Legislature(1999 - 2000)

02/09/2000 01:10 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
               HOUSE RESOURCES STANDING COMMITTEE                                                                               
                        February 9, 2000                                                                                        
                            1:10 p.m.                                                                                           
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                                 
                                                                                                                                
Representative Bill Hudson, Co-Chair                                                                                            
Representative Beverly Masek, Co-Chair                                                                                          
Representative John Cowdery, Vice Chair                                                                                         
Representative John Harris                                                                                                      
Representative Carl Morgan                                                                                                      
Representative Ramona Barnes                                                                                                    
Representative Jim Whitaker                                                                                                     
Representative Reggie Joule                                                                                                     
Representative Mary Kapsner                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                  
                                                                                                                                
All member present                                                                                                              
                                                                                                                                
COMMITTEE CALENDAR                                                                                                              
                                                                                                                                
HOUSE BILL NO. 116                                                                                                              
"An Act relating to the Board of  Agriculture and Conservation, to                                                              
the agricultural  revolving loan  fund, to  the disposal  of state                                                              
agricultural   land,   and   to  the   Alaska   Natural   Resource                                                              
Conservation   and  Development  Board;   and  providing   for  an                                                              
effective date."                                                                                                                
                                                                                                                                
     - MOVED CSHB 116(RES) OUT OF COMMITTEE                                                                                     
                                                                                                                                
CS FOR SENATE BILL NO. 7(FIN) am                                                                                                
"An Act relating to the University  of Alaska and university land,                                                              
and  authorizing the  University  of Alaska  to select  additional                                                              
state land."                                                                                                                    
                                                                                                                                
     - MOVED HCS CSSB 7(RES) OUT OF COMMITTEE                                                                                   
                                                                                                                                
HOUSE BILL NO. 206                                                                                                              
"An Act relating  to the migratory game bird conservation  tag, to                                                              
a nonresident combined  sport fishing and hunting  license, to the                                                              
nonresident  military small  game  and sport  fishing license,  to                                                              
applications  for certain  licenses, tags,  and permits issued  by                                                              
the  Department of  Fish  and Game,  and  to duplicate  crewmember                                                              
licenses."                                                                                                                      
                                                                                                                                
     - BILL HEARING POSTPONED                                                                                                   
                                                                                                                                
PREVIOUS ACTION                                                                                                                 
                                                                                                                                
BILL:  HB 116                                                                                                                 
SHORT TITLE: BOARD OF AGRICULTURE AND CONSERVATION                                                                              
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 2/26/99       324     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 2/26/99       324     (H)  RES, FIN                                                                                            
 3/10/99       418     (H)  COSPONSOR(S): HARRIS                                                                                
 4/14/99               (H)  RES AT  1:00 PM CAPITOL 124                                                                         
 4/14/99               (H)  HEARD AND HELD                                                                                      
 4/14/99               (H)  MINUTE(RES)                                                                                         
 4/21/99               (H)  RES AT  1:00 PM CAPITOL 124                                                                         
 4/21/99               (H)  HEARD AND HELD                                                                                      
 4/21/99               (H)  MINUTE(RES)                                                                                         
 1/24/00               (H)  RES AT  1:00 PM CAPITOL 124                                                                         
 1/24/00               (H)  Heard & Held                                                                                        
 1/24/00               (H)  MINUTE(RES)                                                                                         
 1/31/00               (H)  RES AT  1:00 PM CAPITOL 124                                                                         
 1/31/00               (H)  <Bill Postponed>                                                                                    
 2/09/00               (H)  RES AT  1:00 PM CAPITOL 124                                                                         
                                                                                                                                
