HCRA-260512-0800

Good morning. I call this meeting of the House Community and Regional Affairs Committee to order. Today is Tuesday, May 12th, 2026, and the time is 8:04 AM. Members present are Representative Kai Holland, Representative Mike Prox, um, Representative Garrett Nelson is on the phone and hopes to join us soon. Representative Steve St. Clair, Representative Carolyn Hall, Co-Chair Donna Mears, and myself, Co-Chair Rebecca Himschoot.

We have a quorum to conduct business. I'd like to remind members and staff to please silence your cell phones. We're getting down to that time in the session where if your phone does go off, there isn't time to deliver the donuts. So now it's really serious that you've got to not have your phone on. And before we get started, I would like to thank Sophia Tenney from House Records, who's here documenting today's meeting, and Susan Quigley from the Juneau LIO assisting us with the meeting recording.

And I always like to acknowledge Talia Ames and Thatcher Brower, excellent AIDS for this committee. On today's agenda, we have one item, SB 200, Farm and Agricultural Land Assessments. We'll do invited and public testimony. It's the first hearing on the bill. Senator Bjorkman and staff member Laura Asche, would you please come forward, put your names on the record, and we welcome an introduction to the bill.

And before you guys get started, I just want to.

Remind the committee we have a hard stop at 9:30, so we'll just see how the conversation goes, but we do need to be done at 9:30 today. Good morning, welcome. Good morning, Chair Himschute, Chair Mears, and members of the House Community and Regional Affairs Committee. For the record, my name is Senator Jesse Bjorkman, and I represent the northern and central portions of the Kenai Peninsula. Alaska continues to face persistent food insecurity and our dependence on imported food leaves us vulnerable.

The vast majority of what we eat arrives from outside of Alaska, much of it routed through the Port of Seattle and the Port of Tacoma and then comes into the Don Young Port of Alaska. Senator, could you move your mic a little closer? Apologies. It just seems like you're skipping out a little bit. Thank you.

Any disruption to this critical hub or any of these hubs could have immediate and severe consequences for families across the state. Strengthening Alaska's own agricultural capacity is not optional. It is essential to building a resilient food system that can withstand shocks and protect our communities. State law recognizes the importance of keeping agricultural land in production by allowing farms to be assessed at a special farm use rate for property taxes. As a moment of commentary here, this rate is controlled by the local municipality and is not zero.

This policy helps ensure that farmland remains farmland rather than being sold or converted to more profitable use. In 2024, the legislature, legislature updated these statutes in response to direct feedback from farmers and recommendations from the 2023 Alaska Food Strategy Task Force. Those changes streamline the application process and ensure that essential farm structures such as barns, are included in the farm use assessment. However, an unintended consequence of those revisions excluded some farms operating as S corporations from qualifying for that special farm use rate. The new language in this bill relies on the IRS Schedule F to verify farm income, but Subchapter S corporations are also eligible.

We have corrected the oversight that we made in the previous bill and ensured that all farms are treated fairly and consistently with other agricultural operations. Also, current statutes limit the Farm Use Assessment to farms that produce food for people or for food-producing livestock. While this reflects the urgent need to increase in-state food production, it does not reflect the full reality of Alaska's agricultural economy. Feedback from farmers and agricultural organizations has made it clear that Alaska's agriculture sector is interconnected and mutually supportive. Operations such as hay farms for horses and peony farms contribute to the stability of the entire industry.

Also, uh, by way of more commentary here, folks that grow hay, in order to qualify for the farm use exemption, Under the current system, they have to especially track which hay gets eaten by what in order to determine if they qualify for the farm use exemption. That is a rather onerous process. So if you grow hay and you feed it to a cow or you feed it to a goat, and then someone eats the cow or drinks the cow's milk or eats the goat or drinks the goat's milk, you get a special farm use rate for your taxes. But if a horse eats that hay you're outta luck. This creates a rather onerous process in our tax code, and cleaning that up to provide for a consistent farm use tax for all people that grow hay would continue to support agriculture and the ecosystem that supports us growing food here in the state.

Similarly, for people who grow peonies, uh, many people who are growing peonies are also growing vegetables on the very same ground that they are growing peonies as a way to diversify their crop production, as a way to increase revenue from their farms. And if we are to allow a special farm use rate for vegetables and not for peonies, again, we, we continue to complicate the system that should be unified under one tax code. Senate Bill 200 updates the structure to reflect the reality of farming in Alaska and ensures that all legitimate agricultural operations, including those that support food production indirectly, are eligible for the farm use assessment. If it pleases the co-chairs, I've invited 3 stakeholders who can speak to the importance of this legislation. Thank you.

Okay, thank you for that. And I think the section is available for everyone to read, so I think we'll skip that this morning and go straight to our invited testifiers. We have 3 online with us this morning. Amy Seitz, Policy Director, Alaska Farm Bureau. If you could please unmute yourself, put your name on the record, and share your testimony with us this this morning.

Thank you for being here.

Yeah, good morning, Madam Chair, members of the committee. Um, just making sure my sound is okay and you can hear me. All right, it's perfect. All right, well, for the record, for the record, my name is Amy Seitz. I'm the policy director for the Alaska Farm Bureau, and I appreciate the opportunity this morning to discuss the importance of Senate Bill 200.

For seeing continued growth in agriculture and why a program like this needs to be predictable and available to all farmers regardless of product or location. There are many aspects of farming that are uncertain and out of the farmer's control. You know, the weather, world events, supply chain disruption. Farming in Alaska involves navigating pretty extreme environmental risks. High input costs, and a severe lack of support programs and services that really help our farmers grow.

When there's an opportunity for predictable input costs, you're creating a level of certainty. This helps with long-term planning and long-term investment in that farming business. When programs like this, like in Senate Bill 200, are in statute, they provide that level of predictability that's necessary for a farmer to plan for the next decade, not just for the next season. And there are some who think that this should just be tied to food security. Only our food-producing farms should be supported and considered a farm for the assessment purposes.

The main reason we're here talking about Senate Bill 200, as Senator Bjorkman mentioned, is because non-food farms were removed 2 years ago. And I want to speak a bit about the unintended consequences of that and how In order to improve our food security, we need to support all of our farmers. If we really want to improve food security for now and into the future, we need to start shifting some of our fundamental thinking around agriculture. By removing the non-food farms from the definition of farm use, we create an artificial and damaging divide in our industry. A vibrant agriculture industry is an ecosystem.

And here in Alaska, we all really rely on each other. Our non-food farms are integral to the success of food-producing farms. As an example, a hay farmer selling to horses, as you, you heard earlier, is maintaining productive land, maintaining equipment that can be pivoted or utilized for the broader industry. That hay farmer is keeping in production because they can also sell to horses.

They are also supporting our food industry.

And let's also consider our world-renowned peony industry. These are not food crops, yet they are a cornerstone of Alaska's agricultural economy. When we talk about our food farms, we often talk about keeping Alaska's food dollars circulating in the state, in the local economy. Peonies actually bring new dollars into the local economy through their exports. P&A farmers are diversifying into value-added products like cheese.

