Legislature(2019 - 2020)Anch LIO Lg Conf Rm
06/10/2020 10:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Ak Cares Small Business Directed Grant Program - Community Grant Funds Disbursement | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
INTERIM
June 10, 2020
10:02 a.m.
[Note: meeting took place in the Anchorage LIO and was
recorded from Juneau.]
10:02:38 AM
CALL TO ORDER
Co-Chair Johnston called the House Finance Committee
meeting to order at 10:02 a.m.
MEMBERS PRESENT
Representative Jennifer Johnston, Co-Chair
Representative Dan Ortiz, Vice-Chair (via teleconference)
Representative Ben Carpenter (via teleconference)
Representative Andy Josephson (via teleconference)
Representative Gary Knopp (via teleconference)
Representative Bart LeBon (via teleconference)
Representative Kelly Merrick (via teleconference)
Representative Colleen Sullivan-Leonard(via teleconference)
Representative Cathy Tilton (via teleconference)
Representative Adam Wool (via teleconference)
MEMBERS ABSENT
Representative Neal Foster, Co-Chair
PRESENT VIA TELECONFERENCE
Julie Anderson, Commissioner, Department of Commerce,
Community and Economic Development; Sandra Moller,
Director, Division of Community and Regional Affairs,
Department of Commerce, Community and Economic Development;
Alan Weitzner, Chief Investment Officer, Alaska Industrial
Energy Authority; Representative Bryce Edgmon.
SUMMARY
PRESENTATION: AK CARES SMALL BUSINESS DIRECTED GRANT
PROGRAM - COMMUNITY GRANT FUNDS DISBURSEMENT
Co-Chair Johnston reviewed the meeting agenda. She asked
members to hold their questions until the presentation
concluded.
^PRESENTATION: AK CARES SMALL BUSINESS DIRECTED GRANT
PROGRAM - COMMUNITY GRANT FUNDS DISBURSEMENT
10:04:41 AM
JULIE ANDERSON, COMMISSIONER, DEPARTMENT OF COMMERCE,
COMMUNITY AND ECONOMIC DEVELOPMENT (via teleconference),
began the PowerPoint Presentation: "Ms. Kyle CARES Grant
Program and Community Distribution Payments" (copy on
file).
10:05:21 AM
SANDRA MOLLER, DIRECTOR, DIVISION OF COMMUNITY AND REGIONAL
AFFAIRS, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC
DEVELOPMENT (via teleconference), began with slide 2,
"Community Distribution Payments":
Community Assistance Payments: $257,548.800 (RPL 08-
2020-0250) and RPL 08-2020-0260 through -0832)
(Approved by LB and A May 11, 2020 and adopted by
HB313, which was signed into law by the Governor on
May 22, 2020 )
Provides for mitigation and recovery efforts based on
population as distributed through the community
assistance program.
Requires a signed grant agreement with an approved
resolution from the governing body before first
payment is disbursed.
Second and third payments can be requested after July
1 and upon confirmation of expending 80 percent or
more of previous funds.
Ms. Moller moved to slide 3 which showed specifics on which
communities have received funding and the amounts of the
distributions. She reported that 30 percent of the monies
have been distributed to the communities.
Ms. Moller turned to slide 4, which showed the CARES Act
money disbursement across the state as of the day before.
10:09:00 AM
Ms. Moller moved to slide 5, "Community Distribution
Payments":
Outreach Efforts
April 21: Began preparing communities to receive
payments.
May 15:Grant agreement packages sent to local
governments.
May 22:First round of payments sent to nine
communities.
June 1: "Running tally" of community distribution
payments published on the DCRA website.
June 8:67 communities have received $96 million.
Co-Chair Johnston asked if any member had questions. She
indicated Representative Knopp had joined the meeting.
Representative Josephson queried the department's current
understanding of the community assistance funds. He
wondered what the department's view was on redirecting the
funds into other community use of the funds.
Commissioner Anderson responded that she had not
encountered that specific question, but grantees were
referred to the federal guidance. She remarked that there
was a standing weekly meeting with the Office of Management
and Budget (OMB) and the Alaska Municipal League (AML) to
address those questions.
Co-Chair Johnston asked what the relationship between the
department and the Alaska Municipal League.
