03/27/2000 01:55 PM House FIN

HOUSE BILL NO. 116                                                                                                              
                                                                                                                                
"An Act relating to the Board of Agriculture and                                                                                
Conservation, to the agricultural revolving loan fund,                                                                          
to the disposal of state agricultural land, and to the                                                                          
Alaska Natural Resource Conservation and Development                                                                            
Board; and providing for an effective date."                                                                                    
                                                                                                                                
Co-Chair Therriault provided members with a proposed                                                                            
committee substitute, work draft #1-LS0407\Q, Cook, 3/23/00                                                                     
(copy on file).                                                                                                                 
                                                                                                                                
Co-Chair Mulder MOVED to ADOPT work draft #1-LS0407\Q, Cook,                                                                    
3/23/00. There being NO OBJECTION, it was so ordered.                                                                           
                                                                                                                                
JOE BALASH, STAFF, REPRESENTATIVE THERRIAULT explained that                                                                     
a number of areas needed technical changes, which were made                                                                     
in the committee substitute.  Changes were made to address                                                                      
the concerns of the Department of Law and the Department of                                                                     
Natural Resources.                                                                                                              
                                                                                                                                
In section 1, page 2, line 9 the following language was                                                                         
added: "An appointed member may be removed from office by                                                                       
the governor if the governor first provides a written                                                                           
statement of the reasons for removal to the member and makes                                                                    
the statement available to the public." In the previous                                                                         
version a member could only be removed for cause.                                                                               
                                                                                                                                
Mr. Balash observed that the language in subsection (d) was                                                                     
tightened to address concerns regarding ethics. It prohibits                                                                    
a member from having an existing loan or contract                                                                               
restructured.                                                                                                                   
                                                                                                                                
On line 29 "immediate family member" and "official action"                                                                      
have the meanings given in AS 39.52.960.                                                                                        
                                                                                                                                
In subsection (e) the appointment of the board director is                                                                      
made by the commissioner from a list submitted by the board.                                                                    
The list must have at least two persons.                                                                                        
                                                                                                                                
Sections 2 - 4 were not changed.                                                                                                
                                                                                                                                
Section 5 removes existing language regarding when a loan is                                                                    
delinquent. It was reduced to receipt of payment by the                                                                         
board or the director. This was the recommendation of an                                                                        
audit report. The delinquency penalty is not needed in                                                                          
statute.                                                                                                                        
                                                                                                                                
Representative Williams referred to page 5, line 28. He                                                                         
asked for clarification. Mr. Balash observed that there was                                                                     
some question if the Board would have to meet in order to                                                                       
receive payment.  The director of the board can receive the                                                                     
payment.                                                                                                                        
                                                                                                                                
Section 9 removes language exempting restructuring from the                                                                     
length of time that there was a limitation on existing                                                                          
loans.                                                                                                                          
                                                                                                                                
Section 11 applies to all loans under the statute.                                                                              
                                                                                                                                
Co-Chair Therriault observed that Representative Harris                                                                         
sponsored a bill dealing with interest rates on loans. Some                                                                     
of the language in HB 116 duplicates and conforms to                                                                            
Representative Harris' bill.                                                                                                    
                                                                                                                                
REPRESENTATIVE JEANNETTE JAMES spoke in support of the                                                                          
legislation. She maintained that the legislation                                                                                
accomplishes its goals. She stressed that changes of the                                                                        
director of the Division of Agriculture have been a problem.                                                                    
She observed that there is a problem keeping good directors.                                                                    
                                                                                                                                
ELIZABETH HICKERSON, ASSISTANT ATTORNEY GENERAL, DEPARTMENT                                                                     
OF LAW testified via teleconference. She noted that the                                                                         
committee substitute addresses concerns by the Department of                                                                    
Law. There are no legal issues remaining.                                                                                       
                                                                                                                                
SCOTT MILLER, PRESIDENT, DELTA FARM BUREAU, DELTA JUNCTION                                                                      
testified via teleconference in support of the legislation.                                                                     
                                                                                                                                
ROBERT WELLS, DEPARTMENT OF NATURAL RESOURCES stated that                                                                       
the concerns of the Department of Natural Resources were                                                                        
addressed. The Department of Natural Resources supports the                                                                     
legislation. He noted that the fiscal note would remain                                                                         
essentially the same. There would be a need for more                                                                            
meetings of the board due to additional responsibilities:                                                                       
$10 thousand dollars were added. He observed that the                                                                           
interest rate is similar to HB 203. The interest rate could                                                                     
be reduced, which could lead to increased loan activity.                                                                        
                                                                                                                                
Representative James observed that the Board has been paying                                                                    
the cost of their application.                                                                                                  
                                                                                                                                
Co-Chair Mulder observed that the fiscal note moves from a                                                                      
fixed to an adjustable rate. Mr. Wells stressed that it                                                                         
would be hard to quantify the fiscal impact. Short-term loan                                                                    
rates could be different. The Board is generally very                                                                           
fiscally conservative.                                                                                                          
                                                                                                                                
ART GRISWOLD, DELTA JUNCTION testified via teleconference in                                                                    
support of the legislation. The Alaska Highway Grange also                                                                      
supports the bill.                                                                                                              
                                                                                                                                
Co-Chair Mulder MOVED to report CSHB 166 (FIN) out of                                                                           
Committee with the accompanying fiscal note. There being NO                                                                     
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
CSHB 116 (FIN) was REPORTED out of Committee with a "do                                                                         
pass" recommendation and with a fiscal impact note by the                                                                       
Department of Natural Resources, published date 2/11/00.