They're looking at processing and manufacturing these through oil extraction, and they're building Alaska's agritourism. And all of these pieces are providing jobs in the state. When a P&A farmer buys a tractor or irrigation supplies, they are sustaining the local dealerships and other support businesses that the vegetable farmer down the road also relies on. If we tax the peony farmer out of business, the supply chain for our food farmers could collapse along with them. And many of our peony farmers also produce food, which brings me to my next point.

It would seem by only supporting certain farms in this bill, it would create a logistical nightmare for assessors and farmers alike. And we've been starting to see that impact this past year. So how do we differentiate a sheep raised for fiber versus a sheep raised for meat? Or a nursery that sells both flower starts and vegetable starts? Or the hay producer who sells to livestock for meat production and to horse owners?

We have several producers who grow both food and flowers. How is this assessment done in buildings that are used for both? We should be encouraging all agricultural production, not picking winners and losers based on the end use of the product. All of our farmers are important to building a strong agricultural ecosystem, which in turn will improve our food security.

Farms are engines for economic development. They create on-farm jobs and support the secondary industry jobs through processing, logistics,.

It's like transportation and manufacturing. Once our farmland is subdivided because a farmer was priced out by taxes, that land is gone from production. It's gone from economic development. It's gone from impacting our food security. In Alaska, we have roughly 0.2% of our land that's in farms.

We cannot afford to lose a single acre. And it would be really unfortunate if we lost good productive farmland because of the thought that this tax assessment should just be about food security, while not understanding that we need the support— we need to support the agriculture industry as a whole to improve our food security. So Senate Bill 200 is about more than just the tax rate. It's about recognizing that all farms, whether they grow peonies, rhodiola, or hay, contribute to the economic health and food security of Alaska. And I just want to make sure we're all clear, this bill does not exempt farms from paying taxes.

It just assesses the farmland and the farm building portion at a farm rate, just lower taxes. The houses, other buildings not used for the farming operation They're still taxed at the higher rate. Our farmers still pay. And with that, I urge the committee to support the version of Senate Bill 200 that has inclusive language that supports our entire agricultural ecosystem and supports our farmland. Thank you.

Thanks for your testimony. Any questions from the committee for Amy Seitz? Okay, we'll go to our next testifier then, Rita Jo Schultz, Executive Committee, Farm Bureau.

If you could unmute yourself, put your name on the record. Madam Chair? Yes. Good morning. Madam Chair, honorable members of the House, esteemed colleagues, distinguished guests, thank you for having me.

For the record, my name is Rita Jo Schultz. My family has farmed in Alaska for decades. We operate a working peony farm that welcomes visitors from around the world and contributes to Alaska's horticulture and tourism industry, the two fastest growing industries in Alaska. The federal government recognizes and classifies horticulture as agriculture. The latest US Census shows $18.3 billion in horticulture sales in 2024.

$18.3 Billion. In Alaska, there are 565 horticulture businesses, not covering the smaller mom-and-pop businesses.

Aaskaa is in a position right now to expand our horticulture industry dramatically. The peony industry alone, exporting almost all their crops to the lower 48, is growing, and right now we can't meet the demand. But the same census shows the horticulture industry expenses were up 33%. Farming in Alaska is not easy. Our growing season is short.

Our costs are high. The minimum wage just increased. Fuel prices are out of sight. Every year farmers face rising expenses for equipment, labor, insurance, and infrastructure. Unlike many other businesses, farmers cannot simply raise prices to cover those costs.

Agriculture depends heavily on weather, seasonal tourism, market conditions that are often beyond our control. Property tax relief is important because it helps preserve working farms instead of forcing agriculture land into development. Farmers are often land rich but cash poor. The value of land may increase on paper, but that does not mean the farm is generating more income. Higher property taxes place enormous pressure on family farms and make it harder for the next generation to continue farming.

Family or individually owned operations make up the largest number of operations in the U.S. Statistic Report for Horticulture. Alaska specialty—. Family. In Homer right now, 2 160-acre homesteads that have been in agriculture for many decades are being divided into small lots for housing. There is no going back.

We've lost these 320 acres. Hårtikultūr provides long-term value to Alaska. Farms create local jobs, protect open space and wildlife habitat, and attract tourism. On our farm alone, visitors come not only to see agriculture, but to experience Alaska's natural beauty peaceful landscapes, and rural traditions. One day this summer, we have 80 folks coming for tours.

The market is wide open. Reducing horticulture property taxes is not a handout. It is an investment in preserving Alaska's working lands, rural communities, and agriculture's future. If we want horticulture to survive in Alaska, we must recognize that farmers operate under unique challenges, and we must provide benefits that strengthens our entire state. Thank you for your time and consideration.

Thank you very much for your testimony this morning. Are there any questions for Rita Jo Schultz? Okay, seeing no questions from the committee— oh, Representative Nelson. I'd also like to welcome Representative Nelson to the committee at 8:17. Thanks for getting here safely.

Yeah, I apologize to the committee for being late. Um, Ms. Schultz, um, in the example that you gave on the, uh Well, thank you. Through the chair, apologize, brain scrambled still. Miss Schultz, on the example that you gave of the property in Homer that was agricultural and sounds like is now being moved to subdivisions, would this bill have made a difference? I mean, I, I completely agree on the value of keeping farmland farmland because it can move from farmland to subdivision and it rarely moves back.

I've never seen an example, but there might be one, but would this, would this have made a difference? Michelle, I think it would. I know I, I think it would, um, through the chair, I think it would, uh, directly make a difference. If you have 160 acres and, you know, you're, you're farming it, you're, you're right on the very edge all day, every day, right on the very edge, um, financially, and any Any help is good.

Okay, um, Co-Chair Mears. Um, thank you, Ms. Schultz, for, um, through the chair, I'm thinking about the change 2 years ago where buildings were added, farm structures were added, but there was a change, uh, removing floriculture. So with those 2 changes, how has that affected your business? Ms. Schultz? Through the chair, it's affected us dramatically, not only financially, but it's kind of emotionally put a stop to us thinking, you know, we're not as important as we thought we were.

And we're actually thinking about doing other things with the land ourselves right now because it seems like we're not getting the support that we had hoped for.

Follow-up. Follow-up. Follow-up. I was wondering if you would be willing to share the financial impact.

I think it was about— through the chair, I think it is about $7,000 for us.

Okay. Representative Hall. Thank you, Madam Co-Chair. Good morning, Ms. Schultz. I'm curious, when you said that you're contemplating additional uses for the land, what are those considerations?

Ms. Schultz? We're thinking about— through the chair, we're thinking about doing more like farm stays. We're actually starting a farm stay this year and thinking about building cabins on the property for that type of use. Follow-up, follow-up. Miss Schultz, could you repeat the first part?

I didn't quite catch it. Miss Schultz, um, we have this year, uh, through the chair this year, uh, we're going to— we're attempting to do farm stays here to help with the bottom line. And if that's successful, then we will probably build more cabins and go that way rather than invest in our peony field.

So thank you for repeating that, and also for, um, Co-Chair Mears for passing along a note to me that that was farm stays, essentially. Thank you, Ms. Schultz, and thank you, Madam Co-Chair. Okay, any other questions? Senator Bjorkman. Thank you, Co-Chair Himschut.