BILL:  SB 7                                                                                                                   
SHORT TITLE: INCREASE LAND GRANT TO UNIV. OF ALASKA                                                                             
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 1/08/99        14     (S)  PREFILE RELEASED - 1/8/99                                                                           
 1/19/99        15     (S)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 1/19/99        15     (S)  RES, FIN                                                                                            
 1/25/99               (S)  RES AT  3:00 PM BUTROVICH ROOM 205                                                                  
 1/25/99               (S)  HEARD AND HELD                                                                                      
 1/25/99               (S)  MINUTE(RES)                                                                                         
 2/01/99               (S)  RES AT  3:00 PM BUTROVICH ROOM 205                                                                  
 2/01/99               (S)  SCHEDULED BUT NOT HEARD                                                                             
 2/01/99               (S)  MINUTE(RES)                                                                                         
 2/03/99               (S)  RES AT  3:00 PM BUTROVICH ROOM 205                                                                  
 2/03/99               (S)  MOVED CS OUT OF COMMITTEE                                                                           
 2/03/99               (S)  MINUTE(RES)                                                                                         
 2/05/99       165     (S)  RES RPT  CS  4DP 3NR      SAME TITLE                                                                
 2/05/99       165     (S)  DP: MACKIE, TAYLOR, GREEN, PETE KELLY                                                               
 2/05/99       165     (S)  NR: HALFORD, PARNELL, LINCOLN                                                                       
 2/05/99       165     (S)  FN TO SB (DNR), FNS TO SB & CS                                                                      
                            (UA, F&G)                                                                                           
 2/05/99       165     (S)  FN TO CS (DNR)                                                                                      
 2/25/99               (S)  FIN AT  9:00 AM SENATE FINANCE 532                                                                  
 2/25/99               (S)  <BILL POSTPONED>                                                                                    
 3/04/99               (S)  FIN AT  8:00 AM SENATE FINANCE 532                                                                  
 3/04/99               (S)  HEARD AND HELD                                                                                      
 3/04/99               (S)  MINUTE(FIN)                                                                                         
 4/23/99               (S)  FIN AT  8:00 AM SENATE FINANCE 532                                                                  
 4/23/99               (S)  MOVED CS(FIN) OUT OF COMMITTEE                                                                      
 4/23/99               (S)  MINUTE(FIN)                                                                                         
 4/24/99               (S)  FIN AT 10:00 AM SENATE FINANCE 532                                                                  
 4/24/99               (S)  -- MEETING CANCELLED --                                                                             
 4/26/99               (S)  RLS AT 12:00 PM FAHRENKAMP 203                                                                      
 4/26/99               (S)  MINUTE(RLS)                                                                                         
 4/26/99               (S)  MINUTE(RLS)                                                                                         
 4/26/99      1085     (S)  FIN RPT  CS  5DP 2NR      SAME TITLE                                                                
 4/26/99      1086     (S)  DP: TORGERSON, WILKEN, LEMAN, DONLEY,                                                               
 4/26/99      1086     (S)  PETE KELLY; NR: PHILLIPS, ADAMS                                                                     
 4/26/99      1086     (S)  PREVIOUS  FNS (DNR, UA, F&G)                                                                        
 5/03/99      1202     (S)  RULES TO CALENDAR AND 1 OR 5/3/99                                                                   
 5/03/99      1203     (S)  READ THE SECOND TIME                                                                                
 5/03/99      1203     (S)  FIN  CS ADOPTED UNAN CONSENT                                                                        
 5/03/99      1203     (S)  AM NO  1      ADOPTED Y11 N9                                                                        
 5/03/99      1204     (S)  AM NO 2      ADOPTED UNAN CONSENT                                                                   
 5/03/99      1204     (S)  AM NO 3      ADOPTED UNAN CONSENT                                                                   
 5/03/99      1205     (S)  ADVANCED TO THIRD READING                                                                           
                            UNAN CONSENT                                                                                        
 5/03/99      1205     (S)  READ THE THIRD TIME  CSSB 7(FIN) AM                                                                 
 5/03/99      1205     (S)  COSPONSOR(S): PEARCE, MACKIE, WARD                                                                  
 5/03/99      1206     (S)  PASSED Y15 N5                                                                                       
 5/03/99      1206     (S)  ELLIS  NOTICE OF RECONSIDERATION                                                                    
 5/04/99      1239     (S)  RECONSIDERATION NOT TAKEN UP                                                                        
 5/04/99      1239     (S)  TRANSMITTED TO (H)                                                                                  
 5/05/99      1175     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 5/05/99      1175     (H)  RES, FIN                                                                                            
 5/05/99      1187     (H)  CROSS SPONSOR(S): HALCRO                                                                            
 5/12/99               (H)  RES AT   1:30 PM CAPITOL 124                                                                        
 5/12/99               (H)  HEARD AND HELD                                                                                      
 5/12/99               (H)  MINUTE(RES)                                                                                         
 5/14/99               (H)  RES AT   1:00 PM CAPITOL 124                                                                        
 5/14/99               (H)  FAILED TO MOVE OUT OF COMMITTEE                                                                     
 5/14/99               (H)  MINUTE(RES)                                                                                         
 5/18/99               (H)  RES AT   1:00 PM CAPITOL 124                                                                        
 5/18/99               (H)  MEETING CANCELED                                                                                    
 2/07/00               (H)  RES AT   1:00 PM CAPITOL 124                                                                        
 2/07/00      Text     (H)  Heard & Held                                                                                        
 2/07/00      Text     (H)  MINUTE(RES)                                                                                         
 2/09/00      Text     (H)  RES AT   1:00 PM CAPITOL 124                                                                        
                                                                                                                                
WITNESS REGISTER                                                                                                                
                                                                                                                                
REPRESENTATIVE JEANNETTE JAMES                                                                                                  
Alaska State Legislature                                                                                                        
Capitol Building, Room 102                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Testified as the sponsor of HB 116.                                                                        
                                                                                                                                
PETE FELLMAN, Legislative Aide                                                                                                  
     for Representative John Harris                                                                                             
Alaska State Legislature                                                                                                        
Capitol Building, Room 110                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:  Provided information on the proposed CS for                                                                
HB 116.                                                                                                                         
                                                                                                                                
BILL WARD                                                                                                                       
Ward Farms                                                                                                                      
P.O. Box 1087                                                                                                                   
Delta Junction, Alaska  99737                                                                                                   
POSITION STATEMENT:  Testified in support of the proposed CS for                                                                
HB 116.                                                                                                                         
                                                                                                                                
ROB WELLS, Director                                                                                                             
Division of Agriculture                                                                                                         
Department of Natural Resources                                                                                                 
1800 Glenn Highway, Suite 12                                                                                                    
Palmer, Alaska  99645                                                                                                           
POSITION STATEMENT:  Testified on behalf of the Division of                                                                     
Agriculture and the Department on Natural Resources on the                                                                      
proposed CS for HB 116.                                                                                                         
                                                                                                                                
CAROL CARROLL, Director                                                                                                         
Division of Support Services                                                                                                    
Department of Natural Resources                                                                                                 
400 Willoughby Avenue                                                                                                           
Juneau, Alaska 99801                                                                                                            
POSITION STATEMENT:  Testified on behalf of the Department of                                                                   
Natural Resources the proposed CS for HB 116.                                                                                   
                                                                                                                                
SIG RESTAD                                                                                                                      
HC03 Box 9571                                                                                                                   
Palmer, Alaska  99645                                                                                                           
POSITION STATEMENT:  Explained concerns and testified in support                                                                
of the proposed CS for HB 116.                                                                                                  
                                                                                                                                
LORALI MEIER, Staff                                                                                                             
     to Representative Beverly Masek                                                                                            
Alaska State Legislature                                                                                                        
Capitol Building, Room 126                                                                                                      
Juneau, Alaska  99801                                                                                                           
POSITION STATEMENT:   As  committee aide  for the House  Resources                                                              
Standing  Committee, explained  the  changes in  HCS CSSB  7(RES),                                                              
Version V.                                                                                                                      
                                                                                                                                
