Legislature(1995 - 1996)
02/13/1995 03:30 PM Senate RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE RESOURCES COMMITTEE
February 13, 1995
3:30 p.m.
MEMBERS PRESENT
Senator Loren Leman, Chairman
Senator Drue Pearce, Vice Chairman
Senator Rick Halford
Senator Robin Taylor
Senator Georgianna Lincoln
COMMITTEE MEMBERS ABSENT
Senator Steve Frank
Senator Lyman Hoffman
COMMITTEE CALENDAR
Confirmation Hearing:
Gene Burden, Commissioner Designee of the Department of
Environmental Conservation
John Shively, Commissioner Designee of the Department of Natural
Resources
PREVIOUS ACTION
No previous action to consider.
WITNESS REGISTER
Gene Burden
Commissioner Designee
Dept. of Environmental Conservation
410 Willoughby Ave., Suite 105
Juneau, Alaska 99801
POSITION STATEMENT: Available to answer questions
John Shively
Commissioner Designee
Department of Natural Resources
400 Willoughby Ave.
Juneau, Alaska 99801-1724
POSITION STATEMENT: Available to answer questions
ACTION NARRATIVE
TAPE 95-9, SIDE A
Number 001
CHAIRMAN LEMAN called the Senate Resources Committee meeting to
order at 3:30 p.m. A quorum was not present as Senator Halford was
temporarily unable to be connected to the meeting through the
teleconference system. CHAIRMAN LEMAN stated the committee would
begin by taking testimony.
GENE BURDEN, Commissioner Designee of the Department of
Environmental Conservation (DEC), gave the following testimony. He
began his appointment as the Commissioner Designee on January 16,
1995. He has some environmental experience, but not a great deal.
He holds both bachelors and masters degrees from the University of
Texas at Arlington, and a law degree from St. Mary's University in
San Antonio. His background has been predominantly in the field of
labor relations. He served as labor relations administrator for
General Telephone and Electronics for a four-state region and took
a variety of other positions within that company. He left GTE to
take a position with Tesoro Petroleum Corporation, headquartered in
San Antonio, and was employed as the corporate manager of labor
relations (1978). At that time, Tesoro had about 4,000 employees
and contracts with a variety of labor unions. After a number of
trips to Alaska, and upon the completion of his law degree in 1983,
he took the Alaska Bar exam, and he and his family moved to Alaska
where he joined a small law firm in Anchorage and practiced civil
law. After one year, he returned to employment with Tesoro, and
remained with that company for 8 1/2 years working in a variety of
capacities. After two to three years he took a position as the
Vice President of Administration of Governmental Affairs. He had
also held the position of Vice President of Marketing, and was a
Senior Vice President of Operations when he resigned. For the last
two years of his employment with Tesoro, the environmental section
of the company was under his area of responsibility. He is
married, has two children, and has been active in a number of
public, social, and professional groups over the years, as listed
in his resume.
SENATOR LEMAN thanked Mr. Burden and established, for the record,
a quorum was present and the meeting was called to order at 3:39
p.m.
MR. BURDEN clarified for the committee that he began his employment
with Tesoro in January of 1979.
SENATOR LINCOLN commented she and her constituents feel DEC tends
to discourage economic well being, and imposes an increasing number
of regulations upon small businesses. She asked Mr. Burden what he
intends to do to foster economic growth, especially in the smaller
communities. MR. BURDEN replied he is identifying requirements
that DEC has the flexibility to modify, or to waive, that save
money and simplify the regulatory environment, especially in small
communities. He pointed out a DEC press release, regarding
drinking water testing, was issued during the last week that may
eliminate the need for up to 8,000 tests. The local communities
will be required to submit applications for waiver of testing for
6 chemicals. These are chemicals that DEC staff has identified as
non-existent in the state, or non-existent in the particular
communities. If this proves successful, it could save up to $2
million in unnecessary drinking water testing without impairing the
health of the community. He emphasized DEC needs to define its
objectives and communicate those so that what is to be accomplished
can be measured and reported to the communities. His key staff is
working on strategic planning exercises and will be operating under
a "management by objectives" scheme that will establish concise
objectives within three to four months. He also plans to improve
the public's understanding of how the department works and, by
doing so, find more opportunities to be a constructive influence on
development while protecting the health and environment of the
state.
Number 194
SENATOR TAYLOR indicated his support of Mr. Burden's candidacy but
expressed concern regarding previous professional relationships.
He explained Mr. Burden would be placed in a position where he
would have to make decisions about the enforcement of serious laws
relating to oil and its handling. He questioned whether Mr.
Burden's background experience might cause a conflict of interest.
He assumed Mr. Burden has met with the Tesoro Refinery Company, and
consulted with them, and that they have consented to permit him to
represent the people of Alaska and this government whose interests
may be adverse to Tesoro's interests. He asked Mr. Burden to
respond. MR. BURDEN explained he did meet with Tesoro during the
course of the last year, both Tesoro Alaska and Tesoro
Petroleum Corporation (his largest client in private practice), to
discuss this. Tesoro has consented and understands that he is
representing the State of Alaska. He indicated he may be even more
careful to ensure there is not the appearance of impropriety in
relation to advice or consideration given to Tesoro versus anyone
else. He appreciated Senator Taylor's question and stated he will
try to do anything he can to avoid any conflict of interest issue.
Number 259
SENATOR TAYLOR stated, for the record, the words he used in his
question, and the words Mr. Burden used in his response, are not
generic words. The words "consultation," and "consent," are found
within the Canons of Ethics, Section 1.9 (Rules of Professional
Conduct) and "adverse interests" are defined in Section 1.7.
