Legislature(1997 - 1998)
04/12/1997 10:10 AM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE April 12, 1997 10:10 a.m. MEMBERS PRESENT Representative Jeannette James, Chair Representative Ethan Berkowitz Representative Kim Elton Representative Mark Hodgins MEMBERS ABSENT Representative Fred Dyson Representative Ivan Ivan Representative Al Vezey 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 (* First public hearing) PREVIOUS ACTION BILL: HB 228 SHORT TITLE: BD OF AGRIC./AGRICL.DEVELOP. CORP SPONSOR(S): REPRESENTATIVE(S) JAMES JRN-DATE JRN-PG ACTION 04/03/97 923 (H) READ THE FIRST TIME - REFERRAL(S) 04/03/97 923 (H) STATE AFFAIRS, RESOURCES 04/12/97 (H) STA AT 10:00 AM CAPITOL 102 WITNESS REGISTER BARBARA COTTING, Legislative Assistant to Representative Jeannette James State Capitol, Room 102 Juneau, Alaska 99801-1182 Telephone: (907) 465-3743 POSITION STATEMENT: Presented sponsor statement on HB 228. BILL WARD P.O. Box 350 Soldotna, Alaska 99669 Telephone: (907) 262-5135 POSITION STATEMENT: Provided testimony on HB 228. SIGMUND RESTAD, Representative North Land Pioneer Grange HC 4 Box 9571 Palmer, Alaska 99645 Telephone: (907) 745-3165 POSITION STATEMENT: Provided testimony on HB 228. ROBERT BOYD P.O. Box 929 Palmer, Alaska 99645 Telephone: (907) 745-3625 POSITION STATEMENT: Provided testimony on HB 228. LAURE KNOPP P.O. Box 794 Delta Junction, Alaska 99737 Telephone: (907) 895-4150 POSITION STATEMENT: Provided testimony on HB 228. SCOTT MILLER HC 60 Box 4140 Delta Junction, Alaska 99737 Telephone: (907) 895-5022 POSITION STATEMENT: Provided testimony in support of HB 228. DICK ZOBEL P.O. Box 872683 Wasilla, Alaska 99687 Telephone: (907) 376-5640 POSITION STATEMENT: Provided testimony on HB 228. DANA OLSON HC 30 Box 5438 Wasilla, Alaska 99687 Telephone: (907) 373-4612 POSITION STATEMENT: Provided testimony on HB 228. DOUG WARNER P.O. Box 1902 Palmer, Alaska 99645 Telephone: (907) 745-1193 POSITION STATEMENT: Provided testimony on HB 228. CRAIG TRYTTEN P.O. Box 871628 Wasilla, Alaska 99687 Telephone: (907) 373-0340 POSITION STATEMENT: Provided testimony on HB 228. DR. FREDERICK HUSBY, Dean-Acting School of Agriculture and Land Resources Management University of Alaska Fairbanks P.O. Box 757140 Fairbanks, Alaska 99775-7140 Telephone: (907) 474-7083 POSITION STATEMENT: Provided testimony on HB 228. DR. HOLLIS D. HALL, Director Alaska Cooperative Extension University of Alaska Fairbanks P.O. Box 756180 Fairbanks, Alaska 99775-6180 Telephone: (907) 474-7246 POSITION STATEMENT: Provided testimony on HB 228. ACTION NARRATIVE TAPE 97-41, SIDE A Number 0001 The House State Affairs Work Session on HB 228 was called to order by Chair Jeannette James at 10:10 a.m. Members present at the call to order were Representatives James, Elton and Hodgins. Members absent were Berkowitz, Dyson, Ivan and Vezey. Representative Berkowitz arrived at 10:11 a.m.; Representative Ivan was ill; and Representatives Dyson and Vezey were out of town. HB 228 - BD OF AGRIC./AGRICL.DEVELOP. CORP The first order of business to come before the House State Affairs Standing Committee was HB 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." CHAIR JEANNETTE JAMES called on Barbara Cotting, Legislative Assistant to Representative Jeannette James, to present HB 228. Number 0086 BARBARA COTTING, Legislative Assistant to Representative Jeannette James, first explained the corrections to the minutes of the Wednesday, March 19, 1997 meeting. The identified speaker on page 4 should be changed from "Hollis Hall" to "Chuck Bell". Number 0304 CHAIR JAMES stated as a message to those listening that the bill should be addressed as an option to save the Division of Agriculture's responsibilities. Over the years as a legislator she had found it more and more difficult to get support for the division. "We are a small voice in the state, but an important voice in the state." In particular, an important voice in North Pole, Delta Junction, Nenana, the Kenai Peninsula, and the Matanuska Valley. The Delta Barley project implemented nearly 20 years ago left a bad taste in everybody's mouth who was not directly involved with agriculture. And it had been an uphill battle to find or convince agricultural supporters ever since. She maintained that the project was not a farming failure, but rather a legislative failure. The intent was to establish a farming community, but a farming community strove for growth over time, not instant growth. In the Delta Junction area, farming had succeeded despite the failed project on its own. Therefore, we need to think about the type of options. Number 0534 MS. COTTING read the following sponsor statement into the record: "I submitted this bill in response to numerous requests from members of the agricultural