Legislature(2013 - 2014)SENATE FINANCE 532

04/13/2013 09:00 AM Senate FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 180 MILITARY YOUTH ACADEMY TELECONFERENCED
Moved HB 180 Out of Committee
+ HCR 6 EST. LEG. TASK FORCE ON UNMANNED AIRCRAFT TELECONFERENCED
Moved SCS CSHCR 6(FIN) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 SENATE FINANCE COMMITTEE                                                                                       
                      April 13, 2013                                                                                            
                         9:04 a.m.                                                                                              
                                                                                                                                
                                                                                                                                
9:04:55 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Vice-Chair Fairclough called the Senate Finance Committee                                                                       
meeting to order at 9:04 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Pete Kelly, Co-Chair                                                                                                    
Senator Kevin Meyer, Co-Chair                                                                                                   
Senator Anna Fairclough, Vice-Chair                                                                                             
Senator Click Bishop                                                                                                            
Senator Mike Dunleavy                                                                                                           
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative   Tammie   Wilson;  McHugh   Pierre,   Deputy                                                                    
Commissioner, Department  of Military and  Veterans Affairs;                                                                    
Christine   Marasigan,    Staff,   Senator    Kevin   Meyer;                                                                    
Representative Shelley Hughes.                                                                                                  
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Steve Colligan, E-Terra, LLC, Mat-Su; Ro Bailey, University                                                                     
of Alaska, Anchorage.                                                                                                           
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
CSHCR 6(EDT)                                                                                                                    
          EST. LEG. TASK FORCE ON UNMANNED AIRCRAFT                                                                             
                                                                                                                                
          SCS CSHCR 6(FIN) was REPORTED out of committee                                                                        
          with a "do pass" recommendation and with a new                                                                        
          indeterminate fiscal note from the Legislature.                                                                       
                                                                                                                                
HB 180    MILITARY YOUTH ACADEMY                                                                                                
                                                                                                                                
          HB 180  was REPORTED out  of committee with  a "do                                                                    
          pass"  recommendation  and   with  two  previously                                                                    
          published  fiscal   impact  notes:   FN3(MVA)  and                                                                    
          FN4(EED).                                                                                                             
                                                                                                                                
HOUSE BILL NO. 180                                                                                                            
                                                                                                                                
     "An Act relating to the Alaska Challenge Youth                                                                             
     Academy; and providing for an effective date."                                                                             
                                                                                                                                
9:05:42 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TAMMIE  WILSON, stated that the  objective of                                                                    
the  Alaska  Military  Youth Academy  was  to  assist  young                                                                    
Alaskans between  the ages of  16 and 19,  who statistically                                                                    
are headed for a  troubled future, to become self-confident,                                                                    
contributing  citizens of  the  state. She  shared that  the                                                                    
academy offered a 22 week  residential program and that upon                                                                    
completion the  cadets were  involved in  a 12  month after-                                                                    
care  program   to  further   their  education,   enter  the                                                                    
workforce,  or enlist  in the  military. She  said that  the                                                                    
academy had graduated 4000 cadets  in the last 20 years; the                                                                    
academy  graduated   approximately  300  cadets   per  year.                                                                    
She  related that  the bill  would  change the  name of  the                                                                    
Alaska Military  Youth Academy and  also change  the formula                                                                    
program. She  explained that the academy  currently received                                                                    
7 times  the base  student allocation  (BSA), but  should be                                                                    
funded based on performance.                                                                                                    
                                                                                                                                
9:07:27 AM                                                                                                                    
                                                                                                                                
MCHUGH PIERRE,  DEPUTY COMMISSIONER, DEPARTMENT  OF MILITARY                                                                    
AND  VETERANS AFFAIRS  (DMVA), related  that the  department                                                                    
had worked closely with the  bill sponsors. He stressed that                                                                    
the academy was one of the  best programs in the country. He                                                                    
believed  that the  legislation would  allow the  department                                                                    
more planning time with their  budget cycle. He related that                                                                    
the current  funding formula had  been established  to allow                                                                    
the  division to  grow, which  it had.  He relayed  that the                                                                    
division  now  had  the  ability  to  remove  the  "training                                                                    
wheels"  and  become more  independent.  He  hoped that  the                                                                    
division could work through the  full budget process for the                                                                    
coming fiscal year and debate the merits of the program.                                                                        
                                                                                                                                
