JUNEAU — A man suing the state over plans to distribute federal coronavirus relief aid is asking a judge to block disbursement of a portion set aside for small businesses after Alaska Gov. Mike Dunleavy's administration reinterpreted the rules.
Eric Forrer, contends the money should be spent according to "defined standards," according to a court filing from his attorney, Joe Geldhof.
The filing seeks a court order that would either halt the disbursement of money set aside for businesses until lawmakers approve a "valid expenditure" or block spending of the funds that do not adhere to the "express terms" of a proposal previously ratified by the Legislature. The filing misidentifies the bill number, a typo Geldhof acknowledged.
Forrer has maintained the ratification process itself was problematic, citing constitutional concerns.
Last week, the state Department of Commerce, Community and Economic Development announced eligibility changes to the $290 million program intended to provide additional aid to businesses feeling the economic fallout from the coronavirus. The changes include allowing businesses that received $5,000 or less in certain federal relief funds to become eligible for the state's grant program, provided they meet other requirements.
Alaska received more than $1 billion in federal coronavirus relief aid, $290 million of which the state designated toward a small business program. The program, proposed by the Dunleavy administration and later ratified by the Legislature, excluded businesses that had secured federal program funding directly available to them under a federal coronavirus relief law.
Glenn Hoskinson, a special assistant to Alaska's commerce commissioner, said when the proposal was first drafted, the first round of the federal loan funds had been depleted and the second round hadn't been made available. Hoskinson said by email the department also was not aware then that businesses were getting partial amounts of funds requested from the federal programs.
Hoskinson said last week the Department of Law was looking at how or if the commerce department could amend the eligibility criteria.
At a legislative hearing Wednesday, Assistant Attorney General Bill Milks said attorneys for the state took into consideration factors such as legislative intent and determined there was a "reasonable legal basis" for the proposed adjustments.
Geldhof, in court documents, called the interpretation "fanciful."
Department of Law spokesperson Maria Bahr said Tuesday the department does not have a written opinion and said its public comments on the program were made during the hearing. But the department later released a statement, saying the state stands by the proposed distribution of funds.
"These funds are needed now, and the State stands ready to defend the actions the Governor and Legislature have taken to get funds to those who need it," the statement says.
House Speaker Bryce Edgmon, an independent from Dillingham, in a statement said ensuring all small businesses have a chance to access financial relief "is critically important. At this point, we are still evaluating what the lawsuit means."
"In terms of a remedy, should one be required, all options are on the table. That includes potentially reconvening the Legislature," he said.
Senate President Cathy Giessel, an Anchorage Republican, in a statement said if further legislative action is needed, "we will take action. At this time, however, we support the governor's plan and believe it needs a chance to work."
Giessel was referring to the Senate majority when she said "we," Senate Majority Communications Director Daniel McDonald said.