Legislature(2011 - 2012)CAPITOL 120

02/16/2012 01:00 PM MILITARY & VETERANS' AFFAIRS


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HJR 34 COAST GUARD ICEBREAKERS & ARCTIC BASE TELECONFERENCED
Moved CSHJR 34(MLV) Out of Committee
*+ HB 316 MILITARY FACILITY ZONES TELECONFERENCED
Moved Out of Committee
                 HB 316-MILITARY FACILITY ZONES                                                                             
                                                                                                                                
1:50:18 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  THOMPSON  announced that  the  next  order of  business                                                               
would  be  HOUSE BILL  NO.  316,  "An  Act relating  to  military                                                               
facility  zones in  the  state; relating  to  the development  of                                                               
housing in military facility zones;  relating to the financing of                                                               
projects  in  military  facility  zones;  and  providing  for  an                                                               
effective date."                                                                                                                
                                                                                                                                
1:50:33 PM                                                                                                                    
                                                                                                                                
THOMAS  STUDLER,  staff,  Representative Steve  Thompson,  Alaska                                                               
State Legislature, introduced HB  316 on behalf of Representative                                                               
Thompson, sponsor.   Mr.  Studler said  the bill  gives statutory                                                               
authority  to  the Department  of  Military  & Veterans'  Affairs                                                               
(DMVA)  to establish  military facility  zones within  the state.                                                               
These  zones  are  designated  areas  nearby  military  bases  or                                                               
facilities   where  industrial   or  economic   development  will                                                               
directly enhance  the military's ability to  fulfill its mission.                                                               
Military  facility  zones  are  successfully  employed  in  other                                                               
states as  vehicles to obtain  and administer funds  for business                                                               
development   specifically  relating   to  military   activities.                                                               
Funding  for such  zones  in  Alaska may  be  available from  the                                                               
Alaska Industrial  Development and Export Authority  (AIDEA), the                                                               
Alaska Housing  Finance Corporation  (AHFC), or from  federal New                                                               
Market Tax Credits.   Federal, state, or local  public or private                                                               
funding  sources,  credit,  or guarantee  programs  can  be  made                                                               
available  directly  to  municipalities  and  boroughs  that  are                                                               
working  on  specifically  approved projects  within  a  military                                                               
facility zone.  Military facility  zones create opportunities for                                                               
significant  benefits to  Alaska and  to the  nation.   They will                                                               
enhance  economic   activity  near  military   installations  and                                                               
thereby facilitate economic growth  and development in the state,                                                               
especially  where   local  governments   are  working   in  close                                                               
partnership with their military  counterparts.  The zones promote                                                               
expansion  of   infrastructure  to  benefit  both   military  and                                                               
civilian objectives,  such as  civil defense,  homeland security,                                                               
and emergency response.  They  will enhance the nation's military                                                               
capabilities  by  helping  bases  operate  more  effectively  and                                                               
efficiently.   Finally,  military facility  zones in  Alaska will                                                               
clearly  demonstrate  the   state's  continuing  and  substantive                                                               
support  for the  armed  services, and  help  defend against  the                                                               
negative  impacts on  Alaska's  regional  economies and  military                                                               
communities that might occur should  Congress choose to implement                                                               
the federal Base Realignment and Closure Act (BRAC).                                                                            
                                                                                                                                
1:53:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MILLER  asked  for  a clear  definition  of  what                                                               
constitutes a military facility zone.                                                                                           
                                                                                                                                
[Although  not specifically  stated,  HB 316  was  set aside  and                                                               
taken up later in the meeting.]                                                                                                 
                                                                                                                                
                 HB 316-MILITARY FACILITY ZONES                                                                             
                                                                                                                                
CO-CHAIR THOMPSON returned the committee's attention to HB 316.                                                                 
                                                                                                                                