SENATOR TAYLOR explained Mr. Burden, because of his unique
confidential or proprietary knowledge, could find himself acting in
a manner very adverse to Tesoro. He asked Mr. Burden how he might
let someone else be responsible for that decision, to make sure
that the public does not have the feeling of impropriety.
MR. BURDEN responded he has thought about what scenario might exist
that would affect only the interests of Tesoro and not the rest of
the State. He suspected there may be an issue on a specific permit
resolution issue, and if the decision would only affect Tesoro, to
avoid any appearance of impropriety, he would convey responsibility
to the Deputy or Program Director. SENATOR TAYLOR stated the only
reason he raised that question is that an attorney is held to a
different standard regarding past client relationships, and he
wanted to give Mr. Burden the opportunity to address the issue.
SENATOR LEMAN expressed his support of Mr. Burden. He inquired
whether Mr. Burden came as part of a package with Michelle Brown,
or if Mr. Burden made the choice of his Deputy Commissioner
independently. He asked what constraints were placed on Mr. Burden
in running the Department. MR. BURDEN replied the Governor has not
placed any strings on the way he is operating the Department. The
Governor has taken an active role in the appointment of deputy
commissioners and directors. In the course of discussions, when
Mr. Burden accepted the nomination, no package deal was raised. He
stated he has worked with Ms. Brown for years, she as an assistant
attorney general, when they represented opposing sides. Governor
Knowles, Ms. Brown and Mr. Burden talked about alternatives, but
Mr. Burden felt Ms. Brown had the qualifications necessary to
provide a balance to "straighten things out." He reiterated he is
very supportive of her appointment and that she is his choice for
Deputy Commissioner.
SENATOR LEMAN asked if Mr. Burden foresees any other significant
management changes in the Department. MR. BURDEN responded he
plans to announce new appointments, which total six, beginning the
following day.
Number 302
SENATOR LEMAN asked Mr. Burden if he was prepared to participate in
the reduction of government services, while continuing to provide
for DEC's mandates. MR. BURDEN was unprepared to answer at this
time, however he was sure of some ways to reduce the costs
associated with the Department's work that would be implemented
quickly. He added that through prudent management some of the
duplication that exists can be eliminated, and some of the services
provided that are not mandated can also be cut. Simultaneously,
there are certain activities that are not being addressed that have
generated a great deal of interest, such as inspecting septic tank
systems around the State. He stated he felt optimistic that
meaningful modifications in the budget could be made, but having
been there only one month, he was reluctant to make any
commitments.
Number 330
SENATOR LINCOLN asked if Mr. Burden has had the opportunity to
visit Bush Alaska in the 10 years he has been a resident of Alaska.
MR. BURDEN responded he had not. SENATOR LINCOLN suggested Mr.
Burden become aware of the different needs among rural, bush, and
urban areas, regarding bulk fuel, oil spill, water quality, solid
waste disposal, and air quality regulations. MR. BURDEN thanked
Senator Lincoln, and told her he and Chuck Clark, the Region X
Director of EPA, would be traveling to several villages in mid-May.
SENATOR TAYLOR added he hoped Mr. Burden would travel to his
district since most of his district does not have any type of
municipal water or sewer system.
Number 384
SENATOR LEMAN asked Mr. Burden about his intent and schedule
regarding his review of the water quality standard regulations.
MR. BURDEN replied those regulations are open for comment on four
sections that were addressed by the Sierra Club in their petition.
A fifth section (the anti-degradation provision) was also included.
The comment period closes April 19. Following the comment period
DEC will review the need to further modify those regulations.
During this process, the regulations that are currently in effect
will remain so. SENATOR TAYLOR asked why that is necessary. MR.
BURDEN explained the regulations in question are the culmination of
approximately 2 1/2 years of rule making and were signed about one
hour before the current Administration took office. The Sierra
Club Legal Defense Fund sought to block those regulations from
taking effect and asked the Administration to revoke them, pending
further study. A Department of Law opinion stated the Sierra Club
was likely to win an injunction to stop the application of those
regulations. The decision was made shortly after the change in
Administration, to offer, as an alternative, a petition to the
Department to reopen the regulations.
SENATOR TAYLOR expressed concern that the same Department of Law
signed off on the regulations after working on them for 2 1/2
years. They then told Lt. Governor Coghill to sign and execute
them. He emphasized the additional input period is not the fault
of the Department of Environmental Conservation as they worked long
and hard on the regulations and sent them to the Department of Law.
He noted one member of the Department of Law then chose to write
new substantive regulations and told Lt. Governor Coghill to sign
off on them, even though Commissioner John Sandor questioned the
changes. SENATOR TAYLOR said someone in the Department of Law set
a time bomb off internal to the regulations for the purpose of
blowing them out of the water. In the meantime, industry is unable
to comply with a water standard that is still up in the air.
SENATOR TAYLOR asked Mr. Burden to report back to the committee
regarding these allegations.
Number 450
SENATOR LEMAN described recent meetings he had with oil and gas
industry representatives to discuss cost saving measures and to
make Alaska a more friendly place to do business. UNOCAL commented
on the renewal of permits for discharge from platforms. EPA is
considering more stringent requirements on that discharge. He
inquired as to DEC's position in influencing the EPA regarding the
reissuance of those permits. MR. BURDEN pointed out that DEC's
obligation, when EPA is relying on Alaska law to reissue permits,
is to see that Alaska law is the controlling factor in making those
decisions. SENATOR LEMAN commented that in the past, in selected
cases DEC employees have argued with the EPA for local solutions
and have won. He encouraged that type of continued cooperation.
There being no further questions for Mr. Burden, the committee took
up the nomination of John Shively, Commissioner Designee of the
Department of Natural Resources.
