Legislature(2011 - 2012)CAPITOL 120


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01:03:51 PM Start
01:04:53 PM HB27
01:17:33 PM Eo 115 - Realigning the Oversight Authority of the Alaska Aerospace Corporation
02:23:28 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSHB 27(MLV) Out of Committee
Scheduled But Not Heard
(Companion Bill)
                    ALASKA STATE LEGISLATURE                                                                                  
   HOUSE SPECIAL COMMITTEE ON MILITARY AND VETERANS' AFFAIRS                                                                  
                        February 8, 2011                                                                                        
                           1:03 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Dan Saddler, Co-Chair                                                                                            
Representative Steve Thompson, Co-Chair                                                                                         
Representative Carl Gatto, Vice Chair                                                                                           
Representative Alan Austerman                                                                                                   
Representative Bob Lynn                                                                                                         
Representative Sharon Cissna                                                                                                    
Representative Bob Miller                                                                                                       
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
HOUSE BILL NO. 27                                                                                                               
"An Act relating to the disposition of remains of a member of                                                                   
the military if the member dies while in a duty status."                                                                        
     - MOVED CSHB 27(MLV) OUT OF COMMITTEE                                                                                      
EO 115 - REALIGNING THE OVERSIGHT AUTHORITY OF THE ALASKA                                                                       
AEROSPACE CORPORATION                                                                                                           
     - EXECUTIVE ORDER 115 ADVANCED                                                                                             
SENATE BILL NO. 33                                                                                                              
"An Act relating to the disposition of remains of a member of                                                                   
the military if the member dies while in a duty status."                                                                        
     - SCHEDULED BUT NOT HEARD                                                                                                  
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: HB  27                                                                                                                  
SHORT TITLE: DISPOSITION OF SERVICE MEMBERS' REMAINS                                                                            
SPONSOR(s): REPRESENTATIVE(s) THOMAS, HERRON, FEIGE, SADDLER                                                                    
01/18/11       (H)       PREFILE RELEASED 1/7/11                                                                                
01/18/11       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/18/11       (H)       MLV, STA                                                                                               
02/08/11       (H)       MLV AT 1:00 PM CAPITOL 120                                                                             
WITNESS REGISTER                                                                                                              
CECILE ELLIOTT, Staff                                                                                                           
Representative Bill Thomas                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented HB 27 on behalf of one of the co-                                                              
prime sponsors, Representative Bill Thomas.                                                                                     
MARK SAN SOUCI, Regional Liaison Northwest                                                                                      
Defense State Liaison Office                                                                                                    
Office of the Deputy Assistant Secretary of Defense                                                                             
Deputy Under Secretary of Defense (Military Community and Family                                                                
U.S. Department of Defense                                                                                                      
Tacoma, Washington                                                                                                              
POSITION STATEMENT:  Testified in support of HB 27.                                                                           
VERDIE BOWEN, Director                                                                                                          
Office of Veteran Affairs                                                                                                       
Department of Military & Veterans' Affairs (DMVA)                                                                               
Fort Richardson, Alaska                                                                                                         
POSITION STATEMENT:  Testified in support of HB 27.                                                                           
RIC DAVIDGE, President                                                                                                          
Vietnam Veterans of America                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 27.                                                                           
DALE NASH, Chief Executive Officer                                                                                              
Alaska Aerospace Corporation (AAC)                                                                                              
Department of Commerce, Community, and Economic Development                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of EO 115.                                                                          
CRAIG CAMPBELL, President and Chief Operating Officer Designee                                                                  
Alaska Aerospace Corporation (AAC)                                                                                              
Department of Commerce, Community & Economic Development (DCCED)                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of EO 115.                                                                          
MIKE FORD, Assistant Attorney General & Legislative Liaison                                                                     
Legislation & Regulations Section                                                                                               
Department of Law (DOL)                                                                                                         
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions  during the hearing on EO                                                             
CURTIS THAYER, Deputy Commissioner                                                                                              
Office of the Commissioner                                                                                                      
Department of Commerce, Community & Economic Development (DCCED)                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of EO 115.                                                                          
MAJOR GENERAL TOM KATKUS, Adjutant General/Commissioner                                                                         
Department of Military & Veterans' Affairs (DMVA)                                                                               
Fort Richardson, Alaska                                                                                                         
POSITION STATEMENT:  Testified in support of EO 115.                                                                          
MCHUGH PIERRE, Deputy Commissioner/Chief of Staff                                                                               
Office of the Commissioner                                                                                                      
Department of Military & Veterans' Affairs (DMVA)                                                                               
Fort Richardson, Alaska                                                                                                         
POSITION STATEMENT:   Answered a  question during the  hearing on                                                             
EO 115.                                                                                                                         
ACTION NARRATIVE                                                                                                              
1:03:51 PM                                                                                                                    
CO-CHAIR  DAN  SADDLER  called the  House  Special  Committee  on                                                             
Military  and Veterans'  Affairs meeting  to order  at 1:03  p.m.                                                               
Representatives  Saddler, Thompson,  Gatto, Austerman,  Lynn, and                                                               
