Okay, I'd like to call the Senate State Affairs Committee meeting to order. Let the record reflect that it is
332 p.m.
We are currently in the belts committee room in June, Alaska
Members present vice chair senator Bjorkman senator will a cow ski
Senator Tilton, Senator Great Jackson will be joining us online.
My self-chair Kawasaki, we have a quorum to connect business.
I'd like to thank Kerry Tupoe from Senate Records and David Monroe,
the moderator with the Legislative Information Office.
Today we just have one agenda item and that's an overview of the Alaska Industrial
Development and Export Authority, or ADA as we know it,
They, I know that Randy Rauraro is in another meeting,
but may be joining us toward the latter half of the meeting
if we, unless we get out of here earlier than that.
But online to present, we have Jeff Johns,
the Chief Investment Officer and main presenter today.
Kent Sullivan, General Counsel,
I guess maybe just here for legal questions.
Mark Davis, Special Counsel for historical
and technical questions on specific projects.
I would like to thank you for being here today
and you may start your presentation.
All right, good afternoon Chair,
Vice Chair and committee members.
For the record, my name is Jeffrey Johns.
I currently serve as the Alaskan Industrial Development
and Export Authority Chief Investment Officer, or ADA.
I'm.
As highlighted, I'm joined today by Aida's general counsel, Kent Sullivan, and for the record,
I do have off-camera with me, Jeffrey San Juan, AIDA's infrastructure development program manager.
Again, thank you for opportunity to testify and present to you AIDIS projects,
Provide eight is up either project updates. And finally, I'd also like to address recently. It is credit rating received by S&P
I see that you have the annual report up on screen, and that's a very excellent starting point
Ada I think it was without question is is
Understand that it is the state of Alaska's development finance authority
aid exists to promote economic development, job creation, and retention solely within the state.
ADA was primarily created by legislature to take on in-state development projects
and business finance and lending risk.
and finances projects largely, if not entirely, through ADA's pledged resources, namely it's
revolving fund, and if necessary accessing funds that are invested and held with external managers
that subject to ADA investment policy standard. ADA has two primary financing vehicles,
underwrite, service the loan, and ADA can participate or purchase up to 90% of a loan
to a maximum of $25 million. The LPP then delivers longer terms. It provides patient capital,
as does ADA's other financing programs. Terms range from 15 to 25 years depending on the
equipment 15 years real estate longer term 25 years. What this does is provide lower schedule
payments for Alaskan businesses and the bank's borrowers. It's important to note that ADA does
not compete or replace banks. The program is structured as a participation that keeps bank
underwriting and banks in place facilitating additional lending by those participating
Eight is other primary financing tool is its direct finance program or what we refer
to as the 172 program which is defined in statute, specifically 4488172.
latest channel for capital intensive revenue generating infrastructure and long duration assets
that often don't fit within conventional financing. And again, our investments are solely within
the state of Alaska and fulfillment of our mission, economic development and job creation.
then runs a continuum from concept and feasibility through due diligence with
increasing rigor before any board approval or project or financing
documentation and execution. The discipline is repayment sources, credit
strength, risk assessment, so that projects advance only if they align, as I
said with our mission, statute, and of course subject to board
approval.
Other financing tools that we have in our toolbox are conduit revenue bonds.
ADA can issue taxable or tax exempt conduit
revenue bond for eligible projects.
In this case, ADA only serves as the conduit,
which means that ADA's credits and assets are not at risk.
We facilitate borrower lending, in this
We also have two smaller programs that are capitalized with
ADA funds but that
are facilitated through
the Department of Community Commerce and economic development.
Those are the Small Business Economic Development Fund or SBED.
SBed is a small business tool to
find that startup and expansion that creates
significant long-term employment and ineligible ADA communities,
or I'm sorry, Alaska communities.
December 2025, a three resolution G2512, S-bed was recapitalized up to $6 million.
$3 million came out of eight as revolving fund and $2 million was allocated from the
rural development initiative fund or RDIF, which I'll get to momentarily.
over into SBED and the reason why this was done is because SBed is the more popular of the two
programs administered by investments under DCCED. This recapitalization is expected to finance
approximately 25 to 30 loans and create and preserve approximately 120 jobs as represented
Mr. McCauley had indicated that investments would have to stop accepting applications and suspend lending for a period of up to nine months.
As noted, the other DCED run program using eight of funds is the Rural Development Initiative Fund or RDIF.
RDIA targets small remote Alaskan communities, up 5,000 individuals off-road or maximum 2, 000 on the road system.
This program is job-linked, but is somewhat more constrained than SBED by statutory limits, geography, lower caps, and a higher interest rate and thus that is why SBed is the more popular of the two programs.
Collectively, these programs have in excess of 60 loans outstanding.
The total principle of those loans' outstanding is about $14.5 million.
The average loan size is approximately $225,000, and currently they have a 0% delinquency rate.
Transitioning over to ADA's financial contribution,
and this is also represented in ADA annual report.
It has collectively paid in aggregate in excess of $520 million in dividends to the state commencing in fiscal year 1997.