SENATOR LEMAN:
....We will move to John Shively, the Commissioner Designee
for the Department of Natural Resources. Thank you for being with
us, Mr. Shively, and, I guess, while we're here on record, I
apologize for the fairly short notice for telling you, and I thank
you for making your time available and changing your travel plans
and your other division director meetings to make this possible.
I know you've been on with the department for just a few days now
and I appreciate that. But you were here when I gave the
instructions to Mr. Burden, and, if you'd like to open with an
opening statement, please do.
JOHN SHIVELY:
Thank you, Senator. It actually was not that much trouble to
change and so I'm pleased to be here.
My background in Alaska has run about 30 years. I came here
in 1965 as a Vista Volunteer. I've lived in a variety of
communities here -- I've lived in Yakutat, Juneau, Anchorage,
Fairbanks, Kotzebue and Bethel in my tenure.
A lot of my work, as many of you know, has been with Native
organizations including Rural Cap, which, although it is not
totally Native, is largely rural Alaska Federation of Natives and
NANA. Most of my working life was with NANA. I spent 17 years,
off and on, with them as, generally, a vice president of one kind
or another. I was very active in some of their early efforts in
getting the corporation functional from a business standpoint.
In the natural resources area, I was probably the lead
negotiator in the Red Dog Mine agreement with Cominco. NANA has
done a lot of work with the oil industry, including being part
owner of Endicott oil field, and so I am somewhat familiar with how
those deals come together and what the oil industry is about.
As I am sure most of you are aware, I also served as chief of
staff to Governor Bill Sheffield. I also was chairman and CEO for
United Bank Alaska for a brief period of time and also, I've done
some private consulting, which is what I was doing prior to being
named by the Governor.
As to why I would want the job, other than for the publicity,
I think if there was any department that interests me in
government, having been able to see it from sort of a level where
you got to see it at all, it would be the Department of Natural
Resources. That's somewhat because of my own particular interest
in the state and in development, and I see natural resources as a
department that can have a very positive effect on Alaska and
Alaskans. I also like natural resources -- I have some background
there -- and so when the Governor offered me the job, I accepted
it.
I would be pleased to answer any questions.
SENATOR LEMAN:
Questions from committee members? (none) I'll start it out.
I'm not sure exactly how to ask this, but it is probably the
one on many people's minds and we might as well get it out in the
open. John, you had an involvement in the cover-up of the office
lease deal in Fairbanks with Lenny Arsenault and Governor Sheffield
and offered testimony before the grand jury and did some things
there, you know, to where your reputation, at least then, was
tarnished because of it, and it has recently come back up because
of your appointment here. You know, you and I've talked about it
privately and you've made some statements in public. Just so we
can have it on the record in terms of where you are in putting that
behind you and moving on, I offer you an opportunity to make a
statement about it.
JOHN SHIVELY:
Sure. Well, to say that whole episode was the low point of my
whole life would be, I think, a slight understatement. It was a
very difficult time for me and I did things that I would love to
undo, but I cannot undo.
My testimony in front of the grand jury, though, was not at
issue, I think. The problem with what you called the cover-up and
what other people have called misstating the truth, which it was,
was to unsworn testimony to Dan Hickey in a private interview. It
was not in front of the grand jury. It was real clear in front of
the grand jury and made very clear to me if I lied to the grand
jury and Dan thought that I was lying, that I would be charged with
perjury, and I'm sure would have been given what was going on at
the time.
I learned some very valuable lessons. The mistakes I made
were mine; I made them and I take responsibility for them. The
mistakes did cost me my job at the time. It cost me a good deal of
my reputation, which I had spent a fair amount of time building,
and overshadowed things that I was very proud of in my tenure as
chief of staff.
I can only tell you that I believe I've learned from those
mistakes; I do not intend to repeat that kind of behavior. And it
is for, I think, all of you to decide whether or not you think that
I can live up to that promise.
SENATOR LEMAN:
I have another that was brought to my attention. That's one
of the, I guess, benefits of being a committee chairman -- people
funnel some of this information in. But it has to do with your
role in the bankruptcy of the United Bank Alaska, and some of the
players in that were some of the same players that are in this
Administration and the one you were involved with before: Bill
Sheffield, Willie Hensley, yourself. I don't recall, there may be
others, but as the information comes in, there was a settlement
with the FDIC that some allege may have benefited some of the
participants in it. I don't know all the details of it, but is
there anything that you can recall regarding that that may have any
bearing at all on your capacity to serve as commissioner?
JOHN SHIVELY:
I don't think there is anything that would have a bearing on
my serving as commissioner. A number of people in both this
Administration and the last Administration were involved in that
lawsuit. Former Chief of Staff Max Hodel was one of the people
that was sued at the same time Commissioner Designee Hensley and I
were sued. Former Commissioner Fisher was also sued. A wide
variety of Alaskans got the opportunity to face the FDIC as a
result of the -- as a matter of fact, my friend, Senator Lincoln
was involved in the very same lawsuit. So it was a result of
basically a crash of the Southcentral economy and of the banking
system. We lost 9 banks, I believe, during that period in the
state. So it's not surprising that a number of us got sued.
In terms of your question about whether the settlement
benefited any of us, I don't know how to answer that. If it's
alleged that I got paid some money as a result of that settlement,
I can tell you that I did not. The settlement itself was
confidential. As far as I am concerned, if the FDIC and others
would release it, I'd be happy to see it released tomorrow. I
thought the whole episode was one of the worst experiences that
I've ever had to personally go through in terms of the arrogance of
government and how they treat their citizens. And so if there is
anything that I think would affect on me as commissioner from that
period, it would be how government can overwhelm its citizens just
by the pure might of its pocketbook and its huge legal force, and
I think for Alaskans that experience should be a positive.
