Legislature(2023 - 2024)ADAMS 519
02/08/2023 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Presentations: Federal Infrastructure Investment and Jobs Act Update | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
February 8, 2023
1:34 p.m.
1:34:58 PM
CALL TO ORDER
Co-Chair Edgmon called the House Finance Committee meeting
to order at 1:34 p.m.
MEMBERS PRESENT
Representative Bryce Edgmon, Co-Chair
Representative Neal Foster, Co-Chair
Representative DeLena Johnson, Co-Chair
Representative Julie Coulombe
Representative Mike Cronk
Representative Alyse Galvin
Representative Sara Hannan
Representative Andy Josephson
Representative Dan Ortiz
Representative Will Stapp
Representative Frank Tomaszewski
MEMBERS ABSENT
None
ALSO PRESENT
Mike Anderson, Acting Infrastructure Coordinator, Office of
the Governor; Nils Andreassen, Executive Director, Alaska
Municipal League; Nicole Borromeo, Executive Vice President
and General Counsel, Alaska Federation of Natives.
SUMMARY
PRESENTATION: FEDERAL INFRASTRUCTURE INVESTMENT and JOBS
ACT UPDATE
Co-Chair Edgmon reviewed the meeting agenda. He asked
committee members to hold questions until the end of each
presentation. He discussed the joint role of working on the
budget process. The Alaska Municipal League (AML) and the
Alaska Federation of Natives (AFN) would give their
presentations as navigators/connectors between communities,
tribes, regional corporations, and nonprofit organizations
working with the State of Alaska for opportunities
associated with the federal Infrastructure Investment and
Jobs Act (IIJA).
^PRESENTATIONS: FEDERAL INFRASTRUCTURE INVESTMENT and JOBS
ACT UPDATE
1:37:25 PM
MIKE ANDERSON, ACTING INFRASTRUCTURE COORDINATOR, OFFICE OF
THE GOVERNOR, shared that he had been in the job four weeks
and had replaced Miles Baker who stood up the initiative.
He presented a PowerPoint presentation titled "Federal
Infrastructure Investment in Alaska," dated February 8,
2023 (copy on file). He discussed that IIJA was a massive
and historic piece of [federal] legislation that passed in
November of 2021. He had heard people refer to the
legislation as once in a century or once in a generation.
He believed the bill would help Alaska build, update, and
modernize its roads, ports, bridges, ferries, broadband,
and rural sanitation. The bill would transform the state's
energy, infrastructure, and economy for decades to come.
Mr. Anderson thanked the other presenters for being present
and participating in the meeting. He stated that IIJA was
an effort by a bipartisan coalition of U.S. senators. He
elaborated that some of those involved had wanted $1
trillion in new spending and others wanted to augment
unspent COVID-19 funding with new funds. The bill was a
five-year reauthorization of numerous established programs
primarily in the U.S. Department of Transportation and the
Environmental Protection Agency (EPA). The new monies
totaled $550 billion, which amounted to 46 percent of the
bill and included broadband, energy and power, electric
vehicles, cybersecurity, and resiliency measures. The
majority of the funds would come through existing programs
like U.S. Department of Transportation surface
transportation, Federal Aviation Administration Airport
Improvement Program, rural water, and other. He stated that
it was primarily formula driven and included programs that
had existed for a long time.
1:41:17 PM
Mr. Anderson stated that unlike the Coronavirus Aid,
Relief, and Economic Security (CARES) Act and American
Rescue Plan Act (ARPA), the IIJA funds were formula driven
and would be distributed via a more traditional process.
The state was not expected to receive tranches of funding
or unrestricted direct funding. He explained that only a
very small portion of the funding would fall under that
category.
Mr. Anderson turned to an illustration on slide 3
reflecting the IIJA bill. The dark blue portion of the
bubble chart reflected the traditional federal formula
funding that regularly flowed to the state. The light blue
portion reflected new spending. He stated the new spending
reflected a massive amount of money. He detailed that of
the $550 billion in new money, $284 billion was for
transportation including roads, bridges, airports, ports,
waterways, and other, and $266 billion was for energy,
power grid, broadband, water, resiliency, and environmental
remediation.
1:42:47 PM
Mr. Anderson moved to an overview on slide 4 showing a pie
chart of the IIJA funding by investment category. He noted
that the numbers shown on the slides thus far reflected
funding on a national level. A future slide would address
the role of the Office of Infrastructure to parse out and
track everything coming into the state and opportunities to
apply for funds. He noted the pie chart showed the sheer
diversity of things the bill provided throughout the U.S.
economy.
Mr. Anderson moved to spending categories on slide 5 and
provided a further breakdown of the information. The bill
included $110 billion for roads and bridges and Alaska was
looking to see a 20 percent increase over the course of
five years. The funding for railroads was directed at
Amtrak and improving the Northeast corridor; there was not
a significant portion of funding coming to the Alaska
Railroad. He had a subsequent slide on ferry funding. He
stated that Senator Lisa Murkowski had secured a sizeable
portion of funding for Alaska that would make a substantial
difference to the state. He highlighted funding for
airports, ports, and safe streets initiatives to reduce
roadway deaths and accidents. The list also included
electric vehicle infrastructure and electric buses.
1:45:06 PM
Mr. Anderson did not have a slide specifically pertaining
to broadband, but he touched briefly on the topic. He
relayed that the Alaska Department of Commerce, Community
and Economic Development (DCCED) had opened an Office of
Broadband. He recommended a separate meeting where the
committee could hear from the office about its work. He
noted there was quite a bit of money coming into the state
for broadband.
Mr. Anderson reviewed the work performed by the governor's
Office of Infrastructure on slide 7. The office was
currently in phase 1 of an opportunity tracker consisting
of an extensive Excel spreadsheet including hundreds of
IIJA opportunities for Alaska. The office was coordinating
with state agencies and keeping them apprised of the
situation, in addition to supporting tribes, local
governments, and agencies. Phase 2 of the project would be
putting the opportunity tracker online that would enable
the public to view where the money had been allocated. The
legislature had funded the office with $1 million
undesignated general funds (UGF) the previous year and the
governor's FY 24 budget included another $1 million for the
coming year. The funding would pay for his current position
that would be filled eventually by a more permanent person
in addition to a deputy, a data analyst, and an
administrative support position.