industry in Alaska. It restructures the way state agricultural services will function in our state, making them more responsive to the industry's needs and more in touch with the grass-roots operations of our producing farmers. "Alaska needs to encourage agricultural development! We need to remove roadblocks and allow the industry to grow and prosper, for the benefit of our state and all its citizens. "This bill is just a starting point, and we plan to expand the duties and authorities of the Agriculture Development Corporation once we agree upon its formation. We welcome all input and suggestions." MS. COTTING further stated that Bill Ward and Tam Cook had worked extensively on HB 228 and explained the following sections of the bill: "Section 1 adds an entire new chapter to Title 3, `Agriculture and Animals': `CHAPTER 9, BOARD OF AGRICULTURE.' New Sec. 03.09.101 establishes a 5-members Board of Agriculture: One member shall be a members of a chartered statewide agriculture promotion organization; One shall be a member of a chartered statewide agriculture conservation organization; Two shall be engaged in two different commercial production agriculture enterprises, from two different geographic areas; One shall have general business or financial experience. Board members will serve staggered three-year terms, and will receive $100 per day compensation plus authorized per diem and travel expenses when on official board business. New Sec. 03.09.020 authorizes the Board of Agriculture to elect a chair and a vice-chair, and to appoint an executive director and employe staff. New Sec. 03.09.030 defines a quorum and procedures for board meetings. New Sec. 03.09.040 authorizes the Board of Agriculture to make recommendations to the Commissioner of Natural Resources regarding the classification of land as agricultural. Once a parcel of land is classified as agricultural, this section also authorizes the Board of Agriculture to actually dispose of the land. The Director of the D.N.R. Division of Lands is thus removed from the process of disposing of agricultural land, while the existing Title 38 lottery and auction provision remain the same. "Section 2 adds a new section, Sec. 03.10.015 This establishes the Agriculture Development Corporation, as a public corporation of the state. The Board of Agriculture serves as the corporation's Board of Directors. "Section 3 - 13 make changes to existing law, substituting: Agriculture Development Corporation for (Department) Board of Agriculture for (Department) Corporation for (Director of the Division of Agriculture of the Department) Board of Agriculture for (Commissioner) Board of Agriculture for (Agricultural Revolving Loan Fund Board) and transferring the associated authorities to the Board of Agriculture and the Agriculture Development Corporation. "Section 14 adds the board of Agriculture's executive director and staff to the list of state service positions exempt from the State Personnel Act, Title 39. "Section 15 adds the Board of Agriculture to the Definitions in Title 39, `Public Officers and Employees.' "Section 16 repeals sections in existing law defining the Agricultural Revolving Loan Fund Board and its duties and obligations. The ARLF is thus eliminated and replaced with the Board of Agriculture. "Section 17 allows for staggered terms of initial Board of Agriculture members: one initial members shall serve one year, and two shall serve two years. "Section 18 sets the effective date for this bill July 1, 1998" Number 0882 REPRESENTATIVE KIM ELTON asked if anything disappeared with the addition of this? Number 0896 MS. COTTING replied the Division of Land was removed from the process of disposing of agricultural land. Actually, the Division of Land would be replaced by the board. REPRESENTATIVE ELTON said, so there would not be the Division of Land. CHAIR JAMES explained it was the Division of Land within the Department of Agriculture. MS. COTTING stated the Department of Agriculture would eventually be phased out and replaced with a board of actual farmers. Number 0932 REPRESENTATIVE ELTON said, then the Division of Agriculture headed by former Senator Jay Kerttula would dissolve over time. MS. COTTING replied eventually that could be what happened. We were not sure where we were going with this, however. CHAIR JAMES stated there would be a phase-in process. It would be effective on July 1, 1998, but it did not mean that everything would happen then. The biggest issue was funding. If it continued to depend on state funds the same problems would remain. We needed to set up a system that perpetuated its own money so that it would not have to have General Fund appropriation. "Quite frankly it's not going to be possible to get General Fund