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." Co-Chair Therriault provided members with a proposed committee substitute, work draft #1-LS0407\Q, Cook, 3/23/00 (copy on file). Co-Chair Mulder MOVED to ADOPT work draft #1-LS0407\Q, Cook, 3/23/00. There being NO OBJECTION, it was so ordered. JOE BALASH, STAFF, REPRESENTATIVE THERRIAULT explained that a number of areas needed technical changes, which were made in the committee substitute. Changes were made to address the concerns of the Department of Law and the Department of Natural Resources. In section 1, page 2, line 9 the following language was added: "An appointed member may be removed from office by the governor if the governor first provides a written statement of the reasons for removal to the member and makes the statement available to the public." In the previous version a member could only be removed for cause. Mr. Balash observed that the language in subsection (d) was tightened to address concerns regarding ethics. It prohibits a member from having an existing loan or contract restructured. On line 29 "immediate family member" and "official action" have the meanings given in AS 39.52.960. In subsection (e) the appointment of the board director is made by the commissioner from a list submitted by the board. The list must have at least two persons. Sections 2 - 4 were not changed. Section 5 removes existing language regarding when a loan is delinquent. It was reduced to receipt of payment by the board or the director. This was the recommendation of an audit report. The delinquency penalty is not needed in statute. Representative Williams referred to page 5, line 28. He asked for clarification. Mr. Balash observed that there was some question if the Board would have to meet in order to receive payment. The director of the board can receive the payment. Section 9 removes language exempting restructuring from the length of time that there was a limitation on existing loans. Section 11 applies to all loans under the statute. Co-Chair Therriault observed that Representative Harris sponsored a bill dealing with interest rates on loans. Some of the language in HB 116 duplicates and conforms to Representative Harris' bill. REPRESENTATIVE JEANNETTE JAMES spoke in support of the legislation. She maintained that the legislation accomplishes its goals. She stressed that changes of the director of the Division of Agriculture have been a problem. She observed that there is a problem keeping good directors. ELIZABETH HICKERSON, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW testified via teleconference. She noted that the committee substitute addresses concerns by the Department of Law. There are no legal issues remaining. SCOTT MILLER, PRESIDENT, DELTA FARM BUREAU, DELTA JUNCTION testified via teleconference in support of the legislation. ROBERT WELLS, DEPARTMENT OF NATURAL RESOURCES stated that the concerns of the Department of Natural Resources were addressed. The Department of Natural Resources supports the legislation. He noted that the fiscal note would remain essentially the same. There would be a need for more meetings of the board due to additional responsibilities: $10 thousand dollars were added. He observed that the interest rate is similar to HB 203. The interest rate could be reduced, which could lead to increased loan activity. Representative James observed that the Board has been paying the cost of their application. Co-Chair Mulder observed that the fiscal note moves from a fixed to an adjustable rate. Mr. Wells stressed that it would be hard to quantify the fiscal impact. Short-term loan rates could be different. The Board is generally very fiscally conservative. ART GRISWOLD, DELTA JUNCTION testified via teleconference in support of the legislation. The Alaska Highway Grange also supports the bill. Co-Chair Mulder MOVED to report CSHB 166 (FIN) out of Committee with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CSHB 116 (FIN) was REPORTED out of Committee with a "do pass" recommendation and with a fiscal impact note by the Department of Natural Resources, published date 2/11/00.