03/16/2015 03:30 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| HJR4 | |
| Confirmation Hearing: Attorney General Craig Richards | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | HJR 4 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
March 16, 2015
3:30 p.m.
MEMBERS PRESENT
Senator Cathy Giessel, Chair
Senator Mia Costello, Vice Chair
Senator John Coghill
Senator Peter Micciche
Senator Bert Stedman
Senator Bill Stoltze
Senator Bill Wielechowski
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
CONFIRMATION HEARING
Attorney General
Craig Richards
- HEARD AND HELD
HOUSE JOINT RESOLUTION NO. 4
Urging the United States Congress to provide a means for
consistently and equitably sharing with all oil and gas
producing states adjacent to federal outer continental shelf
areas a portion of revenue generated from oil and gas
development on the outer continental shelf to ensure that those
states develop necessary infrastructure to support outer
continental shelf development and preserve environmental
integrity.
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HJR 4
SHORT TITLE: OFFSHORE OIL & GAS REVENUE SHARING
SPONSOR(s): REPRESENTATIVE(s) SADDLER
01/21/15 (H) READ THE FIRST TIME - REFERRALS
01/21/15 (H) RES
02/27/15 (H) RES AT 1:00 PM BARNES 124
02/27/15 (H) Moved HJR 4 Out of Committee
02/27/15 (H) MINUTE(RES)
03/02/15 (H) RES RPT 6DP
03/02/15 (H) DP: JOSEPHSON, SEATON, TARR, OLSON,
HAWKER, TALERICO
03/04/15 (H) TRANSMITTED TO (S)
03/04/15 (H) VERSION: HJR 4
03/06/15 (S) READ THE FIRST TIME - REFERRALS
03/06/15 (S) RES
03/16/15 (S) RES AT 3:30 PM BUTROVICH 205
WITNESS REGISTER
REPRESENTATIVE DAN SADDLER
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of HJR 4
CARL PORTMAN, Deputy Director
Resource Development Council (RDC)
Anchorage, Alaska
POSITION STATEMENT: Supported HJR 4.
KARA MORIARTY, President and CEO
Alaska Oil and Gas Association (AOGA)
Anchorage, Alaska
POSITION STATEMENT: Had technical difficulties and couldn't
continue her testimony on HJR 4.
PETE STOKES
Alaska Support Industry Alliance (ASIA)
Anchorage, Alaska
POSITION STATEMENT: Supported HJR 4.
CRAIG RICHARDS, Attorney General-designee
Department of Law (DOL)
Juneau, Alaska
POSITION STATEMENT: Testified as Attorney General -designee.
ACTION NARRATIVE
3:30:37 PM
CHAIR CATHY GIESSEL called the Senate Resources Standing
Committee meeting to order at 3:30 p.m. Present at the call to
order were Senators Costello, Coghill, Wielechowski, Stedman,
Micciche, Stoltze and Chair Giessel.
3:31:07 PM
HJR 4-OFFSHORE OIL & GAS REVENUE SHARING
3:31:10 PM
CHAIR GIESSEL announced HJR 4 to be up for consideration.
3:31:15 PM
REPRESENTATIVE DAN SADDLER, Alaska State Legislature, Juneau,
Alaska, sponsor of HJR 4, explained that this resolution calls
upon the federal government to enact a fair and sensible system
of federal revenue sharing in Alaska. He said that oil and gas
development in federal areas can be a boom for the country
providing revenues for the federal government, jobs and a secure
source of domestic energy, but it also creates costly impacts to
nearby states.
The federal government shares the proceeds from such development
with some states to help them offset the costs of improvements
and services necessary for safe and responsible development. On
inshore areas they share 50 percent of the revenue with states
where that production occurs. In states within three miles of
shore, it shares 27 percent and in the four states bordering the
Gulf of Mexico it shares 37.5 percent (Gulf of Mexico Energy
Security Act of 2006). But current federal law says the State of
Alaska (SOA) receives a zero share of the federal revenues from
the Chukchi and Beaufort Seas oil or from other OCS areas.
The federal areas off the North Slope hold tremendous amounts of
oil and gas. Shell's supplemental environmental impact statement
(EIS) for the Chukchi Sea indicated 3 billion-plus barrels of
oil. But just as onshore development on the North Slope required
investments in infrastructure, development of Alaska's offshore
oil and gas will also require investments.
