Legislature(1999 - 2000)
04/14/1999 01:09 PM House RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 116 - BOARD OF AGRICULTURE AND CONSERVATION Number 2520 CO-CHAIR OGAN announced that the next item of business would be 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 Ogan informed listeners that he didn't intend to move the bill today, but was trying to arrange an informal hearing in his own district on Saturday, April 17, 1999, as this affects his own district greatly. Number 2546 REPRESENTATIVE JEANNETTE JAMES, Alaska State Legislature, sponsor, explained that HB 116 would establish some continuity in the agricultural activities of the state as well as consolidate some activities by making three boards into one. The Board of Agriculture is set up to be the operative of the Division of Agriculture and the current director would be hired as the Executive Director by the board. Personally, Representative James believed that agriculture is best directed by those involved in agriculture. She pointed out that the board would be the Board of Agriculture and Conservation and would consist of nine members. As mentioned the current director of the Division of Agriculture would be the Executive Director, one member would be the commissioner of the Department of Natural Resources (DNR), two members would be from Alaska Soil & Water Conservation, and four from different enterprises involved in the commercial production of agriculture. Of those four, one would be from a statewide agricultural promotion organization and one with business or financial expertise. This would be a three year, rotating board. Representative James commented that this is a work in progress and there is no intent to make a decision on this legislation this year. REPRESENTATIVE HARRIS moved to adopt the proposed committee substitute (CS), version LS0407\N, Cook, 4/8/99, as the working document before the committee. There being no objection, it was so ordered. REPRESENTATIVE JAMES pointed out that the legislation does not currently have a fiscal note because a fiscal note cannot be prepared until the process with the legislation is completed. CO-CHAIR OGAN commented that at first glance, HB 116 looks as if it would save money. REPRESENTATIVE JAMES said that is the goal. CO-CHAIR OGAN turned to the public testimony. Number 2788 DAVID ROGERS, Chair, Alaska Natural Resource Conservation and Development Board (AKNRCDB), pointed out that AKNRCDB is one of the boards that is proposed to be merged with the new Agriculture and Conservation Board. He noted that most folks have never heard of AKNRCDB or understand soil and water conservation districts, but due to time constraints he said he would not go into the detail on that. Mr. Rogers informed the committee that AKNRCDB is a governor appointed, five member board which represents all of the regions of the state. The board works closely with the 11 soil and water conservation districts. The board is a link between the districts and the government, in particular the Department of Environmental Conservation (DEC) and the Department of Natural Resources (DNR). The board provides administrative support and money pass through and can also advise the commissioner with regard to agricultural grazing and timber issues. Furthermore, the AKNRCDB is the board of supervisors for the Alaska District which is the twelfth conservation district, all the area outside of the 11 organized soil and water conservation districts. Mr. Rogers reviewed the location of the districts which may be the first public-private partnership. MR. ROGERS announced that he supported the concept of an agriculture policy board, but he was concerned with giving the board land management authority. With regard to merging the Agricultural Revolving Loan Fund (ARLf) and the Dairy Board, he was neutral. Mr. Rogers strongly opposed merger of AKNRCDB with the new board. The AKNRCDB is not just an agricultural board, but a board that also concerns itself with conservation issues in general. The fear is that absorption into a new board with many duties... TAPE 99-25, SIDE B MR. ROGERS appreciated the efforts to bring the commissioner and two members into the mix, but concern remains. Therefore, he opposed HB 116 as currently drafted. CO-CHAIR OGAN inquired as to why the chairman of the AKNRCDB resides in Juneau. MR. ROGERS informed the committee that he is a representative of Southeast Alaska as well as an oyster farmer. Therefore, he qualified as an cooperator. He offered his help to the committee. Number 2878 MARCIA WARD, Ward Farms, testified via teleconference from Delta Junction. Ms. Ward supported HB 116 as it is currently drafted. She did not understand the opposition of Mr. Rogers and others in conservation. Ms. Ward believed that AKNRCDB would become a stronger board with seven conservation members. She guessed that the four farmer representatives on the new board would be cooperators and members of the local and state soil and water conservation districts. She also suspected that one statewide agricultural promotion organization would have a cooperator as a representative. Therefore, conservation would benefit from this proposal. MS. WARD stressed that agriculture needs to be represented and farmers in the business of farming need to sit on the new board. Furthermore, consolidation must occur in the interest of money. She commented that it has been quite some time since an appropriation has been received from the legislature to support agriculture. Yet, the National Resource Conservation Service (NRCS) board takes money from ARLf to fund their board and executive director with no return to the ARLf. She noted that she and her husband have used the ARLf in the past. For new farmers, the gap is tightening. She emphasized the need for low interest