Legislature(2011 - 2012)CAPITOL 120

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


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HJR 34 COAST GUARD ICEBREAKERS & ARCTIC BASE TELECONFERENCED
Moved CSHJR 34(MLV) Out of Committee
*+ HB 316 MILITARY FACILITY ZONES TELECONFERENCED
Moved Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
   HOUSE SPECIAL COMMITTEE ON MILITARY AND VETERANS' AFFAIRS                                                                  
                       February 16, 2012                                                                                        
                           1:07 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Steve Thompson, Co-Chair                                                                                         
Representative Bob Lynn                                                                                                         
Representative Sharon Cissna                                                                                                    
Representative Bob Miller                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Dan Saddler, Co-Chair                                                                                            
Representative Carl Gatto, Vice Chair                                                                                           
Representative Alan Austerman                                                                                                   
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                              
Representative Bob Herron                                                                                                       
                                                                                                                              
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE JOINT RESOLUTION NO. 34                                                                                                   
Urging the United States Congress  to fund all the facilities and                                                               
vessels necessary  for the United  States Coast Guard  to fulfill                                                               
its Arctic  missions, including icebreakers  and an  Arctic Coast                                                               
Guard base.                                                                                                                     
                                                                                                                                
     - MOVED CSHJR 34(MLV) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 316                                                                                                              
"An  Act  relating  to  military facility  zones  in  the  state;                                                               
relating  to  the development  of  housing  in military  facility                                                               
zones;  relating  to  the  financing   of  projects  in  military                                                               
facility zones; and providing for an effective date."                                                                           
                                                                                                                                
     - MOVED HB 316 OUT OF COMMITTEE                                                                                            
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HJR 34                                                                                                                  
SHORT TITLE: COAST GUARD ICEBREAKERS & ARCTIC BASE                                                                              
SPONSOR(s): REPRESENTATIVE(s) HERRON                                                                                            
                                                                                                                                
02/03/12       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/03/12       (H)       MLV, STA                                                                                               
02/16/12       (H)       MLV AT 1:00 PM CAPITOL 120                                                                             
                                                                                                                                
BILL: HB 316                                                                                                                  
SHORT TITLE: MILITARY FACILITY ZONES                                                                                            
SPONSOR(s): REPRESENTATIVE(s) THOMPSON                                                                                          
                                                                                                                                
02/08/12       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/08/12       (H)       MLV, STA                                                                                               
02/16/12       (H)       MLV AT 1:00 PM CAPITOL 120                                                                             
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                              
REPRESENTATIVE BOB HERRON                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Introduced HJR 34, as sponsor.                                                                         
                                                                                                                                
ED PAGE, Executive Director                                                                                                     
Marine Exchange of Alaska                                                                                                       
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HJR 34 and answered                                                              
questions.                                                                                                                      
                                                                                                                                
JEFFREY GARRETT, Maritime Affairs Consultant                                                                                    
Mercer Island, Washington                                                                                                       
POSITION STATEMENT:  Testified in support of HJR 34.                                                                          
                                                                                                                                
LAWSON W. BRIGHAM, Ph.D.                                                                                                        
Distinguished Professor of Geography & Arctic Policy                                                                            
University of Alaska Fairbanks (UAF)                                                                                            
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Recommended changes to HJR 34.                                                                         
                                                                                                                                
THOMAS STUDLER, Staff                                                                                                           
Representative Steve Thompson                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented the sponsor statement for HB 316                                                               
on behalf of Representative Thompson, sponsor.                                                                                  
                                                                                                                                
DALE NASH, Chief Executive Officer                                                                                              
Alaska Aerospace Corporation                                                                                                    
Department of Military & Veterans' Affairs                                                                                      
Ft. Richardson, Alaska                                                                                                          
POSITION STATEMENT:  Testified in support of HB 316 on behalf of                                                              
the Alaska Aerospace Corporation and answered questions.                                                                        
                                                                                                                                
MCHUGH PIERRE, Deputy Commissioner                                                                                              
Office of the Commissioner/Adjutant General                                                                                     
Department of Military & Veterans' Affairs                                                                                      
Ft. Richardson, Alaska                                                                                                          
POSITION STATEMENT:  Testified in support  of HB 316 on behalf of                                                             
the  Department  of Military  &  Veterans'  Affairs and  answered                                                               
questions.                                                                                                                      
                                                                                                                                
JEFF TROAN, Vice President                                                                                                      
Economic Development                                                                                                            
Lockheed Martin Corporation                                                                                                     
Washington, D.C.                                                                                                                
POSITION STATEMENT:  Testified in support of HB 316.                                                                          
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:07:34 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  STEVE THOMPSON  called the  House Special  Committee on                                                             
Military  and Veterans'  Affairs meeting  to order  at 1:07  p.m.                                                               
Representatives Thompson,  Miller, Cissna, and Lynn  were present                                                               
at  the call  to order.   Representatives  Gatto, Austerman,  and                                                               
Saddler were excused.  Representative Herron was also present.                                                                  
                                                                                                                                
          HJR 34-COAST GUARD ICEBREAKERS & ARCTIC BASE                                                                      
                                                                                                                                
1:08:26 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  THOMPSON announced  that  the first  order of  business                                                               
would be HOUSE JOINT RESOLUTION  NO. 34, Urging the United States                                                               
Congress to  fund all  the facilities  and vessels  necessary for                                                               
the United  States Coast  Guard to  fulfill its  Arctic missions,                                                               
including icebreakers and an Arctic Coast Guard base.                                                                           
                                                                                                                                
