flexibility to purchase the product if priced not more than 15 percent above a similar product harvested outside the state. Section 5 - Rewrites municipal procurement code preference for Alaska-grown fisheries products If receiving state money, a municipality is currently required to purchase Alaska Grown seafood products if they are priced not more than seven percent above a similar product harvested outside the state; this would give flexibility to purchase the product if priced not more than 15 percent above a similar product harvested outside the state. CSHB217 (J) Alaska Food Freedom Act Sectional Analysis 2.7.18 Page 2 Section 6 Amends municipal solicitation procedure for procurement code preference for Alaska-grown agricultural and fisheries products If receiving state money, a solicitation by a municipality for the purchase of Alaska Grown agriculture and seafood products must include written notice that these products must follow the rules of Section 4 and 5. Further, if they don't purchase Alaska Grown products, the municipal officer shall certify in writing the reasons why Alaska Grown products were not purchased. Section 7 - Amends state preferences for Alaska Grown agricultural products When agricultural products are purchased by the state or by a school district that receives state money, they are currently required to purchase Alaska Grown products if they are priced not more than seven percent above a similar product harvested outside the state; this would give flexibility to purchase the product if priced not more than 15 percent above a similar product harvested outside the state. Section 8 - Amends state preferences for Alaska Grown fisheries products If fisheries products are purchased by the state or by a school district that receives state money, they are currently required to purchase Alaska Grown products if they are priced not more than seven percent above a similar product harvested outside the state; this gives flexibility to purchase the product if priced not more than 15 percent above a similar product harvested outside the state. Section 9 - Amends state solicitation procedure for procurement preferences for Alaska Grown fisheries and agricultural products If receiving state money, a solicitation by a state or school district for the purchase of Alaska Grown agriculture and seafood products must include written notice that these products must follow the rules of Sections 7 and 8. Further, if they don't purchase Alaska Grown products, the officer responsible shall certify in writing the reasons why Alaska Grown products were not purchased. Section 10 Amends Public Finance Fiscal Procedures Act to collect fees Allows the commissioner of the Department of Natural Resources to collect fees for Alaska Grown promotional merchandise. Section 11 Effective date 2:43:25 PM CO-CHAIR TARR removed her objection. There being no further objection, Version J was before the committee. CO-CHAIR TARR opened public testimony. 2:44:12 PM BRYCE WRIGLEY, President, Alaska Farm Bureau, Inc., said the Alaska Farm Bureau strongly supports all efforts to expand agricultural opportunities in Alaska because as a young state, Alaska has not had the opportunity to build an infrastructure and establish policies to help farmers grow their businesses. In fact, Alaska imports approximately 95 percent of its food, and residents only have a 3- to 5-day supply of most food items in grocery stores. Bills like HB 217 would improve agricultural policies and increase access and options for consumers and farmers. Mr. Wrigley reported the Alaska $5 Alaska Grown Challenge is a tool to increase the visibility of Alaska Grown products, and the bill would strengthen the product preference program which would allow farmers to increase production and serve additional markets. [CSHB 217] provides receipt authority for a revenue stream in support of Alaska Grown marketing materials. Further, good agricultural policies are important because they will increase opportunities to get local products to market, will build the agricultural industry, will increase food security, and will create jobs in the rural farming industry. 2:47:16 PM PATRICIA GRISWOLD, Grandma's Gardens, informed the committee Grandma's Gardens is a greenhouse and garden business. She related she is familiar with state regulations on the labeling of products such as jams and fresh produce, and commented on items not on the agenda. 2:49:55 PM ART GRISWOLD provided comments on topics not pertinent to CSHB 217. 2:51:28 PM There followed a brief discussion of topics not pertinent to CSHB 217. 2:54:43 PM MATTHEW BATES provided comments on topics not pertinent to CSHB 217, and spoke in support of the provision in CSHB 217 related to Alaska Grown. 2:56:32 PM DANNY CONSENSTEIN, Representative, Alaska Food Policy Council (AFPC), said AFPC is a coalition of Alaskans striving to create a healthier, more secure, and more self-reliant Alaska by improving its food system. [AFPC] represents farmers, fishermen, food businesses, schools, government agencies, nonprofits, subsistence users, and consumers in Alaska. He said AFPC is pleased that the legislature is now recognizing food issues are a priority. HB 217 recognizes the critical role played by farmers markets - and other direct sales to consumers - to create a market for agricultural and fishing businesses. In fact, AFPC sees opportunities to create jobs and to diversify the economy by supporting food-related small businesses and retain some of the $1.9 billion that is spent on imported food. In 2014, AFPC published a report that revealed $1 out of $5 earned by Alaska farmers is earned through direct sales, and the direct sales market is growing; at this time annual direct sales are $2.2 million annually. Mr. Constantine explained large industrial-scale agribusiness is not necessary to achieve the goal of more Alaskans eating Alaska Grown food, and he provided an example. He also expressed support for state procurement of local products. 3:03:02 PM JOHANNA HERRON, Coordinator, Marketing, Alaska Grown & Farm to School, Division of Agriculture, DNR, regarding the receipt authority [provision in CSHB 217], informed the committee the division has historically had to find federal funding to provide marketing supplies to farmers; however, farmers have expressed interest in buying supplies wholesale from the division. 3:03:56 PM CO-CHAIR TARR announced public testimony for HB 217 remained open. HB 217 was held over.