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HOUSE BILL NO. 296
IN THE LEGISLATURE OF THE STATE OF ALASKA
THIRTY-THIRD LEGISLATURE - SECOND SESSION
BY THE HOUSE RULES COMMITTEE BY REQUEST OF THE GOVERNOR
Introduced: 1/26/24
Referred: Resources
A BILL
FOR AN ACT ENTITLED
"An Act relating to the powers of the board of agriculture and conservation; relating to 1
loans and limitations under the Alaska Agricultural Loan Act; relating to federal crop 2
insurance contributions; relating to municipal and state procurement preferences for 3
agricultural products harvested in the state and fisheries products harvested or 4
processed in the state; and providing for an effective date." 5
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 6
* Section 1. AS 03.09.030 is amended to read: 7
Sec. 03.09.030. Quorum. Four [FIVE] members of the Board of Agriculture
8
and Conservation constitute a quorum for the transaction of business or the exercise of 9
a power or function at a meeting of the board. 10
* Sec. 2. AS 03.10.020(a) is amended to read: 11
(a) The Board of Agriculture and Conservation (AS 03.09.010) may 12
(1) make a loan to 13 33-GH2386\A
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(A) an individual resident farmer, homesteader, or a partnership 1
or corporation composed of farmers and homesteaders for 2
(i) clearing land for agricultural purposes; 3
(ii) development of farms; 4
(iii) storage and processing of farm produce; or 5
(iv) the purchase of livestock or machinery; 6
(B) an individual state resident, or a partnership or corporation 7
for 8
(i) storage and processing plants for agricultural 9
products; 10
(ii) the commercial production or processing of 11
horticultural products in the state; 12
(iii) the commercial production or processing of animal 13
feed in the state; [OR] 14
(iv) the raising or care of animals in the state for the 15
purpose of marketing their fur; or 16
(v) shipping costs to and within the state; 17
(2) designate agents and delegate its powers to them as necessary; 18
(3) adopt regulations necessary to carry out its functions, including 19
regulations to establish reasonable fees for services provided and charges for 20
collecting the fees; 21
(4) establish amortization plans for repayment of loans, which may 22
include delayed payments of principal and interest for not to exceed five years; 23
(5) enter into agreements with private lending institutions, other state 24
agencies, or agencies of the federal government to carry out the purposes of this 25
chapter; 26
(6) collect the fees and collection charges established under this 27
subsection; 28
(7) refinance a debt obligation incurred by a borrower under this 29
section or through another lender for a purpose authorized by (1) of this 30
subsection if the borrower otherwise qualifies for a loan under AS 03.10.010 - 31 33-GH2386\A
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03.10.060. 1
* Sec. 3. AS 03.10.030(a) is amended to read: 2
(a) A [THE] farm development, chattel, or irrigation loan made under this 3
chapter 4
(1) may not exceed a term of 30 years, except that a chattel loan may 5
not exceed a term of seven years; 6
(2) may not, when added to the outstanding balance of other loans 7
made under this chapter, exceed the maximum loan amount permitted for any 8
borrower established by the Board of Agriculture and Conservation in regulation 9
[A TOTAL OUTSTANDING BALANCE OF $1,000,000]; 10
(3) shall be secured by a first priority real estate or chattel mortgage 11
[OF ANY PRIORITY, EXCEPT THAT THE PORTION OF A LOAN THAT 12
EXCEEDS $500,000, WHEN ADDED TO PRIOR INDEBTEDNESS THAT IS 13
SECURED BY THE SAME PROPERTY, MUST BE SECURED BY A FIRST 14
MORTGAGE]; 15
(4) shall bear interest at a fixed rate comparable to that charged by 16
other agricultural lending institutions in the state for loans similar to those referred to 17
in this subsection. 18
* Sec. 4. AS 03.10.030(c) is amended to read: 19
(c) A short-term loan, to be amortized within one year, not to exceed an 20
amount set by the Board of Agriculture and Conservation in regulation 21
[$350,000] to any one borrower, may be made for operating purposes, except that a 22
loan made under this subsection may not exceed $500,000 [$200,000] unless the loan 23
is made to a borrower in a farm disaster area declared under AS 03.10.058. The loan 24
shall bear interest at a fixed rate comparable to that charged by other agricultural 25
