Legislature(2019 - 2020)Anch LIO Lg Conf Rm

07/14/2020 02:00 PM LABOR & COMMERCE

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as

Audio Topic
02:01:30 PM Start
02:02:52 PM Ak Cares Grant Program
04:32:53 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ AK CARES Grant Program TELECONFERENCED
-- Testimony <Invitation Only> --
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                       Anchorage, Alaska                                                                                        
                         July 14, 2020                                                                                          
                           2:01 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Ivy Spohnholz, Chair                                                                                             
Representative Louise Stutes (via teleconference)                                                                               
Representative Sara Hannan (via teleconference)                                                                                 
Representative Andi Story (via teleconference)                                                                                  
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Zack Fields                                                                                                      
Representative Mel Gillis                                                                                                       
Representative Sara Rasmussen                                                                                                   
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Representative Bryce Edgmon (via teleconference)                                                                                
Representative Bart LeBon (via teleconference)                                                                                  
Representative Dan Ortiz (via teleconference)                                                                                   
Representative Geran Tarr (via teleconference)                                                                                  
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
AK CARES GRANT PROGRAM                                                                                                          
                                                                                                                                
      HEARD                                                                                                                     
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
JULIE ANDERSON, Commissioner                                                                                                    
Department of Commerce, Community & Economic Development                                                                        
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified on the AK CARES grant program.                                                                 
                                                                                                                                
BILL MILKS, Assistant Attorney General                                                                                          
Civil Division                                                                                                                  
Labor and State Affairs Section                                                                                                 
Department of Law                                                                                                               
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified on the AK CARES grant program.                                                                 
                                                                                                                                
REPRESENTATIVE BART LEBON                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Asked questions pertaining to the AK CARES                                                               
grant program.                                                                                                                  
                                                                                                                                
REPRESENTATIVE DAN ORTIZ                                                                                                        
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Asked questions pertaining to the AK CARES                                                               
grant program.                                                                                                                  
                                                                                                                                
MEGAN WALLACE, Director                                                                                                         
Division of Legal and Research Services                                                                                         
Legislative Affairs Agency                                                                                                      
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified on the AK CARES grant program.                                                                 
                                                                                                                                
ALAN WEITZNER, Executive Director                                                                                               
Alaska Industrial Development and Export Authority                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified on the AK CARES grant program.                                                                 
                                                                                                                                
JON BITTNER, Executive Director                                                                                                 
Alaska Small Business Development Center                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified on the AK CARES grant program.                                                                 
                                                                                                                                
REPRESENTATIVE GERAN TARR                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Asked questions pertaining to the AK CARES                                                               
grant program.                                                                                                                  
                                                                                                                                
REPRESENTATIVE BRYCE EDGMON                                                                                                     
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Asked questions pertaining to the AK CARES                                                               
grant program.                                                                                                                  
                                                                                                                                
JULIE ESTEY                                                                                                                     
Greater Wasilla Chamber of Commerce                                                                                             
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT:  Testified on the AK CARES grant program.                                                                 
                                                                                                                                
REEPRESENTATIVE BART LEBON                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   Asked questions pertaining to  the AK CARES                                                             
grant program.                                                                                                                  
                                                                                                                                
JAMES WILEMAN, President & CEO                                                                                                  
Credit Union 1                                                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified on the AK CARES grant program.                                                                 
                                                                                                                                
VINCENT LANG, Commissioner                                                                                                      
Alaska Department of Fish and Game                                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified on the AK CARES grant program.                                                                 
                                                                                                                                
JERRY MCCUNE                                                                                                                    
Cordova District Fishermen United                                                                                               
Cordova, Alaska                                                                                                                 
POSITION STATEMENT:  Testified on the AK CARES grant program.                                                                 
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
2:01:30 PM                                                                                                                    
                                                                                                                                
CHAIR IVY SPOHNHOLZ called the  House Labor and Commerce Standing                                                             
Committee meeting  to order at  2:01 p.m.   Representatives Story                                                               
(via teleconference)  and Spohnholz were  present at the  call to                                                               
order.   Representatives Hannan  (via teleconference)  and Stutes                                                               
(via teleconference) arrived as the meeting was in progress.                                                                    
                                                                                                                                
^AK CARES Grant Program                                                                                                         
                     AK CARES Grant Program                                                                                 
                                                                                                                                
2:02:52 PM                                                                                                                    
                                                                                                                                
CHAIR SPOHNHOLZ announced  that the only order  of business would                                                               
be invited testimony on the AK CARES grant program.                                                                             
                                                                                                                                
CHAIR SPOHNHOLZ  stated that people have  expressed their concern                                                               
that the AK CARES funding is  slow in coming, and not meeting the                                                               
needs of the  small business community.  She reported  that as of                                                               
July 13, 2020,  per Department of Commerce,  Community & Economic                                                               
Development  (DCCED), 2,226  applications had  been received,  of                                                               
which  273   have  been  approved.     If  all   2,226  submitted                                                               
applications  were  approved,  funds  would  total  $98  million,                                                               
leaving a  significant amount  of funding  available.   She added                                                               
that  approximately   $11,426,000,  or   3.9  percent   of  total                                                               
available funds,  has been disbursed  into the community  so far.                                                               
She explained that many applications  have not been processed and                                                               
members of  the business and  fishing communities  have expressed                                                               
interest in  various changes  to the  program.   Today's hearing,                                                               
she  said,  is designed  to  help  the committee  understand  the                                                               
barriers  to accessing  the funds  and  what fixes,  if any,  are                                                               
needed  to prevent  unnecessary  small  business closures  during                                                               
this  difficult  time.    Lastly,  she  introduced  the  list  of                                                               
testifiers.                                                                                                                     
                                                                                                                                
2:06:40 PM                                                                                                                    
                                                                                                                                
JULIE ANDERSON,  Commissioner, Department of  Commerce, Community                                                               
&  Economic  Development  (DCCED), informed  the  committee  that                                                               
DCCED presented revised program  guidelines to the legislature on                                                               
June  17, 2020.   She  said the  department will  be implementing                                                               
changes to  the program's eligibility criteria,  which would make                                                               
businesses  that  received  $5,000  or less  in  PPP/EIDL  funds,                                                               
businesses  that returned  PPP/EIDL  funds in  excess of  $5,000,                                                               
501(c)6  nonprofit organizations,  and  businesses that  received                                                               
relief funds  through municipal grant  programs eligible  for the                                                               
AK CARES  grant program.   She pointed out that  "double dipping"                                                               
is not allowed, meaning that  funding from two different programs                                                               
cannot fund  the same  set of  business expenses.   Additionally,                                                               
she  said  expanded  eligibility criteria  would  include  Alaska                                                               
limited  entry permit  holders, which  are professional  licenses                                                               
that allow fishermen  to buy and sell fish  without a traditional                                                               
business  license.   She noted  that by  granting permit  holders                                                               
access to the  AK CARES grant program,  thousands of participants                                                               
will  be allowed  to  access  the $50  million  allocated to  the                                                               
fishing industry by  the federal CARES Act.  She  stated that the                                                               
fishing  industry is  facing  extreme hardships  as  they try  to                                                               
adjust to  COVID-19 restrictions.   She  said DCCED  is concerned                                                               
about fulfilling their unmet needs.                                                                                             
                                                                                                                                