SENATOR GREEN:
I'm Lyda Green and I'm chairing HESS this year. One of the
primary interests of that committee are some of the clients for
whom we represent and those under the health and social services as
it relates to the Mental Health Trust Settlement. The Mental
Health Settlement requires that DNR set up that separate unit, and
has that separate unit been created?
JOHN SHIVELY:
Yeah, that separate unit has been created. Steve Planchon has
been named the director. That was a decision that was made before
I became commissioner, but one that I support.
SENATOR GREEN:
And what is that unit doing right now?
JOHN SHIVELY:
I suspect they're getting organized. I've not been briefed by
them specifically. I know that they have some regulations that
they need to get out, which they are starting on. We need to get
the trustees appointed -- that, I think, is something the
Governor's office is working on -- and the trustees really need to
focus on the work plan.
I also saw come across my desk a contract that they are in the
process of issuing to assess the process that DNR is using to
transfer the lands into the trust to make sure that the process is
correct.
SENATOR GREEN:
How long will those regulations, once they start on the path,
how long will they take to be implemented?
JOHN SHIVELY:
I can't answer that. Regulations generally take -- if they're
complicated, and I assume that these are going to be complicated
because they are going to be dealing with a number of land transfer
issues, although one would hope that they could learn from the
regulations that DNR presently has in place -- but it could take
two to three months to draft, and then there is the comment period,
then there is the rewrite, and then there's the publication, and
then there's the lawsuit (generally in that order). I certainly
would hope to have something in place by the end of the year, but
some of those decisions are not always within my control.
SENATOR GREEN:
And does that in the meantime impede the progress of the trust
authority in its charge?
JOHN SHIVELY:
I don't know the answer to that. I mean, my assumption is
that the management of the ongoing leases... [END OF SIDE A OF
TAPE]
TAPE 95-9, SIDE B
JOHN SHIVELY:
...can be carried out, you know, under DNR's auspices. In
terms of new arrangements, I just don't know the answer to that.
SENATOR GREEN:
Can development begin taking place?
JOHN SHIVELY:
I don't know the answer to that, but I can find out for you.
SENATOR GREEN:
So we can sit for maybe a year or year and a half without any
money being raised?
JOHN SHIVELY:
Well, there will be some money being raised, because I
understand that some of the lands transferred are currently paying
leases, but whether or not if they have like a new timber sale they
want to do, or something like that, I just don't know the answer.
I can find out for you. I don't know the answer.
SENATOR GREEN:
I think that's real critical because the mood is: we've
settled and now it's time to move forward.
JOHN SHIVELY:
Well, and I would like, you know, if there is a way to
accommodate the trustees under current DNR regulations, I would
want to do that. I mean they may ultimately want to have their own
regulations, but I would assume that there is a way to accommodate
them under ours.
SENATOR GREEN:
In managing the trust lands, how will that be different than
your management of other state lands?
JOHN SHIVELY:
That's going to be up to the trustees. The trustees will set
the management parameters, as I understand it, for those lands, and
DNR will assist where we can. And I'm not real familiar with the
settlement, but my understanding was there was concern about
whether or not this should be run by DNR, and it clearly won't. On
the other hand, because they are associated with DNR I think there
are some opportunities to do some things together that would save
both of us and maybe provide extra exposure for the Mental Health
Lands Trust, in terms of our offices and things, where land could
be made available, that if they had to set up on their own would be
more expensive.
SENATOR GREEN:
I think the perception certainly is that DNR becomes an
encourager as far as this trust authority and not the impediment to
things that they have in mind to more forward with. And I think
they are looking forward to your very active participation and very
positive in protecting that interest and their charge to prepare a
very, very sizeable Mental Health Trust Account.
One of the things that came up earlier, too, is DNR going to
grant access to trust land across state lands?
JOHN SHIVELY:
It is my understanding, although I have not read the actual
settlement, that part of the settlement was that we would provide
such access.
SENATOR GREEN:
And that's without charge, right?
JOHN SHIVELY:
That is my understanding, but I would have to reconfirm that.
SENATOR GREEN:
I have just another tack that was rather troublesome for me.
I watched a video of the 1993 Native Law Conference in which you
made some statements, which I know were directed to your audience,
but I didn't know what to think of your statements and I would
really appreciate an explanation because I found some of them that
hit me the wrong way, and I think very often could have done that
to a lot of people.
I'm going to read the questions I've written, if you don't
mind. In your oath, you've signed to uphold the Alaska and the
U.S. Constitution, however...
JOHN SHIVELY:
We haven't taken our oaths yet -- I will.
SENATOR GREEN:
When you sign your oath you will sign to uphold those
constitutions, but at this Sixth Annual Alaska Native Law
Conference you were highly critical of the U. S. Constitution's
approach to the protection of the individual's rights. Will you
find it difficult to uphold the constitution if you're so critical
of the individual's rights?
JOHN SHIVELY:
Well, I think what I was saying at that presentation was not
that I was critical of the individual's rights. I recognize it as
a very important part of our society. But what is often lost in
the Constitution's protection of individual's rights is the way
Natives perceive their own culture, which is a group right, and
it's very different. And that the Constitution and the courts have
imposed upon Native people a system that doesn't comport with their
culture. My discussion was with Native people about what they
could expect from the judicial system, and I believe that. And
they believe they need to understand that difference.
Now, my responsibility as a government official is to uphold
the state Constitution and the federal Constitution, and I will do
that, but I still have that basic belief that there is a
difference.