1:08:59 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BOB  HERRON, Alaska State  Legislature, introduced                                                               
HJR 34,  as sponsor.   Representative Herron called  attention to                                                               
the supporting  documents provided in  the committee packet.   He                                                               
said the resolution  is the result of the work  Alaskans put into                                                               
the Alaska  Northern Waters Task Force,  including testimony from                                                               
throughout the  state.   The task force  concluded that  the U.S.                                                               
Coast  Guard needs  an Arctic-capable  icebreaker  and a  forward                                                               
base  located closer  to  the  Arctic than  the  current base  at                                                               
Kodiak.  The  base at Kodiak is valuable to  the U.S., however, a                                                               
base near  Nome or Barrow  would protect the interests  of Alaska                                                               
and the nation.   The task force found there  is increased Arctic                                                               
activity, thus an icebreaker and  an Arctic base would enable the                                                               
responsible development  of resources, foster  maritime commerce,                                                               
safeguard   Arctic  residents   and  their   ecosystems,  provide                                                               
emergency  and disaster  preparedness and  response, and  protect                                                               
sovereignty.   Representative Herron  pointed out that  Alaska is                                                               
the Arctic state, and it and  the Coast Guard "need the tools" to                                                               
address the  important resources  there; even nations  without an                                                               
Arctic border are building icebreakers.    He said the supporting                                                               
documents were provided by the  lieutenant governor of Alaska and                                                               
others, and more expert testimony  will follow this introduction.                                                               
There is a zero fiscal note  attached, and the resolution will be                                                               
further  vetted by  the House  State Affairs  Standing Committee.                                                               
He  advised   that  U.S.  Senator  Lisa   Murkowski  has  invited                                                               
legislators  and  others to  attend  a  hearing of  the  Homeland                                                               
Security Subcommittee, U. S.  Senate Committee on Appropriations,                                                               
in Washington, D.C.,  on 3/8/12.  Passage of  the resolution will                                                               
demonstrate  serious  support  in   Alaska  for  the  funding  of                                                               
icebreakers and  facilities to enhance  the Coast  Guard presence                                                               
in the Arctic.  Recent events  on the seas highlight the need for                                                               
the Coast Guard to be an important aspect of life in Alaska.                                                                    
                                                                                                                                
1:14:26 PM                                                                                                                    
                                                                                                                                
CO-CHAIR THOMPSON opened public testimony.                                                                                      
                                                                                                                                
1:14:43 PM                                                                                                                    
                                                                                                                                
ED PAGE,  Executive Director, Marine Exchange  of Alaska ("marine                                                               
exchange"), said the  marine exchange is supported  by the state,                                                               
the Coast  Guard, and the  maritime industry to provide  a marine                                                               
tracking system.   As personal history, he noted  he retired from                                                               
the Coast  Guard 11 years ago  as an officer with  service on the                                                               
East and West  Coasts.  Mr. Page advised that  since World War II                                                               
the Coast  Guard has provided  icebreaking support for  the Great                                                               
Lakes and  for New York  Harbor, but not for  Alaska.    His last                                                               
tour  in the  Coast  Guard  was as  Chief  of  Marine Safety  and                                                               
Environmental  Protection for  Alaska  Region, but  at that  time                                                               
"the  Arctic wasn't  on our  radar screen  [be]cause nothing  was                                                               
happening."   Since  then, the  marine  exchange vessel  tracking                                                               
system  has revealed  that passage  in the  Arctic has  increased                                                               
dramatically, by cruise ships,  Chinese icebreakers, cargo ships,                                                               
tugs  and  barges,  supply  vessels,   and  tankers  from  Russia                                                               
traveling to the  Far East.  Clearly,  now there is a  need for a                                                               
U.S. presence  to establish sovereignty, emergency  response, and                                                               
oversight   of   compliance   with   safety   and   environmental                                                               
regulations.     Unfortunately,   Coast  Guard   icebreakers  are                                                               
reaching the  end of their  lifespans, even though  activities in                                                               
the Arctic  are national  issues and  affect the  entire country.                                                               
The Coast Guard  is recognized worldwide as a  leader in maritime                                                               
safety  and   environmental  protection,  however,   its  present                                                               
capability  in  the  Arctic  is  limited.   Mr.  Page  urged  for                                                               
continued support  from the state for  the U.S. to provide  for a                                                               
Coast Guard presence as required.                                                                                               
                                                                                                                                
1:18:07 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  THOMPSON   asked  what  Coast  Guard   icebreakers  are                                                               
available if needed on the Arctic coast.                                                                                        
                                                                                                                                
MR.  PAGE said  the  U.S.  Coast Guard  Cutter  (USCGC) Healy  is                                                               
operational and  suitable, and there  are smaller  icebreakers on                                                               
the East Coast.  However,  the USCGC Healy was designed primarily                                                               
as a  research vessel with  icebreaking capabilities.    Although                                                               
access to McMurdo Station in  Antarctica is an important mission,                                                               
he  opined the  Arctic mission  is  more pressing,  and the  more                                                               
appropriate place to  stage icebreakers.  In  further response to                                                               
Co-Chair  Thompson, he  said USCGC  Healy is  in Seattle  at this                                                               
time.                                                                                                                           
                                                                                                                                
