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ARIZONA STATE LEGISLATURE

Forty-ninth Legislature – Second Regular Session

 

SENATE NATURAL RESOURCES, INFRASTRUCTURE AND PUBLIC DEBT AND

HOUSE OF REPRESENTATIVES NATURAL RESOURCES AND RURAL AFFAIRS

COMMITTEE OF REFERENCE FOR THE SUNSET REVIEW OF

THE DEPARTMENT OF AGRICULTURE

 

Minutes of Interim Meeting

Tuesday, November 30, 2010

House Hearing Room 4  --  1:00 p.m.

 

 

Co-Chairman Jones called the meeting to order at 1:06 p.m. and attendance was noted by the secretary.

 

Members Present

 

Senator John Nelson, Co-Chairman

Representative Russ Jones, Co-Chairman

Senator Albert Hale

Representative Patricia Fleming

Senator Steve Pierce

Representative Bill Konopnicki

 

Representative Lynne Pancrazi

 

Representative Franklin Pratt

 

Members Absent

 

Senator Amanda Aguirre

 

Senator Sylvia Allen

 

 

 

Co-Chairman Jones stated that the Committee will take testimony only today, starting with the Auditor General’s report, followed by the Department of Agriculture, and then other interested parties who have signed up to speak.  A final hearing will take place on December 14, 2010, for final recommendations and action by the Committee.

 

Shan Hays, Performance Audit Manager, Office of the Auditor General, presented information on a performance audit and sunset review of the Department of Agriculture (Attachment 1).  She explained that two reports were issued, one about the Department’s food safety and quality assurance inspection programs, and a second about the twelve statutory sunset factors.  She stated that the Department agreed with most of those findings and agreed to implement all of the recommendations that were directed to it.

 

Ms. Hays outlined the mission of the Department of Agriculture which is to regulate and support Arizona agriculture while protecting consumers and natural resources.  She described several of the many functions of the Department and outlined budget and staffing numbers. 

 

 

Ms. Hays explained the food safety report findings:

 

Ms. Hays explained one of the twelve statutory sunset factors, complaint handling, and discussed the recommendations that the Department agreed to implement.

 

Senator Pierce asked how the audit handled meat inspections and plants.  Ms. Hays replied that USDA and Arizona State standards are the same and that the USDA is required to take over if a state does not do the inspections.  She added that there would be no need to alter or close down any facilities or alter requirements if this took place.

 

Co-Chairman Jones asked what percentage of the dairy program is funded by the private sector and fees.  Ms. Hays replied that the percentage historically has been one percent, but increased to five percent; she added that a recent report which has not yet been verified showed that the percentage is as high as 17 percent.  She stated that in some states the industry covers most of the cost, in some only 17 percent and in some even less than that.

 

Co-Chairman Jones asked for information about livestock complaints, specifically which were on cattle and which were on horses.  He also asked, of the horse complaints, which were on commercial animals and which were on individual, privately-owned animals.  Ms. Hays explained that in one recent six-month period the Department issued 464 animal welfare calls, 72 percent of which were related to horses and 28 percent regarding livestock including cattle, goats, and sheep.  She stated that the Department would probably know how the horse complaints were distributed.

 

Don Butler, Director, Department of Agriculture, addressed the issue of complaints, explaining that the handling of each complaint takes time to investigate properly and to resolve, sometimes as long as one or two years if the courts are involved.  He stressed that complaints are taken very seriously by his Department.

 

Mr. Butler distributed a handout dealing with food safety funding (Attachment 2).  He informed the Members that 95 percent of cattle slaughtered in Arizona are federally inspected.

 

John Hunt, Director of Animal Services, Department of Agriculture, stated that his Division includes the animal health and welfare program as well as the meat and poultry inspection program, and the dairy and eggs programs that the audit focused on.  He stated that he does not agree with the auditor’s assessment that the state would be better served by not participating in a cooperative state-federal meat inspection program.

 

Mr. Hunt distributed a handout to address questions about revenue from fees (Attachment 3).  He discussed projected income from this year’s fees and added that 2008 fees still go into the state’s general fund.  He explained that his Division has experienced a decline in general fund support, adding that he uses a flexible fee structure to allow for adequate staffing.