1:56:35 PM                                                                                                                    
                                                                                                                                
DALE   NASH,   Chief    Executive   Officer,   Alaska   Aerospace                                                               
Corporation, Department  of Military & Veterans'  Affairs (DMVA),                                                               
informed  the  committee  that Lockheed  Martin  is  the  largest                                                               
defense contractor  in the U.S.  and the world.   He said  HB 316                                                               
derived from  working closely  with Lockheed  Martin in  order to                                                               
improve  the state's  position with  military  customers and  the                                                               
aerospace support industry.  Several  states have adopted similar                                                               
legislation  to  create economic  facility  zones  in support  of                                                               
military installations,  so the  state is in  a position  to help                                                               
facilitate a reduction  in costs for the  military, thus becoming                                                               
more competitive.  When states  partner with the military and its                                                               
industrial base  - for  example, with Lockheed  - costs  are kept                                                               
down  for all.   These  zones are  specific to  the military  and                                                               
should  not be  confused with  other economic  development zones.                                                               
He said  the intent of  the bill is to  affect the area  within a                                                               
reasonable  driving  distance  from military  installations;  for                                                               
example, to  enable the base  to set up low-cost  housing without                                                               
the burden of a large capital  investment.  Mr. Nash advised that                                                               
most military installations have  a large industrial base nearby;                                                               
however,  Alaska has  few aerospace  support  companies.   Nearby                                                               
support  facilities  allow   contractors  to  resupply  equipment                                                               
without  shipping  material  long  distances.    He  assured  the                                                               
committee  this would  help  the Kodiak  Launch  Complex grow  in                                                               
support  of the  National  Aeronautics  and Space  Administration                                                               
(NASA) or the  military.  This approach can also  be an effective                                                               
way  to address  the  BRAC process  because  the military  should                                                               
focus  its concern  on  ships,  planes, and  troops,  and not  on                                                               
recreation  centers, shopping,  and  more.   Sharing these  costs                                                               
with  the   military  would  help  attract   military  expansion,                                                               
including the  utilization of  space on  a base  that may  now be                                                               
idle.     Finally, Mr.  Nash pointed  out that  this is  enabling                                                               
legislation  effective   statewide  for   all  branches   of  the                                                               
military.                                                                                                                       
                                                                                                                                
2:03:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA  asked whether there  are ways to  make the                                                               
legislation  "pay[ing] attention  to exactly  what this  state is                                                               
like."   She  observed  that Alaska  has  many small  communities                                                               
spread  over  vast regions,  and  the  position  of the  state  -                                                               
relative to other states and nearby  land masses - is critical to                                                               
security.  She opined Alaska  should be strengthening its borders                                                               
and "planning ahead" when locating military sites.                                                                              
                                                                                                                                
CO-CHAIR  THOMPSON  held  Representative  Cissna's  question  for                                                               
Deputy Commissioner Pierre.                                                                                                     
                                                                                                                                
2:06:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MILLER  asked  whether  an  economic  zone  or  a                                                               
military facility  zone could be  established on a  military base                                                               
or territory.                                                                                                                   
                                                                                                                                
MR. NASH  explained that other  states have  established "co-use"                                                               
on a base, but  he said "I don't think the  military base nor the                                                               
commander would want to come  under the legislation of a military                                                               
effectiveness zone;" the intent is for  the zone to be close.  He                                                               
agreed the  state has  a strategic  location, but  cautioned that                                                               
its location alone  will not guarantee Alaska will  not turn into                                                               
a training outpost with a skeleton crew.                                                                                        
                                                                                                                                
MR. NASH, in  response to Representative Cissna,  said the Kodiak                                                               
Launch Complex is located on Narrow Cape.                                                                                       
                                                                                                                                
2:09:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CISSNA  observed  there  are a  number  of  other                                                               
places in the state that have a history of military bases.                                                                      
                                                                                                                                
MR. NASH agreed,  but pointed out that HB 316  is trying to focus                                                               
on protecting the  missions that the state now has.   He referred                                                               
to  the  transfer  of  F-16s  from  Eielson  Air  Force  Base  in                                                               
Fairbanks  to  Joint   Base  Elmendorf-Richardson  in  Anchorage,                                                               
saying the  focus now is  to work with  industry in support  of a                                                               
military installation to bring expansion,  or to protect existing                                                               
missions.   He added  that the legislation  will allow  the state                                                               
"to react with the local communities and boroughs ... if                                                                        
opportunities arise; we do not want to have to wait for another                                                                 
legislative cycle to begin the process."                                                                                        
                                                                                                                                
