00                            HOUSE BILL NO. 356                                                                          
01 "An Act establishing a 30-day deadline for the payment of contracts under the State                                     
02 Procurement Code; relating to payment of grants to named recipients that are not                                        
03 municipalities; and providing for an effective date."                                                                   
04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
05    * Section 1. AS 36.30 is amended by adding a new section to read:                                                
06 Sec. 36.30.970. Payment deadline and interest. (a) An agency shall pay a                                              
07 contractor for satisfactory performance on a contract within 30 calendar days after the                                 
08 agency receives a payment request from the contractor that complies with the contract.                                  
09 (b)  If a contractor is not paid as required by (a) of this section, the agency                                         
10       shall pay interest on the unpaid amount of the required payment from the 31st calendar                            
11       day after the date the agency receives a payment request under (a) of this section at an                          
12       interest rate that is equal to the amount set out in AS 45.45.010(a).                                             
13            (c)  If payment is going to be withheld for unsatisfactory performance or if the                             
14       payment request made under (a) of this section does not comply with the requirements                              

01 of the contract, within eight working days after receipt of the payment request the                                     
02 agency shall notify the contractor in writing stating specifically why part or all of the                               
03 payment is being withheld and what remedial actions may be taken by the contractor                                      
04       to receive the full payment.                                                                                      
05 (d)  If the notification by the agency required by (c) of this section does not                                         
06 comply with (c) of this section, the agency shall pay interest on the withheld amount                                   
07 from the eighth working day after receipt of the initial payment request until the                                      
08       agency provides notice that does comply with (c) of this section.                                                 
09 (e)  If part or all of a payment is withheld under (c) of this section, the agency                                      
10 shall pay the withheld amount within 21 calendar days after the contractor                                              
11 satisfactorily completes the remedial actions identified in the notice. If the withheld                                 
12 amount is not paid within the 21 calendar days, the agency shall pay interest on the                                    
13 withheld amount from the 21st calendar day at an interest rate that is equal to the                                     
14       amount set out in AS 45.45.010(a).                                                                                
15 (f)  The obligation to pay interest under this section does not apply to                                                
16       retainage.                                                                                                        
17 (g)  This section does not apply to a public construction or public works                                               
18       contract subject to AS 36.90.200.                                                                                 
19 (h)  In this section, "contractor" means a person who has been awarded a                                                
20       contract with an agency.                                                                                          
21    * Sec. 2. AS 37.05.316 is amended by adding a new subsection to read:                                              
22 (d)  Not less than 20 percent of a grant under this section for a named recipient                                       
23 that is not a municipality must be paid to the named recipient within 10 days after the                                 
24 effective date of the grant agreement. The remainder of the grant must be paid either                                   
25 in monthly installments equal to the amount of grant money the named recipient                                          
26 expended in the previous month or in a lump sum as determined by the Department of                                      
27       Commerce, Community, and Economic Development.                                                                    
28    * Sec. 3. This Act takes effect immediately under AS 01.10.070(c).