2:11:19 PM                                                                                                                    
                                                                                                                                
BILL  MILKS, Assistant  Attorney General,  Civil Division,  Labor                                                               
and  State Affairs  Section, Department  of Law,  said today,  he                                                               
would provide the background to  a court action that was recently                                                               
resolved.   He  explained  that there  was  an injunction  motion                                                               
filed against DCCED seeking to block  a proposed change to the AK                                                               
CARES grant  program.   In a House  Finance Committee  hearing on                                                               
June 17,  2020, DCCED presented revised  program guidelines, such                                                               
as  permitting  businesses  that  received less  than  $5,000  in                                                               
PPP/EIDL funds to  participate.  He explained that  a lawsuit was                                                               
subsequently  filed  challenging  the department's  authority  to                                                               
administer that change,  resulting in a decision  by the Superior                                                               
Court in  Juneau on  July 10, 2020,  which denied  the injunction                                                               
and permitted DCCED  to go forward with revisions.   According to                                                               
the court, DCCED has discretion  to administer the small business                                                               
relief program,  which allows the  department to  make reasonable                                                               
interpretations to the  application of the program.   He said the                                                               
details of the  program were intended to be filled  out later and                                                               
all eligibility criteria were not  filled out in detail, which is                                                               
not unusual for programs administered  by state departments.  The                                                               
court  concluded  that   the  purpose  of  the   program  was  to                                                               
distribute federal CARES Act funds  to businesses and individuals                                                               
who suffered  financial harm  due to  the COVID-19  public health                                                               
emergency; further, that there was  no legitimate purpose for the                                                               
program to exclude  businesses that received less  than $5,000 in                                                               
PPP/EIDL funds  from participating.   He offered his  belief that                                                               
the  court  was particularly  influenced  by  the nature  of  the                                                               
pandemic, the  efforts of both  federal and state  governments to                                                               
react  and   adjust  accordingly,   and  descriptions   from  the                                                               
Legislative Budget and Audit (LB&A) committee.                                                                                  
                                                                                                                                
2:18:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HANNAN questioned whether  DCCED would address the                                                               
eligibility  of  501(c)4 organizations  for  the  AK CARES  grant                                                               
program.                                                                                                                        
                                                                                                                                
2:19:00 PM                                                                                                                    
                                                                                                                                
COMMISSIONER ANDERSON offered her  understanding that the 501(c)4                                                               
organizations  utilize   a  significant  portion  of   funds  for                                                               
lobbying.   She  explained  that per  Treasury guidelines,  funds                                                               
cannot be utilized for lobbying  activities, which is why 501(c)4                                                               
organizations were originally excluded.                                                                                         
                                                                                                                                
REPRESENTATIVE  HANNAN  asked  Commissioner  Anderson  to  define                                                               
"significant."                                                                                                                  
                                                                                                                                
COMMISSIONER  ANDERSON  said  to  do so,  further  analysis  with                                                               
Department of Law's (DOL's) assistance is required.                                                                             
                                                                                                                                
2:20:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STORY questioned whether  business owners who have                                                               
a  part-time business  that supplements  limited income  would be                                                               
eligible for the program.                                                                                                       
                                                                                                                                
COMMISSIONER ANDERSON said in the  process of getting the revised                                                               
program guidelines  approved, that issue has  not been addressed.                                                               
She noted that it could be  considered in the future and deferred                                                               
to Mr. Milks.                                                                                                                   
                                                                                                                                
2:22:39 PM                                                                                                                    
                                                                                                                                
MR.  MILKS explained  that the  particular  revisions that  DCCED                                                               
identified  on  June 17  are  not  the  only adjustments  to  the                                                               
administration of the  program that are possible.   He added that                                                               
the  Superior  Court recognized  that  assessing  changes to  the                                                               
program would  be an ongoing process  that's constantly adjusting                                                               
for specific needs.                                                                                                             
                                                                                                                                
REPRESENTATIVE  STORY  urged  DCCED to  consider  adding  501(c)4                                                               
nonprofit  organizations and  businesses that  supplement limited                                                               
income to the eligibility criteria.                                                                                             
                                                                                                                                
2:26:21 PM                                                                                                                    
                                                                                                                                
CHAIR SPOHNHOLZ  applauded the  changes proposed  by Commissioner                                                               
Anderson.  Nonetheless, she pointed  out that Mr. Milks described                                                               
Judge  Philip  Pallenberg's  decisions  as the  ability  for  the                                                               
administration to make  changes to the program as it  sees fit in                                                               
order  to respond  to the  need.   She offered  her understanding                                                               
that  the  court   order  denied  a  motion   for  a  preliminary                                                               
injunction.   She added that  Judge Pallenberg alluded to  what a                                                               
final decision might look like, but  the decision was not a final                                                               
decision.                                                                                                                       
                                                                                                                                
MR.  MILKS  in response  to  Chair  Spohnholz, acknowledged  that                                                               
Judge Pallenberg's  order denied  an injunction to  block DCCED's                                                               
proposed changes.  He confirmed that  it was not a final decision                                                               
to the  entire case.  Nonetheless,  he explained that one  of the                                                               
factors  to  consider in  an  injunction  action is  whether  the                                                               
plaintiff  has a  clear  likelihood of  success  in bringing  the                                                               
lawsuit.    He  said  in  this  particular  decision,  the  court                                                               
determined that  there was not  a clear likelihood of  success by                                                               
the  plaintiff in  an  effort  to challenge  the  changes to  the                                                               
program.    He  noted  that the  court  decision  clarified  that                                                               
regarding  the administration  of the  program, all  the criteria                                                               
were not  intended to  be spelled  out in detail  in the  RPL and                                                               
that  eligibility standards  could be  clarified later  by DCCED.                                                               
He said the court looked at  whether there was a reasonable basis                                                               
for the adjustments consistent with the purpose of the program.                                                                 
                                                                                                                                
CHAIR SPOHNHOLZ  agreed that Judge Pallenberg  indicated that the                                                               
final  decision would  not rule  in the  plaintiff's favor.   She                                                               
questioned  whether  submitting  an   updated  RPL  to  the  LB&A                                                               
committee  would be  an effective  way  to ensure  a clear  paper                                                               
trail outlining the proposed changes.                                                                                           
                                                                                                                                
MR.  MILK  said  he  is  comfortable that  DCCED  is  within  the                                                               
reasonable legal  zone of  administering the  program.   He noted                                                               
that  most adjustments  were  announced  on June  17,  2020.   He                                                               
offered his  belief that submitting  an updated RPL would  not be                                                               
necessary.                                                                                                                      
                                                                                                                                
