Legislature(2005 - 2006)SENATE FINANCE 532
02/13/2006 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB188 | |
| HB243 | |
| SB207 | |
| HB243 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 188 | TELECONFERENCED | |
| += | HB 243 | TELECONFERENCED | |
| + | SB 207 | TELECONFERENCED | |
| + | TELECONFERENCED |
CS FOR SENATE BILL NO. 207(L&C)
"An Act relating to the membership on the board of directors
of the Alaska Aerospace Development Corporation."
AT EASE 10:09:10 AM / 10:10:00 AM
This was the first hearing for this bill in the Senate Finance
Committee.
DOUG LETCH, Staff to Senator Gary Stevens, the bill's sponsor,
explained that this bill would increase the Alaska Aerospace
Development Corporation (AADC) Board of Directors membership from
nine to 11 members. In addition, it would specify that three of the
11 members must reside on Kodiak Island, which is the area in which
AADC launch activities occur.
Mr. Letch informed the Committee that the current nine member Board
is comprised of three State residents "who have significant high
level experience in private business sector, specializing in
finance, economic development or marketing". Current Board
membership also includes the University of Alaska President or his
designee, the University of Alaska Geophysical Institute director
or his designee, the Department of Commerce, Community and Economic
Development Commissioner or his designee, "two members who have
held or currently hold a position in the aerospace industry or have
special experience with federal regulatory procedures or policies
involving space or operational experience", and a public school
educator or public member.
Mr. Letch stated that the fact that none of the seats are currently
dedicated to a Kodiak Island Borough resident is one of the reasons
that this bill was introduced.
Mr. Letch noted that AADC has conducted "numerous rocket launch
construction projects and other activities" at its Kodiak Launch
Complex (KLC) since the late 1990s. The activities impact local
government activities, businesses, recreational activities, as well
as the economy. KLC is also an integral component of the nation's
missile defense system.
Mr. Letch remarked that the bill's sponsor has determined that
local representation on the AADC Board is important. This
legislation is supported by the City of Kodiak and the Kodiak
Island Borough, which has developed a Resolution [copy on file]
reflecting their support.
10:12:37 AM
Co-Chair Green asked the history of Kodiak Island residents'
participation on the Board.
Mr. Letch noted that up until the previous year, two Kodiak Island
residents were on the Board; currently there is only one. That
person is Dave Woodruff, a successful fish cannery operator and
member of the City Council. The other individual was also a
successful businessman who resigned for personal reasons. A person
who did not reside in Kodiak replaced him.
10:13:23 AM
Senator Stedman supported "the concept of having local
representation" on such Boards; however, he asked whether the
requirement that a Board member must possess "a high level of
experience" might pose a problem; in other words, a limited
qualified applicant pool might be available for a vacant seat on
the Board.
10:14:09 AM
Mr. Letch pointed out that a person from Kodiak could hold the
Board seat specified for either a member of the public or a public
school educator. Island inhabitants would attest that there "are
plenty of qualified people there, and that it would never be an
issue."
Co-Chair Green asked whether the public educator seat being
referenced is the seat designated in Section 1(a)(6) on page 2,
line 9.
Mr. Letch affirmed. A Kodiak Island resident could be appointed to
the public school educator or public member seat designated in
Section 1(a)(6).
Co-Chair Green countered that the three Kodiak Island resident
memberships being proposed would appear to be included in the
language in CS SB 207(L&C) Version 24-LS1208\Y, Section 1(a)(1)
page 1, line 8 through 12. This language reads as follows.
(1) five [THREE] state residents who have a significant
high level of experience in the private business sector,
specializing in financing or economic development or
marketing; three of the state residents appointed under this
paragraph shall be residents of the borough where the launch
activities of the corporation occur;
New Text Underlined [DELETED TEXT BRACKETED]
Co-Chair Green suggested that the Board member designations could
be specified and then language allowing three Kodiak Island
residents to qualify for any of the seats could be included.
Mr. Letch voiced his approval of that suggestion. It would be
further reviewed.
Senator Dyson understood that, at times, the Kodiak Launch site has
been utilized by the federal Department of Defense (DoD). To that
point, he asked whether the AADC Board has authority specific to
management decisions about how the facility could be used and which
clients could use it.
Mr. Letch, while deferring to the Department of Commerce, Community
and Economic Development, stated that the Board "serves in a
variety of capacities as a standard board with advisory capacities
and also decision making capacities".
10:19:09 AM
Senator Dyson worried that the Board might desire to preclude
clients such as the DoD who might use the site "for very strategic
national defense issues".
SALLY SADDLER, Legislative Liaison, Department of Commerce,
Community and Economic Development replied that she could not
adequately respond to the concern until she conducted further
research.
Co-Chair Green noted that Mark Hamilton, AADC Board Member and
President of the University of Alaska was on teleconference and
might be able to answer Senator Dyson's question.
10:20:25 AM
MARK HAMILTON, Chair, Alaska Aerospace Development Corporation
Board and President, University of Alaska, testified via
teleconference from an offnet site. "The Board has the
responsibility of discovering the qualifications of a launch
partner, and they are very specifically technical, and there's, as
you might expect, a very very extensive contract drawn up with each
customer. No one has dibs on the range, no one is a certain
customer until considered by the Board."
10:21:16 AM
Senator Dyson stated that the response "raises questions", as it
could be interpreted to mean that the Board could decide to deny
DoD from utilizing "the facility for national defense purposes".