I just wanted to provide a little more information for Representative Nelson. The portion of the policy that is in statute and has been in statute is the fact that this farm use rate and assessment that goes with it is not an all-out excusal from a portion of those property taxes. It is a deferment. And so if the land were to move out of farm use and to another use that is incompatible with farming, the landowner would be responsible to pay back the amount of taxes that had been deferred for the past 7 years. And so that, that has been the policy of the farm use rate for quite some time, for decades.

And so that, that piece of policy is a strong incentive to keep the, the land in a use that is compatible with farming.

Representative Nelson. Yes, thank you, Madam Co-Chair. Uh, Rep. Mears and I have talked about this bill to a certain extent, but that prompted a question. So a deferment of property taxes— so if, uh, you know, well, I'm just going to say it and then you can tell me if I'm right or wrong on my— I just want to make sure I'm understanding what you're saying. So I have a farm, whatever, and this happens and property taxes are deferred.

And I sell to somebody who wants to subdivide. So the property taxes that were deferred when I was under agricultural production for the last 7 years, then they would have to basically pay that back to the borough or the state. So then once again, it incentivizes it to stay in agriculture. Is that an accurate understanding of what you just said? Through the chair to Representative Nelson.

Yes, the concept is correct. So those taxes would have to be paid back to the Mat-Su Borough in your case. Unfortunately, that has been the case for many pieces of farmland that have been converted to non-agricultural uses in the Mat-Su Borough, and is a reason why the Alaska Farmland Trust has a high interest in in this bill and others like it to ensure that land remains in compatible use for farming. Follow-up? Yes, thank you, Madam Co-Chair.

Follow-up. Just a comment is that I like that where it's— it is different than a conservation easement. However, if somebody does want to move a piece of property out of agricultural use, which I'm not in favor of, but then they will pay a penalty for that, but it doesn't chain future generations, if that makes sense. Like, conservation easements, in my experience, are permanent. And so, um, and I, I'm, I'm not in favor of that.

But like this, just as a comment, I— it— if you want to move it out of agricultural production into subdivisions, agricultural is, uh a low, I guess, I don't know, it doesn't provide a lot of dollars to Alaska, but is a high priority for me. And so if somebody wants to move it out of that, there's a penalty, but then they can still do that. So anyways, that's just a comment that I hadn't heard before in our discussions. So thank you, Senator. Co-chair Meyers.

Thank you through the chair. Senator Bjorkman, a comment and a clarification. One is that This is just one thing around agricultural land. There are other agricultural lands that have got agricultural covenants which are in perpetuity. Perpetuity.

I was close there, man. It's early this morning. And so it just kind of depends on the land. So there's multiple tools for keeping land in agricultural production, and that's one of them. And then clarification, Senator Bjorkman, I can't remember if you'd mentioned in this conversation how long that lookback is, because this bill is only a portion of what we're looking at.

There's a lot more context out there which your office has been steeped in. Thank you, Co-Chair Mears. Um, through Co-Chair Hemmschuh to Representative Mears, the lookback is 7 years.

Okay. All right. And one thing I should have mentioned, I hope that, um, Amy Seitz and Rita Jo Schultz are both still online in case we need to circle back to you. I would like if the invited testifiers could stick with us this morning. I think that would be helpful.

Are we ready to move on to our third? Okay. Our third and final invited testimony this morning is from Theresa Brown, an Anchorage produce grower. If you could please— but I also see owner of Healthy Sprouts. So I'm not exactly sure if you could just identify yourself for the record and tell us your affiliation.

And begin your testimony. We're grateful for your time this morning.

Thank you and good morning, Madam Chair and esteemed representatives. For the record, my name is Teresa Brown. I own and operate AYER Life Care and Healthy Sprouts in Anchorage since 2019. I am also the network coordinator for Anchor Gardens and the organic gardening coordinator with Yardakopia, a program of Alaska Community Action on Toxics. As a business owner, I grow vegetables and medicinal plants, so I'm one of those hybrid examples that were— was mentioned earlier.

I sell them at the summer outdoor farmers market, and then I move indoors to our winter markets at Bell's Nursery in Anchorage. I also make value-added products out of my medicinal plants, my flowers that I grow. I do teas, medicinal oils, salves from what I grow. I became a market gardener in response to COVID in 2020. I had a daycare also named Healthy Sprouts, and it was an Ayurvedic daycare where it was focused on healthy foods, healthy routines, and I had to close it in March of 2020, and it was unclear when it would be allowed to reopen, as all schools had been closed at that time.

I am a certified permaculture designer, so I immediately, when my gate— when my business was closed, I immediately turned to another essential service, which was food. So I turned my house into a greenhouse and started growing hundreds and hundreds of starts.

At that time we didn't know how long any of our businesses would be closed. I became a market gardener to address food security in Anchorage. At the same time, a small group of permaculture gardeners saw that the Victory Garden Movement was taking off in the lower 48. This was March of 2020. This group wanted to bring this gardening movement to Anchorage and called itself Anchor Gardens.

This group also supports a regenerative design system called permaculture. Anchor Gardens was formed to address the empty shelves we were seeing in the grocery stores. Our tagline is "Creating food security one garden at a time." And I was invited to participate in this group from the beginning.

In May of 2020, we got our first vacant lot donated to Anchor Gardens, and I built our first community garden. Using waste streams from local businesses. This method is called sheet mulching or lasagna gardening. With only volunteers, we built a 3,500-square-foot garden in 3 weeks with no money. We used leaves, kitchen scraps, coffee grounds, horse manure, goat manure, chicken manure, rabbit poo, spent grain from microbreweries, and mushroom substrates from our mushroom farmers.

The waste from these businesses were the inputs to our system. These inputs decompose or compost in place to create our no-till nutrient-dense soil that holds water extremely well. The resource that we use in the largest quantity is horse manure. In total for that garden, we used 45 cubic yards of horse manure, 5 cubic yards of goat, chicken, rabbit manure combined, 10 cubic yards of food food scraps, 10 cubic yards of spent grain, and another 10 cubic yards of leaves. 3 Additional cubic yards of coffee grounds, 3 cubic yards of mushroom substrate, and 10 truckloads of cardboard created this community garden.

I mention this to illustrate the volume of waste streams that we diverted from Anchorage's landfill, which is running out of room. This method also saves our local businesses money that they would have to pay to get rid of, and it builds a rich a rich galaxy ecosystem of microorganisms that are perfect for building soil and growing plants with very little to no money spent. Horse manure is the largest input to this system. It is a renewable resource that is extremely valuable to the agricultural ecosystem. Since 2020, Anchor Gardens and Yardikopia regularly partner together to build community gardens.

In addition to our first garden on I Street, we have built two more community community gardens in Fairview, which is a food desert since the closure of their only grocery store. We also built the gardens at In Our Backyard, which is a small tiny home community that houses formerly unhoused seniors. We built a community garden at the Mountain View Library and the Chugach Senior Center, as well as a Midtown community garden off of Benson. Our most recent garden, Perseverance, was finished 2 days ago on Mother's Day, May 10th, in Fairview. We had over 50+ people show up to take a 1-hour class that I teach on lasagna gardening, and then the class builds the garden.

We built the garden in 3 hours, where it took us 3 weeks 6 years ago.

