HB0133a -1- HB 133
New Text Underlined [DELETED TEXT BRACKETED]
34-LS0114\G
HOUSE BILL NO. 133
IN THE LEGISLATURE OF THE STATE OF ALASKA
THIRTY-FOURTH LEGISLATURE - FIRST SESSION
BY REPRESENTATIVES HIMSCHOOT, Fields
Introduced: 3/12/25
Referred: Community and Regional Affairs, State Affairs
A BILL
FOR AN ACT ENTITLED
"An Act establishing a 30-day deadline for the payment of contracts under the State 1
Procurement Code; establishing deadlines for the payment of grants, contracts, and 2
reimbursement agreements to nonprofit organizations, municipalities, and Alaska 3
Native organizations; relating to payment of grants to named recipients that are not 4
municipalities; and providing for an effective date." 5
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 6
* Section 1. AS 36.30 is amended by adding a new section to read: 7
Sec. 36.30.970. Payment deadline and interest. (a) An agency shall pay a 8
contractor for satisfactory performance on a contract within 30 calendar days after the 9
agency receives a payment request from the contractor that complies with the contract. 10
(b) If a contractor is not paid as required by (a) of this section, the agency 11
shall pay interest on the unpaid amount of the required payment from the 31st calendar 12
day after the date the agency receives a payment request under (a) of this section at an 13 34-LS0114\G
HB 133 -2- HB0133a
New Text Underlined [DELETED TEXT BRACKETED]
interest rate that is equal to the rate set out in AS 45.45.010(a). 1
(c) If an agency withholds payment because of unsatisfactory performance or 2
if the payment request made under (a) of this section does not comply with the 3
requirements of the contract, within eight working days after receipt of the payment 4
request the agency shall notify the contractor in writing stating specifically why 5
payment is being withheld and what remedial actions may be taken by the contractor 6
to receive the full payment. 7
(d) If the notification by the agency required by (c) of this section does not 8
comply with (c) of this section, the agency shall pay interest on the withheld amount 9
from the eighth working day after receipt of the initial payment request until the 10
agency provides notice that does comply with (c) of this section. 11
(e) If payment is withheld under (c) of this section, the agency shall pay the 12
withheld amount within 21 calendar days after the contractor satisfactorily completes 13
the remedial actions identified in the notice. If the withheld amount is not paid within 14
the 21 calendar days, the agency shall pay interest on the withheld amount from the 15
21st calendar day at an interest rate that is equal to the rate set out in AS 45.45.010(a). 16
(f) The obligation to pay interest under this section does not apply to 17
retainage. 18
(g) This section does not apply to a public construction or public works 19
contract subject to AS 36.90.200 or an agreement subject to AS 36.90.310. 20
(h) In this section, "contractor" means a person who has been awarded a 21
contract with an agency. 22
* Sec. 2. AS 36.90 is amended by adding a new section to article 4 to read: 23
Sec. 36.90.310. Payment deadline and interest for grants and 24
reimbursement agreements to nonprofit organizations, municipalities, and 25
Alaska Native organizations. (a) An agency shall pay a nonprofit organization, 26
municipality, or Alaska Native organization for satisfactory performance of a grant or 27
reimbursement agreement within 30 calendar days after the agency receives a payment 28
request from the nonprofit organization, municipality, or Alaska Native organization 29
that complies with the grant or reimbursement agreement. If the agency uses federal 30
funds to pay the grant or reimbursement agreement, the agency shall pay for
31 34-LS0114\G
HB0133a -3- HB 133
New Text Underlined [DELETED TEXT BRACKETED]
satisfactory performance within 21 calendar days after the agency receives a payment 1
request that complies with the grant or reimbursement agreement, or within 21 2
calendar days after the agency receives the federal funds, whichever is later. 3
(b) If a nonprofit organization, municipality, or Alaska Native organization is 4
not paid as required by (a) of this section, the agency shall pay interest on the unpaid 5
amount of the required payment at an interest rate that is equal to the rate set out in 6
AS 45.45.010(a) from 7
(1) the 21st calendar day after the date the agency receives a payment 8
request under (a) of this section if the agency uses federal funds to make the payment; 9
(2) the 30th calendar day after the date the agency receives a payment 10
request under (a) of this section for all other payments for grants and reimbursement 11
agreements. 12
(c) If an agency withholds payment because of unsatisfactory performance or 13
if the payment request made under (a) of this section does not comply with the 14
requirements of the grant or reimbursement agreement, within eight working days 15
after receipt of the payment request the agency shall notify the nonprofit organization, 16
municipality, or Alaska Native organization in writing stating specifically why the 17
payment is being withheld and what remedial actions may be taken by the nonprofit 18
organization, municipality, or Alaska Native organization to receive the full payment. 19
(d) If the notification by the agency required by (c) of this section does not 20
comply with (c) of this section, the agency shall pay interest on the withheld amount 21
from the eighth working day after receipt of the initial payment request until the 22
agency provides notice that does comply with (c) of this section. 23
(e) If payment is withheld under (c) of this section, the agency shall pay the 24
withheld amount within 21 calendar days after the nonprofit organization, 25
municipality, or Alaska Native organization satisfactorily completes the remedial 26
actions identified in the notice. If the withheld amount is not paid within the 21 27
calendar days, the agency shall pay interest on the withheld amount from the 21st 28
calendar day at an interest rate that is equal to the rate set out in AS 45.45.010(a). 29
(f) In this section, 30
(1) "agency" has the meaning given in AS 36.30.990; 31 34-LS0114\G
HB 133 -4- HB0133a
New Text Underlined [DELETED TEXT BRACKETED]
(2) "Alaska Native organization" has the meaning given in 1
AS 18.66.020(d); 2
(3) "grant" means a legal instrument of financial assistance between an 3
agency and a nonstate entity that is used to enter into a relationship for which the 4
principal purpose is to transfer anything of value from an agency to the recipient to 5
carry out a public purpose authorized by law; "grant" does not include 6
(A) a cooperative agreement that provides for substantial 7
involvement between the agency and the recipient in carrying out the activity 8
contemplated by the award; 9
(B) a legal instrument used by an agency to acquire property or 10
services for the direct benefit of an agency; 11
(C) cash assistance to an individual; 12
(D) a subsidy; 13
(E) a loan; 14
(F) a loan guarantee; 15
(G) insurance; 16
(H) state funding that is required annually and is calculated 17
through a formula set in statute; 18
(I) a permanent fund dividend; or 19
(J) a grant appropriated to a municipality under AS 37.05.315 20
or a named recipient under AS 37.05.316; 21
(4) "nonprofit organization" has the meaning given in 22
AS 38.05.097(c). 23
* Sec. 3. AS 37.05.316 is amended by adding a new subsection to read: 24
(d) Not less than 20 percent of a grant under this section for a named recipient 25
that is not a municipality must be paid to the named recipient within 10 days after the 26
effective date of the grant agreement. The remainder of the grant must be paid either 27
in monthly installments equal to the amount of grant money the named recipient 28
expended in the previous month or in a lump sum as determined by the Department of 29
Commerce, Community, and Economic Development. 30
* Sec. 4. This Act takes effect immediately under AS 01.10.070(c). 31