Legislature(2017 - 2018)SENATE FINANCE 532
04/25/2018 09:00 AM Senate FINANCE
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CS FOR HOUSE BILL NO. 217(FIN) "An Act relating to civil liability for risks inherent in farm touring; relating to the state and municipal procurement preferences for agricultural products harvested in the state and fisheries products harvested or processed in the state; relating to merchandise sold and certain fees charged or collected by the Department of Natural Resources; and providing for an effective date." 10:34:29 AM REPRESENTATIVE GERAN TARR, SPONSOR, believed that issues related to agriculture were important in discussions about diversifying the state's economy. She offered background information from the Sponsor Statement: More than 95% of Alaska's food is imported, yet farmers in Alaska are ready and motivated to increase production. From 2007 to 2012, direct sales in Alaska grew by 32% - 13 times the national average. In 2017, the Farm Bureau and Division of Agriculture launched a statewide campaign to encourage every Alaskan to spend just $5/week on Alaska Grown products, year-round, to generate $188 million for Alaska's economy. Retailers include Carrs-Safeway, Walmart, Fred Meyer, and Save-U-More. With expectations of further market growth in 2018, Bell's Nursery plans to increase production of tomatoes and cucumbers by 20 percent and the Alaska Flour Company added products to 23 additional retailers throughout the state. Alaska's farmers markets are also growing. In 2005 the Division of Agriculture listed 13 markets in Alaska. In 2014 that number grew to 37, and in 2017, there were 41, with more in planning stages. Market sales include: ? Tanana Valley Farmers Market (Fairbanks) - $1.25 million ? Homer Farmers Market (Homer)- $500,000 ? Kodiak Farmers Market (Kodiak) - $100,000 ? Mountain View Farmers Market (neighborhood market in Anchorage) - $19,000 Representative Tarr discussed the genesis of the bill. She said that the effort was to increase direct producer to consumer sales, eliminating the need for a middle man. She shared that the Department of Environmental Conservation was working with farmers on a pilot program for expanded sales of cottage food products online. Representative Tarr stated that as the bill transitioned, short term policy changes that would benefit farmers came to light. She discussed the receipt authority for the Department of Natural Resources to collect the fee for the promotional use of the "Alaska Grown" logo. She explained that the department would buy more promotional Alaska Grown materials wholesale and then distribute them to farmers. She added that the department would reinvest proceeds from the materials into the Alaska Grown program. Representative Tarr discussed procurement, which she had worked on for four years. She spoke of the Alaska Product Procurement Preference statue, which said that a state procurement officer buying food product would be directed to buy the lowest priced product but could spend up to 7 percent more on Alaskan products. She said that she had requested an audit of the statute in order to fully evaluate the effectiveness of the statute. She relayed that the audit revealed several challenges: the price problem, getting farmers on the preferred vendors list, and not having enough seasonal availability. She shared that the bill added "may spend" up to 15 percent. She stressed that the bill did not require additional spending but would make purchasing Alaskan grown products easier. 10:40:49 AM Representative Tarr used the example of an anchor tenant and smaller shops in a mall environment. She said that if farmers had a solid wholesale opportunity, they would be more likely to sell at a less than retail price because of the size of the contract. She asserted that farmers would grow more if they had assurance that their goods would sell. She believed that the bill would open greater opportunities for Alaskan farmers and would keep state dollars in-state. She relayed that there was a new trend in farm touring and believed that Alaskan could cash in on the activity. She stated that farm tour language had been added to statute, with protections form civil liability. 10:44:19 AM Representative Tarr thought that the activities listed in the bill were low risk for farmers. 10:45:05 AM DIANA RHODES, STAFF, REPRESENTATIVE GERAN TARR, addressed the Sectional Analysis (copy on file): Section 1 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 2 Amends Alaska Code of Civic Procedures, under the section of civil liability for sports and recreation activities Provides more freedom from civil liability to farmers who operate "farm tours" Section 3 Defines farm touring Farm touring means briefly visiting a farm to observe or experience aspects of raising, growing, producing, cultivating, harvesting, or processing an agricultural product as a tourist, without receiving pay. Sections 4 to 7 Amends multiple sections of existing statutes providing for the solicitation and purchasing of Alaska Grown agricultural and seafood products There currently exists a seven percent state and municipal preference procurement preference for Alaska Grown agricultural products harvested in the state and Alaska Grown fisheries products harvested or processed in the state; this would give flexibility to purchase fisheries and agriculture products if priced not more than 15 percent above a similar product harvested outside the state (This includes entities that receive state money, including school districts and the university). Section 8 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 9 Effective date for the "farm touring" is after January 1, 2019. Section 10 Effective date of the bill is July 1, 2019. 10:46:50 AM Vice-Chair Bishop commented on the importance of supporting in-state agriculture. In 1950, Alaska grew 55 percent of its food. He discussed food security and the importance of being prepared for emergencies. He noted that Alaskan products had a greater shelf-life than out-of-state products. Senator Stevens commented on seafood products. He thought that similar interest should be taken in the marketing of seafood products. 10:49:09 AM Co-Chair MacKinnon OPENED public testimony. AMY SEITZ, ALASKA FARM BUREAU, SOLDOTNA (via teleconference), testified in support of the bill. She echoed the comments of Vice-Chair Bishop on food security. She believed that the agriculture industry in the state was young and needed to build infrastructure and supporting policy. She lamented that 95 percent of the food in the state was imported form other states and countries and there was only a 3 to 5-day supply of most food items on grocery store shelves. She remarked on language removed from the bill related to cottage foods industry. She hoped to work with Department of Environmental Conservation on the items that had been removed to the bill. She hoped that the bill would give farmers more opportunity in the product preference program. She discussed receipt authority. She thought that the if fees could be collected for the Alaska Grown marketing items it would help farmers to indicate that products were Alaskan grown, while supporting the Division of Agriculture. She highlighted the importance of public outreach for Alaskan grown products. She hoped to increase the incentives for the State Procurement Office to buy Alaska grown and to develop enticement language to get wholesalers to buy Alaskan grown products. 10:54:36 AM Ms. Seitz concluded that protecting farmers, who offer farm tours, from liability should be a priority. 10:55:15 AM Co-Chair MacKinnon CLOSED public testimony. CSHB 217(FIN) was HEARD and HELD in committee for further consideration. Co-Chair MacKinnon announced that amendments were due the following day at noon. Co-Chair MacKinnon discussed the agenda for the afternoon.