3:33:03 PM
REPRESENTATIVE SADDLER said investments will be required by the
state for roads, ports, airports, utilities, housing, pipelines,
and services such as oil spill and emergency response,
environmental monitoring and mitigation and public health and
safety.
For example, the $2.75 billion generated by the sale of federal
leases in the Beaufort and the Chukchik Seas several years ago
would have brought the state about $1 million if the same
revenue sharing applied in Alaska as applied in Gulf of Mexico
states. In the future, Alaska will get zero percent from the
Chukchi Sea development.
He said this is an important resolution and comes at a time when
the OCS sharing issue is ripe in Washington, D.C., where Senator
Murkowski has pushed legislation in the last two years to insure
a fair share in states other than Gulf of Mexico states. This
will give her support as she pushes the issue again. The
president proposed OCS expansion on the Atlantic Coast, but cut
off the possibility of it in the Beaufort and Chukchi Seas.
SENATOR STOLTZE said the resolution refers to 50 percent revenue
sharing for oil leases whereas the Statehood Compact provided
for 90 percent sharing, which Congress overruled, and asked if
he was comfortable memorializing the 50 percent in the
resolution.
REPRESENTATIVE SADDLER responded that he shared his concern that
the federal government hasn't respected the commitments they
made to the state in the Statehood Act, however, in cooperating
with Senator Murkowski, he did not want to raise the statehood
issue, but rather wanted to strengthen her position on a 37.5
percent split.
SENATOR STOLTZE said he did not think saying he has a moral and
legal case for a higher percentage would diminish his argument
and that the best way to get less than you want is to agree to
ask for it before the negotiation is started.
SENATOR COGHILL agreed with Senator Stoltze that the 90 percent
should not be conceded in any form and had prepared conceptual
statements to maximize what the state could get through revenue
sharing.
REPRESENTATIVE SADDLER said he respected the desire to assert
the strongest possible case.
SENATOR STEDMAN commented that his impression was that Back East
wants to zero everyone out and to consider that in the word-
smithing, because they might want to make everyone like Alaska,
which is zero.
SENATOR COGHILL agreed.
CHAIR GIESSEL asked him if he was offering an amendment.
3:40:20 PM
SENATOR COGHILL replied that he wanted to leave it on the table
and give the sponsor time to digest the concept.
3:42:01 PM
SENATOR WIELECHOWSKI supported the resolution and asked if the
Statehood Act talks about 50 percent applying to offshore beyond
six miles.
REPRESENTATIVE SADDLER answered that there is a distinction
between the revenue sharing from federal lands onshore and
offshore and we should expect a 90/10 split onshore. That same
provision does not apply offshore to the best of his knowledge.
He clarified that this resolution does not call specifically for
a 37.5 percent share; it calls for consistently and equitably
sharing to allow for maneuvering room. He didn't see a problem
with considering the conceptual language now, but wanted the
chance to review it more thoroughly.
SENATOR STOLTZE said the key prize is OCS revenue sharing and
that anything is better than zero. He didn't think it would do
any harm to accurately reflect what the consistent state
position has been.
SENATOR STEDMAN said the session still has plenty of time and
they might think about broadening the concept to Wyoming coal to
pick up as much support from resource states as possible.
3:45:26 PM
CHAIR GIESSEL asked him to say more about the Land and Water
Conservation Fund on page 3, line 3.
REPRESENTATIVE SADDLER answered that it is generally considered
a mitigation fund. He cautioned against broadening the
resolution, because it was designed specifically to bolster the
U.S. Senate delegation as they work specifically on offshore
issues.
SENATOR COGHILL said that was an important point, because Alaska
will be joining all the Gulf Coast states as well as California
on this the OCS issue, especially since we have leases that have
both been leased and now are being withheld by this president.
He said his amendment would effectively delete the first two
whereas clauses and replace them with his whereas clause that
inserts equitable revenue sharing. But the final statement has
to be in support of the Gulf Coast states.
SENATOR STOLTZE said some rural entities outside of our
Congressional delegation have more of an aggressive lobbying
presence than Alaska does at times on revenue sharing issues.
REPRESENTATIVE SADDLER said that was a fair observation.
3:51:03 PM
SENATOR COGHILL asked if any study had been done on the Land and
Water Conservation Fund and Gulf of Mexico Energy Security Act.