appropriations, to my understanding, for the Division of Agriculture after fighting for five years and actually changing very few voices in the Administration, Legislature and general public." Therefore, the land and the assets of the fund would have to support the issue. CHAIR JAMES further said it was important to look at how this would fit into the agricultural experimental station at the university. The station received federal matching funds and was targeted for no more funds from the state. The state had been receiving $3 million of its funds in science and technology which was being phased out. There was no one willing to phase in General Fund support now which meant the program was without matching funds. In addition, there was also the Alaska Cooperative Extension program, and the Soil and Water Conservation program which had been hit by budget cuts as well. They were all necessary components to have a successful agriculture operation in the state. We were attempting to qualify for federal funds to maintain the match and to keep these programs intact while the budget continued to be cut, she maintained. Number 1175 REPRESENTATIVE ETHAN BERKOWITZ asked, if this would create fewer agencies that farmers would have to deal with, while not reducing the range of services available to them? CHAIR JAMES replied it should. It should be part of the goal. Number 1216 MS. COTTING stated an instigating factor for all of this was the depletion of the Agricultural Revolving Loan Fund created to loan money to farmers to help them get started. It was being used, however, to fund the Division of Agriculture now. As a result, the assets were quickly disappearing to the point that there would not be any funds for the farmers if something was not done. MS. COTTING further stated that Bill Ward was on line now. He could answer any technical questions. Number 1276 CHAIR JAMES stated that Mt. McKinley Meats, run by corrections; and Matanuska Maid Dairy, run by the state were assets of the Agricultural Revolving Loan Fund. The money that did not get repaid from the Delta Barley and Point MacKenzie Dairy projects was why there was not support today. There were errors made but she did not blame the people who made the errors; they were not unworkable errors. Number 1351 REPRESENTATIVE MARK HODGINS announced he had a severe dislike of the Division of Agriculture feeding off of the fund. He would be adamant about making the fund available to agriculture and not to the division. Number 1375 REPRESENTATIVE ELTON wondered if there was a new pot of money being identified. He was aware of the Agricultural Revolving Loan Fund and the assets, but in light of diminishing state and federal support, what would be used to get to the self-sustaining number needed. Would an up-front cash infusion be needed from the General Fund? he asked. Number 1415 CHAIR JAMES replied an up-front cash infusion could be needed from the General Fund or somewhere else. The land was of value but it was in the state's hands. She was not interested in dumping land on the market; it just needed to be available. Number 1554 REPRESENTATIVE BERKOWITZ asked if most of the farm land was for small farmers or agri-businesses? CHAIR JAMES replied the Palmer area started with the federal homestead program which included both small and big farms. The Delta area included mostly large farms because of the disposal of land issue. The larger parcels were mostly 240 acres. It really depended on the crop. Number 1599 REPRESENTATIVE HODGINS added that the agricultural industry was not just farm fields. There were shellfish farmers in the Kenai Peninsula and Southeast Alaska. His area was also looking at trees for reforesting, willows for erosion control, oysters, hay, and apples. The emphasis would probably be on the smaller scale. Obviously, if the reforesting problem could be resolved, however, it would help. Number 1684 CHAIR JAMES noted the plant material center in Palmer had been gathering seeds from around the state for re-vegetation after a road project, for example. Agriculture also included husbandry and greenhouses. There were areas in Alaska where game animals were being farmed. It was a huge industry. Number 1730 REPRESENTATIVE BERKOWITZ asked if they were owned by individuals rather than by large corporations? CHAIR JAMES replied, "Correct." Number 1737 REPRESENTATIVE HODGINS added some Native corporations had dabbled in this area also. We certainly would want to encourage that type of support as well. Number 1744 REPRESENTATIVE ELTON asked if there was a definition of the term "agriculture"? Number 1774 CHAIR JAMES replied she did not know if there was a definition of agriculture but she did expect that one would be needed at some point. Number 1824 BILL WARD