02/01/2024 01:30 PM Senate COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| SB161 | |
| SJR13 | |
| Presentation(s): Alaska Broadband Update | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 161 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| *+ | SJR 13 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
February 1, 2024
1:30 p.m.
MEMBERS PRESENT
Senator Forrest Dunbar, Chair
Senator Donald Olson, Vice Chair
Senator Elvi Gray-Jackson
Senator Jesse Bjorkman
Senator Cathy Giessel
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 161
"An Act relating to municipal taxation of farm use land; and
providing for an effective date."
- HEARD & HELD
SENATE JOINT RESOLUTION NO. 13
Encouraging the United States Congress and the President of the
United States to pass and sign legislation amending the Alaska
Native Claims Settlement Act to release certain land held in
trust back to affected Alaska Native village corporations.
- HEARD & HELD
PRESENTATION(S): ALASKA BROADBAND UPDATE
- HEARD
PREVIOUS COMMITTEE ACTION
BILL: SB 161
SHORT TITLE: TAX EXEMPTION FOR FARM USE LAND
SPONSOR(s): SENATOR(s) BJORKMAN
01/16/24 (S) PREFILE RELEASED 1/8/24
01/16/24 (S) READ THE FIRST TIME - REFERRALS
01/16/24 (S) CRA
01/30/24 (S) CRA AT 1:30 PM BELTZ 105 (TSBldg)
01/30/24 (S) Heard & Held
01/30/24 (S) MINUTE(CRA)
02/01/24 (S) CRA AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SJR 13
SHORT TITLE: AMEND ALASKA NATIVE CLAIMS SETTLEMENT ACT
SPONSOR(s): SENATOR(s) DUNBAR
01/26/24 (S) READ THE FIRST TIME - REFERRALS
01/26/24 (S) CRA
02/01/24 (S) CRA AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
BEN ADAMS, representing self
Soldotna, Alaska
POSITION STATEMENT: Testified in support of SB 161.
MARCUS MUELLER, representing self
Kenai, Alaska
POSITION STATEMENT: Testified in support of SB 161.
PAMELA SAMASH, representing self
Nenana, Alaska
POSITION STATEMENT: Testified in support of SB 161.
ADAM JENSKI, representing self
Palmer, Alaska
POSITION STATEMENT: Testified in support of SB 161 and answered
questions on the bill.
ARIELLE WIGGIN, Staff
Senator Forrest Dunbar
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced SJR 13 on behalf of the sponsor.
BEN MALLOT, Vice President
External Affairs
Alaska Federation of Natives
Anchorage, Alaska
POSITION STATEMENT: Provided invited testimony in support of SJR
13 and answered questions.
GREGG RENKES, Senior Vice President
Government Relations
Chenega Corporation
Washington, D.C.
POSITION STATEMENT: Gave invited testimony in support of SJR 13
and answered question.
THOMAS LOCHNER, Director
Alaska Broadband Office
Department of Commerce, Community and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Delivered an update on the Alaska Broadband
Office and answered questions.
ERIN HEIST, Division Operations Manager
Administrative Services Division
Department of Commerce, Community and Economic Development
(DCCED)
Juneau, Alaska
POSITION STATEMENT: Answered questions during the update on the
Alaska Broadband Office.
ACTION NARRATIVE
1:30:55 PM
CHAIR FORREST DUNBAR called the Senate Community and Regional
Affairs Standing Committee meeting to order at 1:30 p.m. Present
at the call to order were Senators Giessel, Gray-Jackson, Olson,
Bjorkman, and Chair Dunbar.
SB 161-TAX EXEMPTION FOR FARM USE LAND
1:31:52 PM
CHAIR DUNBAR announced the consideration of SENATE BILL NO. 161
"An Act relating to municipal taxation of farm use land; and
providing for an effective date."
[This is the second hearing of SB 161 in the Senate Community
and Regional Affairs Committee.]
1:32:01 PM
CHAIR DUNBAR opened public testimony on SB 161.
1:32:36 PM
BEN ADAMS, representing self, Soldotna, Alaska, testified in
support of SB 161, stating that he is a new farmer and rancher
in Alaska. Property taxes on structures are one of a farmer's
biggest expenses, which discourages farming. He said that,
unlike every state he knows, Alaska has the idea of progressive
property taxation. He explained that the more he builds and
farms, the more his property taxes increase. He is now at the
point where he pays considerably more than anyone else in his
neighborhood, including those with more land and residential
structures, all due to farming. He said that in Southcentral
Alaska, it is a hugely discouraging factor. He said farmers
informed him they cannot increase production because they cannot
afford the property taxes on the new structures required for
expansion. He said if the state is serious about food security,
then Alaska needs to:
- stop making minor, incremental changes,
- stop with the far-flung agricultural projects, and
- do something that makes a huge difference to the farmers in
Kenai and Mat-Su, like offer an exemption or a deferral for
structures on farms.
MR. ADAMS compared various forms of taxation on farms around
Alaska. He said the disparity in property taxes makes it cheaper
for certain farms to produce agricultural goods. He said the
state's largest farms are in Delta Junction, and they pay
nothing. Fairbanks has a farm structure exemption, which 78
percent of voters approved. He said farms like his cannot
produce agricultural goods cheaply due to the larger property
tax bills. Before he started farming two years ago, his property
taxes were about $1,000 yearly; now, they are more than $1,000
monthly. He said it is impossible to break even, let alone turn
a profit or grow as a farmer and rancher when the property tax
bill increases every time he builds anything. It is the opposite
of what every other state does, and it needs to change if
Alaskans seriously want food security in the state. He urged the
legislature to fix this before farmers give up and go bankrupt.
He said Alaska cannot have food security under the current law.
1:35:47 PM
MARCUS MUELLER, representing self, Kenai, Alaska, testified in
support of SB 161, stating he is a new farmer in Homer, Alaska.
