Legislature(1995 - 1996)

02/14/1995 03:10 PM House RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
               HOUSE RESOURCES STANDING COMMITTEE                              
                       February 14, 1995                                       
                           3:10 p.m.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Joe Green, Co-Chairman                                         
 Representative Bill Williams, Co-Chairman                                     
 Representative Scott Ogan, Vice Chairman                                      
 Representative Alan Austerman                                                 
 Representative Ramona Barnes                                                  
 Representative Irene Nicholia                                                 
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 Representative John Davies                                                    
 Representative Pete Kott                                                      
 Representative Eileen Maclean                                                 
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 Confirmation of Robert Hinman to the Big Game Commercial Services             
 Board                                                                         
                                                                               
  Confirmation Advanced                                                        
                                                                               
 Confirmation of Gene Burden, Commissioner, Department of                      
 Environmental Conservation                                                    
                                                                               
  Confirmation Advanced                                                        
                                                                               
 Confirmation of John Shively, Commissioner, Department of Natural             
 Resources                                                                     
                                                                               
  Confirmation Advanced                                                        
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 ROBERT HINMAN, Appointee                                                      
 Big Game Commercial Services Board                                            
 P.O. Box 3419                                                                 
 Juneau, AK   99803                                                            
 Phone:  790-2754                                                              
 POSITION STATEMENT:  Answered questions regarding his confirmation            
                                                                               
 GENE BURDEN, Commissioner-Designee                                            
 Department of Environmental Conservation                                      
 410 Willoughby Ave., Ste. 105                                                 
 Juneau, AK   99801                                                            
 Phone:  465-5050                                                              
 POSITION STATEMENT:  Answered questions regarding his confirmation            
                                                                               
 JOHN SHIVELY, Commissioner-Designee                                           
 Department of Natural Resources                                               
 400 Willoughby Ave.                                                           
 Juneau, AK   99801                                                            
 Phone:  465-2400                                                              
 POSITION STATEMENT:  Answered questions regarding his confirmation            
                                                                               
 TAPE 95-15, SIDE A                                                            
 Number 000                                                                    
                                                                               
 The House Resources Committee was called to order by Co-Chairman              
 Green at 3:10 p.m.  Members present at the call to order were                 
 Representatives Green, Williams, Ogan, Austerman and Nicholia.                
 Members absent were Representatives Barnes, Davies, Kott and                  
 MacLean.                                                                      
                                                                               
 CO-CHAIRMAN GREEN stated Mat-Su, Seward and Tok were on                       
 teleconference for listen only.                                               
                                                                               
 ROBERT HINMAN CONFIRMATION                                                  
                                                                               
 ROBERT HINMAN, APPOINTEE, BIG GAME COMMERCIAL SERVICES BOARD                  
 (BGCSB), stated he has been a resident of the state for                       
 approximately 30 years and spent most of his career working for the           
 Alaska Department of Fish and Game (ADF&G) as a wildlife biologist.           
 He said there are very few parts of the state he has not had the              
 opportunity to see.  After his retirement, he was appointed to the            
 Legislative Task Force on Guiding and Game and following that, he             
 was appointed to the BGCSB, of which he is currently serving as               
 Vice Chairman.                                                                
                                                                               
 MR. HINMAN stated he is not now, has never been, or anticipates               
 ever being a guide.  However, he felt the industry is one which               
 must be nurtured, protected, and controlled.  He stressed guiding             
 is a very important industry in the state and is important to the             
 state's visitors as well.  He said the work of the BGCSB has been             
 very concentrated in the last several years due to the overthrow of           
 the old system by the Supreme Court in the Oswichek case.  He noted           
 at that time, the legislature abolished the old board and                     
 established the BGCSB.  He explained the BGCSB has basically                  
 reinvented the whole system.  The legislature established new                 
 legislation which the board is implementing.                                  
                                                                               
 MR. HINMAN said it has taken the board this long to implement most            
 of the system and added that it is not complete yet.  He felt the             
 board has devised a workable system for the management of the                 
 guiding industry in the state.                                                
                                                                               
 Number 096                                                                    
                                                                               
 CO-CHAIRMAN GREEN said statutes governing the board "prohibit                 
 guide-outfitting, transporting, and other big game commercial                 
 service activities that are unsportsmanlike, unethical, unsafe and            
 against principles of game conservation, degrading to a                       
 professional subject to this chapter, or that adversely affects               
 natural resources."  He stated there has been talk about a bill               
 introduced earlier, as well as street talk about the few bad guides           
 who have spoiled the reputation of guides as a group.  He wondered            
 if Mr. Hinman has any plans to address these rogue guides.                    
                                                                               
