05/15/2025 03:15 PM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB11 | |
| HB1 | |
| HB133 | |
| HB4 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 114 | TELECONFERENCED | |
| += | HB 146 | TELECONFERENCED | |
| *+ | HB 100 | TELECONFERENCED | |
| += | HB 1 | TELECONFERENCED | |
| + | HB 133 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 11 | TELECONFERENCED | |
| += | HB 4 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
May 15, 2025
4:18 p.m.
DRAFT
MEMBERS PRESENT
Representative Ashley Carrick, Chair
Representative Andi Story, Vice Chair
Representative Rebecca Himschoot
Representative Ky Holland
Representative Sarah Vance
Representative Kevin McCabe
Representative Elexie Moore (via Teams)
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 11
"An Act relating to contributions and donations from permanent
fund dividends."
- MOVED CSHB 11(STA) OUT OF COMMITTEE
HOUSE BILL NO. 1
"An Act relating to specie as legal tender in the state; and
relating to borough and city sales and use taxes on specie."
- HEARD & HELD
HOUSE BILL NO. 133
"An Act establishing a 30-day deadline for the payment of
contracts under the State Procurement Code; establishing
deadlines for the payment of grants, contracts, and
reimbursement agreements to nonprofit organizations,
municipalities, and Alaska Native organizations; relating to
payment of grants to named recipients that are not
municipalities; and providing for an effective date."
- HEARD & HELD
HOUSE BILL NO. 4
"An Act relating to write-in candidates for President and Vice-
President of the United States."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 11
SHORT TITLE: PFD CONTRIBUTIONS TO GENERAL FUND AND PF
SPONSOR(s): REPRESENTATIVE(s) PRAX
01/22/25 (H) PREFILE RELEASED 1/10/25
01/22/25 (H) READ THE FIRST TIME - REFERRALS
01/22/25 (H) STA, FIN
03/20/25 (H) STA AT 3:15 PM GRUENBERG 120
03/20/25 (H) -- MEETING CANCELED --
05/10/25 (H) STA AT 1:00 PM GRUENBERG 120
05/10/25 (H) -- MEETING CANCELED --
05/13/25 (H) STA AT 3:15 PM GRUENBERG 120
05/13/25 (H) Heard & Held
05/13/25 (H) MINUTE(STA)
05/15/25 (H) STA AT 3:15 PM GRUENBERG 120
BILL: HB 1
SHORT TITLE: SPECIE AS LEGAL TENDER
SPONSOR(s): REPRESENTATIVE(s) MCCABE
01/22/25 (H) PREFILE RELEASED 1/10/25
01/22/25 (H) READ THE FIRST TIME - REFERRALS
01/22/25 (H) STA, FIN
04/15/25 (H) STA AT 3:15 PM GRUENBERG 120
04/15/25 (H) -- MEETING CANCELED --
04/29/25 (H) STA AT 3:15 PM GRUENBERG 120
04/29/25 (H) Heard & Held
04/29/25 (H) MINUTE(STA)
05/08/25 (H) STA AT 3:15 PM GRUENBERG 120
05/08/25 (H) Heard & Held
05/08/25 (H) MINUTE(STA)
05/15/25 (H) STA AT 3:15 PM GRUENBERG 120
BILL: HB 133
SHORT TITLE: PAYMENT OF CONTRACTS
SPONSOR(s): REPRESENTATIVE(s) HIMSCHOOT
03/12/25 (H) READ THE FIRST TIME - REFERRALS
03/12/25 (H) CRA, STA
03/25/25 (H) CRA AT 8:00 AM BARNES 124
03/25/25 (H) Heard & Held
03/25/25 (H) MINUTE(CRA)
03/27/25 (H) CRA AT 8:00 AM BARNES 124
03/27/25 (H) Heard & Held
03/27/25 (H) MINUTE(CRA)
04/03/25 (H) CRA AT 8:00 AM BARNES 124
04/03/25 (H) Heard & Held
04/03/25 (H) MINUTE(CRA)
04/08/25 (H) CRA AT 8:00 AM BARNES 124
04/08/25 (H) Heard & Held
04/08/25 (H) MINUTE(CRA)
04/10/25 (H) CRA AT 8:00 AM BARNES 124
04/10/25 (H) Heard & Held
04/10/25 (H) MINUTE(CRA)
04/29/25 (H) CRA AT 8:00 AM BARNES 124
04/29/25 (H) Moved CSHB 133(CRA) Out of Committee
04/29/25 (H) MINUTE(CRA)
04/30/25 (H) CRA RPT CS(CRA) NEW TITLE 4DP 2NR
04/30/25 (H) DP: HOLLAND, HALL, HIMSCHOOT, MEARS
04/30/25 (H) NR: PRAX, RUFFRIDGE
04/30/25 (H) FIN REFERRAL ADDED AFTER STA
05/15/25 (H) STA AT 3:15 PM GRUENBERG 120
BILL: HB 4
SHORT TITLE: PRESIDENTIAL WRITE-IN VOTES
SPONSOR(s): REPRESENTATIVE(s) SADDLER
01/22/25 (H) PREFILE RELEASED 1/10/25
01/22/25 (H) READ THE FIRST TIME - REFERRALS
01/22/25 (H) STA, JUD
02/11/25 (H) STA AT 3:15 PM GRUENBERG 120
02/11/25 (H) Heard & Held
02/11/25 (H) MINUTE(STA)
05/15/25 (H) STA AT 3:15 PM GRUENBERG 120
WITNESS REGISTER
RILEY NYE, Staff
Representative Mike Prax
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: On behalf of Representative Prax, prime
sponsor of HB 11, gave feedback on proposed amendments.