lending institutions in the state for loans similar to those referred to in this subsection. 26
An applicant for a short-term loan may be required to purchase insurance through the 27
Federal Crop Insurance Act (7 U.S.C. 1501 - 1520) as a condition of the loan. The 28
term of a loan made under this subsection may be extended for up to three years by the 29
Board of Agriculture and Conservation, in the discretion of the board, upon 30
application by the borrower. 31 33-GH2386\A
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* Sec. 5. AS 03.10.030(f) is amended to read: 1
(f) A farm product processing loan may not exceed $500,000 [$250,000]. A 2
mortgage that secures a farm product processing loan may be of any priority if the 3
total indebtedness on the real estate, including the secured farm product processing 4
loan, does not exceed $500,000 [$250,000]. A farm product processing loan that, if 5
made, would raise the existing indebtedness on the real estate securing the loan above 6
$500,000 [$250,000], or a farm product processing loan on real estate that has a prior 7
indebtedness of $500,000 [$250,000] or more, may be made only if all prior 8
mortgagees agree to subordinate their mortgages to that of the state for the amount of 9
the farm product processing loan that exceeds the $500,000 [$250,000] indebtedness 10
limit on the real estate. A farm product processing loan may not exceed a term of 30 11
years or bear interest at a rate that is less than a fixed rate comparable to that charged 12
by other agricultural lending institutions in the state for similar loans, and shall be 13
secured by a real estate or chattel mortgage or both. 14
* Sec. 6. AS 03.10.030(g) is amended to read: 15
(g) A loan for clearing land may not 16
(1) exceed an amount set by the Board of Agriculture and 17
Conservation in regulation [$250,000]; 18
(2) bear interest at a rate that is less than a fixed rate comparable to 19
that charged by other agricultural lending institutions in the state for similar loans; 20
(3) have a term in excess of 20 years; or 21
(4) be made for clearing land other than land that has been classified 22
by the United States Department of Agriculture, Natural Resources Conservation 23
Service, under the Land Capability Classification System as having agricultural 24
potential for the production of annual crops or hay, or for pasture. 25
* Sec. 7. AS 03.13.030 is repealed and reenacted to read: 26
Sec. 03.13.030. State contribution; limitation. Except as provided in 27
AS 03.13.040(b), the state shall pay a percentage of the covered producer's revenue 28
protection policy premium, as calculated by the corporation, equivalent to the amount 29
required to obtain 30
(1) 85 percent revenue protection for the first two policy years; 31 33-GH2386\A
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(2) 80 percent revenue protection for the third policy year; 1
(3) 75 percent revenue protection for the fourth policy year; and 2
(4) if a producer purchases a minimum of 55 percent revenue 3
protection coverage, 70 percent revenue protection for the fifth policy year and any 4
future year. 5
* Sec. 8. AS 03.13.040(b) is amended to read: 6
(b) If for any year the amount appropriated is insufficient to fully fund the 7
contribution required by AS 03.13.030 [AS 03.13.020], the department shall allocate 8
funds on a first come basis. 9
* Sec. 9. AS 03.13 is amended by adding a new section to read: 10
Sec. 03.13.045. Regulations. The department may adopt regulations under 11
AS 44.62 (Administrative Procedure Act) to carry out this chapter, including 12
regulations to establish reasonable fees for services provided by the department. 13
* Sec. 10. AS 03.13.050 is amended by adding a new paragraph to read: 14
(2) "revenue protection" has the meaning given in 7 C.F.R. 457.8. 15
* Sec. 11. AS 29.71.040(a) is amended to read: 16
(a) If a municipality that receives state money seeks to purchase an 17
agricultural product and an agricultural product harvested in the state is available that 18
is of like quality compared with a similar agricultural product harvested outside the 19
state, the municipality 20
[(1)] shall purchase the product harvested in the state [IF THE 21
PRODUCT IS PRICED NOT MORE THAN SEVEN PERCENT ABOVE THE 22
SIMILAR PRODUCT HARVESTED OUTSIDE THE STATE; 23
(2) MAY PURCHASE THE PRODUCT HARVESTED IN THE 24
STATE ONLY IF THE PRODUCT IS PRICED NOT MORE THAN 15 PERCENT 25
ABOVE THE SIMILAR PRODUCT HARVESTED OUTSIDE THE STATE]. 26