 MR. HINMAN responded most businesses have a few sour apples and he            
 agreed that has been the case in the guiding industry as well.  He            
 said one important aspect of the BGCSB is that it not only is a               
 regulatory board, but also has quasi-judicial powers to take action           
 on individuals who have violated the laws and if necessary, assess            
 fines or remove licenses.  He pointed out that the BGCSB has taken            
 actions on literally dozens and dozens of guides in the past                  
 several years.  The board has removed licenses, suspended licenses,           
 levied heavy fines, and has served notice to the industry that the            
 board is intending to be even more strict in the future.                      
                                                                               
 MR. HINMAN said obviously the board has not been able to get all of           
 the bad apples yet.  He stated the investigator the board has at              
 the Department of Commerce has made significant strides in the past           
 year in working more cooperatively with the Department of Public              
 Safety and has been able to be more effective and efficient in                
 bringing cases before the BGCSB.  He noted the investigator                   
 presently has 108 cases under consideration.                                  
                                                                               
 REPRESENTATIVE ALAN AUSTERMAN recalled there had been discussions             
 regarding the need for the BGCSB.  He said many people say the                
 program can be run through ADF&G.  He wondered how Mr. Hinman felt            
 about that suggestion.                                                        
                                                                               
 MR. HINMAN replied the program could be run by the ADF&G or any               
 other organization.  He said at one time the program was run under            
 the ADF&G.  He noted that much has changed since that time and if             
 ADF&G or anyone else would take it over, they would need to have              
 the same amount of or more manpower and funds to do it as under the           
 present situation.  He stated in regard to the need for the                   
 program, he felt if the state did not have any type of control by             
 this board or any other group over the professional guides, there             
 would be a situation of chaos--people who are not qualified would             
 be running around purporting to be guides.                                    
                                                                               
 MR. HINMAN pointed out there currently are statutes which say                 
 nonresidents hunting big game must have a guide, as well as all               
 aliens hunting anything must have a guide.  He said as long as the            
 state has that type of requirement for visitors, it would seem                
 logical the state has a moral duty to maintain quality of that                
 system these people must abide by.                                            
                                                                               
 Number 191                                                                    
                                                                               
 REPRESENTATIVE AUSTERMAN noted that Mr. Hinman's resume indicated             
 he served as a charter boat captain.  He said charter boat                    
 operations has some of the same connotations as big game hunting              
 and he wondered if some day in the future the charter boat industry           
 will require the same type of services that the BGCSB provides the            
 guiding industry.                                                             
                                                                               
 MR. HINMAN responded he can foresee it, but he was not sure the               
 charter boat business has the same degree of necessity that big               
 game hunting has.  He stressed the state does not require                     
 nonresident fishermen go out with a charter boat captain.  He said            
 the way the charter boat industry has grown in the past few years,            
 there will be a need for increasing controls of some nature.                  
                                                                               
 REPRESENTATIVE SCOTT OGAN noted for the record he has known Mr.               
 Hinman for almost two years while serving on the BGCSB.  He stated            
 he has no reservations about Mr. Hinman being confirmed to the                
 BGCSB.                                                                        
                                                                               
 Number 240                                                                    
                                                                               
 GENE BURDEN CONFIRMATION                                                    
                                                                               
 GENE BURDEN, COMMISSIONER-DESIGNEE, DEPARTMENT OF ENVIRONMENTAL               
 CONSERVATION (DEC), said he started in his role as commissioner-              
 designee for DEC on January 16.  He stated he is a ten year                   
 resident of Alaska and during his time in Alaska he first worked              
 for a small law firm and then accepted employment with Tesoro                 
 Alaska where he worked for a little over eight years.  He added               
 that he had worked for Tesoro for approximately three years in                
 their corporate office in Texas.                                              
                                                                               
 MR. BURDEN stated most of his earlier management experience was in            
 the area of labor relations and human resources.  He said he has              
 limited experience in government but noted he did work for the city           
 of Dallas.  He received his bachelors and masters degrees at the              
 University of Texas at Arlington and law degree from St. Mary's               
 University in San Antonio.  He told committee members his                     
 professional experience with General Telephone & Electronics ranged           
 from labor relations administrator to area personnel manager to               
 labor relations director.  Upon joining Tesoro in 1989 he was the             
 corporate manager of labor relations at a time when they had a                
 variety of different unions, and activities ranging from mining on            
 the East Coast to refineries in the Lower 48.                                 
                                                                               
