Legislature(1997 - 1998)
10/31/1997 01:30 PM House STA
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
JOINT MEETING
SENATE STATE AFFAIRS COMMITTEE
HOUSE STATE AFFAIRS COMMITTEE
Wasilla, AK
October 31, 1997
1:30 p.m.
SENATE STATE AFFAIRS COMMITTEE MEMBERS PRESENT
Senator Lyda Green, Chair
Senator Jerry Ward, Vice Chair
SENATE STATE AFFAIRS COMMITTEE MEMBERS ABSENT
Senator Jerry Mackie
Senator Mike Miller
Senator Jim Duncan
HOUSE STATE AFFAIRS COMMITTEE MEMBERS PRESENT
Representative Jeannette James, Chair
HOUSE STATE AFFAIRS COMMITTEE MEMBERS ABSENT
Representative Fred Dyson
Representative Ivan Ivan
Representative Mark Hodgins
Representative Al Vezey
Representative Ethan Berkowitz
Representative Kim Elton
ALSO IN ATTENDANCE
Representative Scott Ogan
Representative Vic Kohring
COMMITTEE CALENDAR
HOUSE BILL NO. 228
"An Act relating to the Board of Agriculture, to the Agriculture
Development Corporation, to the Agricultural Revolving Loan Fund
Board, and to the disposal of state agricultural land; and
providing for an effective date."
- HEARD AND HELD
PREVIOUS SENATE COMMITTEE ACTION
HB 228 - See Joint Senate/House State Affairs minutes dated
10/24/97.
WITNESS REGISTER
Don Brainard
HC01, Box 6145
Palmer, AK 99645
POSITION STATEMENT: Suggested revamping the old system instead of
instituting a new one.
Earl Clabow
537 E. Fern Ave.
Palmer, AK 99645
POSITION STATEMENT: HB 228 does not answer to agriculture's
problems.
Harry Leckwold
Box 335
Palmer, AK 99645
POSITION STATEMENT: Suggested more groundwork before proceeding
with HB 228.
Craig & Vicki Trytten
P.O. Box 871628
Wasilla, AK 99687
POSITION STATEMENT: Need more agricultural land made available.
Dick Zobel
P.O. Box 872683
Wasilla, AK 99687
POSITION STATEMENT: Legislature needs to focus in on and support
agriculture industry.
Ms. Kelly Ladere
P.O. Box 13304
Trapper Creek, AK 99683
POSITION STATEMENT: Need less restrictive government control of
agricultural lands.
Scott Miller
Delta Junction, AK 99748
POSITION STATEMENT: Supports concept behind HB 228.
Herb Simon
Nelchina, AK
POSITION STATEMENT: Neutral on HB 228.
Sam Lightwood
HC 60, Box 229
Copper Center, AK 99573
POSITION STATEMENT: Does not support a five-member board.
Gerald Robson
P.O. Box 13114
Trapper Creek, AK 99683
POSITION STATEMENT: Board should have representation from all
farming areas of state.
Doug Warner
Division of Agriculture
Department of Natural Resources.
P.O. Box 949
Palmer, AK 99645-0949
POSITION STATEMENT: Commented on division's inspection programs.
Robert Wells, Director
Division of Agriculture
Department of Natural Resources
P.O. Box 949
Palmer, AK 99645-0949
POSITION STATEMENT: Reviewed division's activities.
ACTION NARRATIVE
SENATE TAPE 97-28, SIDE A
HB 228 BD OF AGRIC./AGRICL.DEVELOP. CORP
The joint meeting of the Senate State Affairs Committee and the
House State Affairs Committee was called to order at 1:30 p.m. in
the Wasilla City Council Chamber, Wasilla, AK. In attendance were
Chairman Green and Senator Ward of the Senate State Affairs
Committee and Chairman James of the House State Affairs Committee.
The only order of business before the joint committee was a public
hearing on HB 228.
REPRESENTATIVE JEANNETTE JAMES, prime sponsor of HB 228, said the
legislation, which would create an agriculture board and an
agricultural development corporation, is just a starting point,
and, if it is decided to proceed with this kind of a process, there
are a lot more things that need to be in the bill to implement it.