was the first person to testify via teleconference in Kenai. He thanked Chair James for introducing the bill in such a quick and timely manner. It was important that it got on the table now to allow for the work to be done between sessions. The bill showed the limits that needed to be worked within. It was important to keep in mind that the corporation had to work for the benefit of the whole state. It would have to run lean and mean because there would not be very much money generated. Regardless of how this was done, however, everything made by the corporation would go to the General Fund. Consequently, the board would have to come back and ask for an appropriation from the legislature each year which meant that agriculture would have to earn its place within the legislative process and its right to a legitimate appropriation alongside any other agency or department. In addition, the revolving loan fund task force established by the Governor had a report with recommendations that needed to be looked at as well for compatibility. It was important to consider using the board as a managing body versus an individual staff person. The board could bring a variety of expertise to the field. There were inexpensive ways to run the board due to technology. He was anxious to hear what others had to say and would be available for questions. Number 2079 SIGMUND RESTAD, Representative, North Land Pioneer Grange, was the next person to testify via teleconference in Mat-Su. In general, boards could be a benefit by lending expertise to the decision making process and by creating more dialogue. The agricultural community was relatively small creating a potential for conflicts of interests. Alaska had experienced that in the past with conservation and cooperative boards, especially small ones. The bill proposed the same responsibilities that existed right now except for a board that would meet upon occasion, instead upon a daily basis. The proposed budget cuts would abolish several of the division's functions or at least make them inoperable. Therefore, the duties of the non-existing board would not exist anyway. The grange was also concerned about the cost of the board in comparison to the existing structure. Maybe additional funds could be used better with personnel in the field. MR. RESTAD further explained the grange believed that a seven member board instead of a five member board would be better. A quorum of only three people opened up the possibilities of controversial decisions. The grange also suggested four members instead of two members should be engaged in commercial production. MR. RESTAD further explained that the cost of a board meeting could be better used for field personnel. In addition, the word "appoint" on page 2, line 15 should be "hire" instead. Who would have the hiring and firing authority for the executive administration of the board? Would it remain with the Governor, for example? The grange also suggested deleting the language "Legislative Budget and Audit Committee." on page 2, line 22. The minutes were already available to the committee at its request. In addition, there should be an agricultural banker on staff of the Agriculture Development Corporation. In addition, the loan amount of $25,000 should be increased to $50,000 or $100,000 in Sec. 10 with restrictions on how it should be managed. In addition, the word "corporation" on page 6, line 11 should be changed to "executive director" because the corporation and the board were really the same. In addition, the grange suggested deleting the language "except that the board shall carry out the duties of the director under these section." on page 7, lines 6-7. Who was the director in this case? Moreover, SB 109 should pass causing the land section to change in order to conform with the new legislation. In general, the grange felt that a board would not solve the problems. Number 2357 ROBERT BOYD was the next person to testify via teleconference in Mat-Su. He was born and raised in Alaska and had been involved in agriculture since the early 1960's. He just got the bill yesterday and there were several things that he did not like about it. There was a conflict of interest back in the 1960's with the Division of Agriculture so that if you were not part of the "in group" then you did not get a loan. And if you tried to get a loan elsewhere you had a problem. In addition, putting inspection under the Department of Environmental Conservation (DEC) would handicap it. Inspectors came out now on their own time for inspections. If it went out of DEC overtime would be charged. In addition, the new proposed board would have to go back to the legislature for funding. This would not change anything that we had right now. There were a lot of