 MR. BURDEN said he served in a variety of capacities at Tesoro                
 Alaska starting as their personnel manager and on to Vice President           
 of Administration & Government Affairs.  He then assumed                      
 responsibility for the environmental function.  He stated during              
 his time in the state he has had many opportunities to deal with              
 the regulatory agencies as well as the legislature relating to                
 Tesoro's business.                                                            
                                                                               
 REPRESENTATIVE AUSTERMAN noted there are many problems facing                 
 Alaska, particularly problems relating to the water and sewer                 
 issues in the rural areas.  He asked Mr. Burden to comment on what            
 he sees as the biggest obstacle confronting his department.                   
                                                                               
 MR. BURDEN responded there is a twofold problem relating to the               
 water and sewer issues in the state--the magnitude of the problem             
 in terms of the total expenses needed to address rural sanitation             
 issues which really exist all over the state and then having                  
 systems that the people being served by them can maintain and not             
 present a continuing financial obligation to the state.                       
                                                                               
 Number 327                                                                    
                                                                               
 CO-CHAIRMAN GREEN said one of the issues which came up during the             
 18th Legislature regarding the 470 fund is that originally that               
 fund was to establish some response depots around the state in                
 strategic locations and that has never happened.  He asked Mr.                
 Burden to comment on establishing those depots.                               
                                                                               
 MR. BURDEN responded he does not have an established position on              
 that issue.  He said he would like to work with the department and            
 the legislature to determine if spending money on establishing                
 those depots is the best use of dollars, in view of the existence             
 of private spill response operations around the state.  He felt               
 there are locations where it probably will serve the state's best             
 interest to have certain equipment capabilities where it is not               
 going to occur otherwise.  He stressed he would like to have the              
 opportunity to explore what is already in place, from a private               
 sector standpoint, and ensure that where the department spends                
 money is truly areas where it is truly needed.                                
                                                                               
 Number 350                                                                    
                                                                               
 REPRESENTATIVE RAMONA BARNES stated the law is very specific in               
 regard to spill response depots.  She asked Mr. Burden if it was              
 his intent to ignore the law or amend the law.                                
                                                                               
 MR. BURDEN replied no.  He stressed he wants to have a reason basis           
 for where and what the department puts in these locations and if              
 the department concludes that the law, as it is currently                     
 structured, is not in the best interest of the state, then he would           
 want to consult with the legislature to determine a means to fix              
 the problem.  He said designating locations and what is in those              
 locations is not specified in the law and is something the                    
 department needs to evaluate and make recommendations on.                     
                                                                               
 REPRESENTATIVE BARNES recalled when that law went into effect, Mr.            
 Burden worked for Tesoro and the push for the law was not so DEC              
 could have a slush fund but to establish spill response depots.               
 Then when $50 million was reached, the fund would shut off until a            
 disaster occurred.  She felt the surcharge was a phony way to get             
 a nickel a barrel from the oil companies.  She noted the                      
 legislature has done some rectifying in the past.  She said the oil           
 companies are still paying three cents per barrel and asked Mr.               
 Burden if he views that money as part of the department's budget or           
 money there for a specific purpose.                                           
                                                                               
 MR. BURDEN stated the two cents per barrel goes to establishing the           
 $50 million reserve which now has been reached.  He said the three            
 cents goes to help fund ongoing prevention programs which is                  
 considered a part of the department's budget under the current                
 structure.  All of those spill prevention response activities which           
 the department has are funded from those funds.                               
                                                                               
 Number 403                                                                    
                                                                               
 CO-CHAIRMAN GREEN said the Regional Citizens' Advisory Councils,              
 the producers, and DEC have indicated a desire to have a generic              
 contingency plan.  He asked Mr. Burden to comment on that plan.               
                                                                               
 MR. BURDEN stated he wholeheartedly supports simplifying the                  
 contingency plan process and the contents of the contingency plans.           
 He noted he has been on the other side of the table preparing                 
 contingency plans.  He expressed concerns that the contingency plan           
 has expanded to the point where in the event of another accident,             
 the plan may be getting so complicated with material not                      
 specifically relevant to the response, that it needs to be                    
 readdressed.  He noted the approach Representative Green mentioned            
 is one that has been suggested.  He added the department has had              
 communication with one of the major cooperatives on the issue.  He            
 would like to steer a policy which will enable the department to              
 simplify the process to the extent possible under current state               
 law.                                                                          
                                                                               
