Legislature(1997 - 1998)

10/24/1997 01:35 PM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                   JOINT MEETING                                               
       HOUSE STATE AFFAIRS STANDING COMMITTEE                                  
      SENATE STATE AFFAIRS STANDING COMMITTEE                                  
                  October 24, 1997                                             
                     1:35 p.m.                                                 
                 Fairbanks, Alaska                                             
                                                                               
                                                                               
HOUSE MEMBERS PRESENT                                                          
                                                                               
Representative Jeannette James, Chair                                          
Representative Ethan Berkowitz (via teleconference)                            
Representative Kim Elton (via teleconference)                                  
Representative Ivan Ivan (via teleconference)                                  
                                                                               
HOUSE MEMBERS ABSENT                                                           
                                                                               
Representative Fred Dyson                                                      
Representative Mark Hodgins                                                    
Representative Al Vezey                                                        
                                                                               
SENATE MEMBERS PRESENT                                                         
                                                                               
Senator Jerry Ward, Vice Chairman                                              
                                                                               
SENATE MEMBERS ABSENT                                                          
                                                                               
Senator Lyda Green, Chair                                                      
Senator Jerry Mackie                                                           
Senator Mike Miller                                                            
Senator Jim Duncan                                                             
                                                                               
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): REPRESENTATIVES(S) JAMES                                           
                                                                               
Jrn-Date    Jrn-Page           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                        
04/12/97               (H)  MINUTE(STA)                                        
10/24/97               (H)  STA AT  1:30 PM FAIRBANKS LIO                      
                                                                               
WITNESS REGISTER                                                               
                                                                               
BARBARA COTTING, Legislative Assistant                                         
  to Representative Jeannette James                                            
Alaska State Legislature                                                       
Capitol Building, Room 102                                                     
Juneau, Alaska 99701                                                           
Telephone:  (907) 465-6822                                                     
POSITION STATEMENT:  Presented sponsor statement for HB 228.                   
                                                                               
ROBERT WELLS, Director                                                         
Division of Agriculture                                                        
Department of Natural Resources                                                
1800 Glenn Highway, Suite 12                                                   
Palmer, Alaska 99645-0949                                                      
Telephone:  (907) 745-7200                                                     
POSITION STATEMENT:  Introduced himself to the committee members.              
                                                                               
LEW REECE                                                                      
Reece Homesteading                                                             
3074 Riverview Drive                                                           
Fairbanks, Alaska 99709                                                        
Telephone:  (907) 474-0936                                                     
POSITION STATEMENT:  Testified on HB 228.                                      
                                                                               
LARRY PETTY                                                                    
Salcha                                                                         
P.O. Box 56114                                                                 
North Pole, Alaska 99705                                                       
Telephone:  (907) 488-2770                                                     
POSITION STATEMENT:  Testified on HB 228.                                      
                                                                               
BOB FRANKLIN, President                                                        
Alaska Farm Bureau                                                             
P.O. Box 75184                                                                 
Fairbanks, Alaska 99707                                                        
Telephone:  (907) 488-7738                                                     
POSITION STATEMENT:  Testified on HB 228.                                      
                                                                               
KELLY LADERE                                                                   
Susitna Ranch                                                                  
P.O. Box 13304                                                                 
Trapper Creek, Alaska 99683                                                    
Telephone:  (907) 733-1450                                                     
POSITION STATEMENT:  Testified on HB 228.                                      
                                                                               
CRAIG TRYTTEN                                                                  
Trytten Farms                                                                  
P.O. Box 871628                                                                
Wasilla, Alaska 99687                                                          
Telephone:  (907) 373-0340                                                     
POSITION STATEMENT:  Testified on HB 228.                                      
                                                                               
BILL WARD                                                                      
Ward Farms                                                                     
P.O. Box 350                                                                   
Soldotna, Alaska 99669                                                         
Telephone:  (907) 262-5135                                                     
POSITION STATEMENT:  Testified on HB 228.                                      
                                                                               
JIM ELLISON                                                                    
Farm Alaska                                                                    
P.O. Box 55590                                                                 
North Pole, Alaska 99705                                                       
Telephone:  (907) 488-1970                                                     
POSITION STATEMENT:  Testified on HB 228.                                      
                                                                               
HOLLIS HALL, Director                                                          
Alaska Cooperative Extension                                                   
University of Alaska Fairbanks                                                 
P.O. Box 756180                                                                
Fairbanks, Alaska 99775                                                        
Telephone:  (907) 474-7246                                                     
POSITION STATEMENT:  Testified on HB 228.                                      
                                                                               
WENDY REDMAN, Vice President of University Relations                           
University of Alaska Statewide System                                          
910 Yukon Drive                                                                
Fairbanks, Alaska 99779                                                        
Telephone:  (907) 474-7582                                                     
POSITION STATEMENT:  Testified on HB 228.                                      
                                                                               
ED AROBIO, Acting Director                                                     
Division of Agriculture                                                        
Department of Natural Resources                                                
P.O. Box 949                                                                   
Palmer, Alaska 99645-0949                                                      
Telephone:  (907) 745-7200                                                     
POSITION STATEMENT:  Testified on HB 228.                                      
                                                                               
ALLEN MITCHELL, Acting Director and Associate Dean                             
Palmer Research Center                                                         
University of Alaska Fairbanks                                                 
533 East Fireweed Avenue                                                       
Palmer, Alaska 99645                                                           
Telephone:  (907) 746-9450                                                     
POSITION STATEMENT:  Testified on HB 228.                                      
                                                                               
HERB SIMON                                                                     
HC1 Box 2292                                                                   
Glennallen, Alaska 99688                                                       
Telephone:  (907) 822-3059                                                     
POSITION STATEMENT:  Testified on HB 228.                                      
                                                                               
FRED HUSBY, Acting Dean                                                        
College of Natural Resource Development and Management                         
University of Alaska Fairbanks                                                 
P.O. Box 757140                                                                
Fairbanks, Alaska 99775                                                        
Telephone:  (907) 474-7083                                                     
POSITION STATEMENT:  Testified on HB 228.                                      
                                                                               
ACTION NARRATIVE                                                               
                                                                               
TAPE 98-60, SIDE A                                                             
Number 0001                                                                    
                                                                               
CHAIR JEANNETTE JAMES called the joint meeting between the House               
State Affairs Standing Committee and Senate State Affairs Standing             
Committee to order at 1:35 p.m.                                                
                                                                               
HB 228 - BD OF AGRIC./AGRICL.DEVELOP. CORP                                     
                                                                               
CHAIR JAMES indicated the committee would address 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 JAMES said she believes HB 228 needs to be worked on.  She               
said the committee would take testimony.  Chair James informed the             
committee members that the University Cooperative Extension Service            
is hosting the teleconference in Delta Junction.                               
                                                                               