He said that he likes:
- the straightforward approach of SB 161,
- that it includes farm buildings,
- that it includes the use of IRS tax form Schedule F
(Form 1040) and
- the $1000 product value threshold.
1:36:25 PM
MR. MUELLER said he is starting a farm business on 177 acres of
land, 2 miles off-road on the Kenai Peninsula. He works as a
land manager for the Kenai Peninsula Borough during the day. He
wrote a white paper on agriculture in this capacity. It outlines
an agricultural initiative on the Kenai Peninsula that
identifies where the borough could put forward as much as four
to six thousand acres of land for agricultural production. In
the process of writing the white paper, he had a lot of
conversations with the farming community and those interested in
locally grown foods in the region. He has been involved with the
Borough Resilience and Security Advisory Commission for the past
two years. This group of volunteers discusses emerging issues on
the Kenai Peninsula and includes an agricultural subcommittee. A
recurring topic of discussion is the use of tax policy as a tool
for governments to promote agricultural growth across the state.
1:38:44 PM
MR. MUELLER said that the role of tax policy is important,
particularly concerning agriculture. He outlined a finding of
particular importance:
• The agricultural sector is a land-based industry.
• Land is an important part of the supply chain, as is access to
land and the affordability of land.
• Agriculture competes with other sectors for land.
• Land for residential use has the advantage of 30-year,
capitalized upfront mortgages.
• Residential-use land has a major infusion of capital, which
gives this sector a lot of purchasing power.
• In contrast, capital works just the opposite for agricultural-
use land.
• A farmer starts with very little capital, and the goal is to
make the land's soil valuable over time.
• A farmer might build the operation and value of the land over
30 years.
• The economic structure for land used in the agricultural
sector differs greatly from other sectors.
• The tax policy for agricultural producers should reflect the
reality of this difference.
MR. MUELLER thanked the committee for the opportunity to testify
and encouraged support of SB 161.
1:41:12 PM
PAMELA SAMASH, representing self, Nenana, Alaska, testified in
support of SB 161, aligning with previous testimony. She said it
is critical to support efforts to increase food sustainability.
The pandemic taught that Alaska is too dependent on the Lower
48. Farmers in Alaska are like heroes. They supply not only
local food but good-quality local food. Happy, healthy farmers
who humanely raise animals and organic produce means healthy
Alaskans. SB 161 works for everybody.
1:43:00 PM
CHAIR DUNBAR agreed that during the pandemic, Alaska faced a
public crisis that caused a lot of worry. He mentioned the Port
of Tacoma and that Alaska needs to improve its food security.
1:43:21 PM
ADAM JENSKI, representing self, Palmer, Alaska, testified in
support of SB 161 and answered questions. He foraged hay and
raised bison and cattle in the Mat-Su Valley for about 20 years.
He has been leaning into horse hay to pay bills because it is
more profitable. He and his wife lease 3,000 to 4,000 acres of
property between Palmer, Sutton, and Point MacKenzie. He said SB
161 is going in the right direction. He stated that taxes make
farming leased ground more cost-effective than buying property.
He asked that the committee consider allowing farmers to defer
taxes completely. It is hard to find land suitable for
agriculture in Alaska. He stated that SB 161 encourages
landowners to keep their land for agricultural use instead of
pursuing more profitable development opportunities.
1:45:46 PM
SENATOR OLSON asked whether the tax structure has changed in the
Mat-Su Valley over the past 20 years.
MR. JENSKI replied, no. He started when he was 18 and is still
filling out the same tax deferment application, albeit it only
applies to the property itself, not the structures. The tax
deferment helped him slow losses and hang on to 225 acres, down
from 500. He said development outpaces the farmer's ability to
replace land that is developed for other purposes. He foresees
this trend persisting. Point MacKenzie has some big tracts, and
the tax structure helps the land but not the massive barns on
the land. Landowners prioritize tenants who can pay higher
prices to store their RVs and airplanes to recoup their
investments, rather than renting to farmers. He asserted that
the current tax deferment program fails to make these structures
affordable for agricultural purposes.
1:47:16 PM
SENATOR OLSON asked what kind of services the borough provides
in exchange for paid taxes.
MR. JENSKI asked if he meant road services.
SENATOR OLSON replied yes, clearing roads and services that help
farmers sustain their livelihoods.
MR. JENSKI replied that Point MacKenzie is fairly poor. He
expressed frustration that despite paying property taxes, the
community receives no fire protection. He pointed out that two
homes were lost due to the absence of fire services, even though
the prison in Point MacKenzie does have fire protection.
1:48:10 PM
SENATOR BJORKMAN asked him to contact his office about deferment
and ways to improve the program.
1:48:35 PM
CHAIR DUNBAR closed public testimony on SB 161.
CHAIR DUNBAR held SB 161 in committee.
1:48:40 PM
At ease.
SJR 13-AMEND ALASKA NATIVE CLAIMS SETTLEMENT ACT
1:49:53 PM
CHAIR DUNBAR reconvened the meeting and announced the
consideration of SENATE JOINT RESOLUTION NO. 13 Encouraging the
United States Congress and the President of the United States to
pass and sign legislation amending the Alaska Native Claims
Settlement Act to release certain land held in trust back to
affected Alaska Native village corporations.
1:50:23 PM
ARIELLE WIGGIN, Staff, Senator Forrest Dunbar, Alaska State
Legislature, Juneau, Alaska, introduced SJR 13 on behalf of the
sponsor, stating this resolution recognizes a long-standing
issue and challenge for many communities across Alaska. With the
passage of the Alaska Native Claims Settlement Act (ANCSA),
several villages conveyed land to the State to be held in trust.
The expectation was that those lands would revert to villages as
they organized and assumed the responsibilities of municipal
governments. The State continues to hold these lands in trust,
and it has affected the ability of certain regions to develop.
Federal action is needed, and Alaska's congressional delegation
has proposed legislation to address this issue. SJR 13 supports
this legislation. She said that the invited testifiers will
provide more details on ANCSA and the federal legislation.