SENATOR GREEN:
O.K. I still want to -- and I want it for the record -- at
this same meeting you made a quote: "The judicial system is biased
against Natives. The U.S. Constitutional law, which drives state
law, declares that individual rights are supreme and that the
individual is to be protected." You went on to say: "However, in
Native culture, it is the group to be protected." Very, very
different concepts. You went on to say that Natives in this state
are at war with the dominant culture. I still find that very
disturbing, and I want to be sure that if you will restate that in
this present new role this line of thought is not how you will view
your role as a commissioner.
JOHN SHIVELY:
I guess I need some clarification of the question. I mean...
SENATOR GREEN:
You've already actually answered the question on the first
one. I just want to hear it restated that these views will not
taint your approach to handling the Department of Natural Resources
as it applies to all people in the state.
JOHN SHIVELY:
O.K. I understand that. I maintain what I said there. I
still firmly believe from the point of view, and I do not retract
anything I said at that conference. But my responsibilities for
the Department of Natural Resources are different, and I have a
different responsibility and I will swear to uphold those
responsibilities and I will do that. I will, on the other hand,
want to do it with some understanding of the particular role that
Native people play in this state, because I think that is
important. And particularly DNR often has been criticized because
we are not very close to what happens in rural communities, so I
intend to be sensitive to those concepts, but my role is to uphold
the state and federal constitutions and I will do that.
SENATOR LEMAN:
I would like to switch the questioning to another one of your
divisions, John, the Division of Oil & Gas. I think it was before
your involvement -- it certainly was before you became commissioner
-- and I'm not aware that you had involvement in the firing of Jim
Eason as the director of that division, and you can comment on that
if you wish. But the other is, in what direction do you see that
division heading, you know, if you have any thoughts on what type
of person you'd like to place there and what you'd like that
division to do differently that wasn't being done under Mr. Eason.
JOHN SHIVELY:
Well, I wasn't directly involved with the decision to accept
Jim Eason's resignation, although I suspect that if I'd been on
earlier, I would have been. So I don't think the decision would
have been different, and I thought actually that the Daily News
article captured fairly well the problems that Jim faced, and that
was that he had lost some of his ability to work with really both
ends of the constituency. But Jim Eason, I just want to say for
the record, has been an outstanding state employee, and I think if
there is anything that he can be accused of it's sort of over
zealously guarding the public's interest. And he will still have
a role to play, I think, in that in the future, although not as a
director, but he has a lot of knowledge and that knowledge, I
think, can be useful to the state.
I don't see a dramatic change -- I mean, as we know, we're
faced with a sort of difficult decision. We know what's happening
with the pipeline; we know that there is nothing that impacts this
state the way oil does, particularly the state treasury, but in
whole variety of other ways because of how the state treasury
affects, you know, whether its education, or building fish
hatcheries, or helping with road projects, whatever.
I know that the Governor, and I know that you, and I know that
I want to encourage additional development because that is
important to the financial health of this state. How we encourage
on one hand and yet protect the resources of the people and get for
the state what is due the state is going to be a balancing act
which we'll be involved in together. And we have in the Division
of Oil & Gas some outstanding individuals that I think can assist
us in that. So, I don't see any major changes. I hope to get
someone in that position that has some understanding of oil and
gas, that can look at both sides of both the state's interests and
the industry interest, and assist all of us in maximizing
development while still protecting the financial interests of the
state.
SENATOR LEMAN:
Senator Halford, any questions from you?
SENATOR HALFORD:
[On teleconference] Well, I don't have any questions that I
really thought how to -- although I am concerned with Commissioner
Designee Shively's position on the Federal Reindeer Act as it
applies to Alaskans. The reason, of course, is that I have a
constituent who has reindeer and is apparently in conflict with
some federal interpretation, and if reindeer husbandry in Alaska is
racially defined. I am worried that the state then, therefore,
can't under the state constitution be involved in leasing or any
other beneficial activity.
JOHN SHIVELY:
Senator Halford, would you like me to comment on that?
SENATOR HALFORD:
Yes, I would, and I don't really say that I know an answer.
JOHN SHIVELY:
I don't know the answer either. I mean, it is a federal law.
Something that, you know, at least at this point I don't have any
power over, and I don't at this point know what the state's
position on that law would be.
SENATOR HALFORD:
Well, there is a draft attorney general's opinion -- it may
not even be a draft. It may be an actual opinion that says that if
in fact the federal law was carried forward and is truly racially
defined, that the state then would be in violation of its own
constitution for the leasing provisions and other provisions that
we do with regard to the reindeer industry on the Seward Peninsula.
JOHN SHIVELY:
Yeah, I've not seen that opinion, but if you would like me to
request that and take a look at it, I would be happy to do that.
SENATOR HALFORD:
Yes, I would like that, because I feel that in every state in
the United States, except Alaska, any person can raise reindeer,
and they do and they sell them back and forth. But in Alaska,
there appears to be some kind of a prohibition which may or may not
affect reindeer coming from somewhere else. I don't know the
answer, but I feel that somebody is being discriminated against
pretty substantially if they have an [indiscernible] to deal with
the federal government.
SENATOR LEMAN:
Senator Halford, if I remember the facts in that case, the
original animals were transplanted from Canada, I think, if I
remember correctly, and they were not original Alaskan animals.
SENATOR HALFORD:
Well, that's correct, but the federal government is still
trying to basically take over that individual's property.
JOHN SHIVELY:
Senator Halford, I think part of the history was that
originally most of the major herders, or a number of the major
herders, were not Native and right during the Depression the Lohman
Brothers, which were a major operator on the Peninsula, did decide
that they wanted to sell to the government, and as part of that
deal -- and I'm not sure how it came about -- the federal
government did pass the law, bought the deer, and passed a law that
said only Natives could become herders and transferred those deer
to some of the Native herders -- it is my understanding of how that
came about.