CHAIR JAMES explained the purpose of the meeting is to discuss                 
agriculture and what can be done to help that industry grow,                   
prosper and be of help to the state.                                           
                                                                               
Number 0304                                                                    
                                                                               
BARBARA COTTING, Legislative Assistant to Representative Jeannette             
James, Alaska State Legislature, came before the committee and read            
the following sponsor statement into the record:                               
                                                                               
"Please be aware this bill is just a starting point submitted 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 industries needs and more in touch with the grassroots                     
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.                                                              
                                                                               
"Again, this is just a starting point.  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."                                                                  
                                                                               
Number 0633                                                                    
                                                                               
ROBERT WELLS, Director, Division of Agriculture, Department of                 
Natural Resources, came before the committee members and introduced            
himself.  He stated he doesn't intend to take a position on HB 228.            
Mr. Wells said he was glad to hear the word "grassroots" mentioned             
in the sponsor statement.  He said he intends to acquaint himself              
with the Alaskan producers and will listen very carefully to what              
they perceive the needs are of the agricultural community.  He                 
thanked Chair James for having the hearings as they will help him              
understand the needs and desires of the agricultural community.                
Mr. Wells stated, "We're all aware that the agricultural industry              
is growing and I think we are on a nice steady course and I think              
we want to continue that.  We need to examine the assistance and               
programs we have in place and always see where we can do the job               
better."  Mr. Wells thanked Chair James for holding the hearings.              
                                                                               
Number 0754                                                                    
                                                                               
SENATOR JERRY WARD wished Mr. Wells luck with his new job.  He said            
it has to be one of the most challenging positions in the state.               
He said, "As long as you listen to the people that are producing               
the product maybe instead of the ones that are producing                       
regulations, I think it'll work out great."                                    
                                                                               
Number 0828                                                                    
                                                                               
CHAIR JAMES noted Representatives Elton and Ivan are listening via             
teleconference in Anchorage and asked if they had any comments.                
                                                                               
Number 0844                                                                    
                                                                               
REPRESENTATIVE KIM ELTON said, "I don't know if you could hear me,             
but just add my good wishes to Senator Ward."                                  
                                                                               
Number 0858                                                                    
                                                                               
REPRESENTATIVE IVAN IVAN congratulated Mr. Wells on his new                    
position and wished him well.  He noted he is from the village of              
Akiak.                                                                         
                                                                               
Number 0953                                                                    
                                                                               
LEW REECE, Reece Homesteading, came before the committee to                    
testify.  He said over the past 13 or 14 years, his family                     
developed an agricultural homestead in Delta Junction.  He said,               
"We first obtained the property under the Richardson Homestead                 
Development State Act in 19 - I believe in 1983 - 1984.  We've gone            
through the entire process as far as staking the land, developing              
the land, clearing it, and have reached the place now where we're              
producing on 11 acres.  So we have a total of 240 acres, but on 11             
acres we're producing commercial cared crop and we sell to the                 
paramedics market and then through the military sales we've                    
expanded into Emendorf, Fort Richardson and to Kodiak this last                
year.  We processed approximately 130,000 pounds of carrots.  We               
own and operate, in addition to the farm, a packing facility with              
about a 14,000 cubic foot cold storage to maintain the quality of              
the crop."                                                                     
                                                                               
MR. REECE said he appreciates the opportunity to discuss the future            
of agriculture in this state with the committee.  He complimented              
the legislators who were involved in drafting HB 228.  In reference            
to his own farm, he said HB 228 made them look at agriculture from             
a different perspective in the sense that they were more narrowly              
focused on their own activities and they weren't looking at what               
was happening within state government and in other communities.  He            
said the introduction of HB 228 has made them examine exactly what             
they think the role of agriculture and the Division of Agriculture             
should be in the state, what marketing opportunities exist and                 
where the state can assist and where the state has no function in              
the private sector.  Mr. Reece referred to his agricultural history            
and said it goes back at least 14 years in Alaska.  He stated there            
were some difficulties with the Delta project two decades ago, and             
because of that he has a great deal of concern with HB 228.  It                
establishes an agricultural farming board.  Mr. Reece said he                  
thinks the Division of Agriculture has made significant gains in               
the last decade and believes there is momentum within agriculture              
that can be built upon existing framework modification changes.  He            
stated they are extremely concerned that the momentum may be lost              
with the development of another new bureaucracy from (indisc.).  He            
said they would rather see a cooperative effort between the                    
legislature, the agriculture community and other aspects of the                
system in developing and making a stronger contribution.  He                   
pointed out there are some specific areas that need to be worked on            
such as crop inspection and verification.  Without inspection and              
certification of the crops, they can't be sold.  It is a service;              
it is protection for the general public and it protects the grower.            
                                                                               
MR. REECE informed the committee members that another positive                 
aspect he has experienced with the Division of Agriculture was the             
Alaskan grown sales and promotion.  He said he found it to be                  
extremely beneficial for new growers coming into the market.  Mr.              
Reece said they have incorporated the state logo "Alaskan Grown                
Local" on all of their packaging.  They found it as a means to                 
ensure that it is an Alaskan product on the market, it's good                  
quality control as well as a very positive and helpful thing that              
the division can do.                                                           
                                                                               
MR. REECE said he looks forward to further dialogue regarding HB
228.  He also noted he has reviewed the Department of Natural                  
Resources' budget for the previous year.  He said he thinks the                
three special assistants in the Office of the Commissioner had                 
little or no budget.  He suggested that within the Department of               
Natural Resources there should be a review of the allocation of                
resources and the development of renewable resources.  Mr. Reece               
noted agriculture is certainly a renewable resource.                           
                                                                               
Number 1528                                                                    
                                                                               
CHAIR JAMES informed Mr. Reece that she has spent five legislative             
sessions in Juneau and has fought for agriculture money every year.            
And every year she was less successful than the previous one.  She             
noted she has seen the farming community come to Juneau en masse               
and go from office to office and fight for enough funds to keep                
things going.  She said she has fought the issue over inspection               
for not only the crops, but for inspection of crops and plants that            
are coming into the state to see whether they are bringing any                 
diseases into Alaska's pristine growing conditions.  Chair James               
said, "We are seeing the university's budget being slashed                     
constantly and the School of Agricultural Forestry, which is now               
put into a resource management school, we have seen the Cooperative            
Extension Service being reduced in funds and like, they don't care             
if it goes away.  We've also, in the soils conservation area, we've            
found absolutely no real support in Juneau amongst the legislators             
around the state for these issues.  And by putting all of this                 
emphasis together - having these hearings and so forth, maybe we               
can figure out that we have strength enough amongst ourselves to be            
absolutely sure that we have a program that continues.  Those                  
things that you mentioned are extremely important and we need to do            
more research and more planning to get more crops that we can do               
better than anyone else.  And so I appreciate your testimony very              
much and I just wanted to let you know, since we haven't had the               
chance to talk, where I'm coming from on this issue.  It has                   
nothing to do with discrediting the Division of Agriculture."                  
                                                                               
