<?xml version="1.0" encoding="us-ascii"?><InstanceReport xmlns:xsd="http://www.w3.org/2001/XMLSchema" xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance"><Version>2.4.0.8</Version><ReportLongName>000140 - Disclosure - Note 1 - Organization and Summary of Significant Accounting Policies: Organization (Policies)</ReportLongName><DisplayLabelColumn>true</DisplayLabelColumn><ShowElementNames>false</ShowElementNames><RoundingOption /><HasEmbeddedReports>false</HasEmbeddedReports><Columns><Column FlagID="0"><Id>1</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><LabelSeparator>

</LabelSeparator><CurrencyCode /><FootnoteIndexer /><hasSegments>false</hasSegments><hasScenarios>false</hasScenarios><MCU><KeyName /><CurrencySymbol /><contextRef><ContextID>D130101_130630</ContextID><EntitySchema>http://www.sec.gov/CIK</EntitySchema><EntityValue>0000859921</EntityValue><PeriodDisplayName /><PeriodType>duration</PeriodType><PeriodStartDate>2013-01-01T00:00:00</PeriodStartDate><PeriodEndDate>2013-06-30T00:00:00</PeriodEndDate><Segments /><Scenarios /></contextRef><UPS /><CurrencyCode /><OriginalCurrencyCode /></MCU><CurrencySymbol /><Labels><Label Key="CalendarSupplement" Id="0" Label="6 Months Ended" /><Label Key="Calendar" Id="1" Label="Jun. 30, 2013" /></Labels></Column></Columns><Rows><Row FlagID="0"><Id>1</Id><IsAbstractGroupTitle>true</IsAbstractGroupTitle><LabelSeparator>

</LabelSeparator><Level>1</Level><ElementName>us-gaap_PolicyTextBlockAbstract</ElementName><ElementPrefix>us-gaap_</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsCalendarTitle>false</IsCalendarTitle><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><FootnoteIndexer /><Cells><Cell FlagID="0" ContextID="" UnitID=""><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText /><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>xbrli:stringItemType</ElementDataType><SimpleDataType>string</SimpleDataType><IsTotalLabel>false</IsTotalLabel><UnitID>0</UnitID><Label>Policies</Label></Row><Row FlagID="0"><Id>2</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><LabelSeparator>

</LabelSeparator><Level>2</Level><ElementName>us-gaap_BusinessDescriptionAndBasisOfPresentationTextBlock</ElementName><ElementPrefix>us-gaap_</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsCalendarTitle>false</IsCalendarTitle><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><FootnoteIndexer /><Cells><Cell FlagID="0" ContextID="D130101_130630" UnitID=""><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>&lt;!--egx--&gt;&lt;p style='margin:0in;margin-bottom:.0001pt;layout-grid-mode:line;text-align:justify'&gt;&lt;u&gt;Organization&lt;/u&gt;&lt;/p&gt; &lt;p style='margin:0in;margin-bottom:.0001pt;layout-grid-mode:line;text-align:justify'&gt;&amp;nbsp;&lt;/p&gt; &lt;p style='margin:0in;margin-bottom:.0001pt;layout-grid-mode:line;text-align:justify'&gt;NTCI-II is a limited partnership formed under the California Revised Local Partnership Act as of January 12, 1990. The Partnership was formed to invest primarily in other limited partnerships (&amp;#147;Local Partnerships&amp;#148;) which own and operate multifamily housing complexes that are eligible for low income housing federal income tax credits (the &amp;#147;Housing Tax Credit&amp;#148;). The general partner of the Partnership is National Partnership Investments, LLC (the &amp;#147;General Partner&amp;#148; or &amp;#147;NAPICO&amp;#148;), a California limited liability company. The General Partner is a subsidiary of Bethesda Holdings II, LLC, a privately held real estate asset management company (&amp;#147;Bethesda&amp;#148;). The business of NTCI&amp;#150;II is conducted primarily by NAPICO. The Partnership shall continue in full force and effect until December 31, 2030, unless terminated earlier pursuant to the Partnership Agreement or law.&lt;/p&gt; &lt;p style='margin:0in;margin-bottom:.0001pt;layout-grid-mode:line;text-align:justify'&gt;&amp;nbsp;&lt;/p&gt; &lt;p style='margin:0in;margin-bottom:.0001pt;layout-grid-mode:line;text-align:justify'&gt;The General Partner has a one percent interest in the operating profits and losses of the Partnership. The limited partners will be allocated the remaining 99 percent interest in proportion to their respective investments.&lt;/p&gt; &lt;p style='margin:0in;margin-bottom:.0001pt;layout-grid-mode:line;text-align:justify'&gt;&amp;nbsp;&lt;/p&gt; &lt;p style='margin:0in;margin-bottom:.0001pt;layout-grid-mode:line;text-align:justify'&gt;Upon total or partial liquidation of the Partnership or the disposition or partial disposition of a project or project interest and distribution of the proceeds, the General Partner will be entitled to a property disposition fee as mentioned in the partnership agreement.&amp;#160; The limited partners will have a priority item equal to their invested capital plus 6 percent priority return as defined in the partnership agreement.&amp;#160; This property disposition fee may accrue but shall not be paid until the limited partners have received distributions equal to 100 percent of their capital contributions plus the 6 percent priority return. Disposition fees have not been paid or accrued.&lt;/p&gt; &lt;p style='margin:0in;margin-bottom:.0001pt;layout-grid-mode:line;text-align:justify'&gt;&amp;nbsp;&lt;/p&gt; &lt;p style='margin:0in;margin-bottom:.0001pt;layout-grid-mode:line;text-align:justify'&gt;At June 30, 2013 and December 31, 2012, the Partnership had outstanding 72,032 limited partnership interests.&lt;/p&gt;</NonNumbericText><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>nonnum:textBlockItemType</ElementDataType><SimpleDataType>na</SimpleDataType><ElementDefenition>The entire disclosure for the business description and basis of presentation concepts.  Business description describes the nature and type of organization including but not limited to organizational structure as may be applicable to holding companies, parent and subsidiary relationships, business divisions, business units, business segments, affiliates and information about significant ownership of the reporting entity.  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