1:51:47 PM
CHAIR DUNBAR announced Mr. Mallot as an invited testifier.
1:52:08 PM
BEN MALLOT, Vice President, External Affairs, Alaska Federation
of Natives (AFN), Anchorage, Alaska, gave a brief history of
AFN. He said AFN membership includes 179 federally recognized
tribes, 154 village corporations, nine regional corporations,
and ten regional nonprofits. He said AFN supports SJR 13.
MR. MALLOT said that sec. 14(c)(3) of ANCSA required every
Alaska Native village corporation to convey a portion of the
lands it received in case a municipality or city was formed
around its community. He believed that only eight ANCSA villages
have been approved for municipalities.
MR. MALLOT said that AFN passed resolution 23-17 in 2023. This
resolution urges federal action to sunset the ANCSA 14(c)(3)
provision and restore Alaska Native Corporation (ANC) lands that
the State holds in the Municipal Land Trust (MLT) program. He
emphasized that SJR 13 has enormous support from 179 federally
recognized tribes, 154 village corporations, nine regional
corporations, and ten regional nonprofits.
1:54:22 PM
MR. MALLOT said Congress introduced two bills this Congress:
S.2615 and H.R.6489, titled the Alaska Native Village Municipal
Lands Restoration Act of 2023. He said these pieces of federal
legislation essentially sunset the ANCSA 14(c)(3) provision
enacted over 50 years ago. He expressed appreciation that SJR 13
encourages passage of this federal legislation and the
restoration of land back to Alaska Native Corporations (ANCs).
MR. MALLOT said MLT managed lands has created problems for many
ANCs as the it has been underfunded and overtasked for many
years. He said that AFN believes that restoring MLT held lands
would allow communities to make informed decisions about how to
best utilize their lands and resources.
MR. MALLOT said that AFN has supported this type of
congressional legislation for many sessions. He thanked the
chair and the governor for supporting the restoration of ANC
lands. The collaboration between the Native communities and the
State demonstrates to Congress that all parties are aligned.
This was a major hurdle to overcome and a step forward.
1:58:01 PM
SENATOR OLSON asked if any Native village corporations are
opposed to SJR 13.
MR. MALLOT replied that he has not heard of any that oppose the
sunset of ANCSA 14(c)(3). He pointed out that AFN passed this
resolution unanimously at its convention.
1:58:51 PM
SENATOR OLSON asked whether any cities that surround these lands
are in opposition.
MR. MALLOT replied there have been concerns surrounding conveyed
lands that are now cities. He expressed his belief that the work
of AFN and the Alaska delegation to sunset the ANCSA 14(c)(3)
provision and restore lands held by MLT is the first step in
addressing how to make these communities whole. A provision asks
for a resolution from the community, usually the village, so
both the village and tribe have opportunities to determine the
best use for the land. There are many details to consider, and
further steps may be needed to fully address the concerns of
communities that have already conveyed their land.
2:00:28 PM
GREGG RENKES, Senior Vice President, Government Relations,
Chenega Corporation, Washington, D.C., gave a brief over of the
Chenega Corporation, stating he serves as an alternate on the
Board of Directors for the Alaska Native Village Corporation
Association (ANVCA). ANVCA and its 176-member village
corporations uniformly support this legislation. Chenega
Corporation is an Alaska Native village corporation formed under
the Alaska Native Claims Settlement Act (ANCSA). Chenega village
is located on Evans Island in Prince William Sound, about 65
miles from Whittier.
MR. RENKES stated that U.S. Senators Murkowski and Sullivan and
U.S. Representative Peltola introduced legislation in Congress.
This legislation garnered the support of the governor, the
Alaska Federation of Natives, and the Alaska Native Village
Corporation Association. He said that the legislature's support,
embodied in the passage of SJR 13, will help boost this
important federal legislation over the goal line.
MR. RENKES gave a brief update on the status of the
congressional legislation. He stated that the Senate bill,
S. 2615, had a hearing and was favorably reported out of the
Senate Committee on Energy and Natural Resources on December 14.
The House bill still needs to attract the interest of the House
Natural Resources Committee and receive a hearing date. The
Alaska legislatures support and governors support of SJR 13
will help Alaska's congressional delegation push this process
along. He said the hope is to see federal legislation become law
by the end of the 118th Congress.
2:02:38 PM
MR. RENKES said that the federal legislation addresses a loose
end left behind by ANCSA. He stated that no legislation is
perfect, and ANCSA has been amended many times over the last 50
years to improve its impact and address unintended consequences.
This is one of those cases where unintended consequences of the
Act, only visible with the passage of time, need to be
addressed. Section 14(c)(3) of ANCSA required every Native
village corporation formed under the Act to turn a portion of
the lands it received over to the State of Alaska to be held in
trust for the eventual creation of a municipal government. Many
village corporations, but less than half, turned land over to
the State as required, and in a few cases, that land became
municipal lands when municipalities were formed.
MR. RENKES said that in the vast majority of villages, the land
is still being managed, in apparent perpetuity, by the State
Municipal Land Trust. Decades after the passage of ANCSA and
many years after these village corporations turned over land, no
municipalities have been formed, and none are in sight. The
State has administered this federal program for nearly 50 years,
and only eight ANCSA villages formed a new municipality, the
last in 1995. The crafters of ANCSA did not envision perpetual
management of these lands in a State trust; the provision should
have included an expiration date, but it didn't. It is time to
return these lands to those village corporations so they can own
and manage the lands for the benefit of their community members
and Native shareholders as ANCSA intended.
2:04:25 PM
MR. RENKES said that the Municipal Land Trust holds
approximately 11,550 acres. These acres are nearly impossible to
develop due to restrictions imposed by the State's fiduciary
responsibility to a future, but yet unknown municipality. The
Act requires these lands to be:
"improved land on which the Native village is located and as
much additional land as is necessary for community expansion,
and appropriate rights-of-way for public use, and other
foreseeable community needs." (ANSCA 14(c)(3))
MR. RENKES said the lands are in villages where housing and
other community infrastructure should be built. These lands are
what villages need to have available, but they are tied up and
largely blocked from Native community development. This is
expected to continue in perpetuity unless the trust
responsibilities the federal government imposed on the State are
eliminated in federal statute.