Number 1734                                                                    
                                                                               
MR. REECE said, "Madam Chair, if I came across that way, it                    
certainly was not my intent.  Originally, when I began my statement            
I indicated that I appreciated the fact that the legislation was               
introduced because it made me and I think a lot of other people do             
some serious thinking over the past six or eight months.  And I                
think that bill, whatever may happen to it, I think that's most                
significant right now at this particular time."  Mr. Reece said he             
recognized revenues are shrinking and he realizes the difficulty               
Representative James has had in securing funding for the division.             
He said his own belief is, based on his experiences, that sometimes            
within a department that has a division that may or may not have               
quite as high of a profile as other divisions or activities in that            
division, sometimes that division is not always appropriately taken            
care of.  He said he didn't have the figures for the Division of               
Agriculture's budget for last year, but it was significantly lower             
than the $11 million budget he saw identified in the commissioner's            
office.                                                                        
                                                                               
Number 1836                                                                    
                                                                               
CHAIR JAMES said she thinks there is an analogy to agriculture and             
the subsistence issue.  She referred to the subsistence issue and              
said she personally has been trying really hard to negotiate a                 
settlement between the interested parties on both sides so Alaskans            
can have continuing subsistence without fighting.  She said she                
wants to have continuing agriculture without fighting.                         
                                                                               
Number 1928                                                                    
                                                                               
MR. REECE referred to Chair James' comment regarding products                  
brought into the state, and stated whether it's chemicals used in              
the fields or whether it's the products that are in the stores or              
market, it is extremely important.  He referred to his property and            
said he knows every mineral that has been put in the soil and the              
water quality.  He has a history of the soil and wants to maintain             
its pristine condition which would be an appropriate role for the              
Division of Agriculture.                                                       
                                                                               
Number 2033                                                                    
                                                                               
LARRY PETTY, Salcha, was next to come before the committee.  Mr.               
Petty stated he disagrees with the previous speaker.  He said he               
has been in the agriculture business in Alaska for quite awhile.               
He stated, "I first tried to get in the first time they put Point              
MacKenzie up in Anchorage.  But the Division of Ag. [Agriculture]              
started going downhill, I think, when Sheffield was in there and we            
had -- the problems with the mental health came up and so over                 
night, he was for agriculture and then he was against it.  They                
closed the mill, the storage and everything - shipping stuff at                
Seward.  And I don't know whatever happened to that, but from then             
it went downhill until you got Mr. Kerttula in there and he thought            
there couldn't be anything raised in the Mat valley.  And so it                
continued to slide and it has slid and I hope the new director can             
turn that around that we do have agriculture in Fairbanks and the              
Delta area.  They've tried to run people off of the land is what               
they've tried to do so they wouldn't have to transfer some from                
other lands that they wanted to keep to give to mental health for              
the lands that we were trying to farm.  And I know that for a fact             
because of the people that's been run off out in the Eielson and               
ag. area.  And the Division of Agriculture were state employees                
that had no interest in agriculture - I mean the lower people, not             
the director, but the lower people and they should have been trying            
to build agriculture to make their self a better job.  But they                
didn't, they run it down all the time and any kind of a stumbling              
block they put in your way -- anything that -- they wouldn't work              
with you on anything.  And it was just a tremendous fight, I've                
made several trips down and talked to the director and the                     
revolving loan fund board at that time and it was just a mess ever             
since I started with the state.  I don't think that they've done               
agriculture any good from the time they got into it.  Determining              
where the barns was going to be, what they were going to raise - if            
it's dairy or if it's going to be barley and that's all.  And you              
know they kept changing the rules from day to day and when I was               
finally able to borrow some money from the revolving loan fund,                
they told me my loan was approved as read.  Well, I went in and                
first off they said, 'Well it's not exactly approved as you read               
because you have to put up 25 percent of the money.'  So I had to              
put up 25 percent.  Well, they -- the rest of the loan -- I had a              
dozier leased for $3,500 a month and it's just on and on and on.               
And they lost the warrant.  They brought it -- the loan - they                 
brought it to Delta and they were supposed to have dropped it back             
by Fairbanks, but they didn't.  They were running late so they, the            
director, flew back to Juneau and carried the warrant with him and             
it was about six months before I ever got the loan.  Well, at                  
$3,500 a month, you can imagine what kind of a bill I owed for the             
rent of a dozier that I wasn't able to hardly use."                            
                                                                               
MR. PETTY continued, "But I'm saying this is that we do need to                
make a change.  We do need to get somebody that is interested in               
agriculture and expanding it because I'm growing warm weather                  
vegetables up here and I know it can be done.  I've done it for                
about three years now and I think the technology is here now that              
we could raise vegetables that can feed some of the people in                  
Alaska and save fuel and everything else, but we are going to have             
to have some freedom.  We've been tied down and regulated and lied             
to and changed until nobody has the...."                                       
                                                                               
MR. PETTY said, "I would like to see a change in this bill here                
which I would like to see somebody from the university if they were            
into raising vegetables so that we could -- like the plants and                
material center or somebody could grow vegetables only they need to            
be grown up here on the north end.  If we could raise them up here,            
we know we can raise them in Wasilla or somewhere so -- and I know             
we can up here, but we just need to get the type of vegetable that             
does the best, you know, the brand name of whatever type of                    
vegetables it is.  But I -- last year, I grew cucumbers outside -              
a little over a ton of them and I know it can be done.  And I sold             
them to the stores, locally.  I plan on expanding the operation                
next year.  And all I would like to do is see us have somebody                 
that's fair and not change the rules.  Have it down, one rule is               
the same for other like I borrowed $30,000 to clear some land.  I              
spent another $30,000 on it.  The legislators gave us a moratorium.            
Well, I was two days late so they said the fourth year get my                  
moratorium papers in there.  I had to spend that much money on the             
land and I did every year.  Well, they said 'you're two days late,             
we've cancelled your moratorium - everything - all your penalties,             
interest, payments are due now or get off the property.'  Well,                
needless to say I didn't pay them and I did get off the property.              
It took them seven or eight years, but they finally took it.  But              
the loan that I had, which was supposed to have been for $40,000,              
I got $30,000, cleared that land and they took the debt -- they                
took the land back, but took the debt and put it on my other                   
property.  So I still had to pay it.  They sold that land for $600             
or $700 an acre - a portion of it, but my clearing didn't help any             
of it.  I paid $160 an acre for it."                                           
                                                                               
MR. PETTY stated he realized he was talking in the past, but it has            
been a sore spot with him because he knew the state of Alaska was              
trying to get him off of his property.                                         
                                                                               
