[Federal Register Volume 66, Number 118 (Tuesday, June 19, 2001)]
[Notices]
[Pages 32940-32943]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-15418]


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DENALI COMMISSION


Denali Commission Work Plan for Federal Fiscal Year 2003; Request 
for Comments

    Summary: The Denali Commission was established by the Denali 
Commission Act of 1998 to deliver the services of the Federal 
Government in the most cost-effective manner practicable to communities 
throughout rural Alaska, many of which suffer from unemployment rates 
in excess of 50%. Its purposes include, but are not limited to, 
providing necessary rural utilities and other infrastructure that 
promote health, safety and economic self-sufficiency.
    The Denali Commission Act requires that the Commission develop 
proposed work plans for future spending and that the annual work plans 
be published in the Federal Register for a 30-day period, providing an 
opportunity for public review and comment.
    This Federal Register notice serves to announce the 30-day 
opportunity for public comment on the Denali Commission Work Plan for 
Federal Fiscal Year 2003.
    For Further Information Contact: Jeffrey Staser, Federal Co-Chair, 
Denali Commission, 510 ``L'' Street, Suite 410, Anchorage, AK 99501. 
Phone: (907) 271-1414; Fax: (907) 271-1415; email:[email protected]; 
web-site; www.denali.gov.
    Supplementary Information: Copies of the Denali Commission Work 
Plan can be obtained from the Denali Commission web-site at 
www.denali.gov or by contacting the Denali Commission as provided in 
the section above. Copies of the Appendices are not included in the 
Federal Register printing, but are available on the web-site or by 
contacting the Denali Commission.

Part One: Denali Commission Purposes and Approach

Purposes of Commission

    The Denali Commission Act of 1998, as amended (Division C, Title 
III, PL 105-277), states that the purposes of the Denali Commission 
are:

    To deliver the services of the Federal Government in the most 
cost-effective manner practicable by reducing administrative and 
overhead costs.
    To provide job training and other economic development services 
in rural communities, particularly distressed communities (many of 
which have a rate of unemployment that exceeds 50 percent).
    To promote rural development, provide power generation and 
transmission facilities, modern communication systems, bulk fuel 
storage tanks, water and sewer systems and other infrastructure 
needs.

Challenges to Development and Economic Self-Sufficiency

    Geography--The State of Alaska is twenty percent of the landmass of 
the United States, encompassing five climatic zones from the arctic to 
moderate rain forests in the south.
    Isolation--Approximately 220 Alaskan communities are accessible 
only by air or small boat. Some village communities are separated by 
hundreds of miles from the nearest regional hub community or urban 
center.
    Unemployment--The economy of rural Alaska is a mix of government or 
government-funded jobs, natural resource extraction and traditional 
Native subsistence activities. Many rural Alaskans depend on 
subsistence hunting, fishing and gathering for a significant proportion 
of their foods, but also depend on cash income to provide the means to 
pursue these subsistence activities. Cash paying employment 
opportunities in much of rural Alaska are scarce and are highly 
seasonal in many areas; real unemployment rates exceed 50% in 147 
communities.
    High Cost and Low Standard of Living--Over 170 communities suffer 
from inadequate sanitation or a lack of safe drinking water. Residents 
face high electric costs: 61 cents per kilowatt-hour for electricity in 
a few communities; average in rural Alaska is approximately 40 cents 
per kilowatt-hour with State subsidies.

Commission Relationship with Other Organizations

    The Commission acts as a catalyst to encourage local, regional, and 
statewide comprehensive assessment, planning and ranking of needed 
infrastructure improvements, economic development opportunities and 
training needs.
    The Commission, working with agencies or other organizations 
whenever feasible, works to improve coordination, and to streamline and 
expedite the development of needed infrastructure, economic development 
and training.
    The Commission may build on the work of both Federal and State of 
Alaska agencies to identify statewide needs, to establish priorities 
and to develop comprehensive work plans.
    The Commission seeks the support and involvement of all affected 
local communities, governing bodies, businesses and other 
organizations.
    The Commission encourages partnerships between government, non-
profit organizations, and businesses to expedite sustainable economic 
and infrastructure development.

Commission Schedule

    The Commission Work Plan serves as the budget required by the 
federal Office of Management and Budget (OMB) and is submitted one year 
in advance of the fiscal year (FY) it addresses. This document, which 
addresses FY 2003, will be submitted to OMB by October 1, 2001 after 
the 30-day public comment period.