President Hamilton responded that such a decision would be "an
extraordinary circumstance".
President Hamilton communicated that the current contractual
agreement would require DoD to provide the Board "a very specific
timeline if they had a project which required a specific reaction,
there would be contractual obligations on their part." Continuing,
he noted that were "commercial customers to suddenly appear in the
numbers that, frankly, were envisioned 12 years ago where you had
the potential of an Iridium Corporation launching and refreshing as
many as 600 satellites," the Board might make the "difficult
corporate decision" to deny a DoD request that did not pertain "to
a dire national need." The Board would desire to accommodate
commercial opportunities "rather than holding the range open for
whenever" DoD decided to use it.
Senator Dyson assumed that the Board's mission would include
consideration of regional environmental concerns, the impact of
activities on both offshore and onshore areas, the safety of the
local residents, and the financial stability of the Corporation.
However, he was concerned that "a philosophical anti-war anti-
national bent of the Board could restrict U.S. defense efforts."
10:22:13 AM
President Hamilton responded that were the Board "prudently staffed
with people who have that kind of a bias, that that would certainly
be a risk." He opined that that "is not the case of the existing
Board or any Board membership that I have been associated with to
date". The concerns about the site's impact on Kodiak are
absolutely paramount with the Board, as substantiated by the fact
that just about "every single thing that is done out there" is
scrutinized. The position of the people who live on Kodiak Island
has been a known factor as a result of the fact that there has
traditionally been voting Island representation on the Board. In
addition, non-voting elected officials, including members of the
Legislature, have represented the interests of the Island. In
addition, the majority of the Board meetings are held in public
forums. The Board conducts a great deal of effort on issues.
Senator Dyson acknowledged.
10:23:39 AM
Co-Chair Wilken voiced appreciation for President Hamilton's
comments about Legislative participation on the Board, as he has
served for several years on the Board as a representative of the
Senate.
Co-Chair Wilken assured the Committee that, historically, a
Legislator representing the Kodiak Island District has been a non-
voting member of the Board.
Co-Chair Wilken asked whether there is "a sense that the voice of
Kodiak has been squelched and therefore we need to increase the
membership."
10:24:56 AM
Mr. Letch declared that Co-Chair Wilken's comments "hit the nail on
the head." While Legislators representing the District have
continued to serve in "an ex officio capacity" on the Board, there
have historically been two Kodiak Island resident voting members on
the Board. It is unknown as to "whether this was by design or
happenstances". The AADC facility has become "a lightning rod" to
the community in that people watch "every move that AADC makes."
Some people oppose the decisions made by AADC and others support
them. The site has become an important economic factor on the
Island.
10:25:52 AM
Mr. Letch stated that the decisions made by AADC do affect the
community, and the people in Kodiak "feel that" incorporating the
two voting Board membership requirement would best represent their
interests.
10:26:26 AM
Co-Chair Wilken voiced concern that adoption of this legislation
might result in there being requests for geographic representation
on other boards. No other board currently has such specification.
Adoption of this legislation would also specify that more than 25
percent of the Board would be representing one area. His concern
could be likened to that professed earlier by Senator Dyson in
that, while this might be acceptable today, in the future this
action "may lessen the use of that rocket range for whatever
reason."
Co-Chair Wilken voiced concern about "the precedent" that might be
established. As a result of this legislation, "there could be four
people at the table speaking on behalf of Kodiak." He believed that
"Kodiak is well-represented … the people of Kodiak have not been
ignored at all; to the contrary, I suggest that they've been heard
and reheard." While some people might not support the activities
that occur at the site, "the vast majority would agree that the
rocket range is a benefit" both to the area and to Alaska. In
summary, he could not support the legislation as it might lead to
geographical representation as opposed to qualifications dictating
board membership. "If it isn't broke don't fix it."
10:28:30 AM
Senator Dyson spoke in support of Co-Chair Wilken comments. The
Kodiak Launch site is a major launch site that is "very strategic …
to our national interests."
10:29:31 AM
Senator Olson asked whether some controversial issue of importance
to Kodiak Island residents was defeated at some point, due to a
lack of votes on behalf of the local people.
10:29:50 AM
Mr. Letch was unaware of "any specific instance."
10:30:01 AM
President Hamilton stated that the membership of the Board as
currently designated is appropriate, and he did not support the
proposed changes. The Legislators who have represented the
interests of Kodiak on the Board have done a good job. The Board is
also aware of its responsibilities. The individual from Kodiak who
resigned from the Board did so because his business "was being
boycotted". The involvement of politics with private activities
could explain the failure of governmental corporations. The Board
has discussed a variety of membership issues including whether or
not the University President or the Director of the Geophysical
Institute of the University should be on the Board. While he
understood the reason those entities were designated when the AADC
Board was initially developed 12 years prior, changes that have
occurred over time might dictate that there should be fewer rather
than more specific Board member designations. The reason for
including the Commissioner of Department of Commerce, Community and
Economic Development and someone who understands the aerospace
industry on the Board could be substantiated; however, it would be
difficult for him to substantiate the reason "at this stage of the
game" for requiring that the University of Alaska President or a
representative of the Geophysical Institute to be on the Board.
"This ought to be a commercial board" comprised of people who could
move a corporation forward.
10:33:38 AM
Senator Hoffman inquired as to how often and where the Board meets.
Mr. Hamilton replied that while the Board primarily meets quarterly
in Anchorage, there would be a meeting in Kodiak in June 2006.
Co-Chair Green ordered the bill HELD in Committee.
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