Recently the ADA Board approved a $17 million dividend for fiscal Year 25, which is to be paid and fiscal
Year 27. There is a two-year lag. So this year, for example, ADA paid an $11 million
dividend that was declared in Fiscal Year 2023.
These dividends, as defined in statute, are the direct, recurring way that ADA converts its investment and project success into state of Alaska's general fund in support of a state
of Alaskans general funds.
As you'll see in the annual report, and I'm sorry, I am jumping around a bit and don't have the page numbers, but ADA's fiscal year 2025 net position was approximately $1.5 billion.
which was an increase in net position and of approximately $69.5 million.
Moving on in the annual report, there's the section that commences with project status and project updates.
I'm, my goodness, I'll get here momentarily.
Page 21 and page 22.
I will not follow the exact structure of the annual report,
but I address those projects presented.
I'd like to begin with the Ambler Access Project.
Ambler is a proposed 211-mile industrial access road from the Dalton Highway into the
Ambular Mining District to unlock critical minerals development in northwest Alaska.
The purpose of the road is to access multiple mines, deposits over time, plus a broader exploration
potential that includes in excess of 1,700 active mining claims in the region and district.
The district is widely described as copper dominant with copper zinc, lead, cobalt, associated gold, silver.
And federal reports indicate that there's also strategic gallium and germanium present.
It is forecasted eight of forecasts through its partners that the project will create the road.
During the four-year construction period, approximately 140 or 141 jobs annually
during road operations, the estimated fiscal lifetime payments are in excess of $193 million
to the local municipalities and communities, and approximately a billion dollars to
the state tied to mining enabled by the presence and construction of the road.
after approval of Ada's Enelka 1106 appeal and related executive direction federal approvals
and permits were reinstated and Ada is planning on an extensive winter and summer field work
program. Ada Board has approved up to a hundred and in excess of a 100 million dollars of financing
of eight is on assets with Amblar Metals reimbursement commitment in excess of $30 million.
The West Susindna project is another industrial access road that it is advocating for much closer
to Anchorage of course. Mr. John Skye, can I? Yes, of
course, just briefly. I did have a question, a couple of questions on Ambler.
And just I'm reading off the slide deck and it is page it's page 24 the annual report, so I don't know if everybody's on that page right now
The first Ambler's misspelled at the very top, but yeah other than that
I just wanted to ask a couple questions about Amler in general
The mine the road itself. Has it already been fully permitted?
If, if I may, would you kindly permit me to defer to my colleague, Mr. San Juan?
Yeah, absolutely.
Whoever wants to speak.
Thank you.
Through the chair, is that representative Yorkman?
Do you answer your question?
I'm sorry. Sorry, Mr. Chair. The the federal the permits for the road have been permitted. So we have all of our federal permits. That was what the 1106 was granted.
So those have being secured and we are in the process of securing the Federal permits as well.
So, we anticipate having all our permits four right away completed for a federal and state in a near trip.
Mr. San Juan on the permitting for the road
It's listed here as a 200 mile or the background says 211 mile industrial road
was that to be mean that it's only accessed by
certain vehicles or is it
You know, we've heard that. It might be accessible to the public
or it might not be I think I
Had heard at one point that was not going to Be accessible To the general public
And thank you very much for that question, Mr. Chair.
And you're correct.
It is a private industrial access road only.
That is what our permits stated.
And it is, we have to keep all of our, all the access, private, industrial.
And just to clarify, like the Pogo Mine Road, the 40 mile Poga Mine road that's up in Delta
Junction area, that is also sort of an, it's a.
I think it's a, I don't know if it is the same classification or not, but it
is a private road as well,
but there's some way that permitting access, there is some
way to get permitting, permitted access.
Will this not be that same type of situation?
from the Pogo Road because the pogo road does have the permit on that one actually has a private
a public portion of it that basically once a certain once the mind is done it's acknowledged
that it will be transferred over to public so that is completely different as when the
But the permits acknowledge that there is public access.
There's existing rights away, existing trails, activity happening on state land that allows the public to access once that road is completely the mind's done and it's no longer needed for private industrial.
with private industrial access only, no public?
And just one more question on Ambler Access.
If Amblar Metals owns the rights of the road or rights
of right away, and a mine is found along the right
away but it's not by Ambular Metal, will that be accessible somehow?
I think there's some similar discussions up on the North Slope where you've got sort of
Santos and Conoco Phillips. Conico Phillips owns the road. Santos has a project that's off the
road and they're trying to utilize it and I'm just curious if this excludes or would exclude
other projects from happening from different types of mine operators in the area.
I read question and and the way Ambler was set up was identical to the
the long-mount transportation system which is the red dog road in port and red
dog port contemplated multiple minds being developed and
and transportation and access for each one of those individual minds so the
because Ada owns that road import we already have the framework in our
documents
and operating agreements with Red Dog that allows, which we're modeling for AMBER,
which will entail, do the same thing for all the potential mines along the corridor.
And our permits with the state and federal government allow us to be able to provide
access to all of the users. So users have to pay to utilize the AMBA road.
So that is different than Santos where there's basically
some confusion of who can do what.