Miller were present at the  call to order.  Representative Cissna                                                               
arrived as the meeting was in progress.                                                                                         
         HB  27-DISPOSITION OF SERVICE MEMBERS' REMAINS                                                                     
1:04:53 PM                                                                                                                    
CO-CHAIR  SADDLER  announced that  the  first  order of  business                                                               
would be HOUSE  BILL NO. 27, "An Act relating  to the disposition                                                               
of remains of  a member of the military if  the member dies while                                                               
in a duty status."                                                                                                              
1:05:01 PM                                                                                                                    
CO-CHAIR THOMPSON  moved to adopt  the committee  substitute (CS)                                                               
for proposed  HB 27, Version B,  27-LS0191\B, Bannister, 1/26/11,                                                               
as the  working document.   There being  no objection,  Version B                                                               
was before the committee.                                                                                                       
1:05:34 PM                                                                                                                    
CECILE ELLIOTT,  Staff, Representative Bill Thomas,  Alaska State                                                               
Legislature,  explained that  HB  27, Version  B,  would close  a                                                               
loophole  in statute  in  order to  acknowledge  and support  the                                                               
wishes of those  who are serving our country.   The Department of                                                               
Defense  requires  all  service members,  reservists,  and  guard                                                               
members  complete a  record of  emergency data  - DD  Form 93  or                                                               
CG2020D - which  directs and authorizes the  disposition of human                                                               
remains.   Alaska state law  does not currently  recognize either                                                               
form, and  this ambiguity can  add an additional layer  of stress                                                               
to  grieving  families.   Much  care  and  honor  is given  to  a                                                               
deceased soldier, and  CSHB 27 allows for a  smooth transition at                                                               
home and follows the service members' directives.                                                                               
1:06:51 PM                                                                                                                    
REPRESENTATIVE GATTO asked  if there is a  difference between the                                                               
terms "armed services" and "armed forces."                                                                                      
MS.  ELLIOT   responded  that  the  term   "armed  services"  was                                                               
incorporated  in  the CS  to  encompass  the  U. S.  Coast  Guard                                                               
1:07:30 PM                                                                                                                    
CO-CHAIR  SADDLER  called  attention  to  a  memo  found  in  the                                                               
committee packet  from Representative  Thomas that  clarifies the                                                               
changes in the CS regarding the Guard.                                                                                          
1:07:45 PM                                                                                                                    
MARK  SAN  SOUCI,  Regional  Liaison   for  Military  Families  -                                                               
Northwest,  Defense State  Liaison Office,  Office of  the Deputy                                                               
Assistant  Secretary  of  Defense,   Deputy  Under  Secretary  of                                                               
Defense  (DUSD),   U.S.  Department  of  Defense,   informed  the                                                               
committee this  issue has surfaced  because military  people fill                                                               
out  a federal  form that  is frequently  not aligned  with state                                                               
statutes. He gave an example  of a service member, estranged from                                                               
his  wife, who  picked  his  brother to  be  responsible for  his                                                               
remains  if   he  died.     State  law,  however,   defaults  the                                                               
responsibility to  the surviving spouse  and, after his  death, a                                                               
conflict within the  family arose.  Corrective  measures by other                                                               
states  have  been endorsed  by  the  National Funeral  Directors                                                               
Association; in fact,  a majority of states  already recognize DD                                                               
Form  93,  or  are  currently  considering  amendments  to  their                                                               
statutes  to do  so.   He noted  that the  Senate companion  bill                                                               
1:10:01 PM                                                                                                                    
CO-CHAIR  SADDLER surmised  the CS  aligns the  House and  Senate                                                               
versions of the bill.                                                                                                           
1:10:09 PM                                                                                                                    
MR. SAN  SOUCI credited Alaska legislative  staff with correcting                                                               
the omission of the Guard.                                                                                                      
1:10:27 PM                                                                                                                    
VERDIE BOWEN, Director, Office of  Veteran Affairs, Department of                                                               
Military  & Veterans'  Affairs (DMVA),  related that  an incident                                                               
similar to  the example given  occurred in Alaska, and  he opined                                                               
passage  of  the proposed  legislation  would  prevent this  from                                                               
1:11:46 PM                                                                                                                    
RIC DAVIDGE,  President, Vietnam  Veterans of  America, expressed                                                               
his appreciation  to legislative staff  for amending the  bill to                                                               
include Guard members.   He explained that notifying  next of kin                                                               
can be  very difficult;  in fact,  his organization  is sometimes                                                               
called  upon to  recognize the  passing  of a  veteran if  family                                                               
members cannot be located.   Local funeral homes and the National                                                               
Cemetery  Association are  very helpful  in these  circumstances.                                                               
Mr.  Davidge  urged  the  committee  to  pass  the  bill  out  of                                                               
committee as soon as possible.                                                                                                  
1:13:07 PM                                                                                                                    
REPRESENTATIVE GATTO  described a situation in  which a soldier's                                                               
burial  wishes were  ignored.   He  said that  type of  situation                                                               
would be prevented by the passage of the bill.                                                                                  
1:14:08 PM                                                                                                                    
CO-CHAIR  SADDLER  said  he was  impressed  with  the  military's                                                               
efforts to take care of its own.                                                                                                
1:14:22 PM                                                                                                                    
