Legislature(2003 - 2004)

02/05/2003 01:30 PM CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
    SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                  
                        February 5, 2003                                                                                        
                           1:30 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Thomas Wagoner, Chair                                                                                                   
Senator Alan Austerman                                                                                                          
Senator Robin Taylor                                                                                                            
Senator Georgianna Lincoln                                                                                                      
Senator Kim Elton                                                                                                               
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
Confirmation Hearing: Commissioner, Department of Community and                                                                 
Economic Development- Edgar Blatchford                                                                                          
CONFIRMATION ADVANCED                                                                                                           
PREVIOUS ACTION                                                                                                               
No previous action to record.                                                                                                   
WITNESS REGISTER                                                                                                              
Edgar Blatchford                                                                                                                
Department of Community & Economic Development                                                                                  
PO Box 110800                                                                                                                   
Juneau, AK 99811-0800                                                                                                           
POSITION STATEMENT: Confirmation candidate                                                                                    
ACTION NARRATIVE                                                                                                              
TAPE 03-1, SIDE A                                                                                                             
CHAIR  THOMAS WAGONER  called the  Senate Community  and Regional                                                             
Affairs Standing Committee meeting to  order at 1:30 p.m. Members                                                               
present  were  Senators  Austerman,   Elton  and  Chair  Wagoner.                                                               
Senator Lincoln arrived momentarily.                                                                                            
The matter before  the committee was the  confirmation hearing of                                                               
Commissioner Edgar Blatchford.  He asked him to  step forward and                                                               
tell members about himself.                                                                                                     
EDGAR BLATCHFFORD,  Commissioner of  the Department  of Community                                                               
and  Economic  Development,  informed  members he  has  lived  in                                                               
Seward, Alaska  most of  his life.  After graduating  from Alaska                                                               
Pacific University in  1973, he received his law  degree from the                                                               
University of  Washington Law  School. He  returned to  Alaska as                                                               
the  Alaska  Native  Claims  Settlement  Act  was  being  further                                                               
implemented and  began working as  a lobbyist for  Chugach Alaska                                                               
Corporation on  land trade in  Prince William Sound.  During that                                                               
time  he purchased  the Seward  weekly  Phoenix Log  and when  he                                                             
wasn't working for Chugach Alaska  Corporation, ran what became a                                                               
chain of newspapers in rural Alaska.                                                                                            
In  the  1980's he  received  a  Master  of Science  degree  from                                                               
Columbia University  Graduate School  of Journalism.  He returned                                                               
to  Alaska to  work  for Chugach  Corporation  to coordinate  the                                                               
litigation against all  parties involved in the  Exxon Valdez oil                                                               
In  1990  he  began  serving  in  Governor  Hickel's  cabinet  as                                                               
Commissioner  of   the  Department  of  Community   and  Regional                                                               
Affairs.  With  a  change  of  administration,  he  went  to  the                                                               
University   of  Alaska,   Fairbanks  (UAF)   and  taught   rural                                                               
development  courses. He  then transferred  to the  University of                                                               
Alaska, Anchorage (UAA) to teach journalism.                                                                                    
He served  on the  council and  as vice-mayor  and mayor  for the                                                               
City of Seward.  He is currently on leave from  UAA to accept the                                                               
commissioner position.                                                                                                          
The Department  of Community and Economic  Development (DCED) has                                                               
gone through  various amalgamations  since 1959 when  it started.                                                               
There was a  Department of Commerce and a  separate Department of                                                               
Economic  Development  and in  1970  Governor  Eagan created  the                                                               
Department of Community and Regional  Affairs (DCRA). Its primary                                                               
mission grew out  of the constitutional responsibility  to have a                                                               
local  government agency  to deal  with  issues and  the lack  of                                                               
local government in the Unorganized  Borough, but the Legislature                                                               
attached other responsibilities to it  in the 1970s and 1980s. In                                                               
the 1990s it merged with  the Department of Commerce and Economic                                                               
Development into one large department with four divisions.                                                                      
DCED provides  basic services to  Alaskans. It  provides consumer                                                               
protection  through   the  division  of  banking,   securities  &                                                               
corporations  and  the  division of  insurance  and  professional                                                               
occupations  and business  licensing. It  also promotes  economic                                                               
development  through  domestic  and  international  promotion  of                                                               
tourism.  It  actively  promotes   the  sale  and  acceptance  of                                                               
seafood,  timber, minerals  and  other  products. The  department                                                               
administers  loan programs  through the  division of  investments                                                               
and  works with  communities  to create  local opportunities  for                                                               
local people.                                                                                                                   
The  department houses  the  Alaska  Seafood Marketing  Institute                                                               
(ASMI), Regulatory Commission of  Alaska (RCA), Alaska Industrial                                                               
Development  &   Export  Authority  (AIDEA)  and   Alaska  Energy                                                               
