Legislature(1999 - 2000)

04/12/2000 03:10 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                   SENATE RESOURCES COMMITTEE                                                                                 
                         April 12, 2000                                                                                         
                            3:10 p.m.                                                                                           
MEMBERS PRESENT                                                                                                               
Senator Rick Halford, Chairman                                                                                                  
Senator Robin Taylor, Vice Chairman                                                                                             
Senator Pete Kelly                                                                                                              
Senator Jerry Mackie                                                                                                            
Senator Lyda Green                                                                                                              
Senator Georgianna Lincoln                                                                                                      
MEMBERS ABSENT                                                                                                                
Senator Sean Parnell                                                                                                            
COMMITTEE CALENDAR                                                                                                            
HOUSE BILL NO. 114                                                                                                              
"An Act repealing the prohibition against the taking of                                                                         
antlerless moose."                                                                                                              
     -MOVED SCSHB 114(RES) OUT OF COMMITTEE                                                                                     
CS FOR HOUSE BILL NO. 204(RES)                                                                                                  
"An Act relating to elk farming."                                                                                               
     -MOVED CSHB 204(RES) OUT OF COMMITTEE                                                                                      
CS FOR HOUSE BILL NO. 116(FIN)                                                                                                  
"An Act relating to the Board of  Agriculture and Conservation, to                                                              
the director  of agriculture, to  the agricultural  revolving loan                                                              
fund and to loans  from the fund, to the disposal  of interests in                                                              
state agricultural land; and providing for an effective date."                                                                  
     -HEARD AND HELD                                                                                                            
PREVIOUS SENATE COMMITTEE ACTION                                                                                              
HB 114 - See Resources Committee minutes dated 3/29/00.                                                                         
HB 204 - No previous Senate action.                                                                                             
HB 116 - No previous Senate action.                                                                                             
WITNESS REGISTER                                                                                                              
Ed Grasser                                                                                                                      
Aide to Representative Masek                                                                                                    
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Testified for the sponsor of HB 114                                                                      
Mr. Matt Robus                                                                                                                  
Deputy Director                                                                                                                 
Division of Wildlife Conservation                                                                                               
Alaska Department of Fish and Game                                                                                              
PO Box 25526                                                                                                                    
Juneau, AK  99802-5526                                                                                                          
POSITION STATEMENT:  Supports HB 114                                                                                          
Mr. Peter Feldman                                                                                                               
Legislative Aide to Representative Harris                                                                                       
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Testified for the sponsor of HB 204                                                                      
Mr. Robert Wells, Director                                                                                                      
Division of Agriculture                                                                                                         
Department of Natural Resources                                                                                                 
1800 Glenn Highway                                                                                                              
Anchorage, AK 99645                                                                                                             
POSITION STATEMENT:  Supports HB 204                                                                                          
Representative Jeanette James                                                                                                   
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Sponsor of HB 116                                                                                        
Ms. Marsha Ward                                                                                                                 
PO Box 1087                                                                                                                     
Delta Junction, AK  99739                                                                                                       
POSITION STATEMENT:  Supports HB 116                                                                                          
Mr. Bob Franklin, President                                                                                                     
Alaska Farmers Bureau                                                                                                           
PO Box 75184                                                                                                                    
Fairbanks, AK  99707                                                                                                            