[[Page 32941]]

Guiding Principles

     Projects must be sustainable.
     The Denali Commission will generally not select individual 
projects for funding nor manage individual projects, but will work 
through existing state, federal or other appropriate organizations to 
accomplish its mission.
     Projects in economically distressed communities will have 
priority for Denali Commission assistance.
     Projects should be compatible with local cultures and 
values.
     Projects that provide substantial health and safety 
benefit, and/or enhance traditional community values, will generally 
receive priority over those that provide more narrow benefits.
     Projects should have broad public involvement and support. 
Evidence of support might include endorsement by affected local 
government councils (municipal, Tribal, IRA, etc.), participation by 
local governments in planning and overseeing work, and local cost 
sharing on an ``ability to pay'' basis.
     Priority will generally be given to projects with 
substantial cost sharing.
     Priority will generally be given to projects with a 
demonstrated commitment to local hire.
     Denali Commission funds may supplement existing funding, 
but will not replace existing federal, state, local government, or 
private funding.
     The Denali Commission will give priority to funding needs 
that are most clearly a federal responsibility.
     Denali Commission funds will not be used to create unfair 
competition with private enterprise.
    Additional Guiding Principles for Infrastructure Projects:
     A project should be consistent with a comprehensive 
community or regional plan.
     Any organization seeking funding assistance must have a 
demonstrated commitment to operation and maintenance of the facility 
for its design life. This commitment would normally include an 
institutional structure to levy and collect user fees if necessary, to 
account for and manage financial resources, and having trained and 
certified personnel necessary to operate and maintain the facility.
    Additional Guiding Principles for Economic Development Projects:
     Priority will be given to projects that enhance employment 
in high unemployment areas of the State (economically distressed), with 
emphasis on sustainable, long-term local jobs or career opportunities.
     Projects should be consistent with statewide or regional 
plans.
     The Denali Commission may fund demonstration projects that 
are not a part of a regional or statewide economic development plan if 
such projects have significant potential to contribute to economic 
development.
    Additional Guiding Principles for Training:
     Training should increase the skills and knowledge of local 
residents to become employed on jobs created by the Denali Commission's 
investment in public facilities in a community.
     In order to protect the federal investment, training 
should increase the local capacity to operate and maintain Denali 
Commission funded public infrastructure.

Economically Distressed Communities

    The following criteria, to be used in designating economically 
distressed communities or areas, is included in section 5.3 of the 
Denali Commission Code:
    1. Per capita market income no greater than 67% of the U.S. 
average; and
    2. Poverty rate at 150% of the U.S. average or greater; and
    3. Three-year unemployment rate at 150% of the U.S. average or 
greater; or
    4. Twice U.S. poverty rate and either (1) or (3) above.
    As required by the Denali Commission Code, distressed communities 
and/or areas will be identified annually using data available March 
31st of the preceding fiscal year. ``Distressed communities'', as 
defined in the Denali Commission Code, are equivalent to ``severely 
distressed communities'', the term used in the Statute. Because data is 
only available by census area, all communities within an area 
identified as severely distressed will be considered to be severely 
distressed. The Denali Commission recognizes that there are communities 
outside severely distressed census areas that would independently meet 
the criteria for being severely distressed if data were available to 
make that demonstration. To respond to this circumstance, the Denali 
Commission has designed surrogates for each of the above criteria that 
utilize information gathered in Permanent Fund applications, state wage 
and unemployment records, and commercial fisheries income information. 
These surrogate measures will supplement the codified criteria in 
identifying severely distressed communities. Additionally, an appeals 
process will allow communities to demonstrate that they are distressed 
using either the codified criteria or the surrogate criteria if they 
believe they have been unfairly excluded. In as much as the primary 
purpose of the Denali Commission is to provide assistance to distressed 
communities or regions of Alaska, a minimum of 75% of funds available 
to the Commission in FY03 will be allocated to communities or areas so 
designated.

Part Two: Fiscal Year 2003 Work Plan

    The Commission determined that the scope and scale of 
infrastructure issues facing rural Alaska are staggering. Assessment of 
needs and refinement of estimates will be an ongoing process. The total 
of known infrastructure needs is estimated to be over $12 billion. 
Training and economic development needs have not been quantified, but 
the unmet needs in these areas are equally staggering. The following 
table summarizes identified needs for infrastructure categories.

                      Preliminary Needs Assessment
------------------------------------------------------------------------
       Funding category            Category class           Amount
------------------------------------------------------------------------
Infrastructure...............  Housing Construction/      $1,800,000,000
                                Development.
                               School Construction           530,000,000
                                and Major
                                Maintenance.
                               Power Utilities......         168,000,000
                               Fuel Storage.........         450,000,000
                               Drinking Water and            850,000,000
                                Waste Water
                                Facilities.
                               Solid Waste                       Unknown
                                Management
                                Facilities.
                               Health Care                   253,000,000
                                Facilities.
                               Airport Facilities...         926,000,000
                               Road Construction....       7,500,000,000
                               Port Facilities......         214,000,000
                               Telecommunications...             Unknown
                               Community Facilities.             Unknown

[[Page 32942]]

 
                               Other................             Unknown
                              ------------------------------------------
      Subtotal...............  .....................      12,691,000,000
Economic Development.........  Comprehensive                     Unknown
                                Planning.
                               Other................             Unknown
Job Training, Education,       Comprehensive                     Unknown
 Capacity Building.             Planning.
                               Other................             Unknown
                              ------------------------------------------
      Total..................  .....................     12,691,000,000
------------------------------------------------------------------------
See Appendix A for Background Information on this table.