Representative James pointed out that she has been in the
Legislature for five sessions, and every year it has been a battle
to get any money to support agricultural interests in the state.
She said it is an up and growing business in the state and is
something that needs to be supported.
Representative James opened the meeting to public testimony and
said the committee would have a question and answer period after
completion of the testimony.
DON BRAINARD of Palmer said he was a retired employee of the
Agriculture Forestry Experiment Station and presently the owner of
a small hay operation located in the Matanuska Valley.
Mr. Brainard said that having lived in the state for several years
he has heard a lot of complaints about the Division of Agriculture,
but one thing that came out loud and clear last year was that there
are several producers who feel that they could not survive without
the division's continued support, particularly with regard to the
inspection service. He suggested that instead of instituting the
system, as provided by HB 228, revamping the old system. He
believes the Board of Agriculture could give that direction to the
Division of Agriculture, but he is unsure that an Agricultural
Development Corporation is necessary. While he thinks a Board of
Agriculture is a good idea, he could not support HB 228 in its
present form.
REPRESENTATIVE JAMES commented that she doesn't think there is
anyone that could support the bill as it written now because it is
just the beginning.
EARL CLABOW of Palmer related that he comes from a family of
farmers and that he has personally been involved in various aspects
of agriculture all of his life. He said the agriculture industry
in the state is growing at a healthy rate, and the greatest need is
for land so that this growth can continue.
Mr. Clabow said the industry has survived dramatic ups and downs in
the economy, but the major problem over the years has been with
government because there have been few administrations that have
been supportive of the industry. When the oil industry came to the
forefront in the state, agriculture lost the support and the
interests of the legislators in general. Today they find
themselves with administrators, legislators and a bureaucracy that
knows very little about the industry, and their attitude is
indifference, or at least condescending when one tries to explain
what the industry is to the state of Alaska, what its needs are,
and potential solutions to problems they find themselves faced
with.
Mr. Clabow suggested the beginning to getting the industry and
government back on the same track would be the reestablishment of
the Alaska Agriculture Advisory Board, and to use this group to
help reestablish the mission of the Division of Agriculture and get
it back on course. He said they need a healthy, responsive
Division of Agriculture for the industry, they need the inspection
programs, and they need a one-stop government office serving the
industry.
In his closing remarks, Mr. Clabow said he personally feels that HB
228 is not the answer to today's problem and that it would be many
years of continued growth in the industry before it is ready for
such a change.
SENATOR GREEN asked how long the Agriculture Advisory Board had
been in place before it was dissolved. MR. CLABOW didn't know how
long it had been in existence, but he knew it had been in place for
a number of years.
REPRESENTATIVE OGAN asked what role the former Agriculture Advisory
Board played. MR. CLABOW explained that it was a board that met
periodically, representing the views of the industry and
communicating very effectively with legislators and government.
SENATOR WARD agreed with Mr. Clabow that when that board was in
existence, it was the voice for agriculture. He added that at that
same time, cities and boroughs were also bringing forth the
agricultural agenda from their areas to the Legislature, but he
doesn't think it is being done as strongly now as it was back then.
MR. CLABOW said he thinks that the industry is beginning to get
that community support back.
HARRY LECKWOLD of Palmer stated he is not a farmer, but he has been
in the agriculture business for over 45 years. He said
agricultural rise all over the world is being destroyed by nature,
by man, etc., but the population continues to go up. There is a
great potential for the industry in the state, but one of the worst
failures is the fact that there is no course or plan of action to
follow.
Mr. Leckwold said he has heard it expressed that some organizations
are interested in trying to resurrect some of the state's
agriculture potential by putting it into a corporate structure,
away from the government structure. He pointed out that this type
system is being used in the Yukon Territory and seems to be
working. He also pointed out that the Alaska Railroad has a
corporate structure and a business plan and it is functioning well.
Mr. Leckwold said HB 228 does not separate agriculture from
politics because it provides for a five-members board appointed by
the governor, which is the same old approach. He suggested not
moving forward with the legislation until more groundwork is
planned, which he believes would be of benefit to more people.
CRAIG TRYTTEN, owner of a dairy farm at Point McKenzie, said it is
a real disaster when people come to that area from out of state and
see the condition that many of the farms and dairies are in. He
said all of the money that the state poured into that area is being
wasted, and he suggested communicating with other states to get
some ideas on how the agriculture industry in Alaska can be fixed.