REPRESENTATIVE SADDLER responded that he would review the
functioning of the Land and Water Conservation Fund and what the
balance is in time for the next meeting. It is an important
factor for passage of federal legislation, because they might
pick up more support if they can show that development of oil
and gas resources was going to what some perceive as the greater
good of environmental conservation or remediation.
3:53:02 PM
CARL PORTMAN, Deputy Director, Resource Development Council
(RDC), Anchorage, Alaska, supported HJR 4. He said like the Gulf
States, Alaska also contributes to national energy security
through onshore oil and gas development and has generated
billions of dollars to the federal treasury through offshore
leasing. These leases could contain tens of billions of barrels
of oil which in turn could generate hundreds of billions of
dollars in revenue.
RDC has consistently supported federal revenue sharing to
benefit the State of Alaska and local communities agree that
states sustaining offshore energy development and production
deserve a share of the revenue generated because they support
offshore operations and experience impacts to local services and
infrastructure. Federal government grants are inadequate in
addressing the need for additional investment in state
infrastructure or the increased demands on state and local
government resources resulting from offshore development,
especially in Alaska which has more coastline, more rural
communities, and less infrastructure than any other state. RDC
supports HJR 4 especially the concept behind it.
3:55:20 PM
KARA MORIARTY, President and CEO, Alaska Oil and Gas Association
(AOGA), Anchorage, Alaska, had technical difficulties and
couldn't continue her testimony.
3:56:02 PM
PETE STOKES, Alaska Support Industry Alliance (ASIA), Anchorage,
Alaska, supported HJR 4. He works as a petroleum engineer with
Petrotechnical Resources of Alaska, is a board member of the
ASIA, and also serves on the Oil and Gas Competitiveness Review
Board. He said Alaska became the 49th state and could sustain an
economy only through resource development. It is important for
Alaska to share in the OCS royalty revenue as the state is the
entity that provides infrastructure and social fabric (schools
and other state government spending) that support the OCS
development.
MR. STOKES said similar to the OCS Gulf of Mexico, Arctic OCS
development is important for the nation's energy security and
the host state should receive benefit in support of this effort.
This is currently the practice in the Gulf of Mexico and should
be adopted for the Arctic OCS as the state gives the necessary
support for developing oil and gas in the harsh Arctic offshore
environment. An additional precedent is the sharing with Alaska
of 90 percent of federal onshore royalties. Since the federal
government has put many onshore areas, such as the NPR-A off
limits to development and continues to prevent exploration and
development in ANWR, it is even more important for the state to
receive benefit from federal OCS development.
CHAIR GIESSEL thanked Mr. Stokes and finding no further comments
said she would keep public testimony open and hold HJR 4 in
committee.
^Confirmation Hearing: Attorney General Craig Richards
Confirmation Hearing: Attorney General Craig Richards
3:58:59 PM
CHAIR GIESSEL announced the confirmation hearing for Attorney
General Richards.
CRAIG RICHARDS, Attorney General-designee, Department of Law
(DOL), Juneau, Alaska, said he is a lifelong Alaskan; he grew up
in Fairbanks and his family moved there from Atlanta, Georgia.
He went to Wood River Elementary School and ultimately Pearl
Creek; he graduated from Ryan Middle School and West Valley High
School in 1993. He went to the University of Virginia where he
studied finance as an undergraduate student. He knew he wanted
to attend law school and come back to Alaska, so he attended
Washington and Lee University. He clerked for Ralph Beistline
who was in Superior Court at the time and ultimately became a
federal district court judge. The first job he had with a
private law firm was in 2000 with Wohlforth, Bachelor, Johnson
and Brecht in Anchorage founded by Eric Wohlforth that focuses
on public finance. In 2003 he was offered to do financing by
Bill Walker with Walker and LeVeck and ended up working with him
for 12 years and eventually became partner.
In private practice he got his MBA at Duke University where he
focused on finance in the oil and gas area, and in particular
the subject of quantitative modeling of oil and gas issues. His
private practice, which ended in November before he took office,
focused on four areas: municipal law, public finance, oil and
gas taxation, and gas pipeline and other oil and gas project
development on the North Slope.
ATTORNEY GENERAL RICHARDS said he is married to Allison Richards
who teaches English at West High School. He has one son who is
two years old. He thought it would be helpful to tell them the
reason he ultimately decided he would like the opportunity to be
Attorney General is that before he thought taking over the law
firm would be his life if Bill Walker won and if Walker lost,
Walker he would retired and he would be taking over the law
firm, also. It seemed pretty clear. But Mr. Walker won and asked
him to be Attorney General and he decided that he would. It
changed where he was headed in life and ultimately he decided to
do it because it was for a once-in-a-lifetime opportunity to
serve the people of Alaska.