Ms. Moller indicated that the department did not have a
contract with the Alaska Municipal League, but over the
years there was a close relationship with them as they
served a subset of the communities.
Vice-Chair Ortiz asked how updated the website link was in
terms of current information.
Ms. Moller replied that the link was updated twice per
week. The division was receiving requests every day.
10:15:04 AM
Co-Chair Johnston asked whether there was a deadline for
applications.
Ms. Moller indicated that there was not a deadline in
place. The division would be conducting specific outreach
from communities that had not reached out.
Commissioner Anderson turned to slide 6, "Small Business
Relief":
Small Business Relief: $290.0 million (RPL 08-2020-
0251) (Approved by LBandA May 11, 2020 and adopted by
HB313, which was signed into law by the Governor on
May 22, 2020 )
Provide assistance and relief to businesses impacted
by COVID-19: $750,000 for the Alaska Regional
Development Organizations (ARDORs) to provide
technical assistance to regional businesses in
applying for and obtaining funding.
$289,250,000 designated for the AK CARES, a program
established within AIDEA providing grants at the
direction of DCCED to qualifying Alaska small
businesses utilizing a third-party processor(s).
10:18:53 AM
ALAN WEITZNER, CHIEF INVESTMENT OFFICER, ALASKA INDUSTRIAL
ENERGY AUTHORITY (via teleconference), moved to slide 7,
"Alaska CARES Program (AK CARES)":
Grant Program for Alaska's Small Businesses and Non-
Profits:
? Grant Program to expeditiously address those
small businesses and nonprofit organizations
unable to obtain SBA PPP, EIDL, or other federal
program support.
? Small businesses based, licensed, and located
in Alaska including Ccorps, S-corps,
Partnerships, LLCs, Nonprofits (501(c)3 and
501(c)19 organizations) and sole proprietorships.
? Ensure access for both urban and rural
communities.
? Targeted businesses: 50 or less full time
equivalent employees.
? Grant Size: $5,000 to $100,000.
? COVID-19 emergency-related eligible expenses
incurred between March 11, 2020 through the
application date, and eight (8) weeks following
the application date.
Mr. Weitzner turned to slide 8, "Alaska CARES Program (AK
CARES)":
Grant Program for Alaska's Small Businesses and Non-
Profits:
? Initial Tranche: up to $150,000,000 through
Credit Union 1
? Program Launch: June 1, 2020
10:24:03 AM
Mr. Weitzner advanced to slide 9, "Alaska CARES Program (AK
CARES)":
Grant Program for Alaska's Small Businesses and Non-
Profits:
? Initial Tranche: up to $150,000,000 through
Credit Union 1
? Grants Approved in 1st week through June 5,
2020
10:28:47 AM
Mr. Weitzner discussed slide 10, "Alaska CARES Program (AK
CARES)":
Grant Program for Alaska's Small Businesses and Non-
Profits:
? Targeted Businesses: 50 or less full time
equivalent employees as of June 4, 2020
10:30:07 AM
Mr. Weitzner addressed slide 11, "AK CARES Grant Program":
Outreach Efforts
May 15: AK CARES Grant website published.
May 27: AK CARES Grant website updated with
finalized program details.
May 27: AK CARES officially announced via press
release.
May 28: Commissioner Anderson participated in the
Governor's virtual town hall.
June 1: AK CARES Grant program went live.
June 3: Meeting with ARDORs on AK CARES.
June 5: Opinion Piece on AK CARES sent to
newspapers statewide.
10:31:16 AM
Representative LeBon asked about the AIDEA Board Meeting on
May 20, 2020 at which time the board decided to allow 501c6
organizations to be eligible for CARES Grant support. He
believed that there was also an allowance for small
businesses that received small government loan amounts. He
wondered whether those businesses were eligible to apply
for the state CARES Act grant program.
Mr. Weitzner responded that the AIDEA Board had those
discussions, but afterward it was discovered that the HB
313, which enacted the RPL into law, had a different view
of how to incorporate more change to the program. He
suggested that the commissioner might want to comment on
the review of the program.
Commissioner Anderson confirmed that at the AIDEA board
meeting there were discussions about how to improve the
flexibility of the program, but not understanding that the
board was restricted to the verbiage in the RPL. She
indicated that there was work with the Department of Law to
determine the available flexibility within the RPL through
the review of legislative intent and the confines of the
law. She remarked that there was a large gap, and there was
an examination to address the gap and meet the needs.