He also pointed out that people want to come to the state to make
a living at farming, but there is no land available to them because
it is either owned by the state, the feds or the borough, and some
of this land should be made available to help get this industry get
back on its feet.
In conclusion, Mr. Trytten said he doesn't have the answers to
solve the problems that plague the agriculture industry, but he
supports having a board that can address the issue.
SENATE TAPE 97-28, SIDE B
DICK ZOBEL, a farmer from Wasilla, commented that legislators have
to figure some way to address the agriculture industry's needs and
requirements. He voiced his opposition to elimination of the
Division of Agriculture because he believes it is a very integral
part of our state government, and, if it were eliminated,
agriculture would be driven further and further into the ground.
Mr. Zobel said he farmed in the Mat-Su Valley for approximately 19
years, and one thing he learned was that you get out what you put
into it. At that same time, he was working for the state and he
saw the big money come into various state agencies with little
thought and with little actual participation from the industries
that were affected by it. In some cases it worked, but in some
cases it didn't and the agriculture industry is one that didn't
work.
Mr. Zobel stressed the need for the Legislature to focus in on and
support the agriculture industry. He added that there is a lot of
disagreement within the agricultural community as to what the
solution for this problem is, but he thinks the former Alaska
Agricultural Advisory Board was doing a good job and that it set
down a lot of what resulted in a marked increase in agriculture
production. He encouraged the reestablishment of such a board
rather than breaking down the Division of Agriculture and creating
a private entity.
Mr. Zobel also spoke to the critical need for more agricultural
land in the state.
REPRESENTATIVE JAMES pointed out that one area of discussion on
this bill was to capitalize this corporation with the Agricultural
Revolving Loan Fund (ARLF), the existing contracts for land sales
to agriculture, and all of the agricultural land that has been
identified as agricultural land as their base to begin to be able
to be self-sufficient. The corporation would then be responsible
for giving the land out to people. She asked Mr. Zobel that if the
control of the agricultural land was in the hands of the
corporation, or even in the control of the Division of Agriculture
as opposed to the Division of Lands in DNR, did he think this would
make a difference on the success of this type of an operation. MR.
ZOBEL replied that he thought it would make a difference and it is
something that has been mentioned in the industry for a number of
years. It was always brought back to them that state statute
requires that all monies derived have to go into the general fund
unless there is another big series of hoops to jump through until
you get to that point.
REPRESENTATIVE JAMES advised that by setting up a corporation, as
provided by HB 228, the Legislature has to appropriate the money,
but it is the only way to get the revenues to go into a stream to
be used for agriculture.
KELLY LADERE said she is a farmer and a second generation land user
in Alaska, having been raised on a homestead. Over the years she
has learned that you must put as much as you can back into the
ground and it will repay you into perpetuity. Her family has 1,100
acres, but they need 3,000 acres for their operation, however, at
this time, there is no way they can obtain additional land because
of land availability and the tremendous expense. She said there
needs to be a system for financing farmers.
Ms. Ladere said many fine farmers in her area gave up, not because
they couldn't raise the crops, harvest and sell them, but because
of very restrictive government control of the land. She believes
that agricultural land should be in the hands of an agency of
whatever nature that understands the industry, which is not the
case right now.
Ms. Ladere suggested that the Agricultural Development Board should
have seven members instead of the five as provided for in the
legislation with the members being elected from the farm community
by those farmers. She also suggested that the finances should be
separated from administration. She questioned how a business can
succeed when run by someone who is appointed for political reasons.
She said agriculture is an incredibly complex, diverse, difficult
to understand industry.
Ms. Ladere expressed her appreciation to the committee for their
interest and support for the agriculture industry, as well as the
introduction of HB 228.
SCOTT MILLER, testifying via teleconference from Delta Junction,
voiced his support for the concept behind HB 228. For years the
farming community has been fighting for a Board of Agriculture, and
if this board is given some actual authority, it would have a much
more grass roots feel for the needs of the industry.
Mr. Miller expressed his disappointment with the Division of
Agriculture because he believes it has lost is sense of mission and
it is scrambling for funding and self-justification. He also
expressed his disappointment with the current ARLF board because he
feels that their policies are not in touch with the realities of
modern agriculture.
