Committee re-examines Alaska Grown procurement preference; bill would widen price differential to favor in-state producers

The House Labor and Commerce Committee held a second hearing on House Bill 60 on April 4, 2025, a bill that changes the state procurement preference for Alaska-grown agricultural and fisheries products. The measure would increase the required in-state preference from 7% to 10% and raise the permissible higher-price allowance from 15% to 25%.

"House Bill 60 makes some very incremental changes to a Department of Administration procurement statute that's been on the books since 1986," said Anna Latham, deputy commissioner, Department of Commerce, Community and Economic Development. Latham told the committee the statute currently requires state agencies, municipalities and school districts to purchase Alaska-grown or in-state fishery products listed on the state master contract when the in-state item is within 7% of out-of-state cost and available.

Why it matters: Proponents told the committee the change is intended to stimulate a commercial market for Alaska producers by widening the price window that allows in-state growers to compete for institutional buyers such as prisons and school systems. Latham described the change as intended to provide reliable buyers for growers who might ramp up production if they had commercial contracts.

Committee members repeatedly asked how the requirement would apply to municipalities and school districts that receive state funds and whether the mandate ties to the Department of Administration master contract with U.S. Foods. Brooke Cashin, deputy chief procurement officer at the Department of Administration, said the statutory language appears broad and likely covers any agency that receives state funds, but that she would confirm with the law department. Cashin also described the master agreement with U.S. Foods as the primary vehicle for state food purchases and said some agencies are required to use that contract while others may source elsewhere.

Committee members raised implementation questions the measure does not resolve: how many in-state growers can scale to commercial volumes, how quickly they could do so, whether storage and distribution infrastructure would be required, and the potential fiscal impact on municipalities and school districts. Latham said data are limited because so few Alaska-grown items are currently included on the master contract and that Alaska imports over 95% of its food; she reported the Department of Corrections is one of the largest purchasers under the U.S. Foods master contract.

No formal vote was taken during the hearing. Committee members requested additional data from the Department of Administration on current participation in the U.S. Foods contract and cost impacts; Cashin said she would provide procurement data to the committee.

Ending: Committee adjourned after the panel and scheduled further committee business for April 7.