Number 2919                                                                    
                                                                               
CHAIR JAMES acknowledged that mistakes have been made and said,                
"We're having to live with them even though we didn't make them."              
She said when she first became a part of the legislature, there                
might have been five voices that she was able to get to support                
agriculture.  It is about four times that many now.  She said there            
needs to be 40 out of 60 voices to have real support.  Chair James             
said, "Of course, everyone holds the Delta barley project against              
us because of all the money that was spent and nothing grown."  She            
said no matter whether it's farming or anything else, it has to be             
market driven and they didn't allow an opportunity to grow                     
naturally.  Chair James said she doesn't believe it was a farming              
failure, it was a legislative failure.                                         
                                                                               
Number 3110                                                                    
                                                                               
BOB FRANKLIN, President, Alaska Farm Bureau, was next to come                  
before the committee to testify.  He informed the committee members            
he lives about half way between Fairbanks and North Pole and he                
runs a meat processing operation of Alaskan grown products.  Mr.               
Franklin said he believes HB 228 has a lot of merit and it is a                
very good discussion point to start from.  He said presently, the              
director of the Division of Agriculture is appointed by the                    
Governor.  He stated, "Every time the Governor changes, we lose the            
continuity from one director to another where if the board was                 
designated and appointed by the Governor of who or what type of                
lifestyle that person had to have to be qualified to be on the                 
board, then we would have more representation from our industry                
rather than just someone put there which could be put there for a              
favor or payback or however a person gets that position."  Mr.                 
Franklin said it is important that we investigate having a true                
board of agriculture to bring in all the entities to the director.             
He said farmers need to continue to tell the legislature and the               
public their story regarding agriculture and impress the importance            
of an agricultural industry.  Alaska is capable of raising its own             
food, but there isn't enough interest or availability of people to             
get to Alaska to do the job.  This is where the board of                       
agriculture could help the director of the Division of Agriculture             
to put some things into place.  He said the committee will hear                
about a lot of things that has happened in the past, but the past              
can't be changed.                                                              
                                                                               
MR. FRANKLIN explained he believes the biggest thing is that                   
farmers have to get involved and go to Juneau to let the                       
legislature know what they are doing.  Mr. Franklin noted his                  
organization will be doing some strategy planning at their general             
membership annual meeting on November 14 and 15 in Anchorage to                
determine the type of action to take to Juneau in regards to HB
228.                                                                           
                                                                               
Number 3648                                                                    
                                                                               
KELLY LADERE, Susitna Ranch, testified via teleconference from the             
Mat-Su Legislative Information Office.  She informed the committee             
members she was raised on a homestead in the Susitna Valley during             
the 1950s and early 1960s.  She said she earned most of her college            
money raising hay in that area and noted she has had eight years of            
college.  Over the last 18 years she earned her living as a farmer             
and has about 1,100 acres.  She noted she has farmed as much as                
1,100 acres of crop land on other people's land, including her own.            
On the average, she usually crops between 3 and 500 acres.  She                
informed the committee she sells meat from her farm in the legal               
fashion.                                                                       
                                                                               
MS. LADERE spoke of her research of other states and how they                  
governed their agricultural industry.  She said it was her                     
conclusion after conducting the study that the most successful                 
states were those in which a board of agriculture served as the                
governing body for the particular state.  The majority of the board            
members were farmers and the remaining members were people in                  
related businesses.                                                            
                                                                               
MS. LADERE said she is very interested in HB 228.  She will be very            
interested in watching it develop.  She stated she would like to               
make specific comments to Section 03.10.015, "Agricultural                     
Development Corporation."  She said this is the section in which an            
agricultural development corporation is established for the purpose            
of financial business with the farmers.  Ms. Ladere stated the                 
section says that the Board of agriculture will serve as the board             
of directors of the corporation.  She said if she is reading the               
bill correctly, then the only addition that would be needed is to              
name the change.  Ms. Ladere said, "What I mean by that statement              
is that you would be setting up an administrative board that would             
also mean the financial board for this industry.  And that being               
the case, what we're talking about is not these form of government             
with which we are functioning in the state of Alaska or any other              
state in the union, and it's not a form of government in which our             
United States of America functions.  For a board to have the direct            
financial responsibilities as well as the direct administrative                
responsibilities I think is extremely inappropriate."                          
                                                                               
Number 4125                                                                    
                                                                               
CHAIR JAMES said Ms. Ladere brought up a good point and stated she             
tends to agree with her.  She asked Ms. Ladere if she has ever                 
received any loans from the agriculture revolving loan fund.                   
                                                                               
Number 4136                                                                    
                                                                               
MS. LADERE replied, "Yes."  And, she is currently in good standing             
in paying one off.                                                             
                                                                               
CHAIR JAMES said one of the things that she has been fighting over             
the last five years is a legislature that wants to decimate it.                
She said, "In the discussion with this, we also toyed with the idea            
there is some distress with the agricultural revolving loan fund               
and its behavior over the years.  And then this legislative mandate            
that we have to meet that says that these people are doing a good              
job of managing and dissipating funds and collecting them and that             
sort of thing -- and one of the thoughts that we wanted to do, it's            
really not a problem of we don't have any money and soon we won't              
have any if we don't do something.  Anyway, one of the other                   
thoughts was to give that pot money - put it out for bid to some               
other bank or lending institution to manage under the same or                  
similar guidelines that we have and that would be then not having              
it under the same other group of people.  But that's how it got                
there - is trying to protect that fund and from either stealing by             
the legislature or what is may be determined by some to be not                 
managed the way they thought it should."  Chair James thanked Ms.              
Ladere for her thoughts.                                                       
                                                                               
Number 4401                                                                    
                                                                               
CRAIG TRYTTEN, Trytten Farms, testified via teleconference from                
Mat-Su.  He referred to the personal conflict category and said he             
had concerns about being on the board and being able to get a loan.            
He also noted concern with the amount of per diem.  Mr. Trytten                
indicated that he believes the bill needs more work.                           
                                                                               
CHAIR JAMES asked Mr. Trytten to put his concerns in writing and               
send them to her.                                                              
                                                                               
MR. TRYTTEN noted another concern with HB 228 is there is no                   
mention of actually financing land.  He said it talks about the                
agriculture clearing process, development processing, purchasing of            
livestock, machinery, storage, but it doesn't talk about the                   
purchase of farm land.                                                         
                                                                               
Number 4453                                                                    
                                                                               
CHAIR JAMES asked Mr. Trytten if he is talking about the purchase              
of land from the state or a farmer.                                            
                                                                               
MR. TRYTTEN responded, "Well, whatever."                                       
                                                                               