SENATOR HALFORD:
Yes, that's my understanding of the original law as well. But
now we have someone who is trying to commercially be involved in
the industry and he is being told by the federal government that on
a racial basis he can't even have Canadian reindeer.
SENATOR LEMAN:
Senator Lincoln.
SENATOR LINCOLN:
John, just a bit ago you were talking about encouraging
additional development, and I recall, I think a commissioner, twice
removed, was really getting into the agriculture within DNR, and
then it sort of took a real back seat again. We've had testimony
over the years, I think every year that I've been down here, about
the -- and I don't know if I'm saying this right -- but the disease
free potato seedlings that could be sold internationally. And we
talk about additional development in Alaska, economic development
and how we can do that statewide. Thinking back on agriculture, I
think that the state hasn't done a great deal in that area. Have
you given thought into not just agriculture, but when you talked
about the additional development, some of what you intend to do to
encourage that or to plan for that?
JOHN SHIVELY:
Well, of course, the state some people would say did way too
much in agriculture during the boom years. And my perception of it
is that really in experimenting to try to broaden the base of the
Alaska economy, we tried some things that were far too aggressive.
We thought that we could create a multimillion dollar agriculture
industry with huge farms and huge investments overnight. That's
not how agriculture was created in the rest of the country. It was
created, basically, with small operating units of families working
together, and those often then mushroomed out. I think we've
learned a valuable lesson from the late seventies and early
eighties, and we've really revamped, at least as I understand it,
our agriculture policy to start to look at more manageable units.
Actually, I think for the first time last year in some time, the
amount of agriculture products produced in the state grew by about
five percent. And I do think there is some opportunity, but we
really need to do in a way that's manageable, and it's something
that I do have an interest in.
I think in terms of the rural areas, that there may be some
opportunities there and also -- and I'll probably get in some
trouble for this -- but the other area that's associated is
mariculture, where we have some mariculture interests, we have some
parts of mariculture that are currently outlawed, and there are
some things that we've not looked at yet that I think, even if one
happens to believe that finfish mariculture should continue to be
outlawed, there are other products that could be raised, both
offshore and even on land, that we've not looked at that offer some
opportunities for the rural areas.
SENATOR TAYLOR:
I have a couple of questions. There's a bill up on the House
side and I've not heard the Administration's position on it, yet.
It' kind of generically referred to. Representative Williams put
it in and I don't recall the number. I can get it for you. It's
referred to as the log salvage bill. It actually talks about bug
kill timber, which is really not a problem in our district. That's
up North. It also talks about high levels of unemployment, which
certainly is a problem in my district. I wondered if the
Administration had a position on that bill.
JOHN SHIVELY:
I'm not sure that we do. I'm aware of the bill and I think
our forestry people are still looking at it. I don't think we've
taken a position on it, yet, to my knowledge. However, we did just
approve a timber sale on the Kenai for an area that is beetle
infested. It was a commercial sale.
SENATOR KELLY:
Was that part of that lawsuit thing, too, where we just got an
order back on it.
JOHN SHIVELY:
I think everything we do is part of a lawsuit. So
distinguishing our decisions by lawsuit is not an easy thing to do,
but yes, there was a lawsuit on that.
SENATOR TAYLOR:
I constantly hear the concern and share that concern about how
we've got 103 million acres of land, most of which, except for that
very small amount that would result from moving back into the Trust
for Mental Health, is under your jurisdiction in this position.
And we always hear about how there is no employment in our rural
areas, and how there's no infrastructure, no jobs available for
people. And I kind of wondered as the primary owner of the land
and resource base out there, am I still going to hear the same
thing four years from now?
JOHN SHIVELY:
Land ownership and land development are not the same thing.
SENATOR TAYLOR:
I made that out right, we've never developed any of it.
JOHN SHIVELY:
It's not that we haven't developed any of it. If we hadn't
developed any of it, most of us wouldn't be sitting here right now.
SENATOR TAYLOR:
The state didn't do most of that. That was done by the
private sector. Joe Juneau built this town. It wasn't state
government.
JOHN SHIVELY:
I don't expect state government is going to build much of
anything else. I don't look at government as the way to build
economies. That's not been my experience anywhere. Government can
assist in a variety of ways, but government generally, unless it's
government jobs, doesn't build economies. Private people go out
and take the risk. Government has a hard time taking risks,
because if you risk something and lose, everybody is mad at you.
I don't know if you are going to hear the same complaint. Of
course, having been around the state for a while I've heard that,
too. If we just free up the land, it would make a big difference
in the economy and I do think there are things we can do, as Gene
Burden suggested, to make things easier for people who want to do
things. And I think we have to do that, particularly with
declining budgets. We are either going to do less things or we're
going to do more things better. And I'm certainly for that. If
the Legislature or anyone else can suggest major land policies that
would make a huge difference in the rural economy, I'm very open to
them, but my experience is that you really need some resource. And
when the resource opens up, you do as we did in Red Dog and as
we've seen on the North Slope. You do get jobs, but they don't
come just by magic.
SENATOR LEMAN:
If I can interrupt here for just a moment. I don't have the
sign-up list for those who wish to testify. Is there anyone here
who wishes to offer testimony regarding John Shively? I don't want
to cut you out of an opportunity by continuing to ask questions.
If you wish to, sign up and let Annette know. Is there anyone on
the teleconference network that wishes to offer testimony? Is
anyone on the line besides Senator Halford? (There was a "no"
response from the moderator.)