GENEVIEVE WOJTUSIK, Director
Permanent Fund Dividend Division
Department of Revenue
Juneau, Alaska
POSITION STATEMENT: Responded to questions during the hearing
on HB 11.
DANIEL DIAZ, Executive Director
Citizens for Sound Money
Sebastian, Florida
POSITION STATEMENT: Testified in support of HB 1.
NILS ANDREASSEN, Executive Director
Alaska Municipal League
Juneau, Alaska
POSITION STATEMENT: Asked a series of questions during the
hearing on HB 1; gave invited testimony in support of CSHB
133(CRA).
LAWRENCE HILTON, General Counsel
United Precious Metals Association
Alpine, Utah
POSITION STATEMENT: Testified in support of HB 1.
LAURIE WOLF
The Foraker Group
Anchorage, Alaska
POSITION STATEMENT: Gave invited testimony in support of CSHB
133(CRA).
SAM CHANAR, Mayor
City of Toksook Bay
Toksook Bay, Alaska
POSITION STATEMENT: Gave invited testimony in support of CSHB
133(CRA).
SUSAN ANDERSON, CEO
Boys & Girls Club of Southcentral Alaska
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 133.
TREVOR STORRS, President & CEO
Alaska Children's Trust
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 133.
REPRESENTATIVE DAN SADDLER
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, presented HB 4.
ACTION NARRATIVE
4:18:39 PM
CHAIR ASHLEY CARRICK called the House State Affairs Standing
Committee meeting to order at 4:18 p.m. Representatives McCabe,
Holland, Moore (via Teams), Story, and Carrick were present at
the call to order. Representatives Himschoot and Vance arrived
as the meeting was in progress.
HB 11-PFD CONTRIBUTIONS TO GENERAL FUND AND PFD
4:20:06 PM
CHAIR CARRICK announced that the first order of business would
be HOUSE BILL NO. 11, "An Act relating to contributions and
donations from permanent fund dividends."
4:20:29 PM
CHAIR CARRICK opened public testimony on HB 11. After
ascertaining there was no one who wished to testify, she closed
public testimony.
4:21:02 PM
CHAIR CARRICK moved to adopt Amendment 1 to HB 11, labeled 34-
LS0182\A.1, Nauman, 5/14/25, which read as follows:
Page 3, line 19:
Delete "10 percent of the amount of the dividend"
Insert "$25 dollars"
Page 3, line 20:
Delete "10 percent"
Insert "$25 dollars"
CHAIR CARRICK stated that she would object to Amendment 1 for
the purpose of speaking to the amendment. She said that it
would simply change the amount that someone can donate their
permanent fund dividend (PFD) from an increment of 10 percent to
increments of twenty-five dollars. She said that this would
align with the current structure of the "click, pick, give"
program. She said that it would also align with how individuals
are currently able to donate to the education raffle. She said
that by structuring donations this way, it would avoid confusion
for those applying for the dividend who may not understand the
10 percent structure. She said that she offered this amendment
to avoid this type of confusion.
4:22:13 PM
REPRESENTATIVE STORY asked what the bill sponsor thought about
the proposed amendment.