CO-CHAIR SADDLER closed public testimony.                                                                                       
1:14:32 PM                                                                                                                    
CO-CHAIR THOMPSON  moved to report  the committee  substitute for                                                               
HB 27, Version 27-LS0191\B, Bannister,  1/26/11, out of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes.  There being no  objection, CSHB 27(MLV) was reported from                                                               
the  House Special  Committee on  Military and  Veterans' Affairs                                                               
1:15:18 PM                                                                                                                    
The committee took an at-ease from 1:15 p.m. to 1:17 p.m.                                                                       
1:17:33 PM                                                                                                                    
^EO  115  - Realigning  the  Oversight  Authority of  the  Alaska                                                               
Aerospace Corporation                                                                                                           
   EO 115 - Realigning the Oversight Authority of the Alaska                                                                
                     Aerospace Corporation                                                                                  
1:17:33 PM                                                                                                                    
CO-CHAIR  SADDLER  announced that  the  final  order of  business                                                               
would  be Executive  Order 115  which would  transfer the  Alaska                                                               
Aerospace  Corporation (AAC)  from  the  Department of  Commerce,                                                               
Community, and Economic Development  (DCCED) to the Department of                                                               
Military and Veterans Affairs (DMLV).   He stated there are three                                                               
options  when hearing  an Executive  Order (EO):  1. Do  nothing,                                                               
thus the  EO takes effect  60 days from transmittal;  2. Approve;                                                               
3.   Disapprove,   with    a   special   concurrent   resolution.                                                               
Furthermore, no amendments  or changes can be made to  an EO, and                                                               
it  differs  from  a  bill   in  that  there  are  no  individual                                                               
recommendations by committee members.                                                                                           
1:18:42 PM                                                                                                                    
DALE NASH, Chief Executive  Officer, Alaska Aerospace Corporation                                                               
(AAC),   Department   of   Commerce,  Community,   and   Economic                                                               
Development (DCCED), informed the  committee AAC is a state-owned                                                               
independent corporation -  similar to the Alaska  Railroad or the                                                               
Alaska  Housing   Finance  Corporation   -  which   currently  is                                                               
administered through  DCCED.   At the time  AAC was  created, the                                                               
vision was  for it to  launch satellites  and rockets out  of the                                                               
Poker  Flat Research  Range (PFRR)  facility; however,  there are                                                               
populations  downrange  of  that  launch  complex  endangered  by                                                               
stages of  rockets falling back  to earth.   In the  U.S. orbital                                                               
launch facilities  such as Cape  Canaveral, Florida,  and Wallops                                                               
Flight  Facility, Virginia,  are  situated so  that rockets  with                                                               
equatorial orbits launched  from west to east fall  back into the                                                               
ocean.   Similarly, Vandenberg  Air Force  Base in  California is                                                               
positioned  as far  west as  possible.    Therefore,  even though                                                               
Alaska is  sparsely populated, there  was a reluctance  to launch                                                               
rockets into orbit  from PFRR as rocket stages could  fall on the                                                               
North  Slope oil  fields or  on the  Anchorage and  Mat-Su areas.                                                               
After further research by aerospace  engineers, the Kodiak Launch                                                               
Complex (KLC) was developed.                                                                                                    
1:21:29 PM                                                                                                                    
MR.  NASH  continued  to  explain  that  at  the  time  of  AAC's                                                               
inception, it  was also envisioned  by the corporation,  the U.S.                                                               
Air  Force  (USAF),  other space  research  agencies,  and  other                                                               
states  that  there would  be  a  huge  a market  for  commercial                                                               
rockets and the  government would be the secondary  market.  This                                                               
was the rationale  for placing AAC in DCCED.   However, currently                                                               
85-90  percent  of  launches that  go  worldwide  are  government                                                               
launches: in fact,  in the U.S. most rockets are  launched by the                                                               
USAF, the  National Aeronautics and Space  Administration (NASA),                                                               
the  Department  of  Defense  (DOD),  the  National  Oceanic  and                                                               
Atmospheric Administration  (NOAA), and  the DOD  Missile Defense                                                               
Agency  (MDA).   He  stated  that the  15  launches  by KLC  were                                                               
closely  tied to  the aforementioned  customers, and  this market                                                               
requires AAC to be aligned with DMVA.  He said:                                                                                 
     It helps  us look more  like a  federal range.   We are                                                                    
     state-owned; as we launch for  the Air Force we need to                                                                    
     look like the  Air Force to Vandenberg  Air Force Base.                                                                    
     We  launch for  NASA  we  need to  look  like NASA,  we                                                                    
     launch  for  Missile  Defense, we  need  to  look  like                                                                    
     Missile  Defense.   Very often  discussions come  about                                                                    
     about  our  close  interface  with   the,  if  we  need                                                                    
     support,  for  responsive  launches, or  for  security,                                                                    
     because the  satellites are a high  priority government                                                                    
     asset, who do we rely upon?                                                                                                
MR.  NASH  recalled his  previous  contact  with former  Adjutant                                                               
General Campbell  regarding National  Guard (Guard)  operators at                                                               
Fort Greely  who, in the  case of  a responsive launch,  could be                                                               
cross-trained  to  help  AAC's range  safety  system  during  the                                                               
launch of a high priority, high  security satellite.  As a matter                                                               
of fact, one of the  biggest factors in support of cross-training                                                               
is  that the  Guard works  closely with  the Eastern  Range space                                                               
processing  and launch  infrastructure.   Mr. Nash  stressed that                                                               
AAC wants  to maintain  a close relationship  with DCCED  and the                                                               
