Legislature(2025 - 2026)SENATE FINANCE 532
03/25/2025 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB59 | |
| Presentation: Alaska Broadband Office | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 59 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
March 25, 2025
9:02 a.m.
9:02:37 AM
CALL TO ORDER
Co-Chair Hoffman called the Senate Finance Committee
meeting to order at 9:02 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Donny Olson, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Mike Cronk
Senator James Kaufman
Senator Jesse Kiehl
Senator Kelly Merrick
MEMBERS ABSENT
None
ALSO PRESENT
Pete Ecklund, Staff, Senator Lyman Hoffman; Thomas Lochner,
Director, Alaska Broadband Office, Department of Commerce,
Community and Economic Development.
SUMMARY
SB 59 APPROP: SUPPLEMENTAL; FUND CAP
SB 59 was HEARD and HELD in committee for further
consideration.
PRESENTATION: ALASKA BROADBAND OFFICE
Co-Chair Hoffman discussed the agenda.
SENATE BILL NO. 59
"An Act making supplemental appropriations; making
appropriations to capitalize funds; and providing for
an effective date."
9:03:26 AM
Co-Chair Stedman MOVED to ADOPT proposed committee
substitute for SB 59, Work Draft 34-GS1753\N (Marx,
3/22/25).
Co-Chair Hoffman OBJECTED for discussion.
9:03:58 AM
PETE ECKLUND, STAFF, SENATOR LYMAN HOFFMAN, addressed the
committee substitute (CS), which he described as an omnibus
supplemental bill that included capital and operating
items. He drew attention to three documents labeled A, B
and C (copy on file). He explained that Document A was a
short fiscal summary produced by the Legislative Finance
Division (LFD). He directed attention towards the bottom of
the document to a post transfer surplus deficit of $81.1
million in FY 25. He explained that before any new
appropriations were made in FY 25, there was already a
deficit because the small surplus from the previous spring
had changed through a fall revenue forecast that projected
a deficit before any new spending.
Mr. Ecklund continued to address the fiscal summary on
Document A and pointed out that there was a proposed $111.4
million of UGF spending. There was a negative $24 million
in Designated General Funds (DGF), which was mostly related
to a clean-up of how the University of Alaska (UA)
categorized funds, which resulted in reducing UA receipts.
There was a proposed $288.1 million in federal funds, most
of which was related to Medicaid. He informed that most of
the capital spending was to plug orphaned wells.
Mr. Ecklund continued that there was $163.5 million in
Other Funds, mostly related to UA and cleaning up its
budget method. He listed increases in interagency receipts
and statutory designated program receipts. The categories
totaled $539 million. The CS incorporated all of the
governor's supplemental items as requested, including items
in SB 59, the fast-track supplemental; SB 84, the regular
supplemental; and the UGF item in SB 56, the operating
budget.
9:07:00 AM
Mr. Ecklund outlined exceptions to the total, including (in
the numbers section) that the CS changed the Alaska
Vocational Technical Center (AVTEC) item for electrician
and plumbing classes. The governor's request had included
$888.6 thousand UGF, and the CS proposed $660 thousand of
step funds for the purpose. The bill did not include a $1.6
million increment for Village Public Safety Officer (VPSO)
positions. The positions were created the previous session
but had not received legislative approval. In the capital
numbers section, there was a fund source change for the
Alaska Marine Highway System (AMHS). There had been a
request for $6.5 million for maintenance and overhaul to be
from the AMHS System Fund. The fund source was switched to
UGF to avoid a shortfall in the AMHS System Fund in FY 26.
Mr. Ecklund addressed the language section of the CS and
noted that the governor's request of $10.1 million for fire
suppression was increased by $3 million due to the early
start to the fire season. There had been a $10 million
request related to the Supplemental Nutrition Assistance
Program (SNAP) that proposed using two reappropriations
from FY 21, which Legislative Legal Services had deemed
invalid. The CS substituted UGF for the purpose. He noted
that there was an associated penalty and required
investment for SNAP.
Mr. Ecklund continued that additionally, in total in the CS
there was $29 million for the disaster relief fund. Of the
$29 million, the administration had proposed a $3 million
reappropriation. The CS changed the $3 million to UGF.
Mr. Ecklund outlined that in the Department of Corrections,
there was a supervisory standby pay increment request. The
CS broke down the request into three appropriations that
matched the appropriation structure in the FY 26 budget for
the same purpose. The only other changes in the bill were
technical. The CS did not add any items beyond the
governor's request aside from the $3 million addition for
fire suppression. The Constitutional Budget Reserve (CBR)
language in the bill worked to cover the $81 million
deficit before any new appropriations. After adding
appropriations of $111.4 million, the CS would add
approximately $7.5 million for "headroom" to cover any
supplemental requests submitted in the following days
before the end of session. There was an approximate $200
million CBR draw in the CS. If the revenue was lower than
projected, there would be a higher CBR draw to cover the
deficit. The reverse was also true in the case that the
revenue was higher than projected.