9:08:48 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Fairclough noted  fiscal note  3 from  DMVA. She                                                                    
related  that the  proposed operating  funding for  FY14 was                                                                    
$11,074,600.                                                                                                                    
                                                                                                                                
Mr. Pierre commented  that the note reflected  that the bill                                                                    
would  have zero  impact on  the FY14  budget and  might not                                                                    
impact FY15. He said that the  bill would impact the way the                                                                    
money came to  the program. He noted the  reduction from the                                                                    
Department  of  Education  and Early  Childhood  Development                                                                    
(DEED)of approximately  $4 million  in FY14. He  stated that                                                                    
the department  would come  forward in  FY15 to  request the                                                                    
appropriation from the general fund.                                                                                            
                                                                                                                                
9:10:19 AM                                                                                                                    
                                                                                                                                
Senator  Hoffman  wondered  where the  interagency  receipts                                                                    
were being reduced from.                                                                                                        
                                                                                                                                
Mr. Pierre explained that instead  of appropriating money to                                                                    
DEED,  the funds  would be  appropriated  directly to  DMVA.                                                                    
Senator  Hoffman  understood that  the  BSA  would not  need                                                                    
funding for academy students.                                                                                                   
                                                                                                                                
Mr.  Pierre replied  in the  affirmative. He  furthered that                                                                    
instead  of receiving  money from  the  BSA, the  department                                                                    
would receive it directly from the general fund.                                                                                
                                                                                                                                
9:11:06 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:11:50 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Vice-Chair  Fairclough noted  fiscal note  4 from  DEED. She                                                                    
wondered if  the department was  planning of  returning year                                                                    
after  year  to  request  the   allocation  and  should  the                                                                    
committee be  put on  notice that there  would be  a general                                                                    
fund request every year.                                                                                                        
                                                                                                                                
Mr. Pierre responded that every  year the academy would come                                                                    
back and  request a  certain amount based  on the  number of                                                                    
cadets  expected to  graduate.  He stated  that the  program                                                                    
served students  who had  dropped out  of public  school and                                                                    
that that number  could fluctuate. He said  that the program                                                                    
served between 9 and 10  percent of the drop out population.                                                                    
He relayed that  the department would address  the number of                                                                    
students each year and how  much general fund match would be                                                                    
appropriate to fund the student population.                                                                                     
                                                                                                                                
Representative Wilson interjected  that the academy received                                                                    
the  names of  drop outs  from school  superintendents on  a                                                                    
yearly  basis and  that  the  role of  DEED  was  as a  pass                                                                    
through grant.                                                                                                                  
                                                                                                                                
9:13:41 AM                                                                                                                    
                                                                                                                                
Senator Olson  understood that the  students at  the academy                                                                    
currently received 7 times the BSA.                                                                                             
                                                                                                                                
Mr. Pierre explained  that the existing formula  was 7 times                                                                    
the  BSA, times  the number  of residential  students as  of                                                                    
October 1;  plus .6 times  the BSA multiplied by  the number                                                                    
of  non-residential  students as  of  October  1, minus  the                                                                    
federal  match. He  said the  cost was  roughly $35,000  per                                                                    
graduated student.                                                                                                              
                                                                                                                                
9:14:49 AM                                                                                                                    
                                                                                                                                
Senator Olson  noted that roughly 4,000  cadets came through                                                                    
the academy and 70 percent graduated.                                                                                           
                                                                                                                                
Mr.  Pierre replied  that there  had been  a total  of 4,000                                                                    
graduated  in  20  years.  He  said  that  the  academy  had                                                                    
approximately  400 cadets  entering  the  program per  year,                                                                    
with roughly 300 graduates.                                                                                                     
                                                                                                                                
9:15:56 AM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough OPENED public testimony.                                                                                  
                                                                                                                                
Vice-Chair Fairclough CLOSED public testimony.                                                                                  
                                                                                                                                
Senator Bishop MOVED to REPORT  HB 180 out of committee with                                                                    
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
9:16:38 AM                                                                                                                    
                                                                                                                                
HB  180 was  REPORTED  out  of committee  with  a "do  pass"                                                                    
recommendation  and  with  two previously  published  fiscal                                                                    
impact notes: FN3(MVA) and FN4(EED).                                                                                            
                                                                                                                                
