Legislature(2009 - 2010)

04/11/2009 09:17 AM L&C

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Audio Topic
09:17:39 AM Start
09:17:52 AM SB125
09:28:50 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
SB 125-AK AEROSPACE CORPORATION                                                                                               
9:17:52 AM                                                                                                                    
CHAIR OLSON  announced that the  only order of business  would be                                                               
SENATE BILL  NO. 125,  "An Act  changing the  name of  the Alaska                                                               
Aerospace   Development    Corporation   to    Alaska   Aerospace                                                               
SENATOR JOE  PASKVAN, Alaska State  Legislature, stated  that the                                                               
Alaska Aerospace  Development Corporation (AADC)  was established                                                               
by the  Alaska Legislature in  1991.   The AADC was  charged with                                                               
stimulating a  high technology aerospace  industry in  the state.                                                               
The  AADC  in  partial  fulfillment  of  its  charter  built  and                                                               
operates  a  Kodiak  Launch Facility,  the  nation's  first  full                                                               
service commercial spaceport that is  not co-located on a federal                                                               
reservation.   This bill simply seeks  to change the name  of the                                                               
Alaska Aerospace Development Corporation  to the Alaska Aerospace                                                               
Corporation.   He explained  that the  word "development"  in the                                                               
corporation's title  gives the  perception that  the organization                                                               
is  a  nonprofit  administrative   body  that  simply  encourages                                                               
aerospace  development in  Alaska,  rather  than an  organization                                                               
that owns  and operates  space launch  facilities that  are fully                                                               
developed and capable of launching rockets.                                                                                     
SENATOR PASKVAN  stated that  according to  Dale Nash,  the Chief                                                               
Executive  Officer of  the AADC,  the difference  is significant.                                                               
This name change  will assist the corporation  in securing launch                                                               
and other  aerospace related contracts that  generate significant                                                               
economic benefits to Alaska  by providing long-term, high-paying,                                                               
stable  jobs  by  providing  local   economy  diversity,  and  by                                                               
creating  short-term  benefits  from  projects  and  construction                                                               
SENATOR PASKVAN related that the  AADC maintains and operates the                                                               
Kodiak Launch Facility which is  designed to augment the nation's                                                               
ability  to  place  satellites into  orbit  and  support  missile                                                               
defense testing, which has an  impact in Interior Alaska and Fort                                                               
Greely through employment in the region.                                                                                        
9:20:16 AM                                                                                                                    
SENATOR PASKVAN  indicated that the AADC  contributed about $28.7                                                               
million to the state according  to the independent firm, Northern                                                               
Economics, Inc.   During fiscal  year 2008, the AADC  spent about                                                               
$17.8 million  in Kodiak supporting  about 100 local  vendors and                                                               
generating about  155 jobs.   Those jobs paid about  $7.7 million                                                               
in wages  and salaries on  Kodiak Island and nearly  1,000 people                                                               
visited  Kodiak  to  participate  in  activities  at  the  launch                                                               
facility.   He  opined  that the  visits  generated $365,000  for                                                               
hotels, restaurants, and retail services on the island.                                                                         
SENATOR  PASKVAN pointed  out that  the  AADC was  involved in  a                                                               
project to increase  cellular phone access on Kodiak  Island.  He                                                               
highlighted that the activities  helped generate funding for road                                                               
improvements.   He related  that the  Kodiak Launch  Facility was                                                               
responsible for  11 percent of  the total earnings in  the Kodiak                                                               
Island  Borough.   Additionally, the  AADC employed  20 staff  in                                                               
Anchorage and  paid wages,  salaries, and  fees to  its Anchorage                                                               
employees  totaling  $1.7  million.   He  opined  that  the  AADC                                                               
contributed $7.1 million to the Anchorage economy.                                                                              
SENATOR  PASKVAN emphasized  that the  launch site  in Kodiak  is                                                               
operational,  functioning,  and  self supporting,  such  that  no                                                               
Alaska General Fund appropriations  are needed for operations and                                                               
maintenance of  the site.   He  referred to  the fiscal  note for                                                               
$4,500 is  for supplies such  as letterhead, business  cards, and                                                               
website design,  but will be  paid for from federal  receipts and                                                               
not from GF dollars.                                                                                                            
SENATOR  PASKVAN related  that the  corporation's title  needs to                                                               
reflect  these  facts   and  this  name  change   will  help  the                                                               
organization meet its 21st century  goals.  The new title, Alaska                                                               