1:48:40 PM
Mr. Anderson turned to slide 8 and addressed tracking
opportunities and awards in Alaska. He reiterated
information he provided on the previous slide. He reported
there had been $3.5 billion awarded to State of Alaska
departments [in the first two years], much of which was
Department of Transportation and Public Facilities (DOT)
formula funding. Additionally, $4.7 billion had been
committed to Alaska to date for the five-year period. The
number increased to $5.5 billion when including funds to
nonstate entities over the first two years and $6.7 billion
over the five-year period. He noted the funding could
expand beyond the five-year period. He stated the numbers
would continue to grow over the next several years.
1:50:45 PM
Mr. Anderson moved to slide 9 related to the Alaska Marine
Highway System (AMHS). In January 2023, the Federal Transit
Administration (FTA) had awarded AMHS $285 million in six
grant awards. He indicated the state intended to work with
the legislature to match the funding.
Mr. Anderson turned to slide 10 and discussed significant
competitive opportunities for Alaska. Much of the incoming
funding was formula driven, but there were also significant
competitive opportunities for the funding. He highlighted
four areas including electric grid modernization, clean
hydrogen technologies, carbon capture and sequestration,
and rare earth and critical minerals.
Mr. Anderson discussed implementation on slide 11. He
stated that Alaska was fortunate because the way the
legislation was written included opportunities for Alaska.
He listed areas where Alaska should be well positioned to
compete:
• Tribal and Alaska Natives eligibility
• Historically underserved and hard-to-reach
• Multimodal transportation dependency
• Climate impacted
• Installed energy industry infrastructure
• High energy costs
• Rural and disadvantaged communities
• Minority and low-income populations
Mr. Anderson listed challenges for the state associated
with the implementation (slide 11):
Challenges:
• Statewide planning, coordination and communication
• Responsiveness and prioritization
• Technical capacity and workforce availability
• Access to matching funds across all eligible
recipients
1:53:59 PM
Co-Chair Edgmon acknowledged the heavy lift the bill
involved in Washington D.C. that had eventually come
together with incredible bipartisan cooperation. He lauded
the state's Congressional delegation for their hard work.
He highlighted that Senator Lisa Murkowski had been among
the five republican and five democratic senators
responsible for building the legislation that passed. He
elaborated that Senator Dan Sullivan had addressed the
legislature recently and had highlighted the billions of
dollars of benefits including some that were not yet known.
He stressed that without efforts by the late Congressman
Don Young the bill may not have made it through.
Co-Chair Johnson thought Mr. Anderson's was aiming to
provide a snapshot in time showing how much funding was
available and how much Alaska would receive. She remarked
it was hard to know how much funding would come into the
state. She remarked that many times Alaska was
countercyclical with the rest of the country where an
increase in oil prices benefitted Alaska but created
challenges in the Lower 48. She elaborated there was a
shift of workforce between Alaska and the Lower 48 in terms
of being able to find labor. She believed Alaska would
likely be competing for workforce because of the influx of
funding arriving across the country at one time. She asked
if there was a possibility of extending the funds beyond
five years. She questioned how the state would spend the
funds if it did not have the labor and workforce to do so.
1:57:18 PM
Mr. Anderson stated that it depended. In some instances,
the shelf life to spend was within the five-year parameters
and in others it could be extended. He would follow up on
the question. He understood Co-Chair Johnson's point about
workforce and competing for the same things. He stated that
part of the purpose of the Office of Infrastructure was to
collaborate together and increase efficiency. He used a
hypothetical example where three communities were going
after the same project. He suggested that perhaps the
office would work to encourage one community go after the
funding and resources could be collaborated.
Co-Chair Johnson foresaw there would be a need to
potentially extend [the expenditure window] on a case by
case basis if possible.
NILS ANDREASSEN, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL
LEAGUE, added to the comments made by Mr. Anderson. He
stated that while the bill was focused on a five-year
period with funding opportunities within each of the five
years, the time horizon for project deployment would likely
be ten years.
Co-Chair Johnson asked how much funding was still available
for application. She understood there were still funds
coming onto the radar. She asked how much additional
funding was anticipated that the state did not yet know
about.
Mr. Anderson replied that quite a lot was still
outstanding. He elaborated that agencies were in the
infancy stages of getting out their notice of funding
opportunities (NOFO). He characterized it as similar to a
rolling admission. He stated that depending on the
department or agency, some took longer, and others had a
shorter timeline. He detailed that some of the larger
energy projects required an applicant to submit a concept
report before they could apply for a second phase.
Mr. Andreassen elaborated that just two hours earlier the
second round of port improvement development program funds
NOFO was released for $662 million in available funds. He
stated there were still some programs identified in the
first round of funding that had not been released by U.S.
DOT. Additionally, many of the U.S. Department of Energy
(DOE) programs were still available. He believed there were
numerous awards from the first year that had not yet been
released, which would be followed by a second year of
funding opportunities.
Co-Chair Edgmon noted that Representative Cronk had joined
the meeting at 1:45 p.m.
Co-Chair Johnson stated it was exciting to know there were
more opportunities forthcoming. She encouraged departments
to continue looking for funding opportunities.
2:01:40 PM
Representative Hannan looked at the Office of
Infrastructure within the governor's office that had been
funded with $1 million in the FY 23 budget. She referred to
the additional $1 million operational request for the
office. She remarked it was a $2 million office with four
staff to assist in the 30 percent grant programs. She asked
whether additional costs should be anticipated in
departments serving the grants. She explained that the
Department of Commerce, Community and Economic Development
(DCCED) would need to do the grant applications in
collaboration with local governments.
Mr. Anderson responded that there were several agencies
within DCCED that had asked for additional funds in the
governor's budget for grant implementation. He stated there
was a recognition within departments that they may be
woefully understaffed in the specific area given the volume
of incoming funding.