transfer  to   DMVA  will  not  preclude   completing  commercial                                                               
launches,  because commercial  customers  often  own and  operate                                                               
rockets under contracts with DOD or  NASA.  He concluded that the                                                               
transfer to DMVA "is a very good  fit and can help add to several                                                               
opportunities  for   working  together,  teaming   together,  and                                                               
synergy as we move forward."                                                                                                    
1:25:16 PM                                                                                                                    
CRAIG CAMPBELL,  President and Chief Operating  Officer designee,                                                               
Alaska  Aerospace  Corporation  (AAC),  Department  of  Commerce,                                                               
Community & Economic Development  (DCCED), stressed that the move                                                               
to  DMVA  is an  administrative,  not  an operational,  move  and                                                               
explained that AAC  has a separate board of  directors to provide                                                               
oversight  and  direction.    Thus,  oversight  provided  by  the                                                               
department  within government  is  primarily to  ensure that  AAC                                                               
complies with state law, and to  provide a conduit to the budget.                                                               
Furthermore,  federal funding  for KLC  was administered  through                                                               
DMVA, and was a "pass through"  from DMVA to DCCED.  Mr. Campbell                                                               
opined that DOD  questioned this structure, and  he supported the                                                               
move  to  properly align  AAC  for  better understanding  by  the                                                               
federal government.                                                                                                             
1:26:55 PM                                                                                                                    
CO-CHAIR  THOMPSON  stated  his  support for  the  transfer,  but                                                               
questioned the accuracy of the zero fiscal note.                                                                                
1:27:32 PM                                                                                                                    
MR.  CAMPBELL  affirmed there  is  a  zero  fiscal note  for  the                                                               
transfer from  DCCED to  DMLV, however, there  may be  impacts on                                                               
the state budget  for operations; for example, AAC  has a funding                                                               
request for $4 million in the capital budget.                                                                                   
1:27:50 PM                                                                                                                    
REPRESENTATIVE  AUSTERMAN asked  whether  there  are any  "bright                                                               
stars" in the private sector market.                                                                                            
1:28:29 PM                                                                                                                    
MR. NASH said  AAC still believes there are  opportunities in the                                                               
commercial  market;  for example,  there  are  two rockets  under                                                               
development by NASA's  Commercial Orbital Transportation Services                                                               
(COTS)  program.   The  program  has paid  $1.5  billion each  to                                                               
Orbital  Sciences Corporation  (Orbital)  and  SpaceX to  develop                                                               
rockets to resupply the International  Space Station (ISS) and to                                                               
replace the Delta  II rocket, which is  the most-launched medium-                                                               
lift rocket,  weighing about 12,000-14,000 pounds  and lifting to                                                               
low-Earth  orbit.   Currently, AAC  launches small-lift,  80-foot                                                               
rockets weighing 4,000  pounds to low-Earth orbit.   The Delta II                                                               
rocket  has launched  about 148  times, putting  up approximately                                                               
250  satellites,   and  launched  Meridian  and   NAVSTAR  Global                                                               
Positioning  System   (GPS)  satellites.     The   rockets  under                                                               
development are SpaceX's  Falcon 9 and Orbital's  Taurus II, both                                                               
of which launch  from east coast facilities;  however, 40 percent                                                               
of launches are  polar orbits launched from west  coast sites and                                                               
AAC  wants   to  win  one   of  these  contracts.     An  Iridium                                                               
Communications  Inc. satellite  is  scheduled to  be launched  to                                                               
polar orbit  on the SpaceX  Falcon 9, and there  are negotiations                                                               
underway about launching from KLC.                                                                                              
1:31:36 PM                                                                                                                    
MR. NASH turned  to discussions with Orbital about  the Taurus II                                                               
and noted AAC has toured  its Virginia facilities; in fact, KLC's                                                               
last launch  was an Orbital  rocket and another is  scheduled for                                                               
May.    He  pointed  out  that those  rockets  will  launch  GPS,                                                               
Iridium,  communication satellites,  and many  military payloads.                                                               
He re-stated  that 60 percent  of launches are  equatorial orbits                                                               
from the  east coast and 40  percent are west coast.   A contract                                                               
for launching  either rocket is "a  win" for a generation.   Both                                                               
companies   have  west   coast  launches   contracted  in   2014.                                                               
Moreover, winning one  of these bids for one or  two launches per                                                               
year would  establish a tenant  customer "for  as far as  the eye                                                               
can  see."    Mr.  Nash  indicated  that  KLC's  new  and  modern                                                               
technology  makes for  quicker scheduling  and  response than  is                                                               
possible  at Vandenberg  Air Force  Base, and  can ensure  that a                                                               
rocket is  safe or  destroy it in  a day or  two.   Also, rockets                                                               
launched from  Kodiak fly  directly into  orbit versus  a dog-leg                                                               
flight pattern, and can have a 15-20 percent payload advantage.                                                                 
1:34:13 PM                                                                                                                    
MR. NASH assured  the committee KLC has  several other advantages                                                               
such  as  accommodating  medium-lift rockets  that  launch  40-80                                                               
percent of the satellites.                                                                                                      
1:35:11 PM                                                                                                                    
REPRESENTATIVE AUSTERMAN  asked Mr.  Nash to explain  further why                                                               
AAC must have a "look alike federal  side of it," when it is much                                                               
easier to launch from a complex like KLC.                                                                                       
1:35:42 PM                                                                                                                    
MR.  NASH  said, "We  want  [customers]  to  think we  look  like                                                               