9:16:40 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:19:43 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
CS FOR HOUSE CONCURRENT RESOLUTION NO. 6(EDT)                                                                                 
                                                                                                                                
     Recognizing  the Alaska  Center  for Unmanned  Aircraft                                                                    
     Systems  Integration   at  the  University   of  Alaska                                                                    
     Fairbanks  as a  national leader  in unmanned  aircraft                                                                    
     research and development; and relating  to a Task Force                                                                    
     on Unmanned Aircraft Systems.                                                                                              
                                                                                                                                
9:19:54 AM                                                                                                                    
                                                                                                                                
Senator  Bishop  MOVED  to   ADOPT  the  proposed  committee                                                                    
substitute  for HCR  6,  Work  Draft 28-LS0655\P,  (4/12/13,                                                                    
Gardner) as a working document.                                                                                                 
                                                                                                                                
9:20:07 AM                                                                                                                    
                                                                                                                                
Vice-Chair   Fairclough   OBJECTED   for  the   purpose   of                                                                    
discussion.                                                                                                                     
                                                                                                                                
CHRISTINE MARASIGAN,  STAFF, SENATOR KEVIN  MEYER, discussed                                                                    
the changes  in the  current bill. She  stated that  the two                                                                    
major  changes could  be  found  on Pages  3  and  4 of  the                                                                    
legislation. She explained  that on Page 3, line  11, the 15                                                                    
person task force was changed to  a 7 person task force. She                                                                    
said that Page 4 reflected  that the termination date of the                                                                    
committee had been moved to July 1, 2014.                                                                                       
                                                                                                                                
9:21:06 AM                                                                                                                    
                                                                                                                                
Senator Olson queried the ultimate goal of the taskforce.                                                                       
                                                                                                                                
Ms. Marasigan deferred the question to the bill sponsor.                                                                        
                                                                                                                                
Senator Olson understood that the  CS had changed the number                                                                    
of people  on the  taskforce and  the termination  date, but                                                                    
had not altered the original purpose of the taskforce.                                                                          
                                                                                                                                
Ms. Marasigan replied in the affirmative.                                                                                       
                                                                                                                                
9:21:57 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Fairclough WITHDREW  her OBJECTION.  There being                                                                    
NO further OBJECTION, Work Draft 28-LS0655\P was ADOPTED.                                                                       
                                                                                                                                
9:22:13 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SHELLEY  HUGHES,   appreciated  the  changes                                                                    
proposed in the CS. She  said that the legislative taskforce                                                                    
would  be responsible  for providing  policy recommendations                                                                    
for  the   Alaska  Center  for  Unmanned   Aircraft  Systems                                                                    
Integration. She said that  with emerging technology certain                                                                    
laws had to be revisited in  order to ensure that the safety                                                                    
and privacy  of Alaskans.  She stated that  constituents had                                                                    
expressed  concern about  the use  of  military drones.  She                                                                    
relayed that  she had researched  drones and  had discovered                                                                    
that the technology could be  used for good; she believed it                                                                    
was important to  embrace the technology for  the purpose of                                                                    
doing good. She  thought that the aircraft could  be used to                                                                    
save lives and  cited an instance where a drone  was used to                                                                    
locate a  downed aircraft  near Bethel.  She stated  that as                                                                    
the   unmanned  aircraft   were  integrated   into  national                                                                    
airspace the  field would grow  from 70,000 to  100,000 jobs                                                                    
nationwide  in  the  next three  years.  She  stressed  that                                                                    
because Alaska was go far ahead  in this field than the rest                                                                    
of the country,  the economic rewards to the  state could be                                                                    
substantial.  She  said  that the  taskforce  would  examine                                                                    
privacy concerns as  well as the application and  use of the                                                                    
unmanned  aircraft and  potential unmanned  aircraft use  in                                                                    
the private sector.                                                                                                             
                                                                                                                                
9:26:03 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:26:52 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Vice-Chair Fairclough discussed the fiscal note.                                                                                
                                                                                                                                
Senator  Dunleavy  pointed out  to  the  committee that  the                                                                    
fiscal note still reflected a 13 member taskforce.                                                                              
Vice-Chair Fairclough noted that  fiscal note 2 had replaced                                                                    
fiscal note 1.  She stated that there had  been concern that                                                                    
the committee would cost money;  the legislation stated that                                                                    
taskforce members would be allowed  travel and per diem. She                                                                    
understood  that   the  costs  would  be   absorbed  and  no                                                                    
additional funds would be needed.                                                                                               
                                                                                                                                