Representative Hannan had concern about spending that much
money [on the Office of Infrastructure] just to have
someone oversee someone doing the work. She understood it
was a complicated thing. She did not know what a NOFO
looked like, but she imagined it took some translation. She
stated that with the previous tranches of [federal] COVID-
19 funding received, AML had to spend significant time
translating to communities. She observed it was a lot of
money at the administrative top instead of getting the
grants out. She wanted to ensure the focus was on getting
the competitive grant funding to communities. She
understood that the bulk of the bill was structured in a
formulaic fashion, and she was not fearful that DOT would
struggle to figure out how to apply for preexisting
programs; however, she wanted to ensure there was
application support for communities that had not been
successful in getting water and sewer in the past.
2:04:53 PM
Mr. Andreassen replied it was a collaborative effort. He
highlighted that the legislature had also provided funding
to AFN and AML in FY 23 to provide support to communities.
He anticipated the collaboration and need continuing in the
future. He clarified that the role of the Office of
Infrastructure was not to do the work agencies were doing
or writing grants that agencies would be building up the
capacity to also write grants for. He added the departments
did not currently have the capacity. The real value of the
Office of Infrastructure was the broader external
collaboration and making certain there were not missed
opportunities. He saw the office augmenting the capacity of
the agencies, strengthening the collaboration between
current partners, and bringing in additional planning
efforts at the regional level between the private sector,
nonprofits, tribes, and local governments.
Representative Ortiz looked at the third bullet point on
slide 2 indicating that many programs required a 20 percent
non-federal match. He highlighted that a 20 percent match
would have a significant impact on the state's funding
source. He asked if the administration was committed to
partnering with the legislature to receive every federal
dollar possible.
Mr. Anderson answered that he was present representing the
Office of Infrastructure. He would follow up on the
question. He noted the governor's FY 24 budget included
$156 million to help capitalize and maximize on $1.5
billion in federal funds.
Co-Chair Edgmon thought the representatives from AFN and
AML could likely help respond to the question.
2:08:57 PM
Representative Ortiz looked at national five-year totals
for broadband on slide 6. He asked for detail about the $20
billion designated for promoting affordability and equity.
He remarked that when there had been efforts to expand
broadband at the state level much of the money had been
used up by the providers. He explained that the broadband
may have been reaching areas, but the rates were
exorbitant.
Mr. Anderson replied that the entity doing the majority of
the distribution was the National Telecom Information
Administration (NTIA). He detailed that NTIA had broken the
category down into four programs. The first was the digital
equity program, which would be very large. He elaborated
that the State of Alaska Office of Broadband received
$567,800 to come up with a digital equity planning program;
the planning effort was being administered by the Rasmuson
Foundation. Second was the Broadband Equity Access and
Deployment (BEAD) program, which would bring a minimum of
$100 million into the state. There was $500 million in seed
funding for Office of Broadband planning efforts. The BEAD
program had $42 billion to dole out, which would be
announced later in the year. The third and fourth were the
Middle Mile and Tribal Broadband Connectivity programs. He
asked Ms. Borromeo to expound on his answer.
NICOLE BORROMEO, EXECUTIVE VICE PRESIDENT AND GENERAL
COUNSEL, ALASKA FEDERATION OF NATIVES, replied there would
be billions of dollars that would come to Alaska in two
ways. The first was through a formula grant. She explained
that every state had been mapped. Alaska's maps were
deficient and needed to be changed in many areas. She noted
that AFN, the state, and many of the telecom providers
believed the way the federal government had mapped the
underserved and unserved communities was very deficient in
almost all regions of the state. The second revenue stream
would be through competitive grants. She explained the
Office of Infrastructure was needed to help get "us" in the
room to compete and advise entities on when grants were
coming. She stated there was significant ground to cover
and "many hands make light work." She intended to review
the tribal set-asides AFN was tracking. She stated the more
eyes and ears the state could have in far corners of
Washington D.C., Juneau, and everywhere in between, would
enable the state to capitalize on the funds.
2:13:58 PM
Representative Galvin stated that she had heard from U.S.
Senator Dan Sullivan that the bill, particularly as it
related to broadband, had been specifically written to make
sure underserved areas would be given higher priority. She
wondered if the bill had also been written to help
underserved areas with regard to water and sewer. She
thought about the needs in Alaska and how new it was with
regard to infrastructure. She thought it could be an
incredible opportunity for the state.
Mr. Andreassen replied that one of Alaska's competitive
advantages with regard to IIJA was that many communities in
the state were underserved. He elaborated that underserved
was applicable to each of the buckets [shown on slide 6].
There was a [federal] Justice40 Initiative from the
administration that talked about disadvantaged communities
and included rural, tribal, and numerous metrics that each
agency factored in to determine who was underserved,
unserved, disadvantaged, etcetera with additional scoring
and merit that came with the determinations.
Representative Galvin assumed there may be extra points
awarded to communities with shovel ready projects.
Mr. Andreassen agreed.
Representative Josephson believed Mr. Anderson had
mentioned $156 million in the capital budget, which
increased by approximately 10 times when including the
federal portion. He looked at slide 2 that highlighted the
need to double the federal funding albeit with partners. He
asked if the House Ways and Means Committee should book in
the figure so potentially in the outyears it would be $250
million to $300 million in capital spending.
Mr. Anderson referenced the 20 percent federal match and
stated in certain instances the amount needed was smaller
and in others the match may be an additional 5 to 10
percent higher. He did not want to overstep his role as the
infrastructure coordinator. He was primarily tasked as a
collaborator responsible for tracking the funding. He
deferred to the Office of Management and Budget in terms of
giving direction to the House Ways and Means Committee.
2:18:29 PM
Representative Josephson considered a scenario where there
were tribal, state, and local government partners. He asked
if there was a system for reaching the match or if it was
an ad hoc negotiation.
Ms. Borromeo believed it would be a wise fiscal policy for
the state legislature to set aside funds to match all of
the grant programs. She stated it was analogous to priming
a well. She stated it was necessary to dump water down the
well to turn on the tap. She explained that allocating
matching funds to the programs, the benefit to Alaskans
regionwide would be felt 80-fold. She replied to
Representative Josephson's most recent question and stated
it was an ad hoc negotiation; something that was being seen
currently with many energy grants.