But our state and federal permits allow us to be the sole
manager of the project and attain revenue sources.
Be able to enter into agreements with the different minds
to allow access along the road.
Great, thank you, Mr. San Juan.
Please continue.
Wait, there is a question Vice Vice Chair Bjorkman, thank you chair Kawasaki.
Mr. San Juan or anyone else, last year we heard a significant amount about this road
as well as what the Nana Regional Corporation thought of the road.
NANA was and had been in support of that project and now they were not in
position changed? What is the current position of NANA regional on this road?
Through the chair, Senator Bielkman, we are started to have conversations again with NANNA,
and so we're working on trying to get a access agreement to do the winter work,
so they have come back and at least are starting to communicate after we received our right-of-way
So we are working with NANNA, and I think the relationship is starting to get rebuilt.
So that's for the most part what I could share right now is that we
are work on increasing our stakeholder outreach within their community and with the NANA region itself.
Thank you.
Thank you, Mr. Chair. Moving on to the other
principal industrial access road that it is is the project proponent for the West Susan access project
This particular road is intended to establish dependable managed access into a region of the state land with significant development potential
reducing logistics barriers and and
um increasing investment and development for this part of the the state and region.
Their project remains in early permitting in July 2025. It is submitted in individual section 404
permit application and jurisdictional determination to the US uh to request the
US Army Corps of Engineers a key step before any construction decisions.
is an industrial toll road structure as Mr. San Juan described very much like the Delong Mountain
Transport System, the DMTS, so users bear a larger share of of long-term construction and
maintenance costs rather than the general taxpayers.
Section 1002 is approximately $1.5 million of a million acres in coastal
plain area in the Amoir refuge that Congress specifically designated for
potential oil and gas development. It holds coastal plain federal leases
each with an initial term of 10 years that were issued initially after the 2021 BLM lease sale.
In January 2025 executive order 14153 and the interior secretary order 3422 initiated steps to
restore leasing permitting and reinstate the 2020 record and decision framework. In March 2025
Judge Sharon Gleason ruled, interior and properly cancelled ADA's leases, resulting in the reinstatement of ADA leases.
Recently, ADA signed new lease agreements and remitted just under $11 million related to their reinstatement.
However, beginning in fiscal year 2034, that payment will shift to 70% state, 30% federal government.
ADA has already begun permitting pre-development seismic permitting work with a local company related to, again, its 3D seismic program, which we anticipate that will commence in approximately one year's time.
Yes, please. So in 2018 when I think it was 2018, when the original lease sale came out,
there were the, I don't know, 20 or so parcels, Aida picked up a handful of them. And then there
were some others that were picked by private, private end holders. What happened to the other
Yes, through the chair, Senator, those two particular leases, when eight as leases were
cancelled in approximately June, July of 2020.
Those two corporations, the simple way is they gave their leases back to the BLM.
And they receive, I'm assuming they received their bonus bid payments and any other payments that were associated with that.
Two of those two leases are actually important leases that ADA believes has significant resource potential.
And I expect that we will receive board approval if requested to bid on those particular leases in a subsequently sale if and when that does happen.
Thank you
As we've already referenced here
I would like to address the DeLong mountain transport system or DMTS the 52 approximately 52 mile road and port
That aid of financed in support of the red dog mine
Again, as I said, DMTS is the enabling 52-mile road import system that may have made the
red dog mind possible, which of course is in the Northwest Arctic borough.
In addition to the whole road and port facilities, it also contains fuel system storage and utilities.
The local and regional fiscal impact of not only the mine and the road and port system
has been significant.
The Northwest Arctic borough has received in excess of $300 million in revenue, including
approximately $ 300 million of PELTER payment in lieu of taxes.
And since 2018, the Village Improvement Fund has generated in access of 50 million dollars.
DMTS provides for approximately 500 direct year-round jobs, plus approximately 1,100 indirect or
induced jobs statewide. Total wages exceed $150 million annually, and more than half
There's been in excess of two billion dollars in royalty payments over the project life with approximately 1.8 billion
dollars
Distributed to Ada or Alaska native corporations through the seven I and seven G seven J payment and revenue sharing program
Tech
Red Dog's operators and total taxes that have paid to the state are estimated to exceed $1 billion.
And sustaining that requires new or bodies beyond currently permitted reserves,
as I'm sure the committee members are aware that the mine life end of mine
life is anticipated to come.
to a close here in approximately 2031.
However, tech, of course, is moving forward
on the possibility of developing additional reserves
in two particular ore bodies that are on state land.
The next project I'd like to briefly address is, yes, please.
Do you have a question about the red dog?
It mentions here about 1,000 nanoshare holders.
Do have any idea what that?
I guess within the mind footprint itself,
what the percentage of labor is that's local labor,
or at least Alaska in-state hire?
Through the chair, Mr. Chair,
I don't particularly have that breakdown,
but I can certainly get that for you in a subsequent follow-up
unless my colleagues are aware of that particular statistic.
Kent is indicating no, and Mr. San Juan does not have that.
So if I may, I will jot that down as an action item.