Mr. Miller pointed out that in Delta and other areas where
agriculture is in place, livestock is the backbone of their
industry, and they are in need of some livestock enhancement
programs. He also spoke to the need for making more land available
and getting more real farmers involved in the picture. He said
that is a real problem in this state: there are a lot of land
owners, but we do not have a lot of serious farmers.
HERB SIMON, testifying via teleconference from Nelchina, stated he
doesn't either endorse or reject HB 228.
Mr. Simon said that although the agriculture community nationwide
experiences troubles from time to time, he is not aware of even one
of the other 49 states having the type of bureaucratic slanted
government strangle hold on producers as is experienced here in the
state of Alaska. He said very few producers in this state have
actually ever had a level playing field in relation to the Division
of Agriculture. He suggested as a starting point to resolve these
problems, redefining the role of government in relationship to
agriculture and then what role the Division of Agriculture has
played in some of these areas.
One of the concepts of HB 228 will turn the agriculture land base
into an endowment for either the Division of Agriculture or a new
corporation, although he doesn't see the total Legislature
supporting such an endowment. However, some of the problems within
the industry, although not necessarily created by the Legislature,
may be the result of the failure on the part of the administrations
to justify to the Legislature the need for appropriations that
perform these various government roles.
Mr. Simon also spoke to the importance of the various support
services that are bolstered by any agriculture activity. He said
if we just focus in on agriculture, it doesn't really look very big
in its present configuration, but when you take an overall economic
analysis of agriculture, it is a real shot for i.e. local
economies.
Mr. Simon said he doesn't know much about the regulatory process
and he requested that Mr. Warner of the Division of Agriculture
explain the various regulations and the interface between the
Division of Agriculture and U.S. Department of Agriculture.
SAM LIGHTWOOD, testifying via teleconference from Kenny Lake,
stated he thought a five-member board of directors leaves something
to be desired because those five people will have a lot of work to
do. [THE REMAINDER OF MR. LIGHTWOOD'S TESTIMONY WAS DIFFICULT TO
HEAR ON THE TAPE AND NOT TRANSCRIBABLE]
SENATE TAPE 97-29, SIDE A
GERALD "DUSTY" ROBSON of Trappers Creek said he agreed that a board
of directors should have representation from all of the farming
areas in the state, and he suggested an Alaska Native should serve
on the board as well. He thinks it is important to get the land
out to the public and then to figure out how to keep it in
agriculture because right now more agricultural land is being lost
than gained.
DOUG WARNER, Division of Agriculture, said inspection programs not
only provide a means to commerce for local produce and farmers, it
is also a consumer protection device to maintain that consumers in
the store are purchasing quality produce. The Division of
Agriculture offers produce inspection services which maintains that
the produce purchased by the consumers meets certain grade level.
They also certify produce that comes in from the Lower 48. The
division also provides a meat grading service that helps the farmer
be compensated in relation to what the value of that product is, as
well as identifying for the consumer the type of meat that is being
purchased.
REPRESENTATIVE JAMES asked if the division charges fees for these
services. MR. WARNER acknowledged that they do provide a fee basis
for some of their inspections. If a wholesaler has a problem with
a van load of bananas that come up from Ecuador or wherever, they
will inspect that produce and a fee is charged to adequately cover
that service. In the past, they have inspected produce from local
farmers as a market and development project for which there has not
been a direct fee charged.
SENATOR GREEN asked how the division tracks the money that is
brought in by fees. MR. WARNER explained that all the fees are
collected by the U.S. Department of Agriculture, and after they
deduct for overhead for collection and management, the balance is
sent to the state. The division has to then receive authority from
the Legislature to spend those funds. He added that in
relationship to the funds that he specifically deals with, they are
all accounted for. He feels like the division is getting exactly
back from the state what they put into it.
REPRESENTATIVE JAMES said she has had concern with plants, seeds,
etc., coming into our pristine state that may have hosts of
disease, and she asked if these inspections were state mandated and
not involved with the USDA. MR. WARNER said Alaska cooperates with
other states to make sure that when receiving seeded materials from
other states that it comes from an area that is certified free from
disease. He also clarified for Representative James that animals
brought into the state have to go through a very strict federal
requirement with disease testing and blood tests before they can
enter the state.