CHAIR JAMES said that maybe it isn't in the bill, but she was of               
the opinion that one of the things that would be capitalized with              
the corporation was the agricultural lands in the state.  The lands            
would continue to be sold the way they have been sold, which is                
under the state's financing.  Chair James referred to the                      
university and the roll it plays, the Soils Conservation Service,              
the Cooperative Extension Service, and any other places where any              
agricultural efforts could be orchestrated together to make better             
use of the funds that are available.                                           
                                                                               
Number 4630                                                                    
                                                                               
MR. TRYTTEN said he is on the Wasilla Soil and Water Board and he              
thinks it is very important that when lands are dispersed, there               
should be a farm and conservation plan.  He said he would also like            
to see seven members on the board and four should be farmers.                  
                                                                               
Number 4657                                                                    
                                                                               
CHAIR JAMES referred to a conservation plan and a farm plan and                
said one of the problems she has with a farm plan is you can make              
a farm plan today and the market is not there ....                             
                                                                               
TAPE 97-60, SIDE B                                                             
Number 001                                                                     
                                                                               
CHAIR JAMES continued, "...having a problem under the mandates of              
their purchase of state land that they have a period of time when              
they had to have a certain amount of land cleared.  And the crop               
that they're working on doesn't - didn't allow them to do that when            
there was other priorities that they had to do first."  Chair James            
said a conservation plan, which is how you manage to use the land              
and protect the soil and water, certainly is a very important                  
issue.  She said she understands that very clearly.  Over the last             
30, 40 or 50 years, she has been concerned with keeping the soil on            
the ground and not going down the streams.  A farming plan which               
specifically says which crops you are going to grow and when you               
are going to grow them, et cetera, is a good framework.  Every year            
you have to make a decision on how the market affects everything,              
what the weather does, et cetera.  Chair James described a loan                
situation her brother participated in the Yakamah Valley.  She                 
noted she supports the soil and water conservation efforts.                    
                                                                               
Number 0201                                                                    
                                                                               
BILL WARD, Ward Farms, testified via teleconference from the Kenai             
Legislative Information Office.  He informed the committee members             
he has a farm on the Kenai Peninsula and a farm in the Delta                   
Junction area.  He read the following testimony into the record:               
                                                                               
"This legislation is comprised of two main components, the                     
formation of a Board of agriculture and the creation of an                     
independent agriculture development corporation.  Each element of              
this legislation on a sound basis should be reviewed on single                 
merits.                                                                        
                                                                               
"A board of agriculture, made up of newly appointed Alaskan                    
residents, has the ability to bring forth experience and expertise             
from within the agriculture industry and help guide and manage the             
administration and development of agriculture policy in Alaska.                
This board, with its defined qualifications and service, merge,                
compliment and replace the efforts currently undertaken by the                 
Agriculture Revolving Loan Fund Board and the Natural Resource                 
Conservation Board.                                                            
                                                                               
"It is imperative for government and the private sector to work                
together in the formulation and administration of public policy and            
the board of agriculture to ensure that the policies administered              
by our state government coincide with efforts of the private sector            
industry.  Even if the Division of Agriculture is retained, the                
board of agriculture is a positive addition to the DNR [Department             
of Natural Resources] structure.                                               
                                                                               
"Agriculture must be represented by an advocacy agency to stimulate            
the development of the industry, to facilitate market growth for               
agriculture products, to interact with other agencies on matters of            
public policy and to protect the health and overall interest of the            
Alaskan public.                                                                
                                                                               
"In the past, the DNR, Division of Agriculture, has served in this             
capacity and under the right circumstances, it should continue to              
do so in the future.  Unfortunately, the Division of Agriculture               
has fallen victim to budget cuts, severe criticism from all fronts,            
lack of administrative support and poor staff attitudes.  In truth,            
the division has no state budget because both the legislature and              
the Administration has chosen to steal dedicated funds from the                
ARLF (Agriculture Revolving Loan Fund) for operations rather than              
provide legitimate general fund monies.  Bureaucracy downsizing may            
be warranted, but without the necessary internal reorganization the            
result is an agency unable to provide service to anyone.                       
                                                                               
"The Division of Agriculture has no clear mission or long-term                 
objectives.  It has had no leadership for the past several                     
Administrations and is left with a staff that is understandably                
either unable or unwilling to serve the agriculture industry.  When            
you call the division and find that they have no market development            
program, no land disposal program other than piecemeal                         
repossessions, a reduced inspection program, a loan program                    
burdened with unwieldy regulations and mountains of paperwork, no              
relationship with their sister divisions or other government                   
agencies and a staff looking to retirement as the way to restore               
their outlook on life.  To correct this, the Administration will               
have to dedicate the time and resources to rebuild the agency from             
the ground up focusing on service to an industry and responsible               
public policy administration.  In addition, the Administration  and            
legislature will have to address long-term stable funding by                   
establishing a balanced and reasonable general fund appropriations,            
federal allocations, land sale contracts, asset management,                    
interagency agreements and industry fees.  That will require a                 
commitment by both parties to work together in a non-partisan way              
to provide long-term solutions to preserve the division as an                  
agency of state government.  I'm not optimistic that we'll see that            
level of commitment or effort from this Administration or                      
legislature, and without it the Division of Agriculture is destined            
to disappear and its regulatory duties dispersed amongst other                 
agencies.  The agriculture industry will be left to fend for itself            
without government support or leadership.                                      
                                                                               
"House Bill 228 will give us the tools, as an industry, to manage              
our own growth and development.  It will create a public/private               
partnership whereby the state provides agriculture classified lands            
and ARLF assets for the Agriculture Development Corporation to                 
manage.  Agriculture not only generates dollars which remain in the            
state, it also provides high quality fresh food for our citizens               
and stabilizes rural economies, provides aesthetic diversity,                  
conservation enhancement and improved wildlife habitat.  The                   
implementation of House Bill 228 will create a board of agriculture            
made up of dedicated and qualified industry representatives who                
will manage the Agriculture Development Corporation to facilitate              
agriculture's growth, develop its markets and stabilize farm-based             
incomes, all of which will result in a significant contribution of             
the economy of Alaska.                                                         
                                                                               
"I want to thank Representative Jeannette James for her dedication             
to agriculture and sponsorship of this legislation and I would like            
to encourage the passage of House Bill 228."                                   
                                                                               
MR. WARD requested from Chair James that she put the                           
representatives from the university and extension service in the               
hot seat and ask them how their mission statements and budgets                 
would affect agriculture.  He understood that their budgets could              
not provide adequate service to the agricultural industry, and in              
some cases their directions were going more urban, away from the               
rural economy.                                                                 
                                                                               