SENATOR LEMAN:
I had a question from a person that may have been a
constituent call me in the past several months..and this is
probably a question I should just direct at whoever is in the
Recorders Office..It looks like Judith Brenner, the Regional
Manager in Fairbanks, but there is a person who was doing work out
in Kotzebue and was trying to get survey information, or plats, and
said that recently the policy in the Fairbanks office was changed
to where they would no longer send the plat to them by mail and pay
the $3 or whatever the fee was..which was an acceptable process
before, but they told him, if you want them, you'll have to come up
here, look through the files, find them yourself, copy them, and
pay your $3, because the Legislature cut our budget. That in my
opinion is the wrong way for them to respond to Legislative
downsizing of government. When those things happen, it stops any
credibility with the public or the Legislature. I don't know if
that was an isolated situation or if that's policy in that office,
but you probably aren't aware of that, but I suggest that you look
into it and check. My suggestion would be to get a user friendly
policy for dealing with the public.
JOHN SHIVELY:
I think you've all heard the Governor say that he wants the
government to be customer driven. The person in Kotzebue is the
customer and I know that government sometimes forgets who the
customer is. That's a big thing for this Governor and that's an
excellent example where we have a policy that's convenient for us,
but not for the customer. So I'll take a look at it, thank you.
SENATOR LEMAN:
I think the person was in Anchorage. He may have been a
surveyor, but he was doing work in Kotzebue. It's just an example
of where we can do a lot better.
There have been proposals from time to time about increasing
the endowment for the University. We had a proposal before the
last Legislature. Any reaction to some of those proposals?
JOHN SHIVELY:
I don't have a personal reaction. I was a former member of
the Board of Regents. I suppose I might have had a different view
in those days. I think really you're dealing with a finite
resource. We've got 103 million acres of land and I don't know
what the Administration's position is, but in that case, if you
want to take a million acres and transfer it to the University as
a way for them to supplement their budget, that's clearly doable.
Whatever revenues might come from those lands obviously will
ultimately be deducted from revenues we would get into the General
Fund and how you deal with the University in terms of offsetting
those things, I guess, ultimately will be between the Legislature.
It seems to me, one reason to do it, if one wanted to do it, was
because one believed the University would be more aggressive in
developing those lands and maybe they would and maybe they
wouldn't. I don't know the answer to that. You're not creating
anything new by doing the transfer. You may be helping the
University, though, and that may be in itself, good public policy.
SENATOR LEMAN:
Last year, I know, Senator Taylor and I both worked on a bill
that was in a Committee we were on regarding transfer of tidelands
to municipalities..in this case it was Cordova. There may have
been a situation in Whittier and more recently in Sand Point where
the tidelands..?
ANNETTE KREITZER:
The Aleutians East Borough.
SENATOR LEMAN:
And then there's the situation in Cordova where a fellow had
built his house on tidelands and it turned out to encroach a foot
or two on state tidelands and they're trying to work out an
agreement. He could give up some property and the city would
actually get more access to the beach. Everybody would win from
it. It just didn't happen, because I don't know if there are
people who want to hold onto their empire or whatever, but I have
a bill in this year and think Representative Moses has one on the
other side..a bill that will deal with this. It's my opinion that
maybe the municipalities have a better idea of how they can deal
with the tidelands. Perhaps develop them or use them. Wouldn't we
be better off to transfer that to them and let them do it.
JOHN SHIVELY:
I have no conceptual problem with that, Senator. In fact, I
think community based decisions are generally the best. It seems
to me that if we are downsizing what we are doing and if somebody
else wants to take over some of our responsibility recognizing, as
I understand, that they get only the surface of those tidelands,
because I think we are prohibited by the constitution from
transferring the subsurface. I have no personal problem with that.
SENATOR TAYLOR:
I guess I want to get back to this issue of utilization of our
state lands and resources. The Administration just recently
totally reversed the position taken by the former Administration as
concerns habitat conservation areas in the National Forest in
Southeast Alaska. By so doing the Forest Service locked up over
600,000 acres out of a total land base of 1.2 million acres. So
50% of the remaining forest got locked up. I think they would have
done that whether or not the Administration changed its mind, but
public comment during the entire period of public comment was nine
to one in opposition to the Forest Service doing that. They didn't
listen to any of us. They made their decision and I'm sure they
were very appreciative of the fact that the Administration helped
them along that line.
Unemployment in my community is at 30% right now. I figure it
will be 50% by the time I get out of the Legislature. This
Administration has control of 6,000 acres on Wrangell Island alone
adjacent to the timber mill that's out of work. I've heard a lot of
rhetoric about how we're going to have the U.S. Forest Service come
up with some timber for you. That and a letter to the chaplain
will get you something.
What about the timber you own? What about the timber that's
owned by the state of Alaska in Southeast Alaska? Will any of that
be made available? I'm not talking about a half million board feet
here or one million board feet there that might keep some
volkswagen saw mill going for a couple of months. I'm talking
about timber. Will you and will this Administration put some of
the state's timber up? Or are we all just writing letters to the
chaplain and hoping that D.C. will come through for us?
JOHN SHIVELY:
I don't have an answer to that Senator. As you know, the
Tongass is probably the most contentious part of this state in
terms of resource development.
SENATOR TAYLOR:
Not for the people who live in it.
JOHN SHIVELY:
Well, sometimes, although to be fair often when people see the
tree being cut in their own back yard, they are not as supportive
as they are if they are being cut somewhere else. That's true even
in Southeast and I've seen it in other parts of the state when I
was in government before. I can't answer your question and I don't
think the Administration at this point has a firm policy on what to
do - in fact, I know we don't - about the Tongass. We are
discussing things with the Forest Service and we will look at our
own timber. There is no question of that.