2:05:20 PM
MR. RENKES said that once ANCSA became law, the Bureau of Land
Management (BLM) pushed to settle ANSCA 14(c)(3). In the early
1980s, some communities transferred deeds in the momentum of
that federal effort to implement the law. The State received the
bulk of the land held in trust during that push. He said that 83
statewide village communities still have their lands tied up in
the Municipal Land Trust program.
MR. RENKES said that some village corporations defied the law
and never transferred land to the Municipal Land Trust. Other
than the early push by BLM, there was no enforcement mechanism
at the State level to require participation. However, a cloud on
title remains on lands held by village corporations that failed
to participate. Any development use of this land requires the
State's written disclaimer of interest. This extends the
negative impact of ANCSA 14(c)(3) beyond the 83 communities with
lands held in the Municipal Land Trust.
2:06:32 PM
MR. RENKES said that his village, Chenega, currently has
approximately 385 acres of land within the Municipal Land Trust
(MLT). The State holds most of the core lands in the Chenega
village in trust. The topography and wetlands in Chenega
severely limit available developable lands, making the lack of
developable land a severe problem. When looking at future
development sites, many buildable areas fall within lands held
by the State trust. Even the village cemetery is held in trust
by the State. This undermines Chenega's right to self-
determination and self-governance. While some of this land is
subject to MLT lease agreements to accommodate public
facilities, these leases are subject to fees. They are
cumbersome to update or amend to accommodate community needs.
Chenega should control these settlement lands, not the State of
Alaska. Most critically, the Municipal Land Trust program
prevents Chenega from improving the community. Chenega needs
housing, particularly workforce housing, economic opportunity
for village residents, and jobs.
2:07:41 PM
MR. RENKES said the Alaska congressional delegation introduced
legislation that includes the following elements:
• If a village corporation conveyed all required land to the
State, then the property conveyed to the State in trust
reverts to the village corporation.
• If a village corporation conveyed only a portion of required
lands to the State in trust, then those lands revert to the
village corporation, and the village corporation is relieved
of any further requirement to convey the remaining lands.
• If the village corporation has not conveyed lands to the State
in trust, the conveyance requirement is eliminated.
• Reversion of the lands to the village corporations is subject
to all valid and existing rights created by the Municipal Land
Trust, and the village corporations assume all obligations of
the State with regard to those valid existing rights.
2:08:32 PM
MR. RENKES concluded his comments by stating that he cannot
express how important it is to have State support for this
federal legislation.
2:09:18 PM
CHAIR DUNBAR asked about the village corporation's plans for the
land should the federal legislation pass.
2:09:52 PM
MR. RENKES gave a brief history of Chenega before answering. He
said Chenega is one of the oldest villages in Prince William
Sound and was on the first Russian census. The first Russian
governor of Alaska was Lord Baranov. He married a woman from
Chenega, and she was the initial first lady. He outlined
Chenega's rich history:
• The village was destroyed in the 1964 earthquake by a series
of tsunamis that hit the village seconds apart, completely
wiping out the village and killing one-third of the
population.
• It took 20 years to repopulate the village.
• By 1984, a village site was selected.
• By 1987, some Department of Housing and Urban Development
(HUD) housing was built. People moved back into the village.
• In 1989, the Exxon Valdez Oil spill completely decimated the
village food source, and people had to leave.
• The village had to repopulate again.
2:10:48 PM
MR. RENKES said Chenega has faced adversity through natural and
human-made disasters. Yet, the village continues to persevere.
The people are working hard to preserve their culture, language,
and history and provide economic opportunities in the community
so the village can continue repopulating.
MR. RENKES said that while the village has a platted northern
subdivision complete with roads and utilities to the site, one-
third of the land is owned by the Municipal Land Trust (MLT).
MLT has denied the village's requests for that land because the
State is holding it in trust for a future municipality. The
village cannot use the land for a private housing development
until MLT conveys it. If the village obtains the land, it will
build out the northern subdivision with much-needed housing,
particularly workforce housing. He explained that one of the
challenges is Chenega's remote location. It is 65 miles by water
to the closest community, Whittier. This makes it difficult to
attract workers to the village without providing them with
housing.
2:12:01 PM
MR. RENKES said that a housing plan is at the top of the village
corporation's list for these lands should the federal
legislation pass. Another important issue is the village bulk
fuel system, which is in dire need of work. The village wants to
get fuel down to the dock to provide boat refueling, which could
expand recreational and commercial fishing opportunities in
Prince William Sound. He explained that by the time a boat gets
to Chenega from Whittier, it needs fuel to return. This would
provide some economic opportunity for the community, but it is
not possible without obtaining the MLT lands. Housing and fuel
infrastructure are just two projects that would bring essential
economic opportunity. The village corporation would undertake
these two projects first.
2:13:16 PM
CHAIR DUNBAR held SJR 13 in committee.
2:13:32 PM
At ease.
^PRESENTATION(S): ALASKA BROADBAND UPDATE
PRESENTATION(S): ALASKA BROADBAND UPDATE
[Contains discussion of SB 140.]
2:14:42 PM
CHAIR DUNBAR reconvened the meeting and announced a presentation
from the Alaska Broadband Office (ABO).
2:14:59 PM
THOMAS LOCHNER, Director, Alaska Broadband Office, Department of
Commerce, Community and Economic Development, Anchorage, Alaska,
delivered an update on the Office and answered questions. He
said it has been a year since he first addressed the committee.
He said a lot has happened in the last year, and there are many
exciting developments to share today. He described his work
history and experience, stating it provided him with a
comprehensive knowledge of all aspects of telecommunications.