Authority   (AEA),  Alaska   Aerospace  Development   Corporation                                                               
(AADC),  Alaska Science  & Technology  Foundation (ASFT),  Alaska                                                               
Railroad  Corporation (ARRC).  The department  currently has  507                                                               
employees  and  costs the  state  approximately  $32 million  per                                                               
fiscal  year with  staff in  Juneau,  Anchorage, Fairbanks,  Tok,                                                               
Kotzebue,  Nome,  Dillingham,  Bethel and  Kodiak  and  Bellevue,                                                               
Washington.  The   FY  03   budget  is   $151  million   and  the                                                               
unrestricted general  fund portion of  that is $41 million  or 27                                                               
percent of the budget.                                                                                                          
DCED includes two percent of  the statewide, unrestricted general                                                               
funds. The department administers about  $74 million in grants to                                                               
municipalities,  unincorporated   communities,  and  non-profits.                                                               
Funding sources for  the grants include but  aren't restricted to                                                               
the  general  fund,  federal   funds,  Power  Cost  Equalization,                                                               
Science and Technology Foundation  endowment earnings, and inter-                                                               
agency receipts. State revenue sharing  or Safe Communities grant                                                               
programs amount to about $29 million for 2003.                                                                                  
SENATOR   AUSTERMAN   asked   whether  he   had   evaluated   the                                                               
restructuring effects of HB 40.                                                                                                 
COMMISSIONER  BLATCHFFORD  admitted he  hadn't  had  the time  to                                                               
analyze the  impact of the  amalgamation of the  two departments,                                                               
but that he is partial to  the old DCRA responsibilities of being                                                               
an advocate  for municipalities.   When state  government impacts                                                               
communities,  the  municipalities  need  to  participate  in  the                                                               
decision making process.                                                                                                        
SENATOR AUSTERMAN requested a written  analysis on the effects of                                                               
HB 40  at some point  before the  end of the  legislative session                                                               
because when  a move  of that  sort is made,  it is  important to                                                               
critique the action.                                                                                                            
COMMISSIONER BLATCHFFORD assured  him he would receive  a copy of                                                               
his remarks and analysis.                                                                                                       
SENATOR ELTON welcomed the Commissioner back to Juneau.                                                                         
He  asked for  an interpretation  of the  transition team  intent                                                               
regarding restoring  road construction authority to  the governor                                                               
rather than leaving that authority with the Legislature.                                                                        
COMMISSIONER BLATCHFFORD  explained the transition team  meant to                                                               
work  closely  with  local  communities   and  look  at  ways  to                                                               
streamline project  procedures particularly in rural  Alaska. His                                                               
interest is to  work with private landowners to look  for ways to                                                               
access  their  natural resources  if  they  so desire.  The  team                                                               
looked at  ways to  foster economic  development in  rural Alaska                                                               
and determined  it would  be beneficial to  develop a  rural sub-                                                               
cabinet  from DCED,  Department  of Natural  Resources (DNR)  and                                                               
Department of Transportation and Public Facilities (DOT&PF).                                                                    
SENATOR ELTON  saw no mention  of local communities when  he read                                                               
the report. He did see a  prerogative of one branch of government                                                               
in its  support role of  funding projects, but realizes  that was                                                               
not the intent of the transition team.                                                                                          
COMMISSIONER  BLATCHFFORD  assured members  the  team  in no  way                                                               
intended   to  encourage   the  Administration   to  bypass   the                                                               
legislative process.                                                                                                            
SENATOR   LINCOLN   agreed   with   the   Commissioner   on   the                                                               
restructuring of DCRA.                                                                                                          
In the  State of  the State address,  Governor Murkowski  said he                                                               
has  asked DCED  to  work with  Native  regional corporations  to                                                               
determine  how  the state  might  be  able  to help  in  resource                                                               
development. The  Governor said "...a close  working relationship                                                               
between the state and Alaska  Native Corporations can provide the                                                               
economic  engine for  rural Alaska...."  Senator Lincoln  assured                                                               
the Commissioner Native Corporations  provide the economic engine                                                               
for all of Alaska. She asked  for specifics on how the department                                                               
intends to initiate the process.                                                                                                
COMMISSIONER BLATCHFFORD  replied the idea of  working with land-                                                               
based  corporations  began  with  passage of  the  Alaska  Native                                                               
Claims Settlement  Act (ANCSA). It  is a fair attempt  to provide                                                               
an  avenue   for  Alaska  Natives  to   participate  in  economic                                                               
opportunities  in Alaska.  The team  suggested the  state has  an                                                               
obligation  to work  with regional  and  village corporations  to                                                               
look  at priority  projects because  this  area of  the state  is                                                               
growing  rapidly  and  some  type   of  economic  development  is                                                               
necessary or the state will  suffer the consequences. This is the                                                               
reasoning  behind the  formation of  the tri-agency  sub-cabinet,                                                               
but there is not desire to  impose any effort on any corporations                                                               
unless invited.                                                                                                                 
SENATOR  LINCOLN asked  about  the status  of  the second  deputy                                                               
commissioner position established to focus on rural affairs.                                                                    