 CO-CHAIRMAN GREEN stated Anchorage and Fairbanks have both                    
 experienced problems with air quality.  He wondered what Mr.                  
 Burden's attitude is about the use of alternate fuels such as                 
 compressed natural gas (CNG) and liquified natural gas (LNG).                 
                                                                               
 MR. BURDEN responded he is excited about the prospects of gas as a            
 fuel.  There is a supply of gas in the proximity of Anchorage and             
 there are initiatives in Anchorage presently involving the                    
 municipality, the state, and private industry to try and make CNG             
 available on a broader basis.  He stated CNG burns clean, has a               
 good reputation for safety, and offers a great opportunity to use             
 another means to try and reduce the air emission issues in                    
 Anchorage and Fairbanks.  He said unfortunately Fairbanks does not            
 have the proximity to natural gas.                                            
                                                                               
 Number 446                                                                    
                                                                               
 REPRESENTATIVE OGAN stated he is aware of some abuses of power by             
 DEC including taking creative routes of enforcement.  He asked Mr.            
 Burden to comment on his position in regard to working with                   
 businesses.                                                                   
                                                                               
 MR. BURDEN replied he is concerned about that perception and                  
 situations which can drive that perception.  The department just              
 completed a couple of days of strategic planning for setting                  
 specific objectives for the department and one of the categories              
 was in the area of public contact.  He said that category will                
 involve customer service training for those people who have a lot             
 of public contact.  He stated if one looks at some of the many                
 routes for that perception of the department, there are complex               
 rules and regulations being dealt with.  He noted a lot of the                
 regulated community does not have the background and familiarity              
 with the process.  Therefore, part of the department's role is to             
 educate the regulated community and the public as to what the laws            
 and requirements are.  He felt there are things which can be                  
 modified while still enforcing the laws of the state without                  
 jeopardizing the objectives of protecting human health and the                
 environment.                                                                  
                                                                               
 REPRESENTATIVE OGAN felt DEC and other agencies have quasi-judicial           
 powers that circumvent due process rights.  He said when an agency            
 such as DEC has the authority, without a court action, to deprive             
 someone of the their rights to use their property, he has a                   
 problem.  He asked Mr. Burden to be sensitive to the matter.                  
                                                                               
 Number 503                                                                    
                                                                               
 REPRESENTATIVE BILL WILLIAMS asked Mr. Burden to comment on the               
 water quality standard issue.                                                 
                                                                               
 MR. BURDEN said the water quality standards were signed into law              
 approximately one hour before Governor Knowles was sworn into                 
 office.  Shortly thereafter, it became clear there was going to be            
 a lawsuit to try and stop the implementation of those regulations             
 on several grounds.  One of the grounds was there had been                    
 substantial modifications in the regulations from the time they               
 were last public noticed to the time they were signed.  He stated             
 the regulations which went into effect January 5, 1995, are the               
 regulations which the Environmental Protection Agency (EPA) uses in           
 making decisions regarding permanent applicants in the national               
 pollutant discharge elimination system (NPDES) permit status.                 
                                                                               
 MR. BURDEN said some of the consideration involved concern about              
 having further delays in a number of major NPDES permits that were            
 working their way through the EPA review process.  As an                      
 alternative, a suggestion was made that there is a vehicle for an             
 individual or a group to use to seek a redress of a piece of or all           
 of the regulations.  He stated when he began his position on                  
 January 16, on his desk was a request to repeal those regulations             
 and declare an emergency.  He elected to deny that request.                   
                                                                               
 MR. BURDEN added there was also a request to reopen all the                   
 regulations for reconsideration.  He studied that request and                 
 talked to people in Region X, EPA and consulted with staff.  He               
 said one area he determined the regulations were deficient was the            
 absence of the antidegradation provision which is going to be a               
 requirement in the regulations.  He stated there were four topics             
 raised by the Sierra Club Legal Defense Fund and after review, he             
 recommended that regulations be reopened to hear comments on those            
 topics.  He stated that process is underway and comments will be              
 received until April 19, 1995.  Following the comment period, there           
 will be an opportunity to make a decision one way or the other on             
 whether the department wants to recommend new regulations or change           
 regulations.                                                                  
                                                                               