9:11:03 AM
Co-Chair Hoffman WITHDREW his objection. There being NO
further OBJECTION, it was so ordered. The CS for SB 59 was
ADOPTED.
SB 59 was HEARD and HELD in committee for further
consideration.
9:11:38 AM
AT EASE
9:13:26 AM
RECONVENED
^PRESENTATION: ALASKA BROADBAND OFFICE
9:13:34 AM
THOMAS LOCHNER, DIRECTOR, ALASKA BROADBAND OFFICE,
DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT,
discussed a presentation entitled "Alaska Broadband Office
- Broadband and Digital Empowerment Update" (copy on file).
He relayed that he was present to provide an update on the
two programs managed by the Alaska Broadband Office (ABO) -
the Alaska Broadband Grant Program (an extension of the
Broadband Equity Access and Deployment Program under
Infrastructure Investment and Jobs Act (IIJA)) and the
Digital Equity Act, also under IIJA.
Mr. Lochner looked at slide 2, "Alaska Broadband Office
Mission
Facilitate access to the full benefits of broadband to
all Alaskans with improved quality of service and
lower costs.
Mr. Lochner spoke to slide 3, "Alaska Broadband Office,"
which showed a flow chart. He relayed that when he was
previously in committee the ABO had only four employees,
and had since grown with the program requirements. The team
had added a project coordinator and an administration
manager to ensure budgeting in alignment within state and
federal requirements.
Mr. Lochner showed slide 4, "Alaska Broadband Grant
Program."
Mr. Lochner turned to slide 5, "State Partners":
Division of Community and Regional Affairs
• Grant Administration
• Mapping Analytics and Data Resources
Department of Natural Resources
• Office of Project Management and Permitting
• Mining, Land, and Water
Department of Transportation and Public Facilities
• Project Coordination
• Permitting
Department of Environmental Conservation
• Permitting
Mr. Lochner considered slide 6, "Funding Source: Broadband
Equity, Access, and Deployment Program from the Federal
Infrastructure Investment and Jobs Act," and reminded that
the Alaska allocation for BEAD was just over a billion
dollars. He anticipated that we would be distributing just
short of $990 million to infrastructure projects.
9:18:00 AM
Senator Kaufman asked about the project coordinator
position on the organizational chart and the project
coordination listed on the slide under the Department of
Transportation and Public Facilities (DOT). He asked Mr.
Lochner to expand on the division of tasks between the two
roles.
Mr. Lochner noted that the Venn diagram illustrated the
overall project, and the role within DOT was for project
needs within the department.
Co-Chair Stedman referenced slide 6 and the $1 billion
allocation. He asked how much of the funding had been
sequestered or frozen by the federal government.
Mr. Lochner answered "none."
Mr. Lochner displayed slide 7, "Major Accomplishments
Broadband Equity, Access and Deployment (BEAD)
Broadband Grant Program
The Alaska Broadband Office (ABO) submitted its
Initial Proposal Volume II (the grant program
structure) on December 27, 2023.
• The National Telecommunications and Information
Administration (NTIA) approved the State of Alaska's
Initial Proposal Volume II on October 10, 2024.
• The ABO launched the Alaska Broadband Grant Program
application period December 16, 2024, with an
application close of April 14, 2025.
BEAD State Challenge Process
• The NTIA approved the State of Alaska's assessment
of the Served, Unserved, and Underserved Broadband
Serviceable Locations (BSLs) on December 31, 2024.
Mr. Lochner commented on the significant amount of time
between ABO's grant proposal and its approval by the
National Telecommunications and Information Administration
(NTIA). There had been two primary challenges to the
approval of the BEAD program. He mentioned Footnote 70 in
the Notice of Funding Opportunity. The footnote had
modified Subsection 15, which had iterated that on tribal
lands the owner had authority over the land. Footnote 70
indicated that in order to have a project assigned, at
least 51 percent of tribes in the region must approve the
project within an area.
Mr. Lochner recounted that ABO Tribal Liaison Melissa
Kookesh had pointed out that the footnote violated the
Alaska Native Claims Settlement Act (ANCSA) by giving
authority over the land to non-landowners. The Department
of Law had been consulted and concurred with the tribal
liaison. He continued that NTIA asserted that tribes had to
be involved in activity on its lands. The situation had
taken a long time to resolve but there had been resolution.