MR. LOCHNER emphasized that permitting takes three to four
years, while the actual build only takes about six months. He
said that ABO is doing everything possible to expedite the
permitting process because the State only has four years to
complete these mega projects, with a potential 50-year
extension. He stressed the need for ABO to be efficient as
possible in everything it does.
2:19:08 PM
MR. LOCHNER advanced to slide 2. The slide showed an expanded
ABO organizational structure from the previous year and outlined
the following organizational partners:
Division of Community and Regional Affairs
• Grant Administration
• Mapping Analytics and Data Resources
Department of Natural Resources
• Office of Project Management and Permitting
• Mining, Land and Water
Department of Transportation and Public Facilities
• Project Coordination
• Permitting
Department of Environmental Conservation
• Permitting
2:20:12 PM
MR. LOCHNER moved to slide 3, stating this slide from last year
was included to provide context. He explained that the
Infrastructure Investment and Jobs Act (IIJA) had two items that
provided funding through the states. He said that Alaska is
passing its funds through to subgrantees. This slide shows last
years two federal IIJA items and amounts:
[Original punctuation provided.]
Infrastructure Investment and Jobs Act (IIJA)
NATIONAL TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION
(NTIA) BROADBAND FUNDING PROGRAMS
Broadband Equity, Access, and
Digital Equity Act (DE): Deployment (BEAD):
$2,750,000,000 $42,450,000,000
2:20:58 PM
MR. LOCHNER moved to slide 4 to discuss the Digital Equity Act.
He said there are three tranches of funding that will go to
improve the broadband experience of eight covered populations.
The tranches of funding and covered populations are listed
below:
[Original punctuation provided.]
Digital Equity Digital Inclusion Digital Literacy
ALLOCATED 2.75 BILLION FOR ALL STATES AND TERRITORIES
• Planning Grants: $60 Million Alaska Awarded $567,800
• Capacity Grants: $1.44 Billion Alaska's Award: TBD
• Competitive Grants: $1.25 Billion Alaska's Award: TBD
COVERED POPULATIONS
• Individuals with a Language Barrier
• Incarcerated Individuals
• Individuals with Disabilities
• Individuals in Low-Income Households
• Aging Individuals
• Veterans
• Individuals who are Members of a Racial or Ethnic
Minority
• Individuals who Reside in Rural Areas
2:22:28 PM
MR. LOCHNER moved to slide 5, stating Alaska received over $1
billion in BEAD funding. He praised Alaska's congressional
delegation, whose educational efforts significantly influenced
the National Telecommunications and Information Administration's
(NTIA) perspective on the five allocations outlined in the
Notice of Funding Opportunity (NOFO). This advocacy resulted in
a doubling of Alaska's allocation, giving the state the highest
allocation on a per capita basis. He reviewed slide 5:
[Original punctuation provided.]
Broadband Equity, Access, and Deployment
ALLOCATED $42.45 BILLION
FOR ALL
STATES AND TERRITORIES
Alaska's Allocation: $1,017,139,672.42
DISBURSEMENTS OF ALASKA'S ALLOCATION
Grants will be based on percentage of locations that
are:
• 1st Priority -- Unserved - less than 25Mbps/3Mbps
• 2nd Priority -- Underserved - less than 100Mbps/20Mbps
and
• 3rd Priority -- Unserved Community Anchor Institutions -
less than 1Gbps/1Gbps
2:23:46 PM
SENATOR GIESSEL asked if this is the money the legislature is
attempting to appropriate in Senator Hoffman's bill.
MR. LOCHNER answered that he believes so but deferred the
question to Ms. Heist.
CHAIR DUNBAR invited Ms. Heist to put herself on the record to
answer whether the BEAD allocation pertains to SB 140, sometimes
called the "bag" bill.
2:24:23 PM
ERIN HEIST, Operations Manager, Administrative Services
Division, Department of Commerce, Community and Economic
Development (DCCED), Juneau, Alaska, answered questions during
the update on the Alaska Broadband Office. She said that she is
not certain about that specific bill. The governor's FY2025
budget includes this full allocation as a capital item.
MR. LOCHNER followed up, stating the funding is not part of the
bag bill.
2:25:01 PM
MR. LOCHNER concluded his comments on slide 5.
2:25:38 PM
MR. LOCHNER moved to slide 6, which showed a map and stats from
one year ago. He explained that the initial Federal
Communications Commission (FCC) map was missing about 70
communities. The second version improved, and the third version
is still better, though not perfect. ABO is working with the FCC
to identify every broadband serviceable location accurately.
Slide 6 provided the following statistics:
[Original punctuation provided.]
Understanding of Broadband Landscape 1 Year Ago
Percentage
Alaska of Total
Communities Communities
Served (green) 112 28.9
Projects(blue) 80 20.6
Underserved (purple) 12 3.1
Unserved (reddish pink) 184 47.4
Sum Total 388
2:26:35 PM
MR. LOCHNER moved to slide 7, which provided an overview of what
ABO has done over the last year:
[Original punctuation provided.]
Understanding the Broadband Landscape
Alaska Broadband Office Activities
• In partnership with many Alaskans, the ABO developed
and submitted the State of Alaska Digital Equity
Plan making the State to be eligible for an
allocation of the $1.44 billion Digital Equity
Capacity Grant funds.
• The ABO developed and submitted the State of Alaska
BEAD, Initial Proposal Volume 1 Challenge Process
and are in the final approval process giving
Alaskans a voice in where the infrastructure will be
built.
• The ABO developed and submitted the State of Alaska
BEAD, Initial Proposal Volume 2 Grant Program and
are in the curing stage of the process.
2:27:58 PM
MR. LOCHNER moved to slide 8, giving an overview of what changed
in the past year:
Understanding the Broadband Landscape (cont.)
What has Changed in the Past Year
• The Federal Communications Commission (FCC) Mapping
updated from R1 (missing nearly 70 communities
completely) to R3.2 (all communities represented but
still not perfect). Maps are updated every 6 months.