Vandenberg,   but   realize  how   different   we   are  in   our                                                               
responsiveness   and  flexibility."     He   noted  that   launch                                                               
procedures are unique  and KLC can make changes  and decisions in                                                               
days  that  may  take  60-180  days  at  large,  well-established                                                               
ranges, because they  are a bureaucracy.  The interest  in KLC is                                                               
because of  its responsive  nature - although  KLC abides  by the                                                               
same regulations, it keeps to  the basics without adding overhead                                                               
and bureaucracy.                                                                                                                
1:38:07 PM                                                                                                                    
REPRESENTATIVE AUSTERMAN then referred to  page 1, line 8, of the                                                               
EO that  adds a  new chapter.   He  asked for  clarity as  to the                                                               
contents of  the original chapter,  pointing out the  name change                                                               
from the  Alaska Aerospace Development Corporation  to the Alaska                                                               
Aerospace Corporation.                                                                                                          
1:38:57 PM                                                                                                                    
MIKE  FORD, Assistant  Attorney  General  & Legislative  Liaison,                                                               
Legislation  &  Regulations  Section, Department  of  Law  (DOL),                                                               
directed  attention  to page  19,  line  29,  section 4,  of  the                                                               
executive  order,  which  listed   the  repealed  statutes.    He                                                               
explained  that  the executive  order  repeals  existing law  and                                                               
creates a new  chapter with "one small difference."   The initial                                                               
statutes of the  corporation were put in Title 14  because of the                                                               
corporation's original  connection with the University  of Alaska                                                               
(UA).     With  the  new   direction  and  organization   of  the                                                               
corporation, the  intention is to  move the relevant  statutes to                                                               
Title  26,  which  is  the  DMVA title.    He  advised  the  only                                                               
significant  change in  language  is in  the  composition of  the                                                               
board,  which now  includes the  adjutant  general of  DMVA.   In                                                               
further  response  to  Representative   Austerman,  he  said  the                                                               
addition of  the adjutant  general did not  increase the  size of                                                               
the  board, but  replaced  the position  of  the commissioner  of                                                               
1:41:45 PM                                                                                                                    
REPRESENTATIVE  GATTO referred  to  page 1,  line  13, asked  for                                                               
clarification of  the language,  "affiliated with  the University                                                               
of Alaska but with a separate and independent legal existence."                                                                 
MR. FORD  said abovementioned  language is  existing law,  and he                                                               
opined the reference is in  keeping with the original educational                                                               
goals  and  duties  of  the  university  and  AAC;  however,  the                                                               
language  does not  have significance  other than  that it  was a                                                               
part of the existing mission of the corporation.                                                                                
1:43:04 PM                                                                                                                    
MR. FORD,  in further response  to Representative Gatto,  said he                                                               
is not  aware of any problems  created by this language  since it                                                               
is just  recognition of  a past  association.   No new  duties or                                                               
obligations are created.                                                                                                        
REPRESENTATIVE  GATTO then  asked  for clarification  of page  1,                                                               
line 15, of the executive order that read:                                                                                      
     (b)  The corporation may not be terminated as long as                                                                      
     it has bonds, notes, or other obligations outstanding.                                                                     
MR. FORD  explained that this  language is intended  to recognize                                                               
legal obligations;  for instance, if a  corporation is terminated                                                               
without  satisfying its  legal  obligations,  other legal  issues                                                               
1:44:32 PM                                                                                                                    
CO-CHAIR SADDLER  concluded a corporation could  cease operations                                                               
if its legal obligations are "paid off."                                                                                        
1:44:49 PM                                                                                                                    
REPRESENTATIVE AUSTERMAN called  attention to page 5,  line 7, of                                                               
the   executive  order   regarding  the   six  purposes   of  the                                                               
corporation and pointed out that  two purposes are not related to                                                               
the university, and four purposes  are related.  He observed that                                                               
AAC's  scope of  work  has changed  over the  years  in terms  of                                                               
unmanned flights, and he asked  where that is incorporated in the                                                               
new  language;  in fact,  in  the  new  chapter  there is  not  a                                                               
stronger presence  of the future  of AAC, beyond  its affiliation                                                               
with UA.                                                                                                                        
MR.  NASH expressed  his  understanding that  the  change in  the                                                               
initial legislation deals  with the movement from  DCCED to DMVA.                                                               
He recalled  that the  name of the  corporation was  changed from                                                               
the  Alaska Aerospace  Development Corporation  to ACC  two years                                                               
ago at the withdrawal from PFRR  and UA.  Initially, there was an                                                               
understanding  that  all rockets  would  be  launched from  PFRR;                                                               
however, Kodiak is one of the  best locations on Earth from which                                                               
to launch  polar orbits.  He  acknowledged that a rewrite  of the                                                               
purpose of  ACC is  needed, and that  the corporation  has become                                                               
"an  unbelievable  world-class  launch  facility  on  a  rock  in                                                               
Kodiak."  He gave his personal reasons for working at ACC.                                                                      
1:49:04 PM                                                                                                                    
MR. NASH continued, saying KLC is  the essential core of AAC and,                                                               
like Florida and its space  program, there are related industries                                                               
such  as  aircraft, radar,  and  communication  built around  the                                                               