It takes us 3 hours today. The people that showed up to learn this method were owners or are owners of small businesses and also brand new market gardeners and young and old beginner to experienced gardeners. Anchor Gardens and Yardacopia both practice and teach this regenerative system of gardening. ACAT Yardacopia's goal is growing food and growing community without the use of heavy chemicals and pesticides. Anchor Gardens is building food security one garden at a time.

Together, both organizations have grown their membership to include over 5,000 gardeners in Anchorage. Our collective goal is to grow urban agriculture, grow market gardeners, grow them into wanting to become farmers, inspire our youth to want to become involved in the agricultural industry, We want to grow compost hubs, grow community, grow more local food, and become more food secure in Anchorage. Since COVID each and every year has increased the importance of why Alaska specifically, Anchorage, needs to grow more local food. Whether it is a 7.2 earthquake that could disrupt shipping lanes or a nano-sized virus or shipping disruptions caused by shortages or high tariffs or the high cost of a barrel of oil. The cost of goods has been increasing steadily in Alaska.

Anchorage has the highest density of people and is foods insecure. Grocery stores have about 3 days of food on their shelves and most residents have less than 2 weeks of food in their pantries. Food security is good for stability. Growing more local food also creates a stronger local economy, creates more jobs, and keeps the money circulating in Alaska. Alaska also has an aging farming or farmer population.

4 Years ago I was sitting at the annual Farm Bureau meeting where I heard the average age of Alaskan farmers was 67 years old. So I guess that makes them 73 now. More concerning than that was that many of these farmers did not have a succession plan to replace themselves. Alaska cannot afford to lose the experience and wisdom of these farmers or reduce the number of farmers that make up our Alaskan food system. Our mission is to get more people growing a garden and inspire those gardeners to be so successful that they are motivated to selling their abundance, their vegetables, as a viable secondary income stream that could become their primary income stream.

Anchorage needs to be included in the tax exemption, the property tax exemption, to add incentives to the pathway to becoming a market gardener and to further inspire a market gardener to become a farmer. We need to make it easier, not harder, to enter the agricultural industry in Alaska. Anchorage can become a gateway to inspiring people to become farmers. Alaska needs more farmers. As the cost of goods goes up around us weekly, locally grown food could very well become cheaper than food shipped to Alaska.

As a market gardener, I have seen over the past 7 years a vibrant, supportive clientele that supports locally grown produce and locally made goods. Our farmers markets can support more market gardeners and farmers bringing their wares to the markets as well as to grocery stores and restaurants. There is a demand in place and we need to answer that call with increasing the supply. As a business owner that I do not own property, I would also benefit from the property tax exemption as I have multiple small plots in many of the community gardens that I have built, which is inefficient and costly in traveling between the gardens and what I spend in gas. I would love to be able to consolidate my gardens and have one or two large gardens on private land.

The property tax exemption exemption would allow me to create a mutually beneficial arrangement with landowners to grow on their land. This would also be beneficial for new market gardeners as well in the same scenario as myself. This would allow me to grow my business and grow more food for Anchorage. Thank you for your time. Thank you for your testimony.

We have a question from Representative Nelson.

Thank you, Madam Co-Chair. It wasn't a question necessarily for the testifier, but for the bill sponsor. Okay, if I could ask all of our invited testifiers to stay on line this morning, we may circle back to you. So, got a question for testifier. Okay, yeah.

Oh, okay, so let's go to that question first. Representative Holland first. Thank you for Ms. Brown. Yeah, Ms. Brown, thank you. Through the co-chair, I had a couple things I wanted to ask you.

First off, I just— when you're rattling off the amount of material that you have brought into the facilities, the dump truck loads, literally, I was just— I was awestruck. So impressive. So the first question I've got is, in terms of the bill that we have before us, I'm trying to understand how does it change or improve the situation for the gardening you're doing. It sounds like what you've described is really valuable. We have a community garden at our church, so we're kind of familiar with some of the value the participants get.

But it seems like everything you've described is already allowed under the current statutes that we have here. And I'm just trying to parse out, does this bill have a particular element of it that you're advocating for that is important, or are you just kind of broadly advocating for farming in urban areas, which is fine. I'm just trying to get some clarification relative to the bill itself. Ms. Brown?

Uh, for the chair, um, thank you for the question. I, I am advocating broadly for growing urban agriculture, but also Growing more farmers, which we need, and providing incentives for that to happen, whether it's a market gardener such as myself or more of a larger-scale farmer, and having that property tax exemption is an incentive. It does make it easier. This industry is not a high-profit margin industry. As previous testifiers have said, there are a lot of unique challenges to growing in our cold climate.

And our— and the weather and the cost of goods and what we have to pay to ship almost everything up here. The community gardens is an incubator. It is sort of that gateway to inspiring new gardeners to be so successful they want to become a market gardener and have a secondary source. I personally have to have two jobs jobs to make a living as well as be a market gardener. It is a tough industry.

So any exemptions, any support that we can get is invaluable to growing food. Thanks. Follow-up? Thank you. Great.

Thank you for that. And then for clarification, you raised the issue of indoor gardening in homes. I am also interested in hydroponics and other agricultural activities that might be done in existing buildings. I'm curious whether or not the farm exemption can be used for somebody's home or garage that is converted over for some sort of growing operation, um, and if an industrial building— I was involved in helping with some startups that was using an industrial building for indoor hydroponics, if those kinds of uses qualify under what this legislation is addressing. And Mr. Ryan, I don't know if you know that or the bill sponsor, but it sounds like you've been doing indoor gardening and you mentioned converting your home over to a— I believe you said a greenhouse.

So curious, can somebody do that with their own home and turn it into and get qualification of their home as a farm? That's for the testifier or the bill sponsor? Because she sounds like she's actually done this to her own home, so curious how that worked. Ms. Brown, if you could respond to that. Sure, for the chair.

Uh, well, I was acting out of necessity, and so I just— I had, I had a home that I was renting that was— had very— had a lot of windows, so it just was being, um, very practical in what I could do. And, and it worked with a lot of grow lights as well. Um, I, I do believe this bill can support and, and offer some tax exemption.

For any area that you are using to grow starts or edibles or vegetables. I think maybe Senator Bjorkman might be able to answer that a little more clearly. I believe that any, you know, any buildings that are used specifically for growing would qualify. Thank you. Let's turn that question to Senator Bjorkman.

Please. Thank you. Thank you. Through the chair to Representative Holland. Yep, we have gained some, some clarity specifically from Ledge Legal on this, and we have a memo stating that specifically it would exclude like retailers.

Like, so if you have a retail establishment and you're simply just like selling plants, like Fred Meyer or whatever, like that's not a farm. But for, for an individual owner who has a building and they're using a portion of that building and they sell at least $2,500 worth of stuff, farm stuff that they're producing on their farm, they qualify. And the square footage of the building that they are using, so that is assessed, and then they get the discounted rate based on that assessment. However, only— and this is where the deferment kicks in to make sure that it's not being, not being abused. So if they're, if they're using— a farmer is using a portion of the building and they're going to be excused from a portion of their taxes, that needs to be a long-term commitment for them unless they just are okay with paying the back taxes.