• The NTIA has determined the Served, Underserved and
Unserved Locations in Alaska and published them in
the National Broadband Availability Map (NBAM).
• The NTIA has determined the High-Cost (no funding
match required) and Non-High-Cost Areas (25% funding
match required) based on Census Block Groups.
• The ABO has evaluated the ultra-remote locations
within the Non-High-Cost Areas (will be asking for a
waiver for the 25% funding match).
2:28:42 PM
MR. LOCHNER advanced to slide 9, The National Broadband
Availability Map (NBAM)/ABO Map: High-Cost (red) and Non-High-
Cost. He explained that the Non-High-Cost Areas are shown in a
lighter color on the map and require a 25 percent match. In many
areas, ABO considered whether residents would have the means to
contribute a 25 percent match of a $10,000,000 project. After
considering the matter, ABO is prepared to request a waiver in
certain areas to secure 100 percent funding. The High-Cost
areas, shown in red on the map, received an automatic waiver,
meaning NTIA will fund 100 percent of the project costs.
2:29:33 PM
CHAIR DUNBAR asked whether a formal waiver process is provided
for in statute, and whether the federal government has been
amenable to those waivers.
2:29:50 PM
MR. LOCHNER replied that the federal government indicated it is
amenable to those waivers. ABO listed the waivers in the grant
program and description, Initial Proposal, Volume II. Although
the federal government liked the waivers, they requested that
ABO submit them after the grant program. He expressed his
anticipation for submitting the waivers on a case-by-case basis
as the applications come in.
2:30:34 PM
MR. LOCHNER moved to slide 10, The NBAM/ABO Map: Bethel Area
Detail. He said that NTIA gave the Bethel Native Corporation an
award to build fiber to and within Bethel. This development will
change the dot color on the map to light blue, indicating a
project. He pointed out that ABO needs to provide 100Mbps to
the communities outlined in orange and is evaluating the
appropriate technology, noting fiber is not a feasible option
due to remoteness. He said microwave, low earth orbit (LEO)
satellite, or geosynchronous (GEO) satellite technologies would
most likely serve these communities.
2:32:14 PM
MR. LOCHNER moved to slide 11, The NBAM/ABO Map: Anchorage.
Despite the classification Anchorage has as a "served"
community, the map displayed pockets of "underserved" locations
within the municipality. He pointed out specific areas of
"unserved" locations, too, such as Rabbit Creek, Bear Valley,
and Post Road. He emphasized that part of the ABO Internet
charter is to provide Internet to all. All communities will be
served.
2:33:04 PM
SENATOR GIESSEL commented that she will tell the residents of
Rabbit Creek that there is hope on the horizon, and the same
applies to Rainbow Valley.
2:33:23 PM
MR. LOCHNER continued speaking to slide 11, stating that ABO
would request waivers for the areas on the map outlined in
lighter-colored polygons. It is foreseeable that residents
getting a 75 cents on the dollar subsidy will have better means
to build in dense population areas within Anchorage. He said
that is not the case outside these dense population areas.
2:33:58 PM
MR. LOCHNER moved to slide 12, which showed a timeline chart
divided into two main categories: the Grant Program Approval
Process and the Running of the Grant Program. He reviewed these
two categories on slide 12, BEAD Milestone Dates & ABO Timeline:
Grant Program Approval Process (Initial Proposal Volume 2)
There are four 30-day segments from February 2024 to May 30,
2024.
- Public Review of BSLs
- Challenge Period
- ISP Rebuttal Period
- ABO Mediate Period
Running of the Grant Program (Final Proposal)
This category pertained to two periods:
Interested Parties Application Period
• Grant Opportunities Posted June 2024
• This 120-day grant period ran from June to the end of
September.
• Grant Applications Due October 2024
Alaska Broadband Office Application Review and Grading
• 90-day review and grading period
• Grant awards announced January 2025
2:36:57 PM
MR. LOCHNER moved to slide 13 and compared the financial and
operational considerations of four common technologies: fiber,
microwave, low earth orbit (LEO) satellite, and geosynchronous
(GEO) satellite. He said a positive outcome of House Bill 363
(ch. 52, SLA 22) was the implementation of the Statewide
Broadband Advisory Board and the Technical Working Group. The
Statewide Broadband Advisory Board convenes monthly to provide
advice to ABO. The Technical Working Group evaluates
technologies and prioritizes them based on their usefulness for
the Alaskan experience. The chart on slide 13 reads:
[Original punctuation provided.]
Comparison of Technologies
Fiber
Consideration - Financial
1
Initial CapEX $1.5 to $2.8 Billion
Ongoing O&M $84 Million/Year (est.)
Services Cost $99.00 - $10,000/Month
Consideration - Operational
Residential Service Ready Yes: Optimal
Medical Service Ready Yes: Optimal
Weather Impacted No
Useful Life 25 Years
Capacity (Terabits/second) 30
Synchronous Service Yes
Meets FCC's Proposed
100/100Mbps Service Yes
Latency 2 60 ms
Oversubscription Needed 1:1 to 5:1
1. Statewide build
Microwave
Consideration - Financial
2
Initial CapEX ~$0.4 to $1.5 Million/Site
Ongoing O&M $150 to $250
Thousand/Site/year
Services Cost $99.00 - $10,000/Month
Consideration - Operational
Residential Service Ready Yes: Optimal
Medical Service Ready Yes: Optimal
Weather Impacted Yes
Useful Life 5 Years
Capacity (Terabits/second) 0.01
Synchronous Service Yes
Meets FCC's Proposed
100/100Mbps Service Yes
Latency 40 60 ms
Oversubscription Needed 10:1 to 20:1
2. Microwave site needed every 30 60 miles
Low Earth Orbit (LEO) Satellite
Consideration - Financial
Initial CapEX $1.4 to $3.0 Billion
3
Ongoing O&M $500 Million/Year (est.)