2:33:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BART  LEBON, Alaska State Legislature,  asked if a                                                               
501(c)6  nonprofit  organization would  be  eligible  for the  AK                                                               
CARES grant program if it received $10,000 in EIDL funds.                                                                       
                                                                                                                                
COMMISSIONER ANDERSON  said the $5,000 limit  would prohibit that                                                               
organization from being eligible under current guidelines.                                                                      
                                                                                                                                
2:34:18 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DAN ORTIZ,  Alaska State  Legislature, sought  to                                                               
clarify whether  DCCED is willing  to go forward with  the change                                                               
that allows  people with a Commercial  Fisheries Entry Commission                                                               
(CFEC)  permit to  apply for  relief  funding from  the AK  CARES                                                               
grant program, which totals $290 million.                                                                                       
                                                                                                                                
COMMISSIONER ANDERSON  answered yes.   She said if they  meet the                                                               
other eligibility requirements, CFEC  permit holders are eligible                                                               
for the AK CARES grant program.                                                                                                 
                                                                                                                                
2:36:29 PM                                                                                                                    
                                                                                                                                
MEGAN  WALLACE,   Director,  Division   of  Legal   and  Research                                                               
Services,  Legislative Affairs  Agency,  stated that  she has  no                                                               
objection to the summary of  Judge Pallenberg's decision provided                                                               
by Mr. Milks.   She reiterated that the decision  was issued on a                                                               
preliminary injunction  motion, adding  that the  litigation will                                                               
continue  to move  forward unless  the parties  otherwise resolve                                                               
it.   She noted that  the matter could  go to the  Alaska Supreme                                                               
Court.   She said there  is no  dispute that the  legislature has                                                               
the  power  to  make  changes  to  the  program.    However,  she                                                               
questioned  whether  the RPL  process  would  be the  appropriate                                                               
venue to  make additional changes to  the AK CARES program.   She                                                               
explained that  her concern  is largely  based on  the "tortured"                                                               
litigation   history   with   respect   to   passage   of   RPLs;                                                               
additionally, she said the statute  that authorizes RPLs does not                                                               
contemplate the  committee returning  to approve or  address RPLs                                                               
after they have been approved.   She opined that if a decision is                                                               
made to  use the  RPL process,  it would be  at risk  for further                                                               
litigation; however, if  changes were made by law  there would be                                                               
no legal issues.                                                                                                                
                                                                                                                                
2:41:40 PM                                                                                                                    
                                                                                                                                
CHAIR  SPOHNHOLZ questioned  whether  Judge Pallenberg  intimated                                                               
that the  final decision  would end up  in DCCED's  favor, giving                                                               
the department the authority to  make administrative changes that                                                               
were not originally identified in the initial RPL.                                                                              
                                                                                                                                
MS.  WALLACE  explained  that  Judge  Pallenberg's  decision  was                                                               
limited to the eligibility criteria  revisions that were proposed                                                               
before the  court.   She said  Judge Pallenberg's  decision gives                                                               
some  guidance that  DCCED in  conjunction  with DOL  can use  to                                                               
assess  whether additional  changes  fit  within that  framework.                                                               
She  reiterated  that  without  a decision  on  the  merits,  the                                                               
plaintiffs  could object  to subsequent  changes and  continue to                                                               
fight  the   process.    Nonetheless,   she  stated   that  Judge                                                               
Pallenberg's ruling  in the Superior  Court indicated  that DCCED                                                               
should be afforded some flexibility.                                                                                            
                                                                                                                                
2:45:20 PM                                                                                                                    
                                                                                                                                
ALAN WEITZNER, Executive  Director, Alaska Industrial Development                                                               
and   Export  Authority,   noted   that   AIDEA  recognizes   the                                                               
applications are  not being  processed quickly  enough.   He said                                                               
AIDEA and  DCCED have had  several constructive  discussions with                                                               
Credit Union  1 and other experienced  financial institutions and                                                               
grant providers  as an exchange  of best practices  on processing                                                               
grants.   He  stated that  AIDEA, DCCED  and Credit  Union 1  are                                                               
working on  implementing several  ideas from  those conversations                                                               
that will significantly  improve the process.   One such example,                                                               
he  said, is  changing the  forms that  people have  submitted to                                                               
streamline information  for the  processors from Credit  Union 1.                                                               
He  explained that  AIDEA is  working on  adopting a  centralized                                                               
portal  function  for the  AK  CARES  program with  the  expanded                                                               
eligibility criteria that was recently announced by DCCED.                                                                      
                                                                                                                                
CHAIR SPOHNHOLZ inquired about small  businesses that hoped to be                                                               
eligible for  the AK  CARES grant program  but received  too much                                                               
funding  from the  PPP/EIDL to  qualify.   She asked  for further                                                               
clarification  on the  process of  returning those  funds to  the                                                               
federal government.                                                                                                             
                                                                                                                                
2:48:28 PM                                                                                                                    
                                                                                                                                
COMMISSIONER  ANDERSON  said DCCED  found  it  important to  give                                                               
people  that received  just  over $5,000  in  PPP/EIDL funds  the                                                               
opportunity to return excess funds,  which would allow them to be                                                               
eligible  for the  program.   She explained  that the  department                                                               
would  require verification  that the  funds were  returned along                                                               
with  a  revised  application  for   the  program  in  which  the                                                               
applicant  would  certify what  he  or  she  used the  $5,000  in                                                               
PPP/EIDL  funds for  to avoid  claiming the  same expenses  to be                                                               
reimbursed by the AK CARES program.                                                                                             
                                                                                                                                
CHAIR SPOHNHOLZ said  one of the concerns is that  there is not a                                                               
mechanism for small businesses and  nonprofits to return funds to                                                               
the Small  Business Administration (SBA).   She asked if  this is                                                               
true.                                                                                                                           
                                                                                                                                
COMMISSIONER ANDERSON  offered her understanding that  there is a                                                               
simple process to return the funds.                                                                                             
                                                                                                                                
CHAIR SPOHNHOLZ  asked Mr.  Bittner to  describe the  process for                                                               
small businesses  to return  the amount of  funds over  $5,000 to                                                               
make them eligible for the AK CARES grant program.                                                                              
                                                                                                                                
2:51:21 PM                                                                                                                    
                                                                                                                                
JON   BITTNER,   Executive   Director,  Alaska   Small   Business                                                               
Development  Center, explained  that  returning EIDL  funds is  a                                                               
simple process  that involves writing  a check and mailing  it to                                                               
the SBA office  in Colorado.  He stated that  returning PPP funds                                                               
is more complicated  as there is no existing  mechanism to return                                                               
them.   However, he offered  his understanding that  people could                                                               
prepay the PPP loan back up to the amount in question.                                                                          
                                                                                                                                
CHAIR  SPOHNHOLZ posited  that  people who  repaid  the PPP  loan                                                               
would  be  risking the  possibility  of  their application  being                                                               
denied for the AK CARES grant program.                                                                                          
                                                                                                                                