4:04:21 PM
SENATOR COSTELLO thanked him for coming by her office and asked
what things he considered in the category of why he might not
want to do this job.
ATTORNEY GENERAL RICHARDS replied that it's tough on your family
to be gone so much and financially it changed where he was
headed. He is old enough to have an established law practice,
but not old enough to have made a lot of money. He couldn't
maintain his practice and had to let his clients go.
SENATOR COSTELLO asked him to describe the role of Attorney
General.
ATTORNEY GENERAL RICHARDS replied the attorney general's
position is multifaceted; on one hand you provide legal advice
to your governmental clients and oversee the Department of Law.
You provide legal advice to the governor and serve as the
peoples' attorney. Being the peoples' attorney has several
important aspects; on one hand you enforce and prosecute the
laws of the State of Alaska. Alaska is actually unique in that
the prosecutorial function is embedded within the statewide
agency. In most places local district attorneys (DA) at the
county level are the ones that prosecute most of the laws. As
the peoples' attorney the attorney general files rate
proceedings, makes decisions about whether or not there are
anti-trust issues with various transactions, is ultimately
responsible for collection of revenues for restitution in
criminal cases and child support matters.
4:07:45 PM
SENATOR COSTELLO said one of the reasons many states have the
position elected is to avoid any kind of a conflict of interest
that the individual might have with the governor and asked him
to talk about his relationship with the governor and whether
serving in this capacity is a conflict of interest considering
their history of working together.
ATTORNEY GENERAL RICHARDS said his view of an elected attorney
general versus an appointed one is that there are only five
other states that have attorney generals appointed by the
governor. Tennessee's Supreme Court appoints that state's
Attorney General, and Maine's Attorney General is appointed by
the legislature. In all other states, it is an elected position.
The advantage with an elected Attorney General is that the AG is
independent of the governor and doesn't have the potential
conflict of interest Senator Costello mentioned. This is the
case when the governor's office might view decisions AG should
make differently than an AG who is the peoples' attorney.
The disadvantage of an elected attorney general position is that
the office can become heavily politicized. In some states,
attorney general means almost a governor, because often times it
is a stepping stone for a different office. In that instance,
you have the potential where the governor and the attorney
general don't work together merely for political reasons. So, he
thinks there are advantages and disadvantages to both systems
and looks forward to developing an opinion about which is
better.
In terms of his personal relationship with the governor, he said
that when he took the office he had two conditions: his wife's
agreement, which he got, and that the governor would understand
that he would exercise independence of the office, which he
didn't have a problem with.
SENATOR COSTELLO said he had made disparaging remarks about SB
21 and the gasline bill that are now law and asked if he would
be able to stand behind those laws.
ATTORNEY GENERAL RICHARDS answered that he hoped that any
comments he makes on public policy in the State of Alaska
wouldn't be taken as disparaging, they would have been in an
attempt to further public dialogue. The role of his office is to
fully and faithfully execute the laws of the SOA and that is
what he will be doing.
SENATOR STOLTZE asked him to talk about the role as the
governor's attorney and of the attorney general in representing
state agencies.
4:12:52 PM
ATTORNEY GENERAL RICHARDS responded that it's important to
really understand who your client is. The unique thing about
attorneys general in this state and throughout the country,
almost without exception, is he provides legal support and legal
services to the agencies of the state of Alaska including the
governor's office. He provides counsel and representation to the
best of his ability. If there is any conflict between what the
governor wants and what is in the peoples' best interest his
answer is to represent the people. He has full faith in his
ability to work with the governor and exercise the independent
judgement he needs.
4:15:13 PM
SENATOR COGHILL asked when he started working with the governor.
ATTORNEY GENERAL RICHARDS replied in July 2003.
SENATOR COGHILL asked if he worked with the governor on the
formulation of the Port Authority.
ATTORNEY GENERAL RICHARDS answered no; he said the Port
Authority was founded in 1999 and he didn't really work any Port
Authority business until 2005.
SENATOR COGHILL asked outside of the governor if he worked for
anything that the Port Authority had to do structurally or
legally.