REPRESENTATIVE  MILLER asked  what  the capabilities  of a  fully                                                               
equipped icebreaker would be.                                                                                                   
                                                                                                                                
1:20:21 PM                                                                                                                    
                                                                                                                                
MR. PAGE advised  a fully equipped icebreaker would  have a stern                                                               
configured so it  could back up in ice, and  it would have larger                                                               
displacement and  greater horsepower than  the USCGC Healy.   The                                                               
legacy icebreakers like the USCGC  Polar Star and USCGC Polar Sea                                                               
have more horsepower and different hull configurations.                                                                         
                                                                                                                                
REPRESENTATIVE MILLER asked how long  it would take an icebreaker                                                               
to get from Kodiak to the Arctic.                                                                                               
                                                                                                                                
MR. PAGE  estimated one week,  depending on the thickness  of the                                                               
ice.  In further response  to Representative Miller, he confirmed                                                               
that  the response  would take  days, unless  the icebreaker  was                                                               
already in the Arctic.                                                                                                          
                                                                                                                                
1:22:15 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   LYNN   asked   several   questions   about   the                                                               
capabilities of an icebreaker.                                                                                                  
                                                                                                                                
MR. PAGE  said he  has limited  knowledge, but  the design  of an                                                               
icebreaker involves the thickness and  design of the hull so that                                                               
it rides  on top of  the ice.   Icebreakers have  ballast systems                                                               
that move  water from  the stern  to the  bow and  propellers and                                                               
steering gear that  are well protected from ice,  along with more                                                               
power  and  displacement  to  break  thicker  ice.    In  further                                                               
response  to Representative  Lynn, he  said the  USCGC Healy  can                                                               
travel through ice six feet thick.                                                                                              
                                                                                                                                
1:24:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA  expressed her understanding  that military                                                               
organizations need  to prepare to  be ready for  difficult tasks.                                                               
She  asked  if   the  resolution  goes  far   enough  to  support                                                               
readiness.                                                                                                                      
                                                                                                                                
MR. PAGE  said current  operations are  increasing -  350 vessels                                                               
travelled  through  the  Bering  Strait   last  year  -  and  the                                                               
resolution seeks to ensure that  Coast Guard capabilities grow as                                                               
the pace of  the traffic grows.   The Coast Guard plans  to go to                                                               
the Arctic this summer with  vessels and aircraft, and there will                                                               
be challenges  with equipment that  may not be designed  for cold                                                               
weather.   He  opined the  resolution identifies  a mission:  the                                                               
future need  for more facilities, capabilities,  and icebreakers.                                                               
In further response  to Representative Cissna, he said  HJR 34 is                                                               
a good beginning and an important endorsement from the state.                                                                   
                                                                                                                                
MR. PAGE,  in response to  Representative Lynn,  said helicopters                                                               
are standard equipment on icebreakers.                                                                                          
                                                                                                                                
1:29:32 PM                                                                                                                    
                                                                                                                                
JEFFREY GARRETT,  Maritime Affairs  Consultant and  retired Coast                                                               
Guard Rear  Admiral, provided a  brief history of  his experience                                                               
serving  in  the icebreaker  fleet.    He  served in  both  Polar                                                               
Regions, and  particularly in Arctic Alaska,  although during his                                                               
career most  operations were limited  to defense support  and the                                                               
support of  science programs.  However,  transformational changes                                                               
occurring  in  the  Arctic affect  the  Coast  Guard's  statutory                                                               
responsibilities.  More  recently, the Coast Guard  is seeking to                                                               
project  an   Arctic  presence   by  deploying   cutters,  boats,                                                               
aircraft,  and specialized  teams to  test equipment,  but during                                                               
this time of growing need,  its polar icebreaker capabilities are                                                               
drifting into "obsolescence."   He observed that  the Coast Guard                                                               
has been unable to deploy  an icebreaker for Arctic multi-mission                                                               
purposes for  over two years, and  plans for the USCGC  Polar Sea                                                               
have been canceled, forcing the  U.S. to charter a Russian vessel                                                               
to serve  bases in  Antarctica.  In  addition, the  USCGC Healy's                                                               
mission to deliver  fuel to Nome this year  disrupted its planned                                                               
maintenance and  operations schedule.  Mr.  Garrett commended HJR                                                               
34  and  Alaska's  strong  call for  the  federal  government  to                                                               
provide  the  Coast  Guard with  the  capabilities,  particularly                                                               
polar icebreakers, to meet national needs  in the Arctic.  He was                                                               
encouraged by the  2013 federal budget which  contains funding to                                                               
begin the  acquisition of an  icebreaker, and urged  quick action                                                               
to restore the  USCGC Polar Star and the USCGC  Polar Sea to full                                                               
operational capabilities.                                                                                                       
                                                                                                                                