 MR. BURDEN said in the course of this review and assuming that the            
 antidegradation provision ends up in the final regulations, he has            
 been advised by the Attorney General's Office it will take at least           
 a year before those regulations or any change in regulations could            
 become law.  He stated in the interim, the regulations signed                 
 December 5 are in effect and will remain in effect if and until               
 there is a change in regulations generated by DEC.  He noted permit           
 applications currently being reviewed by EPA are being reviewed               
 under existing water quality regulations.                                     
                                                                               
 Number 560                                                                    
                                                                               
 CO-CHAIRMAN WILLIAMS asked how the situation will affect the                  
 Ketchikan Pulp Company (KPC) water quality permit.                            
                                                                               
 MR. BURDEN said he cannot respond directly because he does not have           
 any predisposition as to whether there will be modifications to the           
 regulations having a further effect on KPC.  He added that he had             
 met with representatives of that entity.  He felt the                         
 antidegradation provision, which he expects to be in the new                  
 regulations, will not have an impact on KPC.                                  
                                                                               
 REPRESENTATIVE BARNES recalled that Mr. Burden had stated the                 
 regulations went into effect a few hours before Governor Knowles              
 becoming the Governor.  She wondered if he was implying that was              
 somehow improper.                                                             
                                                                               
 MR. BURDEN replied no.                                                        
                                                                               
 REPRESENTATIVE BARNES clarified there had been a year or more of              
 work on the current water quality standard regulations which were             
 signed by the previous Administration.                                        
                                                                               
 MR. BURDEN stated two and one-half or three years of work had been            
 done.                                                                         
                                                                               
 REPRESENTATIVE BARNES felt with the extensive hearings held, anyone           
 who wanted a chance to comment certainly had the opportunity.                 
                                                                               
 MR. BURDEN agreed there was a great deal of comment submitted on              
 these regulations.                                                            
                                                                               
 REPRESENTATIVE BARNES asked if the department is now fearful                  
 because of a lawsuit by the Sierra Club Legal Defense Fund.                   
                                                                               
 MR. BURDEN replied that is a good question.  He said in regard to             
 the four or five areas in the regulations being reviewed, the                 
 department plans to give the most straightforward review as                   
 possible.  He suspects there will be decisions made which do not              
 satisfy the requests made by the Sierra Club Legal Defense Fund and           
 they may want to take further action.                                         
                                                                               
                                                                               
 REPRESENTATIVE BARNES stated she does not care if the Sierra Club             
 Legal Defense Fund sues when the state has followed all of the due            
 process in establishing regulations.                                          
                                                                               
 Number 596                                                                    
                                                                               
 CO-CHAIRMAN GREEN observed there has been a significant amount of             
 money expended for permits by various corporate structures for re-            
 establishing mining.  He noted their problems come from the EPA but           
 also noted that EPA and DEC dovetail a lot.  He wondered if there             
 is anything which can be done to help these companies get through             
 this permit process.                                                          
                                                                               
 MR. BURDEN stated he has met with Echo Bay representatives and a              
 number of community representatives.  He pointed out that Echo Bay            
 has spent $80 million in development thus far and another $80                 
 million has been spent on Kensington.  He noted there are                     
 environmental problems associated with both of those projects which           
 have not been sorted out yet.  He said he is encouraged by an                 
 indication from the Echo Bay representatives and the community of             
 a willingness to get together and try to sort out some of the                 
 issues separating the group.  He felt there should be a common                
 ground to address community concerns.  He stated one of those                 
 concerns is very significant and that is the effect on Juneau's               
 water supply.  He believed there are some alternatives available              
 and Echo Bay is willing to look at some flexible approaches to deal           
 with that issue and others.                                                   
                                                                               
 Number 625                                                                    
                                                                               
 REPRESENTATIVE OGAN expressed concern that the Alaska government              
 and the agencies who regulate businesses are sending out an ominous           
 message to the business community in this country and abroad that             
 it is not a good idea to do business in Alaska and gave several               
 examples.  He noted the state has had a serious decline in oil                
 revenues and there is a need to send out a message to the business            
 community that Alaska is a better, friendlier, and easier place to            
 do business with.                                                             
                                                                               
 MR. BURDEN stated the objective of the Administration is to help              
 improve Alaska's ability to conduct business and have people come             
 to the state and invest.  He said many of the components of that              
 perspective, whether it is a state like Alaska or some foreign                
 country that happens to appear temporarily attractive to investment           
 dollars, involve the stability and consistency on the regulatory              
 side of the business.  He stressed that is something the department           
 has to be very sensitive to.  He noted that many of these issues              
 are controversial and subject to diametrically opposed views of the           
 parties.                                                                      
                                                                               