JIM POUND, Legislative Aide                                                                                                     
     for Senator Robin Taylor                                                                                                   
Alaska State Legislature                                                                                                        
Capitol Building, Room 30                                                                                                       
Juneau, Alaska  99801                                                                                                           
POSITION  STATEMENT:   Briefly discussed  SB  7 on  behalf of  the                                                              
prime sponsor.                                                                                                                  
                                                                                                                                
ACTION NARRATIVE                                                                                                                
                                                                                                                                
TAPE 00-8, SIDE A                                                                                                               
Number 0001                                                                                                                     
                                                                                                                                
CO-CHAIR  MASEK  called  the House  Resources  Standing  Committee                                                              
meeting to  order at  1:10 p.m.   Members present  at the  call to                                                              
order  were   Representatives  Hudson,  Masek,   Cowdery,  Harris,                                                              
Morgan, Barnes, Whitaker, Joule and Kapsner.                                                                                    
                                                                                                                                
HB 116 - BOARD OF AGRICULTURE AND CONSERVATION                                                                                
                                                                                                                                
Number 0116                                                                                                                     
                                                                                                                                
CO-CHAIR  MASEK announced  the first  order of  business would  be                                                              
HOUSE BILL NO.  116, "An Act relating to the  Board of Agriculture                                                              
and Conservation, to the agricultural  revolving loan fund, to the                                                              
disposal of  state agricultural  land, and  to the Alaska  Natural                                                              
Resource Conservation and Development  Board; and providing for an                                                              
effective date."                                                                                                                
                                                                                                                                
Number 0162                                                                                                                     
                                                                                                                                
REPRESENTATIVE JEANETTE  JAMES, Alaska State  Legislature, sponsor                                                              
of HB 116,  reported that some  of the concerns that  were brought                                                              
up in the last  meeting had been resolved.  She  indicated she had                                                              
worked  with the Division  of Agriculture  to  try to resolve  any                                                              
disputes.  She  noted that the proposed committee  substitute (CS)                                                              
for  HB 116  before them  is version  1-LS0407\XXX, Cook,  2/9/00.                                                              
She explained that  the big focus was simply to put  in a Board of                                                              
Agriculture  and Conservation  that  would consist  of people  who                                                              
have direct knowledge of agricultural  interests, and to have them                                                              
be  in charge  of the  policies and  regulations  which they  work                                                              
under with continuity from administration to administration.                                                                    
                                                                                                                                
REPRESENTATIVE  JAMES emphasized  the word  "conservation" in  the                                                              
board's name,  in order to tell the  world that they are  not just                                                              
users of  the land  but are also  taking care  of the land  in the                                                              
process.   She stated  that the crux  of the whole  bill is  to be                                                              
able to  have the Board of  Agriculture and Conservation  hire the                                                              
director  of   the  Division  of  Agriculture;   therefore,  there                                                              
wouldn't be  any break  in the continuity  of the policies  within                                                              
administrations.                                                                                                                
                                                                                                                                
Number 0378                                                                                                                     
                                                                                                                                
CO-CHAIR  HUDSON made a  motion to  adopt the  proposed CS  for HB
116, version 1-LS0407\XXX,  Cook, 2/9/00, as a work  draft.  There                                                              
being no objection, Version XXX was before the committee.                                                                       
                                                                                                                                
REPRESENTATIVE  JAMES explained  that there  needs to  be a  nexus                                                              
between  the  Board  of  Agriculture   and  Conservation  and  the                                                              
administration, principally the commissioner  of the Department of                                                              
Natural  Resources (DNR);  therefore, they  put that  back in  the                                                              
bill.   The commissioner of  DNR is added  as a board  member, and                                                              
legislative  confirmation of  the board  is not required  anymore;                                                              
however, the  governor can remove  a board member only  for cause.                                                              
The sole authority  for the Board of Agriculture  and Conservation                                                              
to make decisions on Title 38 lands,  agricultural lands, has been                                                              
removed  and left with  the Division  of Mining,  Land and  Water;                                                              
however, the board must be consulted  prior to any such decisions.                                                              
                                                                                                                                
REPRESENTATIVE  COWDERY requested clarification  on the  makeup of                                                              
the board  and wondered  what is  meant by,  "Four from  different                                                              
enterprises in commercial production agriculture."                                                                              
                                                                                                                                
REPRESENTATIVE JAMES  explained that it would be  someone from one                                                              
of the agricultural activities.   Be it someone who raises carrots                                                              
or  cows, it  would be  someone who  is familiar  with the  needed                                                              
regulations and  policies.  She further  stated that the  board is                                                              
going to  be making decisions  on the Agricultural  Revolving Loan                                                              
Fund (ARLF)  applicants; whether or  not the interest  rate should                                                              
be changed; and those types of decisions.   Since they are pulling                                                              
from a small  pool of possible applicants, it is  likely that some                                                              
of  them  already have  an  ARLF  [loan]  or  have a  contract  to                                                              
purchase land from  the state, for example.  She  pointed out that                                                              
it would  really reduce  the pool of  possible applicants  if they                                                              
eliminated anyone  who had those existing obligations,  and [would                                                              
be] a disadvantage to the bill.  This is a compromise.                                                                          
                                                                                                                                
REPRESENTATIVE  JAMES drew  attention to  the sectional  analysis.                                                              
Under Section 1 it reads:                                                                                                       
                                                                                                                                