Okay. Then based on that and based
on the economic impacts that are being touted in
this particular Red Dog Project,
can you tell me about Amblar?
If Amble were to have the-
500 direct jobs, 495 direct job, $72 million in wages, and 3,436 additional indirect or
induced jobs within the region.
According to the slide, what would, are you, or is the ADA Board requiring that Amblur
Metals or that the producers or whoever is involved with the project at the end commit
I can answer that through the chair.
For the AMBLA project, when you see the total amount
of economic activity, it's strictly for the road itself.
When we talk about the mines,
that's where the majority of the jobs actually transpire.
And AMBLEA Metals has a partnership with NANNA,
and the same arrangement that NANA has with tech
applies to AMBERA METALS.
So that means that they do have a preferential
hiring target for Nana shareholders for the Amla Mining District. I mean, not the
Amma Mining district, but the AMLA Metals prospect of Arctic and at Bournite. So,
ADA itself does not, we cannot have a targeted shareholder higher preference as a state agency,
but NANA and its partnership and agreement with AML Metels is completely separate from our project.
Okay, thank you for that clarification, Mr. Sanlon.
On the road construction and operations,
it also quotes that there's 360 direct jobs
for the Road construction period, 81 direct-jobs
annually for road operation and maintenance.
Would those be, I mean, is there anything
that can commit the hiring of the
road maintenance and the
road-construction to be local hire and Alaskan hires?
I'll ask Kent to give kind of his feedback
regarding shareholder hire on that one.
But Kent, can you provide the response to that, please?
I can.
Good afternoon, members of the committee and Chair
Kawasaki.
My name is Kent Sullivan, General Counsel for ADA.
Last name, S-U-L-l-I-V-A-M for the record.
The challenges is that as a state entity to the extent that ADIS is letting out any contracts
for construction on Ambler Road, ADIT itself is prevented from doing any preferential hire
for Alaska Natives. But that being said, to that there are portions of the road that are going
end up holding those contracts to perform that work across their own lands or have entities
bid on those. Certainly, Nana and Doyon have the ability to invoke shareholder preference
with regard to workers that are performing that on their lands. So that can happen on
would administer, it's not possible to do a shareholder hire preference.
Okay, so actually this might be a question for you as general counsel.
You know, Ada's role is since 1967 was to make sure to diversify the state economy,
provide jobs and sort of employment opportunities within the State of Alaska for Alaskans.
And I'm just curious, does that still hold that ADA wants to ensure that that is something
that's taken into account when they're making sort of these either loans or conduit revenue
bonds or any of those types of things, that, a discussion that sort overrides the entire discussion.
Mr. Chair, yes, the answer to that question is we absolutely do.
It's a big consideration and a factor when we look at projects, when
we looked at loans, and when they look applicants,
the number of jobs that will be generated, who will hold those jobs,
where the company is from and the jobs
that they're creating, all of that is a major factor
and major consideration.
in doing what Ada does.
It certainly is, and it's a big part of the conversation.
So with that, it is a part the conversations,
but so you're saying that Ada as a board can't use that
as preference or as an under it when it
is being negotiated, that whatever company does get alone
a bond or or something like that doesn't have I mean isn't
to the maximum extent of the law sort of
being able to I me forced to hire Alaskans first. Is that not something that Ada can do?
So mr. Chair when we have contracts that are sent out for RFP or we're seeking proposals
Certainly we have the ability to have Alaska preference, if you will, on many of those contracts,
but that's different than shareholder preference with regard to Alaska Native corporations.
Alaska preferences is something that can be invoked at times under certain circumstances,
but shareholder preferences are something they cannot. And when I say that jobs are a
major consideration, I'm talking about jobs generally, not simply shareholder jobs and not
We do look at a company and if the project is large enough,
roughly what percentage do they look
at folks coming from out of state or what
percentage of folks would be hired in state.
But generally speaking, we're looking at job creation
as a whole and the amount of
salary and whatnot that would be associated with those jobs whether they're high paying jobs low paying
jobs that type of thing but not we don't generally differentiate between elastic shareholder higher and
Alaska here
Great. Thank you, mr. Sullivan senator Bjorkman has a question
Thank You chair Kawasaki
Could you please talk a little bit about how the economics of red dog mind change as?
the mine site moves from its current location to state land.
I'll let Jeff answer that if we could.
Yeah, through the chair, the economics that we have with the existing agreement with Reddong,
we entered into a 50 year agreement, with tech.
And so, that 50-year agreement contemplates a minimum annual assessment for the duration
of the agreement, which we entered into 1990, therefore, we expect to have payments of
the minimum Annual Assessment until 2040.
So regardless of what happens at the mine site, tech will be making a minimal manual payment
to ADA.
incentives based upon tonnage of the traffic that goes through the port, as well as the commodity
prices of zinc escalators. So, depending on the price escalator and the tonnech,
ADA has been receiving additional revenue based on those two metrics. But from once the, if for
our two state lands.
Ada will continue to receive revenue until 2040.
Thank you for that answer.
Okay, you can continue.
Thank
you. Moving on, I would
I'll segue to the interior
energy project or the
interior gas utility.