So A person cannot build a garage to store their Ferraris and have a goat pen in the corner and get a reduced rate on their entire Ferrari garage because they have a couple of goats. Um, so the system is designed to make it difficult to cheat, and it's designed to benefit farmers that are in it for the long haul, to actually support the ecosystem of farming. And I would note to your first question, Ms. Brown talked about the amount of horse manure that she used, and having horses and the ability to use kind of their waste stream as fertilizer is pretty essential to other farming. So, yep, thank you. Follow up with that.

Follow up. Great, thank you. Thank you for the feedback. The other piece of this, I'm curious if you can just clarify. I know in Anchorage there's a piece of property along a major —state road that would otherwise be commercial property that has some sort of community garden on it.

Does a private commercial property owner who turns over the property for a community garden type of use get access to this? I think what you've said is they could, but they would have to be in jeopardy with the 70-year issue also. Does that make sense through the chair to how I—. [Speaker:COMMISSIONER TREGONING] I'm saying it's zoned owned commercial but being used for community gardens. Temporarily unused land, you know, in a commercial strip that for some reason is not currently being used for commercial use.

And I think the logic that the sponsor has given us would suggest that they might be able to use it, an exemption, but they would also have the 7-year clock hanging over them. I just want to make sure I'm understanding this.

Through the co-chair to Representative Holland, Yes, you're correct. They are subject to the deferment penalty. Also, typically in community garden situations, folks that are growing food in those gardens, they may sell that food, but a requirement to access the deferment program is $2,500 in sales. So, um, it's great. Like, community gardens are awesome, but this is— this, this program is designed to be an incentive for folks who might be really stoked about their community garden to take the next step up and start marketing stuff that they grow, um, for, for sale outside with flowers or for vegetables or what have you.

So it's, it's kind of that intermediary step where it typically would not apply to a usual community garden setup because they're, they're not sales and not really a farm. That's very helpful. Thank you. But an entry-level step is important there. Yeah.

Okay. I think Representative Nelson had a question for the sponsor.

Yes, thank you, Madam Co-Chair. Kind of get down to the brass tacks. One is a big fan of horse turds, or as we call it in Idaho, pony gold, because, you know, less weeds going through. So, Nelson, you can only say that because it's after a certain time in session where— that would normally go on stage. That was very respectful.

That's what we call it, pony gold. But a question to the bill sponsor. And, you know, I have a garden as well that gets consumed by my children. So it may be profitable someday. But down to the— like when we're talking about like an actual business, the questions that I have is I wonder if you could clarify the added language, and I listened to your introduction on, you know, $2,500 gross income, that makes sense.

But I was wondering if we could clarify some of the S corp language in here in this bill that's just, it seems like, you know, well, I mean, like, it doesn't seem like, but this is existing language in statute. Sounds like it's kind of a cleanup. But on the S corp language, whether it's on, yeah, I mean, it's on page 1 and 2 before we get into definitions.

Just to kind of clarify what that would do for when we go to the definitions when it talks about, you know, management of livestock for dairying, that's additional language I think is good and I mean, we used to— I don't remember how many eggs used to be shipped out of the Mat-Su. It was hundreds of thousands. I mean, like, when we talk about agriculture, I mean, we used to have a thriving industry here. And the reality is that right now it's just kind of cheaper to bring it up from the lower 48, which we might be able to change. But if we want to get back to that, which sounds like is the goal, I was wondering if you could just kind of comment some on the— the changes to the tax structure or what this language would do in the bill.

Does that make sense? Yes. Through Kocher-Himschoot to Representative Nelson. Yes. So we discovered after we passed a farm bill to include farm use buildings last legislature that many farmers file their taxes with a— because they're organized as under Subchapter S corporations.

So they are S corporations. Unfortunately, many assessors were not allowing the tax forms showing gross sales of $2,500 or more under an S corp to be used to qualify for the farm use assessment. And so the, the only change that we're making there with the S corp language is to allow farms that are organized under Subchapter S as a corporation to qualify for the farm use rate.

Follow-up? Follow-up, yes, thank you.

So, give me a minute, ma'am. Okay. I'm not sure. Ripson St. Clair had a question, so we can come back. Thank you.

Through the chair, Senator Bjorkman, So this, this would codify, uh, a shall instead of a may, correct, Senator? I don't know if that makes sense, but it, it's— we talk about the local control and we talk about, um, letting boroughs who are going to be the ones losing money or deferring, not at the state level.

Can they opt out of this, or is this they must do this? Senator? Through the chair to Representative Sinclair. This program would be conducted under the mandatory tax exemption, much like the $150,000 senior citizen tax exemption and tax exemptions for disabled veterans. So yes, this would fall under the program as it is now under the mandatory section, but it does not exempt all of those taxes as we've discussed.

It's only a portion of that. The optional part of the program is that local municipalities control how they calculate their farm use rate based on the property makeup of their community. And the balance that they need to strike with their local farm use rate in their own community. There's significant community agency in calculating that farm use rate, and it's something that we had strong support from, from the Mat-Su Borough when we passed the bill last legislature. Follow-up.

Follow-up. Thank you, Senator.

You said under mandatory, but I can tell you as a disabled veteran, I don't have to claim that exemption. I can— and when we talk about mandatory and optional, that's an optional one. I can claim it. I'm not required to. So again, it goes back to if you're saying that this is mandatory, I think that takes away a little bit from the local control, in my opinion.

Thank you. Through the chair to Representative Sinclair. Yes, in that sense, this would be an optional exemption for farmers to participate in or not. No farmer has to participate in the program. Thank you.

Okay, and I wanted to also, before we go to public testimony, let the committee know we have Brian Scoresby, Director of the Division of Agriculture, with DNR online, and Sandra Muller, Director, Division of Community and Regional Affairs, DCCED, online. And I probably should have said that before, but those folks are with us today. And I think if it's okay, we'll move on to public testimony. Okay. So, um, yeah, okay.

So I'm going to go ahead and open public testimony on Senate Bill 200. Looking in the room, I don't see anyone there, but online I do see one person for public testimony. Margaret Atsutt, Lands Coordinator, Alaska Farmlands Trust. Were you intending to testify this morning?

Good afternoon, Madam Chair and members of the committee. For the record, my name is Margaret Atsutt and I'm the Lands Coordinator for the Alaska Farmland Trust, and I'm calling in support of SB 200. Um, for the past 20 years, Alaska Farmland Trust has worked directly with farmers and landowners across the state to help protect agricultural land aid farmland owners in passing their land through farm succession planning, and improving access to farmland through our Farm Link program. One thing we consistently hear is that agricultural tax deferments are one of the most important tools helping landowners keep their land in agriculture instead of converting it to non-agricultural use. That matters because Alaska is rapidly losing farmland.

In the Mat-Su alone, more than 3,000 acres of farmland have been lost over the past decade while development has continued to expand. Once farmland is converted, it is extremely difficult and expensive to bring back into production. To address a question heard earlier about Ag Tax deferment impacts preventing land from— preventing from land conversion, from conversations I've had with landowners who are preparing for farm succession planning, having that deferment incentivizes the next generation whether or not they're going to actively farm it or rent it out continuing forward. Expanding the definitions of what qualifies for agricultural tax deferment is important because agriculture today includes more than traditional row crops or traditional vegetable crops. Alaska farmers are producing food, nursery products, floriculture, hay, fodder, and fiber.