ATTORNEY GENERAL RICHARDS answered that he represented the Port
Authority across its functions including everything from day to
day, who chairs the meetings and does the minutes, provided
legal advice on a number of small issues and helped work on
strategy for the Port Authority, and worked on the proposal in
2010 to do the North Slope trucking project. He worked on the
gasline including a whole number of issues; what comes to mind
is the Port Authority entered an AGIA application in 2007.
SENATOR COGHILL asked if he was there when the North Slope
Borough pulled out.
ATTORNEY GENERAL RICHARDS answered yes.
SENATOR COGHILL asked about the devolution of authority there.
Did it just land in Fairbanks and Valdez?
ATTORNEY GENERAL RICHARDS answered yes.
SENATOR COGHILL asked if he worked with Mayor Whitaker.
ATTORNEY GENERAL RICHARDS answered yes.
SENATOR COGHILL said now he is working with Mayor Whitaker and
the governor, so there is a perceived conflict and asked how he
would work with them to put up firewalls.
ATTORNEY GENERAL RICHARDS replied that from a legal standpoint
there isn't a conflict because of representing the governor on
prior work on the Alaska Gasline Port Authority's behalf.
4:18:41 PM
SENATOR COGHILL said because we are trying to put together an
energy project that is trucking and an Alaska Stand Alone
Pipeline that has similar structures to the Port Authority, he
wanted to understand how the internal discussion doesn't become
a conflict to Alaskans.
ATTORNEY GENERAL RICHARDS said he has no ethical conflict or he
would build barriers between himself and any potential
conflicts. The FNG trucking deal is being looked at by the
Alaska Industrial Development and Export Authority, which is
independent.
SENATOR COGHILL said that brought up another name, the Brenna
Law firm, because he hears of rate cases being brought up. It
looks like a conflict, so help him understand that.
ATTORNEY GENERAL RICHARDS said he handled two cases with Mr.
Brenna; the first was when Mr. Brenna represented the Fairbanks
North Star Borough in the TAPS valuation disputes and he
represented the City of Valdez. So, in that representation they
worked together. The only other time that he handled a case with
Mr. Brenna was in 2012 when Mr. Brenna hired him to represent
his client, Tesoro and Anadarko, in the Sr. FERC case for about
six months.
SENATOR COGHILL said he was not on a hunt, but these are
questions that had to be asked. He asked if it puts him in
conflict when the state starts asking him for legal opinions on
things he has been in court on or advised clients on. Can he
separate how he defended a client and how he might defend Alaska
very differently, especially on oil and gas issues?
ATTORNEY GENERAL RICHARDS replied that he wouldn't take any
action or make a decision on any matter on which he had a
conflict. In fact, he was extremely diligent on the front end of
coming into office of making sure he did everything in the most
transparent and ethically appropriate way. That includes getting
an outside legal opinion on what his prior representation of
clients might mean to his role as Attorney General. He met with
the ethics attorneys in the Department of Law before he took
office and was given formal adivce on how to proceed with any
apparent conflicts. He did precisely what he was told to do: to
delegate four cases to Martin Schulz, head of the Oil, Gas and
Mining Section, to handle those matters.
4:23:17 PM
SENATOR COGHILL asked him how perceived and actual conflicts are
handled. Would a conflict have to be handed to somebody other
than an AG, what would normally be an Attorney General's job?
ATTORNEY GENERAL RICHARDS explained that the difference between
perceived and actual conflict is that an actual conflict is
under the law or professional ethics. A perceived conflict would
be where you don't have an actual conflict but someone might be
concerned about the appearance of one. Whether or not, because
of his prior representation in oil and gas cases, the state has
to bring in outside attorneys, the answer is no. The one
exception is that ethics advice normally is given to the
lieutenant governor by the ethics opinion in the Department of
Law, but the lieutenant governor specifically asked to be
allowed to retain outside legal counsel to provide advice if he
moved to remove his delegations in any of the cases in which he
delegated his authority. Attorney General Richards said he
approved that.
4:25:24 PM
SENATOR STOLTZE asked what his biggest legal victories are
involving the state and the industry as a private attorney.
ATTORNEY GENERAL RICHARDS answered that his biggest win was the
TAPS Ad Velorem case where he, on behalf of the City of Valdez,
got the taxable value of the TAPS raised from $3 billion to $10
billion. It was many years of hard fought litigation but it was
a good and just result. He lost a case involving the vessel tax
that the City of Valdez levied on vessels over 95 ft. in length.