Number 0832                                                                    
                                                                               
CHAIR JAMES referred to her appointment on the deferred maintenance            
task force and the problems it has encountered because of the                  
limited amount of funds.  The reality, she stated, is that the                 
budget can not grow unless something else shrinks.  Until the                  
people tell us they are willing to pay for services then the                   
deferred maintenance plan will not change.  As a matter of reality,            
it is important to look at what can and can not be changed.                    
Therefore, you can count on the budget being smaller next year and             
agriculture is not considered important to the members in charge of            
the budget.  But we need to be prepared when it is time for a                  
change.  In addition, there is a growth factor in the state which              
we have not been meeting for a number of years.  The population is             
growing and as a result increasing infrastructure that needs to be             
maintained.  We are at the point of needing to take programs away.             
The staff has already been cut to the point that they can not                  
operate.  This is serious business.  She cited the road commission             
meeting of the Eilson Farm Road as an example of getting to a point            
where the road can not be maintained anymore.                                  
                                                                               
Number 1518                                                                    
                                                                               
JIM ELLISON, Farm Alaska, stated the President of the United States            
is about to instigate a clean air act that could add another 50                
cents to the gas dollar.  "We're gonna get to a point where the                
working guy can't drive down the road.  He doesn't have the money              
to buy the gasoline."                                                          
                                                                               
Number 1547                                                                    
                                                                               
CHAIR JAMES stated we have set our levels of acceptance way too                
low, according to the environmental movement.  A realistic level is            
needed.  She doesn't know how to change it because once government             
tightens up on something it never loosens up again.  But we can                
keep it from going deeper.                                                     
                                                                               
Number 1651                                                                    
                                                                               
MR. FRANKLIN stated the biggest thing that we have to realize is               
that all of the standards were set on unscientific basis.  The air             
quality in Fairbanks is based on a different standard than Los                 
Angeles.                                                                       
                                                                               
Number 1757                                                                    
                                                                               
HOLLIS HALL, Director, Alaska Cooperative Extension, University of             
Alaska Fairbanks, stated any action that articulates the needs of              
agriculture and creates a positive image would be good.  In Alaska,            
a new philosophy of creating rather than buying is needed.  The one            
area that this new philosophy can be achieved in is agriculture.               
The attitude and lack of support for a basic industry such as                  
agriculture is foreign to him because he grew up in a state where              
agriculture was prioritized.  There has been a deliberate procedure            
to destroy the support of agriculture by making the extension                  
service weak.  The research and experiment station has undergone a             
27 percent reduction in the last seven years.  The Alaska                      
Cooperative Extension has undergone a 26 percent reduction.                    
                                                                               
MR. HALL stated, nevertheless, the extension is trying to keep the             
services to agriculture and farmers in place in Delta Junction,                
Fairbanks, Kenai and Palmer.  In an effort to continue to make a               
commitment to agriculture the district office in McGrath was                   
closed.  The community development program was also closed.  The               
extension program also went from four to two administrators.                   
                                                                               
Number 2300                                                                    
                                                                               
MR. WARD asked Mr. Hall whether the agents in Delta Junction and               
Palmer would be filled on a full-time basis or were they temporary             
positions.                                                                     
                                                                               
Number 2314                                                                    
                                                                               
MR. HALL replied they will be a one year appointment, temporary                
positions.  More than likely they will not be filled by individuals            
with an advanced degree in agriculture.  They will not be permanent            
positions until there is more information on funding for the                   
future.                                                                        
                                                                               
Number 2403                                                                    
                                                                               
MR. WARD asked Mr. Hall what would be needed to convert the                    
positions from temporary to permanent.                                         
                                                                               
Number 2420                                                                    
                                                                               
MR. HALL replied funding at about $3.1 million would be needed to              
offer services as the extension did seven years ago.                           
                                                                               
Number 2507                                                                    
                                                                               
MR. WARD asked Mr. Hall if the urban coverage has been hit as hard             
as the rural farm-based coverage.                                              
                                                                               
Number 2521                                                                    
                                                                               
MR. HALL replied probably not because 10 percent of the district               
agents are located in the town that has 50 percent of the                      
population.                                                                    
                                                                               
Number 2617                                                                    
                                                                               
CHAIR JAMES noted for the record that Representative Ethan                     
Berkowitz has been in Anchorage listening via teleconference for a             
while.                                                                         
                                                                               
Number 2636                                                                    
                                                                               
MR. TRYTTEN stated that he knows about the downsizing of                       
agriculture in the state and federal budget.  He suggested selling             
some of the land in the state, only 1 percent of it is owned by the            
public.  He pays property taxes and has the worst roads, no mail,              
no fire or police services.  Something is wrong.                               
                                                                               
Number 2723                                                                    
                                                                               
CHAIR JAMES announced that the legislators in Anchorage had to                 
leave for other meetings.  She noted that James Hayes from U.S.                
Senator Ted Stevens office was also in attendance in Fairbanks.                
                                                                               
Number 2751                                                                    
                                                                               
WENDY REDMAN, Vice President of University Relations, University of            
Alaska Statewide System, said the impact on rural Alaska is                    
disproportionate because the money being spent is so little in                 
comparison to the needs.  She suggested relaying some of the                   
comments made today to the meeting of the Board of Regents in                  
November.                                                                      
                                                                               
Number 3001                                                                    
                                                                               
SENATOR WARD suggested in regards to the 50 cent increase on gas to            
send a letter to Newt Gingrich and ask him to follow the proper                
course for treaty ratification.  It is on a fast track now and has             
already cost almost 7,000 jobs.                                                
                                                                               
SENATOR WARD further stated in regards to land ownership that there            
are four separate bills to transfer land from public to private                
ownership for large projects.                                                  
                                                                               
Number 3206                                                                    
                                                                               
MR. FRANKLIN asked Chair James where we go from here.                          
                                                                               
Number 3218                                                                    
                                                                               
CHAIR JAMES stated next week there will be a meeting in Mat-Su.                
The bill will be taken up again in Juneau in the House State                   
Affairs Standing Committee.  We will see if there is a way to                  
refine the bill so that it is acceptable.                                      
                                                                               
MR. FRANKLIN asked Chair James if the bill has gone through the                
Legislative Legal Department.                                                  
                                                                               
CHAIR JAMES replied the bill was drafted by the Legislative Legal              
Department.                                                                    
                                                                               
Number 3336                                                                    
                                                                               
MS. REDMAN asked Chair James if the Administration has a position              
on the bill that she knew of.                                                  
                                                                               
Number 3353                                                                    
                                                                               
CHAIR JAMES replied that she has worked with Commissioner Shively.             
He will not oppose the bill.  He also helped some with drafting the            
bill.                                                                          
                                                                               
Number 3431                                                                    
                                                                               
MR. WELLS stated that the Commissioner wants to hear from the farm             
community before any additional work is done on the bill.                      
                                                                               
Number 3535                                                                    
                                                                               
CHAIR JAMES stated a plan is needed; the bill is only an idea.  She            
is not going to write a simple bill so that the Administration has             
to write regulations to implement the chapter.  Parameters are                 
needed in the beginning.                                                       
                                                                               