COMMISSIONER BLATCHFFORD  replied they  are currently  looking at                                                               
all exempt  and partially exempt positions.  Attention is focused                                                               
on  rural Alaska  needs and  the department  recognizes that  the                                                               
natural  resource base  for the  state  is located  there. He  is                                                               
undecided whether  the department  should have two  deputies, one                                                               
deputy,  or  another division.  Currently  just  one position  is                                                               
SENATOR  ELTON  noted  the transition  report  suggested  HB  184                                                               
issues  should be  revisited because  it aligns  the division  of                                                               
insurance regulations  with a Graham Leach  Bliley Act. Consumers                                                               
must  opt-in   or  opt-out  on   sharing  financial   and  health                                                               
information, which  has very real privacy  implications. He asked                                                               
whether  the   department  would   revisit  opt-in   opt-out  for                                                               
individuals doing business in the State of Alaska.                                                                              
COMMISSIONER  BLATCHFFORD  said the  intent  of  the division  of                                                               
insurance is to  protect the consumer. The  insurance industry is                                                               
in  a state  of  crisis  and the  department  is  looking at  all                                                               
insurance issues.  They are  paying very  close attention  to the                                                               
industry as a whole and to what insurance consumers are saying.                                                                 
SENATOR  ELTON thought  changing  the  opt-in opt-out  provisions                                                               
would require new legislation not regulatory change.                                                                            
SENATOR  LINCOLN  said  a  constituent  submitted  the  following                                                               
question for  her to ask: "How  do you perceive the  role of DCED                                                               
and  the  office of  fisheries  and  management and  division  of                                                               
international trade  and development  in our  state's fisheries?"                                                               
She  asked him  to include  ways he  believes the  department can                                                               
improve and support the fishing industry in his answer.                                                                         
COMMISSIONER BLATCHFFORD stated he  has worked on fishing related                                                               
issues  his entire  career  and the  industry is  in  a state  of                                                               
crisis  today. He  and  his  department will  be  a  part of  the                                                               
ongoing  discussions   of  how   to  assist  fishermen   and  the                                                               
processing industry. It is a  huge issue and although suggestions                                                               
have been made, none have, as  yet, found firm footing. The focus                                                               
is to  protect the fisherman,  protect communities and  find ways                                                               
that everyone's interests are fairly and adequately served.                                                                     
SENATOR  LINCOLN asked  Senator Austerman  whether she  needed to                                                               
follow up on the response.                                                                                                      
SENATOR AUSTERMAN replied  it is too early  in the Administration                                                               
to give a concrete answer.                                                                                                      
SENATOR LINCOLN noted the 129  communities she represents dot the                                                               
map and  she is nervous about  further cuts to rural  Alaska when                                                               
she  hears   that  some  agencies  may   need  impact  statements                                                               
detailing outcomes of a five to  ten percent cut. She asked where                                                               
the Commissioner sees cuts that rural Alaska can absorb.                                                                        
COMMISSIONER BLATCHFFORD  said there  is no definitive  answer at                                                               
this time.  He assured  her he takes  the responsibility  to head                                                               
the  agency  seriously  and  is   dedicated  to  providing  local                                                               
services to  the Unorganized  Borough. Any  cuts would  be fairly                                                               
and honestly addressed.                                                                                                         
SENATOR  AUSTERMAN  noted some  things  have  been added  to  the                                                               
department that  are not  tied to  the Alaska  State Constitution                                                               
and legislators  would like  to hear how  involved the  state and                                                               
department should  be in these  areas. He  asked for a  report on                                                               
those types of agencies at a later date.                                                                                        
COMMISSIONER  BLATCHFFORD  replied  they are  flexible  in  their                                                               
SENATOR  ELTON   highlighted  some   of  his   special  interests                                                               
concerning the department:                                                                                                      
   · Sometimes the department hasn't some a very good job of                                                                    
     setting milestones toward goals  and then measuring progress                                                               
     toward those  goals. As a  leader, it's important to  have a                                                               
     good  measuring stick  and  he  hopes that  is  part of  the                                                               
     management strategy.                                                                                                       
   · He is a firm proponent of the ardor approach to economic                                                                   
     development. Homegrown efforts, based on the region, are                                                                   
     sometimes more important than top down initiatives. He is                                                                  
     frustrated at the micro managing of some affiliated                                                                        
   · He complemented the Commissioner on the management team he                                                                 
     is bringing in and expressed the hope he would keep the                                                                    
     equally good managers already in place.                                                                                    
There was no further testimony.                                                                                                 
CHAIR WAGONER asked for a motion.                                                                                               
SENATOR AUSTERMAN made a motion to forward Edgar Blatchford's                                                                   
name as Commissioner of the Department of Community and Economic                                                                
Development to the full Senate for confirmation.                                                                                
There being no objection it was so ordered.                                                                                     
There being no further business to come before the committee,                                                                   
Chair Wagoner adjourned the meeting at 2:10 p.m.                                                                                

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