This particular entity exists to lower long-term energy costs by expanding natural gas allergy
supply storage and distribution for broadly speaking the Fairbanks, North Star Burrow
and North Pole via the IGU.
of sustainable energy transmission and supply data sets SCTS program.
The first North Slope LNG delivery came in October 2025, reducing the demand on cooking
let natural gas from South Central. Regular truck deliveries or L&G truck
deliveries recently began in December of 2025 and there's averaging approximately 70,000 gallons a day.
The IGU now serves approximately 3,600 customers with a distribution system exceeding 230
miles with air quality benefits from reduced PM 2.5 particulate matter, of course, as we
are aware that Fairbanks and surrounding area does suffer from that in particular in the
winter time.
This particular shipyard, of course, is a major ADA-owned maritime industrial facility supporting
Alaska Marine Highway system festivals and other state, federal, and commercial maritime
work, keeping maintenance jobs and spend within the state as opposed to sending it outside
particular down in the Pacific Northwest.
to an entity referred to or called JAG Alaska JEG Marine Group.
Operations activity and activity has surged.
The workforce has grown from approximately 15 to 150 on site
and there is a strong backlog over the next 18 to 24 months
in terms of projects in the JUG pipeline.
Also, ADA and JOG are explicitly building
training and career pathways tied to shipyard and maritime trades as we understand that there is a
quite a bit of shortfall of marine electricians for the ship yard given the pipeline of projects
and vessel repair and maintenance work that JAG has already secured.
Moving much further up into the into this state.
Specifically, the North Slope, I'd like to address recently closed financing for an entity
called Aliascam. The Aliescam Northslope plant is a first-of-its-kind public-private
financing, as I said, for industrial plant in approximately three to four miles west of Dead Horse.
It is anticipated to produce approximately 750 barrels a day of methanol and approximately
13 to 1400 barrels per day, of ultra low sulfur diesel.
It's important to note that for all intents and purposes that one cannot or producer cannot
produce a barrel of oil without the presence of methanol up in the North Slope.
and support lower emissions operations relative to importing product from methanol,
in particular from outside Alaska, and lower input cost to North Slope producers,
as methanol is currently imported from Trinidad, Tobago,
and Asia.
ADA's financing for this particular project is initially a construction loan of up to 70 million
dollars. It will convert into a 50 million dollar plus capitalized interest,
senior secured term loan for 10 years, plus what we've characterized as a 20
million dollar retirement of the loan in lieu of what
we characterized a royalty which is a price per gallon for both products produced
through the plant up to its name plate capacity
for no less than 50 years.
And this particular royalty payment does survive any type of change of control if, for example, ownership changes.
As of the end of December of this past year, progress for the construction of
the plant remains aligned with the approved baseline schedule.
Mechanical completion is forecast for early 2027, with commissioning and testing coming shortly thereafter.
So essentially, the project is on schedule and on budget.
Another recent ADA financing, it is related to Cook Inlet natural gas supply, in particular
for Hex Cook inlet or Fury Operating Alaska.
It has recently closed and funded the first draw on a $50 million revolving credit facility
that supports drilling and production for financing for hex Fury operating Alaska who
This is obviously aimed at stabilizing and expanding in state natural gas supply.
Hex's publicly reported production share of quick inlet gas is currently at 7.5 percent.
Hex management is targeting greater than a 10 percent share
cookie and let natural gas supply with additional drilling and
decided the potential for any up towards a 15% longer term
if development succeeds and this will be facilitated. These targets will
be facilitating through ADA's established revolving line of credit.
It's important to note to the jobs question is that upon acquiring the company, Hex focused
on transitioning jobs from out-of-state Alaska residents, and they've moved from one Alaskan
employee to over 20 within the first year, they do have an Alascan higher focus.
Another flagship asset that ADA owns is the Ted Stevens Anchorage International Airport,
the FedEx MRO facility.
This particular facility is a revenue-producing asset for ADA.
It generates approximately $1.7 million a year paid to ADA through lease payments occupied
by FedEx.
particular facility since approximately 1995. This facility supports approximately 50 to 60
skilled aircraft maintenance jobs, keep specialized aviation work within Alaska,
and recently ADA invested approximately $3 million in replacing the roof to protect and preserve the
is the Department of Military Investment Affairs, the U.S. Coast Guard Building on Joint Base Elmondor
Richardson. This is a pay-free paid-for-use ADA-owned asset that generates in excess of a million
dollars a year in payments to ADA, which are fixed through calendar year 2043.
When the project was constructed, it was delivered ahead of schedule, and under budget,
it produced approximately 80 construction jobs and helped retain in excess of 100 acreage-based
Coast Guard jobs.
I'd like to address a few projects that are not actually represented and projects and
financing that aren't represented in the annual report.
One is the blood bank of Alaska loan facility.
ADA financed $8.5 million as a part of a $45 million loan
to build and expand Alaska's in-state blood testing facility in Anchorage.
At the time, construction supported approximately 130 jobs
and a total of 230 jobs, both indirect and induced.