And all these operations contribute to our food security and local economy, as we have heard from invited testimony. This is especially critical in regions like Natsu, Kenai, and Fairbanks, where some of Alaska's best soils are located near our population centers. Protecting farmland near where people live helps keep food more accessible, affordable, and resilient. These lands also make physical sense for communities. National research consistently shows that farmland generally costs less in public services than residential development, while still contributing to the local tax base.

In other words, keeping land in agriculture helps support both food security and long-term community stability. Agriculture land is not just vacant land waiting for development. It is essential infrastructure for Alaska's future, and helping landowners manage those lands through AgTAK deferments helps keep it in production. Thanks for your time, and I'm happy to answer any questions. Thank you for your testimony.

Are there any questions for Ms. Atseth? Okay, I see no one else in the room and no one else online wishing to testify, so we will close public testimony. And at this point, I think we're going to go ahead and entertain a motion to adopt the work draft committee substitute version H as the working document on this bill. Representative Mears. I move that we adopt the work draft committee substitute for SB 200 version 34-LS1096/ACE-H as the working document.

And I'm going to object for the purpose of an explanation. I'm going to ask Talia Ames to go through the explanation of changes for us, and then I'll invite Senator Bjorkman back up to give his comments on the CS.

For the record, Talia Ames, staff to Representative Mears. Summary of changes, version G.A. To version H. In Section 3, it's amended so that the mandatory municipal property tax deferments apply to land use used to produce agricultural products for human or animal consumption, or products that are used to breed and manage livestock. This change is made by updating the definitions of farm use and livestock in version H of the bill. The definition of farm use is amended so that it applies to land used to cultivate crops or other agricultural products for human consumption, or that are used to feed, breed, and manage livestock.

Also, the definition of livestock is changed so it no longer includes horses.

Thank you for that. And I think we can go to committee discussion at this point. So, um, Co-Chair Mears. Um, thank you, Co-Chair Himschoot. So, um, where I see we're at with this is that the committee substitute rolls us back a little bit to just pretty direct consumption and food security issues.

And then I want to have a little bit more of a discussion to see if there's other places we want to go with that. So the— I've got 3 things on, on my list. Hay, making sure that all the hay— Representative Nelson and I had a conversation about this of like —how you say—floriculture and fiber to make sure that, you know, to have that discussion about where that's happening. So the— I hope Senator Bjorkman will help address this as well— is that there's that option for local option for the property tax for this to apply. But our local municipalities in the last couple of years have not been choosing that.

So there's an option. Just who, who exercises it, whether it's something that we're doing at our level or something that we want to remain with the local government. So I'm seeing like a very narrow band of discussion in here, but I'd like to adopt the CS and then have that discussion about like how much further to bring that. And we do intend to hear this bill again on Thursday. Okay, are there— is there committee discussion of the CS?

Representative Holland and then Senator Bjorkman. I think if you'd like to also comment on the CS, I think that would be helpful. So, Senator— sorry, Representative Holland. Thanks, Co-Chair Himschute. I've got a couple questions as it relates specifically to the CS change, and I've got some broader questions when we come back later for kind of the bill in general.

But just for clarification, that this new CS we're adopting, I believe, has removed the animal consumption characteristic of what farm use is, which I'm trying to reconcile that with what I thought I heard earlier in our discussion, that this was going to allow farm use for growing hay that was going to be used for whatever use— horse, cow, we didn't have to keep track of it. Am I correct that this CS now moves it back to just being tied to human consumption, or am I misunderstanding this change? I just need clarification. I think Co-Chair Mears is most familiar with the CS. Thank you, through the chair.

So there have been some changes in this definition over the last couple of years, and originally the animal consumption was spelled out specifically, but this has gotten a little bit more for feeding, breeding, and management of livestock for dairying and/or combination of those uses, which I think is the definition from like 4-ish years ago before the changes 2 years ago. Trying to roll back in the way— way back machine. So this is, this is sort of like an original description from a few years ago. Representative Holland, I'm going to ask the indulgence of the committee for a quick at ease. Yep.

I'm going to remove my objection to the adoption of the CS. I'll object.

Thanks. So, follow-up? Thank you. And we're also passing the gavel here. Oh, we're still at ease, aren't we?

No, we're back on the record. Okay, thank you. So, follow-up? Please continue. Okay, thank you.

Okay, so I think I have sorted out my question with what we've just.

Discussed that in line— page 2, line 28, it does still include for feeding, which gives us the pathway for farming activity that's producing hay.

But it does still kind of leave me a little uncertain about the horse feeding since horses are out. The other question I had is that the issue of horses has been in and out of the bill, and I'm wondering if I can just get a little bit of background in terms of what's the dynamic going on with the issue of horses being in and being out. And I'm really kind of under— wanting to understand this because I'm wondering or expecting that perhaps the horse issue may still come up before we're done, and I want to be able to understand kind of the background of how we got to where we're at so that if it later comes up as an issue again I kind of understand the rationale for where we're at now. Thank you. I'll, I'll get into that briefly and then pass it on to Senator Bjorkman.

But he pointed out to me yesterday morning that the livestock definition is not exclusive, it includes.

Follow-up? Follow-up. You're gonna eat the horse. Um, so I, I guess I'm left unsure what that means. So, um, I think right now page 3, line 12, livestock no longer includes horses explicitly, correct?

Explicitly. So Is that to say that if I am raising horses, this would no longer allow the use of the farm agricultural property exemption for land that's used exclusively to raise horses? I think that it gets to where we're getting into splitting hairs here and where we're, where we're dividing this issue. So I think the way that CS is written, that property that was exclusively doing horses and getting this income from horses would not be included, but providing food and materials for them, like if you're growing hay for example, would be included. But that's part of the discussion here today to to parse this out and see where our lines are.

But I think Senator Bjorkman has been steeped in this issue a bit more and would have more to contribute to the conversation.

Thank you, Co-Chair Mears. Through the Chair, in response to Representative Holland, the way that I interpreted the proposed CS was that by changing the definition of livestock in the definition section, and then if you read on page 2, lines 28 and 29, so it says that you can raise crops and harvest crops for the purpose of feeding, breeding, and management of livestock.

That removing, removing horses from the definition would cut out hay from horses from the deferment program. And so then you create a problem that I mentioned earlier in my presentation where a farmer has to keep track of or somehow designate or divide out which hay gets fed to horses, which hay gets fed to cows or goats or whatever other hay production and then how to, how to balance that. So for further clarity on your question about horses, um, a person who simply has a horse on their property or horses, they don't automatically qualify for the farm use rate. They must have a business that is producing sales of over $2,500 per year from their horses producing farm products. They must have a business on their farm of some, some substance to create revenue to qualify.

So if I have horses that I ride, or a horse, you know, a feelings horse or whatever that I like to have around, you don't qualify for the farm use rate. You actually have to be in production and have sales as a farm in order to qualify. Follow up then. Follow up. Great, thank you.

Thanks for that. You know, I, um, I guess I have two thoughts. One is I'm still interested in how do we preserve the ability of someone to be growing hay, and that's farm regardless of who eats the hay. I think that's farming, and that ought to be clarified. This entanglement with horses to me seems like it's problematic for the hay farmers.