complex.   He  expressed his  view that  KLC is  an "enabler"  to                                                               
create  an  Alaska  aerospace  industry,   and  has  teamed  with                                                               
Lockheed Martin in  a partnership that he hopes will  result in a                                                               
ground  base defense  system  with a  sizeable  workforce in  the                                                               
Delta Junction  area.  There are  also plans to team  with the UA                                                               
system  to  win  research  projects  and  grants,  and  with  the                                                               
National  Guard to  attract launches  of  USAF unmanned  aircraft                                                               
systems to  help with  homeland security,  fisheries enforcement,                                                               
weather monitoring,  and other  tasks.   Mr. Nash  concluded that                                                               
AAC's new  chapter is based  around DOD government  contracts and                                                               
AAC will grow, at Kodiak  and beyond, to build Alaska's aerospace                                                               
industry to rival its military presence.                                                                                        
1:51:50 PM                                                                                                                    
MR. CAMPBELL expressed  his interest in joining Mr.  Nash and the                                                               
board of directors  to develop a future for AAC.   The first step                                                               
is  to  draft  a  strategic  plan  that  encompasses  the  larger                                                               
aerospace industry  in Alaska,  and that  defines how  to achieve                                                               
its plan.   The  strategic plan will  also refine  the transition                                                               
from  the original  Alaska Aerospace  Development Corporation  to                                                               
the new AAC.                                                                                                                    
1:52:55 PM                                                                                                                    
REPRESENTATIVE AUSTERMAN stated it is  not his goal to reject the                                                               
1:53:05 PM                                                                                                                    
REPRESENTATIVE  CISSNA  spoke  of Alaska's  strategic  geographic                                                               
position; in fact, Cold Bay  is an alternate landing location for                                                               
NASA.  She asked, "Does that tie into this in some way?"                                                                        
MR. CAMPBELL said it could.   He recalled his past experience and                                                               
efforts to  have DMVA develop  a strategic plan to  identify what                                                               
needs to be  done in the future.  The  development of a strategic                                                               
plan  requires   everyone  to   contribute  and   evaluate  their                                                               
thoughts.   At  that point  all  of the  possibilities along  the                                                               
spectrum  of  human space  flight  are  open; although  KLC  will                                                               
probably  not launch  the space  shuttle,  or resupply  missions,                                                               
there are plenty of other possibilities.                                                                                        
1:54:32 PM                                                                                                                    
CO-CHAIR SADDLER turned  attention to line 27,  paragraph 6, page                                                               
5, of EO 115, that called  for "developing of a state strategy to                                                               
encourage  space-related business."   He  asked whether  there is                                                               
currently a strategy extent that will be changing in the future.                                                                
MR. NASH said yes.   He added that AAC will  continue to build on                                                               
that  strategy to  include  emerging  opportunities, a  statewide                                                               
focus,  and  partnerships  with UA  and  prime  contractors  like                                                               
Lockheed  and  others.  The  strategic plan  is  expected  to  be                                                               
released in  another month after it  is reviewed by the  board of                                                               
1:55:44 PM                                                                                                                    
REPRESENTATIVE  GATTO  asked  how  many  manmade  satellites  and                                                               
pieces of "space junk" are circling the Earth.                                                                                  
MR. NASH  estimated 1,000-2,000 manmade satellites  are in orbit;                                                               
in fact,  satellites break away from  Earth at the same  speed as                                                               
gravity  is pulling  them  back,  so objects  tend  to remain  in                                                               
orbit.    About 1,500-2,000  satellites  have  been launched  and                                                               
about 15,000-20,000  pieces of golf  ball-sized debris  are being                                                               
tracked.  Additionally, there is  transitory debris from asteroid                                                               
belts and natural  sources.  He recalled a  collision three years                                                               
ago  when   China  destroyed  one   of  its  own   satellites  to                                                               
demonstrate  its   offensive  capability.    This   event  raised                                                               
interest in KLC because of its  "responsive nature in space."  He                                                               
concluded that  space is congested  and contested, thus  the open                                                               
orbits possible from KLC are desirable.                                                                                         
1:58:26 PM                                                                                                                    
CO-CHAIR SADDLER  asked whether EO  115 holds any changes  in the                                                               
disposition of personnel, assets, or money.                                                                                     
MR. NASH indicated no.                                                                                                          
1:59:37 PM                                                                                                                    
REPRESENTATIVE GATTO asked  if all satellites travel  in the same                                                               
MR. NASH  explained that  orbits travel in  the same  direction -                                                               
whether launched  north or south on  a Polar orbit -  so a launch                                                               
may be delayed for a short time to avoid an intercept.                                                                          
2:01:04 PM                                                                                                                    
CURTIS THAYER,  Deputy Commissioner, Office of  the Commissioner,                                                               
Department   of  Commerce,   Community  &   Economic  Development                                                               
(DCCED),  explained that  he is  the  commissioner's designee  on                                                               
AAC's board of directors.   The department is fully supportive of                                                               
the development and growth of  AAC, and of the aerospace industry                                                               
in Alaska.   He  recalled his  first visit  to the  Kodiak launch                                                               
site  in 1995,  and the  growth that  has taken  place up  to its                                                               
latest launch in November 2010.   The department has overseen AAC                                                               
since  its  inception,  supporting its  significant  development,                                                               
progress  and  growth;   in  fact,  an  early   study  found  the                                                               
facility's contribution  to the  economy to  be $28.7  million in                                                               