money to support new developing farmers and the need for control of agricultural lands. "The Division of Lands clings to agricultural lands as though they were a goldmine of their own." In conclusion, Ms. Ward urged the committee to consider HB 116 as currently drafted. Number 2711 ROBERT FRANKLIN, State President, Alaska Farm Bureau, testified next via teleconference from Fairbanks. He noted that HB 116 was discussed at length during the Spring board meeting. Furthermore, the construction and support of a Board of Agriculture has been on the resolution board for years. He commented that the Farm Bureau will continue to work with legislators on this issue. Mr. Franklin supported HB 116. STEVE GIBSON, Director, Homer Soil and Water Conservation District, testified via teleconference from Homer. He noted that first he would speak for the district. The Homer district has determined that reorganization may or may not be a good choice, but the inclusion of the district would be a loss of representation. He identified the narrowing focus as the main reason for "not coming on board with the proposed statute." The conservation concerns for miners, the timber industry, et cetera would not be recognized as agriculture. Furthermore, there may be geographical problems with regard to some areas being more represented than others. MR. GIBSON then spoke as an individual. He believed that there will be a considerable long-term fiscal impact with HB 116. This legislation would place many state resources into the ARLf and discounts many of those assets based upon the nine member board. That should be reviewed. Additionally, the board is exempted from the public meeting which may be problematic, especially since the board is empowered to own its own members' money. Number 2500 CO-CHAIR OGAN stated that he had received the Association of Soil and Water Conservation letter dated April 5, 1999, from Omar Stratman. Co-Chair Ogan asked if Mr. Gibson had seen the letter. MR. GIBSON said it was brought to his attention this morning. He commented that the Homer district would second the comments in the letter. JACKIE BECKER, Active Member and Officer, Kenai Farm Bureau, testified via teleconference from Kenai. She informed the committee that she and her husband were currently planning and working toward owning their own farm. Ms. Becker supported HB 116 and believed the new board would help save money through consolidation. Furthermore, the life of the ARLf would be extended which is important for the next generation of farmers, her son. Currently, that does not look to be the case. She did not believe this consolidation would harm the other boards as much as they think. There is no intent to destroy any other boards. Additionally, it is important to have active agricultural community members as part of the board. Number 2344 SIG RESTAD, Northland Pioneer Grange, testified next via teleconference from the Mat-Su Valley. Upon the agricultural committee's review, it is opposed to the current draft of HB 116. He recognized that all of state government, including the Division of Agriculture, has room for improvement. However, there is no reason to "reinvent the wheel." He stated, "A board of seven that is kind of a quasi unit, away from the regular governmental procedures does not sound like a way to build up communications with administration and work with the administration." He questioned how employees would respond under the proposed arrangement. With regard to the language referring to the notion that "land sales and management income may be appropriated," Mr. Restad did not believe one could be assured such would be appropriated to the board. He pointed out that there is legislation from territorial days which utilizes the language "appropriations shall be made to operate this legislation" and that is not the case. Furthermore, there are fiscal additions that are not necessary. He shared some of the concerns of soil and water conservation with regard to their ability to maintain their work with only two members. Over many years, the Grange has taken the stand that the Division of Agriculture has an agricultural responsibility, a land conservation and development responsibility, and a consumer responsibility. The division should continue to be funded through appropriated funds. On the other hand, ARLf was established to make agricultural related loans and funds generated were to be used to operate the fund and revolve for the benefit of future farmers with agricultural loans. He stressed the need to maintain that intent. There are other ways than HB 116 that could better accomplish this. CO-CHAIR OGAN requested that any written testimony should be provided to the committee. Number 2131 ART GRISWOLD, End of the Alaska Highway Grange, testified via teleconference from Delta Junction. Mr. Griswold supported HB 116. In response to Co-Chair Ogan, Mr. Griswold explained that a grange is a farmer's paternal organization dating back to the Civil War. The grange began to help farmers organize and deal with politics. For example, the National Grange has paid lobbyists to advocate for legislation and support of agriculture. Currently, there are four active granges in Alaska. MR. GRISWOLD commented that he believed Representative James has an answer to a potential problem. There need to be continuing funds to develop agriculture. He recognized that the state will not be able to continue to fund agriculture and therefore, it needs to become self-sustaining. Mr. Griswold said that he would rather pay five percent interest to Alaska's fund rather than the federal five percent. Number 1920 JIM ELLISON, Publisher, Alaska Farmer Magazine, testified via teleconference from Fairbanks. Mr. Ellison informed the committee that he farms stock and fowl. He commented that