POSITION STATEMENT:  Supports HB 116                                                                                          
Mr. Bill Ward                                                                                                                   
PO Box 1087                                                                                                                     
Delta Junction, AK  99739                                                                                                       
POSITION STATEMENT:  Supports HB 116                                                                                          
Mr. Craig Trytten                                                                                                               
PO Box 871628                                                                                                                   
Wasilla, AK  99739                                                                                                              
POSITION STATEMENT:  Commented on HB 116                                                                                      
Ms. Carol Carroll, Director                                                                                                     
Division of Support Services                                                                                                    
Department of Natural Resources                                                                                                 
400 Willoughby Ave.                                                                                                             
Juneau, AK  99801-1754                                                                                                          
POSITION STATEMENT:  Answered questions regarding HB 116                                                                      
Ms. Elizabeth Hickerson                                                                                                         
Assistant Attorney General                                                                                                      
Department of Law                                                                                                               
1031 W 4th Ave., Suite 200                                                                                                      
Anchorage, AK  99501-1994                                                                                                       
POSITION STATEMENT:  Answered questions regarding HB 116                                                                      
ACTION NARRATIVE                                                                                                              
TAPE 00-23, SIDE A                                                                                                            
Number 001                                                                                                                      
CHAIRMAN HALFORD called the Senate  Resources Committee meeting to                                                            
order  at 3:10  p.m.   Present were  Senators  Pete Kelly,  Green,                                                              
Taylor, Mackie, Lincoln and Chairman  Halford.  The first order of                                                              
business to come before the committee was HB 114.                                                                               
           HB 114-REPEAL PROHIBITION ANTLERLESS MOOSE                                                                       
CHAIRMAN  HALFORD  announced  that  the  committee  has  held  one                                                              
hearing on  HB 114 and that  the sponsor has prepared  a committee                                                              
substitute (CS).                                                                                                                
MR. ED GRASSER, legislative aide  to Representative Beverly Masek,                                                              
sponsor  of HB  114, said  that after  working  with the  advisory                                                              
committees  and the  Alaska Department  of Fish  and Game  (ADFG),                                                              
Representative  Masek concluded  that  an outright  repeal of  the                                                              
antlerless  moose provision  of statute  was not  workable so  the                                                              
groups came to  a compromise solution.  The CS  relieves the Board                                                              
of  Game of  the time  and cost  involved  in implementing  annual                                                              
antlerless hunts.   It allows the Board to adopt  regulations that                                                              
are  effective for  up  to two  consecutive  regulatory years  and                                                              
requires a  majority of  local fish  and game advisory  committees                                                              
with jurisdiction to object in writing to stop a hunt.                                                                          
MR. GRASSER  explained that  under the  present statute,  ADFG has                                                              
had  to arrange  a  meeting of  the  advisory  committees to  take                                                              
action before  the Board  could take  action.  Arranging  advisory                                                              
committee meetings  was problematic for ADFG because  many of them                                                              
are in rural Alaska and do not meet often.                                                                                      
MR.  MATT ROBUS,  Deputy  Director  of  the Division  of  Wildlife                                                              
Conservation, ADFG, stated support for HB 114.                                                                                  
SENATOR MACKIE moved to adopt the  proposed CS (1-LS0538\D) as the                                                              
working version  of the committee.   There being no  objection, it                                                              
was so ordered.                                                                                                                 
CHAIRMAN HALFORD  announced that  SCSHB 114(RES)  will need  to be                                                              
accompanied by a resolution to change  the title because the House                                                              
no longer wants  the original title.  He noted  the resolution was                                                              
being prepared.                                                                                                                 
SENATOR GREEN moved SCSHB 114(RES)  from committee with individual                                                              
recommendations.  There being no objection, the motion carried.                                                                 
CHAIRMAN   HALFORD  announced   that   SCSHB   114(RES)  and   its                                                              
accompanying resolution moved from committee.                                                                                   