direct  and indirect  spending, 235  jobs, and  $12.5 million  in                                                               
payroll.     Furthermore,  260 Alaska  firms  provided goods  and                                                               
services to  the Alaska  aerospace industry  in Fiscal  Year 2008                                                               
(FY  08).   Launch  periods  increase  economic development  even                                                               
more, clarifying AAC's role in economic  development.    In order                                                               
for  this  growth to  continue,  AAC  needs  to expand  its  core                                                               
mission   to   encompass  U.S.   government,   military-supported                                                               
operations.   For  this reason,  Mr. Thayer  explained, switching                                                               
oversight authority  to DMVA will better  support AAC's continued                                                               
growth and growth  of the aerospace industry.   Furthermore, DMVA                                                               
has the  capacity to  partner with  ACC's ongoing  operations, as                                                               
well  as  the  development  of new  infrastructure.    He  opined                                                               
changing the oversight  authority will mean better  access to the                                                               
federal military command structure,  and a greater opportunity to                                                               
attract the  military contracts that  will directly  support KLC.                                                               
Additionally,  the change  will  provide  related private  sector                                                               
opportunities and will give AAC  a clear opportunity for contacts                                                               
to  secure future  launches.    He  concluded that  because DCCED                                                               
wants AAC to  be successful, the department would  like to retain                                                               
a  seat  on the  board  of  directors  in  order to  support  and                                                               
cultivate   the   economic   development  components   of   AAC's                                                               
2:04:51 PM                                                                                                                    
REPRESENTATIVE AUSTERMAN  asked whether a  seat for DCCED  on the                                                               
board of directors requires changes within the current statute.                                                                 
MR. THAYER  said no.  The  EO transfers the seat  between the two                                                               
commissioners, but does not add a seat.                                                                                         
2:05:43 PM                                                                                                                    
CO-CHAIR SADDLER  asked for an  estimate of the  economic benefit                                                               
to Kodiak and Alaska.                                                                                                           
MR. THAYER deferred to Mr. Nash.                                                                                                
2:06:26 PM                                                                                                                    
MR. NASH  stated the benefit has  been as high as  $54 million in                                                               
one  year during  construction of  infrastructure and  the Kodiak                                                               
Kenai  Fiber Link.  Annual economic  studies  reveal an  economic                                                               
benefit  of  from  $20-$30  million  in  a  typical  year.    The                                                               
corporation  contributes  approximately  11 percent  of  Kodiak's                                                               
economy.   Benefits also accrue  to Anchorage and Cordova  due to                                                               
AAC's off axis site in Cordova.                                                                                                 
2:08:00 PM                                                                                                                    
REPRESENTATIVE AUSTERMAN  added the benefits of  Kenai's learning                                                               
center and the downlink stations in Fairbanks.                                                                                  
MR. NASH confirmed  that ACC operations led  to downlink stations                                                               
in  Fairbanks and  radar  sites in  Juneau.   He  noted that  the                                                               
Challenger  Learning Center  is an  excellent addition  to Kenai.                                                               
In addition,  AAC tries to  support 40 UA scholarships  per year;                                                               
in fact, UAA is one of  50 NASA space grant universities, and the                                                               
money given to  UAA is matched by NASA  for space-related student                                                               
activities.   He concluded  that the launch  complex itself  is a                                                               
multi-use facility that supports  grazing buffalo and cattle, and                                                               
recreational use.                                                                                                               
2:10:05 PM                                                                                                                    
REPRESENTATIVE  MILLER referred  to page  7, line  18, indicating                                                               
that the  corporation can apply  to the federal government  for a                                                               
grant  allowing the  designation  of corporation  territory as  a                                                               
foreign  trade zone.   He  asked for  a definition  of "corporate                                                               
territory" and the ramifications of  the designation as a foreign                                                               
trade zone.                                                                                                                     
MR.  NASH  deferred  to  DOL  on  the  definition  of  "corporate                                                               
territory."   However, he first  explained that although  AAC has                                                               
not  launched any  foreign satellites,  the  designation of  free                                                               
trade zone means that foreign  satellites can be launched without                                                               
charging a tariff.                                                                                                              
2:11:43 PM                                                                                                                    
MR.  FORD   opined  "corporate  territory"   is  land   that  the                                                               
corporation owns and that could  be designated as a foreign trade                                                               
2:12:05 PM                                                                                                                    
REPRESENTATIVE MILLER assumed  that a privately-owned corporation                                                               
with  its own  territory and  relief from  taxes would  no longer                                                               
fall under the jurisdiction of the state.                                                                                       
MR. NASH responded  that AAC has long-term leases  with the state                                                               
as that  is more  cost effective  than owning  land.   The Alaska                                                               
Railroad  Corporation  is  the   model  AAC  is  using  regarding                                                               
facilities and assets.  The  corporation supports its status as a                                                               
tax-free  zone, and  would also  like to  qualify as  an economic                                                               
development zone so it may apply  for new market tax credits.  He                                                               
provided an example of the  financing capabilities of tax credits                                                               
and how they are used to  build capital infrastructure.  Mr. Nash                                                               
was  unsure about  sovereign territory  and said,  "We very  much                                                               
like, when we go  in we say, 'We have the  State of Alaska behind                                                               
us,' just  like Florida likes to  go in and say,  'We're Florida,                                                               