That we have, particularly out in the valley, that that's an important source of revenue. But you, um, through the chair to the sponsor, you're touching on a key issue that I also wanted to ask about, which is there's a subtle but I think significant change in the definition of the $2,500. The original bill talked about $2,500 worth of product sales produced from the land, so you had to have something that you could pick up, put in a box, and deliver to a customer. This is a product I made it from my land and I've gotten revenue from it. The bill now says I have to have $2,500 yearly gross income from the land.

So it doesn't say I have to make anything, it just says I have to have $2,500 from that land, which going back to horses for a moment, if horses were there, and I realize we've kind of taken it out, but if I had horses there and I had a barn and I was also able to board some other horses, or perhaps I was doing riding lessons for people that came over and rode my horses, my understanding is the definition we have now of gross income from the land, if I'm boarding other people's horses or if I'm doing riding lessons, I will have income and I could easily come up with $2,500 worth of gross income. And it seems like we've kind of changed the fundamental nature of farmland producing something that is sold versus farmland that could be used for, I've lost the word we used earlier, stay farming or farm stays. Farm stays. Farm stays. It seems like we're creating a situation where if I have land that is somehow qualifying within this farm use and I do farm stays, I have a couple cabins on there and I rent those out, I put them on Airbnb, I'm going to have gross income that if I have land that has vegetables I'm growing for my own consumption, so I don't sell any of the vegetables that I make, but I have a farm stay on there, so I have $2,500 in gross income.

So I didn't sell the vegetables, but I had income from the land that was tied to the fact I had vegetables, farm stay. Is that what we're intending to do here? Because I think that's the consequence of this new language change.

Through the chair to Representative Holland. I think the working phrase you correctly pointed out, it's on page 2, line 29 and 30. The owner or lessee of the land must be actively engaged in farming and derive at least $2,500 of yearly gross income. So the intent here is that the income from the land has to be farm income. It cannot be like Airbnb income.

Like, a farm use building is not a cabin on a farm that people stay in. That's not a farm use. That is an entirely different use that would not fit this definition. Whether or not someone can use income from boarding a horse, that may be. Then it goes back to the question philosophically of, do we value the opinions of the Farm Bureau and those farmers who recognize horses as essential portions of agriculture and drive the demand and create a stable market for hay, and also are creating a stable source for fertilizer from those horses.

Those two things to me are really the most consequential reasons why you would want to continue to have horses fall under the definition of livestock and qualify for the farm use land deferment is is because they continue to provide kind of an anchor tenant for the hay market that can also be used to feed food animals. And they're also keeping a lot of land in production. I think it's important to note that up until 2024, that definition that we've been talking about, about, you know, what is livestock and that the part of the statute that we changed in the last legislature, that had been in existence since 1967. For a very long time, this was the definition and it included flowers, it included horses. And so it's been really a longstanding tradition that we recognize the totality of farming in this state.

And that's, I realized after we passed the bill.

Passed the bill and I talked to other farmers that I made a significant error in cutting out horses and flowers in the bill that we passed last legislature, and I really wish I would not have done that. But the way to fix that is to make the correction.

Representative Nelson. Thank you, Madam Co-Chair. I, you know, after our discussion and more work I, I, uh, I tend to agree with the bill sponsor, frankly, in that, um, in the CS on page 2, it removes animal consumption as a definition, correct? And I, uh, I know many businesses now that— I mean, whether it's peonies or— I mean, there's, there's agriculture, I guess it depends on how you define it, but if the goal is to incentivize people to keep land in a productive state outside of building a house on it— because I have never seen a property, as I said, I've seen property move from agriculture, however you want to define it, to subdivisions, but I've never seen a subdivision move back to agriculture. And if the goal is to you know, provide as many incentives as possible, which I think is our role, to, to keep land in agricultural production, however you want to define it.

Um, or, you know, there's very little cleared land in Alaska, and to keep it in that— removing animal consumption, I, I know many businesses that You know, just they have dozens and dozens of horses and they provide essentially trail rides, but they have also hundreds of acres that those horses graze on in the summer, and then they have to feed them through the winter. So then we go back to the hay production thing as well, and I think that removing the the, um, in the farm use, the animal consumption, I think that we're getting down to, uh, I, I don't know, like you said, we're splitting hairs. But we just— to personal experience in Idaho, I mean, we graze, as I told you, we, we had— we also had like, I think, 34 horses that we did not consume. There was not human consumption, but we used them, and they were an invaluable and irreplaceable piece of our farm equipment, you know, for our agricultural use. And so I think that it's— I think it's unwise to, uh, to strike that language, um, from the original bill in the CS.

So, Representative Nelson, I think we need to look back to what the definition was back in 2023. Mm-hmm. And it doesn't use that animal consumption language. It's farm use means the use of land for profit for raising and harvesting crops for the feeding, breeding, and management of livestock for dairying or other agricultural use or any combination of these. So the language in the bill it has that, or animal consumption deleted out of it, but it's going back to a definition from 2023.

So I think the intent and application is still there. It's just the words are different going back to what they were in 2023. I don't know if Senator Bjorkman has got more insight on the parsing of these words. Can I follow up real quick? Please do.

Yeah, so I'm just going off of the words here, and in the CS, that the, uh, on page 2, when it says farm use means use of land for profit for raising and harvesting crops or other agricultural products for human consumption, but the or animal is taken out of the CS. Am I, am I misreading that? Understood. It's just that it's going back to the original definition from 2023, which included those, those uses. So I, I don't see it as— I see using more words instead of the fewer words on animal consumption.

May I follow up? Follow up.

So that— but like, it's, it's not more words, it's two And I think in my mind it's significant for purpose of debate. Like, if people are not eating horses in Alaska—. Yeah, me too—. But horse meat's delicious. I've had it.

But it is, I think, exempting it or cutting it out of this definition. I mean, it's just like, words matter. And, uh, and I think that cutting out or animal consumption, I think that that's a mistake in the CS. Understood. Um, right, I, I see it as feeding, breeding, and management is actually a broader definition because there's things that you grow for animals that you don't necessarily feed them.

Follow-up, follow-up. I, I completely understand that, and I think adding but or animal because it starts with for human consumption And so adding, like, removing animal consumption gets to this whole horse issue, which is, I mean, it's, it's not a big thing necessarily in Alaska. However, a lot of hay that is bought in Alaska is for horses, and humans are not consuming them in Alaska.

So that's just— I think that keeping in, or animal consumption, one protects businesses that that's all they do. They're not raising their horses for human consumption. Whether they're raising them for their own— maybe they just ride around with them. But there also are businesses that use horses extensively. I mean, that's their business.

That's their entire business model. I think if we're going to, you know, like as we discussed, step in, I think that that is a legitimate agricultural use for discussion. And I will defer for now. Thank you. Do you want to chime in on that, Senator Biafran, before I get to Representative St. Clair?

Thank you.

Coach Ramirez for the opportunity to respond to Representative Nelson. I think that either, either way in that we approach that, that part of the bill, um, it could go either way. The operative thing that would secure, secure hay for horses is adding— making sure horses stays into the definition of livestock. So you're kind of both right about the issue that you're talking about here. You're just talking about it from two different ends of the stick.