* Sec. 12. AS 29.71.040(a), as amended by sec. 11 of this Act, is amended to read: 27
(a) If a municipality that receives state money seeks to purchase an 28
agricultural product and an agricultural product harvested in the state is available that 29
is of like quality compared with a similar agricultural product harvested outside the 30
state, the municipality 31 33-GH2386\A
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(1) shall purchase the product harvested in the state if the product is 1
priced not more than seven percent above the similar product harvested outside 2
the state; 3
(2) may purchase the product harvested in the state only if the 4
product is priced not more than 15 percent above the similar product harvested 5
outside the state. 6
* Sec. 13. AS 29.71.040(b) is amended to read: 7
(b) If a municipality that receives state money seeks to purchase a fisheries 8
product and a fisheries product harvested or processed within the jurisdiction of the 9
state is available that is of like quality compared with a similar fisheries product 10
harvested or processed outside the jurisdiction of the state, the municipality 11
[(1)] shall purchase the product harvested or processed within the 12
jurisdiction of the state [IF THE PRODUCT IS PRICED NOT MORE THAN SEVEN 13
PERCENT ABOVE THE SIMILAR PRODUCT HARVESTED OR PROCESSED 14
OUTSIDE THE JURISDICTION OF THE STATE; 15
(2) MAY PURCHASE THE PRODUCT HARVESTED OR 16
PROCESSED IN THE JURISDICTION OF THE STATE ONLY IF THE PRODUCT 17
IS PRICED NOT MORE THAN 15 PERCENT ABOVE THE PRODUCT 18
HARVESTED OR PROCESSED OUTSIDE THE JURISDICTION OF THE 19
STATE]. 20
* Sec. 14. AS 29.71.040(b), as amended by sec. 13 of this Act, is amended to read: 21
(b) If a municipality that receives state money seeks to purchase a fisheries 22
product and a fisheries product harvested or processed within the jurisdiction of the 23
state is available that is of like quality compared with a similar fisheries product 24
harvested or processed outside the jurisdiction of the state, the municipality 25
(1) shall purchase the product harvested or processed within the 26
jurisdiction of the state if the product is priced not more than seven percent above 27
the similar product harvested or processed outside the jurisdiction of the state; 28
(2) may purchase the product harvested or processed in the 29
jurisdiction of the state only if the product is priced not more than 15 percent 30
above the product harvested or processed outside the jurisdiction of the state. 31 33-GH2386\A
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* Sec. 15. AS 29.71.040(c) is amended to read: 1
(c) A solicitation by a municipality for the purchase of agricultural or fisheries 2
products must include written notice of the purchase requirements and limitations 3
under (a) and (b) of this section and specify that agricultural products harvested in the 4
state and fisheries products harvested or processed within the jurisdiction of the state 5
will be used where possible, subject to the limitations under (a) and (b) of this section. 6
A seller of agricultural or fisheries products shall submit an accurate copy of the 7
seller's current wholesale pricing list in the seller's response to a solicitation. 8
Submission of inaccurate pricing information may be cause for debarment under 9
AS 36.30.640 or civil penalties under AS 36.30.930. If a municipality that receives 10
state money purchases agricultural products harvested outside the state or fisheries 11
products harvested or processed outside the jurisdiction of the state, the municipal 12
officer responsible for the purchase shall certify in writing the reasons that agricultural 13
products harvested in the state or fisheries products harvested or processed within the 14
jurisdiction of the state were not purchased. 15
* Sec. 16. AS 29.71.040(c), as amended by sec. 15 of this Act, is amended to read: 16
(c) A solicitation by a municipality for the purchase of agricultural or fisheries 17
products must include written notice of the purchase requirements and limitations 18
under (a) and (b) of this section and specify that agricultural products harvested in the 19
state and fisheries products harvested or processed within the jurisdiction of the state 20
will be used where possible, subject to the limitations under (a) and (b) of this section. 21
[A SELLER OF AGRICULTURAL OR FISHERIES PRODUCTS SHALL SUBMIT 22
AN ACCURATE COPY OF THE SELLER'S CURRENT WHOLESALE PRICING 23