MR. BITTNER  said yes, there  is no certainty that  returning the                                                               
funds would grant automatic eligibility.                                                                                        
                                                                                                                                
2:53:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STORY questioned whether  returning PPP funds is a                                                               
common  practice in  other states.    She asked  for the  average                                                               
amount of PPP/EIDL funds being received.                                                                                        
                                                                                                                                
MR.  BITTNER  said in  Alaska,  roughly  990 businesses  received                                                               
$5,000 or less  in PPP funds.  He reported  that the average EIDL                                                               
amount is $100,000  and the average PPP is  slightly less, around                                                               
$60,000 to  $70,000.  He said  he would follow up  with the exact                                                               
numbers.                                                                                                                        
                                                                                                                                
2:55:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STUTES noted  that most people who  received a PPP                                                               
loan  are not  in the  position to  return it.   She  opined that                                                               
excluding  people who  received PPP/EIDL  funds is  troubling and                                                               
urged AIDEA and DCCED to figure  out a way to make them eligible,                                                               
even if it means deducting  the amount received in PPP/EIDL funds                                                               
from the amount awarded by the AK CARES program.                                                                                
                                                                                                                                
COMMISSIONER  ANDERSON said  going forward,  DCCED will  consider                                                               
that as  they continue to  look for  ways to improve  the program                                                               
and meet the needs of applicants.                                                                                               
                                                                                                                                
REPRESENTATIVE SPOHNHOLZ  said economic development  and business                                                               
experts  have   advocated  for  small  businesses   to  have  the                                                               
opportunity  to  use  AK CARES  funding  to  complement  PPP/EIDL                                                               
funds,  as  the  purpose  of  each program  is  different.    She                                                               
suggested exploring ways  to modify the AK  CARES program further                                                               
to  allow businesses  that  received funding  over  $5,000 to  be                                                               
eligible.                                                                                                                       
                                                                                                                                
2:58:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STORY questioned whether  returning PPP funds is a                                                               
common practice in other states or if it's unique to Alaska.                                                                    
                                                                                                                                
COMMISSIONER  ANDERSON said  her  team has  researched how  other                                                               
states are  implementing relief  programs and  many of  them have                                                               
chosen to distribute funds directly  through those entities.  She                                                               
added  that  the  issue  of  returning SBA  funds  has  not  been                                                               
directly addressed.                                                                                                             
                                                                                                                                
CHAIR SPOHHOLZ  inquired as to  DCCED's process of  engaging with                                                               
the business community to identify their concerns and feedback.                                                                 
                                                                                                                                
COMMISSIOENR  ANDERSON explained  that DCCED,  AIDEA, and  Credit                                                               
Union  1  are  regularly  involved in  conversations  with  small                                                               
businesses,  Alaska Regional  Development Organization  (ARDORs),                                                               
and economic  development organizations.   She said they  need to                                                               
form a plan  to communicate the revised  program guidelines while                                                               
simultaneously listening  to concerns from small  businesses that                                                               
are not currently eligible.                                                                                                     
                                                                                                                                
CHAIR SPOHNHOLZ asked how communication is structured.                                                                          
                                                                                                                                
COMMISSIONER ANDERSON  said primarily, engagement  occurs through                                                               
bi-weekly  meetings with  economic development  organizations and                                                               
weekly meetings  with ARDORs.   Additionally,  she said  there is                                                               
daily interaction with  small businesses.  She added  that one of                                                               
the  Alaska  Development Team  members  also  engages in  regular                                                               
meetings with the fishing industry to understand their concerns.                                                                
                                                                                                                                
3:03:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GERAN TARR, Alaska  State Legislature, opined that                                                               
it may be  too late to change the AK  CARES grant program because                                                               
many  businesses have  already  closed.   She questioned  whether                                                               
business closures are being tracked.                                                                                            
                                                                                                                                
COMMISSIONER ANDERSON said  she is not aware of  a mechanism that                                                               
provides real time data on business closures.                                                                                   
                                                                                                                                
CHAIR SPOHNHOLZ  emphasized the  importance of  actively engaging                                                               
with   ARDORs,  small   businesses,   and  economic   development                                                               
organizations across  the state to identify  solutions as quickly                                                               
as  possible.   She  said  Alaska does  not  want  to lose  small                                                               
businesses  that   have  contributed  to  the   state's  economic                                                               
vitality.   She  added that  without real  time data  on business                                                               
closures, identifying pressure points  through active outreach is                                                               
a necessity.                                                                                                                    
                                                                                                                                
COMMISSIONER ANDERSON agreed.                                                                                                   
                                                                                                                                
3:06:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BRYCE  EDGMON,  Alaska State  Legislature,  asked                                                               
whether DCCED  is confident that  most, if  not all, of  the $290                                                               
million can be disbursed with the current structure in place.                                                                   
                                                                                                                                
COMMISSIONER  offered her  belief  that with  the recent  program                                                               
revisions and current RFP process  in place to bring more program                                                               
operators on board, the funds will be distributed.                                                                              
                                                                                                                                
REPRESENTATIVE  EDGMON   sought  clarification  on   whether  the                                                               
eligibility  requirements  need to  be  changed  to disburse  the                                                               
entire $290 million.                                                                                                            
                                                                                                                                
COMMISSIONER ANDERSON said DCCED  is implementing revised program                                                               
guidelines  and will  continue to  monitor  the requirements  and                                                               
identify areas  in which the  program can be modified  within the                                                               
given parameters.                                                                                                               
                                                                                                                                
3:08:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   EDGMON  stated   that  he   continues  to   hear                                                               
frustration from  businesses that  cannot comply with  the $5,000                                                               
PPP/EIDL  limit.   He  added  that  businesses  do not  have  the                                                               
ability  to  pay their  loans  or  grants  back  to get  to  that                                                               
threshold.  He  asserted that he is not confident  in the ability                                                               
to disburse the full amount of funds.                                                                                           
                                                                                                                                
COMMISSIONER   ANDERSON   acknowledged  Representative   Edgmon's                                                               
concern.    She noted  that  the  injunction motion  delayed  the                                                               
ability to administer the revised  program guidelines in a timely                                                               
manner.   She expressed her  shared frustration, adding  that the                                                               
department  is trying  to accomplish  the process  responsibly to                                                               
meet the intent of the program.                                                                                                 
                                                                                                                                
REPRESENTATIVE  EDGMON  emphasized that  he  does  not want  [the                                                               
program]  to be  in the  same position  in two  weeks' time.   He                                                               
reiterated his lack  of confidence in the adequacy  of the recent                                                               
program changes.   He opined that  a better job needs  to be done                                                               
all around.                                                                                                                     
                                                                                                                                
CHAIR  SPOHNHOLZ asked  if Commissioner  Anderson has  considered                                                               
lifting the  cap on the amount  of PPP/EIDL funds a  business can                                                               
receive to  be eligible  for the  AK CARES  program.   She opined                                                               
that  $5,000 is  an arbitrary  number  and the  program could  be                                                               
further streamlined by allowing some flexibility on that issue.                                                                 
                                                                                                                                