one must remember that this is about agriculture. There is no question that a board can better represent farmers and land conservation. Mr. Ellison noted that he has farmed and ranched in Alaska for 30 years and has never had to use state funds. If the desire is for agriculture to grow in Alaska, there must be people in positions with agricultural experience. He believed this to be a good start. "The Alaska Farmer Magazine supports it, maybe not quite just like it's written, but as what we see is going to be the finished product." BRUCE WILLARD, Rancher, testified via teleconference from Homer. He noted that he has been a rancher since 1959. Mr. Willard supported the Board of Agriculture having people on the board that are in agriculture. Other than that, more work on the legislation is necessary. He believed that the folks from the soil and water conservation boards have some "qualified reasons" for opposition. Number 1698 DOUG WITTE, Program Coordinator, Alaska Association of Conservation Districts, testified via teleconference from the Mat-Su Valley. The aforementioned reference to the letter dated April 5, 1999, was sent to each member of the House Resources Committee. He explained that the Alaska Association of Conservation Districts is a 501(c)(3) nonprofit organization which supports the efforts of all 13 Alaskan soil and water conservation districts. These 13 districts represent 65 locally elected supervisors and more than 850 private land owners. At the convention in March, the association supported the concept of the Board of Agriculture. However, the association opposes the consolidation of the AKNRCDB and any of the authorities under AS 41.10 as outlined by Mr. Rogers. The association supports the appointment of a member of the Alaska Conservation District movement to one of the nine member boards. Furthermore, the association does not recognize any cost savings as a result of the proposed consolidation under HB 116. He expressed interest in being involved in the fiscal note process. MR. WITTE commented, "Although a number of out supervisors and/or cooperators with the districts have a whole-hearted concern and interest in issues such as the operation management of Matanuska Maid, Mt. McKinley meats, and ... other assets within the [indisc.] portfolio; they also have an interest in the day-to-day responsibilities, marketing and inspection unit within the Division of Agriculture and they probably have ... an interest in the policies and procedures that guide ARLf operating, development, and processing loans." Mr. Witte informed the committee that the main mission of the association is "to guide the development of lands classified for agriculture following proven soil and water conservation methods and that the integrity of the farm and ranch resources are protected over time." Under AS 38.05.321 a farm development plan was required as part of a agriculture land sale contract until two years ago. The farm development plan outlined the location of the farmsteaders and real property improvements as well as areas to be managed for commercial timber. These are obviously tied to the physical features of the farm tract and easily expressed on a map and referred to as the conservation plan. That is the document the soil and water conservation districts are expected to provide the land contract holder. Currently, this is on a voluntary basis per 11 AC 67.180. Although the farm development plan under AS 39.05.321 was repealed by SB 109, the conservation planning requirement remains. Whether land and resource concerns are agriculture, it is critical to recognize the physical and environmental limitations. This type of planning is done to support and offer the type of science and natural resource management assistance which is practically unavailable to the average private landowner. Mr. Witte pledged support of future legislative industry development of agriculture in Alaska. Number 1295 K. KIRK, Plweger Farms, indicated that HB 116 was a great piece of legislation. For the first time, people in agriculture will be making decisions on agriculture. Overall, HB 116 is written well. He commented, "Fort the first time, since we started this agriculture program, ... it is meeting the requirements of the farmer." He recalled the clearing requirements when this program first began. The farmers received the farms with the trees on the farms in October. The farmers were told that the first payment had to be received the next October. This meant that a farm had to be clear, put into production, and make a profit on the farm within the first year. The man that made that decision did not know what farmers had to do. That caused problems and ultimately led to the state giving a moratorium for a year. Mr. Kirk fully supported this program. ROB WELLS, Director, Division of Agriculture, testified via teleconference from the Mat-Su Valley. Mr. Wells noted that the division has some concerns, but the division's current position is neutral. He discussed the meeting schedule of the ARLf board and the Creamery Corporation. The Creamery Corporation was purposefully set up an arm's length from ARLf in order that it was not subject to state procurement rules. This allowed them to run similar to a private enterprise. That procedure has been successful to date. He expected that the new Board of Agriculture under HB 116, due to the board's new responsibilities, would have more meetings. Therefore, there are concerns regarding the perceived savings through consolidation of these boards. The current ARLf board has demonstrated that it is fiscally conservative as evidenced by the Division of Legislative Audit who viewed ARLf loan procedures and approval in 1997 to be approaching what is expected in the private lending sector. MR. WELLS expressed concern