10:34:38 AM
Representative LeBon wondered whether the department would
accept an application from a small business who had already
received a small grant from SBA.
Commissioner Anderson replied that it was currently under
examination, by looking at clarification on the verbiage
within existing law. She remarked that they were currently
sticking to the language in the RPL.
Representative LeBon asked that if a business were to
return SBA money would make them eligible to apply for the
state grant.
Commissioner Anderson responded that the scenario was one
of the areas currently under review in the RPL.
Representative Wool felt that there could be a change in
the RPL that could assist in the ability to allow for more
businesses to receive the money.
Commissioner Anderson indicated the department was looking
at flexibility in the interpretation of the RPL.
Representative Wool noted that there were currently 1100
loan applications for approximately $50 million, which was
approximately one-sixth of the total fund of close to $300
million. He surmised that there was a possibility for 6000
applicants. He remarked that so far 44 were approved and 11
had been funded in the program. He felt that the pace
indicated that it would be a long time to get through
thousands of applications. He queried effort to accelerate
the process.
Mr. Weitzner replied that the RFP was amended to contract
other program operators with the intent of speeding up the
processing. He believed that by getting new program
operators there would be an acceleration of funding.
10:40:28 AM
Representative Wool asked if AIDEA was looking at other
lending institutions.
Mr. Weitzner replied in the affirmative. He reported that
AIDEA had amended the RPL last week to alleviate the burden
on one institution.
Representative Wool asked if AML was being paid by the
communities.
Commissioner Anderson responded that AML was not contracted
with the department. She was not aware of any contracts
with AML.
Ms. Moller replied that she was unsure if communities were
paying AML. The department did not have a contractual
agreement.
Co-Chair Johnston asked if the department was looking for
an answer from statewide institutions or outside of the
state.
Mr. Weitzner responded that the RFP was limited to a
statewide application.
Representative Carpenter referred to slide 7 and slide 8.
He wondered whether the businesses with 50 or less
employees was the target group for the program.
Mr. Weitzner responded in the affirmative. He explained
that the target of 50 or less employees was based on
information from the Department of Labor and Workforce
Development (DLWD) that reflected that there were over
15,000 of those businesses.
10:45:26 AM
Representative Sullivan-Leonard queried the oversight of
some of the non-profit businesses that may be receiving
federal funding that was not through the CARES Act. She
asked whether there was tracking of those different kinds
of funds.
Mr. Weitzner responded that the application process
required a certification that they had not received any
other forms of federal funding. He stated that there was
not a separate verification process.
Representative Sullivan-Leonard recalled that there was
some past practice in the Department of Commerce, Community
and Economic Development (DCCED) to work with the local
administrations to assist in grant applications. She
wondered whether there was a utilization of the local
government specialists to assist in the grant process.
Mr. Weitzner responded that there was work with the ARDORs
group on community access. He remarked that the rural
application umber was approximately 34 percent.
Vice-Chair Ortiz returned to the question of community
distribution and AML's role in the process. He wondered if
AML was a conduit. He wanted to better understand the role
of AML.
Commissioner Anderson replied that it was the first she had
heard of the issues. She asked Director Moller to respond
further.
Ms. Moller replied that the department did not have a
contract or formal MOA with AML. She was unaware of the
payment from the community of Juneau.
Commissioner Anderson added that the services that AML was
providing assistance in determining the efforts for
payments going directly to communities. She thought AML's
role was similar to that of the ARDORS.
Co-Chair Johnston was not sure if Juneau was discussing
membership fees with AML.
Vice-Chair Ortiz expressed concern about the funds and the
appropriate use of CARES Act fund. He remarked that there
should be an examination of the origin of the money from
Juneau to AML. He felt that there should me no cost for
AML's assistance in the program.
Representative Merrick asked about the most COVID-19-
related common expenses were being applied for through the
CARES Grant Program.
Mr. Weitzner responded that the most common expense was
related to rent, mortgages, property, and utilities.
Representative Carpenter asked about the timeframe for the
RPL change. He also asked how long it would take to get
another financial institution online.