     A person may be appointed to  the board even though that                                                                   
     person  or an immediate  family member  has an  existing                                                                   
     lease,  permit,   or  loan   for  which  the   board  is                                                                   
     responsible, but that person  may not participate in any                                                                   
     board action  that directly affects that  lease, permit,                                                                   
     or loan.   While serving on the board, and  for one year                                                                   
     after  leaving  that  office,   a  board  member  or  an                                                                   
     immediate  family  member  of  a board  member  may  not                                                                   
     obtain a new lease, permit,  or loan for which the board                                                                   
     is responsible.                                                                                                            
                                                                                                                                
REPRESENTATIVE JAMES  indicated she believes it  really closes the                                                              
door  to  the  ethics  issue  in a  way  that  is  meaningful  and                                                              
measurable.   She added  that the  board's authority  to hire  the                                                              
director of the Division of Agriculture  is unchanged, and that is                                                              
the  one   remaining  dispute  with   the  Administration.     The                                                              
Administration's   recommendation  was  to   have  the   Board  of                                                              
Agriculture  and  Conservation suggest  three  names  for them  to                                                              
choose from and  let them appoint the director of  the Division of                                                              
Agriculture.    She emphasized  that  it  would totally  undo  the                                                              
purpose of  HB 116, which is  to keep long-term continuity  in DNR                                                              
between administrations.                                                                                                        
                                                                                                                                
Number 0833                                                                                                                     
                                                                                                                                
REPRESENTATIVE  BARNES referred  to  Sections 4,  6 and  7 of  the                                                              
sectional  analysis.  She  asked Representative  James to  explain                                                              
how  she is  amending  the existing  interest  rates  on the  farm                                                              
loans.                                                                                                                          
                                                                                                                                
REPRESENTATIVE  JAMES  responded that  she  believes the  interest                                                              
rate is at  8 percent on the ARLF  loans.  The purpose  is that an                                                              
interest rate over  time is not necessarily  always representative                                                              
of  the  current situation  out  there  in  the public;  when  the                                                              
interest is too high, no one borrows  any money, and the ARLF does                                                              
make money  from loaning  money.  Therefore,  the ARLF  makes more                                                              
money if there is an interest rate  that is competitive with other                                                              
farm loan entities that give loans.                                                                                             
                                                                                                                                
REPRESENTATIVE BARNES  pointed out that in the  sectional analysis                                                              
under Section  6 it  reads, "...  amends existing statute,  making                                                              
the  interest rate  on farm  development,  chattel, or  irrigation                                                              
loans comparable  to that  charged by  other agricultural  lending                                                              
institutions in the state."  She  wondered what other agricultural                                                              
lending institutions in the state are comparable to the ARLF.                                                                   
                                                                                                                                
REPRESENTATIVE  JAMES  replied  that  there is  the  Farm  Service                                                              
Agency,  an  old federal  program  that  is  not financed  by  the                                                              
federal government anymore.                                                                                                     
                                                                                                                                
REPRESENTATIVE  BARNES  stressed   that  if,  in  fact,  they  are                                                              
lowering the interest rates, then  she is not going to support the                                                              
bill, because she  is sick of all the money that  they have pumped                                                              
into the  farms.  Although  she supports  farming, a lot  of money                                                              
has been spent on  farming in the state, and if  the interest rate                                                              
is being changed, then she wants to know it.                                                                                    
                                                                                                                                
Number 1139                                                                                                                     
                                                                                                                                
PETE  FELLMAN, Legislative  Aide for  Representative John  Harris,                                                              
Alaska  State  Legislature,  pointed  out that  the  Alaska  Rural                                                              
Rehabilitation  Corporation  (ARRC) and  the  Farm Service  Agency                                                              
(FSA) are  the current lending corporations  in Alaska.   The AARC                                                              
determines  its interest  rates based  on  whether the  loan is  a                                                              
short-term  or  long-term  loan.   By  making  the  interest  rate                                                              
comparable to  those available through other  agricultural lending                                                              
institutions, the interest rate may go up.                                                                                      
                                                                                                                                
REPRESENTATIVE  BARNES asked why,  if another lending  institution                                                              
can give  a loan for less  money, someone would borrow  money from                                                              
the ARLF.                                                                                                                       
                                                                                                                                
MR. FELLMAM replied  that it is an option for anyone  who wants to                                                              
borrow  money for a  farming operation.   He  explained that  what                                                              
they  are  trying   to  accomplish  is  to  make   the  ARLF  more                                                              
competitive, because the Division  of Agriculture is funded solely                                                              
by the ARLF.                                                                                                                    
                                                                                                                                
REPRESENTATIVE BARNES  reiterated that  every dime that is  in the                                                              
ARLF belongs  to Alaska and its people,  and to have a  board that                                                              
is not confirmed  by the legislature or appointed  by the governor                                                              
controlling the  money and establishing interest  rates is totally                                                              
beyond her.                                                                                                                     
                                                                                                                                
Number 1268                                                                                                                     
                                                                                                                                
REPRESENTATIVE JAMES explained that  the board is appointed by the                                                              
governor  on  a  revolving  basis.     She  said  she  understands                                                              
Representative  Barnes'  concerns and  the  trauma  that she  went                                                              
through during that  process of spending a lot of  money to create                                                              
an agricultural  situation that  was unrealistic.   However,  as a                                                              
result  of that,  there are  farmers now  on land  that they  have                                                              
purchased,  and they  are the  survivors.   The  industry has  the                                                              
potential  to be healthy;  there  are weeds growing  on land  that                                                              
could be in production if there were a system to do it.                                                                         
                                                                                                                                