2:11:38 PM                                                                                                                    
                                                                                                                                
CO-CHAIR SADDLER, co-sponsor of HB 316, had the following                                                                       
testimony read by Co-Chair Thompson [original punctuation                                                                       
provided, with some formatting changes]:                                                                                        
                                                                                                                                
     To Co-Chair Thompson and Members of the MLV Committee:                                                                     
                                                                                                                                
     Though  I can't  be there  today,  I wanted  to put  on                                                                    
     record  my   strong  support   for  HB   316,  Military                                                                    
     Facilities  Zones.   I  was  pleased  to work  on  this                                                                    
     legislation  during  the interim  with  Representatives                                                                    
     Thompson  and Feige,  and  to see  it  come before  our                                                                    
     committee.  I see  HB 316  as an  important legislative                                                                    
     tool to strengthen the  position of military facilities                                                                    
     in our state.                                                                                                              
                                                                                                                                
     Alaska  has 32  different  military installations  that                                                                    
     are critical elements in our  state economy.  There are                                                                    
     more than 24,000 active-duty,  Guard and Reserve troops                                                                    
     serving in Alaska, with an  annual payroll of more than                                                                    
     $1.5 billion.   About 13  percent of the  state economy                                                                    
     depends  on   the  military,  with  the   impact  being                                                                    
     especially significant near the larger installations.                                                                      
                                                                                                                                
     These  bases are  a significant  part  of our  nation's                                                                    
     defense structure.   They defend the  nation's airspace                                                                    
     and  outer  space;  rapidly deploy  forces  around  the                                                                    
     world in times of  crisis; support global logistics and                                                                    
     transportation   functions;    and   provide   training                                                                    
     opportunities  that  are  unmatched  elsewhere  in  the                                                                    
     world.                                                                                                                     
                                                                                                                                
     We've heard  recent news  that does  not bode  well for                                                                    
     Alaska's military  bases.  We've  heard news  of nearly                                                                    
     half-trillion dollars  in defense budget cuts  over the                                                                    
     next 10 years.  We've heard of the possible  loss of F-                                                                    
     16s from  Eielson Air Force  Base, and of  HC-130s from                                                                    
     Joint  Base  Elmendorf-Richardson.   We've  heard  that                                                                    
     nearly 270 civilian  jobs are being cut  from these two                                                                    
     bases.  And we've heard  the Secretary of Defense raise                                                                    
     the prospect  of another round in  the Base Realignment                                                                    
     and Closure (BRAC) process that could mean the further                                                                     
     diminution of the military's presence in Alaska.                                                                           
                                                                                                                                
     HB 316 can provide a number of significant benefits to                                                                     
     our state and nation:                                                                                                      
                                                                                                                                
        · It will provide a mechanism for bringing new                                                                          
         federal and state money to bear on the bases.                                                                          
        · It will help develop infrastructure that can                                                                          
          improve living conditions and economic prospects                                                                      
          for    the   communities    surrounding   military                                                                    
          facilities.                                                                                                           
        · It will help Alaska's bases become more efficient                                                                     
          and better able to effectively perform their                                                                          
          missions, strengthening the case against their                                                                        
          realignment or closure.                                                                                               
        · It will provide a mechanism to fund expansion of                                                                      
          existing facilities to embrace new missions.                                                                          
        · It will help protect private - and public-sector                                                                      
          jobs.                                                                                                                 
        · It will provide another positive demonstration of                                                                     
          Alaska's support for the military.                                                                                    
                                                                                                                                
       I am proud to be a co-sponsor of this legislation;                                                                       
     please join me in supporting its passage.                                                                                  
                                                                                                                                
       Rep. Dan Saddler, Co-Chair, Military and Veterans                                                                        
     Affairs Committee                                                                                                          
                                                                                                                                
