HB 116-BOARD OF AGRICULTURE AND CONSERVATION  CHAIRMAN HALFORD announced the committee would take up HB 116 and that a series of amendments had been prepared. The committee took a brief at-ease from 3:30 to 3:32 p.m. CHAIRMAN HALFORD informed committee members that the sponsor had prepared three amendments to HB 116. SENATOR MACKIE moved to adopt Amendment 1 for the purpose of discussion. There being no objection, Amendment 1 was adopted. BARBARA COTTING, staff to Representative Jeanette James, sponsor of HB 116, informed committee members that the three amendments are the result of a subcommittee meeting held yesterday. Amendment 1 deals with the ethics portion of the bill. It gives the Board authority to establish standards for loans but removes the Board's authority to make final decisions on granting those loans. The amendment will remove any conflict of interest and allow board members to have loans. CHAIRMAN HALFORD asked who will make the final determination of which applicants get a loan. MS. COTTING replied the loan officer will in conjunction with the director. CHAIRMAN HALFORD asked if the agricultural community is comfortable with that much power resting in the director. MS. COTTING replied yes, for that particular part of the function. SENATOR MACKIE asked if the subcommittee discussed the issue of finding people to serve on the board since most qualified people will have members of their families involved in agriculture. SENATOR GREEN stated this board was modeled after the Commercial Fishing and Agriculture Bank (CFAB). SENATOR TAYLOR asked if the board will establish the standards and criteria upon which a loan may be granted, rather than decide who will get a loan. SENATOR GREEN said that is correct. SENATOR LINCOLN asked if her concern about immediate family members was removed. She also asked to hear from the staff at the Department of Natural Resources (DNR) and asked whether they were advised of the changes. SENATOR GREEN said DNR staff were advised and given copies. CHAIRMAN HALFORD asked Mr. Wells to address the first of the three amendments. MR. ROB WELLS, Director of the Division of Agriculture, stated his understanding of the intent of this legislation was to invest more power in the board. He said he thinks the language on page 3 of the bill that says, "may employ staff as directed by the board as responsible for the daily operations of the Agriculture Revolving Loan Fund" could create a potential conflict. SENATOR LINCOLN asked Mr. Wells whether DNR supports Amendment 1 and, if not, what DNR's concerns are. MR. WELLS said he has not had a chance to confer with the Commissioner on the amendments. [His next statement was inaudible.] SENATOR MACKIE asked Mr. Wells what his concern is. He stated many questions regarding conflicts of interest were raised at the last hearing and that Amendment 1 takes the approval of loans out of the board's hands. MR. WELLS said the board will direct the director regarding the daily operations of the fund. The board is still responsible for the disposal of the assets of the Agricultural Revolving Loan Fund and will write regulations that address the loans and the disposal of assets. Therefore, just because the board is removed from the actual vote does not mean it is not directing the director. Number 864 CHAIRMAN HALFORD asked Ms. Hickerson to comment. MS. ELIZABETH HICKERSON, Assistant Attorney General, said the Department of Law still has concerns. The Legislature has the ability to totally exempt boards and commissions from the Executive Ethics Act. This amendment provides that the director will now make the loans. Therefore, a board member could get a loan yet the board member directs the director which creates the potential for abuse regarding the loan. She stated Section 16 is problematic because under that section, the board disposes of property. The board is not restricted from purchasing property. A board member could play a major role in determining which parcel will be disposed of and when and how it will be disposed. The board member could actively participate in drafting an RFP and then submit a proposal and be awarded the property and have the board approve it. She thought that to be one of the true forms of conflict of interest. SENATOR GREEN asked Ms. Hickerson which version of the bill she was working from. MS. HICKERSON said the version she received from Representative James' office this morning. SENATOR GREEN asked Ms. Hickerson if she was working from Version Q. MS. HICKERSON said she was. CHAIRMAN HALFORD announced that the committee would recess to the call of the Chair to allow Senators to attend the floor session and to allow time for more work to be done on the bill. He then recessed the meeting at 3:43 p.m.