1:32:58 PM                                                                                                                    
                                                                                                                                
LAWSON W. BRIGHAM, Ph.D., Distinguished  Professor of Geography &                                                               
Arctic  Policy, University  of Alaska  Fairbanks (UAF),  informed                                                               
the committee  he is a former  commander of the USCGC  Polar Sea.                                                               
Dr.  Brigham   raised  a  question  of   protocol  regarding  the                                                               
resolution,  noting that  the draft  form of  the resolution  was                                                               
sent  to Senior  Arctic Officials  of  the Arctic  states but  he                                                               
recommended that the resolution be  sent to the Foreign Ministers                                                               
of the Arctic states.  On  a more substantive matter, he observed                                                               
the last passage  of the resolution urges the U.  S. Congress and                                                               
the   administration  to   consider   all   options  to   finance                                                               
icebreakers,  including   charging  fees,  leasing,   and  giving                                                               
icebreakers  to   the  private   sector.    Dr.   Brigham  highly                                                               
recommended  that legislators  remove that  section because  user                                                               
fees have  no place  in the  operation of the  Coast Guard.   The                                                               
Congress and  administration should  fund the  Coast Guard  as it                                                               
does the  Navy or Air Force,  and ships should not  be leased for                                                               
use by the Coast Guard.                                                                                                         
                                                                                                                                
1:35:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MILLER called attention to  page 2, line 1, of the                                                               
resolution which read:                                                                                                          
                                                                                                                                
      WHEREAS ice cover in the Arctic is at historic lows,                                                                      
     and multiyear ice is decreasing;                                                                                           
                                                                                                                                
REPRESENTATIVE MILLER asked whether this  loss of ice will affect                                                               
how  many icebreakers  are needed,  and if  this passage  applies                                                               
exclusively  to the  Arctic, or  also to  the Bering  and Chukchi                                                               
Seas.                                                                                                                           
                                                                                                                                
1:36:28 PM                                                                                                                    
                                                                                                                                
DR. BRIGHAM said the multiyear  ice will disappear in the Arctic,                                                               
aiding navigation,  but the  retreat of ice  and the  thinning of                                                               
ice  has drawn  traffic  and  opened sea  lanes  leading to  more                                                               
responsibility   for   the   Coast  Guard   for   presence,   law                                                               
enforcement, security, and science.    It is a misconception that                                                               
less ice  reduces the need for  icebreakers when, in fact,  it is                                                               
the opposite  due to the greater  use of the whole  of the Arctic                                                               
Ocean.  This  is related to natural resource  development and the                                                               
longer season of open navigation.                                                                                               
                                                                                                                                
REPRESENTATIVE  MILLER   surmised  a  less   than  fully-equipped                                                               
icebreaker may be designed for these conditions.                                                                                
                                                                                                                                
1:38:11 PM                                                                                                                    
                                                                                                                                
DR. BRIGHAM reminded  the committee the Bering Sea  to the Arctic                                                               
Ocean is fully  ice-covered so if industry seeks  to operate year                                                               
around, or  in the fall  and spring,  the need for  an icebreaker                                                               
with USCGC  Polar Sea capability  is more necessary.   Operations                                                               
deep  in the  winter season,  such as  exploration in  the Bering                                                               
Strait, would be beyond the capability of the USCGC Healy.                                                                      
                                                                                                                                
DR. BRIGHAM,  in response to  Representative Lynn,  estimated the                                                               
time needed to build an icebreaker  is eight to ten years, due to                                                               
the budget process in Washington, D.C.                                                                                          
                                                                                                                                
1:40:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON  supported Dr. Brigham's  recommendation on                                                               
protocol.    Regarding the  resolve  on  leasing, he  offered  to                                                               
address Dr. Brigham's concerns during  the hearing process on the                                                               
resolution.  He then asked  whether the USCGC Polar Star's return                                                               
to service  and its  projected length of  service is  accurate in                                                               
the resolution.                                                                                                                 
                                                                                                                                
DR.  BRIGHAM indicated  yes.   The  challenge  is to  appropriate                                                               
sufficient  funds to  keep the  ships running  in the  short run,                                                               
with  the hope  of funding  the acquisition  of a  new ship.   He                                                               
agreed that the costs are  extraordinary and a challenging budget                                                               
issue.                                                                                                                          
                                                                                                                                
1:43:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON  inquired whether  the action of  the USCGC                                                               
Healy  for the  community of  Nome, and  the fact  that China  is                                                               
building  another  world-class   icebreaker,  will  convince  the                                                               
administration and the Navy to invest in icebreakers.                                                                           
                                                                                                                                
DR. BRIGHAM  opined these events  show the high readiness  of the                                                               
Coast Guard and  that it only lacks assets; it  has quality staff                                                               
and  readiness.   Other less  visible factors,  such as  offshore                                                               
development, require a  presence on the ice and  in the shallower                                                               
waters  around  Alaska.    He suggested  buoy  tenders  are  also                                                               
necessary.                                                                                                                      
                                                                                                                                
1:46:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON heard  the Navy has ordered  51 warships at                                                               
$500  million  each, and  he  suggested  that  one should  be  an                                                               
icebreaker.                                                                                                                     
                                                                                                                                
DR.  BRIGHAM agreed  saying,  "Two  of them  could  equate to  an                                                               
icebreaker,  [of] course  that's not  necessarily how  Washington                                                               
works."   Because  the U.S.  has an  extraordinary investment  in                                                               
Antarctica,  he encouraged  investment in  America's presence  in                                                               
both  Polar   Regions  by  increasing  the   nation's  icebreaker                                                               
capability to support both Antarctica and the Arctic.                                                                           
                                                                                                                                