3:12:44 PM                                                                                                                    
                                                                                                                                
COMMISSIONER  ANDERSON   recalled  that  constituents   who  were                                                               
recipients  of PPP/EIDL  loans of  $5,000 or  less had  expressed                                                               
concern about their  eligibility for the AK  CARES program during                                                               
the RPL  process.  She said  the $5,000 cap was  established from                                                               
that  feedback.   However,  she  noted that  as  the program  has                                                               
evolved,  it  is becoming  clear  that  there are  problems  with                                                               
implementation  and  sufficiency.     She  added  that  DCCED  is                                                               
considering amending the $5,000 cap.                                                                                            
                                                                                                                                
3:13:47 PM                                                                                                                    
                                                                                                                                
CHAIR  SPOHNHOLZ reiterated  that  numerous economic  development                                                               
experts  have communicated  that the  $5,000 limit  is arbitrary.                                                               
She  emphasized  the importance  of  providing  support to  small                                                               
businesses.                                                                                                                     
                                                                                                                                
3:14:35 PM                                                                                                                    
                                                                                                                                
JULIE ESTEY,  Greater Wasilla Chamber  of Commerce,  said Wasilla                                                               
is the economic  hub of the fastest growing area  in Alaska.  She                                                               
informed the committee that the  Greater Wasilla Chamber Commerce                                                               
represents  nearly  300  members   primarily  composed  of  small                                                               
businesses   and  nonprofits.     She   explained  that   Wasilla                                                               
businesses were  hit by closures  and restrictions in  the spring                                                               
and although they are currently  open, they are largely reporting                                                               
significantly less  revenue.  She  stated that she  looks forward                                                               
to  the development  of  an  efficient system  for  the AK  CARES                                                               
program, which would  allow the funding to reach  people who need                                                               
it.  She  shared that the landscape of Wasilla's  Main Street has                                                               
already shifted from the loss of  a business that was a supporter                                                               
of numerous  large nonprofits  - especially  at-risk youth.   She                                                               
said  in  addition  to  the   business  and  its  employees,  the                                                               
community will also  be impacted by its closure.   She noted that                                                               
many businesses  were recovering from the  earthquake when COVID-                                                               
19 hit.   She  explained that  without reserves  in place  due to                                                               
earthquake-related  losses,  some  businesses are  closing  their                                                               
doors  indefinitely.     Additionally,  several  large  community                                                               
nonprofits are  relying on PPP  funds, which are  quickly running                                                               
out.   Other  struggling businesses,  she said,  have received  a                                                               
small amount  of funding that  excludes them from  qualifying for                                                               
additional  help.    She   commended  Commissioner  Anderson  for                                                               
considering lifting the  $5,000 threshold.  She  opined that with                                                               
the  existing  uncertainty,  getting assistance  and  funding  to                                                               
businesses  as efficiently  as possible  "has been  the one  hope                                                               
that businesses have  to keep going."  She  advocated for 501(c)6                                                               
nonprofit  organizations,  which  includes  the  Greater  Wasilla                                                               
Chamber  of Commerce.    She  noted that  the  chamber has  spent                                                               
countless  hours compiling  data and  resources for  its members,                                                               
connecting them with elected officials  and bringing in speakers,                                                               
all  without   charge.    Additionally,  the   chamber  has  been                                                               
providing data to  community nonprofits to aid  in their response                                                               
planning from  business impact  studies.   She reported  that the                                                               
chamber has  lost one-quarter of  its annual income  with further                                                               
projected losses. Overall, she said,  the chamber is projected to                                                               
lose about 50 percent of its  annual revenue.  She explained that                                                               
the chamber  has cut  back staff and  expenses but  lacks another                                                               
avenue  of support  and  cannot responsibly  take  on loan  debt;                                                               
therefore, access  to the AK  CARES funding would be  a lifeline.                                                               
She expressed her support for  the changes listed by Commissioner                                                               
Anderson,   specifically   expanding  eligibility   for   501(c)6                                                               
organizations  and   businesses  that  received  any   amount  of                                                               
PPP/EIDL funding.   She concluded  by asserting that the  need is                                                               
stark and very real for businesses in the Wasilla community.                                                                    
                                                                                                                                
3:22:44 PM                                                                                                                    
                                                                                                                                
REEPRESENTATIVE BART  LEBON, Alaska  State Legislature,  asked if                                                               
the Greater Wasilla Chamber of  Commerce applied for EIDL funding                                                               
through the SBA.                                                                                                                
                                                                                                                                
MS. ESTEY said she does not know.   She offered to follow up with                                                               
the requested information.                                                                                                      
                                                                                                                                
3:24:41 PM                                                                                                                    
                                                                                                                                
MR. WEITZNER explained  that AIDEA has been running  a RP process                                                               
by  initially   engaging  with  Credit   Union  1.     After  the                                                               
announcement  for  the  AK  CARES  program,  AIDEA  initiated  an                                                               
addendum  to  extend  the  existing   RP  program  and  look  for                                                               
additional  program operators.   He  indicated that  AIDEA, DCCED                                                               
and Credit  Union 1  see a benefit  to having  additional parties                                                               
that  could  provide their  experience  with  other programs  and                                                               
apply that  information to streamline  the AK CARES process.   He                                                               
reported  that   constructive  discussions  have   occurred  with                                                               
experienced financial  institutions about existing  programs with                                                               
federal funding, as well as  other grant providers, to understand                                                               
best  practices  for processing  applications.    He stated  that                                                               
AIDEA is  working on implementing  their suggestions  into Credit                                                               
Union  1's  existing   application  base  as  well   as  the  new                                                               
applications  under the  revised  program guidelines.   He  noted                                                               
that establishing a centralized  portal for new applications will                                                               
be  critical   for  eliminating  confusion  about   the  required                                                               
information.   He opined that  developing a central  portal would                                                               
help the  processing time for  program operators.   Regarding the                                                               
status  of  the  RFP,  he  said,  it  is  currently  outstanding;                                                               
however, AIDEA  is in  the process  of engaging  in conversations                                                               
with additional program operators.                                                                                              
                                                                                                                                
3:28:08 PM                                                                                                                    
                                                                                                                                
CHAIR  SPOHNHOLZ recalled  that the  administrative fee  is being                                                               
changed to  entice more participants  to administer  the program.                                                               
She asked if that is true.                                                                                                      
                                                                                                                                
MR.  WEITZNER explained  that AIDEA  has left  the administrative                                                               
fee open  to allow potential  interested parties to  respond with                                                               
their bid.                                                                                                                      
                                                                                                                                