2:14:49 PM                                                                                                                    
                                                                                                                                
MCHUGH    PIERRE,   Deputy    Commissioner,    Office   of    the                                                               
Commissioner/Adjutant   General,   Department   of   Military   &                                                               
Veterans'  Affairs,  addressed  questions  that  had  been  asked                                                               
previously.   He clarified that  the nearby community  will apply                                                               
for the zone and  will designate the size of the zone  - up to an                                                               
area of  500 square  miles.    The area  may overlap  an existing                                                               
military  facility,  but will  not  have  an impact  on  existing                                                               
businesses  or other  activities.   The  legislation enables  the                                                               
community  to develop  the  area near  the  military facility  in                                                               
cooperation  with partners  such  as Lockheed  Martin, which  are                                                               
direct  contractors with  the U.S.  Department of  Defense (DOD).                                                               
Other businesses, such as "payday  lenders" cannot take advantage                                                               
of  this  legislation.   For  example,  if Fairbanks  North  Star                                                               
Borough  created a  zone and  a company  that contracts  with DOD                                                               
proposes a  project in  an area  near Eielson  Air Force  Base or                                                               
Fort  Wainwright,  the  company  could  qualify  for  development                                                               
opportunities  such as  low-interest  loans from  AHFC or  AIDEA.                                                               
Mr. Pierre said DMVA feels it  is critical to diversify the users                                                               
of the  military installations in  order to offset the  high cost                                                               
of operating  military installations in Alaska,  maintain current                                                               
missions, expand to new missions, and build the economy.                                                                        
                                                                                                                                
2:17:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CISSNA  related that  some  of  the residents  of                                                               
Galena want to  use facilities at the closed  base for harvesting                                                               
willow, and asked  whether this legislation would  be relevant to                                                               
that issue.                                                                                                                     
                                                                                                                                
2:18:30 PM                                                                                                                    
                                                                                                                                
MR. PIERRE  indicated no.   House  Bill 316  is relevant  only to                                                               
existing, active military installations.   In further response to                                                               
Representative Cissna, he  said Fort Greely is a  good example of                                                               
a community with an existing military infrastructure.                                                                           
                                                                                                                                
CO-CHAIR  THOMPSON   asked  whether  the  legislation   could  be                                                               
utilized at a new base.                                                                                                         
                                                                                                                                
MR. PIERRE said yes.                                                                                                            
                                                                                                                                
2:20:28 PM                                                                                                                    
                                                                                                                                
JEFF  TROAN,  Vice   President,  Economic  Development,  Lockheed                                                               
Martin Corporation,  said he has  worked for Lockheed  Martin for                                                               
30 years - 15 years in  economic development.  He generally works                                                               
on economic  development agreements  between Lockheed  Martin and                                                               
states and localities,  which lower the cost of  business for his                                                               
company  so it  can pass  the savings  on to  the military.   The                                                               
zones  create  an  optimum business  climate  that  supports  the                                                               
military  mission  and lowers  the  cost  of goods  and  services                                                               
through enhanced relationships.    He noted that  in other states                                                               
the zones follow town planning and  are usually out the main gate                                                               
of  the  military base  and  in  the  surrounding area  where  an                                                               
industrial  park would  be.   Mr.  Troan gave  the  example of  a                                                               
military  commander who  wants to  obtain  an electronic  warfare                                                               
mission but  who has  no facilities.   A contractor  could create                                                               
the  infrastructure necessary  to do  the mission  and share  the                                                               
infrastructure with military  personnel.  To establish  a zone on                                                               
the   base,  "enhanced-use   leasing  or   modified  enhanced-use                                                               
leasing"  legislation   is  necessary  and  the   base  commander                                                               
segregates an unused portion of the  base, leases it to a private                                                               
or public  entity, and  that area is  redeveloped to  support new                                                               
missions on the base but  with private and public capital instead                                                               
of military construction funds.   This happened at (Indisc.) near                                                               
Ogden, Utah.                                                                                                                    
                                                                                                                                