[Although not  specifically stated,  public testimony  was closed                                                               
and HJR 34 was set aside and taken up later in the meeting.]                                                                    
                                                                                                                                
1:48:03 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 1:48 p.m. to 1:50 p.m.                                                                       
                                                                                                                                
1:50:04 PM                                                                                                                    
                                                                                                                                
Co-Chair Thompson called the meeting back to order at 1:50 p.m.                                                                 
                                                                                                                                
                 HB 316-MILITARY FACILITY ZONES                                                                             
                                                                                                                                
1:50:18 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  THOMPSON  announced that  the  next  order of  business                                                               
would  be  HOUSE BILL  NO.  316,  "An  Act relating  to  military                                                               
facility  zones in  the  state; relating  to  the development  of                                                               
housing in military facility zones;  relating to the financing of                                                               
projects  in  military  facility  zones;  and  providing  for  an                                                               
effective date."                                                                                                                
                                                                                                                                
1:50:33 PM                                                                                                                    
                                                                                                                                
THOMAS  STUDLER,  staff,  Representative Steve  Thompson,  Alaska                                                               
State Legislature, introduced HB  316 on behalf of Representative                                                               
Thompson, sponsor.   Mr.  Studler said  the bill  gives statutory                                                               
authority  to  the Department  of  Military  & Veterans'  Affairs                                                               
(DMVA)  to establish  military facility  zones within  the state.                                                               
These  zones  are  designated  areas  nearby  military  bases  or                                                               
facilities   where  industrial   or  economic   development  will                                                               
directly enhance  the military's ability to  fulfill its mission.                                                               
Military  facility  zones  are  successfully  employed  in  other                                                               
states as  vehicles to obtain  and administer funds  for business                                                               
development   specifically  relating   to  military   activities.                                                               
Funding  for such  zones  in  Alaska may  be  available from  the                                                               
Alaska Industrial  Development and Export Authority  (AIDEA), the                                                               
Alaska Housing  Finance Corporation  (AHFC), or from  federal New                                                               
Market Tax Credits.   Federal, state, or local  public or private                                                               
funding  sources,  credit,  or guarantee  programs  can  be  made                                                               
available  directly  to  municipalities  and  boroughs  that  are                                                               
working  on  specifically  approved projects  within  a  military                                                               
facility zone.  Military facility  zones create opportunities for                                                               
significant  benefits to  Alaska and  to the  nation.   They will                                                               
enhance  economic   activity  near  military   installations  and                                                               
thereby facilitate economic growth  and development in the state,                                                               
especially  where   local  governments   are  working   in  close                                                               
partnership with their military  counterparts.  The zones promote                                                               
expansion  of   infrastructure  to  benefit  both   military  and                                                               
civilian objectives,  such as  civil defense,  homeland security,                                                               
and emergency response.  They  will enhance the nation's military                                                               
capabilities  by  helping  bases  operate  more  effectively  and                                                               
efficiently.   Finally,  military facility  zones in  Alaska will                                                               
clearly  demonstrate  the   state's  continuing  and  substantive                                                               
support  for the  armed  services, and  help  defend against  the                                                               
negative  impacts on  Alaska's  regional  economies and  military                                                               
communities that might occur should  Congress choose to implement                                                               
the federal Base Realignment and Closure Act (BRAC).                                                                            
                                                                                                                                
1:53:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MILLER  asked  for  a clear  definition  of  what                                                               
constitutes a military facility zone.                                                                                           
                                                                                                                                
[Although  not specifically  stated,  HB 316  was  set aside  and                                                               
taken up later in the meeting.]                                                                                                 
                                                                                                                                
          HJR 34-COAST GUARD ICEBREAKERS & ARCTIC BASE                                                                      
                                                                                                                                
1:54:05 PM                                                                                                                    
                                                                                                                                
CO-CHAIR THOMPSON announced that the committee would return its                                                                 
attention to HJR 34.                                                                                                            
                                                                                                                                
1:54:55 PM                                                                                                                    
                                                                                                                                
CO-CHAIR THOMPSON moved Amendment 1 which read:                                                                                 
                                                                                                                                
           "COPIES of this resolution shall be sent to the                                                                    
     Honorable  Barack   Obama,  President  of   the  United                                                                    
     States;  the Honorable  Hillary Rodham  Clinton, United                                                                    
     States  Secretary   of  State;  the   Honorable  Sergey                                                                    
     Viktorovich Lavrov, Minister of  Foreign Affairs of the                                                                    
     Russian  Federation;  the   Honorable  Erkki  Tuomioja,                                                                    
     Minister for Foreign Affairs  of Finland; the Honorable                                                                    
     Carl  Bildt, Minister  for Foreign  Affairs of  Sweden;                                                                    
     the  Honorable Jonas  Gahr Støre,  Minister of  Foreign                                                                    
     Affairs of  Norway; the Honorable John  Baird, Minister                                                                    
     of  Foreign  Affairs  of Canada;  the  Honorable  Össur                                                                    
     Skarphéðinsson,  Minister   for  Foreign   Affairs  and                                                                    
     External   Trade  of   Iceland;  the   Honorable  Villy                                                                    
     Søvndal, Minister  for Foreign Affairs of  Denmark; the                                                                    
     Honorable  Admiral Robert  J. Papp,  Commandant, United                                                                    
     States Coast Guard; Ambassador  David A. Balton, Deputy                                                                    
     Assistant  Secretary for  Oceans and  Fisheries, United                                                                    
     States  Department of  State;  Rear  Admiral Thomas  F.                                                                    
     Ostebo,  Commander,  United  States  Seventeenth  Coast                                                                    
     Guard  District; the  Honorable Sean  Parnell, Governor                                                                    
     of  Alaska; the  Honorable  Mead Treadwell,  Lieutenant                                                                    
     Governor of  Alaska; the  Honorable Lisa  Murkowski and                                                                    
     the  Honorable  Mark  Begich, U.S.  Senators,  and  the                                                                    
     Honorable  Don Young,  U.S. Representative,  members of                                                                    
     the  Alaska  delegation  in  Congress;  and  all  other                                                                    
     members of the 112th United States Congress."                                                                              
                                                                                                                                