Number 3553                                                                    
                                                                               
MR. WELLS stated he will work with all parties to develop a plan.              
                                                                               
Number 3631                                                                    
                                                                               
MR. FRANKLIN explained one of the reasons he set up a meeting with             
the Commissioner was because he wanted to get general funding for              
the inspectors.  The inspectors help the industry as a consumer                
protection program so the positions should be paid for out of the              
general fund.                                                                  
                                                                               
Number 3717                                                                    
                                                                               
CHAIR JAMES wondered if there are fees collected.                              
                                                                               
Number 3721                                                                    
                                                                               
MR. FRANKLIN replied there were $91,000 in a federal grant for                 
military inspection purposes.  If the money goes into the general              
fund then it should be compensated back to the program as a                    
receipt.  He warned the Representatives and Senators that he will              
be beating on their doors in Juneau for those general funds monies.            
                                                                               
Number 3821                                                                    
                                                                               
SENATOR WARD said the state institutions do not buy Alaskan grown              
products.  He asked if it is because we do not have inspectors, and            
if anybody has tallied how much institutions buy in a year from                
outside farmers.                                                               
                                                                               
Number 3913                                                                    
                                                                               
MR. FRANKLIN replied that 99 percent of the institutions buy from              
outside products even though they have to consider local products              
according to law.  The wholesalers and suppliers need to buy                   
Alaskan products because they bid low enough to exclude the Alaskan            
farmer.                                                                        
                                                                               
Number 3958                                                                    
                                                                               
ED AROBIO, Acting Director, Division of Agriculture, Department of             
Natural Resources, explained selling to the military has been a                
very good market for Alaskan farmers.  The military has been very              
receptive.  The difficulty is with the state institutions because              
of the state procurement procedure.  The state tends to buy on a               
multi-item situation.                                                          
                                                                               
Number 4055                                                                    
                                                                               
CHAIR JAMES commented in other states an association is used to                
sell the crops.  She would like to see that happen under the board             
of agriculture eventually, at present the volume is not there yet.             
                                                                               
Number 4147                                                                    
                                                                               
MR. FRANKLIN stated it would be surprising to many people that the             
inspector in Palmer has inspected $20 million worth of logs to go              
to Italy.  A lot of time is also spent inspecting bans for color               
and quality.  The public and the merchants are the ones demanding              
this.  It is a necessary evil that does not need to come out of the            
ARLF.                                                                          
                                                                               
Number 4232                                                                    
                                                                               
ALLEN MITCHELL, Acting Director and Associate Dean, Palmer Research            
Center, University of Alaska Fairbanks, stated in the early days               
the Division of Agriculture had annual agricultural development                
plans.  The experiment station responded accordingly.  This is not             
the situation now.  The experiment station still has some resources            
and it would like to put them towards the development of                       
agriculture in conjunction with the Division of Agriculture and the            
Cooperative Extension Service.                                                 
                                                                               
Number 4353                                                                    
                                                                               
CHAIR JAMES announced for the record that Sara Fisher from the                 
office of Representative Gene Therriault is in the audience.                   
                                                                               
Number 4412                                                                    
                                                                               
MR. WARD commented one of the problems is the assumption that                  
agriculture does not pay for anything, it just comes out of the                
general fund.  Ironically, the fees are not recorded and there is              
a misunderstanding that the industry already pays for inspection               
services.  For example, there is a fee paid to Mt. McKinley Meats              
for every animal processed.  And the plant keeps the carcass and               
makes money off of it.  He reiterated the industry is paying its               
way, but not all of it is being recorded.  He suggested looking                
towards expanding the industry by transferring state land sales to             
the Division of Agriculture.                                                   
                                                                               
TAPE 97-61, SIDE A                                                             
Number 0001                                                                    
                                                                               
MR. WARD continued by suggesting further consolidation within the              
Department of Natural Resources such as combining forestry, with               
the exception of the fire-fighting bunch, with agriculture.                    
                                                                               
Number 0108                                                                    
                                                                               
SENATOR WARD asked Mr. Reece when he was with corrections whether              
there was there something formed with the Governor and the Division            
of Agriculture in terms of procurement policies for corrections.               
He asked, "Did it fall by the wayside?"                                        
                                                                               
Number 0132                                                                    
                                                                               
MR. REECE replied it did fall by the wayside.  There probably was              
not enough emphasis placed by the Administration to finalize or                
implement the concept.                                                         
                                                                               
Number 0143                                                                    
                                                                               
SENATOR WARD stated maybe we could chat about this further.  He                
thought that it had at least been attempted.                                   
                                                                               
Number 0204                                                                    
                                                                               
MR. REECE stated that the Division of Agriculture took a lead role             
along with the Palmer office.  It was the emphasis of the division,            
however, that pushed the concept.  The division tried to                       
consolidate purchasing with state agencies and to obtain market                
data for pricing.                                                              
                                                                               
Number 0256                                                                    
                                                                               
MR. AROBIO said the division recently received pricing information             
from one of the procurement agencies.  The figures made Alaskan                
purchasing so far out of line that it would not make sense for                 
anyone to do it.  The division does not believe that is the reality            
because it knows that the farmers are selling more and it is really            
not that out of line.  It could be a lack of understanding by                  
outside vendors.  There is no reason why it can not work, but it               
might take a legislative push.                                                 
                                                                               
Number 0408                                                                    
                                                                               
SENATOR WARD stated the institutions are not opposed to it.                    
                                                                               
Number 0426                                                                    
                                                                               
MR. AROBIO replied it is not the institutions; it is the people who            
buy for the institutions.                                                      
                                                                               
Number 0431                                                                    
                                                                               
SENATOR WARD stated maybe we ought to revisit the issue again.                 
                                                                               
Number 0502                                                                    
                                                                               
MR. AROBIO stated the pioneer homes, the university system and the             
hospitals did not have a problem with procuring Alaskan products;              
in fact, they like them.  It is not working above those systems,               
however.                                                                       
                                                                               
Number 0552                                                                    
                                                                               
HERB SIMON testified next via teleconference from Mat-Su.  He                  
stated he was concerned in legal terms how the board of agriculture            
would perform.  Under the present Division of Agriculture if                   
something goes amiss, the producer has an option of redress of a               
grievance.  He noted, however, that not many in the past have been             
too successful.  He reiterated he was curious how the board would              
be organized to protect the state and the individual producers in              
terms of liability and sovereign immunity.  In addition, he was                
also curious how the board would handle product inspections and                
cited the issue of "e-coli."                                                   
                                                                               
Number 0839                                                                    
                                                                               
MS. COTTING replied that regulatory functions would have to be                 
taken care of with the formation of the board of agriculture.  The             
bill drafter did not want to tackle the issue just yet.  But, the              
whole area of regulatory functions would have to be dealt with                 
later on.                                                                      
                                                                               