things within the division that could be changed to make it more farmer friendly and to encourage young people into agriculture, but this was not the route to go. Number 2414 CHAIR JAMES asked Mr. Boyd if he had any suggestions, given the fact that if nothing was done the entire Division of Agriculture could be lost? MR. BOYD replied the division was not very farmer friendly. On the one hand it wanted you to support the issues and on the other hand the division bashed you. You were caught in the middle. The Division of Agriculture could be streamlined by not paying wages and loans out of it and start by paying grants, for example. CHAIR JAMES asked Mr. Boyd if he was talking about the Agricultural Revolving Loan Fund or the Division of Agriculture? MR. BOYD replied both - the fund for taking grants and wages out, and the division for streamlining. CHAIR JAMES replied the legislature tried to do that in the budget this year. The final budget had yet to be approved, however. It was a temporary measure pending the fact of determining its existence. It was important to determine how to continue the existing agricultural services in an assimilated manner that would cost less and would be more efficient. MR. BOYD replied the basis of the problem was going back to the legislature for funding. CHAIR JAMES said she did not know that until she heard the testimony from Mr. Bill Ward. That was never her intent nor did she think it would work. "We might have to figure out something else there." TAPE 97-41, SIDE B Number 0001 CHAIR JAMES stated the basic problem was that we could not get funding for agriculture anymore. "We just don't have enough support out there." As we got closer to the end of this process we would be able to project financial records to see exactly how much it would cost. Until we get to that point, however, it was all surmising. Hopefully, we could get to that point by this summer. Number 0032 MR. BOYD stated if she put together a committee he would be willing to serve on it. Number 0042 LAURE KNOPP was the next person to testify via teleconference in Delta Junction. She and her husband had a feed and dairy business. The past failures, as Representative James mentioned, were related to legislative decisions; and, in part, to the initial experimental nature of farming in Alaska. She had seen a lack of continuity of policies that were crucial to building a solid infrastructure for agriculture. The term "at the discretion of the director" had a negative impact on her family business. She had seen favors handed to political cronies and honest and experienced farmers ignored because there was no vested interest in their properties. She would like to see the support for the bill and broadening the responsibilities to five or seven positions would get away from the good-ole-boy attitude. There would probably be a lot of amendments to the bill. The status quo of the division was not benefitting her industry. "There's going to have to be some changes and I know the industry is wide open to changes now." Number 0134 SCOTT MILLER was the next person to testify via teleconference in Delta Junction. He relayed a story about a farmer who was both addicted to farming and loved Alaska. "A lot of us fall into that category. We seemed to be the only ones that believe agriculture has a place in Alaska." He could not understand the mentality of the dollars being shipped out of the state with every barge of food that came in to the state. We supplied less than 5 percent of our own food he cited. The industry could build a future for ourselves and the next generations by supply food for the state. He supported HB 228; an entity that was farmer driven was much better than a bureaucratically dictated system like the current one. He wanted to believe that the board would be more efficient and effective. "Who other than farmers are masters of efficiency? We have to be." In Delta Junction he was active in the Delta-Greely Community Coalition and read the following into the record: "The realignment of Fort Greely is creating a sudden and severe economic dislocation throughout the greater Delta region. The livestock industry is a critical segment of the region's economy and has been identified as a major area for expansion in the economic revitalization. Expansion of the Delta region's livestock industry is dependent on the overall stability and development of livestock and red meat processing industry in the state of Alaska. Recent progress has been made in addressing key issues of long-term stability and development of the overall industry. Farmers are committed to and working on the development of a new cooperative and focused on the production, processing and marketing of Alaska grown red meat products. This