                       HB 204-ELK FARMING                                                                                   
MR. PETER  FELDMAN, staff to  Representative John  Harris, sponsor                                                              
of  the  measure, gave  the  following  overview.    HB 204  is  a                                                              
housekeeping bill  that will transfer  the management  of domestic                                                              
elk,  not  wild  elk,  to  the  Division  of  Agriculture  in  the                                                              
Department of Natural  Resources.  That division  is familiar with                                                              
fencing regulations,  quarantines,  and practices associated  with                                                              
domestic animals.                                                                                                               
SENATOR  TAYLOR   stated  his   appreciation  for   Representative                                                              
Harris's efforts.                                                                                                               
MR. MATT  ROBUS, Division of  Wildlife Conservation,  ADFG, stated                                                              
support for HB 204 as written.                                                                                                  
MR. ROBERT WELLS, Director of the  Division of Agriculture, stated                                                              
support for HB 204.                                                                                                             
MR. BILL  WARD of Kenai  said those in  the domestic  elk industry                                                              
worked with DNR and ADFG to put together this legislation.                                                                      
SENATOR  TAYLOR  moved  HB  204  from  committee  with  individual                                                              
recommendations and its accompanying  fiscal note.  There being no                                                              
objection, the motion carried.                                                                                                  
          HB 116-BOARD OF AGRICULTURE AND CONSERVATION                                                                      
REPRESENTATIVE  JEANETTE  JAMES,  sponsor  of  HB  116,  gave  the                                                              
following overview of  the legislation.  It took  some time to get                                                              
all  parties  involved  in  this   legislation  to  agree  to  the                                                              
provisions of HB  116.  The purpose of the bill  is to establish a                                                              
Board of  Agriculture and  Conservation  to provide continuity  in                                                              
agricultural policies  over changing administrations.   It creates                                                              
an  eight member  board,  comprised of  seven  people involved  in                                                              
grass roots  and commercial and  production agriculture,  plus the                                                              
Commissioner  of  DNR.    The new  board  will  submit  names  for                                                              
selection of  the director of the  Division of Agriculture  to the                                                              
Commissioner.   The  bill  requires that  the  Board be  consulted                                                              
prior to  any disposal of agricultural  land.  HB 116  extends the                                                              
life of  the agricultural revolving  loan fund (ARLF)  by ensuring                                                              
that the  new board has  control over  ARLF funds. Last,  the bill                                                              
provides  for much  needed stability  and long  term planning  and                                                              
growth for the agricultural industry in Alaska.                                                                                 
MS. MARSHA  WARD, an  agricultural producer  from Delta  Junction,                                                              
stated support  for HB 116.   She commented that agriculture  is a                                                              
long term  business operation  that requires  more stability  than                                                              
the State has provided  in the past.  The rules  change every time                                                              
a new governor or commissioner takes  office.  She urged committee                                                              
members to pass HB 116.                                                                                                         
SENATOR GREEN asked how many people  Representative James believes                                                              
will  qualify to  serve on  the Board  given  the restrictions  in                                                              
Section (d) on page 2.                                                                                                          
REPRESENTATIVE JAMES  said those restrictions will  limit the num-                                                              
ber of people  who can serve on  the board to a great  extent, but                                                              
it would  be very difficult to  have board members  with specific,                                                              
personal  interests in  the ARLF  managing it.   She thought  that                                                              
forbidding  board members to  make changes  to any existing  state                                                              
loans they  have during their terms  to be an ethical way  to deal                                                              
with the problem.                                                                                                               
SENATOR GREEN  asked what  the current  restrictions are  for ARLF                                                              
Board members.                                                                                                                  
REPRESENTATIVE JAMES read the following,                                                                                        
     (a) A member of the Agricultural Revolving Loan Board may                                                                  
     not, during the member's term of office or within one year                                                                 
     after ceasing to be a member of the Board, attain a loan                                                                   
     under this Chapter other than a short term loan under AS                                                                   
    (b)  A person  may not  serve on the  board if  the person  is                                                              
     delinquent  on  payments  on   a  loan  obtained  under  this                                                              