3:29:58 PM                                                                                                                    
                                                                                                                                
JAMES  WILEMAN, President/CEO,  Credit  Union  1, explained  that                                                               
Credit Union 1 accepts the  AK CARES program applications through                                                               
their  portal, verifies  the information,  processes the  grants,                                                               
and  disburses  the funds.    He  said  it  can be  that  simple;                                                               
however,   the   lag   comes  from   verifying   the   supporting                                                               
documentation  for  eligible expenses.    He  explained that  the                                                               
instructions call  for items  to be listed  on the  schedule with                                                               
supporting documents, such  as a receipt or  statement, to verify                                                               
the  expense; staff  must then  sift through  the information  to                                                               
ensure that items  are COVID-19 related.  He  said sometimes it's                                                               
clear and  other times it  requires back and  forth communication                                                               
with  the grantee,  which  adds significantly  more  time to  the                                                               
processing  time.   He noted  that improvements  have been  made,                                                               
including  short  videos  that  accompany  each  section  of  the                                                               
application process.  He emphasized  the importance of submitting                                                               
complete  application  packages  and opined  that  a  centralized                                                               
portal would  help with that.   He noted that Credit  Union 1 has                                                               
reached out to applicants who  have not responded, which makes it                                                               
difficult to disburse relief to  them.  He opined that onboarding                                                               
new operators for  the program would quicken  the distribution of                                                               
funds.  He explained that  Credit Union 1 has repurposed internal                                                               
staff  and hired  temps  to add  hours  of additional  processing                                                               
capability.                                                                                                                     
                                                                                                                                
3:34:09 PM                                                                                                                    
                                                                                                                                
CHAIR SPOHNHOLZ asked  if throughout the process,  Credit Union 1                                                               
has  learned anything  that has  helped speed  up the  processing                                                               
time in recent days.                                                                                                            
                                                                                                                                
MR. WILEMAN stated  that Credit Union 1 has  done everything they                                                               
can on  that front and is  in the process of  testing several new                                                               
forms that could help operators  process the applications faster.                                                               
Overall,  he said,  it's  difficult for  business  owners to  put                                                               
together all the supporting  documentation that's required, which                                                               
results  in  a "back  and  forth"  with  operators and  a  longer                                                               
processing time.  He reiterated  that Credit Union 1 has improved                                                               
from an  internal standpoint.   He explained that they  are quick                                                               
to  sort applications  that cannot  be processed  and need  to be                                                               
resubmitted from  complete applications that can  be processed as                                                               
quickly as possible.                                                                                                            
                                                                                                                                
CHAIR  SPOHNHOLZ asked  if the  new forms  are making  a dramatic                                                               
difference in  the amount of  applications that can  be processed                                                               
daily.                                                                                                                          
                                                                                                                                
MR.  WILEMAN said  the new  forms have  only been  tested with  a                                                               
handful of  applications; nonetheless,  they should speed  up the                                                               
processing time.                                                                                                                
                                                                                                                                
CHAIR SPOHNHOLZ  pointed out that  currently, only 12  percent of                                                               
submitted  applications have  been  approved.   Based on  today's                                                               
testimony, she  expressed doubt that  there would  be significant                                                               
acceleration in processed applications.                                                                                         
                                                                                                                                
MR. WILEMAN  reiterated that  the new  forms are  encouraging and                                                               
speed up  the application process;  however, he pointed  out that                                                               
it  will take  time to  provide those  forms to  people who  have                                                               
already applied.   He said  the biggest frustration is  that many                                                               
applications are not  complete enough to process.   He added that                                                               
the  possibility of  bringing on  an additional  operator with  a                                                               
centralized  portal would  be most  helpful moving  forward.   He                                                               
said  there is  hope  for  optimism, but  it  will  take time  to                                                               
complete the  RFP process to bring  on a new operator  and to get                                                               
new forms resubmitted by applicants.                                                                                            
                                                                                                                                
3:39:17 PM                                                                                                                    
                                                                                                                                
CHAIR SPOHNHOLZ  asked how a  portal would dramatically  speed up                                                               
the time it takes to process applications.                                                                                      
                                                                                                                                
MR. WEITZNER  explained that providing new  applications that are                                                               
easier  to  process  would  speed   up  the  review  process  and                                                               
ultimately  improve the  turnover time.   He  added that  a well-                                                               
designed  portal would  be the  first  interface that  applicants                                                               
engage in and would help improve the processing time.                                                                           
                                                                                                                                
CHAIR  SPOHNHOLZ  questioned  whether   an  online  portal  would                                                               
eliminate the need for paper applications.                                                                                      
                                                                                                                                
3:45:01 PM                                                                                                                    
                                                                                                                                
MR. WEITZNER answered yes.  He  said the purpose of the portal is                                                               
to  ensure  an  innate  database that  provides  applicants  with                                                               
required fields to  be filled out as opposed to  paper forms that                                                               
may have  be submitted incompletely,  which leads to  an extended                                                               
discussion  between   program  operators  and  applicants.     He                                                               
expressed his hope  that implementing a portal would  be the most                                                               
significant method  to speed  up the processing  time.   He added                                                               
that  streamlining   internal  Credit   Union  1   procedures  by                                                               
implementing input  from a broader  group would also  quicken the                                                               
review process.                                                                                                                 
                                                                                                                                
CHAIR SPOHNHOLZ  acknowledged the importance of  streamlining the                                                               
process.                                                                                                                        
                                                                                                                                
MR.  WEITZNER   noted  that  implementing  best   practices  from                                                               
experienced  organizations   should  help   avoid  the   need  to                                                               
restructure at  a later stage.   Regarding the RFP,  he expressed                                                               
his  hope  that  communicating   the  aforementioned  changes  to                                                               
interested  parties  would  show  that  AIDEA  is  interested  in                                                               
incorporating feedback  from Credit  Union 1 and  is implementing                                                               
changes in a coordinated, collaborative process.                                                                                
                                                                                                                                
CHAIR SPOHNHOLZ inquired as to the timeline for the live portal.                                                                
                                                                                                                                
MR. WEITZNER said he does not know.                                                                                             
                                                                                                                                
CHAIR SPOHNHOLZ  asked if there  has been an RFP  issue regarding                                                               
the creation of the portal.                                                                                                     
                                                                                                                                
MR. WEITZNER said  AIDEA would issue an addendum  to the existing                                                               
RFP; however, there have been  conversations on whether to create                                                               
that portal internally  within AIDEA or to  incorporate a program                                                               
operator  with   an  existing  portal   that  can  be   used  for                                                               
centralized processing.                                                                                                         
                                                                                                                                
REPRESENTATIVE STUTES  noted that her office  contacted DCCED and                                                               
Alaska  Department  of Fish  &  Game  (ADF&G) about  making  CFEC                                                               
permit holders  eligible for the  AK CARES grant program  in mid-                                                               
May.  She expressed her  hope that moving forward, quicker action                                                               
would be taken.                                                                                                                 
                                                                                                                                
3:46:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STORY  sought clarification on what  is holding up                                                               
the process for people that already submitted applications.                                                                     
                                                                                                                                