 MR. BURDEN said he will try to bring to the department a                      
 consistency and an effort to take into account the concerns from              
 not only the development side but of the public side as well,                 
 relative to environmental health issues associated with these                 
 projects.  The department can help promote development by looking             
 at some of the success stories which have occurred in the state in            
 recent years and gave an example.  He stated it is important to               
 study the success stories and determine what they did right so the            
 department can impart that to not only the businesses but also to             
 the department to speed these processes up.                                   
                                                                               
 Number 664                                                                    
                                                                               
 CO-CHAIRMAN GREEN stated when the Chernobyl problem came up, there            
 was department personnel who went to that area and areas in Europe            
 and suggested a plethora of radiological monitoring devices.  He              
 wondered if the department can perhaps maximize the use of some of            
 the federal monies available.  He said at one time it seemed like             
 the department was more interested in finding additional turf                 
 rather than taking care of the turf they had.                                 
                                                                               
 TAPE 95-15, SIDE B                                                            
 Number 000                                                                    
                                                                               
 MR. BURDEN stated the department has identified specific objectives           
 and he believes, as Vince Lombardi once said, "we take care of the            
 basics better than anyone else and everything else falls into                 
 place".  He said radiological monitoring is a serious matter and              
 something worthy of consideration.  He was not sure that DEC will             
 be involved in monitoring in foreign countries, however, because it           
 is a state department or federal issue.  If in fact the need                  
 arises, the department would be talking to people in Washington and           
 agencies at the federal level to try and have that activity take              
 place.                                                                        
                                                                               
 REPRESENTATIVE IRENE NICHOLIA noted for the record that she                   
 supports Mr. Burden as commissioner of DEC.  She hoped that Mr.               
 Burden, once he is confirmed, establishes better relationships with           
 the small businesses in rural Alaska because they have concerns               
 about their relationship with DEC.                                            
                                                                               
 REPRESENTATIVE NICHOLIA made a MOTION to FORWARD the name of Gene             
 Burden to the joint committee for confirmation.                               
                                                                               
 CO-CHAIRMAN GREEN asked if there were any objections.  Hearing                
 none, the MOTION PASSED.                                                      
                                                                               
 REPRESENTATIVE OGAN made a MOTION to FORWARD the name of Bob Hinman           
 to the joint committee for confirmation.                                      
                                                                               
 REPRESENTATIVE NICHOLIA asked if there was a letter of transmittal            
 for Robert Hinman from former Governor Hickel because his name is             
 not included in a letter dated February 13, 1995, from Governor               
 Knowles indicating his appointments.                                          
                                                                               
 CO-CHAIRMAN GREEN stated he has not seen a letter of transmittal.             
                                                                               
 REPRESENTATIVE NICHOLIA felt the appointment is not legal if there            
 is not a letter of transmittal.                                               
                                                                               
 CO-CHAIRMAN GREEN stated it is not up to the committee to determine           
 whether or not it is legal, but appreciated Representative                    
 Nicholia's comments.  He said the committee's responsibility is to            
 determine, from the standpoint of resources, if he is the one the             
 committee agrees to pass on.  He stressed the legality of it would            
 have to be addressed on the floor.                                            
                                                                               
 REPRESENTATIVE NICHOLIA OBJECTED to the motion.                               
                                                                               
 CO-CHAIRMAN GREEN asked for a roll call vote.  Voting in favor of             
 the motion were Representatives Ogan, Austerman, Williams and                 
 Green.  Voting against the motion was Representative Nicholia.                
 The MOTION PASSED 4-1.                                                        
                                                                               
 Number 106                                                                    
                                                                               
 JOHN SHIVELY CONFIRMATION                                                   
                                                                               
 JOHN SHIVELY, COMMISSIONER-DESIGNEE, DEPARTMENT OF NATURAL                    
 RESOURCES (DNR), stated he came to Alaska in 1965 as a VISTA                  
 volunteer and noted a large part of his work in the state has been            
 with the Native community.  He said he also worked as Chief of                
 Staff for Governor Sheffield, was Chairman and Chief Executive                
 Officer for United Bank of Alaska for a short period of time, and             
 has been a consultant for some time.  He commented in regard to the           
 background he brings to the DNR--because of his involvement with              
 the Native community, he has had long standing involvement in                 
 legal, regulatory, and legislative issues relating to land.  He               
 mentioned when he worked for NANA Development Corporation, he was             
 the lead negotiator in putting together the Red Dog deal with                 
 COMINCO.  He added that he did quite a lot of work for the oil                
 industry, including the fact that NANA has a share of the Endicott            
 oil field and he was involved in the early unitization discussions            
 about that oil field.                                                         
                                                                               