Mr. Andreassen added there was not the capacity at the
local, tribal, or any other level to everything available
when it came to non-federal matching funds. He had seen a
request from local governments for $1.2 billion in projects
for transportation alone. He estimated there were likely at
least $2 billion in response to the projects. He stated
that finding a 20 percent match would be a collaborative
effort, but it would not rest on local and tribal
governments to take on the entire amount. He emphasized
that a partner at the state level was critical.
Representative Josephson looked at slide 5 showing that
Alaska would receive about 20 percent of a 31 percent
increase the first year [for roads and bridges]. He asked
if the 31 percent increase represented a federal nationwide
increase and Alaska would receive one-fifth of the amount.
Mr. Anderson replied affirmatively.
Representative Coulombe noted it was a lot of money in a
short amount of time. She asked if the Office of
Infrastructure would be responsible for ensuring funds were
spent appropriately. She wondered if the responsibility
would reside with the Office of Infrastructure, the federal
government, or local communities.
2:21:32 PM
Mr. Anderson asked if Representative Coulombe was talking
about the $1 million increment for the Office of
Infrastructure.
Representative Coulombe clarified she was asking about the
federal grants coming into the state. She wanted to know
who was accountable for ensuring the funding was spent in
the way it was intended.
Mr. Andreassen replied that the responsibility would not
reside with the Office of Infrastructure. The applicant
would have direct responsibilities to the granting agency
at the federal or state level.
Co-Chair Edgmon stated that given the role of DOT in Alaska
including the AMHS, it would be warranted to have another
hearing to get more into specifics. He noted that Mr.
Anderson had only been on the job for a month and the
committee was putting him in the hot seat.
Representative Tomaszewski looked at environmental
remediation on slide 3. He referred to a $32 million grant
secured by Alaska's Congressional delegation for federal
remediation to clean up legacy wells. He asked if the
funding was part of the federal infrastructure bill
package. He asked if the state would have to come up with
20 percent matching funds for legacy well cleanup on
federal land.
Mr. Anderson replied it was his understanding that those
types of initiatives were covered and would be distributed
through the EPA and other agencies. He deferred to Mr.
Andreassen for additional detail.
Mr. Andreassen confirmed that the programs were covered
under IIJA. He explained that the match requirement varied.
He had not seen as much of a match requirement under EPA
funded programs, whereas a 20 percent match requirement was
much more likely for programs under the federal DOE and
DOT. He believed the Department of Natural Resources (DNR)
was the state agency responding to the formula or
competitive opportunities.
2:24:49 PM
Ms. Borromeo presented a PowerPoint presentation titled
"AFN Navigator Program: A Statewide Success Story" (copy on
file). She read from a prepared statement:
From AFN's point of view, the recent federal
investment in states, tribes, tribal organizations,
and our Alaska Native corporations under the six major
economic relief bills, one of which is IIJA, is
nothing short of transformative. But unfortunately,
the Native community has not been able to compete for
these opportunities for a number of reasons, central
of which is broadband. Another reason competitive
applications have been hard for tribes, tribal
organizations, and Native corporations to manage is
that they have very limited personnel and general
funds. This is where the Navigator Program comes in.
The Navigator Program was started in 2021 with a
simple goal in mind. We want to capitalize on this
once in a generation federal investment for post-
pandemic economic recovery and we're doing so through
a public private partnership. The Navigator Program is
currently in what we're calling internally Phase 3.
Phase 1 was June to December 2021, and it was launched
under a CARES grant from the State of Alaska. During
that short six months we designed and deployed the
program and we also focused on our number one goal at
the time which was primarily education and outreach.
Ms. Borromeo elaborated that much of the information had
not been getting to tribes, tribal organizations, and
Alaska Native corporations (ANCs) in a quickly and easily
digestible way. She explained that the Navigator Program
was very successful. She stated that the Alaska Native
community had finally received its share of the CARES
funding after successfully fighting all the way to the U.S.
Supreme Court in the Chehalis litigation. She detailed that
the Chugach Alaska Corporation understood the need for
follow-on funding because the funding had lapsed with the
state. She highlighted the need to keep the well primed in
order to be competitive.
Ms. Borromeo continued to speak to slide 2 related to the
Navigator Program. Phase 2 of the program ran from November
2021 to September 2022. During that time, the program
continued to provide education and outreach on all of the
different tribal set asides. The program had evolved
consciously and focused on putting together consortium
applications because AFN had realized that tribal
administrators, employees, and Native executives were too
taxed to keep up with all of the outreach and notice of
funding opportunities. Additionally, the awards were quite
competitive.
Ms. Borromeo detailed that since July of 2022, the
Navigator Program had evolved once again. The program was
currently operating under a grant from the legislature.
Compliance and reporting had been added to the baseline
services of education and outreach along with consortium
applications. She explained that with many of the federal
grants, if the grantee did not do what they were supposed
to do, they would undergo a red flag during the federal
audit process. She elaborated that if tribes, tribal
organizations, ANCs, or any other organization in Alaska
was flagged, it meant jeopardizing all of the federal
programs.
2:29:01 PM
Ms. Borromeo discussed that the program operated under a
hub and spoke model (slide 3). She explained that AFN was
the hub, and its consultants and collaborators were the
spokes. There were three main levels of navigators in the
program. The first was a federal navigator responsible for
tracking legislation in its draft and final form as well as
corresponding grant programs that came out of the different
pieces of legislation. She relayed that AFN was tracking
all six major pieces of economic relief passed by Congress,
including IIJA, but it was primarily focused on CARES,
ARPA, the Consolidated Appropriation Act of 2021 and on
knowing the federal set asides for tribes were located in
regular and special legislation.
Ms. Borromeo continued to review slide 3. She relayed that
after the legislation and grant programs were transmitted
to the Native community, the Navigator Program brought in
its regional navigators. She detailed that all 12 Alaska
Native Claims Settlement Act (ANCSA) regions had been
assigned a navigator responsible for building and
maintaining relationships with hundreds of tribes, Native
corporations, tribal organizations, and other influential
individuals and organizations in their regions. The goal
was to ensure navigators knew what every community in their
region needed, whether their priority was water and sewer,
broadband, transportation, energy, or other. She noted the
information was kept in various databases.