A compromise was made and Section 15 was followed to allow
the landowner purview of permits and easements. Each
applicant had to show a good faith effort of informing
tribes of activity.
Mr. Lochner addressed the second challenge in approval of
ABO's grant application. There had been concern that one of
the other non-NTIA federal programs was going to fail. The
program covered an entire region of the state. He explained
that ABO had had purposefully delayed filing the mapping in
order to coordinate with the other program to ensure
coverage in that area.
9:24:01 AM
Mr. Lochner highlighted slide 8, "Current Alaska Broadband
Grant Program Elements," which listed pass/fail criterion
and scoring for the current ABO grant programs. He
discussed organization of the grant program. He listed
criteria on the slide:
1. Applicant License and Registration Information
2. Organizational and Managerial Capability
3. Financial Capability
4. Other Public Funding Disclosure
5. Technical Capability
6. Project Sustainability
7. Compliance with Applicable Federal, State, and
Local Laws
8. Civil Rights and Nondiscrimination Law Compliance
9. Cybersecurity and Supply Chain Risk Management (C-
SCRM)
10. Weather/Climate/Natural Hazard Threat Assessment
and
Mitigation Plan
11. National Environmental Policy Act (NEPA)
Requirements
12. Indian Tribe/Tribal Entity Proof of Support
13. Low-Cost Option
14. Middle Class Affordability
15. Application and Grant Agreement Certification
Mr. Lochner discussed project sustainability and used the
example of a village that set up Wi-Fi with a LEO provider.
As soon as the LEO provider sent the first bill, the
village turned off the service and went with Starlink due
to the cost.
Co-Chair Hoffman asked Mr. Lochner to explain the
significance of LEO.
Mr. Lochner relayed that LEO signified a "low earth orbit"
satellite provider and noted that there were currently
four. He explained that Starlink and others had and/or were
developing LEO. He explained that a LEO was only about
3,000 miles up, while mid-orbit was about 15,000 miles up
and geo-synchronous orbit was about 23,000 miles up.
Mr. Lochner continued to address the list of grant criteria
on slide 8. He relayed that items 13 and 14, a low-cost
option and middle-class affordability, would likely go away
due to the impact of what was happening in Washington D.C.
He discussed fixed rates being perceived as rate
regulation. He discussed publishing ABO's contract. He
discussed timing of the grant program and recommendation of
awards, and ABO's streamlining of items up front.
9:28:15 AM
Mr. Lochner addressed the scoring criteria on the right-
hand side of slide 8. He mentioned working with NTIA to
come up with scoring. He mentioned the affordability
program changing, due to numbers that might be construed as
rate regulation. He discussed streamlining of permitting.
He discussed extensive permitting work at a previous job.
Mr. Lochner looked at slide 9, "Broadband Grant Program
Timeline 2024 Estimate, 2025 Current, and 30-Day Review,"
which showed a timeline of the Broadband Grant Program for
the initial proposal Volume 2. He compared his time
estimate from the previous year with the green brackets
that showed actual progress. He mentioned a pause to do an
executive order impact review. He discussed questions of
what Congress could do that might impact ABO.
Mr. Lochner addressed slide 10, "Broadband Grant Program
Timeline 2025 Projection," which continued the timeline
from the previous slide, including the final proposal and
grant build phases. He highlighted that ABO would take 90
days to review applications and was in the process of
contracting National Environmental Protection Agency
consultants as well as professional engineers to help with
application review. After administration review, ABO would
submit the final results to NTIA.
9:31:55 AM
Mr. Lochner showed slide 11, "Alaska Digital Empowerment
Capacity Grant Program."
Co-Chair Hoffman asked if Mr. Lochner had a map of what ABO
anticipated coverage to be for the broadband program. He
thought many people already had Starlink or other programs.
He asked what the people of Alaska could expect when fiber
optic cable was made available.
Mr. Lochner detailed that ABO had a map on its website that
showed every broadband serviceable location that ABO had
been approved for, and showed served and underserved
capacities. The map also showed where community boundaries
are to see what locations fell within communities. He
described a remote cabin that would likely need to be some
sort of satellite solution. He mentioned that Starlink kept
its customer rolls confidential, so ABO did not have a
sense of which locations that were served. The challenge
with any LEO satellite provider was that service ability
shrank with greater numbers. He mentioned a map of space
that showed all the Starlink satellites. He shared that
there was a band around the Earth that covered the Lower 48
brilliantly, however there were only five to seven Starlink
satellites over Alaska at any given time, so if there was
more adoption, more satellites were needed or service would
go down.