During the COVID-19 pandemic, acted with a guarantee and temporary relief relief to maintain uninterrupted statewide blood services.
Another project that is not represented in the annual port is ADA financing to Huna Totem Corporation and the Icy Strait Point facility, not too far from Juneau.
to what it was referred to as the phase two development, which includes a 500 foot floating dock and a welcome center
which strengthened the visitor economy in HUNA. This is in fact a unique structure is because Ada
Direct partnered with Ada's loan participation program establishing a loan facility in excess of $30 million.
The destination now sees approximately 240 seasonal cruise ship visits and over 500,000 passengers
each year. The project converts tourism into local employment and is the largest employer in HUNA,
which has a community population of approximately 1, 000 individuals.
aid us projects and aid is financing. I'm happy to entertain any particular questions
that the committee may have. If not, I would very much like to transition over to the Northern
Economics document, the 16 page executive summary that was provided to The Committee.
And Jeff and Mr. Chair, if I could,
I have just a few points of clarification that I'd like
to make about some of our other earlier testimony.
you bet mr. Sullivan thank you mister check um one thing i wanted to clarify
is well certainly it's true that the ombler access project is going to be a private industrial
road um it is important to um but the committee understand why that is
With regards to the M.R. Access Project, because that's a 211-mile road,
it covers a very broad geographic area, and as the committee is aware,
it crosses both Nana land and Doyon land.
And one of the big concerns that both, Nanna and Doanon have,
is potential impacts to subsistence users and to the native communities along the road.
And so, one of the requirements for being allowed to potentially have access across Nana and
Doyan land is that the Road be private. And, so there's really no way for the project to move
honouring that commitment and that requirement. So that's the reason why the Ambler Access Project
requires construction of a private industrial road. On the other hand, I'd like to point out that
some of the early testimony may have been a little bit unclear as to the West's Sitna project.
The Wests Sitner project is differentiated from the Ambler Access project and
along both the DOT portion of the road, as well as the ADA portion
of road. So it's different than Ambler in that the Weso
Center project is intended to be a public road at this point.
Um, the other thing I'd like to point out is that, um,
and where metals will not be owning the entirety of the
andler access road, I think it was suggested in a,
in question that perhaps that might be the case.
Instead,
the plan at this point is
that all stakeholders.
along the road, including the mining companies that will use it,
not just Amblur Nuddles, but other mining
companies, as well as Nana and Doyon, will have
likely an ownership interest in the
road or at least in The Legal Unity
that is formed to hold and manage the
road. And so it won't be just one mining
clear that up. And then finally, with regard to preferential hire, as I pointed out earlier,
it is a state corporation is not allowed to have preferential higher for Alaska Native
Corporation shareholders. But on the other hand, we do when we
do RFPs, We do allow a preference to be given, but that preference isn't to
companies that invoke Alaska hires, instead that preference is to Alaska companies.
So, Alaska entities that are formed and organized and domiciled in Alaska, that's where the
preference goes to on many of our RFPs, so I just want to make that clarification as well.
And that is all I have, but happy to answer any follow-up questions for me if you might
have on those.
Thank you, Mr. Sullivan.
Senator Bjorkman.
Thank you, Chair Kawasaki, through the chair to Mr. Sullivan. Mr Sullivan, I heard you mention
concerns about wildlife impacts
Wasn't there a study that was released at the end of calendar year 2025 that said the Ambler Road would have minimal impact
On caribou herds that is that it might encounter
That is correct mr.
Pardon me sir, I'm working through the chair, that is correct, and I'll have Jeff address
that particular study that you're referencing.
I was speaking to the concerns that Nana and Doyon have raised.
They've been particularly concerned about potential impacts to wildlife and to subsistence
uses along the road.
And so that's where their concerns are, but you're correct that we did release a study
just recently that addressed that the Road will have minimal impacts too wildlife.
But Mr. San Juan, if you want to address that in any more detail, feel free.
Yeah, thank you through the chair. Senator Bergman.
That is correct. Ada did release once in October, November a study from Dr. Matthew Cronin regarding the impact of
of the Amla Road to the Western Arctic Kerber herd.
That was a concern of many of
the community members from the Northwest Arctic Bureau,
as well as in the Doryell region,
as far as the potential impact of Kerbeu
of our road on the west of Arctic Herber herd.
And the findings were that
the the western Arctic
north and west of the proposed Amler Access Project.
And so it doesn't mean that the Caribou do not sometimes cross the Amner Road,
but it is not in the regular, reoccurring, far migration pattern of
the Western Arctic Caribourhood, which is typically on the western side of
around the community of Amber and Shudnek. And so that was one of the key findings.
But most importantly also acknowledges that some of
the causes to the decline of Western caregiver is without the road currently
that is anticipated is weather events from icing,
as well as events related to predation.
And so predations seems to be a big cause
of the potential decline of
the Western Arctic care we've heard,
as long as significant weather
events that has caused more of
the significant declines throughout the different years.
