Use it or lose it: NV lawmakers urge state to hit federal housing, broadband funding deadlines

This article was originally published by Nevada Current.

Nearly a third of Nevada’s $2.7 billion in American Rescue Plan Act funding has not yet been spent, and state lawmakers are beginning to take a closer look at the pending projects in order to ensure the federal funds are spent by next year’s deadline.

Legislative Counsel Bureau Fiscal Analyst Brody Leiser last week told lawmakers on the Interim Finance Committee that approximately $789 million of the state’s $2.7 billion in ARPA funding has not yet been spent. He noted the figure is under review because the state is still reconciling budget reporting after the August cyberattack. But the unspent amount is still significant.

Half of the unspent money is tied to two areas — housing and broadband internet.

State Sen. Rochelle Nguyen, a Democrat from Las Vegas, said she has “real concerns” about whether the state will be able to spend the money by the end of next year. If the state fails to, the money will revert to the federal government.

Lawmakers have heard that some of the projects haven’t broken ground, or have been locked up in federal tape, she added.

“When is the cutoff date where  you’re going to consider reallocating these funds to other programs?” Nguyen asked the Governor’s Finance Office.

Tiffany Greenameyer, the director of the Governor’s Finance Office, said her team does not have any drop-dead deadlines that would force a revisiting of approved ARPA projects. She said the housing division and the state broadband office are on track and there “seems to be no problem with spending those dollars.”

Christine Hess, chief financial officer of the Nevada Housing Division, told lawmakers she had already planned on “taking a much harder look” in December at the agency’s more than 40 projects to evaluate their spending plans and their risk levels. She said some projects are already overspent and may require more funding, suggesting that some shifting of funds might happen.

“We don’t have a drop-dead date,” she said. “If the Governor’s Finance Office wants us to set one, then we’ll be working with them to set one. But certainly we are proactively working.”

Lawmakers allocated $250 million to the housing division’s Home Means Nevada project. Legislative staff listed the spent amount at $22.9 million.

Meanwhile, the Governor’s Office of Science, Innovation and Technology received $203.5 million in ARPA allocations. Only $30.1 million has been spent.

Brian Mitchell, director of OSIT, told lawmakers his office is “ahead of schedule” when looking at the budget projections given to legislators during the session earlier this year.

“Are we going to be able to get these projects done by December 31, 2026? The answer is yes,” he said.

Mitchell acknowledged that the permitting process is extensive because 86% of land in Nevada is federally owned, but added that progress is moving along. He said one of the biggest permits left to secure is one that crosses six different U.S. Bureau of Land Management offices.

Once that permit is issued, four crews will begin working on the project, which has a 75-day construction timeline.

“We have a very long lead time before we hit any kind of a drop dead date on that,” he said.

Other permits are expected to be issued in the next month or two, or are already issued but construction is unable to begin because crews are required to wait for migratory birds to leave the area.

Mitchell told lawmakers he last met with the BLM state director on the second day of the government shutdown. Mitchell explained that the federal employees working on permitting have been able to continue working despite the shutdown because the federal agency charges “cost recovery fees” when applications are submitted. Those are covering salaries.

“So that’s not a concern for us,” he added.

Assemblymember Greg Hafen, a Republican from Pahrump, requested Mitchell return to lawmakers during their December meeting with a full accounting of where each individual project is, including their approvals and whether they have broken ground.

“I’m being told that at least one of them, or two of them, do not have local approvals and entitlements in place, which is very concerning to me,” he said. “I don’t know where they’re at in the process. They could be done next week. It could take another six months and that would be very very concerning.”

Broadband Update

Mitchell acknowledged the changing federal guidance on the federal Broadband Equity, Access and Deployment program, better known as BEAD, has been “anxiety inducing” but told lawmakers he does not foresee funding deadline issues.

In June, the Trump administration rescinded the Biden administration’s approval of a $416 million BEAD proposal submitted by Nevada, forcing the state to resubmit a plan and “do in 90 days what it previously had done in nine months.”

The BEAD policy changes made by Trump favor satellite internet providers, like Elon Musk’s Starlink, over fiber optics providers. They also require states to spend less money overall.

Nevada submitted a new $375 million proposal to the National Telecommunications and Information Administration  in September. Among the subgrantees listed: SpaceX (aka, Space Exploration Technologies Corp), the parent company of Starlink, which had not been included in the now-rescinded application.

According to OSIT press releases, the Biden-era proposal had more than 80% of unserved locations in Nevada being served by fiber. The new plan puts the percentage at around 64%. More than a quarter — 29% — are expected to be served by low-earth orbit satellites.

According to Mitchell, the NTIA has “committed to approving the BEAD funds by the end of the calendar year.”

“I’ve been going back and forth with the NTIA nonstop on different items within” the new proposal, he added.

The BEAD-funded projects, known as phase three of the High Speed Nevada Initiative, are independent of ARPA-funded projects and have deadlines further out, according to Mitchell. Contractors working on both types of projects know they must spend the ARPA money before the BEAD money, he added.

Mitchell said the state has had to rework grant agreements, and put in new policies and procedures, because of changing policy at the federal level. He added that some of the changes will make the project less administratively burdensome and others will make things more burdensome.

“In some cases, the NTIA has still not released the guidance for how we will be expected to administer the program post award,”  he said. “So we are still waiting for some of that guidance and we’ll have to adjust on the fly.”

State Sen. Dina Neal, a Democrat from North Las Vegas, expressed concern about the federal government eliminating from its BEAD policies language regarding women-owned businesses, fair labor practices, civil rights, and minority communities.

She sees “a conflict between what is currently in state law” and “the ties of the federal money.”

“We want to do broadband, which is important,” she added, “but at the same time, it’s like shaking hands with the devil and saying, ‘Yeah, I’ll take the money although all of these things are stripped out.’”

Mitchell said the revised BEAD policy did not remove the state’s obligation to comply with federal civil rights and labor laws, or state laws.

“Nothing in the restructuring policy notice would prevent us from following state laws in those regards,” he also emphasized. “We will continue to comply with all of those.”

He confirmed the changes mean BEAD funds can not be used for community engagement, but said the  state’s broadband office can — and plans to — conduct such outreach on their own dime.

“Communities will continue to hear from us about these projects,” he said.

Where the Money Comes From

The BEAD program is funded by the Bipartisan Infrastructure Law, the 2021 law championed by then-President Joe Biden. Democratic U.S. Sen. Jacky Rosen has said she was a leading author of the broadband section of that legislation.

Trump vehemently opposed the Bipartisan Infrastructure Law. Shortly after taking office for his second term issued an executive order halting disbursement of its funds, though he would later renege and limit which projects would be paused.

The hundreds of millions of dollars in broadband infrastructure provided by the Bipartisan Infrastructure Law and ARPA,which was  also enacted during the Biden administration, are expected to “deliver reliable high-speed internet to nearly 50,000 unserved and underserved homes, businesses, and community institutions statewide,” according to Gov. Joe Lombardo’s office.