HB 226-ORGANIC FOOD  MS. BARBARA BITTNEY, staff to Representative Bill Stoltze, sponsor, explained that HB 226 simply adopts the federal definition of "organic." Since the federal government changed the definition and standards for "organic," produce can no longer be certified as organic within the State of Alaska without this legislation. Organic producers must go to Oregon, Washington, and other states for certification. This legislation will create a state certification program within Alaska. Inspectors will fly to Alaska but Alaskans who are familiar with local agriculture can certify that produce is organic. Last year, Representative Harris introduced this same legislation [HB 432] but it was not enacted before the end of the session. MS. BITTNEY told members when the federal definition of "organic" was enacted the certification cost was increased. That increase from $500 to between $1500 and $3000 was significant for smaller producers. Many organic farmers sell to farmers markets; it is not a high volume industry. Anyone who sells $5000 or more of organic produce must be certified. She clarified that the House Finance Committee zeroed out the fiscal note and plans to fund the program with program receipts. SENATOR ELTON said the original fiscal note had a cost of $37,000 per year. He asked the number of organic farmers in Alaska who could cover that cost. MS. BITTNEY could not give a number but said there are three farmers markets in Anchorage, one in Eagle River, one in Fairbanks, one in Homer, one in Soldotna, and Delta and Talkeetna plan to start farmers markets. In addition, there are some very large agricultural farms in her area. She said the number is fairly significant. SENATOR ELTON asked if this will be a cheaper alternative than flying an inspector to Alaska. MS. BITTNEY said her hope is that by having a state certification program, Alaska will eventually have in-state inspection, which will significantly reduce the cost. CHAIR OGAN stated: I'd just like to say, you know, my district - in fact in my neighborhood we have one of the best organic farmers - Larry DeVilbiss. I literally - I drank more carrot juice after recovering from my heart attack last year and I can tell you what - that stuff is good. I know it sounds disgusting but the Mat Valley carrots are the sweetest carrots in the world. I mean they're really, really good and you throw a little apple in there and it's full of calcium and really good stuff. I attribute a lot of my good health today due to a vigorous organic carrot program. In fact I'm going back on it when I get home. I miss them. That's weird for me - you're talking a meat and potatoes guy - anyway.... SENATOR SEEKINS said he is very much in support of this bill because he produces organic fertilizer from his herd of horses. SENATOR LINCOLN noted the federal regulations now recognize wild salmon as organic and asked Ms. Bittney if that interacts with HB 226. MS. BITTNEY said HB 226 strictly applies to agricultural products. Meats are dealt with in a different section of statute but that is something that could be explored. SENATOR LINCOLN said she thought Ms. Bittney said HB 226 pertains to more than agricultural products. MS. BITTNEY said she was referring to herbs and essential oils from lavender, for example. CHAIR OGAN recognized the presence of Representative Stoltze. He then noted that Ms. Bittney said a farmer must have certification to sell over a certain amount of produce but no amount is included in the bill. MS. BITTNEY said the amount is listed in the federal guidelines, which require anyone selling under $5,000 per year in organic products to meet the standard; anyone selling $5,000 or more must have certification. If a state official went on-site and found a farmer did not have certification, that farmer could be fined. She clarified the limit set on the fines is up to $10,000. The Department of Natural Resources (DNR) would set the actual fine amounts in regulation. SENATOR ELTON asked if DNR would be required to do enforcement in Seattle if produce was shipped from Alaska to Seattle. MS. BITTNEY said when a farm is certified, an inspector reviews the entire operation. Right now, inspectors often look at the end product but it is impossible to determine if it meets the federal guidelines. According to the U.S. Code, an organic farmer will have to keep three-years' worth of documentation on how the soil was amended and the soil would be subject to testing. The Code contains a long list of sprays and other products that can and cannot be used. SENATOR ELTON asked if anything in HB 226 will require DNR to enforce the labeling requirements outside of Alaska. MS. BITTNEY said she would have to get an answer to that question. SENATOR DYSON said he is leery about creating more government. CHAIR OGAN took public testimony. MR. MARK REMPEL, an organic farmer from Palmer, stated support for HB 226. He said he was disappointed that the same bill did not pass last year because he was forced to go outside of Alaska to get his certification. MR. RIVER BEAN, President of the Alaska Organic Association, told members that up until the fall of last year, his organization could certify organic growers. However, that can no longer be done under the new federal rule. He asked the legislature to support HB 226 because it will allow the organic farmers in Alaska to get their produce certified by the State of Alaska rather than by another state. Also of concern is that many farmers in the state are unaware of the serious consequences of using the word "organic" with their produce. Farmers who are mislabeling their produce could be fined up to $10,000 if federal enforcement were to occur. That kind of a fine would break most of those farms. He believes those farms are selling more than $5,000 worth of produce and would have to go out-of-state for certification. He said last year he paid $350 to have his farm certified as organic; this year the cost to get certified by Washington State would be more than $2,000, which is unaffordable. He said his association would like to see an agricultural inspector in Alaska, which could be an outcome of HB 226. SENATOR WAGONER asked how many commercial organic farmers work in Alaska. MR. BEAN said that four were certified last year. He believes there are about 40 smaller scale organic farmers. MR. SHANE HERR, a third generation carrot farmer, said he sees HB 226 as a necessary evil for economic development. CHAIR OGAN said that many people have the perception that farming is not a viable industry in Alaska but that is not true in his district. TAPE 03-46, SIDE B  CHAIR OGAN said that farmers, like fishermen, are free market risk takers, which he has a lot of respect for. He then moved HB 226 from committee with its zero fiscal note from the House Finance Committee. SENATOR SEEKINS objected. SENATOR DYSON said he is very concerned that the House has chosen to not fine parents whose children burn down schools and slash tires yet this House bill fines the poor farmers $10,000. CHAIR OGAN called Senator Dyson's comments out of order. SENATOR DYSON stated objection to the motion. SENATOR LINCOLN stated objection to the motion because the committee had not heard testimony from farmers in the Delta area. A roll call vote was taken. The motion to pass HB 226 from committee failed with Senators Stevens, Dyson, Seekins, Elton and Lincoln opposed, and Chair Ogan in favor, who then moved to reconsider the vote. All members then voted in favor, therefore the motion to move HB 226 from committee passed unanimously. SENATOR SEEKINS asked that the record show that Representative Stoltze had turned three shades of red. CHAIR OGAN adjourned the meeting at 4:28 p.m.