Legislature(1999 - 2000)
04/12/2000 03:10 PM Senate RES
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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
03.10.030(c).
(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
chapter....
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-
tion.
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
recently.
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
farmers.
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
CRP.
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
year.
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
control.
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
land.
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
3.
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
50..."
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
ARLF.
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
Agriculture.
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
116.
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
that.
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
language.
SENATOR GREEN asked if DNR opposed including the conflict of
interest language in the bill.
REPRESENTATIVE JAMES asked Elizabeth Hickerson to answer that
question.
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
confirmation.
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
p.m.
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