Juneau

Legislators gathered in Juneau Monday, taking the appropriate health measures, to work on a $1 billion-plus appropriations bill extending federal aid to Alaska communities and small businesses affected by COVID-10 effects on the economy.

The money is being made available under the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act passed recently by Congress.

It’s assumed the bill will be passed by Wednesday night, May 20, which is the 120th day of the 2020 session of the Legislature. That is the deadline set by the state Constitution.

Lawmakers got right to work Monday. Senate Bill 243 passed out of the Senate Finance Committee late Monday afternoon. In the state House HB 313 passed out of the House Rules committee. The two bills are identical.

If Gov. Mike Dunleavy signs the legislation immediately on final passage, as he is expected to do, about $365.5 million will be rolled out to communities as the first installment of $586.6 million to be paid by the end of the year.

The Matanuska-Susitna Borough’s share of this will be $38 million, according to data developed by the Department of Commerce, Community and Economic Development, or DCED. About $32.35 million to be sent as soon as Dunleavy signs the bill and borough administrators get the required paper completed.

The city of Wasilla is expected to receive $8.9 million in the first payment and a total of $18.69 million by Dec. 30. Palmer will receive $3.92 million initially and a total of $7.56 million by year-end. Anchorage, for its part, will receive $116.7 million in the first payment and $156.7 million for the year in total.

The first payments could be made as early as Friday, Niel Steininger, director of the state’s Office of Budget and Management, told the Senate Finance Committee Monday. It was thought that the appropriation would be the only item on the Legislature’s agenda, but in a surprise development two bills on the verge of passage when lawmakers recessed at the end of March – a motor fuel tax increase and a set of major changes to the state’s – alcohol regulation law, appeared on the House calendar.

The items were deferred to the Tuesday, May 19 calendar for the House. Both bills have already passed the Senate. The fuel tax bill, sponsored by Sen. Click Bishop, R-Fairbanks, would double the state’s existing 8 cents-per-gallon motor fuel tax to 16 cents per gallon. The money raised would help fund maintenance on roads, Bishop said.

The alcohol regulation bill involves a long-planned revamp of Title 4, the state statute that governs liquor licensing. Sen. Peter Micciche, R-Kenai Peninsula, the sponsor, has steered bill over several years to the point that it is now near final passage. Miccicche has worked with a large stakeholder group that, remarkably, has achieve consensus among parts of the industry that are often at odds.

Meanwhile, legislators are familiar with many details of appropriation bills. Two House committees, the Finance and Labor and Commerce committees, have held hearings In recent weeks, during the recess, on the administration’s proposals for using the money.

In addition, the Legislature’s Budget and Audit Committee, with both Senate and House leaders among its members, have reviewed the proposed spending in detail.

The plan basically spells out how a $1.25 billion federal grant sent to the state as part of the CARES act will be distributed. Most of the money is split between funding for communities and a separate program for aid to small businesses who were unable to get Small Business

Two formulas governing distribution of fund for communities have been developed. One follows procedures of the long-existing Community Assistance Program where money is allocated basically according to community population.

The second formula is new as is crafted to augment the community assistance formula’s tie to population with one that aids communities that have been hit hard by the COVID-19 economic slowdown. Developed by the Office and Management and the DCED, this formula is linked to community economic data which will reflect the economic closures forced by the virus.

Meanwhile, a second part of the administration’s plan, which is also in the appropriations bill, involves $290 million for grants to small businesses and nonprofits. The Alaska Industrial Development and Export Authority, the state development finance corporation, will make the grants and oversee the program but the administration of the grants will be contracted to private financial institutions.

AIDEA is in the process of awarding a contract to Credit Union 1 as the first of these administrators and there may be others, Alan Weitzner, acting director of AIDEA, told the Senate Finance Committee Monday.

Information materials on how the grant program will work are still being developed, Weitzner said, but it is targeted toward businesses and nonprofits with 50 employees or less who were unable to get one of the SBA’s Payroll Protection Act loans and who can demonstrate financial losses due to the COVID-19 closures in the state’s economy.

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