Ms. Borromeo explained that the third navigator was her
position as program director. She oversaw all of the
administration of the program and focused keenly on federal
policies and advocating for changes in policy when they did
not benefit Alaska. She provided two examples involving a
change that AFN was instrumental in bringing to ARPA. She
detailed that ARPA had a $20 billion tribal set-aside.
Congress had directed the Department of Treasury to
allocate $1 billion based on a pro rata share to all 574
tribal governments. Treasury had discretion over the
remaining $19 billion. She elaborated that the federal
government held tribal consultations, which AFN
participated in, and had asked for written comments on how
AFN believed the funds should be distributed. In the end,
the funds had been dispersed based on population and
economic loss. She explained that Alaska's tribes were
small and would never be able to compete with the Navajo,
Cherokee, and Choctaw tribes in terms of tribal citizens.
Additionally, because of the time and manner in which
tribes in Alaska had settled their land claims with the
federal government, most of the tribal employees were
employed by their regional nonprofit. She expounded that on
their IRS 990 forms, tribes in Alaska were not showing any
economic losses; the economic loss was borne by the
regional nonprofit.
Ms. Borromeo explained that when Treasury had published the
funding formula, AFN asked for a follow up meeting to
explain that the 229 tribes in Alaska would be shut out of
$19 billion. She relayed that Treasury officials had been
polite but held firm that the funding formula had been
published and was done. She shared that AFN's President
Julie Kitka had informed Treasury that AFN would spend the
weekend working on a white paper to try to convince
Treasury otherwise. The paper had been sent at the end of
th
May and by the 4 of July there had been no response. She
explained that after reaching out via email, she received a
call from a Treasury official who informed her of an
announcement in the federal register specifying that funds
had been clawed back for Alaska. The change resulted in a
mandatory $1 million to every tribe in the country. She
stated that even though the change benefited all tribes,
Alaska and northern California Rancheria were the big
winners. Without AFN's involvement in advocating for the
funds, the state would have lost out on
$200 million. She explained that only about 10 of the
tribes in Alaska showed an economic loss and had a
population large enough to qualify for the initial funding.
2:34:53 PM
Ms. Borromeo discussed targeted assistance on slide 4. She
relayed that the Navigator Program provided a plethora of
technical assistance to Alaska's tribes, tribal
organizations, and ANCs. They did not discriminate within
the Native community about the eligible entity; as long as
the funds benefitted the Alaska Native community and all of
Alaska by extension, AFN was tracking, analyzing, and
hounding to ensure applications were in. She expounded that
AFN had a funding database of the different grant
opportunities and produced one-page funding summaries.
Additionally, AFN provided workshops and trainings, often
in partnership with the federal government. She shared that
AFN also provided weekly newsletters that included the most
important opportunities. The organization was helping with
reporting and compliance to ensure tribes and tribal
organizations had submitted all of the appropriate grant
reports. In certain limited instances, AFN had put together
an application on behalf of the Native community through
its consortia applications.
2:36:29 PM
Ms. Borromeo reviewed the statewide program scale on slide
5. The slide showed programs AFN was tracking for the
tribal set asides in the six economic relief bills. Some of
the programs were in IIJA, CARES, and ARPA. The
organization looked at the opportunity holistically and not
just by the different pieces of legislation. She
highlighted there was roughly $35 billion in tribal set
asides that could be used to supplement the state's
investment in rural Alaska. She noted that AFN did not want
its efforts to supplant any investment the legislature
would make in rural Alaska.
Ms. Borromeo turned to slide 6 and provided several
concrete examples of AFN's work. She shared that AFN had
been successful in securing a $35.1 million broadband award
from NTIA. The application was submitted on behalf of 74
Alaska Native tribes and village corporations. She relayed
there were about five big broadband programs and the first
to come out was the Tribal Broadband Connectivity Program.
The program provided two separate sources of grants
including infrastructure and use and adoption. She
elaborated that use and adoption involved taking existing
service and figuring out how it could be modified to
provide better service, subsidies, and improving
telehealth. She explained that AFN had realized the second
stream of revenue for use and adoption was not going to be
accessed; therefore, AFN complied an application including
74 tribes and village corporations and was successful in
being awarded the grant. She shared that AFN had been told
by NTIA the application was the gold standard and benchmark
by which they judged all other applications. She added it
was the largest award in Indian country.
Ms. Borromeo elaborated that AFN would focus the award on
seven primary areas including telehealth, subsidies, a
train the trainer program, a roving IT program, and other.
The hope was to turn much of the work over to many of the
other Native corporations and tribes who were coming in a
separate wave with BEAD and Middle Mile.
2:39:26 PM
Ms. Borromeo turned to slide 7 and relayed that in addition
to the Tribal Broadband Connectivity Program, AFN had put
together three other consortium applications on behalf of
the Alaska Native community. The slide reflected the number
of consortia members AFN was representing through its
applications in addition to the secured funding amounts.
She detailed that AFN had been awarded $35.1 million for
the Tribal Broadband Connectivity Program; the award was
currently in the implementation phase. The next award was
around $4.4 million for the broadband Digital Equity
Planning Grant Program. She noted the funding amount shown
on the slide may be a little low or high; it depended on
the number of other applicants. She relayed that with 147
members, NTIA had told AFN it was the largest consortium.
Ms. Borromeo continued to review programs on slide 7. The
Capital Projects Fund was a $9.7 million formula grant that
could be used for telehealth, education, and workforce
development. She elaborated that approximately one month
before the application deadline, Treasury let AFN know
there were over 100 Alaska tribes that had not applied. She
explained that AFN had come in to help because broadband
had been a barrier in many instances. She elaborated the
application was online only and many of the tribes did not
have stable broadband. She had personally entered every
tribe into the database to determine how difficult the
process was. She discussed the difficulty of the process
that included a fingerprint, copy of a driver's license, a
video scan, and various other measures.
Ms. Borromeo highlighted the State Small Business Credit
Initiative on slide 7. She explained it was a loan to grant
program that AFN was very excited about and was working
with the Alaska Small Business Development Center. She
relayed that AFN had the largest consortium in the nation.