REPRESENTATIVE JAMES  pointed out that  the issue of  the Division                                                              
of  Agriculture's  being  supported  out  of the  ARLF  is  -  and                                                              
Representative  Barnes is correct  - state money  that was  put in                                                              
there for  that purpose; however, it  is not now considered  to be                                                              
general funds, and  for the last few years the  entire Division of                                                              
Agriculture  has  been  funded by  the  ARLF.    If the  ARLF  can                                                              
continue to  make money and fund  the Division of  Agriculture, it                                                              
eliminates the ability to take new  funds to support the division.                                                              
She pointed  out that  the big fear  is that if  they did  have to                                                              
come up  with new funds to  support the Division  the Agriculture,                                                              
the  division  would  disappear,  and  there does  need  to  be  a                                                              
Division  of Agriculture,  because  there  need  to be  regulatory                                                              
policies in order to have  successful  agricultural occupations in                                                              
the state.  The  whole idea is to extend the ARLF  to take care of                                                              
the Division  of Agriculture  so that  it is  making its  own way;                                                              
with   its  being   managed  by   people   directly  involved   in                                                              
agriculture, they can support themselves over the long term.                                                                    
                                                                                                                                
Number 1476                                                                                                                     
                                                                                                                                
REPRESENTATIVE  BARNES  reiterated that  every  dime  in the  ARLF                                                              
comes from  general fund dollars.   She also said the  farmers are                                                              
not a new  generation of farmers;  they are the same  farmers that                                                              
have been  borrowing money since the  land was disposed  of in Big                                                              
Delta.  She  referred to Senator  Lyda Green's bill and  said they                                                              
had  worked on  it and  tried to  iron  out the  problems so  that                                                              
farmers could go to the banks and  borrow money, and she supported                                                              
it.  However,  she does not support taking state  money and making                                                              
it  any less  viable for  those farms  to  get those  loans.   She                                                              
stated that she supports the virus-free  potatoes and the exports,                                                              
but that there does  need to be some control over  the loans - and                                                              
she believes that all controls are being removed.                                                                               
                                                                                                                                
REPRESENTATIVE  JAMES  disagreed   that  the  controls  are  being                                                              
removed.    She said  that  she  believes  more control  and  more                                                              
options are being given for the ARLF  to be a more successful loan                                                              
program so that it is competitive.   The hope is that they will be                                                              
able to sustain the income of the  ARLF to continue to support the                                                              
Division of Agriculture and not have  to come back and beg for any                                                              
money.                                                                                                                          
                                                                                                                                
REPRESENTATIVE BARNES  indicated she hopes that is the  case.  She                                                              
pointed  out  the  history:    when  controls  and  oversight  are                                                              
removed, and  when the money is gone,  they are back asking  for a                                                              
handout.                                                                                                                        
                                                                                                                                
REPRESENTATIVE JAMES explained that  the money that is used out of                                                              
the ARLF  still has to  be appropriated  by the legislature.   She                                                              
said  that  she understands  that  it  is specific  language  that                                                              
Representative  Barnes  is  distressed with,  because  setting  an                                                              
interest  rate  in statute  has  more  credibility than  having  a                                                              
floating rate that makes it be competitive  with other areas.  She                                                              
indicated that  the only  change in the  overall picture  is going                                                              
from a governor-appointed political  appointee to determining what                                                              
the policies  are and having  a board  whom they believe  would be                                                              
more  conservative  and  more  realistic  on  the  decision-making                                                              
process.   The  debate is  over whether  the ARLF  should be  made                                                              
competitive or  should be  left in statute  as it is,  and whether                                                              
that is good or bad for tomorrow.   She added that she believes it                                                              
should be made competitive.                                                                                                     
                                                                                                                                
Number 1755                                                                                                                     
                                                                                                                                
REPRESENTATIVE BARNES  asked what the purpose is of  Section 13 of                                                              
the sectional  analysis, where it reads,  "A loan may not  be made                                                              
without  the approval  of a  majority  of the  board, except  that                                                              
emergency loans up to $50,000 may  be approved by majority vote of                                                              
a committee  composed of  the board  chair, another board  member,                                                              
and the director."                                                                                                              
                                                                                                                                
REPRESENTATIVE  JAMES  pointed out  that  there  may be  emergency                                                              
loans necessary.   This way,  they would not  have to call  all of                                                              
the board members  together, with the extra expense  and [concerns                                                              
about] timing.                                                                                                                  
                                                                                                                                
REPRESENTATIVE  BARNES referred  to  Section 14  of the  sectional                                                              
analysis, where  it exempts  the new board  from a public  meeting                                                              
requirement.  She asked what the thinking is on that.                                                                           
                                                                                                                                
REPRESENTATIVE  JAMES stated that  it is  referring to  the notice                                                              
requirement for the meeting.                                                                                                    
                                                                                                                                
REPRESENTATIVE  BARNES pointed  out that  it says "public  meeting                                                              
requirements."   She said  that she assumes  that could  be almost                                                              
anything.                                                                                                                       
                                                                                                                                
Number 1900                                                                                                                     
                                                                                                                                
REPRESENTATIVE  COWDERY requested  clarification  on the  interest                                                              
rate.  He pointed  out that farmers are going to  want to know the                                                              
total cost of the loan, which would  be difficult to know if there                                                              
were  a fluctuating  rate.   He asked  whether he  was correct  in                                                              
thinking that.                                                                                                                  
                                                                                                                                
REPRESENTATIVE JAMES  said they are not advocating  for a floating                                                              
rate.   They are advocating  that there  be a rate  established at                                                              
the time the loan is made which is  a binding interest rate unless                                                              
there is some subsequent reason why it should be changed.                                                                       
                                                                                                                                
REPRESENTATIVE COWDERY  pointed out that  at the time the  loan is                                                              
made, the interest rate would be  whatever the competitive rate is                                                              
at the time; it is not actually a fixed rate.                                                                                   
                                                                                                                                
REPRESENTATIVE JAMES  said that is correct.   I would be  fixed by                                                              
the policy at this time, but it could be changed.                                                                               
                                                                                                                                
