HOUSE BILL NO. 226 An Act relating to the sale, offer for sale, representation, and labeling of food or other agricultural products as organic, and to the state organic certification program; and providing for an effective date. Representative Stoltze introduced the bill noting that Co- Chair Harris staff had done a lot of work on this issue during the past two legislative sessions. BARBARA BITNEY, STAFF, REPRESENTATIVE BILL STOLTZE, stated that HB 226 was a measure to bring Alaska in line with the federal definition of "organic". In 2001, the final rule for the federal definition of "organic" was adopted; the law allowed for a transition period from mid-2001 to October, 2002, giving states 14 months to come into line with the federal definition of organic. HB 432 was introduced in April 2002 with the language needed to make the change. It nd did not pass before the 22 Legislative session adjourned. HB 226 is back this year, making it a very simple measure to bring the State of Alaska's definition of organic agricultural products in line with the federal definition. It will create an Alaska organic certification program providing in-state certification for organic agricultural producers, processors and handlers. At this time, operators are paying to fly certification specialists to Alaska whose fees may be as high as $1,500 to $3,000 dollars to verify Alaskan operations comply with the federal organic standards. With passage of HB 226, qualified inspectors would complete the inspection process, with the final certification process being performed by a designated State official. Representative Stoltze voiced concern with the fiscal note. He was not sure that the amount was justified. He noted that there is a large presence of United States Drug Administration (USDA) officials, whom the State should be able to rely upon for technical assistance. Whatever the decision of the Committee regarding the note, Representative Stoltze indicated that he wanted to get the bill through the House. He added that Senator Green was in support of the bill on the Senate side and that it was her intent to "trim" the note. Co-Chair Williams asked the responsibilities associated with the requested position. Ms. Bitney explained that the State would continue to bring outside inspectors to Alaska. The State will need to review all documentation and sign off on the certification for it. It would be a ½ time position. She believed that the fiscal note was minimal. Co-Chair Harris noted that he would like to zero out the note. He asked if a part time person would be hired or would they be using someone already in the Department. Ms. Bitney responded that it would be someone within the Department. Co-Chair Harris asked if there was a program within the Department where a fee could be associated with the costs to pay that amount. Ms. Bitney responded that was a possibility that had not yet been explored. Co-Chair Harris interjected that through regulations, the Department could impose a fee for the users. He proposed that the Committee modify the fiscal note, taking the $37 thousand dollars from general funds and put it under $37 thousand dollars from program receipts, which would zero out the general fund draw. Representative Stoltze commented that it had been difficult to get a "straight answer" from the federal bureaucracy. Co-Chair Williams encouraged that Co-Chair Harris work with Representative Stoltze and the Department on the fiscal note. Co-Chair Harris advised that it would be appropriate to move the bill out with the fiscal note changed and placing the $37 thousand dollars under general fund program receipts. Co-Chair Harris MOVED that MOTION. There being NO OBJECTION, the fiscal note was revised. Representative Hawker inquired if that change would need to be reflected in the bill. RIVER BEAN, (TESTIFIED VIA TELECONFERENCE), PRESIDENT, ALASKA ORGANIC ASSOCIATION, PALMER, commented that in the past, his company had been certifying organic farms in the State of Alaska. Under the organic program rule, they could no longer do that. The federal government took that over as of October 22, 2002. The State can no longer use the word "organic" without certification, which affects a large number of farmers in the State. These farmers cannot afford to go to the State of Washington to certify. On behalf of all the organic farmers in the State, Mr. Bean requested support for coming in line with the federal government standards so that Alaska can call their produce "organic". Mr. Bean agreed to pay a user fee to maintain the organic status. Representative Croft asked about the federal criteria and if each state had to separately meet the criteria. Mr. Bean replied that anyone that applies for accreditation can certify. The Alaska Organic Association cannot afford to be accredited with the federal government. There are over 30 states that have state programs and a number of private companies that are accredited with the federal government. The federal government does not provide the certification but rather the accreditation. Representative Croft asked if that needed to be done either through private industry or through the government. Mr. Bean stated that was correct. He reiterated that their association couldn't afford to do it on their own. GERALD DEVILBISS, (TESTIFIED VIA TELECONFERENCE), ALASKA ORGANIC ASSOCIATION, WOLVERINE FARMS, PALMER, encouraged Committee members to pass the bill. He supported implementing a user fee to help cover costs. He mentioned that there is a big part of Alaska agriculture that is getting "swept under the rug". He voiced his appreciation to Representative Stoltze for bringing this issue to the State Legislature's awareness. SHANE HERR, (TESTIFIED VIA TELECONFERENCE), ALASKA ORGANIC ASSOCIATION, ORGANIC FARMER, WOLVERINE FARMS, PALMER, encouraged passage of the bill. He stressed it would be advantageous to the State of Alaska. Mr. Herr commented that tourism capitalizes on Alaskan grown products. He believed that there could be federal funding available to help the State with the receipts. The farmers cannot support the entire tab but would be supportive of a user fee. Representative Stoltze voiced his appreciation for those people that testified. He recognized how labor intensive the work they do is. Representative Stoltze MOVED to report HB 226 out of Committee with individual recommendations and with the new adjusted fiscal note. There being NO OBJECTION, it was so ordered. HB 226 was reported out of Committee with "do pass" recommendation and with a revised fiscal note by the Department of Natural Resources.