The program was a $500 million tribal set aside and AFN was
poised to capture about one-fifth of the total. The award
amount of $92 million (shown on slide 7) represented the
floor; the ceiling was expected to tap out somewhere
between $125 million and $150 million after the
reallocation was made later in the current year.
Ms. Borromeo addressed the Grid Resilience Formula Grant
Program on slide 7. The program was administered by the
U.S. Department of Energy. She noted that the legislation
had included the Alaska Native regional and village
corporations, but they had been cut out as the program was
being applied. She explained that AFN had advocated for the
funding and had successfully secured $65 million. She
highlighted that through AFN's consortium applications it
had secured $206.2 million. The number did not reflect all
of the hundreds of other applications AFN had been
encouraging and tracking.
2:43:20 PM
Ms. Borromeo addressed slide 8 titled "Statewide Returns on
Investment- To Date." She reviewed that Phase 1 of the
Navigator Program had included a state investment from the
CARES grant of $2.5 million to AFN, which AFN had used to
secure $210 million (a return on investment of $84). Phase
2 was funded with a $1.75 million CARES grant through the
Chugach Alaska Corporation, which brought in $206.2 million
(a return on investment of $118).
2:44:27 PM
Representative Stapp congratulated AFN on a job well done.
He asked Ms. Borromeo to let him know how the legislature
could help AFN to continue its endeavors.
Representative Hannan congratulated Ms. Borromeo on her
work.
Co-Chair Johnson stated the job Ms. Borromeo and AFN had
done was outstanding. She wanted to ensure there was not a
duplication of efforts between the state or between tribal
entities. She noted Co-Chair Edgmon had mentioned the idea
of another committee meeting. She suggested that perhaps
part of the conversation could be about how the partnership
could be with the state moving forward. She communicated
the desire to work together as much as possible.
2:47:03 PM
Mr. Andreassen presented a PowerPoint presentation titled
"Alaska Municipal League: Leaning Local: Strengthening
Local Governments" (copy on file). He thanked the committee
for the opportunity. He stated he was often impressed with
the work done by Ms. Borromeo and AFN. He noted there was a
good collaborative relationship between AFN and AML and all
three entities at the table. He shared that similar to AFN,
AML had responded to all of the activities at the federal
level from the $565 million to local governments under the
CARES Act to ARPA and the implementation and compliance. He
highlighted it had been a lot of work for all involved. He
believed it spoke to the responsiveness of AFN, AML, and
the governor's office that the state was ready to step up
into the opportunities and challenges.
Mr. Andreassen stated that while they had been successful
over recent years, the work was not done. He had a planner
on staff who had developed a logic model shown on slide 2
to show why specific work was being done, how it was being
done, and where they were headed. He shared that a year and
a half ago his board of directors the Alaska Conference of
Mayors had stated that if it was a once in a generation
opportunity, it would make sense to put every effort
possible into making the most of it. He worked with the
goal to bring as many federal dollars into Alaska as
possible and doing whatever needed to be done to make it
happen. He remarked it did not matter to him if the money
went to the state, local governments, nonprofits, or
tribes. The goal was to see federal funding from the
opportunity to come into Alaska because it would enrich the
entire state; it would displace funding requirements at the
state level, augment budgets at the local level, and foster
collaboration between municipalities and tribes.
Mr. Andreassen elaborated that the effort was accomplished
by collaborating and building up capacity and competency.
He relayed the last year had been a big learning curve for
organizations that had never done grant writing or provided
technical assistance. He elaborated that AML had more staff
working on infrastructure development currently than he had
on staff when he began working for the organization three
years back. Ultimately the goal was to have partnerships in
place to see projects delivered and project sustainability.
The organization was looking 10 to 30 years into the future
to determine how to make sure infrastructure built would
last for decades. He shared that much of the collaboration
was in place. The Alaska Infrastructure Coordinating
Committee had been necessary in the past year and they had
witnessed collaboration between AFN, AML, the Office of the
Governor, and other organizations with equity in the
effort. The committee met biweekly to address how to avoid
duplication and how to partner on things. He stated that of
the $3 billion plus that came into the state the past year
the Denali Commission, Alaska Native Tribal Health
Consortium (ANTHC), University of Alaska, and the Small
Business Development Center had been involved in making
sure the funds came in and were successfully deployed.
2:51:49 PM
Mr. Andreassen turned to slide 3 and discussed
infrastructure collaboration. He stated the effort was
informal and AFN, AML, and the governor's office were
making certain it continued. He saw one of the values of
the Office of Infrastructure as keeping the group going and
thinking about how to expand and bring other perspectives
who were benefiting or could benefit from the
opportunities.
Mr. Andreassen moved to slide 4 titled "Strategic
Infrastructure Development." He relayed that AML had seen
greater interagency and intergovernmental collaboration
than ever before. He detailed that AML had a memorandum of
agreement (MOA) with the Department of Transportation and
Public Facilities (DOT) and Department of Health (DOH) and
was talking with the Department of Environmental
Conservation (DEC). The goal was collaborative
relationships between the state and its political
subdivisions that enhanced the ability to pursue the
competitive opportunities.
Mr. Andreassen turned to slide 5 showing a table reflecting
the Alaska Transportation Funding Opportunity Hub jointly
developed by DOT and AML for $1.2 billion in projects. He
explained that local projects would get fed through the
hub, evaluated by AML, and local governments, tribes, and
nonprofits could apply to some extent to state programs
that were formula funded from IIJA. The hub would generate
a project map for legislators and others showing where
collaboration could be encouraged as projects were
developed and deployed. He expounded that AML's role was to
compare the 182 applications that came in for the 38
funding opportunities at the federal level. He stressed it
was a significant amount of evaluation. Additionally, there
were plenty of building efforts to be done to ensure
success over the next five to ten years.