And, so, that was some of
the main findings, it also kind of
discusses and shows maps related to the the long mountain transportation system and with the
long amount of transportation systems, the actual careable migration, that is the regularly occurring
migratory route for the Western Arctic Kerberghur. So he does acknowledge that the
long-mounting transportation
isn't a heart of a regular occurring migration pattern.
And it's not one of the causes of,
of decline if the west are occurred before it.
So there's some of
the key findings of that report.
Can't think of anything else,
but it is definitely a good study by Dr. Cronin.
Thank you for that clarification.
Thank you very much.
I did have a question.
It was on a very, very early slide
and had to do with the Rural Development Initiative Fund.
And I was just reading a little bit more
about what it is and it's for populations of 5,000 or less,
not connected to road rail to Anchorage or Fairbanks
or a population of 2,00 or last connected by roadrail.
So for the public's information,
it mentioned that you were recapitalizing
economy, you know, economic fund, small business,
economic development program, that's it,
small-business economic-development program
with three million transferred from the art,
from rural one to that one, and it is,
does that leave the rural ones without any funds,
or was there a strategic reason why that was done?
Mr. Chair, it's a very good question.
In fact, as noted, so in March of 2025, the S-BED program,
the Small Business Economic Development Program,
had less than $300,000 in cash.
It had a pipeline of in excess of
$1.5 million of loan applications.
As noted that the only way that
the DCCD Division of Investments Director,
fund any of those is they'd have to suspend lending for approximately six
months to allow the revolving fund related to Aspen to recapitalize based
upon payments. The board resolution in December again took three million dollars
from eight as revolving fun to re-capitalize Asped.
as noted, is the lesser of the two, or least popular of, the
two programs. S-BED in late 2025 had approximately
$6 million in it. So we're taking three out of that $ 6
million from our RDIF to put into S BED for an
aggregate recapitalization of up and it's up to $3 million
out-of-the-RDIF, but for conversational purposes we'll say
Half from ADA, half from the RDIF.
Great.
Thank you very much for clarifying that.
And if there's no further questions on the report,
we have next, I think, the, let's see,
impact or impacts of the report on the economic and fiscal contributions of
the Alaska Industrial Development and Export Authority. It's dated January
2026 and it's the document that's in your binders. Correct or as we have
referred to as the Northern Economics Report Executive Summary brochure it
Oh, segue air transitioning to that.
Northern economics and through legislation
has concluded and written that ADA was built
or constructed to do the hard things
that private capital often avoids in Alaska.
Provide long-term patient risk adjusted capital
and infrastructure adjacent investments shaped by distance.
logistics, seasonality, and small markets.
The Alaskan legislature made a deliberate policy choice.
The permanent fund would act and serve as long-term wealth trust,
and ADA would serve, as the development finance
shield that absorbs risks and protects the permanent
fund from lending pressure. There are two important quotes in the executive
brochure that if you'll permit me, I'd like to read them.
One, the first one is from David Rose or Dave Rose,
the First Director of the Alaska Permanent Fund
and Ada's First Executive Director.
Mr. Rose put it plainly in his book,
saving for the future.
The Permanent fund is a trust fund for
the people of Alaska.
Ada was established to help finance Alaska
development projects, which are often very risky
and sometimes fail completely.
Mr Rose.
Later on in his book, to specifically chapter 9, explained why Ada exists as a distinct institution rather than a function inside the permanent fund.
I quote, we could create a development bank out of in parenthesis Ada rather then creating one using the Permanent Fund.
Ada would become a shield absorbing the risk of the state of state lending and deflecting political pressure created by, and I, quote loan crazies.
There's another important quote in the brochure.
This is based upon an interview that Northern economics had directly with Eric Wolford.
Mr. Wolfford explained that Ada's dividends further cushion the need for the state to
tap the permanent fund to make up shortfalls in Ada General Fund, and that this makes
Simply put, in other words, aid is not just a financing tool, it is an institution designated to generate statewide economic output, and to convert a portion of that success into reoccurring general fund support through a statutorily defined dividend mechanism.
The implant model, which is widely used for this type of assessment, as the ADIS has contributed in excess of $60 billion in cumulative economic output from the period 1987 through to 2025 and 2022 dollars to the state of Alaska.
Most of that is durable operations.
Approximately $28 billion through direct operations output and an additional $25 billion of indirect
and induced operations, construction is added about $3.5 or $4 billion and then an
additional two billion dollars of direct and reduced.
It's long-lived operating activity that sustains jobs and payroll year after year.
As employers noted, how did Northern economics reach the $60 billion conclusion?
So Northern Economics defines economic output as direct plus indirect plus induced effects,
and it used the implant input-out model of Alaska's economy to estimate those.
In plan is short for impact analysis and planning.
It is a regional input-output economic modeling system used to estimate
how a change in spending or production ripples through economy.
In this case, how aid is investments,
owned finance projects have rippled and translated throughout the Alaskan economy?
The study is transparent on its data limits.
For example, Alaska employment wage data is considered confidential without firm authorization.
Approximately 60% of the businesses contacted directly did provide data just supplemented
by third-party research to verify where possible.
And the concluding from Northern Economics is that ADA is a development tool that also
generates recurring budgetary and fiscal support for Alaska and Alaskans.
