published Monday, February 6th, 2012

Governor Bill Haslam seeks merger of 6 environmental panels

NASHVILLE -- Gov. Bill Haslam's first effort to reduce state boards will merge six panels with significant environmental duties into three, affecting one with regulatory power over gas stations, including the family's Pilot Travel Centers.

The Republican insists the proposal won't diminish conservation efforts in Tennessee or present a conflict of interest for him.

Haslam is proposing to combine the Solid Waste Disposal and the Petroleum Underground Storage Tank boards; the Water Quality Control and Oil and Gas boards; and the Conservation Commission and Tennessee Heritage Conservation Trust Fund board.

John McFadden, executive director of the Tennessee Environmental Council, said he doesn't expect a noticeable change if the mergers happen because conservation interests already are sparsely represented.

"These boards are so heavily weighted to the industry side, and the reality is clean water and clean air don't have much representation on them," McFadden said in a phone interview.

"The flip side of that is you had six boards making really bad decisions, and now you're only going to have three boards making really bad decisions," he said.

Haslam, a former president of the Knoxville-based Pilot chain of truck stops, has pledged to recuse himself from matters that could affect the family business in which he still holds an undisclosed stake.

But the governor said he cleared the legislation on combining the boards that could affect Pilot before the measure was introduced.

"I actually talked with legal counsel and others to say that obviously that's a place that does intersect with Pilot, but really that wasn't changing the authority; it was just combining two boards," Haslam said in a recent interview.

"In this case, I think any ramifications toward me -- or increased or decreased decision-making from the governor -- didn't really impact that," he said.

The Petroleum Underground Storage Tank Board, created a couple of decades ago with an act to protect public health and the environment from leaky underground fuel storage, oversees several matters that affect Pilot.

It sets standards for the tanks, which are at every gas station, and develops regulations that govern how tank owners test for leaks, conduct fuel delivery and respond to any spills. It also has a say in administering a cleanup fund that comes from fees paid by tank owners and companies making or importing petroleum products in Tennessee.

The governor's Pilot connections gave rise to questions last year when he imposed a temporary freeze on new rules and regulations, including a proposed requirement for gas stations to replace older single-walled underground fuel storage tanks with double-walled tanks if they are used to dispense fuel blends with more than 10 percent ethanol.

Haslam told the Chattanooga Times Free Press at the time that he had been unaware that the freeze on rules and regulations would affect underground tanks and potentially Pilot.

The board mergers are among a series of proposals the governor wants to make to the state's 200 boards and commissions.

Other changes include giving the governor or his commissioners the power to hire and fire executive directors of various panels, including the Tennessee Higher Education Commission and the Board of Accountancy.

Both boards have experienced disputes over leadership when past governors sought to oust their executive directors. Former Democratic Gov. Phil Bredesen in 2003 fired Darrel Tongate, then the head of the Board of Accountancy, over a dispute over official travel to Hawaii while the state struggled with a budget shortfall.

Tongate sued the state for ignoring a law that said he served at the pleasure of the board, not the governor. The state settled the case in 2008 by paying Tongate $100,000 and his attorney $50,000.

The Tennessee Higher Education Commission, or THEC, was created in 1967 to coordinate among the state's public higher education systems -- the University of Tennessee and the Board of Regents.

The commission's effectiveness has been under scrutiny at least since the 1996 firing of executive director Bryant Millsaps at the behest of former Republican Gov. Don Sundquist.

Bredesen called THEC the "fifth wheel" of Tennessee's higher education program, but ultimately did not seek major changes in its makeup.

Rich Rhoda, who succeeded Millsaps as THEC's executive director in 1998, said he welcomes the governor's proposal.

"The way he explained it, he obviously wants to have a more direct connection with higher education, and that's great," he said.

Rhoda said he wasn't concerned that the governor might seek to replace him.

"It's about the structure," he said. "I don't think it's about personalities."

Another change in Haslam's proposal would be to do away legal language requiring the governor to choose members of boards from lists provided by various interest groups. A governor would instead take those candidates into consideration, but could choose anybody else to serve.

"The objective was that we shouldn't have the people who are being regulated saying 'here's who we want to be on that board,'" Haslam said. "The flip side to that is that we do want to have people who are knowledgeable on the subject."

The governor said he's not wedded to that part of the proposal.

"To be honest with you, I'm OK with either approach to that," he said. "And I've told the Legislature that."

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