Mr. Andreassen discussed scale and explained the work that
went on at AML and AFN at any of the different levels meant
sorting through the hundreds of NOFOs, tracking the
different agencies, tracking the funding buckets (i.e.,
buckets focused on resiliency, energy, etcetera), and
tracking open dates for funding opportunities. The table on
slide 5 was meant to show how to think ahead. The desire
was to get ahead of the current cycle. He explained that
the previous year was responsive, ad hoc, and informal in
trying to make the most of the opportunities. Systems of
collaboration had been built, but the work was not
complete. He stated the second year of IIJA was focused on
strengthening and augmenting the collaborative efforts. He
remarked that as every other state in the nation was also
more sophisticated in their response, the goal was to be
thinking ahead to the next year in terms of necessary
research, design and planning preparation, and to match
needs for the next year's NOFO in order to avoid jumping
every time a new funding opportunity arose. He pointed to
the blue and yellow colored cells on the right portion of
the table, which reflected grant opportunities AML had
responded to directly, in addition to AML applied or
supported applications from the state or local governments.
2:55:57 PM
Mr. Andreassen turned to slide 6 and discussed community
planning and infrastructure management. He stated there was
a significant amount to do and it was not merely responding
to grant opportunities and playing "Whac-a-Mole" with
NOFOs. The work involved thinking about being strategic in
the deployment of the funds, procurement, and workforce. He
highlighted there were supply chain issues, and bids
obtained three years back were 150 percent higher now for
purchasing goods and services. It was necessary to think
about project management and grant reporting and outcomes.
All of the work was coming in year three in ways that had
not been experienced in the first year; it would require an
additional level of scaling up. He discussed the need to
plan for the future in terms of how the infrastructure
would be maintained and operated in the years to come, what
asset management would be necessary, and what new systems
were needed to ensure the infrastructure was sustainable.
Mr. Andreassen reviewed takeaways on slide 7. The scale of
the infrastructure package was immense and overwhelming. He
highlighted that the legislature would see a request for
funding and an interest in strengthening the partnership
that had developed. He remarked that if AML only responded
to requests for information from the Department of Energy,
it would take up weeks of their lives. He believed there
was a huge amount of investment necessary in the
partnerships that had developed to continue to make the
most of the opportunities.
Mr. Andreassen moved to challenges and opportunities on
slide 8. He stated that none of the challenges would go
away in the next year, but he believed it was very
important for the committee and legislature to be thinking
about the kinds of investments that could be made together
to meet the challenges, the level of intergovernmental
collaboration the Office of Infrastructure could offer, how
to come together around procurement planning, and the
matching requirements. He stated there was good legislation
from the State of Colorado that implemented a match fund
for political subdivisions, tribes, and others to access in
order to reduce the burden and barrier to replying to
federal grant opportunities.
Mr. Andreassen discussed potential actions on slide 9. He
considered the funds were a once in a generation
opportunity and remarked that if the funding opportunity
was not accessed, it would mean waiting until the next
generation before the opportunity came again. He spoke
about the importance of responding at the state and local
level to make the most of the funding. He stated there was
a lot of urgency to having it in place in the current year.
He stated there was a lot more that could be done. He
referenced strategic and regional planning involved and
noted there were pieces in place. He highlighted DOT as an
example and stated perhaps regional planning organizations
were a step in the right direction. He stated that much
collaborative work was required. He shared that AML would
host the annual Infrastructure Symposium sometime in the
current year, which would build off of an event co-hosted
by AFN and AML the previous year.
Mr. Andreassen discussed the role of state and partners on
slide 10. He highlighted the importance of continuing to
make the most of responding to competitive grant
opportunities. He remarked that formula grants were
substantial, but if the state wanted to make the most of
the funding opportunities it needed to compete. He stated
that competing for the grants took skill, competency, and
sophistication. He shared that in the past eight months AML
had submitted $1.4 billion in projects and had heard back
about $300 million to $400 million in successful
applications over that time. He highlighted the successful
advocacy made by the state's Congressional delegation. He
noted the need to get more sophisticated in the years to
come. Additionally, the state would need to get more
coordinated about procurement, collaboration, and workforce
issues so as the funds were deployed, efficiencies could be
found. It was necessary to better understand what was
taking place at the local and regional level and have
systems in place at the agency and state level to respond
to and advance priorities. Lastly, it was important to have
sustainability in mind for the long-term.
3:01:25 PM
Co-Chair Edgmon referred to Mr. Andreassen's mention of the
Congressional delegation and work at the ground level by
U.S. Senator Lisa Murkowski. He referenced a handbook
produced by the White House the previous year that included
investments in energy, climate resiliency, the high cost of
living in rural Alaska, the development of clean and
renewable energy, and energy storage and grid
modernization. He asked the presenters to address
provisions that may be in IIJA relative to their work as
navigators or at the governor's office.
Mr. Andreassen responded that more work was required on the
federal/state interface. He reasoned that Ms. Borromeo
could not be sent to Washington D.C. every time a federal
agency issue came up. He stated that each of the provisions
in the [IIJA] bill were up to agency interpretation (e.g.,
implementation of Justice40 and thinking about
disadvantaged communities). He elaborated that each of the
different funding agencies had their own criteria and
processes for determining what metrics were being used for
how to think about Alaska communities. He relayed they were
not consistent, the data was poor, and often they were
tailing Alaska. He noted the aforementioned items fell
under the category of work to do by the state's
Congressional delegation.
Mr. Andreassen remarked that the work was not complete. He
referenced the Inflation Reduction Act, which had not yet
been discussed, in addition to a huge amount of money going
into air quality, climate, resilience, carbon reduction,
etcetera. He did not believe it was necessary to be afraid
of some of the terms. For example, some of the NOFOs talked
about improving HVAC systems. He elaborated that for
pollution reduction and climate resilience, the federal
government was calling for basics that were desired in all
communities such as improving safety and increasing energy
efficiency and associated costs. He stated a lot of very
meaningful work could get done if the state could figure
out how to access it. He cited the Energy Efficiency and
Conservation Block Grant Program as an example. He detailed
there were 400 tribal entities eligible for the block
grants at $10,000 apiece. He stated it took more work to
apply and comply with the grants than it was worth;
however, there was discussion about whether to leave $4.3
million on the table. He spoke to the importance of
thinking about how to work through the issues. He stated
that the biggest challenge was whether the data was
available, whether state agencies were organized around
supporting tribal and local applications and response, and
whether there were projects available to advance for each
of the competitive opportunities.