REPRESENTATIVE COWDERY  indicated that he is glad to  hear that it                                                              
is flexible.                                                                                                                    
                                                                                                                                
Number 2177                                                                                                                     
                                                                                                                                
REPRESENTATIVE  WHITAKER  wondered  if  it is  a  subsidized  loan                                                              
program that is being considered.                                                                                               
                                                                                                                                
REPRESENTATIVE JAMES replied no.                                                                                                
                                                                                                                                
REPRESENTATIVE WHITAKER  asked if  there was any  consideration of                                                              
newly allocated state general funds.                                                                                            
                                                                                                                                
REPRESENTATIVE JAMES replied no.                                                                                                
                                                                                                                                
REPRESENTATIVE  WHITAKER  wondered  if  it  is fair  to  say  that                                                              
commercial lenders  in Alaska would  find it difficult to  lend to                                                              
the agricultural sector.                                                                                                        
                                                                                                                                
REPRESENTATIVE  JAMES responded  that in  the kind  of loans  that                                                              
they give.  the answer is yes, but  in real estate loans  they can                                                              
probably get (indisc.--coughing).                                                                                               
                                                                                                                                
REPRESENTATIVE  WHITAKER replied  that it  is because these  loans                                                              
are short-term, special loans.                                                                                                  
                                                                                                                                
REPRESENTATIVE JAMES answered yes.                                                                                              
                                                                                                                                
REPRESENTATIVE WHITAKER pointed out  that given that there are few                                                              
and limited borrowing  alternatives, farmers really do  not have a                                                              
choice.                                                                                                                         
                                                                                                                                
REPRESENTATIVE  JAMES explained that  it is  a real lifesaver  for                                                              
the "little person."                                                                                                            
                                                                                                                                
REPRESENTATIVE  WHITAKER  pointed out  that  since no  alternative                                                              
exists for  the little person and  there is no additional  cost to                                                              
the  state,  what  Representative  James  is  proposing  might  be                                                              
reasonable in that it provides competitive agricultural lending.                                                                
                                                                                                                                
REPRESENTATIVE JAMES indicated that she believes it does.                                                                       
                                                                                                                                
REPRESENTATIVE WHITAKER  wondered if that is the  basic premise of                                                              
the bill.                                                                                                                       
                                                                                                                                
REPRESENTATIVE JAMES clarified that  the basic premise of the bill                                                              
is  [having] the  board of  directors manage  the money.   But  in                                                              
order for  them to have the  tools to make intelligent  decisions,                                                              
they have to have the authority.                                                                                                
                                                                                                                                
REPRESENTATIVE WHITAKER concluded that it seems reasonable.                                                                     
                                                                                                                                
Number 2314                                                                                                                     
                                                                                                                                
CO-CHAIR HUDSON wondered how much  money is currently available in                                                              
the ARLF.                                                                                                                       
                                                                                                                                
MR. FELLMAN responded that it is $6 million.                                                                                    
                                                                                                                                
CO-CHAIR HUDSON wondered if that  is the entire corpus of the fund                                                              
or just the interest that is available.                                                                                         
                                                                                                                                
MR. FELLMAN responded that it is the entire corpus of the fund.                                                                 
                                                                                                                                
CO-CHAIR  HUDSON wondered  what  the interest  rate  is for  other                                                              
active institutions that loan money for this purpose.                                                                           
                                                                                                                                
MR. FELLMAN said it varies and is  determined by the type of loan.                                                              
                                                                                                                                
CO-CHAIR HUDSON requested clarification  that the interest rate is                                                              
set in statute  now at 8 percent,  but that there are  other rates                                                              
out  there, so  it should  be  done on  some  sort of  comparative                                                              
[basis],  at the  determination  of  the board.    He wondered  if                                                              
anyone  else can make  that determination,  like  a quorum  of the                                                              
board members.                                                                                                                  
                                                                                                                                
REPRESENTATIVE  JAMES  said that  is  correct.   A  quorum of  the                                                              
board,  which includes  the  commissioner of  DNR,  can make  that                                                              
determination.                                                                                                                  
                                                                                                                                
CO-CHAIR HUDSON  requested clarification that the  commissioner is                                                              
a voting member of the board.                                                                                                   
                                                                                                                                
REPRESENTATIVE JAMES affirmed that.                                                                                             
                                                                                                                                
CO-CHAIR  HUDSON said  that  presumably the  Administration  would                                                              
have a voice there.                                                                                                             
                                                                                                                                
REPRESENTATIVE JAMES replied yes.                                                                                               
                                                                                                                                
CO-CHAIR  HUDSON asked what  is being  said in  Section 23  of the                                                              
bill.                                                                                                                           
                                                                                                                                
REPRESENTATIVE JAMES  pointed out that in Section 23  they are not                                                              
changing any  law.   They are inserting  the Board of  Agriculture                                                              
and Conservation as the advisor to the process.                                                                                 
                                                                                                                                
Number 2539                                                                                                                     
                                                                                                                                
BILL WARD,  Ward Farms,  testified via  teleconference from  Delta                                                              
Junction, where  he is  a farmer.   He said  he has supported  the                                                              
bill in the past  but has some additional testimony.   He informed                                                              
the committee that  the Administration has been  actively involved                                                              
in the  bill ever  since its inception  in 1996.   He pointed  out                                                              
that Commissioner  John Shively and  the director of  the Division                                                              
of  Agriculture  have  been  involved   in  this  ever  since  the                                                              
beginning, and they have had the opportunity to look at it.                                                                     
                                                                                                                                