Services Cost $99.00 to $10,000/Month
Consideration - Operational
Residential Service Ready Yes: Optimal
Medical Service Ready No: Occasional Poor
Satellite Coverage
Weather Impacted Yes
Useful Life 5 Years
Capacity (Terabits/second) 3
Synchronous Service No
Meets FCC's Proposed
100/100Mbps Service No
Latency 40 60 ms
Oversubscription Needed 20:1 to 100:1
3. Replacement of LEO satellites every 5 years
Geosynchronous (GEO) Satellite
Consideration - Financial
Initial CapEX $150 to $250 Million
Ongoing O&M $100 to $350 Thousand/Year
(est.)
Services Cost $99.00 - $10,000/Month
Consideration - Operational
Residential Service Ready Yes: Optimal
Medical Service Ready No: High Latency
Weather Impacted Yes
Useful Life 20 Years
Capacity (Terabits/second) 0.15
Synchronous Service No
Meets FCC's Proposed
100/100Mbps Service No
Latency 600 800 ms
Oversubscription Needed 20:01
2:38:17 PM
MR. LOCHNER moved to slide 14. He said the Digital Equity Plan
requires that installed broadband is useful and safe and does
not cause further problems for the users of the eight-covered
populations. He said the plan is robust and has specific key
performance indicators. Slide 14 reads:
[Original punctuation provided.]
Understanding the Digital Equity Need
• State of Alaska Digital Equity Plan completed by the
January 28, 2024 deadline
• The plan will be a key feature in the Digital Equity
Capacity Grant Notice of Funding Opportunity.
• The plan was developed through a statewide Digital
Equity outreach by the Rasmuson Foundation, Alaska
Federation of Natives, Alaska Municipal League, and
many other non-profits and individuals.
2:39:04 PM
MR. LOCHNER moved to slide 15, stating that ABO had 196
listening sessions and sometimes hosted multiple sessions within
a community to engage with the eight covered populations:
[Original punctuation provided.]
Digital Equity - Outreach
In 2022 and 2023 there were 196 Digital Equity
Listening Sessions to reach the Covered Populations in
the following communities:
Akiachak, Akiak, Alakanuk, Ambler, Anchorage, Bethel,
Chitina, Cooper Landing, Cordova, Crooked Creek,
Dillingham, Eagle River/Chugiak, Eureka, Fairbanks,
Galena, Gambell, Glacier View (virtual), Healy, Homer,
Houston, Hydaburg, Juneau, Kake, Kasigluk, Kenai,
Ketchikan, Klawock, Kobuk, Kodiak, Kongiganak,
Kotzebue, Kwethluk, Lake Louise/Eureka, Lime Village,
Manokotak, McGrath, Mekoryuk, Nanwalek, Napakiak,
Napaskiak, Nenana, Newtok, Nome, Noorvik, North Pole,
Palmer, Pilot Station, Point Lay, Quinhagak, Russian
Mission, Saint Mary's, Savoonga, Seldovia, Seward,
Sitka, Sleetmute, Soldotna, Talkeetna, Teller, Tok,
Toksook Bay, Tununak, Tyonek, Unalaska, Utqiagvik,
Valdez, Wasilla, Wrangell, Yakutat
2:39:35 PM
MR. LOCHNER moved to slide 16, showing a chart of key
performance indicators (KPIs) for the eight covered populations
and the NTIA-required areas. ABO extracted this chart directly
from its Digital Equity Plan, and the numbers serve as reference
points. Slide 16 reads:
[Original punctuation provided.]
Understanding the Digital Equity Need
Matrix of Key Performance Indicators (KPI) to Requirements
a.
Affordability of access to
fixed and wireless
broadband technology
KPI Reference numbers from the
State of Alaska Digital Equity Plan
1. Individuals with a Language Barrier 2.3.1.
2. Incarcerated Individuals 2.4.2.(B)
3. Individuals with Disabilities 2.3.1.
4. Individuals in Low-Income 2.3.1.
Households
5. Aging Individuals 2.3.1.
6. Veterans 2.3.1.
7. Racial and Ethnic Minorities 2.3.1.
8. Individuals Primarily Living in Rural 2.3.1.
Areas
2:39:41 PM
b.
The online accessibility
and inclusivity of public
resources and services
KPI Reference numbers from the
State of Alaska Digital Equity Plan
1. Individuals with a Language Barrier 2.3.5.
2. Incarcerated Individuals 2.3.5.
3. Individuals with Disabilities 2.3.5.
4. Individuals in Low-Income 2.3.5.
Households
5. Aging Individuals 2.3.5.
6. Veterans 2.3.5.
7. Racial and Ethnic Minorities 2.3.5.
8. Individuals Primarily Living in Rural 2.3.5.
Areas
c.
Digital Literacy
KPI Reference numbers from the
State of Alaska Digital Equity Plan
1. Individuals with a Language Barrier 2.3.4.
2. Incarcerated Individuals 2.4.2.(B)
3. Individuals with Disabilities 2.3.4.
4. Individuals in Low-Income 2.3.4.
Households
5. Aging Individuals 2.3.4.
6. Veterans 2.3.4.
7. Racial and Ethnic Minorities 2.3.4.
8. Individuals Primarily Living in Rural 2.3.4.
Areas
2:39:44 PM
d.
Awareness of, and the
use of, measures to
secure the online with
respect to, an individual
KPI Reference numbers from the
State of Alaska Digital Equity Plan
1. Individuals with a Language Barrier 2.3.2.
2. Incarcerated Individuals N/A
3. Individuals with Disabilities 2.3.2.
4. Individuals in Low-Income 2.3.2.
Households
5. Aging Individuals 2.3.2.
6. Veterans 2.3.2.
7. Racial and Ethnic Minorities 2.3.2.
8. Individuals Primarily Living in Rural 2.3.2.
Areas
e.