1:55:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LYNN objected for the purpose of discussion.                                                                     
                                                                                                                                
CO-CHAIR THOMPSON said the amendment is in response to Dr.                                                                      
Brigham's testimony recommending a change in procedure to follow                                                                
proper protocol on who receives the resolution.                                                                                 
                                                                                                                                
1:55:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LYNN removed his objection.  There being no                                                                      
further objection, Amendment 1 was adopted.                                                                                     
                                                                                                                                
1:55:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LYNN moved to report  HJR 34, Version 27-LS1303\A,                                                               
as amended, out of committee  with individual recommendations and                                                               
the accompanying fiscal  notes.  There being  no objection, CSHJR                                                               
34(MLV)  was  reported out  of  the  House Special  Committee  on                                                               
Military and Veterans' Affairs.                                                                                                 
                                                                                                                                
1:56:17 PM                                                                                                                    
                                                                                                                                
                 HB 316-MILITARY FACILITY ZONES                                                                             
                                                                                                                                
CO-CHAIR THOMPSON returned the committee's attention to HB 316.                                                                 
                                                                                                                                
1:56:35 PM                                                                                                                    
                                                                                                                                
DALE   NASH,   Chief    Executive   Officer,   Alaska   Aerospace                                                               
Corporation, Department  of Military & Veterans'  Affairs (DMVA),                                                               
informed  the  committee  that Lockheed  Martin  is  the  largest                                                               
defense contractor  in the U.S.  and the world.   He said  HB 316                                                               
derived from  working closely  with Lockheed  Martin in  order to                                                               
improve  the state's  position with  military  customers and  the                                                               
aerospace support industry.  Several  states have adopted similar                                                               
legislation  to  create economic  facility  zones  in support  of                                                               
military installations,  so the  state is in  a position  to help                                                               
facilitate a reduction  in costs for the  military, thus becoming                                                               
more competitive.  When states  partner with the military and its                                                               
industrial base  - for  example, with Lockheed  - costs  are kept                                                               
down  for all.   These  zones are  specific to  the military  and                                                               
should  not be  confused with  other economic  development zones.                                                               
He said  the intent of  the bill is to  affect the area  within a                                                               
reasonable  driving  distance  from military  installations;  for                                                               
example, to  enable the base  to set up low-cost  housing without                                                               
the burden of a large capital  investment.  Mr. Nash advised that                                                               
most military installations have  a large industrial base nearby;                                                               
however,  Alaska has  few aerospace  support  companies.   Nearby                                                               
support  facilities  allow   contractors  to  resupply  equipment                                                               
without  shipping  material  long  distances.    He  assured  the                                                               
committee  this would  help  the Kodiak  Launch  Complex grow  in                                                               
support  of the  National  Aeronautics  and Space  Administration                                                               
(NASA) or the  military.  This approach can also  be an effective                                                               
way  to address  the  BRAC process  because  the military  should                                                               
focus  its concern  on  ships,  planes, and  troops,  and not  on                                                               
recreation  centers, shopping,  and  more.   Sharing these  costs                                                               
with  the   military  would  help  attract   military  expansion,                                                               
including the  utilization of  space on  a base  that may  now be                                                               
idle.     Finally, Mr.  Nash pointed  out that  this is  enabling                                                               
legislation  effective   statewide  for   all  branches   of  the                                                               
military.                                                                                                                       
                                                                                                                                
2:03:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CISSNA  asked whether there  are ways to  make the                                                               
legislation  "pay[ing] attention  to exactly  what this  state is                                                               
like."   She  observed  that Alaska  has  many small  communities                                                               
spread  over  vast regions,  and  the  position  of the  state  -                                                               
relative to other states and nearby  land masses - is critical to                                                               
security.  She opined Alaska  should be strengthening its borders                                                               
and "planning ahead" when locating military sites.                                                                              
                                                                                                                                
CO-CHAIR  THOMPSON  held  Representative  Cissna's  question  for                                                               
Deputy Commissioner Pierre.                                                                                                     
                                                                                                                                
2:06:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MILLER  asked  whether  an  economic  zone  or  a                                                               
military facility  zone could be  established on a  military base                                                               
or territory.                                                                                                                   
                                                                                                                                
MR. NASH  explained that other  states have  established "co-use"                                                               
on a base, but  he said "I don't think the  military base nor the                                                               
commander would want to come  under the legislation of a military                                                               
effectiveness zone;" the intent is for  the zone to be close.  He                                                               
agreed the  state has  a strategic  location, but  cautioned that                                                               
its location alone  will not guarantee Alaska will  not turn into                                                               
a training outpost with a skeleton crew.                                                                                        
                                                                                                                                