Aerospace  Corporation, is  unambiguous about  their capabilities                                                               
and will  improve their ability  to offer launch services  to the                                                               
national and  international aerospace  market.  He  urged support                                                               
of this legislation.                                                                                                            
9:22:19 AM                                                                                                                    
REPRESENTATIVE NEUMAN inquired  as to how having  the name change                                                               
would assist the corporation in securing launches.                                                                              
SENATOR PASKVAN answered that the  confusion arises with the name                                                               
"development"  since people  assume  that the  organization is  a                                                               
nonprofit development  only organization.   He explained  that by                                                               
removing  the   name  "development"   will  indicates   that  the                                                               
"corporation" is  independently capable and are  fully engaged in                                                               
the process.                                                                                                                    
REPRESENTATIVE NEUMAN inquired as to  how this request for a name                                                               
change arose and if the AADC approached the industry.                                                                           
9:24:05 AM                                                                                                                    
DALE NASH, Chief Executive  Officer, Alaska Aerospace Development                                                               
Corporation (AADC)  explained that  the issue has  been discussed                                                               
for years  with the AADC board.   He related he  is very familiar                                                               
with  the space  shuttle programs  in Florida,  Virginia and  New                                                               
Mexico  and questions  that  have arisen  with  the function  and                                                               
scope  of the  AADC.   He stressed  that the  AADC repeatedly  is                                                               
asked questions  about its status, that  organizations assume the                                                               
AADC  is  a  nonprofit  organization.   Thus,  the  organizations                                                               
question  the  level  of  state  funding for  each  launch.    He                                                               
remarked  that  he could  provide  countless  e-mails from  space                                                               
advocacy groups with  similar misconceptions about the  AADC.  He                                                               
opined the  AADC is  very different from  other states  that fund                                                               
facilities.   He related  most states do  not have  a corporation                                                               
that will provide funding for launches.                                                                                         
MR. NASH explained  that the AADC can handle  almost every aspect                                                               
of  a  launch  from  logistics, operations,  which  include  such                                                               
functions  as "stack  the hardware,  process the  satellites, and                                                               
process the  rocket motors."  He  related the AADC has  the range                                                               
safety system  to track  and ensure rockets  fly 1700  miles down                                                               
range.   He highlighted that  the AADC coordinates  launches with                                                               
the  Federal Aviation  Administration, the  U.S. Coast  Guard and                                                               
other  government   agencies  that   need  notification   of  any                                                               
launches.     Additionally,   he  pointed   out  that   the  AADC                                                               
experiences  problems  with   defense  contract  audit  agencies.                                                               
Thus,  the AADC  must  continually  assert its  status  as a  for                                                               
profit agency, not  a nonprofit development agency.   Instead, he                                                               
must  assert  that  the  AADC   is  an  aerospace  company.    He                                                               
highlighted  that the  name change  will assist  the AADC  during                                                               
many  aspects  of  its  work,  including  contract  negotiations,                                                               
discussions, and introductions.  This  bill will clarify that the                                                               
AADC is not a nonprofit organization, he stated.                                                                                
9:26:59 AM                                                                                                                    
REPRESENTATIVE  CHENAULT related  that  he  could understand  the                                                               
quandary that  the organization  has had.   He asked  whether the                                                               
senator  who represents  the region  in which  the Kodiak  Launch                                                               
Facility is located supports the name change.                                                                                   
SENATOR PASKVAN  related that the  senator who  represents Kodiak                                                               
Island is  thrilled to have  the name of the  corporation changed                                                               
and has asked him to carry the bill.                                                                                            
9:27:54 AM                                                                                                                    
CHAIR  OLSON,  after first  determining  no  one else  wished  to                                                               
testify, closed public testimony on SB 125.                                                                                     
9:28:37 AM                                                                                                                    
REPRESENTATIVE NEUMAN  moved to  report SB  125 out  of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
note.   There being no  objection, SB  125 was reported  from the                                                               
House Labor and Commerce Standing Committee.                                                                                    

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