Representative Shelly Hughes agreed.                                                                                            
                                                                                                                                
Vice-Chair Fairclough OPENED public testimony.                                                                                  
                                                                                                                                
9:28:37 AM                                                                                                                    
                                                                                                                                
STEVE COLLIGAN,  E-TERRA, LLC, MAT-SU  (via teleconference),                                                                    
testified  in  support  of  HCR  6.  He  believed  that  the                                                                    
technology would revolutionize data  gathering. He said that                                                                    
the  evolution of  the industry  should  be integrated  into                                                                    
Alaska  law in  order to  craft meaningful  legislation that                                                                    
protected the public.                                                                                                           
                                                                                                                                
9:33:19 AM                                                                                                                    
                                                                                                                                
Senator Olson  queried the maximum altitude  that the drones                                                                    
could reach.                                                                                                                    
                                                                                                                                
Mr. Colligan replied that the  ceiling was restricted at 400                                                                    
feet. He added  that certain aircraft had a  weight limit as                                                                    
well.                                                                                                                           
                                                                                                                                
9:35:30 AM                                                                                                                    
                                                                                                                                
RO   BAILEY,   UNIVERSITY    OF   ALASKA,   ANCHORAGE   (via                                                                    
teleconference),  explained  that  the  range  and  altitude                                                                    
consult for  unmanned aircraft  system was  the same  as any                                                                    
manned  aircraft system.  She said  that the  ones that  the                                                                    
university  had  been  working   with  were  generally  much                                                                    
smaller,  less than  55 pounds,  but capable  of significant                                                                    
altitudes. She stated  that the drones used  by the military                                                                    
could go up  to an excess of 60,000 feet.  She stressed that                                                                    
no  unmanned  aircraft  system   could  enter  the  national                                                                    
airspace  system  without  extensive study  by  the  Federal                                                                    
Aviation  Administration (FAA).  She  said  that test  sites                                                                    
were  designed  to  completely  develop  the  processes  and                                                                    
procedures to  ensure that manned  aviation was safe  at all                                                                    
times when  the operation  of unmanned aircraft  systems was                                                                    
expanded beyond  public entities  to private  and commercial                                                                    
entities.                                                                                                                       
                                                                                                                                
9:37:44 AM                                                                                                                    
                                                                                                                                
Senator Olson wondered about the  plans for dealing with out                                                                    
of control drones.                                                                                                              
                                                                                                                                
Ms.  Bailey replied  that  jam  proof communication  systems                                                                    
were being  discussed to reduce  the probability of  a drone                                                                    
being taken over. She added  that the aircraft would undergo                                                                    
significant testing  and extensive, well  protected software                                                                    
would be used in the  drone, which would cause the autopilot                                                                    
to  make specific  and known  actions. She  shared that  the                                                                    
drones  would  ultimately  have  a  system  onboard  with  a                                                                    
separate and secure communication  like that would allow the                                                                    
drone to be forcibly crashed.                                                                                                   
                                                                                                                                
9:41:36 AM                                                                                                                    
                                                                                                                                
Senator Olson  assumed that the taskforce  would address the                                                                    
issue   of   drones    colliding   with   manned   aircraft.                                                                    
Representative Hughes replied in the affirmative.                                                                               
                                                                                                                                
Vice-Chair Fairclough returned the gavel to Senator Meyer.                                                                      
                                                                                                                                
9:43:17 AM                                                                                                                    
                                                                                                                                
Co-Chair Meyer CLOSED public testimony.                                                                                         
                                                                                                                                
Vice-Chair  Fairclough   MOVED  to  REPORT  HCR   6  out  of                                                                    
committee with individual  recommendations and a forthcoming                                                                    
amended fiscal note.                                                                                                            
                                                                                                                                
SCS CSHCR  6(FIN) was REPORTED  out of committee with  a "do                                                                    
pass"  recommendation and  with a  new indeterminate  fiscal                                                                    
note from the Legislature.                                                                                                      
                                                                                                                                
Co-Chair Meyer discussed housekeeping.                                                                                          
                                                                                                                                
9:44:58 AM                                                                                                                    
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 9:45 a.m.                                                                                          

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