2:25:09 PM                                                                                                                    
                                                                                                                                
MR.  NASH  returned  to Representative  Cissna's  question  about                                                               
harvesting  biofuel at  the closed  base in  Galena.   He advised                                                               
that the  legislation could  enable harvesting  of biofuel  in an                                                               
area near an active base.                                                                                                       
                                                                                                                                
CO-CHAIR THOMPSON  gave an example  of a private company  using a                                                               
military  facility zone  to  finance the  construction  of a  gas                                                               
pipeline to Eielson Air Force Base.                                                                                             
                                                                                                                                
MR. NASH agreed this would be a "perfect candidate."                                                                            
                                                                                                                                
REPRESENTATIVE CISSNA  opined the  military zones  - if  they are                                                               
long-term - would be beneficial for local jobs.                                                                                 
                                                                                                                                
2:28:05 PM                                                                                                                    
                                                                                                                                
CO-CHAIR THOMPSON closed public testimony.                                                                                      
                                                                                                                                
REPRESENTATIVE MILLER asked whether  there are any differences in                                                               
law enforcement, fire and rescue,  or taxes within the zone, once                                                               
the zone is designated.                                                                                                         
                                                                                                                                
CO-CHAIR THOMPSON advised the status would not change.                                                                          
                                                                                                                                
2:29:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LYNN moved to report  HB 316, Version 27-LS1191\I,                                                               
out  of   committee  with  individual  recommendations   and  the                                                               
accompanying fiscal notes.  There  being no objection, HB 316 was                                                               
reported  out of  the  House Special  Committee  on Military  and                                                               
Veterans' Affairs.                                                                                                              

Document Name Date/Time Subjects
1-HJR034A- Bill.pdf HMLV 2/16/2012 1:00:00 PM
SSTA 3/22/2012 9:00:00 AM
HJR 34
2- HJR 34 - USCG Icebreakers Arctic Base - Sponsor Statement.pdf HMLV 2/16/2012 1:00:00 PM
SSTA 3/22/2012 9:00:00 AM
HJR 34
3- HJR 34 - 12 01 11-LG Treadwell on Icebreakers.pdf HMLV 2/16/2012 1:00:00 PM
SSTA 3/22/2012 9:00:00 AM
HJR 34
4- HJR 34 - 2010 USCG Auth Act - AMSA Section.pdf HMLV 2/16/2012 1:00:00 PM
SSTA 3/22/2012 9:00:00 AM
HJR 34
5- HJR 34 - ANWTF Recs PP 14-21.pdf HMLV 2/16/2012 1:00:00 PM
SSTA 3/22/2012 9:00:00 AM
HJR 34
2- HB 316 - Sponsor Statement.pdf HMLV 2/16/2012 1:00:00 PM
HB 316
3-HB316 Sectional Analysis.pdf HMLV 2/16/2012 1:00:00 PM
HB 316
6- HJR 34 - Foreign Minister Amendment.pdf HMLV 2/16/2012 1:00:00 PM
SSTA 3/22/2012 9:00:00 AM
HJR 34
4- HB316-Fiscal Note- DCCED-AIDEA-02-10-12.pdf HMLV 2/16/2012 1:00:00 PM
HB 316
7- HJR 34 - Ltr from Lawson Brigham.pdf HMLV 2/16/2012 1:00:00 PM
SSTA 3/22/2012 9:00:00 AM
HJR 34
8- HJR 34 Leg Coun-Fiscal Note.pdf HMLV 2/16/2012 1:00:00 PM
SSTA 3/22/2012 9:00:00 AM
HJR 34
5- HB316-Fiscal Note-DMVA-MVA-CO-02-13-12.pdf HMLV 2/16/2012 1:00:00 PM
HB 316
6- HB316-Fiscal Note-DOR-AHFC-02-10-12.pdf HMLV 2/16/2012 1:00:00 PM
HB 316
1- HB0316 ver I- Bill.pdf HMLV 2/16/2012 1:00:00 PM
HB 316
Saddler testimony HB 316.pdf HMLV 2/16/2012 1:00:00 PM
HB 316
9- CSHJR34 (MLV) ver. M.pdf HMLV 2/16/2012 1:00:00 PM
HJR 34