     chapter. The  governor shall discharge a member  of the board                                                              
     who is delinquent  on payments on a loan  obtained under this                                                              
She pointed out these provisions  are very similar to the language                                                              
in the bill.                                                                                                                    
CHAIRMAN  HALFORD referred  to the federal  grain reserve  program                                                              
and asked whether the State is lending  money to people to develop                                                              
agriculture  who can  then sell  their  ability to  produce for  a                                                              
contract price for non-production.                                                                                              
REPRESENTATIVE JAMES  deferred to Mr.  Wells to answer  that ques-                                                              
Number 796                                                                                                                      
MR. ROB WELLS,  Division of Agriculture, answered  that farmers do                                                              
have  the right  to get  State loans  and then  take advantage  of                                                              
federal grain reserve program contracts.                                                                                        
CHAIRMAN  HALFORD pointed  out that  the previous  law, which  was                                                              
disregarded by  the Administration, contained a  specific prohibi-                                                              
tion against subsidizing development  to sell the subsidized value                                                              
to the federal government.  He stated  he has a problem with that.                                                              
REPRESENTATIVE JAMES  asked if that prohibition could  be added to                                                              
HB 116.                                                                                                                         
CHAIRMAN  HALFORD stated,  "I'd want  to discuss  it a little  bit                                                              
too.  I  don't want it to  be unreasonable but the thing  that was                                                              
very frustrating  about the  original Delta work  out is a  lot of                                                              
the CRP contracts  had a value  exceeding the value of  the parcel                                                              
after  we  wrote  down  huge  amounts   of  money  on  the  parcel                                                              
purchases."    He noted  it  is not  an  issue  he has  looked  at                                                              
MR. BOB  FRANKLIN, President of  the Alaska Farm  Bureau, informed                                                              
committee members that the current  CRP rate is about $37 per acre                                                              
on  the  acreage that  is  put  into  CRPs,  acreage that  is  not                                                              
considered in HB 116.  He noted that  a majority of the members of                                                              
the Alaska Farm Bureau support HB  116 and he encouraged committee                                                              
members to support it.                                                                                                          
MR. JIM  HARRISON informed committee  members he has  been farming                                                              
since 1970.   He feels the agricultural industry  has been "yanked                                                              
around" by changes in administrations.   HB 116 will settle things                                                              
down.   The issue  of CRPs  is not a  clear cut  deal as  it costs                                                              
money to maintain  CRPs.  He does  not see how regulation  on CRPs                                                              
will benefit the industry at all.                                                                                               
MR. BILL WARD stated support for  HB 116 as farmers have struggled                                                              
for  a  long   time  to  get  where  they  are.     Regarding  the                                                              
qualifications of  Board members, he felt the  restrictions in the                                                              
bill will  limit the  number of people  who can  serve.   He asked                                                              
committee members to review it in  relation to the Ethics Act.  He                                                              
thought the  requirement that a Board  member wait one  year after                                                              
serving  before applying  for a loan  will be  difficult for  many                                                              
MR. CRAIG  TRYTTEN told  committee  members that  both he and  his                                                              
wife would  like to serve  on the Board  but cannot  because their                                                              
lease is due in  2½ years and they could not  re-lease or purchase                                                              
their farm under the conditions set  out in HB 116.  He emphasized                                                              
that HB 116  has bipartisan support  but he would like  to see all                                                              
regions of the State represented.                                                                                               
MR. FELDMAN, also  a Delta farmer, explained to  committee members                                                              
that  in  order  to qualify  for  a  CRP,  a farmer  must  have  a                                                              
production base.   Whether the farmer  borrows money from  the FSA                                                              
or the ARLF does  not matter, what matters is that  the farmer can                                                              
prove his or  her production base.   To prove that, a  farmer must                                                              
grow crops  for a certain number  of years, show a history  with a                                                              
farm  service   agency  of  how   much  was  grown.     With  that                                                              
information,  the CRP  or  payments are  based  on the  production                                                              
history.  He said a person cannot  just borrow money and put it on                                                              
CHAIRMAN HALFORD asked Mr. Feldman if he has a CRP contract.                                                                    
MR. FELDMAN said he does not.                                                                                                   