 

Co-Chairman Jones stated that he believes the state has a responsibility for public health and safety and that the costs to secure these should not be entirely on the producers.  He asked about the fee increases and their impact on the private sector versus the state general fund.  Mr. Hunt replied that he thought Ms. Hays’ figure of 17 percent for the dairy program was close, and that the general fund covers the entire meat inspection program but is reimbursed a portion at year-end from the Department.  He stated that the funding structure is complex, but generally Arizona’s fees are much higher than any other state with a similar industry.

 

Co-Chairman Jones stated that it is his understanding that there is no differentiation in statute between equine complaints dealing with commercial horses and those dealing with private ownership.  Mr. Hunt concurred with that statement, adding that his department investigates all equine complaints because horses are classified as livestock in Arizona.

 

Co-Chairman Nelson asked how much cost is added to the price-per-pound of meat by inspection requirements.  Mr. Hunt replied that he did not have that economic analysis. 
Co-Chairman Nelson commented that this information is needed as the economy becomes global.

 

Co-Chairman Jones asked about the effects of legislative sweeps on top of the 23 percent budget cuts.  Co-Chairman Nelson stated that the public health, safety and welfare will be affected because the policing functions of the Department would be diminished.  Mr. Hunt concurred, but stated that flexibility in fees does allow the Department to maintain the integrity of the inspection programs.

 

Co-Chairman Jones inquired if the current funding is adequate if there were no legislative sweeps of funds.  He also asked if sweeps did happen, what programs might fail. 
Co-Chairman Nelson added that this is pay-for-service which goes into the cost-per-pound of meat, so it eventually comes back to the public.

 

Ellis Jones, Acting Director, Arizona Office of Pest Management, addressed the Members to discuss upcoming legislation to move the Office to the Department of Agriculture. 
Co-Chairman Jones explained that this topic was not part of today’s agenda and that, until the legislation goes forward, it is not in order for this meeting.

 

Mark Ellsworth, President, Yuma Fresh Vegetable Association, explained that the group is comprised of growers and shippers.  He discussed the transition over the years from food quality to food safety, adding that fees have been reduced and procedures standardized.  He explained that programs such as Arizona Iceberg Lettuce Research Council and Arizona Citrus Research Council are supported by industry fees;  no general money is appropriated for these services.  He urged the Legislature to stop all sweeps of fruit and vegetable fund monies and to allow the councils to keep working.

 

Bas Aja, Director of Public Affairs, Arizona Cattlemen’s Association, stated his support for the continuation of the Department of Agriculture.  He explained that the Auditor General report has an urban bias and stressed the importance of services to the rural areas of the state.

 

Co-Chairman Jones asked if the Department is the appropriate organization to handle complaints about mistreatment of horses when those animals are like family pets.  Discussion ensued.

 

Robert Shuler, Arizona Horse Council, stated his opinion that the Department is the appropriate organization to handle these complaints, adding that some are not valid because the person registering the complaint is not familiar with livestock.

 

Philip Bashaw, Arizona Farm Bureau, stated that he supports continuation of the Department of Agriculture.  He commented on two of the recommendations of the audit:  dairy safety program costs and transferring meat and poultry inspections to the USDA.  He stated that the dairy program fees are now consistent with those of other states.  He explained that 90 percent of slaughterhouses operate on the state meat inspection program provided by the Department of Agriculture and the Bureau would like to see this continue. 

 

Senator Pierce asked what percentage of the general fund is allocated to the Department of Agriculture, because its budget has already been cut to the bone and rural Arizona is greatly affected by this.  He stressed the importance of protecting agriculture in Arizona.

 

Co-Chairman Jones stated that final recommendations and motions regarding the continuation of the Department of Agriculture for another ten years will be presented at a meeting to be scheduled on December 14, 2010.

 

Without objection, the meeting adjourned at 2:31 p.m.

 

 

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Jane Dooley, Committee Secretary

December 10, 2010

 

(Original minutes, attachments and audio on file in the Office of the Chief Clerk; video archives available at http://www.azleg.gov)

 

 

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COR - SENATE NRIPD AND HOUSE NRRA

                        November 30, 2010

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