MR.  WILEMAN stated  that the  difficulty is  widespread, ranging                                                               
from  incorrect  applications   to  incomplete  eligible  expense                                                               
schedules.  Another  common mistake, he said,  is that applicants                                                               
forget to  provide supporting documentation to  verify that their                                                               
business expenses  are COVID-19 related and  within the timeframe                                                               
parameters of the  program.  He explained there is  often a great                                                               
deal  of  back  and  forth to  acquire  missing  information  for                                                               
applications  that are  mostly complete.   He  added that  Credit                                                               
Union  1's  records show  phone  calls  or  emails sent  to  many                                                               
applicants who  reportedly "haven't  not heard back"  from Credit                                                               
Union 1.  He  said Credit Union 1 is reliant  on the applicant to                                                               
return their call or upload  the required information.  He stated                                                               
that Credit  Union 1 makes  every effort to complete  the reviews                                                               
and process the grants.                                                                                                         
                                                                                                                                
3:49:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STORY  asked if  Credit  Union  1 has  considered                                                               
bringing people in to expedite the customer service process.                                                                    
                                                                                                                                
MR.  WILEMAN  said  originally,  no.     He  explained  that  the                                                               
necessary  skills were  deployed  to the  Credit  Union 1  branch                                                               
staff;  additionally,  ARDORs  held  informational  sessions  for                                                               
businesses.     He  offered  his  belief   that  the  application                                                               
checklist  and   informational  videos  have   helped  businesses                                                               
complete their  applications.  He  said Credit Union staff  1 has                                                               
done  everything  they  can  in terms  of  customer  service  and                                                               
reiterated  that   they  are  reliant  on   applicants  providing                                                               
complete applications.                                                                                                          
                                                                                                                                
REPRESENTATIVE LEBON said he spent  several weeks with his former                                                               
banking  employer and  reported that  most PPP  applications were                                                               
submitted  incompletely, which  required follow-up  conversations                                                               
to acquire  additional information.   He asked if Credit  Union 1                                                               
is disbursing funds electronically.                                                                                             
                                                                                                                                
3:52:52 PM                                                                                                                    
                                                                                                                                
MR.  WILEMAN   said  checks  are  being   mailed  via  controlled                                                               
disbursements   to  grant   applicants'   unpaid  bills,   future                                                               
expenses, or  to the grant  applicant directly  for reimbursement                                                               
of paid expenses.                                                                                                               
                                                                                                                                
REPRESENTATIVE  LEBON   surmised  that   all  checks   are  being                                                               
disbursed by mail to vendors or applicants.                                                                                     
                                                                                                                                
MR. WILEMAN confirmed that.                                                                                                     
                                                                                                                                
3:53:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STORY  speculated  that  transferring  the  funds                                                               
electronically would streamline  the process.  She  asked why the                                                               
checks are being disbursed by mail.                                                                                             
                                                                                                                                
MR. WILEMAN explained  that Credit Union 1 is  mailing the checks                                                               
to  ensure  an  appropriate  paper  trail  for  potential  future                                                               
audits.  He noted that Credit Union 1 was instructed to do so.                                                                  
                                                                                                                                
CHAIR SPOHNHOLZ  sought to clarify whether  the instructions were                                                               
included in the AIDEA contract.                                                                                                 
                                                                                                                                
MR. WILEMAN  answered yes.  He  said Credit Union 1  has not been                                                               
receiving negative feedback about the method of disbursement.                                                                   
                                                                                                                                
3:55:12 PM                                                                                                                    
                                                                                                                                
MR.  WILEMAN in  closing,  indicated that  Credit  Union 1  would                                                               
continue  to  improve on  disbursing  the  grants as  quickly  as                                                               
possible.                                                                                                                       
                                                                                                                                
3:56:47 PM                                                                                                                    
                                                                                                                                
VINCENT LANG,  Commissioner, Alaska Department of  Fish and Game,                                                               
explained that  the federal CARES  Act provided $300  million for                                                               
nationwide  fishery  relief, of  which  ADF&G  believed it  would                                                               
receive a large percentage based  on the proportional landings of                                                               
Alaska.   However,  when the  money was  awarded, each  state was                                                               
capped at  $50 million.   Subsequently, he said,  ADF&G submitted                                                               
an  RPL  to gain  control  of  the  distribution of  those  funds                                                               
through DCCED.  Instead, the  $50 million was distributed via the                                                               
[Regional Fishery Management Councils],  which nullified the need                                                               
for  the RPL.    He  continued to  explain  that  there are  five                                                               
eligible groups competing for the  $50 million awarded to Alaska,                                                               
including the processing sector,  the charter and lodge industry,                                                               
the aquaculture  industry, commercial fishermen,  and subsistence                                                               
users.  He said currently,  ADF&G has been discussing eligibility                                                               
criteria with  National Marine Fisheries  Service (NMFS)  and the                                                               
individual  groups  to  establish  a  plan for  the  funds.    He                                                               
indicated that ADF&G is consciously  taking a deliberate approach                                                               
to  avoid   pulling  fishermen  out   of  the  water   to  submit                                                               
applications during a critical part of their season.                                                                            
                                                                                                                                
4:02:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STUTES questioned  whether Pacific  States Marine                                                               
Fisheries Commission (PSMFC) is involved.                                                                                       
                                                                                                                                
COMMISSIONER LANG confirmed that.                                                                                               
                                                                                                                                
4:02:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   ORTIZ  sought   clarification  on   whether  the                                                               
processing sector is eligible for funding from the $50 million.                                                                 
                                                                                                                                
COMMISSIONER LANG  offered his understanding that  processors are                                                               
eligible.                                                                                                                       
                                                                                                                                
CHAIR SPOHNHOLZ  inquired as to  a reasonable timeframe  in which                                                               
the fishing industry could expect relief checks to be disbursed.                                                                
                                                                                                                                
COMMISSIONER LANG said ADF&G is aiming  to get a plan approved by                                                               
NMFS by the end of September  to allow the disbursement of checks                                                               
by the  end of the calendar  year.  He reiterated  his reluctance                                                               
to pull fishermen away from  their work to complete applications.                                                               
He said the  relief checks could be small compared  to the income                                                               
they could make from fishing.                                                                                                   
                                                                                                                                
CHAIR SPOHNHOLZ commended that.                                                                                                 
                                                                                                                                
4:05:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STUTES asked  to what  degree PSMFC  is involved;                                                               
also, for the deadline that the funds must be distributed by.                                                                   
                                                                                                                                
COMMISSIONER LANG  offered his  belief that  the deadline  is the                                                               
end of  the 2021 calendar  year.   He indicated that  ADF&G would                                                               
provide PSMFC with a clear spending  plan that allows them to cut                                                               
checks for eligible candidates.                                                                                                 
                                                                                                                                
REPRESENTATIVE STUTES shared her  understanding that the deadline                                                               
is September 2021.                                                                                                              
                                                                                                                                
4:07:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STUTES asked whether  receiving funds from the $50                                                               
million would make  recipients ineligible for the  AK CARES grant                                                               
program.                                                                                                                        
                                                                                                                                