CHAIRMAN HALFORD asked if the CRP  contract is $37.50 per acre per                                                              
MR. FELDMAN  answered that is probably  an average because  when a                                                              
farmer applies  for a  CRP, the farmer  makes a  bid.   The County                                                              
Committee meets and  reviews the federal regulations.   If the bid                                                              
is  too high,  the bid  is disqualified;  if  it is  too low,  the                                                              
County Committee  will accept  it.  The  CRP program  requires the                                                              
farmer to maintain  the land so it  has to be planted  for erosion                                                              
CHAIRMAN  HALFORD  indicated  that   this  issue  has  been  under                                                              
discussion for 15  years but when the Legislature  did the DNR and                                                              
ARLF combined work out several years  ago, it contained a specific                                                              
provision that  said a farmer could  not get the work out  and use                                                              
the CRP  or the  State would be  in violation.   The State  did it                                                              
contrary to  the law.  The problem  was that the value  of some of                                                              
the property was  written down to $200,000 or  $300,000 when those                                                              
pieces of property  had outstanding CRP contracts.   The contracts                                                              
themselves  were worth  $500,000.  Chairman  Halford thought  that                                                              
was a very serious abuse of the system.                                                                                         
MR. FELDMAN  agreed that  it was  a serious  problem in  the early                                                              
1980's.   He noted  that today,  any CRP  subsidies come  from the                                                              
federal government.  The State does  not subsidize agriculture; it                                                              
puts the  money in for  loans that revolve.   Interest  charged on                                                              
ARLF loans  is used  to support  the revolving  loan fund  and the                                                              
farmers,  and to  keep the  Division  of Agriculture  alive.   The                                                              
Division of  Agriculture has had  no State funding for  ten years.                                                              
He maintained  the Division  is working  toward a whole  different                                                              
scenario today.                                                                                                                 
SENATOR  TAYLOR commented  that because  the  Division is  drawing                                                              
interest on  the ARLF, the fund  will remain stagnant  or diminish                                                              
over time.                                                                                                                      
MR. FELDMAN  stated that  at this point,  the ARLF will  last five                                                              
years.  The ARLF has almost $6 billion  left and it costs about $1                                                              
million per  year to run the  Division of Agriculture  to disperse                                                              
CHAIRMAN HALFORD  asked if  it is to  the farmers' advantage  that                                                              
the Division of Agriculture be as small as possible.                                                                            
MR. FELDMAN  explained  that it is  to the  farmers' advantage  to                                                              
have control of the Division of Agriculture.   If they can put the                                                              
Division of  Agriculture in  the hands of  a farmers'  board, they                                                              
will be  very conservative  about who they  loan money to  and how                                                              
the money is spent.                                                                                                             
Number 1459                                                                                                                     
SENATOR GREEN pointed out that the  language about the disposal of                                                              
land was  a lot stronger  in the original  version of HB  116, and                                                              
that the bill now  uses the word "may" instead of  "shall" on page                                                              
REPRESENTATIVE JAMES  said that she originally wanted  to create a                                                              
board to oversee  the sale of land.  That approach  brought a huge                                                              
fiscal note  because the board would  have to use the  Division of                                                              
Land's personnel to  do that work.   Compromise  language was then                                                              
inserted into the bill which says  that the division will cease to                                                              
exist when no more land is available to sell.                                                                                   
SENATOR  GREEN  asked Senator  Taylor  if  he recalls  from  prior                                                              
discussions about  agricultural lands  any language  that pertains                                                              
to agricultural land designations.                                                                                              
SENATOR TAYLOR  replied, "There is, and  if you look in  - I can't                                                              
remember the  number of  the bill  right now.   It's a  lands bill                                                              
that's been  locked up in  Finance now for  two years.   They were                                                              
prepared to  move that bill out -  I think it may have  even moved                                                              
to Rules, because  what they did was to put  an appropriation bill                                                              
along with it to  carry a fiscal note and that  fiscal note was $9                                                              
million  to sell  25,000 acres  of land  - actually  75,000 -  but                                                              
CHAIRMAN  HALFORD  asked  if  delivering  it  to  the  people  was                                                              
expensive rather than the sale cost.                                                                                            