REPRESENTATIVE JAMES noted that aphids brought in on plants have
been a big problem in the state of Alaska, and she was told by the
Division of Agriculture that if the state were to expand the
inspection service for plants, it could then charge the retailer
for that service so that it could be self-supporting. MR. WARNER
said it would be timely to initiate a program like that, and he
feels it is very fortunate that there hasn't been more disease
brought into this state.
REPRESENTATIVE OGAN asked if the concept of the bill is to set up
a quasi-private corporation similar to the Alaska Railroad
Corporation. REPRESENTATIVE JAMES acknowledged that is the general
idea, but she reiterated that the legislation is not complete.
REPRESENTATIVE JAMES voiced her frustration that for five years she
has watched the Division of Agriculture's budget decline and the
actual spending off of the Agriculture Revolving Loan Fund, and she
questioned how this division can save what it has in order to
protect agriculture and to not have it completely dissolved. MR.
WARNER responded that he thinks some sort of advisory board from
the farming communities that can hear constituents' concerns and
make recommendations would be a good starting point, although as a
general rule, the division tries to be very receptive to ideas to
do things better. He stressed the importance of carrying this
message across to all legislators in Juneau, especially those who
have not been supportive of the industry in the past.
REPRESENTATIVE JAMES commented that from administration to
administration, the people change, but agriculture keeps on going
and there is no continuity of plans, so it is important to set up
something that could have some continuity over the long haul. She
added that she does not believe that it is errors on the part of
the Division of Agriculture as much as it is political input and
political opinion that agriculture doesn't count.
HERB SIMON pointed out that the former Agriculture Action Council
was formed as a political subdivision under the Department of
Commerce & Economic Development while the Division of Agriculture
was within the Department of Natural Resources so there wasn't any
continuity. When Governor Sheffield abolished the council, all of
the remaining funds that were directly appropriated to the council
were supposed to go the Division of Agriculture, but that never
happened. He suggested that whatever kind of new board is created,
to make sure that it has continuity and interface with the Division
of Agriculture.
SENATOR GREEN said in last year's Governor's budget, the entire
Division of Agriculture was funded from ARLF funds. This was of
great concern to herself and Representative James, and they made an
inquiry and were told that at the present rate of use of that
fund,either by the end of 1998 or the beginning of 1999, the fund
would most probably be extinguished for money available for loans.
She and Representative James subsequently requested an audit of the
ARLF, but she has not yet seen the result of that audit. She has
written a letter to the Governor, with copies to the Division of
Agriculture and others, requesting that as they formulate this
year's budget, that the Division of Agriculture be returned, in
part at least, to the general fund. She said fortunately, the loan
fund forecast is much better now than it was last year, however,
she encouraged that the participants in the meeting correspond with
their legislators and the administration commenting on how they
would like to see the division funded in the upcoming budget.
REPRESENTATIVE JAMES said another issue is the $3 million to the
University of Alaska for the agriculture and forestry experimental
farm which is being committed to being reduced by $500 million a
year. She added that with another chunk out of their budget, they
will be out of business and will not be able to get their federal
matching funds.
VICKI TRYTTEN of Wasilla commented that when she and her husband
farmed in the Lower 48, they basically just farmed, but since
moving to Alaska and farming in this state, they have found that
they need to be involved, particularly because the industry is in
such an infantile state in Alaska. She said it is time that the
farmers themselves are this Board of Agriculture to overlook what
is going on with their lives and livelihood.
REPRESENTATIVE OGAN said there has been a lot of talk about the
former board, but he is always a little leery about creating extra
layers of government, especially that are politically appointed.
He wondered if it is better to have a governor appointed board like
before, or would it be better to put together an ad hoc citizen's
group from various people that are politically active and that will
be a sounding board. CRAIG TRYTTEN responded that they are not
proposing starting another government agency or being part of
another government agency; they want an advisory board that has
farmers as its members.