It was challenged as it related to the oil tankers that called
the Port and the U.S. Supreme Court ultimately ruled the tax
unconstitutional.
4:28:00 PM
SENATOR WIELECHOWSKI asked how much taxpayer money was saved in
the TAPS Ad Velorem case and who else he had represented over
the years and for what types of cases.
ATTORNEY GENERAL RICHARDS said he had done a lot of public
finance work for the Railroad, AHFC, Alaska Municipal Bond Bank,
Anchorage Waste Water Utility, the Municipality of Anchorage,
the City of Valdez, the Aleutians East Borough, Kenai, and a
good chunk of Alaska municipalities that are public corporations
that are involved in the issuance of municipal bonds. On the
municipal side he has represented various tax matters for
Valdez, Kenai, Aleutians East Borough, and the City of Sand
Point.
His litigation practice until the last year or two, focused
litigation on oil and gas tax cases. Most of his representation
was for the City of Valdez and a few others like Kenai's AS
43.56 issues. He always has considered himself as a
transactional attorney and a finance guy, but over the last
three or four years he enjoyed litigating construction cases and
other complex cases.
SENATOR WIELECHOWSKI asked if he felt capable of managing the
workforce at the Department of Law.
ATTORNEY GENERAL RICHARDS answered yes; he has extensive
experience in managing complex litigation and transactions. Even
though the Department of Law as the largest law firm in the
state has 500 people.
SENATOR WIELECHOWSKI asked for details about the TAPS case to
give people a feel for its magnitude and complexity.
ATTORNEY GENERAL RICHARDS explained that the litigation of the
TAPS case started in earnest in late 2004. There was a 3-6 day
hearing before the State Assessment Review Board every single
year since then save one in 2012. Ultimately, each of those
hearings resulted in appeals to the Alaska Superior Court. They
were the largest and most complex trials in the history of the
State of Alaska and involved millions of documents, every tax
year 2 percent of the value. So, when the dispute is about a $3
billion value versus a $10 billion value, the amount of money
you are talking about is 2 percent of $7 billion in terms of
ultimate taxes collected by state and local governments. The
sums of money over 10 years are huge. Each of those cases had
two major trials that involved 3-4 dozen witnesses, 100
depositions, a million pages of documents, thousands of
exhibits, legal teams on both sides running to the tune of 8-10
lawyers with an equal number of paralegals and all the support
needed to handle complex litigation like that. Ultimately, it
ended up in appeals to the State Supreme Court, as well.
4:32:54 PM
SENATOR WIELECHOWSKI asked him to talk about how he deals with
conflicts of interest in terms of being an attorney on one side
of an issue one day and the other side the next day with a
different client.
ATTORNEY GENERAL RICHARDS answered that it's common for it to
happen to attorneys. It's not common that many people have the
opportunity to step into the attorney general's role, but the
way he is handling it is that he worked very closely with ethics
counsel and an independent counsel that he hired himself to
understand what the conflicts are under Alaska law and where
they exist to take the appropriate steps as the ethics attorneys
told him to do. The couple of cases that he handled against the
state, the TAPS value case in particular, was a large case, but
it was just one of thousands of cases that the Department of Law
has before it. He has delegations in place for a few of those
cases, it's a small part of the total book of business. The mere
fact that he represented against the state in one case doesn't
create conflicts in other cases. However, he believed his prior
experience in the oil and gas realm made him a better attorney
for the state not a worse one. He understands the issues in a
way that some attorney generals haven't with their backgrounds.
CHAIR GIESSEL said in talking about the TAPS valuation that he
is now the Attorney General for the state and is sitting on the
other side of the table. In such a valuation case, could they
expect the vigor and diligence for the state that he showed on
the other side of the table?
ATTORNEY GENERAL RICHARDS answered, "Absolutely. I am a zealous
advocate for my client."
CHAIR GIESSEL said it seems like it would be difficult to
suddenly change his viewpoints.
ATTORNEY GENERAL RICHARDS responded that as a lawyer it's common
to do so. First of all, delegations are in place. At a more
theoretical level, as an attorney he has the ability to
understand who his current client is and zealously advocate on
his behalf.