SENATOR TAYLOR said  that is correct and that  the Commissioner of                                                              
DNR would sell land  if the Legislature pays him  enough to do so.                                                              
He suggested  creating  a land board  within the  bill that  would                                                              
make recommendations to the Division  and the Legislature on which                                                              
lands should be  designated for sale.  He thought  that may be one                                                              
of  the  only ways  to  get  around this  Administration  and  its                                                              
"fiefdom" of land holdings.                                                                                                     
REPRESENTATIVE  JAMES asked if  Senator Taylor  was thinking  of a                                                              
land board  in general because the  board created in HB  116 could                                                              
designate  agricultural  land.   She  pointed out  she  originally                                                              
intended  that the proceeds  from  the sales be  deposited  in the                                                              
SENATOR  TAYLOR  said  a  board   that  can  designate  or  select                                                              
agricultural lands  is a good  idea but that Representative  James                                                              
will run into Executive Branch frustration  if the board itself is                                                              
responsible for sales or determining  the price, especially if the                                                              
board is  comprised of  people who  will be buying  the land.   He                                                              
suggested that  the board submit  a report to the  Legislature, in                                                              
the same manner as the Local Boundary  Commission, and if there is                                                              
no action taken against it, it will become effective.                                                                           
REPRESENTATIVE JAMES  thought that was  a good idea.   She stated,                                                              
"The other comment  that I wanted to make too, which  I didn't say                                                              
here, is that  because it's not in  the statute - is  the Creamery                                                              
Board currently  is a separate board  and this board will  also be                                                              
the Creamery Board so there is a  reduction in the number of folks                                                              
that would be on that Board and the  Creamery has been paying some                                                              
of the per diem  of the Creamery Board meetings so  there would be                                                              
some - a  little bit of money  coming from them for this  board as                                                              
well so - and then of course we have  those two properties we need                                                              
to sell or liquidate in some way  and that is the Creamery and the                                                              
meat packing plant.  And there is  right now someone interested in                                                              
that, whether  or not  that materializes  or not,  but I  think we                                                              
should be aggressive  in trying to liquidate those  properties and                                                              
that money then will go back into  the Agricultural Revolving Loan                                                              
Fund because that  is an asset of the Agricultural  Revolving Loan                                                              
Fund.   I think there's  about 20 - with  the book value  they got                                                              
$26 million  in  that - in  contracts  that are out  there and  in                                                              
those two properties."                                                                                                          
CHAIRMAN  HALFORD asked  Representative James  if she thinks  this                                                              
legislation advances the cause of selling those two properties.                                                                 
REPRESENTATIVE JAMES said she believes it does.                                                                                 
CHAIRMAN HALFORD replied he hopes so.                                                                                           
Number 1744                                                                                                                     
SENATOR GREEN  asked if under  the current procedure  the Governor                                                              
may appoint  a director  of the  Division of  Agriculture with  no                                                              
approval by the Legislature.                                                                                                    
REPRESENTATIVE JAMES said that is correct.                                                                                      
SENATOR  GREEN asked  if the  Legislature has  the opportunity  to                                                              
approve or deny the Governor's appointments to the ARLF board.                                                                  
REPRESENTATIVE  JAMES explained that  no legislative  confirmation                                                              
is required  on this  board because it  has no regulatory  duties.                                                              
The board  members then  submit two names  to the Commissioner  of                                                              
DNR  from  which  to  appoint  a   director  of  the  Division  of                                                              
SENATOR GREEN asked Carol Carroll to respond.                                                                                   
MS. CAROL CARROLL,  Director of the Division of  Support Services,                                                              
DNR, clarified  that the members  of the Board of  Agriculture are                                                              
not confirmed  by the Legislature now,  nor will they be  under HB
SENATOR  GREEN  pointed  out  the  nominations  to  the  Board  of                                                              
Agriculture were reviewed by the Senate Resources Committee.                                                                    
MS. CARROLL  clarified that  she was referring  to the  members of                                                              
the ARLF.                                                                                                                       
SENATOR GREEN indicated that was what she was referring to.                                                                     