LIST IN THE SELLER'S RESPONSE TO A SOLICITATION. SUBMISSION OF 24
INACCURATE PRICING INFORMATION MAY BE CAUSE FOR DEBARMENT 25
UNDER AS 36.30.640 OR CIVIL PENALTIES UNDER AS 36.30.930.] If a 26
municipality that receives state money purchases agricultural products harvested 27
outside the state or fisheries products harvested or processed outside the jurisdiction of 28
the state, the municipal officer responsible for the purchase shall certify in writing the 29
reasons that agricultural products harvested in the state or fisheries products harvested 30
or processed within the jurisdiction of the state were not purchased. 31 33-GH2386\A
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* Sec. 17. AS 36.15.050(a) is amended to read: 1
(a) When agricultural products are purchased by the state or by a school 2
district that receives state money, and an agricultural product harvested in the 3
state is available that is of like quality compared with a similar agricultural 4
product harvested outside the state, the state or school district shall purchase the 5
product [A PREFERENCE NOT LESS THAN SEVEN PERCENT NOR MORE 6
THAN 15 PERCENT SHALL BE APPLIED TO THE PRICE OF PRODUCTS] 7
harvested in the state. 8
* Sec. 18. AS 36.15.050(a), as amended by sec. 17 of this Act, is amended to read: 9
(a) When agricultural products are purchased by the state or by a school 10
district that receives state money, a preference not less than seven percent nor more 11
than 15 percent shall be applied to the price of products [AND AN 12
AGRICULTURAL PRODUCT HARVESTED IN THE STATE IS AVAILABLE 13
THAT IS OF LIKE QUALITY COMPARED WITH A SIMILAR AGRICULTURAL 14
PRODUCT HARVESTED OUTSIDE THE STATE, THE STATE OR SCHOOL 15
DISTRICT SHALL PURCHASE THE PRODUCT] harvested in the state. 16
* Sec. 19. AS 36.15.050(b) is amended to read: 17
(b) When fisheries products are purchased by the state or by a school district 18
that receives state money, and a fisheries product harvested or processed within 19
the jurisdiction of the state is available that is of like quality compared with a 20
similar fisheries product harvested or processed outside the jurisdiction of the 21
state, the state or school district shall purchase the product [A PREFERENCE 22
NOT LESS THAN SEVEN PERCENT NOR MORE THAN 15 PERCENT SHALL 23
BE APPLIED TO THE PRICE OF PRODUCTS] harvested or processed within the 24
jurisdiction of the state. 25
* Sec. 20. AS 36.15.050(b), as amended by sec. 19 of this Act, is amended to read: 26
(b) When fisheries products are purchased by the state or by a school district 27
that receives state money, a preference not less than seven percent nor more than 28
15 percent shall be applied to the price of products [AND A FISHERIES 29
PRODUCT HARVESTED OR PROCESSED WITHIN THE JURISDICTION OF 30
THE STATE IS AVAILABLE THAT IS OF LIKE QUALITY COMPARED WITH 31 33-GH2386\A
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A SIMILAR FISHERIES PRODUCT HARVESTED OR PROCESSED OUTSIDE 1
THE JURISDICTION OF THE STATE, THE STATE OR SCHOOL DISTRICT 2
SHALL PURCHASE THE PRODUCT] harvested or processed within the jurisdiction 3
of the state. 4
* Sec. 21. AS 36.15.050(c) is amended to read: 5
(c) A solicitation for the purchase of agricultural or fisheries products must 6
include written notice of the preferences under (a) and (b) of this section and specify 7
that agricultural products harvested in the state and fisheries products harvested or 8
processed within the jurisdiction of the state will be used where possible. A seller of 9
agricultural or fisheries products shall submit an accurate copy of the seller's 10
current wholesale pricing list in the seller's response to a solicitation. Submission 11
of inaccurate pricing information may be cause for debarment under 12
AS 36.30.640 or civil penalties under AS 36.30.930. If the state or a school district 13
that receives state money purchases agricultural products harvested outside the state or 14
fisheries products harvested or processed outside the jurisdiction of the state, the 15
officer responsible for the purchase shall certify in writing the reasons that agricultural 16
products harvested in the state or fisheries products harvested or processed within the 17
jurisdiction of the state were not purchased. 18
* Sec. 22. AS 36.15.050(c), as amended by sec. 21 of this Act, is amended to read: 19
(c) A solicitation for the purchase of agricultural or fisheries products must 20
include written notice of the preferences under (a) and (b) of this section and specify 21