SENATOR TAYLOR:
We all point the finger at the bad guy Forest Service. Let's
take a look in the mirror, because I know who some of the bad guys
are. I know who just joined hands with the Forest Service. So as
a consequence I'm going to expect the State of Alaska and this
Administration to follow through on the word that it gave to my
community and said it was going to help. Help is trees. If you
come up with anything else, and I don't care how many Department of
Labor people you send down to hand out welfare checks. That ain't
help. So I'm going to be measuring the validity of this
Administration's comments by the volume of board feet that I see
made available in that district for commercial purposes. And if in
fact we are still studying it a year or two years from now, then
the public needs to be made aware that their word is no good. I
don't anticipate having this discussion again with you and you
telling me we haven't made any decisions about that. The decision
ought to be to help those people. That's why the Governor just did
a fancy little press conference for those people when they came to
town. They were told eight of them could come in and have a
private chat with him. When they showed up here, the lights were
on, the cameras were there, and he waltzes out and makes a little
sermonette speech to them and walks back into his office. They
never even got a chance to even chat with the guy. But they got
used as victims for a real nice press conference on how hard he's
concerned about it. I hope you'll be more concerned than he is and
more sincere, John. Because I guarantee I'm going to be looking at
budgets in the process of doing it. If timber isn't being put up,
you don't need those employees. I hope we have a good
understanding on that one.
JOHN SHIVELY:
I think you've been very clear. Thank you, Senator.
SENATOR LEMAN:
Any other questions?
SENATOR TAYLOR:
I've got one more. You do control the people Loren was
talking about on the filing of deeds and other things.
JOHN SHIVELY:
The Recorder's Office.
SENATOR TAYLOR:
I've watched as we have been reinventing government. I've
watched it happen three times in the past. We've had to fight like
crazy to keep those recording offices open, because somebody always
wants to centralize them and stick them in some other place. The
question of being customer driven is not just a cliche'. This
Legislature passed a resolution last year that said the
Administration shall be customer driven. Al Vezey on the other
side tacked on a 40 hour week and that got all the symbolism as the
thing moved through the press and I don't know if we've given up on
that concept or we're negotiating on it. I don't know where we're
at on that. That wasn't the purpose of the legislation. The
purpose was to say that if you've got offices out there, they ought
to be open at 5:00 in the afternoon, not closing at 4:30. So that
the people going home from work would have an office available to
them. The Legislature instructed the Administration wherever
possible to come up with a plan that would implement that. So I
would hope in your efforts..I know as a business person you know
how important those filing offices are. I hope in your efforts as
you look at these things, you'll be able to try and carry that out.
As those instructions were given by the Legislature over a year
ago. Thanks, John.
SENATOR LEMAN:
If I can add to that..one of the more recent developments and
one I think is probably going to be successful is Saturday banking
or at least a few hours on Saturday. And a number of them would
extend beyond what we would previously thought would be normal
banking hours. Maybe we can look at things - rotating lunch hour
times or even staff to look if there are some specific cases maybe
where we can be available to the public. Those are ideas that are
probably worth exploring.
JOHN SHIVELY:
I think they are. No question about it.
SENATOR LEMAN:
I just have a final one. John, it seems like the federal
government is attempting through various means to either regulate,
restrict, or in some cases, just intimidate the public's use of
Alaska's navigable waters. I saw recently the notice that if
you're planning to do work on the Kenai National Wildlife Refuge -
and it was worded a little bit strange - including the Kenai River,
then see us for a permit. Well, thank you, but Alaska still has
its own navigable waters, and I just want to know what you plan to
do to help ensure that the State's position will prevail. And I
mean the State's rights under our compact will prevail when it
comes to our navigable waters.
JOHN SHIVELY:
Well, the federal regulation versus state regulation is a
problem in a whole variety of areas. It's one of those things, to
be frank, that if the country is going to recapture any of its
entrepreneurial spirit, has to be looked at. We can permit to
death. I don't believe in that. I believe in strong environmental
controls. I believe in doing things correctly, but I don't believe
that government should be used just to impede things. As far as
I'm concerned, one of the things the Governor has talked about is
how to - and this is not new in this government - I've heard it in
the Hickel Administration, I've heard it in the Cowper
Administration, I heard it in the Sheffield Administration, and I
don't recall Hammond saying it, but it's this whole idea of people
having to get too many permits and nobody knows what's going on and
people have conflicting ideas.
My wife writes oil spill contingency plans. She deals with
three major agencies: the Coast Guard, EPA, and DEC. They all
require a different table of contents. That's crazy. That has
nothing to do with cleaning up oil. There's a lot of that and it
is incumbent on us to deal with those kinds of things. People are
mad about it. In my mind, one of things that people were saying in
the revolution, if it was a revolution that people say took place
last November, was just that - that government has sort of lost its
sense. And the environmental groups are right. People weren't
saying we shouldn't have environmental controls. That's not what
the people were saying. People want a clean environment. But
people want it done with some sense, not permit after permit after
permit. This is something of concern to me and something by the
time I leave office to have fewer permits and not more.
SENATOR LEMAN:
I agree with you on that. We're working on legislation that
I plan to introduce soon that deals with placarding for hazardous
materials and it's a case where one agency wants it just a certain
way and another agency wants a slightly different format and you
end up having about four different reports at great cost. If we
can ever get the four or five to come together and say alright,
let's just put it in a standard format and do the report once, it
makes a whole lot of sense. Those are the types of things we are
going to have to find, because government is going to have to
become far more efficient than it is right now.
That's all the questions I have and I'm losing the Committee.
Is there anyone in the audience who wishes to testify regarding the
appointment of Commissioner Shively? Do you have anything else you
would like to say that we haven't already covered or wish to
embellish on anything said?
JOHN SHIVELY:
I appreciate your time.
SENATOR LEMAN adjourned the meeting at 4:58 p.m.
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