DOT says AMHS FY26 relies on uncertain federal grant; vessel proceeds restricted to replacement fund
Get AI-powered insights, summaries, and transcripts
Sign Up Free
Summary
DOT told the subcommittee AMHS's FY26 operating budget included $77.9 million in federal authority tied to an FTA program created by the Infrastructure Investment and Jobs Act; DOT said the FTA did not issue a NOFO last year and that proceeds from vessel sales must be deposited into the vessel replacement fund and require legislative appropriation to spend.
At a Feb. 5 House Finance subcommittee meeting, Department of Transportation & Public Facilities officials told members that the Alaska Marine Highway System (AMHS) FY26 operating budget included $170.7 million in total operating funds, of which $77.9 million was federal authority tied to an FTA operating grant created under the Infrastructure Investment and Jobs Act.
Dom Pinon said the Federal Transit Administration did not issue a notice of funding opportunity (NOFO) last year for a recurring operating grant the department has used for the past three years, leaving an unresolved federal-authority assumption in the FY26 appropriation. "Last year, the Federal Transit Administration did not issue a notice of funding opportunity for this grant," Pinon said, and DOT is "working with our federal partners and our congressional delegation to find ways to restore that funding in our budget."
Committee members pressed DOT on contingency plans if the NOFO does not return. Pinon noted the historical timeline from NOFO to award averaged roughly 152–190 days. Deputy Commissioner Catherine Keith described possible cost-mitigation options, including selling the Matanuska (used as a hotel vessel) to realize operating-cost savings and proceeds, but she emphasized legal constraints on proceeds from vessel sales.
"Statute requires proceeds from a vessel sale be deposited into the vessel replacement fund," Dom Pinon said. He added that proceeds can only be spent from that fund through a legislative appropriation; DOT cannot repurpose those proceeds for operating costs without authorization. Later in the hearing DOT estimated the vessel replacement fund balance at approximately $40 million with roughly half already appropriated toward the Tustamina replacement vessel.
What happens next: DOT said it is engaging the FTA and congressional delegation to clarify NOFO timing and urged the subcommittee the department will provide a clearer accounting and options for AMHS should federal authority not be restored.
This article is based on testimony and exchanges at the Feb. 5 subcommittee briefing.