Commissioner Anderson responded that the RFP was due on the
coming Friday [June 12, 2020]. It would likely be within 2
weeks.
Co-Chair Johnston indicated the committee would likely
schedule a follow-up meeting.
10:56:12 AM
Representative Carpenter thought there were some people
disappointed that they applied for PPP, because they were
not aware of a possible better financial opportunity.
Representative Josephson wondered why there needed to be a
determination of the legality of the RPL. He asked if it
was time for the legislature to come together to fix the
issue.
Commissioner Anderson was hoping to find some flexibility
to be able to fix the issue. She had heard the story of
entities receiving much less through the PPP program. The
department was looking for flexibility to address concerns.
Representative Josephson was aware everyone had the same
broad goal. He stated that it was his understanding that
the language had been suggested by the administration. He
was available for assistance and further discussion on the
issue.
Co-Chair Johnston asked if the department was looking at a
waterfall approach of the tranches.
11:00:24 AM
Mr. Weitzner asked for clarification of the waterfall
effect.
Co-Chair Johnston wondered if there were remaining funds in
the first tranche would flow into the second tranche.
Mr. Weitzner reported that AIDEA wanted some flexibility,
and it could be that it would be organized off of the same
cue.
Co-Chair Johnston was aware the issue was a moving target.
She appreciated everyone's efforts.
Ms. Moller moved to slide 12, "AK CARES Grant Program:
ARDORs":
ARDOR Participation
? Three complete grant agreements received as of
June 8.
? Grant funds can be used to provide ARDORs with
resources to assist small businesses in applying
for COVID-19 grants.
? For the non-represented areas of the state,
UAA's Small Business Development Center (SBDC)
has offered to be the liaison to reply to
inquiries and assist communities.
? Kenai Peninsula Economic Development District
launching multiple town halls.
? Southeast Conference partnering with Spruce
Roots to provide virtual workshops.
? Anchorage Economic Development Corporation
coordinating multiple community organizations
promoting AK CARES grants for businesses.
? Fairbanks North Star Borough preparing a local
grant program.
? Five ARDORs have notified DCRA that communities
within their regions plan to use CARES Act funds
for business relief.
11:09:42 AM
Representative Sullivan-Leonard asked who was handling the
ARDORS for the Mat-Su Borough. She remarked that in the
past, the Mat-Su had had a defunded ARDORS group.
Ms. Moller neglected to mention that the nine ARDORs
represented nine regions. She remarked that the University
of Alaska Anchorage (UAA) was working with the Mat-Su.
Representative Sullivan-Leonard asked if the Mat-Su ARDORs
had been contacted to be resurrected.
Ms. Moller had not had any direct conversations about that
possibility.
Representative Sullivan-Leonard wondered whether the Small
Business Administration Centers were open to assist the
Mat-Su to ensure that the businesses received the funding
for the community.
Ms. Moller agreed to provide that information.
Representative Wool wanted to understand the grant program
with the ARDORS. He asked if the grants were going to the
ARDORS, and wondered if they were a facilitating entity.
Ms. Moller responded that they were receiving grants
through the RPL, and there was a specific start date that
the funds and activities would be eligible for repayments
or use of the funds. She was aware of additional staffing
being done to help facilitate the program.
11:15:59 AM
Representative Wool referred to slide 12. He heard the
ARDOR resided within the boroughs. He asked if he was
correct.
Ms. Moller responded that the Fairbanks North Star Borough
would receive the grant through the Mayor's office.
Representative Wool commented like it was all housed within
the borough.
Ms. Moller responded, "That's correct."
Representative LeBon commented on bank participation with
Credit One. He encouraged the state and AIDEA to look to
local banks for participation. He also commented on small
businesses that had already received funding, and
encouraged fast action to ensure that those in need
received the funds as soon as possible.
Co-Chair Johnston would consult with Co-Chair Foster about
a follow-up meeting for an update.
ADJOURNMENT
11:20:37 AM
The meeting was adjourned at 11:20 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| DCCED Presentation to House Finance (6.10.20).pdf |
HFIN 6/10/2020 10:00:00 AM |
CARES ACT |
| HFIN Follow-Up Information from DCCED (6.10.20).pdf |
HFIN 6/10/2020 10:00:00 AM |