with the CS in regard to the independent authority of this Board of Agriculture and whether it is not part of the executive branch. If it is part of the executive branch, this board would be subject to the Executive Ethics Act. He noted that the Division of Lands has significant concerns with the Title 38 land disposal responsibilities in HB 116. Mr. Wells announced that he had pledged to work with Representative James over the interim to develop solutions. Number 0592 SCOTT MILLER, Misty Mountain Farms, testified via teleconference from Delta Junction. He informed the committee that he was the local Delta Chapter, Farm Bureau President. Mr. Miller supported HB 116 for three reasons. Firstly, HB 116 brings the current ARLf interest rates more in line with other lending institutions which is necessary to support agricultural development. Secondly, there is no meaningful assistance for the drought situation in Delta Junction. He indicated it to be in the state's interest to have a restructuring program for farmers. Thirdly, Mr. Miller supported the concept of the Board of Agriculture as well as having farmers directing quality and development. This legislation makes good sense and would help Alaskan agriculture develop and build its agricultural industry. WAYNE BOUWENS, 65 year Alaskan resident; Chairman, Palmer Soil and Water Conservation District, testified next via teleconference from the Mat-Su Valley. He noted that he has been involved in agriculture for most of those 65 years. Mr. Bouwens said that he would like to see a Division of Agriculture. He commented that the soil and water conservation movement will suffer under the proposed new board. In conclusion, Mr. Bouwens said HB 116 needs more work. Number 0206 CO-CHAIR OGAN announced that he planned to meet with those interested in this issue in his district individually after the town meeting scheduled for Saturday, April 17, 1999. DICK ZOBEL, Member, AKNRCDB, testified via teleconference from the Mat-Su Valley. He believed Mr. Rogers had outlined the AKNRCDB's position. He noted that he has been involved with the conservation districts since 1976 and is therefore, a member of the Wasilla Soil and Water Conservation District which is a member of the Alaska Association of Soil and Water Conservation Districts. He recalled the use of the word "power" during the hearing. TAPE 99-26, SIDE A MR. ZOBEL stressed that the conservation districts are not power organizations. These districts are made up of volunteers. Anyone that enters the local conservation district is sent by the state or is a private landowner requesting help. Mr. Zobel commented that the conservation districts do not want power. The comment that HB 116 is an agricultural bill makes the conservation districts, the state association, and the state board apprehensive because they have a broader vision than just agriculture. Mr. Zobel turned to the issue of funding and stressed that there were years that no funding was received and creative measures were taken to provide the service. In closing, the bill that would include two people (from the soil and water conservation districts) would not do the job. Number 0244 CO-CHAIR OGAN stated that if anyone wanted to add further comments, he would allow that at this time. MR. FRANKLIN requested that Representative James address the conservation issue. He did not see anything in HB 116 that affects the districts. BARBARA COTTING, Legislative Assistant to Representative James, Alaska State Legislature, responded that there is no intention to take anything away from the districts. The idea is to consolidate several boards who are not effective standing alone in order to strengthen the functions of all the boards. How that is accomplished probably does need work. Therefore, everything is open for negotiation. Ms. Cotting agreed with Mr. Franklin that the language in HB 116, as currently written, does not affect the conservation districts. MR. FRANKLIN pointed out that there are two different entities, 13 soil and water conservation districts and the state soil and water conservation board. PETE FELLMAN, Delta Dairy Farmer, informed the committee that he has been actively farming for 20 years and has been involved with soil and water conservation for that time as well. He noted that he was testifying on his own behalf, although he is staff to Representative Harris. Mr. Fellman turned to the makeup of the board. One of the members must be of a general business background which could be in mining, logging, fishing, et cetera. Two of the members will be actively involved with soil and water conservation districts. One of the members would be the commissioner of DNR, who would have statewide interest. Therefore, four members would be farmers or from farmer groups. Currently, there are 13 conservation districts while only four districts are represented by people living in that district. The number proposed under HB 116 would have eight people from the 13 districts who could be on the conservation board. Therefore, these groups will become more valid and more fully represent the state. Mr. Fellman emphasized that this will not affect most of the money that comes to soil and water conservation which comes through a federal division, NRCS. He indicated that there is no controversy surrounding the ARLf and the need to move the interest in line with the Farm Service Agency (FSA) which can help farmers during such situations as droughts. He referred to the letter from Omar Stratman(ph); this will not affect the districts. CO-CHAIR OGAN acknowledged that this is a major change in the way business is done in agriculture. He noted his support of agriculture due to its importance in everyone's life. HB 116 was held in committee.
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