step which has already begun establishes an organized approach to developing the meat industry and provides a focal point for agreements with the state on transaction plans and actions." MR. MILLER in conclusion asked: "Where do we want to go with agriculture in this state? Do we just want to have a few people growing vegetables, a small dairy industry, and a few people trying to make a living raising barley to support the few dairies, and everybody else just trying to grow a little hay to feed a few horses?" Agriculture in this state was back in the 1970's when we were moving into the twenty-first century. "We've got to get with the program and figure out support for the industry to move forward." There was criticism of the Delta-Greely situation when it was trying to look at the industry as a whole. This could involve an ethanol plant; the numbers indicated it could work. The by-products could support a livestock industry for a red meat and dairy industry. We needed to look at the whole thing and try to make it work as one big economic unit. Number 0346 CHAIR JAMES announced Mr. Miller had faxed a lot of information about ethanol and it was available for those who were interested. CHAIR JAMES further announced that she had been talking with individuals interested in micro-brewing who were using in-state barley. They would really like to make their micro-brews Alaskan grown. If anybody out there was interested in growing hops and barley she would connect the interested parties together. Number 0395 DICK ZOBEL was the next person to testify via teleconference in Mat-Su. He echoed the comments made by Mr. Boyd and Mr. Restad. He had been involved in agriculture for the past 20 years in the Mat-Su Borough. The bill was a duplication of what was in place already. Those who participated in agriculture during the big money days tried to influence the political appointees to create a formation for the Division of Agriculture; and knowing the General Fund, we were trying to reinvent the wheel with this bill. The basic problem was funding and the legislature. He did not mean to insult the committee members, but it was important to target the people who did not view a $30 million industry as anything that needed money -tourism or forestry, for example. In the big picture, the state would suffer far less environmentally if agriculture expanded compared to other industries. The bottom line was to target those who did not support the industry. Number 0490 CHAIR JAMES said she agreed with Mr. Zobel. It was an uphill battle, however. She had been working on it for five years. If it was not able to operate on its own and to make its own money with control over the funds, it would not work. We were here to put a fence around these things so that they could not be attacked or excluded. The agricultural experimental farm at the university was always the first to go when it was an intricate part of agriculture in the state. She also cited the Alaska Cooperative Extension program, and the soil conservation program as big participants in the agricultural community that were also subject to reduction. Number 0642 REPRESENTATIVE BERKOWITZ wondered what the experiences had been in other states. He asked: Had other states made an effort to do what we were setting out to do? And how successful had they been? Number 0651 CHAIR JAMES replied she did not have the answer to his questions. Number 0658 MR. WARD replied in other states there was a more traditional agricultural industry. In most states, they had a "department" of agriculture and not a division under the Department of Natural Resources. Other states used a board but it was part of a much larger system. Number 0691 DANA OLSON was the next person to testify via teleconference in Mat-Su. She wanted to talk about restructuring the agricultural programs today rather than the bill. The Americans with Disability Act (ADA) had let disabled people down by screening programs that were not accessible. The only program in existence - currently - was the Agricultural Homestead Program that was less physically intensive than other programs. Her husband was handicapped and had experienced personal bias, of which, complaints had been filed. It was an issue that needed to be addressed or the state would lose its federal agricultural funds. She suggested considering a handicapped person as a participant on the board. Number 0770 DOUG WARNER was the next person to testify via teleconference in Mat-Su. He worked for the Division of Agriculture and was developing a farm. He agreed that the status quo was not good as was true in many industries. The key was a farmer driven industry along with funding. He did not know if the bill would change that, however. In addition, the United