 Number 143                                                                    
                                                                               
 REPRESENTATIVE BARNES stated she has known John Shively ever since            
 he came to Alaska and has known him in all the positions he has               
 occupied.  She said they have been on opposite sides of the table             
 many times but has never enjoyed working with anyone more than she            
 has with him.  She stressed Mr. Shively has her wholehearted                  
 support.  She added this is the first time she has ever expressed             
 support for any person running for commissioner in any                        
 Administration.                                                               
                                                                               
 REPRESENTATIVE NICHOLIA added that she also supports Mr. Shively's            
 appointment.                                                                  
                                                                               
 REPRESENTATIVE OGAN said the Chickaloon River in his district has             
 been blocked by some private land owners who own land on adjacent             
 sides with the idea they have rights extending into the navigable             
 waterway.  He wondered what Mr. Shively is going to do to assure              
 that public access to all navigable waters remains open to                    
 everyone.                                                                     
                                                                               
 MR. SHIVELY asked if the situation being referred to is a private             
 individual land grant from either the state or federal government.            
                                                                               
 REPRESENTATIVE OGAN replied it is an individual land grant from the           
 federal government.                                                           
                                                                               
 MR. SHIVELY clarified the owners are claiming people cannot walk up           
 the sides.                                                                    
                                                                               
 REPRESENTATIVE OGAN said the owners have strung a cable across the            
 river and want to charge people money to float the river.                     
                                                                               
 MR. SHIVELY stated he does not have a legal answer but from what he           
 does know, it seems to be an absolute violation of state law.  The            
 water column is clearly not owned by those individuals.  He said if           
 the situation has not been turned over to the Attorney General's              
 Office, he would be happy to do it.                                           
                                                                               
 Number 208                                                                    
                                                                               
 CO-CHAIRMAN GREEN clarified that Mr. Shively is aware of the dust             
 stirred up in the 18th legislature about SB 308 which was a fix to            
 the lease sale 78 in the Cook Inlet.  He said Governor Knowles has            
 indicated one of his early agenda items is the repeal of SB 308.              
 He asked Mr. Shively to comment.                                              
                                                                               
 MR. SHIVELY responded it was his understanding that the Governor              
 did campaign on that issue but whether or not it is one of his                
 early priorities, he did not know.  He also understood that the               
 President of the Senate made a strong statement about that                    
 legislation.  He said at this point, he has no plans and he has not           
 been asked to do anything in regard to that legislation.                      
                                                                               
 REPRESENTATIVE BARNES clarified that Mr. Shively is familiar with             
 the law and the charges to him under the law.                                 
                                                                               
 MR. SHIVELY replied yes.                                                      
                                                                               
 REPRESENTATIVE BARNES stated as long as SB 308 is on the books, Mr.           
 Shively is bound to uphold that law.                                          
                                                                               
 MR. SHIVELY said that is correct.  He added that in his previous              
 life, he supported that bill.                                                 
                                                                               
 Number 246                                                                    
                                                                               
 CO-CHAIRMAN WILLIAMS stated there were a number of regulations                
 introduced last year for changes in Title 38.  He wondered if Mr.             
 Shively had looked at those regulations.  He also asked if the                
 Administration will support those changes and have them introduced            
 again.                                                                        
                                                                               
 MR. SHIVELY replied those regulations had passed his review for re-           
 introduction.  He said the committee will be seeing some Title 38             
 revisions.                                                                    
                                                                               
 CO-CHAIRMAN GREEN stated Mr. Shively has been an outspoken advocate           
 of Native rights and now he is the chief administrator of the                 
 state's land.  He wondered how Mr. Shively plans to resolve                   
 possible differences.                                                         
                                                                               
 MR. SHIVELY responded he has different responsibilities now.  He              
 recalled back in 1983 when he was appointed Chief of Staff, a                 
 senator commented that he would have to broaden his horizons.  He             
 felt he did broaden his horizons and is comfortable he can do that            
 now.  He stated he recognizes the things he advocated for, both as            
 a representative of a Native organization and as a representative             
 of a business, might not be the same from the inside.  He added               
 that he knows he has different responsibilities and those                     
 responsibilities are bound by the laws of the state.  He felt he              
 can uphold those responsibilities and stressed it is his intent to            
 do so.                                                                        
                                                                               