MR.  WARD said  that  with regard  to having  the  board hire  the                                                              
director of the [Division] of Agriculture,  he believes that there                                                              
should be  some continuity with  the director from  administration                                                              
to administration.    He explained  that one of  the reasons  this                                                              
legislation  came   forward  is   that  the  people   involved  in                                                              
agriculture have been given the message  from the legislature that                                                              
the general  fund will not be  available to run the  division; the                                                              
only  funds  available  are  those   appropriated  from  the  ARLF                                                              
account, and when those funds run out, the division may expire.                                                                 
                                                                                                                                
MR. WARD pointed  out that the other message they  have been given                                                              
is  from  the  Administration:   they  will  not  actively  pursue                                                              
general  funding  for  the  Division  of  Agriculture  unless  the                                                              
legislature gives  it to them, which  they've said they  will not.                                                              
He said that  they are left looking  at a dwindling corpus  of the                                                              
fund;  therefore,  they  will  be  able  to  do  an  adequate  job                                                              
protecting the ARLF, because they  know that it is the last pot of                                                              
money from which to draw.  He added  that he supports the proposed                                                              
CS for HB 116 and still feels that  it is a good bill, even though                                                              
it has been watered down, picked at, and pulled apart.                                                                          
                                                                                                                                
Number 2905                                                                                                                     
                                                                                                                                
ROB  WELLS,  Director,  Division  of  Agriculture,  Department  of                                                              
Natural Resources,  testified via teleconference from  Palmer.  He                                                              
said that Representative James did  a good job of pointing out the                                                              
concerns that the Administration has with the bill.                                                                             
                                                                                                                                
TAPE 00-8, SIDE B                                                                                                               
Number 2915                                                                                                                     
                                                                                                                                
MR. WELLS offered  to answer questions, noting  that cash reserves                                                              
of $6,700,000  are available  for  lending at  this point.   Total                                                              
value of  the fund is at  $28 million, which includes  outstanding                                                              
loans  and assets  in possession,  such  as farms  that they  have                                                              
received back through foreclosures.                                                                                             
                                                                                                                                
CO-CHAIR HUDSON  remarked that he  finds it refreshing to  see the                                                              
amount and  the diversity of  agricultural activity that  is going                                                              
on in the state.   He said he supports anything  that will elevate                                                              
agriculture and in-state production.   He wondered if there is any                                                              
diminishment  in   the  bill  of   the  state's   loan  management                                                              
activities.                                                                                                                     
                                                                                                                                
MR. WELLS responded that a legislative  audit done on the ARLF was                                                              
released,  and it  pointed out  a few  areas of  improvement.   He                                                              
indicated that the  audit reflects that the ARLF  is being managed                                                              
conservatively  by the existing  board members  and director.   He                                                              
confirmed that there  is concern in the industry  with the lack of                                                              
general funding,  and once  they run out  of the assets  that they                                                              
can sell  to keep  the fund balance  where it  is, it is  possible                                                              
that the  fund's cash reserves  will be  gone and the  Division of                                                              
Agriculture will not be able to operate anymore.                                                                                
                                                                                                                                
MR.  WELLS said  they  don't necessarily  have  any problems  with                                                              
letting the interest  rate not be fixed at 8 percent.   He pointed                                                              
out their  "good borrower credit,"  which allows the  director, on                                                              
an  annual  basis,  to  give  up to  a  2  percent  interest  rate                                                              
reduction; however,  whenever issuing a new loan, they  want it to                                                              
be at  a fixed  rate so that  they don't  have to hire  additional                                                              
staff to manage  moveable-rate loans.  He explained  that the real                                                              
issues that they  have concerns about .... [Testimony  was cut off                                                              
due to a teleconference malfunction.]                                                                                           
                                                                                                                                
Number 2630                                                                                                                     
                                                                                                                                
CAROL CARROLL, Director, Division  of Support Services, Department                                                              
of  Natural Resources,  stated that  they have  been working  with                                                              
Representative  James to  try to  come to  an agreement;  however,                                                              
they are still in  a disagreement on the function  of the board in                                                              
hiring the director  and what kind of relationship  the department                                                              
would have  with that.   She  indicated DNR  does not support  the                                                              
construction  of the board.   Commissioner  John Shively  has been                                                              
interested  in the development  of the  board, and the  department                                                              
has played  a part in  the development of  the bill.   Ms. Carroll                                                              
pointed out  that when they  saw the  last rendition of  the bill,                                                              
they thought  perhaps they could  get involved, because  it looked                                                              
like they  may be  able to come  to some  agreement that  would be                                                              
good for  agriculture in  the state.   [Part of her  testimony was                                                              
lost due to teleconference malfunction.]                                                                                        
                                                                                                                                
Number 2482                                                                                                                     
                                                                                                                                
CO-CHAIR HUDSON  pointed out that  somewhere along the  line, they                                                              
have to trust the people who have  a vested interest in the state.                                                              
He said that  he believes it is  a constructive bill, and  he does                                                              
not think that it is trying to shut  the Administration out of the                                                              
policy-making process.                                                                                                          
                                                                                                                                
MS. CARROLL responded that it isn't  that they don't trust people;                                                              
it  is the  ability for  an Administration  to have  some sort  of                                                              
discretion over  policy.  She  pointed out that  Commissioner John                                                              
Shively was not  averse to having the board act like  the Board of                                                              
Forestry,  which  interviews  candidates  for the  job  and  makes                                                              
"picks" for the  commissioner, who then chooses from  that pool of                                                              
candidates.                                                                                                                     
                                                                                                                                
CO-CHAIR  HUDSON stressed  the need  to  let the  industry have  a                                                              
stronger say regarding how they will rehabilitate the industry.                                                                 
                                                                                                                                
Number 2299                                                                                                                     
                                                                                                                                
REPRESENTATIVE  HARRIS  agreed  with Representative  Hudson.    He                                                              
pointed  out  that part  of  what  the agricultural  community  is                                                              
calling for is a continuity over  the years from administration to                                                              
administration.   He pointed out that  the intent of the  board is                                                              
to provide  some of that, and he  does not understand why  the DNR                                                              
is so concerned with losing some control.                                                                                       
                                                                                                                                