MR. NASH, in  response to Representative Cissna,  said the Kodiak                                                               
Launch Complex is located on Narrow Cape.                                                                                       
                                                                                                                                
2:09:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CISSNA  observed  there  are a  number  of  other                                                               
places in the state that have a history of military bases.                                                                      
                                                                                                                                
MR. NASH agreed,  but pointed out that HB 316  is trying to focus                                                               
on protecting the  missions that the state now has.   He referred                                                               
to  the  transfer  of  F-16s  from  Eielson  Air  Force  Base  in                                                               
Fairbanks  to  Joint   Base  Elmendorf-Richardson  in  Anchorage,                                                               
saying the  focus now is  to work with  industry in support  of a                                                               
military installation to bring expansion,  or to protect existing                                                               
missions.   He added  that the legislation  will allow  the state                                                               
"to react with the local communities and boroughs ... if                                                                        
opportunities arise; we do not want to have to wait for another                                                                 
legislative cycle to begin the process."                                                                                        
                                                                                                                                
2:11:38 PM                                                                                                                    
                                                                                                                                
CO-CHAIR SADDLER, co-sponsor of HB 316, had the following                                                                       
testimony read by Co-Chair Thompson [original punctuation                                                                       
provided, with some formatting changes]:                                                                                        
                                                                                                                                
     To Co-Chair Thompson and Members of the MLV Committee:                                                                     
                                                                                                                                
     Though  I can't  be there  today,  I wanted  to put  on                                                                    
     record  my   strong  support   for  HB   316,  Military                                                                    
     Facilities  Zones.   I  was  pleased  to work  on  this                                                                    
     legislation  during  the interim  with  Representatives                                                                    
     Thompson  and Feige,  and  to see  it  come before  our                                                                    
     committee.  I see  HB 316  as an  important legislative                                                                    
     tool to strengthen the  position of military facilities                                                                    
     in our state.                                                                                                              
                                                                                                                                
     Alaska  has 32  different  military installations  that                                                                    
     are critical elements in our  state economy.  There are                                                                    
     more than 24,000 active-duty,  Guard and Reserve troops                                                                    
     serving in Alaska, with an  annual payroll of more than                                                                    
     $1.5 billion.   About 13  percent of the  state economy                                                                    
     depends  on   the  military,  with  the   impact  being                                                                    
     especially significant near the larger installations.                                                                      
                                                                                                                                
     These  bases are  a significant  part  of our  nation's                                                                    
     defense structure.   They defend the  nation's airspace                                                                    
     and  outer  space;  rapidly deploy  forces  around  the                                                                    
     world in times of  crisis; support global logistics and                                                                    
     transportation   functions;    and   provide   training                                                                    
     opportunities  that  are  unmatched  elsewhere  in  the                                                                    
     world.                                                                                                                     
                                                                                                                                
     We've heard  recent news  that does  not bode  well for                                                                    
     Alaska's military  bases.  We've  heard news  of nearly                                                                    
     half-trillion dollars  in defense budget cuts  over the                                                                    
     next 10 years.  We've heard of the possible  loss of F-                                                                    
     16s from  Eielson Air Force  Base, and of  HC-130s from                                                                    
     Joint  Base  Elmendorf-Richardson.   We've  heard  that                                                                    
     nearly 270 civilian  jobs are being cut  from these two                                                                    
     bases.  And we've heard  the Secretary of Defense raise                                                                    
     the prospect  of another round in  the Base Realignment                                                                    
     and Closure (BRAC) process that could mean the further                                                                     
     diminution of the military's presence in Alaska.                                                                           
                                                                                                                                
     HB 316 can provide a number of significant benefits to                                                                     
     our state and nation:                                                                                                      
                                                                                                                                
        · It will provide a mechanism for bringing new                                                                          
         federal and state money to bear on the bases.                                                                          
        · It will help develop infrastructure that can                                                                          
          improve living conditions and economic prospects                                                                      
          for    the   communities    surrounding   military                                                                    
          facilities.                                                                                                           
        · It will help Alaska's bases become more efficient                                                                     
          and better able to effectively perform their                                                                          
          missions, strengthening the case against their                                                                        
          realignment or closure.                                                                                               
        · It will provide a mechanism to fund expansion of                                                                      
          existing facilities to embrace new missions.                                                                          
        · It will help protect private - and public-sector                                                                      
          jobs.                                                                                                                 
        · It will provide another positive demonstration of                                                                     
          Alaska's support for the military.                                                                                    
                                                                                                                                
       I am proud to be a co-sponsor of this legislation;                                                                       
     please join me in supporting its passage.                                                                                  
                                                                                                                                
       Rep. Dan Saddler, Co-Chair, Military and Veterans                                                                        
     Affairs Committee                                                                                                          
                                                                                                                                