SENATOR STEDMAN said the point is that it gives a lot of people
indigestion that the attorney general represented Valdez in the
TAPS case, but he personally would prefer to hire the winner
rather than the loser. He looks at attorneys as hired guns. His
concern is dealing with the oil and gas industry being the
biggest and most influential industry and the most financially
important to the state, it's good to have a candidate that
understands the complexities of the issues. He would be a little
gun shy to have an attorney general that was clueless in the
state's biggest and most important area.
4:38:35 PM
ATTORNEY GENERAL RICHARDS said he was honored to work for the
City of Valdez, but if he had been hired by an oil company
instead, he would have provided the same level of zealous
advocacy for them as he did for the city.
SENATOR STOLTZE asked him to describe the interplay of the
governor's campaign statements and the school funding lawsuit as
reported by the Ketchikan Daily News.
ATTORNEY GENERAL RICHARDS responded that he was involved in the
campaign but not with anything related to the Ketchikan lawsuit.
The only thing he knows about the governor's position is what he
read in the paper six months ago about something he said in a
debate. He could say that the State of Alaska is on track to
appeal the Superior Court's decision and maintain the same
litigation positions that were taken in the last administration.
4:41:19 PM
SENATOR COGHILL said he had a conversation with Attorney General
Richards earlier about the Sturgis case that had to do with
permitting use of an airboat; the question about the state's
right to that waterway became the real question and asked what
the state was going to go with defending Alaska's right to
waterways.
ATTORNEY GENERAL RICHARDS answered that he would first tell him
what is public about where the case sits now. The state is
filing an amicus in support of Mr. Sturgis' petition for cert,
but he has decided not to file an appeal of the state's case,
because the state's case really devolved into a standing
question. It was the view of the Department of Law and himself
that there are probably better fact patterns that the state can
pursue in the future that will be better to have before the
courts where people aren't fighting about whether or not they
have standing, effectively.
SENATOR COGHILL asked what "standing" means, because he only
sees Alaska's water rights slipping away.
ATTORNEY GENERAL RICHARDS responded that courts held in the
state's case (distinct from the Sturgis case) that the state
couldn't bring the lawsuit, because the activity had already
occurred and was, therefore, moot. Effectively this meant the
state didn't have any grounds to bring the case, because the
permits and water samples had already been collected and the
activity had occurred.
He explained that federal courts aren't like state courts. If
you have an interest that is impacted and feel like the court
should address it, as a general rule, the State of Alaska court
system will generally be willing to decide legal issues. The
federal courts are much narrower about when they will decide the
legal case. This was an instance when they decided not to. It is
very rare for the U.S. Supreme Court to overturn a circuit
decision on standing grounds.
SENATOR COGHILL asked if he would vigorously defend the State of
Alaska's right to waterways in the Alaska.
ATTORNEY GENERAL RICHARDS answered yes.
4:45:26 PM
SENATOR STOLTZE asked what role a former attorney general, Bruce
Botelho, who was the longest tenured in the history of Alaska,
has in this administration.
ATTORNEY GENERAL RICHARDS replied that he understands Mr.
Botelho was involved in helping set up the transition process;
the governor and lieutenant governor had a transition meeting in
Anchorage with a couple hundred folks and he was the lead on
organizing that. Then when the governor and lieutenant governor
came into office, he worked for approximately 2.5-3 months in
the governor's office helping with transition. He hasn't been in
that position for a while and his doesn't have a current role
and he is gone for good.
SENATOR STEDMAN asked how much exposure he has had with
navigable waters issues, the point being that the state lost the
Glacier Bay case and now it's a federal park. He has heard they
want the entire Southeast waterways, which is extremely
alarming.
ATTORNEY GENERAL RICHARDS answered that his background there
isn't that deep. When he clerked for Ralph Beistline 13 years
ago, he had one equal footing case that involved the Minto Flats
when he became familiar with that body of law. He committed to
studying hard and said that he had attorneys who had worked in
that area full time for many years that handle the cases on a
day-to-day basis. As Attorney General, he has incredible depth
to go to get help in coming up to speed and making decisions.
4:49:58 PM
CHAIR GIESSEL said she was concerned about not challenging the
standing that the state was denied in the Sturgis case and
having relinquished some amount of control.
ATTORNEY GENERAL RICHARDS answered he didn't think the state had
relinquished any control. The one questions he asked the
attorneys handling the case when he was confronted with the
decision of whether to file a cert on the state claims is if we
don't, are we in any way negatively impacted on bringing a case
in the future, and he got the same answer multiple times: no.