MS. CARROLL stated it is her understanding  that the names are not                                                              
now presented to  the Legislature for confirmation  nor would they                                                              
be under HB 116.                                                                                                                
CHAIRMAN  HALFORD   indicated  they   could  require   legislative                                                              
approval  but  the  question  is  whether  they  fit  the  current                                                              
constitutional   provision   of   regulatory   or   quasi-judicial                                                              
appointments.   If the  Board is  given any regulatory  authority,                                                              
the appointees would require legislative confirmation.                                                                          
REPRESENTATIVE JAMES  said in the  original bill, the  board would                                                              
write all of the regulations for the Division of Agriculture.                                                                   
SENATOR  GREEN asked  if  the Administration  would  not agree  to                                                              
REPRESENTATIVE JAMES indicated that was correct.                                                                                
Number 1865                                                                                                                     
CHAIRMAN HALFORD  stated that the  bill cannot be made  perfect at                                                              
this time and  trying to make it perfect could  prevent any action                                                              
from being taken.   He said although it lacks  other provisions he                                                              
would like to see included, it is a step in the right direction.                                                                
REPRESENTATIVE JAMES  said she would like to see  other provisions                                                              
included in the bill but this legislation is a first step.                                                                      
SENATOR  LINCOLN  asked if  the  language  that prevents  a  board                                                              
member  or  one's  immediate  family  member  from  entering  into                                                              
contracts, purchasing  land or borrowing  money from the  ARLF for                                                              
one year after  leaving office is existing language  (page 2, line                                                              
17).   She noted the  statutory definition  of a family  member is                                                              
quite broad.  She questioned who  would want to serve on the board                                                              
with that restriction because many  members of the same family are                                                              
usually  involved in farming.                                                                                                   
REPRESENTATIVE JAMES said HB 116  expands the existing definition.                                                              
SENATOR  LINCOLN  asked why  Representative  James  would want  to                                                              
include immediate family members.                                                                                               
REPRESENTATIVE JAMES said she would rather not.                                                                                 
SENATOR LINCOLN asked where the new definition came from.                                                                       
REPRESENTATIVE JAMES  said it is the language  that was negotiated                                                              
with DNR.                                                                                                                       
SENATOR LINCOLN asked if DNR asked to expand the definition.                                                                    
REPRESENTATIVE JAMES said yes.                                                                                                  
SENATOR  GREEN  asked  what  Representative  James  learned  about                                                              
restrictions on  comparable board members.  She  expressed concern                                                              
that  the pool  of  people with  a  background  in agriculture  in                                                              
Alaska is small.                                                                                                                
REPRESENTATIVE  JAMES thought Senator  Green was absolutely  right                                                              
but noted there are not a lot of  other boards to compare to.  She                                                              
felt the restrictions are too tight  and that it will be difficult                                                              
to find people to serve.  She pointed  out that four board members                                                              
need to be from different enterprises  in commercial production of                                                              
agriculture of which  there are a limited number.   She thought it                                                              
might be  possible to  delete the  provision that prohibits  board                                                              
members from entering  into contracts or loans for  one year after                                                              
their  terms have  ended.   She  noted  the Executive  Ethics  Act                                                              
contains restrictions  because board  members may get  information                                                              
that will serve their interests.                                                                                                
SENATOR GREEN  asked how the  private sector handles  restrictions                                                              
on board members of banks.                                                                                                      
REPRESENTATIVE JAMES said through disclosure.                                                                                   
SENATOR GREEN asked if that same standard could apply.                                                                          
REPRESENTATIVE  JAMES said  the problem  she sees  is that  people                                                              
managing a fund  of money are insiders.  When  they take advantage                                                              
of knowledge they gain from their  board membership, it is assumed                                                              
they are acting unethically, even  though some actions may not be.                                                              
She noted  the farmers she spoke  to believe they can  find people                                                              
to serve so she considers this bill to be a start.                                                                              