Incorporated' and Virginia does the same."                                                                                      
2:14:54 PM                                                                                                                    
REPRESENTATIVE   MILLER  maintained   his   question  about   the                                                               
application and meaning of the abovementioned two phrases.                                                                      
MR. FORD  offered to provide answers  at a later date.   He asked                                                               
whether AAC  has received  a grant  or has  been designated  as a                                                               
foreign trade zone.                                                                                                             
2:15:41 PM                                                                                                                    
MR. NASH  confirmed that  AAC has been  designated as  free trade                                                               
zone.   In addition,  AAC receives federal  grants; in  fact, the                                                               
most  recent  grant helped  pay  for  paving  a road.    However,                                                               
further meaning surpasses his understanding.                                                                                    
2:16:29 PM                                                                                                                    
REPRESENTATIVE  AUSTERMAN recalled  the designation  of corporate                                                               
territory and  land and advised  that the objective was  to bring                                                               
in  satellite  components so  that  satellites  can be  built  in                                                               
Kodiak  and then  launched on  rockets.   The ability  to have  a                                                               
duty-free zone  as a  tax base keeps  costs down,  and encourages                                                               
REPRESENTATIVE MILLER asked for a legal clarification.                                                                          
2:17:35 PM                                                                                                                    
MR. FORD will provide clarification.                                                                                            
2:17:55 PM                                                                                                                    
MAJOR   GENERAL   TOM  KATKUS,   Adjutant   General/Commissioner,                                                               
Department of Military & Veterans'  Affairs (DMVA), expressed his                                                               
support  of the  move.   He observed  that changes  in technology                                                               
make  the military  AAC's best  customer base,  and the  military                                                               
also  has  "a  sense  of  comfort,  [when]  dealing  with  fellow                                                               
military  members."   This is  true in  administrative functions,                                                               
control, and  looking out  for the  welfare of  the state  and of                                                               
developing  businesses.    Major  General  Katkus  expressed  his                                                               
interest in  the challenge ahead  and his expectation  of working                                                               
closely with  the commissioner of  DCCED.  He concluded  that the                                                               
executive  order  creates  synergy  and  will  move  an  advanced                                                               
product into the marketplace.                                                                                                   
2:19:17 PM                                                                                                                    
CO-CHAIR  SADDLER asked  whether EO  115 makes  any personnel  or                                                               
structural changes to  DMVA, with the exception of  the change to                                                               
the board of directors.                                                                                                         
MAJOR  GENERAL KATKUS  assured the  committee "it's  a zero  cost                                                               
movement from one department to the other."                                                                                     
2:19:59 PM                                                                                                                    
CO-CHAIR SADDLER closed public testimony.                                                                                       
2:20:13 PM                                                                                                                    
REPRESENTATIVE  AUSTERMAN  asked  whether   the  language  of  an                                                               
executive order can be changed or amended.                                                                                      
CO-CHAIR SADDLER  expressed his belief that  the committee cannot                                                               
change  the  text of  an  executive  order;  the options  are  to                                                               
approve, disapprove, or do nothing.                                                                                             
REPRESENTATIVE AUSTERMAN  was unsure whether Alaska  statutes can                                                               
be changed  by an  executive order  without participation  by the                                                               
2:21:19 PM                                                                                                                    
REPRESENTATIVE CISSNA opined after  two years the legislature can                                                               
create laws to overcome even executive orders.                                                                                  
2:21:42 PM                                                                                                                    
MR.  FORD  confirmed  that  the options  for  the  committee  are                                                               
acceptance   or  rejection,   without  amendment.   However,  the                                                               
legislature can always introduce bills to change existing laws.                                                                 
2:22:06 PM                                                                                                                    
MCHUGH PIERRE, Deputy Commissioner/Chief  of Staff, Office of the                                                               
Commissioner, Department of Military  & Veterans' Affairs (DMVA),                                                               
in  response  to  Representative Austerman,  explained  that  the                                                               
existing  DMVA  statute does  not  have  an existing  chapter  to                                                               
facilitate  housing  this  body  of language,  thus  DOL  created                                                               
Chapter 27 of Title 26, which is a new chapter.                                                                                 
2:22:54 PM                                                                                                                    
REPRESENTATIVE AUSTERMAN  moved to  advance EO  115, 27-GH1013\A,                                                               
out  of   committee  with  individual  recommendations   and  the                                                               
accompanying fiscal notes.  There  being no objection, EO 115 was                                                               
advanced  from  the  House  Special  Committee  on  Military  and                                                               
Veterans' Affairs.                                                                                                              
2:23:28 PM                                                                                                                    
There being no further business before the committee, the House                                                                 
Special Committee on Military and Veterans' Affairs meeting was                                                                 
adjourned at 2:23 p.m.                                                                                                          

Document Name Date/Time Subjects
HB 27.pdf HMLV 2/8/2011 1:00:00 PM
CSHB 27.pdf HMLV 2/8/2011 1:00:00 PM
CSHB 27 changes ltr head.pdf HMLV 2/8/2011 1:00:00 PM
MEMO hearing req HB27.pdf HMLV 2/8/2011 1:00:00 PM
DD Form 93.pdf HMLV 2/8/2011 1:00:00 PM
DOD Support.pdf HMLV 2/8/2011 1:00:00 PM
List of states.pdf HMLV 2/8/2011 1:00:00 PM
HB 27 Testifier List.pdf HMLV 2/8/2011 1:00:00 PM
EO 115.pdf HMLV 2/8/2011 1:00:00 PM
EO 115 Transmittal Memo from Clerk.pdf HMLV 2/8/2011 1:00:00 PM
EO 115 Transmittal Ltr from Governor.pdf HMLV 2/8/2011 1:00:00 PM
EO 115 Fiscal Notes.pdf HMLV 2/8/2011 1:00:00 PM
Sponsor Statement HB 27.pdf HMLV 2/8/2011 1:00:00 PM
HB027-DMVA-VS-2-7-11 v2.pdf HMLV 2/8/2011 1:00:00 PM
HB 27
2-7-11 ltr of support for HR27 (2).pdf HMLV 2/8/2011 1:00:00 PM
2-7-11 ltr of support to House for HR27.pdf HMLV 2/8/2011 1:00:00 PM