MS. CARROLL replied  that she understands his point,  but that the                                                              
department does not think, philosophically, that it will work.                                                                  
                                                                                                                                
Number 2125                                                                                                                     
                                                                                                                                
SIG  RESTAD testified  via teleconference  from Palmer.   He  said                                                              
that he is affiliated  with the grange.  He stated  that he has no                                                              
objection to the way the bill is written at the present time.                                                                   
                                                                                                                                
CO-CHAIR MASEK closed public testimony.                                                                                         
                                                                                                                                
Number 2012                                                                                                                     
                                                                                                                                
REPRESENTATIVE COWDERY made a motion  to move CSHB 116, version 1-                                                              
LS0407\XXX,  Cook,  2/9/00,  out   of  committee  with  individual                                                              
recommendations  and  attached  fiscal  notes.    There  being  no                                                              
objection, CSHB  116(RES) moved from the House  Resources Standing                                                              
Committee.                                                                                                                      
                                                                                                                                
SB  7 - INCREASE LAND GRANT TO UNIV. OF ALASKA                                                                                
                                                                                                                                
Number 1955                                                                                                                     
                                                                                                                                
CO-CHAIR MASEK announced that the  next order of business would be                                                              
CS  FOR  SENATE BILL  NO.  7(FIN)  am,  "An  Act relating  to  the                                                              
University  of Alaska  and university  land,  and authorizing  the                                                              
University of Alaska to select additional state land."                                                                          
                                                                                                                                
Number 1933                                                                                                                     
                                                                                                                                
REPRESENTATIVE  BARNES made  a motion  to adopt  proposed HCS  for                                                              
CSSB 7(RES), version  1-LS0072\V, for discussion.   There being no                                                              
objection,  it  was  so  ordered  and Version  V  was  before  the                                                              
committee.                                                                                                                      
                                                                                                                                
LORALI MEIER, Staff to Representative  Beverly Masek, Alaska State                                                              
Legislature,  serving as  committee aide  for the House  Resources                                                              
Standing  Committee,   explained   that  Version  V   incorporates                                                              
Representative  Masek's  amendment   offered  in  the  meeting  of                                                              
February 7,  2000.  The new language  is on page 4, and  two other                                                              
changes simply  make the rest of  the bill conform to  the changes                                                              
made on page 4.  On page 4, line 26, it read:                                                                                   
                                                                                                                                
     A list  of selections  submitted may  not be  considered                                                                   
     approved  for conveyance  to  the University  of  Alaska                                                                   
     unless the  legislature acts to approve the  list during                                                                   
     the  legislative  session  during  which  the  list  was                                                                   
     submitted.                                                                                                                 
                                                                                                                                
MS. MEIER noted  that the cleanup language appears on  page 8.  On                                                              
line  13, "of  the  later"  was removed.    On  line 14,  "or  the                                                              
adjournment  of  the legislative  session  during  which the  list                                                              
containing the  land was not  disapproved by the  legislature" was                                                              
removed.  On  line 19, "of the  later" was removed.   And on lines                                                              
20-22, the language  was removed that read "or  the adjournment of                                                              
the legislative session during which  the list containing the land                                                              
was not disapproved by the legislature."                                                                                        
                                                                                                                                
Number 1562                                                                                                                     
                                                                                                                                
JIM  POUND, Legislative  Aide  for  Senator Robin  Taylor,  Alaska                                                              
State Legislature,  testified briefly on behalf  of Senate Taylor,                                                              
the  prime  sponsor.  He indicated  Senator Taylor will  work with                                                              
both sides  on the matter to  achieve a university land  bill that                                                              
everyone can  be proud  of.  He  explained that  the goals  are to                                                              
transfer the  selection process of  state land for  the University                                                              
of Alaska and  to show good faith  to Congress.  He  urged members                                                              
to move HCS CSSB 7(RES), Version V, from committee.                                                                             
                                                                                                                                
Number 1444                                                                                                                     
                                                                                                                                
REPRESENTATIVE  COWDERY made  a motion  to move  HCS CSSB  7(RES),                                                              
version    1-LS0072\V,    from     committee    with    individual                                                              
recommendations and attached fiscal notes.                                                                                      
                                                                                                                                
REPRESENTATIVE  JOULE  objected   and  stated  that  he  has  some                                                              
concerns  with  the bill  as  it  relates  to the  other  boroughs                                                              
involved.                                                                                                                       
                                                                                                                                
A roll  call vote  was taken.   Representatives Whitaker,  Harris,                                                              
Cowdery,  Hudson and  Masek voted  in  favor of  moving the  bill.                                                              
Representatives  Morgan, Barnes, Joule  and Kapsner  voted against                                                              
it.   Therefore, HCS  CSSB 7(RES) moved  from the House  Resources                                                              
Standing Committee by a vote of 5-4.                                                                                            
                                                                                                                                
Number 1264                                                                                                                     
                                                                                                                                
REPRESENTATIVE BARNES commented that  she believes in the disposal                                                              
of state lands, but that in the disposal  of state lands they have                                                              
to be careful in how they are disposing  of it so that the returns                                                              
come to  the state.   She added that  she has always  had concerns                                                              
with the bill.  [HCS CSSB 7(RES) was moved from committee.]                                                                     
                                                                                                                                
ADJOURNMENT                                                                                                                     
                                                                                                                                
Number 1172                                                                                                                     
                                                                                                                                
REPRESENTATIVE  MASEK  adjourned   the  House  Resources  Standing                                                              
Committee meeting at 2:30 p.m.                                                                                                  
                                                                                                                                

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