that agricultural products harvested in the state and fisheries products harvested or 22
processed within the jurisdiction of the state will be used where possible. [A SELLER 23
OF AGRICULTURAL OR FISHERIES PRODUCTS SHALL SUBMIT AN 24
ACCURATE COPY OF THE SELLER'S CURRENT WHOLESALE PRICING LIST 25
IN THE SELLER'S RESPONSE TO A SOLICITATION. SUBMISSION OF 26
INACCURATE PRICING INFORMATION MAY BE CAUSE FOR DEBARMENT 27
UNDER AS 36.30.640 OR CIVIL PENALTIES UNDER AS 36.30.930.] If the state 28
or a school district that receives state money purchases agricultural products harvested 29
outside the state or fisheries products harvested or processed outside the jurisdiction of 30
the state, the officer responsible for the purchase shall certify in writing the reasons 31 33-GH2386\A
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that agricultural products harvested in the state or fisheries products harvested or 1
processed within the jurisdiction of the state were not purchased. 2
* Sec. 23. AS 03.13.020 is repealed. 3
* Sec. 24. The uncodified law of the State of Alaska is amended by adding a new section to 4
read: 5
REPORT TO THE LEGISLATURE. Not later than the 30th legislative day of the 6
First Regular Session of the Thirty-Fourth Alaska State Legislature, the Department of 7
Administration, with the assistance of the Department of Commerce, Community, and 8
Economic Development, shall prepare and present to the legislative committees having 9
jurisdiction over procurement an annual report evaluating the procurement preferences 10
established under AS 29.71.040(a) and (b), as amended by secs. 11 and 13 of this Act, and 11
AS 36.15.050(a) and (b), as amended by secs. 17 and 19 of this Act. The report must include 12
(1) annual data and year-over-year comparisons of 13
(A) the total value of Alaska products purchased; 14
(B) the type of products purchased, including raw or value-added 15
products and the amount purchased by volume or units; 16
(C) the number of Alaska businesses participating; and 17
(D) the number of Alaska businesses with sales to institutional buyers, 18
including state agencies, school districts, or local governments; and 19
(2) a recommendation from the Department of Administration, with input 20
from the Department of Commerce, Community, and Economic Development, addressing 21
whether to extend the changes made by secs. 11, 13, 15, 17, 19, and 21 of this Act. 22
* Sec. 25. The uncodified law of the State of Alaska is amended by adding a new section to 23
read: 24
TRANSITION: PENDING SOLICITATIONS FOR PROCUREMENTS AND 25
CONTRACTS. (a) AS 29.71.040(a) - (c), as amended by secs. 11, 13, and 15 of this Act, and 26
AS 36.15.050(a) - (c), as amended by secs. 17, 19, and 21 of this Act, do not apply to 27
(1) solicitations for procurement and the resulting contracts if the solicitations 28
are pending on the effective date of those sections and if the invitation to bid or other
29
solicitation was issued before the effective date of those sections; and 30
(2) procurement contracts entered into before the effective date of those 31 33-GH2386\A
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sections, including extensions or amendments of those contracts. 1
(b) Notwithstanding (a) of this section, AS 29.71.040(a) - (c), as amended by secs. 11, 2
13, and 15 of this Act, and AS 36.15.050(a) - (c), as amended by secs. 17, 19, and 21 of this 3
Act, may apply to procurements or contracts described in (a)(1) of this section if all parties to 4
the procurement or contract agree in writing that the provisions apply to the solicitation or 5
contract. 6
* Sec. 26. The uncodified law of the State of Alaska is amended by adding a new section to 7
read: 8
TRANSITION: REGULATIONS. The Board of Agriculture and Conservation and the 9
Department of Natural Resources may proceed to adopt regulations necessary to implement 10
the changes made by secs. 2 - 10 and 23 of this Act. The regulations take effect under 11
AS 44.62 (Administrative Procedure Act) but not before the effective date of the law 12
implemented by the regulations. 13
* Sec. 27. Sections 1 and 26 of this Act take effect immediately under AS 01.10.070(c). 14
* Sec. 28. Sections 11, 13, 15, 17, 19, and 21 of this Act take effect July 1, 2024. 15
* Sec. 29. Sections 2 - 10 and 23 of this Act take effect July 1, 2025. 16
* Sec. 30. Section 12, 14, 16, 18, 20, and 22 of this Act take effect June 30, 2029. 17