3:05:55 PM
Representative Galvin thanked the presenters for their work
and was grateful for the information. She asked how to make
sure the state was meeting the needs of Alaskans. She
referenced Ms. Borromeo's discussion on connectivity and
the number of Alaskans who were now connected because of
the dollars brought into the state. She believed AFN must
have had its eye on a certain set of values it hoped to see
come to fruition. She imagined water and sewer would be
high on the list of needs. She estimated there were 40 or
so communities still struggling with the basics of water,
sewer, and housing. She wondered how much consideration had
been put towards workforce and whether the state had what
it took to accomplish the work.
Ms. Borromeo responded that the federal agencies had really
chosen what opportunities AFN would apply for. She
explained that as legislation was passed and programs were
stood up by the agencies, they did not all move at the same
pace. She noted that Mr. Andreassen mentioned earlier that
he was jealous of the things AFN had been able to do. She
relayed that in the next coming years she would be cheering
him in the things he would be able to do because the
programs were moving at different paces. She elaborated
that the Tribal Broadband Connectivity Program through NTIA
was the first big billion dollar program, which happened to
be a tribal program. The federal government had been ready
with the Digital Equity Planning Grant next, which was
where AFN had to focus. The water and sewer programs had
not come online yet. She expected energy and transportation
would be two large departments that started to move in this
fiscal year. She reported that Mr. Andreassen and the local
governments may be better positioned than tribal
governments to capture those resources. She spoke to the
importance of collaborating to ensure the strongest
applicant was at the table.
Representative Galvin thanked Ms. Borromeo. She stated the
answer clarified the importance of having a central body
helping to put all of the work and partnerships together.
Ms. Borromeo answered that the central body was Mr.
Andreassen. She complimented Mr. Andreassen on his ability
to pull people together and keep people informed.
Additionally, he did not make the situation a competitive
race to see who could do the best the fastest. She relayed
the state deserved significant credit as well for ensuring
the tribal governments, Native corporations, and tribal
organizations were positioned to compete for competitive
funds and were in the room when the decisions were being
made.
3:10:04 PM
Representative Cronk thanked the presenters for their work.
He stated that working together for the benefit of Alaska
was something everyone involved should all be working for.
He remarked that the state could not do the work on its
own. He shared that he had traveled around his district
with Ms. Borromeo to see the highlights including fish on
the Yukon. He asked what the legislature could do to help
in terms of energy. He asked how to get the funding to
upgrade the Rail Belt, continue the road belt, tie it all
together, and benefit all Alaskans. He noted that once the
electric rate dropped it would change the Power Cost
Equalization (PCE) rate and all of rural Alaska would
benefit from the projects. He relayed there had been an
electrical meeting the previous week and all entities
including Cordova and Dillingham had been onboard. He asked
how the legislature could help AML and AFN garner the
funds. He stressed that affordable energy was still not
affordable in rural Alaska. He wanted to get to cheap
energy.
Mr. Andreassen replied that in terms of energy, there were
not as many answers from the U.S. Department of Energy as
one would like in order to meet the needs of Alaska. He
detailed that the Alaska Energy Authority (AEA) was the
prime respondent to some of the opportunities. He
elaborated that AEA had submitted a letter of interest or
concept paper for grid resilience for the Rail Belt and
rural areas through separate applications. There were
tribal set asides that would make an incremental
difference. He believed they needed to figure out how to
mesh the efforts in order to ensure the whole state had its
needs addressed. He explained that much of what the U.S.
Department of Energy was distributing was research grants
related to new technologies. The distribution was not about
patching holes and was not the "meat" that some communities
may be looking for.
Mr. Andreassen clarified that IIJA would not solve all of
the state's infrastructure needs. He recalled coming to the
committee table three years back to talk about the state's
$30 billion infrastructure deficit including housing and
school construction. He highlighted that the items were not
included in IIJA. He stated that water and sewer were
included and hopefully the state would see the needs of
unserved communities met. He remarked that the bill would
not address most of the energy needs. He believed the state
had a good partner in the AEA. He elaborated that each
agency was scaling up and responding in ways they never had
before. He explained that the state did not previously have
to compete for transportation dollars, it had received
formula funding. He relayed that Alaska Housing Finance
Corporation (AHFC) would take more of a role in some of the
work, including for energy. He stated the need to be
supportive of agency operations.
Mr. Andreassen replied to an earlier question by
Representative Galvin about workforce. He relayed there was
no funding in IIJA for workforce development. He referenced
a presentation from the previous year specifying the state
was short by 16,000 workers to do most of what was needed
for the infrastructure investment. He had seen the vacancy
numbers in municipalities and elsewhere and the gaps
remained. He believed there was new funding coming through
the Inflation Reduction Act. There were specific
opportunities AML had flagged for the University of Alaska
and others related to workforce. He remarked that the
Denali Commission and others were thinking about how to
leverage the funds. He stated it was necessary to keep in
mind there was a five to ten-year process. Currently, the
state was just applying for grants, which did not take a
workforce; it was necessary to think about subsequent years
when people were needed on the ground. He believed ANTHC
needed 70 people per year for water and sewer projects.
3:15:38 PM
Co-Chair Edgmon thought it was fair to say in the context
of IIJA that a lot of the funding was authorized for
programs that had yet to be conceived. There would be
future opportunities that people were not yet aware of. He
noted there was no funding for deferred maintenance in IIJA
outside of operating money for AMHS. He thought perhaps the
committee should consider a briefing on the inflation act
later on. He thanked the presenters.
Co-Chair Edgmon reviewed the schedule for the following
day.
ADJOURNMENT
3:17:25 PM
The meeting was adjourned at 3:17 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 2.8.23 House Finance Committee re Infrastructure.pdf |
HFIN 2/8/2023 1:30:00 PM |
HFIN IIJA Presentation |
| HFIN 2.8.23 AFN Navigator PresentationFINAL.pdf |
HFIN 2/8/2023 1:30:00 PM |
IIJA - HFIN |
| HFIN Infrastructure - AML IIJA 020823.pdf |
HFIN 2/8/2023 1:30:00 PM |
IIJA HFIN |