Um, so generally my comments on the CS would be that the CS would remove from the definition of essentially farm use. It would remove flowers and hay for horses that had been there since 1967. And so I don't support that. Like I said earlier, I made a mistake when I wrote them out of the bill that passed in Senate Bill 179 in the last legislature. And so I appreciate the discussion, but The operation here is that we have a system right now that is very difficult to manage because it requires separate appropriation and attribution of the farm tax deferment based on very small divisions of ground that grow peonies versus vegetables and hay that feeds horses versus hay that feeds sheep.

And so— or there's all kinds of different problems by trying to divide it out this way that I did not fully understand before. And so for those reasons, I'm not supportive of the committee substitute.

Representative St. Clair. He answered my question. Thank you, Madam Chair. I've got a couple questions when you're ready. Representative Holland.

Great. Thank you. And I realize we're running short on time. One clarification question through the co-chair, and then I want to get to my substantive final question. For clarification, I guess, to the bill sponsor, is it your understanding that the CS that we're adopting would not cover flowers as a farm use?

That's correct. Through the chair to Representative Holland, yes, because it requires consumption. That's perfect, thank you. And I'd like to work on that. I think that's an important issue.

The other.

Commissioner Nelson, a question I wanted to ask through the co-chair relates to Section B, top of page 3, the use of land adjoining land that's in an approved soil conservation plan. I'm curious about the genesis of this new language, and I'm— with recognizing a short amount of time, I'm curious what's involved in getting a soil conservation plan. This seems like it— Um, might be something important. It might also just be a way for someone to come out and declare their contiguous adjoining land that all of a sudden I'm soil conservation plan because I'm not doing anything with it, so I'm conserving it and getting a farm tax exemption. And I'm just wondering where this came from and how do we view this so that it is appropriately tied to the value in the land as opposed to a backdoor for someone to be able to have this soil conservation plan option for deferring their tax bill.

Through Co-Chair Mears to Representative Holland, thank you for the question. I will ask Ms. Seitz or Ms. Adsett to talk to the specifics of a soil conservation plan. I will speak to the rationale behind why this language is in the bill. The language is in the bill because unfortunately certain local folks decided to use the new piece of legislation that we passed 2 years ago as a weapon against farmers who had had the benefit of the farm deferment program previously and cut out significant portions of their land from the farm use exemption that had been included in soil conservation plans. So land on parcels that was held in reserve and used for farming in future years and not developed had been included in the farm under the, that kind of farm use strategy and definition, but it had been cut out by certain assessors.

So we sought to make sure that if they had a soil conservation plan, that that could fall under the farm use and farm tax deferment structure as well. And if Margaret or Amy Seitz would like to speak to how the soil conservation plans come to be, that would be most excellent. Thank you. Miss Seitz.

Yeah, thank you, through the chair. This is Amy Seitz, Policy Director for the Alaska Farm Bureau. Soil Conservation Plans, typically farmers will work with the local Soil and Water Conservation District, work with the folks there to look at kind of the farm layout, what the different soil needs are to keep our keep our soils healthy. So, I wouldn't say it's a difficult process. There's interaction with the local groundwater conservation districts, just to make sure we don't end up in a Dust Bowl issue again.

So, I wouldn't say they're difficult. It does just take time with the soil and water conservation district to look at the farm plan, you know, how best to protect those soils. Quick follow-up. Follow-up. Thank you.

I wonder if it would be possible for us to get, before we meet again on Thursday, a summary or report on the number of soil conservation plans that are supporting agricultural production. I'm just curious whether this is a 1 or 100 issue, if that's available information without being too onerous.

If it's available, it'd be interesting just to understand the scope of this. If it's helpful, Ms. Seitz and I were discussing this yesterday, and hopefully I get this right. So if you're looking at a piece of farmland, the buffer, a woodland buffer between a water body and the production land is part, is integral to that farm use. And so I think that's an example of what this part of the bill addresses. Ms. Seitz, have I got that about right?

Yes, yes, Madam Chair. Yeah, there are definitely situations in, in the farm layout, as we were discussing yesterday, if someone has a hay field or a pasture and then nearby there's a waterway, the health of the ecosystem there, it's better to have you know, a tree stand in between the field and the waterway. So having protections like that to make sure, you know, the environment, the soil, remain healthy.

Okay, any further questions before we consider the adoption of the CS? Just a follow-up, um, Representative Holland. Co-chair Mears, is in the discussion you had, or maybe, uh, I'm sorry, I don't I didn't catch the name that we're talking with. Is there a report available that documents these soil conservation plans that are contiguous to farmland and part of the farm production? Ms. Seitz, do you have that information available?

Through the chair, Representative Holland, I do not have data on hand with numbers of how many. I can reach out to the Soil and Water Conservation Districts to see how easy that might be to round up. And I don't know, I think you mentioned Director Scoresby is online with the Division of Agriculture. He might know if, I mean, they might have some information around numbers of soil conservation plans, but I can reach out to the Soil and Water Conservation District and see how easy that would be. Yeah, through the chair, if it's easy and available by Thursday when we meet again, that would be great.

If it's hard and longer. It's more of general interest, so I don't want to hold up the process. Thank you. And we'll get contact information for you for someone that might be able to have more of a discussion. If it's not the direct numbers, maybe there's a conversation around it.

Representative Paul, do you maintain your objection? I remove my objection.

You got to say it. I will object. Will the clerk please call the roll? Oh, can I speak to it? Oh, I'm sorry.

Yes, very quickly. Madam Co-Chair, I appreciate your indulgence. I know we're running up against the clock, but it seems like the concerns that we have— um, I will not speak for everybody— the concerns that I have with the CS are in the language in the original bill, SB 200. The CS removes flowers and livestock. And in the definition of livestock is horses.

We've talked about the human consumption thing. So I, I think that it's, um, from my perspective, I think we should just stick with the original SB 200. So I object to the CS, and I will maintain my objection. Thank you. Does anybody else want to speak to the adoption of this?

Yes. Uh, will the clerk please call the roll?

Representative Hall. Yes. Representative Holland. I'll pass. Representative Prox is not present.

Representative St. Clair. Yes. Representative Nelson. No. Co-chair Himschu.

Is not present. Representative Holland?

Yes. Co-chair Mears? Yes. And one nay.

Thank you. With a vote of 4 yeas and 1 nay, the CS is adopted. But I definitely want to have more discussions as we go along in the next couple of days. I know it's getting— I here, but we will set an amendment deadline.

Let's try for noon tomorrow, but that's open for discussion as long as we're all communicating and are talking about where that is and where to pull forward.

We're doing things on the fly now, so it just might be a little last minute as we, we get into Thursday morning. With that, that concludes our business for today. Tomorrow we will announce the agenda for Thursday's committee meeting. This will be on it. I don't know what we might else be getting from the Senate or anything else.

We are now in the 24-hour rule. So again, doing it live and making it up as we go along. Representative Nelson, did you have a comment before we gavel out? Yeah, I think— didn't some of the governor's bills get assigned to our committee? Or one of his that was read across the floor?

That doesn't really matter. Yeah, we'll do it live. Yeah, we'll let you know. We'll let you know tomorrow because we got a 24-hour rule. So, um, thank you all, and that'll conclude our business for today.

This meeting is adjourned at 9:35 AM.