 CO-CHAIRMAN GREEN said it has been mentioned in the paper that the            
 petroleum industry is indicating a strong desire to get into a                
 cooperative basis as part of an incentives package that the state             
 of Alaska, in competition with major dollars around the world,                
 could come up with.  He asked Mr. Shively to comment on incentives            
 which might help spur the state's economy.                                    
                                                                               
 MR. SHIVELY stated incentives are a tricky issue because the                  
 department has two responsibilities.  The first responsibility is             
 to get the resources development but the second responsibility is             
 to get a fair return for the citizens of the state.  He said                  
 deciding that mix is a challenge everyone faces.  He felt there are           
 times when incentives will be important, particularly for getting             
 certain developments off the ground.  He indicated the department             
 has had meetings with the industry already.                                   
                                                                               
 MR. SHIVELY said he is not sure there will be an answer to the                
 incentives question during this session.  He felt there may be a              
 partial answer.  He thought the issue deserves a great deal of                
 study both by the legislature and the Administration.  He stated              
 incentives need to be done because the state needs to be                      
 competitive in the world market.  He noted the state has lived off            
 of Prudhoe Bay for a long time and there are a variety of other               
 opportunities in the state.  He mentioned that the Red Dog project            
 got an incentive in a way.  The state made a major investment                 
 building a road to port.  He expressed support for incentives.                
 Mr. Shively stressed these developments need to pay for themselves            
 and need to show a return for the state.                                      
                                                                               
 REPRESENTATIVE BARNES noted in regard to the Red Dog project and              
 the road, that money was paid back to the state with interest.                
                                                                               
 MR. SHIVELY said that was correct.  The incentive gave the Red Dog            
 project a head start and yet the state got its capital back and               
 more.  He felt those are the kinds of incentives which should be              
 looked at.                                                                    
                                                                               
 CO-CHAIRMAN GREEN noted that not all selections for both the state            
 and Natives, through the Native corporation land selection, have              
 been resolved.  He asked how Mr. Shively anticipates his role in              
 trying to negotiate between a selection and an overselection.                 
                                                                               
 MR. SHIVELY said if there are areas the state is particularly                 
 interested in, the state needs to go to the Native corporation and            
 determine if the overselections can be lifted.  He noted the danger           
 for the state has always been that if the Native corporation knows            
 the state is interested, they may be interested themselves.  He               
 stated it is going to take some time and felt it is in the best               
 interest of everyone to take time on those overselections.  The               
 state wants to maximize the benefit for everyone.  If Native                  
 corporations get resources and develop those resources, that is a             
 benefit to the state and a benefit generally to some of the poorer            
 citizens of the state.  He stressed it is not a competitive                   
 situation but one where if it is looked at together, there is an              
 opportunity to maximize the amount of land in the state having                
 economic potential that the federal government no longer owns.                
                                                                               
 Number 348                                                                    
                                                                               
 CO-CHAIRMAN GREEN stated the south Barrow gas field has provided              
 energy to the community of Barrow for some time.  He noted there              
 are many villages that could possibly get into the same situation             
 and possibly get away from leaking fuel oil tanks.  He asked Mr.              
 Shively to comment on the possibility of the state and someone with           
 expertise, such as the petroleum industry, trying to develop                  
 alternate energy in the remote areas of the state.                            
                                                                               
 MR. SHIVELY responded there is a lot of opportunity there and added           
 there is also opportunity with the federal Department of Energy who           
 is also very interested in shallow gas.  He stated there is gas               
 being generated off of coal which is buried and those gas resources           
 certainly could be used to lower energy costs.  He recalled an                
 earlier discussion regarding the problems of villages meeting                 
 environmental regulations.  He felt there is not enough money in              
 the state to fix the problems of having rural communities meet the            
 current federal and state laws as they relate to oil storage.                 
 Therefore, the state is going to have to look for other                       
 alternatives.                                                                 
                                                                               
 REPRESENTATIVE AUSTERMAN made a MOTION to FORWARD the name of John            
 Shively to the joint committee for confirmation.                              
                                                                               
 CO-CHAIRMAN GREEN asked if there were any objections.  Hearing                
 none, the MOTION PASSED.                                                      
                                                                               
 ADJOURNMENT                                                                   
                                                                               
 There being no further business to come before the House Resources            
 Committee, Co-Chairman Green adjourned the meeting at 4:15 p.m.               
                                                                               
                                                                               

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