    The Denali Commission will collaborate with other funding agencies 
and with all impacted and interested parties to address identified 
needs on a priority basis. Allocation of Denali Commission funds to 
various funding categories and classes within those categories will be 
based on a formula agreed to by the Commission at the beginning of each 
fiscal year. For FY03 the formula allocates 75% of general appropriated 
funds to infrastructure, 10% to economic development and 10% to job 
training and capacity building. The Commission has a statutory limit of 
5% for administrative expenses. In addition to appropriated funds, the 
Commission receives $7-$10 million annually in interest from the Trans 
Alaska Pipeline Liability (TAPL) fund, which is earmarked for bulk fuel 
facility upgrade and maintenance. The Commission may receive other 
special purpose funds as well.
    Of necessity, the Commission's work must be phased over a number of 
years based on the urgency of competing needs and availability of 
funding. The theme of rural energy, as one important prerequisite to 
all other utilities and economic development, was selected as the top 
priority for infrastructure funds. Primary health care facilities were 
identified as the second infrastructure theme for the Commission 
beginning in FY00. These two themes will continue to be areas of focus 
for infrastructure funds through FY03, and the Commission, consistent 
with Congressional intent, may add one or more additional themes.
    For planning purposes, the Commission has budgeted $150,000,000 
using the Commission's approved formula for FY03.

----------------------------------------------------------------------------------------------------------------
                                                               FY03 budget      TAPL interest      TAPL & FY03
                  FY03 budget projection                         request            funds           combined
----------------------------------------------------------------------------------------------------------------
Infrastructure:
    Bulk Fuel.............................................       $30,000,000        $9,500,000       $39,500,000
    Power Generation......................................        26,500,000  ................        26,500,000
    Health Clinics........................................        21,500,000  ................        21,500,000
    Transportation \1\....................................        35,000,000  ................        35,000,000
    Community Facilities \2\..............................        16,500,000  ................        16,500,000
                                                           -----------------------------------------------------
      Sub-total...........................................       129,500,000  ................       139,000,000
Economic Development......................................         6,500,000  ................         6,500,000
Training..................................................         6,500,000  ................         6,500,000
Administration \3\........................................         7,500,000           500,000         8,000,000
                                                           -----------------------------------------------------
      Total...............................................       150,000,000        10,000,000      160,000,000
----------------------------------------------------------------------------------------------------------------
\1\ Transportation includes: ports & docking, airports, local roads and trails.
\2\ Community facilities includes: wastewater treatment and handling, drinking water, solid waste, other
  priority community facilities.
\3\ Administration: figure used reflects 5% ceiling, not actual overhead cost. This includes future salary
  obligations, directed studies, independent audits, and project support.

    In accordance with the Denali Commission Code, development and 
execution of the Administrative Budget is solely the responsibility of 
the Federal Co-Chair. Allocation of funds within the balance of the 
budget will be made by the full Denali Commission, utilizing the 
guiding principles outlined in Part one of this document, and priority 
systems designed specifically for each budget category.
    Project implementation will generally be accomplished through 
state, local or federal government entities, regulated utilities, or 
non-profit organizations. It shall be the responsibility of all such 
implementing organizations to comply with all applicable laws. Any 
special requirements will be articulated in the funding agreement 
between the Denali Commission and the funding recipient.
    As indicated above, 75% of Denali Commission base funds are 
designated for priority infrastructure themes and those funds are 
distributed using priority systems designed for each theme. 
Concurrently the Commission encourages communities and regional 
entities to complete comprehensive community and economic development 
plans. Priority systems for themes selected for funding by the 
Commission give credit to communities with current comprehensive plans.
    Projects resulting from funding of infrastructure themes generally 
are consistent with high priorities identified in community plans. The 
existence of community plans greatly facilitates the location, design, 
and completion of infrastructure projects within a community. The 
Denali Commission also reserves approximately 10% of its general 
funding for economic development projects, which commonly are 
identified in local, or regional economic development plans.
    The Commission also participates in the organization and execution 
of regional ``economic summits.'' These summits, which are generally 
held

[[Page 32943]]

throughout the State, bring key state and federal agencies together 
with communities and regional organizations for the purpose of matching 
needs identified in community and regional comprehensive plans with 
federal, state and other available funding.

Jeffrey B. Staser,
Federal Co-Chair.
[FR Doc. 01-15418 Filed 6-18-01; 8:45 am]
BILLING CODE 3300-01-U