9:35:52 AM
Co-Chair Hoffman asked about the basic service difference
between Starlink and fiber.
Mr. Lochner thought Starlink maximized at about when 230
megabytes down and about 50 megabytes up. When it was
higher it could go up to 150 mg down and 20 up. With fiber,
depending on configuration, one could do 30 terabytes of
data. He thought that with artificial intelligence (AI) and
additional infrastructure, there would be a need for more
and more bandwidth which he thought would ultimately
overwhelm Starlink's capacity.
Co-Chair Hoffman asked about where the state would be with
connectivity once the entire project was done.
Mr. Lochner thought Co-Chair Hoffman had asked a "wonderful
but challenging question." He relayed that before the $1
billion was allocated to the state, ABO had sent an
analysis to ITIA that indicated it would take $2 billion to
do what was needed in the state. He noted that the state
had been successful with other programs, which had offset
the need. He opined that there would still be some
extraordinarily high-cost areas that would have to be
served with a LEO option. He thought there would be 96
percent of the state that would be fiber, and the other 4
percent would be the high-cost option.
Co-Chair Hoffman asked how Alaska would compare with the
rest of the country.
Mr. Lochner did not have the information at hand but
offered to provide it at a later time.
9:38:46 AM
Mr. Lochner looked at slide 12, "Funding Source: Digital
Equity Act from the Federal Infrastructure Investment and
Jobs Act
$2.75 BILLION FOR ALL STATES AND TERRITORIES
• Planning Grants: $60 Million Alaska Awarded:
$567,800.00
• Capacity Grants: $1.44 Billion Alaska's Award:
$5,631,769.64
• Competitive Grants: $1.25 Billion Alaska's Award:
TBD
Mr. Lochner discussed the three tranches of funding listed
on the slide. He discussed contracting with the Rasmusson
Foundation for help writing a plan. He anticipated further
awards of $1.8 million for FY 25 and $1.8 million for FY 26
for digital empowerment. He thought the funding listed on
the slide would "tap the surface" and was in no way
comprehensive considering cyber security and what was
needed.
Co-Chair Hoffman asked how the infrastructure would be
maintained once the services were in place.
Mr. Lochner mentioned the criteria of sustainability. There
was a system by which applicants would be able to look up
each community and get information on sustainability. He
discussed households with fiber and pre-determined project
areas to create an economy of scale. He mentioned
sensitivity to regions and listed villages that tended to
be close enough to be able to combine for sustainability.
9:43:29 AM
Mr. Lochner showed slide 13, "Major Accomplishments
State of Alaska Digital Empowerment Capacity Grant
Program
• The NTIA approved the State of Alaska's Digital
Empowerment Capacity Grant Program on November 10,
2024
• The ABO launched the Alaska Digital Empowerment
Capacity Program application period on December 13,
2024, with an application close of April 12, 2025
• Successful applicants will receive a portion of $5.6
Million
Mr. Lochner referenced slide 14, "Alaska Digital
Empowerment Capacity Grant Dates & Timeline," which he
noted was a visual representation of all the elements.
Mr. Lochner turned to slide 15, "Thank You":
Thomas Lochner
Director, Alaska Broadband Office
[email protected]
907-269-4048
Co-Chair Hoffman thanked Mr. Lochner for his presentation.
He thought the program was a big endeavor that would leave
the state better off.
Mr. Lochner thanked the committee.
Co-Chair Hoffman discussed the agenda for the following
day.
ADJOURNMENT
9:45:15 AM
The meeting was adjourned at 9:45 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 032525 Alaska Broadband Office Presentation to Senate Finance Committee 3.25.25.pdf |
SFIN 3/25/2025 9:00:00 AM |
|
| SB 59 Fiscal Summary Gov Amend Supp CS less formal.pdf |
SFIN 3/25/2025 9:00:00 AM |
SB 59 |
| SB 59 SFC FT Sup - Agency Summary - All Funds.pdf |
SFIN 3/25/2025 9:00:00 AM |
SB 59 |
| SB 59 SFC FT Sup - Agency Summary - UGF Only.pdf |
SFIN 3/25/2025 9:00:00 AM |
SB 59 |
| SB 59 work draft version N.pdf |
SFIN 3/25/2025 9:00:00 AM |
SB 59 |
| 032525 Response to Questions ABO Response to SFIN 4.4.25.pdf |
SFIN 3/25/2025 9:00:00 AM |
|
| 032525 Alaska Broadband Office Presentation to Senate Finance Committee 3.25.25.pdf |
SFIN 3/25/2025 9:00:00 AM |