They will find a case where standing isn't an issue and that is
the goal.
SENATOR COGHILL asked what damage would have been done if we
would have lost that standing.
ATTORNEY GENERAL RICHARDS answered that the probability of
winning was 1 percent and he doesn't like to go to the Supreme
Court with the State of Alaska taking 1 percent shots. It is
better off finding a better case that is more arguable,
particularly when we have a slightly higher probability shot in
an amicus ability to support the Sturgis petition, itself.
SENATOR COGHILL said the federal government is both our friend
and our enemy, but there has been some regulatory flow over the
years, the EPA being one of them and OCS another. He was
concerned about the 111(d) rule in the Interior. He understood
that the DEC was just looking for an exception to the rule and
he has some good legal opinions that they are outside the
constitution on it. He asked if he had a chance to look at that.
ATTORNEY GENERAL RICHARDS replied he hadn't dealt with 111(d)
case. They did win in a panel before the Ninth Circuit and it's
going before them in a full hearing. He didn't know whether or
not the state has a valid constitutional claim outside of the
standard main line of attack, which is that the EPA was out of
bounds in requiring CO compliance without a cost-based analysis
2
on the electric utility side.
SENATOR COGHILL said he had gathered some brief materials for
him and hoped he would consider them. He asked who the lead is
on federal litigation issues.
ATTORNEY GENERAL RICHARDS answered a bunch of different
attorneys handle it in the Natural Resources section. The
Statehood defense attorney is Kent Sullivan.
SENATOR COGHILL said the land and the trust issue is coming
their way; it is mostly a Native issue, but it could have a huge
impact on how lands are handled and managed in Alaska.
4:54:57 PM
ATTORNEY GENERAL RICHARDS replied that it is something that he
is learning. It is a big issue with massive policy implications.
The federal government reversed its position, rules became final
a few months ago. It had always been Interior's position that
lands could not be put into trusts and there was an Indian law
in Alaska. The Obama administration has wholesale reversed that
position and adopted regulations that do allow it. The state is
in the process of challenging that and it is currently before
the D.C. Circuit.
SENATOR COGHILL appreciated that, because people's ability to
traverse and produce on the lands in Alaska are going to depend
upon cooperation between the state, the federal government, and
the Native landholders. That throws us a curve that could
literally bottle us up through several generations.
4:55:58 PM
SENATOR STOLTZE said he had a half dozen fisheries issues, but
would ask only one and a half questions. In 2011, Attorney
General Sullivan agreed to aggressively pursuing the state's
position on the United Cook Inlet Drift Association (UCIDA)
lawsuit and was seeking to have the case in federal court, to
bring in federal management under the Magnuson Stevens Act. One
of the main instigators of the case was one that the governor
actively sought to put on the Board of Fisheries and that caused
him a lot of pause. He asked what the administration's position
is on this.
ATTORNEY GENERAL RICHARDS answered that he didn't know anything
about the case, but he would be happy to follow up on it.
SENATOR STOLTZE said it is being appealed. Another quick
question: there is a lot of concern in an ADF&G budget meeting
about the Estrada case in which a subsistence net is proposed to
be strung on the Kenai River involving conservation and
protecting species issues. Lieutenant Governor Mallott was
sitting in on this, and he asked if anyone had any discomfort on
the optics level having him sitting there. If the state were to
lose that case it would create an incredible precedence in
diminishing its conservation abilities.
ATTORNEY GENERAL RICHARDS responded he wasn't aware of the
issue.
SENATOR STOLTZE said it was a criminal proceeding.
ATTORNEY GENERAL RICHARDS said he knew the state's position is
on appeal and no change of action has been taken since this
administration took over and he didn't have enough of the fact
pattern to have an opinion.
CHAIR GIESSEL said she also had more questions for Attorney
General Richards and would schedule another meeting.
5:00:10 PM
CHAIR GIESSEL adjourned the Senate Resources Standing Committee
meeting at 5:00 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HJR 4 Sponsor Statement.pdf |
SRES 3/16/2015 3:30:00 PM |
HJR 4 |
| HJR 4A.pdf |
SRES 3/16/2015 3:30:00 PM |
HJR 4 |
| HJR 4 Fiscal Note -1-1-030215-RES-N.pdf |
SRES 3/16/2015 3:30:00 PM |
HJR 4 |
| Resume-Attorney General - Richards.pdf |
SRES 3/16/2015 3:30:00 PM |