2:14:49 PM                                                                                                                    
                                                                                                                                
MCHUGH    PIERRE,   Deputy    Commissioner,    Office   of    the                                                               
Commissioner/Adjutant   General,   Department   of   Military   &                                                               
Veterans'  Affairs,  addressed  questions  that  had  been  asked                                                               
previously.   He clarified that  the nearby community  will apply                                                               
for the zone and  will designate the size of the zone  - up to an                                                               
area of  500 square  miles.    The area  may overlap  an existing                                                               
military  facility,  but will  not  have  an impact  on  existing                                                               
businesses  or other  activities.   The  legislation enables  the                                                               
community  to develop  the  area near  the  military facility  in                                                               
cooperation  with partners  such  as Lockheed  Martin, which  are                                                               
direct  contractors with  the U.S.  Department of  Defense (DOD).                                                               
Other businesses, such as "payday  lenders" cannot take advantage                                                               
of  this  legislation.   For  example,  if Fairbanks  North  Star                                                               
Borough  created a  zone and  a company  that contracts  with DOD                                                               
proposes a  project in  an area  near Eielson  Air Force  Base or                                                               
Fort  Wainwright,  the  company  could  qualify  for  development                                                               
opportunities  such as  low-interest  loans from  AHFC or  AIDEA.                                                               
Mr. Pierre said DMVA feels it  is critical to diversify the users                                                               
of the  military installations in  order to offset the  high cost                                                               
of operating  military installations in Alaska,  maintain current                                                               
missions, expand to new missions, and build the economy.                                                                        
                                                                                                                                
2:17:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CISSNA  related that  some  of  the residents  of                                                               
Galena want to  use facilities at the closed  base for harvesting                                                               
willow, and asked  whether this legislation would  be relevant to                                                               
that issue.                                                                                                                     
                                                                                                                                
2:18:30 PM                                                                                                                    
                                                                                                                                
MR. PIERRE  indicated no.   House  Bill 316  is relevant  only to                                                               
existing, active military installations.   In further response to                                                               
Representative Cissna, he  said Fort Greely is a  good example of                                                               
a community with an existing military infrastructure.                                                                           
                                                                                                                                
CO-CHAIR  THOMPSON   asked  whether  the  legislation   could  be                                                               
utilized at a new base.                                                                                                         
                                                                                                                                
MR. PIERRE said yes.                                                                                                            
                                                                                                                                
2:20:28 PM                                                                                                                    
                                                                                                                                
JEFF  TROAN,  Vice   President,  Economic  Development,  Lockheed                                                               
Martin Corporation,  said he has  worked for Lockheed  Martin for                                                               
30 years - 15 years in  economic development.  He generally works                                                               
on economic  development agreements  between Lockheed  Martin and                                                               
states and localities,  which lower the cost of  business for his                                                               
company  so it  can pass  the savings  on to  the military.   The                                                               
zones  create  an  optimum business  climate  that  supports  the                                                               
military  mission  and lowers  the  cost  of goods  and  services                                                               
through enhanced relationships.    He noted that  in other states                                                               
the zones follow town planning and  are usually out the main gate                                                               
of  the  military base  and  in  the  surrounding area  where  an                                                               
industrial  park would  be.   Mr.  Troan gave  the  example of  a                                                               
military  commander who  wants to  obtain  an electronic  warfare                                                               
mission but  who has  no facilities.   A contractor  could create                                                               
the  infrastructure necessary  to do  the mission  and share  the                                                               
infrastructure with military  personnel.  To establish  a zone on                                                               
the   base,  "enhanced-use   leasing  or   modified  enhanced-use                                                               
leasing"  legislation   is  necessary  and  the   base  commander                                                               
segregates an unused portion of the  base, leases it to a private                                                               
or public  entity, and  that area is  redeveloped to  support new                                                               
missions on the base but  with private and public capital instead                                                               
of military construction funds.   This happened at (Indisc.) near                                                               
Ogden, Utah.                                                                                                                    
                                                                                                                                
2:25:09 PM                                                                                                                    
                                                                                                                                
MR.  NASH  returned  to Representative  Cissna's  question  about                                                               
harvesting  biofuel at  the closed  base in  Galena.   He advised                                                               
that the  legislation could  enable harvesting  of biofuel  in an                                                               
area near an active base.                                                                                                       
                                                                                                                                
CO-CHAIR THOMPSON  gave an example  of a private company  using a                                                               
military  facility zone  to  finance the  construction  of a  gas                                                               
pipeline to Eielson Air Force Base.                                                                                             
                                                                                                                                
MR. NASH agreed this would be a "perfect candidate."                                                                            
                                                                                                                                
REPRESENTATIVE CISSNA  opined the  military zones  - if  they are                                                               
long-term - would be beneficial for local jobs.                                                                                 
                                                                                                                                
2:28:05 PM                                                                                                                    
                                                                                                                                
CO-CHAIR THOMPSON closed public testimony.                                                                                      
                                                                                                                                
REPRESENTATIVE MILLER asked whether  there are any differences in                                                               
law enforcement, fire and rescue,  or taxes within the zone, once                                                               
the zone is designated.                                                                                                         
                                                                                                                                
CO-CHAIR THOMPSON advised the status would not change.                                                                          
                                                                                                                                
2:29:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LYNN moved to report  HB 316, Version 27-LS1191\I,                                                               
out  of   committee  with  individual  recommendations   and  the                                                               
accompanying fiscal notes.  There  being no objection, HB 316 was                                                               
reported  out of  the  House Special  Committee  on Military  and                                                               
Veterans' Affairs.                                                                                                              
                                                                                                                                
2:30:15 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Special Committee  on Military and Veterans'  Affairs meeting was                                                               
adjourned at 2:30 p.m.                                                                                                          

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