CHAIRMAN HALFORD informed committee  members that according to the                                                              
existing law,  the board is  comprised of seven  members appointed                                                              
by  the Governor  and  confirmed  by the  legislature  in a  joint                                                              
session.  He  asked Senator Green and Senator Taylor  to work with                                                              
Representative  James to come  up with  "the strongest  version of                                                              
this that we can get passed."                                                                                                   
SENATOR  LINCOLN asked  the subcommittee  to look  at the  section                                                              
that pertains to the immediate family  because she was told it was                                                              
added because  the bill repeals  the current conflict  of interest                                                              
SENATOR  GREEN asked  if  DNR opposed  including  the conflict  of                                                              
interest language in the bill.                                                                                                  
REPRESENTATIVE  JAMES  asked Elizabeth  Hickerson  to answer  that                                                              
MS.  ELIZABETH HICKERSON,  Assistant  Attorney General,  explained                                                              
that   Representative  Harris   recommended   that  the   one-year                                                              
restriction  be included.   Under  the  existing Executive  Ethics                                                              
Act, people would be prohibited from  serving on the board if they                                                              
had   any   existing  loans,   permits,   leases,   or   financing                                                              
arrangements with the ARLF.  The  provision in HB 116 is a limited                                                              
exemption from the  Executive Ethics Act that was  worked out with                                                              
Representative James,  Assistant Attorney Jim Baldwin  and herself                                                              
and it was acceptable to the Administration.                                                                                    
CHAIRMAN HALFORD asked where the  definition of "immediate family"                                                              
is located in the bill.                                                                                                         
MS.  HICKERSON  said  it  is  in  the  Executive  Ethics  Act,  AS                                                              
39.52.060, which is referred to on  line 31 of page 2 of the bill.                                                              
SENATOR LINCOLN  read from the statute, "aunts,  uncles, brothers,                                                              
stepchildren,  adopted children,  people who  are living  with you                                                              
CHAIRMAN HALFORD stated that a person  living in the same economic                                                              
unit  will  obviously  have  an  economic  benefit  but  it  is  a                                                              
different situation if it applies  to a brother who lives down the                                                              
road and with whom you've been arguing for 20 years.                                                                            
SENATOR  GREEN asked  if the Legislature  has  any input into  the                                                              
selection, confirmation, complaint or removal of board members.                                                                 
REPRESENTATIVE JAMES  replied that  confirmation would have  to be                                                              
included in the bill because it is not automatic.                                                                               
CHAIRMAN  HALFORD clarified  that as  long as  the board has  some                                                              
quasi-judicial  or regulatory  function,  it  qualifies under  the                                                              
section   of  the   Constitution  that   allows  for   legislative                                                              
REPRESENTATIVE JAMES  replied, "This one has every  bit, and maybe                                                              
a little bit more, than the current  one.  If the current one says                                                              
it can do it, then we can say this one can do it."                                                                              
SENATOR GREEN  asked whether  the Governor  can remove  the entire                                                              
ARLF board if he chooses.                                                                                                       
REPRESENTATIVE  JAMES  said  the  Governor  can  unless  the  bill                                                              
contains a "for  cause" provision.  She said the  bill started out                                                              
with that provision.                                                                                                            
TAPE 00-23, SIDE B                                                                                                              
SENATOR  GREEN said  what she  would  like to  get at  is that  to                                                              
remove  an appointed  member, the  Governor must  first provide  a                                                              
written statement  to the  member of the  reasons for  removal and                                                              
make a statement to the public.   She believes the removal must be                                                              
public and not a dark secret.                                                                                                   
REPRESENTATIVE  JAMES said  in  other cases  that  only means  the                                                              
Governor must write  the board member a letter saying  he does not                                                              
like the board member's philosophy.                                                                                             
SENATOR GREEN  asked what would happen  if all board  members were                                                              
removed by the Governor and not replaced.                                                                                       
CHAIRMAN  HALFORD announced  that the subcommittee  would  work on                                                              
those questions  and  that the bill  would be  brought before  the                                                              
committee in  a couple of days.   There being no  further business                                                              
to come  before the  committee, he adjourned  the meeting  at 4:20                                                              

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