States Department of Agriculture (USDA) programs were cooperative agreements with the federal government. It would be a challenge to find a way to do that with the private industry. The good-ole-boy concept was a reality of politics whether with the current system or a board. Number 0850 CHAIR JAMES explained a letter had been sent to Alaska's congressional delegation asking them to work with us on maximizing any funds at the federal level. Number 0870 MR. WARNER stated it was important to find a way to put a "good taste of agriculture in people's mouths rather than a bad taste." Number 0900 CRAIG TRYTTEN was the next person to testify via teleconference in Mat-Su. He was a dairy and hog farmer at Pt. MacKenzie. He owed money to the state and felt the bill was kind of bad. There should be a lot more people having a say than five. They were all appointed by the Governor when there should be people from every sector - vegetable, beef, hog and dairy. We should also have a secretary of agriculture that was recognized in the state and in Washington D.C. to help with the federal funds. CHAIR JAMES asked if Mr. Ward had any response to the comments made thus far from the testifiers? Number 0970 MR. WARD replied the points made were valid. There needed to be a strong agency type influence for the agricultural industry in terms of both regulations and inspections. The key issue was how to built a structure that was publicly supported and accepted. In response to the legislative process, funding tracks could be included in statute giving the legislature the ability to recognize its obligation. The legislature and the general public did not understand the benefit from agricultural representation. He cited currently there was funding for the plant material center as an agricultural function when in fact the center was doing a tremendous amount of good for the general public through its reclamation and horticultural efforts. The inspection program, in addition, was for the benefit of the public. He did not have a problem addressing the issue of the legislature and funding. He had tried for five years now to protect general funding and it had gotten worse every year. The people who testified today had not testified at the budget hearings. He wondered where they had been during those hearings. He recognized the testimony in regards to the board. A board of experts would benefit the public. The people who served on boards were not there to get rich or for a power trip. They were there to honestly do some good. The problem was that Alaska was so big and diverse it was difficult to understand the interests of all of the areas. Therefore, the more knowledge on the board the better. If there was a way to keep the Division of Agriculture, then great. But a board for oversight was still needed because the expertise was in the field and not the bureaucracy. Number 1320 DR. FREDERICK HUSBY, Dean-Acting, School of Agriculture and Land Resources Management, University of Alaska Fairbanks, was the next person to testify via teleconference in Fairbanks. He was concerned about the restructuring and regulatory functions. Separating the regulatory function would not simplify things for the farmers. He explained the School of Agriculture was faced with $1 million budget cut because of its dependence on the Alaska Science and Technology Foundation funding and the Governor's proposed roll back of $530,000 July 1, 1997. As a result, it could not match $485,000 of federal funds causing six program to be cut. In addition, the following July 1 of 1998 another $1 million would be removed closing everything down except the degree program. The school had been working with the congressional delegation and state representatives and senators to see if the $530,000 could be rolled back to the foundation. It was an acute problem. In the long-run, it would be best if the school remained within the university structure to get the match if the funding problem was solved. He suggested establishing a foundation that had to generate its own revenue to prevent going back to the legislature. He recognized that would require General Fund money initially. Number 1469 CHAIR JAMES said she did not know what was needed to maintain federal support. It was the General Fund match that was the problem. In the long-run she thought that the board would be able to fund the university programs. The research had not been done yet on how to get the money initially. But, if the money needed to be fought for every year, it would be too hard to maintain interest. She was working on stalling the $530,000 mentioned by Mr. Husby for one year. It was being used as an excuse until a solution was found. Number 1585 DR. HOLLIS D. HALL, Director, Alaska Cooperative