Number 0921                                                                    
                                                                               
CHAIR JAMES stated that Mr. Simon found the hole.                              
                                                                               
Number 1028                                                                    
                                                                               
MR. SIMON replied the state of Alaska has been negligent in funding            
product inspections appropriately even though there had been a                 
greater demand on product inspections.  He suggested including                 
provisions to prioritize the function of product inspection.                   
Consumer confidence at present is at an all time low.  He asserted             
that we all have a responsibility to ensure to the public that the             
products are fit for human consumption.                                        
                                                                               
Number 1220                                                                    
                                                                               
CHAIR JAMES stated there are a number of producers in the Fairbanks            
area who were selling their products as pesticide free.  Alaskan               
grown agricultural products have an advantage when selling to                  
outside markets because we are isolated and have cold weather which            
gets rid of a lot of the diseases and insects.  Therefore, it is               
important to ensure that nothing is brought into the state as well.            
                                                                               
Number 1414                                                                    
                                                                               
MR. WARD asked Mr. Husby to talk about the future for research from            
the university in terms of the budget and the consequence of the               
budget reduction.                                                              
                                                                               
Number 1500                                                                    
                                                                               
FRED HUSBY, Acting Dean, College of Natural Resource Development               
and Management, University of Alaska Fairbanks, replied, right now,            
the school of agriculture, experiment station and extension service            
are at their critical-mass point.  Further reductions will result              
in a layoff of one or two researchers, at least, along with the                
program.  He noted, accreditation of the forestry degree program               
would be threatened, if a forestry faculty member was lost.  If a              
couple of people were lost at the Palmer research center and the               
Fairbanks station, it would threaten the ability to keep them open.            
He explained the budget cuts have been continuous since 1992.  We              
started in 1992 with about $3.7 million of state funds for the                 
experiment station and have lost approximately eight or nine                   
faculty members that have not been replaced.  In addition, $3                  
million has been lost to the university  administration.  Now, the             
School of Agriculture has to fight for that $3 million every year              
for the Science and Technology Fund.  Furthermore, another $1                  
million has been lost through cuts from the university and the                 
Governor.  He reiterated we started with $3.7 million, we lost $4              
million and we are still here.  Somebody wants us here and it isn't            
the university administration.  There are clients, constituents and            
a few legislators that continue to support the program.  This year             
the faculty contracts have been reduced from 12 to 11 months                   
because of another $500,000 cut.  We are trying to look at things              
positively to help keep the moral up.                                          
Number 2038                                                                    
                                                                               
MR. WARD stated it was scary to hear about the loss of the research            
faculty members because he needs technical assistance to help him              
operate for a profit.  He wondered whether it was possible to move             
the experiment station out of the university system to obtain                  
additional funding.                                                            
                                                                               
Number 2153                                                                    
                                                                               
MR. HUSBY replied formula funding is based on rural population and             
the gross national product of agriculture.  Competitive grants are             
usually very specific.  Therefore, he did not see the federal                  
government helping more, but the state government could help more              
in terms of quality faculty members.  He suggested a tri-partied               
appointment of faculty which included teaching, service and                    
research activities.                                                           
                                                                               
Number 2514                                                                    
                                                                               
CHAIR JAMES reiterated her concerns of the reality check and the               
serious budget problems of the state:  a lack of growth.                       
Agriculture would be a good source of growth, but the budget                   
problem is a serious issue.                                                    
                                                                               
Number 2833                                                                    
                                                                               
MR. HUSBY stated there has been $30 million in cash receipts from              
agriculture and that number increases yearly.  We know that we                 
cannot get more money; we would just like to make sure that no more            
money is taken away.  We are on-line in regards to revenue coming              
into the state as an industry.  We are all at a critical mass-point.           
                                                                               
Number 3024                                                                    
                                                                               
MR. HALL stated often times we are more interested in letting                  
someone do it for us, but in this case people are willing to do it             
for themselves.  The state should not wait to develop an industry              
such as agriculture.  Otherwise, what will the state do when the               
oil wells go dry.                                                              
                                                                               
Number 3152                                                                    
                                                                               
MR. WARD stated there is a need for the disposal of lands and                  
requested that the Division of Agriculture work on it.  He asked               
how much could be sold and put into production, and how much demand            
is there.                                                                      
                                                                               
Number 3316                                                                    
                                                                               
MR. AROBIO replied the Division of Agriculture already knows the               
amount of lands that are classified or potentially classified for              
agriculture to be sold.  The issue of demand would take more time,             
however.                                                                       
                                                                               
Number 3338                                                                    
                                                                               
MR. PETTY stated he would like to see the university clear some of             
its land and grow crops.                                                       
                                                                               
Number 3405                                                                    
                                                                               
CHAIR JAMES replied it is an option.  The university manages its               
lands tightly.                                                                 
                                                                               
Number 3411                                                                    
                                                                               
MR. HUSBY explained a section in Eielson was requested to set up a             
demonstration farm but the program would not have had any money to             
develop it because of its declining budget.                                    
                                                                               
Number 3558                                                                    
                                                                               
MR. AROBIO stated the university has additional land in the Delta              
Junction area, but the program does not have the budget to do                  
anything with it.                                                              
                                                                               
Number 3603                                                                    
                                                                               
MR. HUSBY stated former Director Jay Kerttula of the Division of               
Agriculture transferred 360 acres to the Delta project.                        
                                                                               
Number 3625                                                                    
                                                                               
CHAIR JAMES stated she remembered the pork project a few years ago             
when the university was willing to make land available for the                 
project in Nenana.                                                             
                                                                               
Number 3710                                                                    
                                                                               
MR. AROBIO stated there is 175,000 acres classified for agriculture            
use in Nenana.  The problem is getting to it.                                  
                                                                               
Number 3720                                                                    
                                                                               
MR. HUSBY stated the university lands office was interested because            
it believed that timber and agriculture were the best source of                
revenue on the managed lands.                                                  
                                                                               
Number 3735                                                                    
                                                                               
CHAIR JAMES stated she had a constituent in the Nenana area who was            
talking about utilizing a section of university land for a game                
bird project.                                                                  
                                                                               
Number 3816                                                                    
                                                                               
CHAIR JAMES thanked all of the participants and announced next week            
the House State Affairs Standing Committee will be at City Hall in             
Wasilla.  She indicated the bill would be held over.                           
                                                                               
Number 3855                                                                    
                                                                               
SENATOR WARD explained medical issues prevented Lyda Green, Chair,             
Senate State Affairs Standing Committee, from being here today.                
She is very interested and supportive of agriculture.                          
                                                                               
ADJOURNMENT                                                                    
                                                                               
CHAIR JAMES adjourned the joint meeting of the House and Senate                
State Affairs Standing Committees in Fairbanks at approximately                
3:30 p.m.                                                                      

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