Availability and affordability
of consumer devices and
technical support for those
devices
KPI Reference numbers from the
State of Alaska Digital Equity Plan
1. Individuals with a Language Barrier 2.3.3.
2. Incarcerated Individuals 2.4.2(C)
3. Individuals with Disabilities 2.3.3.
4. Individuals in Low-Income 2.3.3.
Households
5. Aging Individuals 2.3.3.
6. Veterans 2.3.3.
7. Racial and Ethnic Minorities 2.3.3.
8. Individuals Primarily Living in Rural 2.3.3.
Areas
2:40:35 PM
MR. LOCHNER moved to slide 17, which provided estimates for the
Digital Equity Milestone Dates and the ABO Timeline:
• End of January 2024
State of Alaska Digital Equity Plan completed
• End of March 2024
NTIA Publishes Digital Equity Capacity Grant Notice of Funding
Opportunity (NOFO) (estimated)
and
State responds to the Digital Equity Capacity Grant NOFO to
develop subgrants (estimated timeline)
• Beginning of June 2024
NTIA Publishes Digital Equity Competitive Grant NOFO
(estimated)
and
Public responds to Digital Equity Competitive Grants NOFO
(estimated timeline)
• Beyond June 2024
Further updates to the calendar post availability of the
Capacity Grant NOFO
2:41:19 PM
MR. LOCHNER moved to slide 18 to discuss workforce development,
which is the key feature of both the BEAD and Digital Equity
Programs:
[Original punctuation provided.]
BEAD and Digital Equity -- Workforce Development
The ABO is engaging and partnering with a broad range
of entities to develop an Alaska Broadband Workforce
Development Plan that will intersect both the BEAD
Program and the Digital Equity Plan.
The plan identifies three goals and five strategies.
Alaska Workforce Development Plan Goals:
1. Increase the number of Alaskans qualified to fill
broadband construction and operations occupations,
2. Develop a diverse and inclusive regional broadband
industry workforce, and
3. Strengthen and expand post-deployment capacity for
residents to learn about and navigate education,
training, and career opportunities, including self-
employment, available using high-speed broadband
access.
2:42:52 PM
MR. LOCHNER moved to slide 19, which lists five workforce
development strategies:
[Original punctuation provided.]
BEAD and Digital Equity -- Workforce Development (cont.)
Alaska Broadband Workforce Development Plan Strategies:
1. Implement the Broadband Workforce Development Plan
and build a sustainable, standards-based program,
with a focus on public-private partnerships to
produce a highly skilled and technically trained
workforce that can meet industry labor supply
challenges,
2. Build on the existing construction industry training
and workforce efforts,
3. Increase career awareness and information about
telecommunications occupations and employment,
4. Increase education and training programs that
prepare students and adults for apprenticeship and
entry-level employment in telecommunications
occupations, and
5. Put in place recruitment, training, and employment
efforts focused on historically underrepresented
groups.
2:43:08 PM
CHAIR DUNBAR asked whether the ABO workforce development plan is
funded.
MR. LOCHNER replied that a percentage of the $1 billion BEAD
funding is available for implementing workforce development and
improvement, and some funding is available to cover
administrative fees.
CHAIR DUNBAR commented that is good to hear.
2:43:58 PM
CHAIR DUNBAR sought confirmation that though federal dollars
fund these mega projects in Alaska, the State will not own them.
Instead, the State has grants for entities like GCI, Cordova
Telecom Cooperative, and nonprofits. He expressed his
understanding that, ultimately, those entities will own these
assets.
MR. LOCHNER replied that is correct.
Chair Dunbar remarked that the State is essentially granting
these entities natural monopolies in each area. He inquired
about the long-range plan to prevent these entities from
engaging in price gouging after the federal government funds the
building of their assets.
MR. LOCHNER replied that is a significant challenge. He said
short of legislative action, there is not a function within the
Alaska Broadband Office (ABO) to prevent it.
2:45:13 PM
CHAIR DUNBAR sought confirmation that these entities are not
regulated like utilities.
MR. LOCHNER replied that broadband was regulated before it was
deregulated seven years ago. Legislative action is required to
change the status of broadband regulation.
2:45:32 PM
SENATOR GRAY-JACKSON drew attention to Digital Equity Outreach
on slide 15 and asked about the digital outreach efforts in the
eastern Aleutians. She noted that she did not see the Akutan and
King Salmon communities on the list.
MR. LOCHNER replied that he would get back to the committee on
that. He stated that ABO reached out to Atka, Adak, and several
of the Aleutians East communities, not on the digital equity
side but on the BEAD side. ABO generally conducted outreach via
Zoom or during events when residents traveled to town for the
Alaska Federation of Natives (AFN) convention and other
conferences.
2:46:59 PM
There being no further business to come before the committee,
Chair Dunbar adjourned the Senate Labor and Commerce Standing
Committee meeting at 2:46 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 161 - FN DCCED; Community and Regional Affairs.pdf |
SCRA 2/1/2024 1:30:00 PM |
SB 161 |
| SJR 13 Testimony Delivered 11-8-2023.pdf |
SCRA 2/1/2024 1:30:00 PM |
SJR 13 |
| SJR 13 Sponsor Statement.pdf |
SCRA 2/1/2024 1:30:00 PM |
SJR 13 |
| SJR 13 Support 2023 AFN Resolution.pdf |
SCRA 2/1/2024 1:30:00 PM |
SJR 13 |
| SJR 13 Version A.pdf |
SCRA 2/1/2024 1:30:00 PM |
SJR 13 |
| AK GOV Letter re AMLT.pdf |
SCRA 2/1/2024 1:30:00 PM |
SJR 13 |
| SJR 13 DCCED_DCRA MLT Presentation to SCRA 2023-04-20.pdf |
SCRA 2/1/2024 1:30:00 PM |
SJR 13 |
| Senate Community & Regional Affairs Alaska Broadband Office Presentation 2.1.2024.pdf |
SCRA 2/1/2024 1:30:00 PM |
Alaska Broadband Office - DCCED |