Governor introduces appropriation bill for initial $1 billion federal infrastructure funding

Gov. Mike Dunleavy submitted a bill to the Legislature April 4, to appropriate $1.004 billion in initial funding anticipated to be received by the state from the 2021 federal Infrastructure Investment and Jobs Act, known as the IIJA.

Most of the money to be received by Alaska and to go through state agencies must be approved by the Legislature in an appropriations bill. Of the $1 billion, $868 million will come from the federal government; $79.5 million from state Undesignated General Funds and $56.38 million from other sources.

The governor’s bill appropriates capital and operating funds to state agencies and to some non-state organizations that will partner with the state, along with local governments and Alaska Native entities, to implement the federal funding.

“While the federal infrastructure bill doesn’t provide the state with pots of unrestricted infrastructure funds that Alaska can spend as we see fit, it does contain substantial funding to improve our roads, airports and water infrastructure, and new investments in bringing broadband to the state,” the governor said.

“In addition, the bill provides competitive opportunities for Alaska to modernize our electric grid, pursue clean energy technology, to develop our substantial critical minerals and rare earth elements,” he said.

The bill was introduced following the passage of the IIJA by Congress in November, which was followed last month by passage of the federal Fiscal Year 2022 omnibus appropriation bill. It’s expected that 60 percent of the 5-year federal authorization will be allocated by formula with the remaining 40 percent expected to be awarded through competitive grants administered by federal agencies.

Funds distributed by formula will go through existing federal programs such as the long-standing federal surface transportation program, which funds highway and airport construction in Alaska.

For the 40 percent in grants, state agencies and municipalities will develop proposals that will have to complete with those from other states. Non-profits and tribes will also be submitting competitive grant proposals.

Here are some highlights in the governor’s bill:

• $560.2 million in additional federal funds will be available for surface transportation, rural water and wastewater programs, veterans services and cybersecurity grants.

• $37.4 million will be available for federal weatherization programs and the Alaska Low Income Home Energy Assistance Program. The state’s Alaska Housing Finance Corp. will play a central role in this.

• $28 million will be available for investments to modernize the electric grid, developing clean hydrogen and to develop a research demonstration facility for critical and rare earth minerals in Alaska. The state’s Alaska Energy Authority, the Department of Natural Resources and the University of Alaska will play a role in these $5 million to stand up the State of Alaska Infrastructure Office to coordinate and consolidate efforts with all recipients of IIJA funds

• $4 million will be available to construct housing for teachers and public safety personnel in rural communities not connected to the road system

• $2.5 million will be available to the Alaska Federation of Natives to continue the navigator program, a joint effort with the state that helps to secure funding available in the IIJA legislation for tribes and rural communities

The governor is ready to engage with lawmakers, local governments and non-state organizations on maximizing the value of the IIJA bill, the governor’s office said in a statement.

Committees in the House and Senate bill take up the appropriation bill, in House Bill 414 and Senate Bill 241, beginning this week.