Lawsuit blocks AK CARES changes, BSDC tasked with helping businesses navigate pandemic relief

Recent changes to the AK CARES small business relief program have yet to go into effect because of “a number of pending factors,” according to Glenn Hoskinson, spokesman for the Alaska Department of Commerce, Community, and Economic Development, DCCED for short. At least one of these factors is an ongoing lawsuit challenging the legality of the change.

The suit was filed by Eric Forrer, the same Juneau resident who challenged the state government in May over the legality of the AK CARES act as a whole, according to Paul Labolle, chief of staff to Rep. Neal Foster (D-Nome). The original lawsuit claimed that state spending must go through the legislative branch and thus it was unconstitutional for the governor to unilaterally institute the AK CARES spending plan. The plan uses the $1.5 billion allocated to Alaska from the federal CARES act to provide pandemic-related economic relief to a wide variety of sectors. Although the state legislature was no longer in session, it reconvened to ratify the plan, and most AK CARES programs have started to go into effect.

Last Monday, though, Forrer filed a second lawsuit challenging a specific amendment to the small business relief program, which allowed businesses that had received up to $5,000 in federal aid to also apply for state grants. Because the original plan ratified by the legislature stipulated that no recipient of federal relief would be eligible for state funding, Forrer argues that the Legislative Budget and Audit Committee needs to meet to approve the amendment.

While businesses that have not received federal relief can apply for and receive AK CARES grants today, businesses that would only be eligible under the amendment cannot. Hoskinson said the DCCED is “aiming for mid-July” to get the issue resolved, and recommends that businesses prepare application packets in the meantime.

Businesses can apply through Credit Union 1 online, via phone or fax, or in person at a Credit Union 1 branch office. The AK CARES act also allocates a total of $750,000 to Alaska Regional Development Organizations, ARDORs for short, to help businesses apply for grants. The state’s 10 ARDORs have existed for more than 20 years, and aim “to encourage the formation of regional development organizations to prepare and implement regional development strategies,” according to the DCCED website.

The ARDOR for Nome and the surrounding area is the Bering Strait Development Council, BSDC for short.

The BSDC has 18 members from a wide variety of economic and social sectors including housing, transportation, mining, education, health and Native tribes. It operates under the umbrella of Kawerak, Inc., using Kawerak’s 501(c)3 to apply for grant funding and advising projects led by Kawerak’s Community Planning & Development program. Members of the council are not Kawerak staff and their mission is to “serve the people, communities, and businesses of the Bering Strait region by promoting economic development opportunities that improve the economic, social, and environmental quality of life,” according to Barbara Nickels, Economic Development Specialist at Kawerak and lead BSDC staff.

In normal years, the BSDC performs a wide range of tasks, from collecting economic data to sponsoring workshops for local business owners. Nickels said that in the coming weeks, the BSDC will begin advertising its technical assistance to help businesses apply for AK CARES grants, as well as to keep businesses informed of ongoing changes to eligibility and application criteria. Although Kawerak on the whole is a non-profit primarily serving tribal members, Nickels said that the activities of the BSDC encompass all residents of the region.

In addition to helping residents with business licenses apply for AK CARES grants, the BSDC also connects residents with other sources of pandemic relief funding. They connect local artists who lack business licenses but are still struggling with the crash of the tourism industry, for example, with statewide resources like the Alaska Arts & Culture Emergency Relief COVID Grant. Nickels also mentioned further changes to the AK CARES program that have yet to be announced, and said that the BSDC would be charged with making sure local businesses have the most up-to-date information.