Extension, University of Alaska Fairbanks, was the next person to testify via teleconference in Fairbanks. It was important to keep in mind that the federal funds were for experimentation and extension services so it was necessary to continue a relationship with the federal government. The legislature or the University of Alaska system needed to decide to invest public dollars into research and development in the state, or not. A major part of research and development was experimentation and extension services. It was a philosophical decision that needed to be made. Was it important to develop the resources in the state? If the answer was, yes, from the legislature then a commitment from the Board of Regents was necessary as well. He did not know how to get out of that stream of decision makers and funding, however. It was probably going to stay that way, but it did not mean that oversight and review was not needed which a board could fulfill by reporting to the legislature. Number 1797 CHAIR JAMES agreed with Mr. Hall. She was happy to see the people willing to testify today, but she had hoped that there would be a lot more. She did not know, however, if they did not care or were too busy doing other things, for example. A crowd of identified people were necessary to move the legislature. Maybe, we should consider a lobbyist. Number 1915 REPRESENTATIVE HODGINS thought of some other areas to include in the scope of agriculture in the state. He cited the following: The Wild Berry Products in Homer; honeybee farms in Kasilof; and mushroom gathering. There were a wide variety of things in the state and because of its temperate zones innovation was necessary to determine how something could be grown then marketed. He further cited by Port Moller there were people growing things by utilizing the heat around the hot springs. There was a lot that could be done, but unfortunately the state did not have the money from an agricultural industry like the state of Washington. There were a lot of innovative people in the state, and if legislation could be crafted to allow them to free think and to help them in areas that they needed non-monetarily, then that should be the emphasis to move forward. Number 2120 CHAIR JAMES suggested listing the things that the state needed to be a clearing house on, such as, matching buyers and producers. The regulatory and inspection issue was interesting because Alaska did not have the pest problems due to the cold in the winter and there was twenty-four hours of sunlight in the summer. The university was doing an extraordinary job in providing this type of unique information. She also cited the arctic research at the university and the circumpolar conference for agriculture in the arctic. In addition, small loan money was needed which should be provided by banks, and land was needed to be made available for farming. Number 2394 REPRESENTATIVE ELTON explained his concept of agriculture, having grown up in Juneau, was limited to dairy which did not exist any more in Juneau. He understood the value in changing a governmental process. However, there were other dynamics at play. He cited access to markets as an example. TAPE 97-42, SIDE A Number 0001 REPRESENTATIVE ELTON further stated the trend had been to decrease General Fund dollars for any type of economic development - tourism, commercial fishing, or mining, for example. The testimony today raised the fact that there were different expectations of the system amongst the agricultural environment. And the challenge would be how to meet the varying expectations. He was suspicious, however, that simply changing the process would fix the problem. He applauded Chair James for getting the discussion going on the process. Number 0176 MR. TRYTTEN explained he walked into the Division of Agriculture yesterday to take care of other business and just happened to find out about the hearing. CHAIR JAMES replied she not know how to get the message out further. She was glad he was here today. She asked for his mailing address so that she could notify him of everything that was happening. A letter was sent to 300 individuals after the last hearing. She asked Mr. Trytten to tell everybody interested to contact her to get on the mailing list. CHAIR JAMES explained she would like to have one more meeting before the session was over. She would notify everybody of the date later. Work would continue through the interim to include meetings in Mat-Su, Delta and Kenai. MS. COTTING explained the Legislative Information Offices (LIO) could help by maintaining a list of interested people. CHAIR JAMES asked everybody to check with the LIO's as well. ADJOURNMENT Number 0406 CHAIR JAMES adjourned the House State Affairs Standing Committee meeting at 11:50 a.m.