ROBERT WELLS, Director, Division of Agriculture, Department of
Natural Resources, said he took the job as director knowing that it
would be quite a challenge, knowing of the existence of HB 228 and
the recent passage of SB 109. He has had a busy two weeks on the
job. With the passage of SB 109 and its implementation, the
divisions of lands and agriculture will be going to public
informational meetings from Delta to Homer, and he will take that
opportunity to go to the Kenai Peninsula and upper Mat-Su Valley to
get a sense of the folks in those areas. He said his initial focus
is what he is calling an "outreach."
Mr. Wells said the Agricultural Revolving Loan Fund had a meeting
recently and made loans to farmers, with another meeting scheduled
for November. He added that he shares the concern for the
integrity of the ARLF and the continued funding of the division out
of that source; it is not a positive prospect and they need to find
alternatives. Bringing back general funding to the Division of
Agriculture will save that loan fund and it will continue to be a
source of funds for farmers who have need.
Mr. Wells said the Plant Materials Center, which does research and
helps with revegetation projects on the military bases, with oil
companies and with mining operations, continues its good work.
Currently, the meat plant, which usually is not up to capacity at
this time of year, is full and working.
Mr. Wells after the annual agriculture symposium, which will be
held in Anchorage in November, he plans on having a meeting which
would include the Division of Agriculture, the Farm Bureau and
those members of the ag committee who are not part of the Farm
Bureau to redefine and refocus the Division of Agriculture. He
said as long as he is the director of the division, they will be
committed to the long-term steady growth of the agriculture
industry.
In conclusion, Mr. Wells said he agreed with the reestablishment of
an advisory board, but he believes the director of the division
ought to be doing that outreach and is he is willing to do that
outreach.
SENATOR GREEN advised that she will be urging that regulations be
promulgated on SB 109, that it not just be policy, that it not just
be notifications. She said it needs to go through the regulatory
process and be publicly discussed. She also noted that everyone at
the table was unanimous on the desire for land disposal and that it
has been a main focus of what legislators have been trying to do
this year. She said it is a very difficult issue because some of
the powers that be right now feel that the purpose of the Division
of Lands is not to dispose of land, which she totally disagrees
with.
SENATE TAPE 97-29, SIDE B
MR. WELLS informed the committee that the Division of Lands did
dispose of 11 parcels within the last year and he said they
anxiously await the removal the mental health cloud at Point
McKenzie so that they can dispose of additional land.
HERB SIMON asked if the Legislature can draft legislation directing
that the classified agricultural lands in the state of Alaska be
managed and administered by the Division of Agriculture or the
corporation. He said there is difficulty dealing with the Division
of Lands because their mission is a little bit different than the
mission of the Division of Agriculture. REPRESENTATIVE JAMES
clarified that the Legislature could direct them to transfer that
activity of selling the land to the Division of Agriculture, but it
is not possible under the current structure to have the money go
any place else except to the general fund. SENATOR GREEN pointed
out that it would accomplish the goal of getting more land sold
because the Division of Agriculture would be more intent in selling
the land.
CRAIG TRYTTEN voiced his frustration that he and wife bought land
a year ago and still have not received title for it. SENATOR GREEN
said what he is talking about is part of what motivates a
reorganization conversation to come about, because it is real
difficult to understand why there are so many problems with these
transactions.
DICK ZOBEL commented that he thinks the issue of lands, the paper
work, etc., is quite common with the Department of Natural
Resources, and he suggested that perhaps some reorganization should
be done at the DNR level. He said it is ridiculous that only three
percent of the land has been distributed to the public in this
state, and he thinks legislators have the hammer to have these
agencies justify their existence.
KELLY LADERE pointed out that the basic agreement between a land
grant college and the federal government, which endows it with
land, is that it will educate those in that state in natural
resources. Most specifically, relative to the University of Alaska
it was mining and agriculture. However, approximately four of five
years ago the University of Alaska ceased to fully honor its
agreement, which is of great concern to her. She said this is a
facet of what the committee is discussing relative to land.
In her closing remarks, REPRESENTATIVE JAMES stated that when this
topic was being discussed in committee before the bill was ever
drafted, the effort was to try to put arms around all of the
various parts of agriculture so that the money could be utilized
more effectively, to maximize the ability to get federal funds, and
all of other things that are necessary to have a valid and vibrant
agricultural community.
There being no further business to come before the committee, the
meeting adjourned at approximately 4:05 p.m.
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