COMMISSIONER  LANG offered  his understanding  that it  would not                                                               
make  applicants ineligible;  however, they  "can't be  made more                                                               
than complete  in their  losses by the  different aspects  of the                                                               
CARES Act."                                                                                                                     
                                                                                                                                
REPRESENTATIVE STUTES  surmised that if an  applicant applied for                                                               
the CARES  Act it would be  considered when applying for  the $50                                                               
million.                                                                                                                        
                                                                                                                                
COMMISSIONER LANG said, "they can't  be made more than whole, and                                                               
NMFS  will  take  that  into   account  through  the  application                                                               
process."                                                                                                                       
                                                                                                                                
REPRESENTATIVE STUTES questioned whether it's exclusionary.                                                                     
                                                                                                                                
COMMISSIONER LANG offered his belief that it is not.                                                                            
                                                                                                                                
4:09:07 PM                                                                                                                    
                                                                                                                                
JERRY MCCUNE,  Cordova District Fishermen United,  explained that                                                               
before fishermen start  a season, they must  spend between $5,000                                                               
and $6,000 for expenses such  as insurance, boat maintenance, and                                                               
storage.   He noted  that some  Alaskan fisheries  haven't opened                                                               
while others  are almost closed;  therefore, fishermen  will need                                                               
help.   He stated that COVID-19  has created low prices  and poor                                                               
markets.    The  processors,  he said,  have  spent  millions  in                                                               
response to  the pandemic,  which also  adds to  low prices.   He                                                               
expressed frustration with the amount  of time PSMFC has taken to                                                               
allocate money  in the past.   He expressed appreciation  for the                                                               
expanded eligibility requirements, which  will allow fishermen to                                                               
use a  CFEC permit  in lieu  of an Alaska  business license.   He                                                               
expressed support  for making fishermen that  received any amount                                                               
of PPP/EIDL funds  and 501(c)5 organizations eligible  for the AK                                                               
CARES program.                                                                                                                  
                                                                                                                                
4:17:03 PM                                                                                                                    
                                                                                                                                
MR. BITTNER reported  that nationally, the average  for PPP loans                                                               
is $105,000  and the EIDL  loan average  is $65,000.   In Alaska,                                                               
the average  PPP loan is  $112,000 and  the average EIDL  loan is                                                               
$65,000.   He  added that  the average  national EIDL  advance is                                                               
$3,300 and in Alaska, it's $3,100.   Overall, he said the SBA has                                                               
made  just over  $4.9 million  in PPP  loans since  the program's                                                               
inception.  There  is over $130 billion left and  the program has                                                               
been extended for several months  longer.  He said 11,201 Alaskan                                                               
companies  have  received a  PPP  loan  to date,  totaling  $1.26                                                               
billion.   He noted that several  changes were made the  PPP, one                                                               
which allows  commercial fishing  employees to count  towards the                                                               
total amount  awarded in PPP.   He reported that  nationally, the                                                               
industries  that  have  received  the  most  money  to  date  are                                                               
healthcare/social   assistance,   professional   scientific   and                                                               
technical    services,     construction,    manufacturing,    and                                                               
accommodation/food  service.    In Alaska,  the  highest  awarded                                                               
industries   are   healthcare,  construction,   other   services,                                                               
accommodation/food  services,  and  professional  scientific  and                                                               
technical  services.    He  stated that  5,780  EIDL  loans  were                                                               
awarded to  Alaskans totaling $358 million.   Additionally, 9,376                                                               
Alaskans  received EIDL  grants totaling  $31 million.   Overall,                                                               
almost   30,000  individual   transactions  came   through  those                                                               
programs totaling over one billion.                                                                                             
                                                                                                                                
4:21:58 PM                                                                                                                    
                                                                                                                                
MR. BITTNER  continued to explain that  difficulty exists because                                                               
no one funding  source can solve all the  problems for businesses                                                               
in Alaska.   He said the  situation is dire.   The tourism season                                                               
is nonexistent, and  locals cannot replace the  revenue made from                                                               
the usual 2.2 million visitors.   He stated that the oil industry                                                               
is  experiencing a  slight rebound;  however,  the price  remains                                                               
well below  last year's, which  has a ripple effect  on secondary                                                               
industries  across the  state.   Restaurants  are  also having  a                                                               
rough time,  as are  most other  industries.   He noted  that the                                                               
healthcare  industry is  rebounding, most  likely resulting  from                                                               
the easing  of restrictions on  elective surgeries.   He reported                                                               
that a significant  number of Alaskans are  still on unemployment                                                               
and a significant  number of Alaskan businesses -  37.9 percent -                                                               
are  closed.   Furthermore, conservative  estimates suggest  that                                                               
the economic  impact in Alaska  will last  for one to  two years.                                                               
He  highlighted an  increase in  community support  of businesses                                                               
and support from financial institutions and anchor industries.                                                                  
                                                                                                                                
4:27:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STUTES asked  for clarification  on whether  $130                                                               
billion is left in the PPP.                                                                                                     
                                                                                                                                
MR. BITTNER  said yes, there is  a large amount of  money left in                                                               
the program.  He added that based  on the burn rate over the last                                                               
several weeks, nothing  suggests that the money will  run out any                                                               
time soon.                                                                                                                      
                                                                                                                                
REPRESENTATIVE STUTES asked  when fishermen can apply  for the AK                                                               
CARES program with a CFEC permit in lieu of a business license.                                                                 
                                                                                                                                
COMMISSIONER  ANDERSON  said  DCCED  is  finalizing  the  revised                                                               
program  requirements and  RFP process.   She  said it  should be                                                               
available to fishermen in the next two to three weeks.                                                                          
                                                                                                                                
REPRESENTATIVE  STUTES  asked   if  Commissioner  Anderson  would                                                               
notify Chair Spohnholz when a definitive date becomes available.                                                                
                                                                                                                                
COMMISSIONER ANDERSON confirmed that.                                                                                           
                                                                                                                                
4:29:10 PM                                                                                                                    
                                                                                                                                
CHAIR SPOHNHOLZ  encouraged everyone to  read the UAA  Center for                                                               
Economic Development's analysis of the  PPP.  She emphasized that                                                               
each program is  designed to pay for different  expenses and that                                                               
different kinds  of businesses  are eligible for  each one.   She                                                               
reiterated  that  businesses  that  received $5,000  or  less  in                                                               
PPP/EIDL funds are  currently eligible for the  AK CARES program;                                                               
additionally,  that  DCCED   would  explore  further  eligibility                                                               
expansions.   She expressed  concern that  34 percent  of Alaskan                                                               
businesses are currently closed  and emphasized the importance of                                                               
protecting  the   small  business  community  to   keep  Alaskans                                                               
working.                                                                                                                        
                                                                                                                                
4:32:53 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Labor and  Commerce Standing Committee  meeting was  adjourned at                                                               
4:32 p.m.                                                                                                                       

Document Name Date/Time Subjects