I'd like to conclude my remarks on Northern economics and I'm happy to entertain any
additional questions or any questions that the committee may have at this point in time.
Yes, so we have, as a committee, been sort of waiting for this Northern Economics report,
and we did get a copy of the 16 page, looks like 16 pages in total executive summary.
When does ADA intend to have the rest of this document, and what was the holdup?
In my capacity, I had certainly provided extensive comments to Northern economics.
Those have been shared with Ada's executive director as Mr. Raro, Randy Rarro, Ada executive
director has testified previously. It was the executive directors' decision to review the
documentation and the more comprehensive report. And that communication was I stalled for
a suite of reasons, personal health reasons not only from a native perspective but also that from
northern economics. We understand that it is long time been coming and we do anticipate
now that we've been able to release and have approval as staff to share the executive
summary, the more comprehensive report will follow quite shortly thereafter.
What exactly does that mean as far as quite quickly?
Mr. Chair, as of January the 15th,
we received direct communication from Northern Economics.
It says they were waiting for some final inputs
from A to senior staff,
and I expect that this will be available
by the end of the month.
That's the end of January then
That correct approximately weeks time. Okay. Thank you. We will we will ask for that again
Senator Bjorkman has a question. Thanks, Senator Kawasaki
Thank You for for putting this report on the record right now. I appreciate that as well as the discussion of
public funds used within Ada and Ada's
production of other public Funds in the course of a dividend
of course as we learned through the budgetary process last year that dividend could be at
a wide range of numbers and some of the reappropriation of that dividends was vetoed and instead
of $80 being used to fund some state expenditures money from the higher education fund was used
Has Ada considered contemplated the consequences of potential expansion of the usual and customary
aid of dividend if the legislature is unwilling to reconstitute funds that were pulled from
the higher ed fund last year and what that might mean for future years?
the claim that because
Technically and an interesting claim again related to statements made here about public funds
That public Funds although we now have established through the history of the fund as well as really the coal mingling of funds in and out of
With with the dividend are used to build a road like Amblar that
those funds not being, quote unquote, public would somehow justify that
Amble Road not been able to be accessed by the general public.
Now, Senator Bjorkman, through the chair, if I may, I would certainly defer that this
response to the question to Ada's general counsel. And if we do not have an immediate response,
we'll take this back and speak with with our executive director and senior staff and respond
accordingly. Senator Bork then through the chair I'm happy to jump in there and answer your last
question first and that is is there a connection between
Public funds being used and the fact that the Amblor Road is intended to be a private industrial access road.
There's no legal connection between those two just because public funds are used to construct a road does not mean that
the road has to the public.
And that's a long established that was the way the Dalton was built.
The Dalton was built with public funds and yet, or with some public fund, pardon me,
and any at the Dalton, was initially private and has been private, many portions of it for a long time.
And Alaska has made clear that a road can be constructed using public
funds, and, yet can still be regulated as being a private road.
and this the second part of the question and I'm sorry the the other part
of that question if you could remind me I am sorry senator right last year the
legislature identified funds through the expansion of a to dividend to be a
fund source for part our budget that we passed last
year. The governor vetoed those funds and instead funds from higher education
If the legislature is not successful in recapitalizing the higher education fund,
is there any concern or has ADA contemplated that there will be more of an appetite
to take money from ADA and expanding their dividend in the future?
Senator working through the chair, I don't have an answer to that.
I can certainly look into it and try to get back to you, but I
don' t have a answer for you on that right now.
I think that should be something that we all might contemplate.
Also, although I appreciate the statement and the position and
the precedent that public dollars can be used to make roads that
I strongly and vociferously disagree with that practice.
I think that that is not the way that we should be doing business in Alaska.
Certainly that road is now going to be denied access to locals as I doubt that there would
be enforcement in that area of the state to actually make that happen.
I that if we're going build roads in this state that they be open to everybody
to certainly public ground on those roads, and if private parties don't want to grant access
through their private land, that's up to them. However, we have standards as we know about what
it is we expect for development and moving across the country. And Thomas Jefferson, when he thought
to put section line easements across the landscape and although it would be pretty hard to navigate
section-line easement in a straight line in many parts of Alaska I think that concept of allowing
access to and through land across a landscape is one that I
think is pretty important so I just wanted to say that but thanks
Thank you. Are there any further questions for any of the presenters today?
Okay. Well, I just wanted to say that I appreciate you being able to be here in lieu of Mr.
Raro who's probably still tied up with the other House State Affairs Committee meeting.
General Counsel, Kent Sullivan, and Jeffrey Sanwan,
who's working specifically on the Amblar Road Project.
We wanted to thank you for your time.
Thank you, for the presentation.
And we look forward to seeing the rest of the report
from Northern Economics within the month.
So thank, you very much.
Is there any other business to come before committee?
That hearing none, we will be adjourning this meeting.
I will let you know now that there will not likely
be a meeting on Thursday, January 29th,
but we'll cancel officially tomorrow morning during floor.
Without any further ado, the meeting is adjourned.
The record, let the record reflect time is 448.