4:22:25 PM
RILEY NYE, Staff, Representative Mike Prax, Alaska State
Legislature, on behalf of Representative Prax, prime sponsor of
HB 11, characterized Amendment 1 as a "friendly" amendment. He
said that the amendment would not impact bill implementation or
intent.
4:22:49 PM
REPRESENTATIVE HOLLAND asked Mr. Nye if somebody wanted to give
away the remaining part of the PFD, and it was not captured by
the $25 breakdown, whether there had been any discussions for
how to clear the remaining dividend.
CHAIR CARRICK said that she has thought about this scenario and
discussed it. She discussed anecdotal evidence regarding how
most people manage their PFD donations.
4:24:47 PM
CHAIR CARRICK removed her objection to Amendment 1. There being
no further objection, Amendment 1 was adopted.
4:25:05 PM
REPRESENTATIVE HOLLAND moved to adopt Amendment 2 to HB 11,
labeled 34-LS0182\A.2, Nauman, 5/14/25, which read as follows:
Page 1, line 1, following "dividends":
Insert "; and relating to disclosures included
with an individual permanent fund dividend"
Page 1, following line 2:
Insert a new bill section to read:
"* Section 1. AS 43.23.028(a) is amended to read:
(a) By October 1 of each year, the commissioner
shall give public notice of the value of each
permanent fund dividend for that year and notice of
the information required to be disclosed under (3) of
this subsection. In addition, the stub attached to
each individual dividend disbursement advice must
(1) disclose the amount of each dividend
attributable to income earned by the permanent fund
from deposits to that fund required under art. IX,
sec. 15, Constitution of the State of Alaska;
(2) disclose the amount of each dividend
attributable to income earned by the permanent fund
from appropriations to that fund and from amounts
added to that fund to offset the effects of inflation;
(3) disclose the amount by which each
dividend has been reduced due to each appropriation
from the dividend fund, including amounts to pay the
costs of administering the dividend program and the
hold harmless provisions of AS 43.23.240;
(4) include a statement that an individual
is not eligible for a dividend when
(A) during the qualifying year, the
individual was convicted of a felony;
(B) during all or part of the qualifying
year, the individual was incarcerated as a result of
the conviction of a
(i) felony; or
(ii) misdemeanor if the individual has been
convicted of a prior felony or two or more prior
misdemeanors;
(5) include a statement that the
legislative purpose for making individuals listed
under (4) of this subsection ineligible is to
(A) provide funds for services for and
payments to crime victims and operating costs of the
Violent Crimes Compensation Board;
(B) provide funds to pay restitution owed
to crime victims;
(C) provide funds for grants to nonprofit
organizations for services for crime victims and for
mental health services and substance abuse treatment
for offenders;
(D) provide funds for the office of
victims' rights;
(E) provide funds to the Council on
Domestic Violence and Sexual Assault for grants for
the operation of domestic violence and sexual assault
programs; and
(F) obtain reimbursement for some of the
costs imposed on the Department of Corrections related
to incarceration or probation of those individuals;
(6) disclose the total amount that would
have been paid during the previous fiscal year to
individuals who were ineligible to receive dividends
under AS 43.23.005(d) if they had been eligible;
(7) disclose the total amount transferred
or appropriated for the current fiscal year under
AS 43.23.048 for each of the accounts, funds, and
agencies listed in AS 43.23.048;
(8) include a statement that the total
amount of the dividend may be subject to federal
individual income tax, regardless of donations or
contributions made under AS 43.23.130, 43.23.135, or
43.23.230."
Page 1, line 3:
Delete "Section 1"
Insert "Sec. 2"
Renumber the following bill section accordingly.
CHAIR CARRICK objected for the purpose of discussion.
REPRESENTATIVE HOLLAND explained that Amendment 2 would be a
disclosure that would be added to the dividend process. He said
that it simply would provide a disclosure that the total amount
of the dividend may be subject to Federal Income Tax, regardless
of any donations or contributions to charitable groups. He
talked about the issue of surprise Federal Income Tax for
individuals who donated their PFD. He discussed confusion
associated with energy rebates and new taxable income and
related it to the proposed amendment.
4:26:43 PM
REPRESENTATIVE STORY asked Mr. Nye what the bill sponsor thought
of the amendment.
MR. NYE responded that given discussions with the bill sponsor,
Representative Prax, he was happy to defer to the will of the
committee for this amendment. He said that this would likely
not cause any major fiscal implications but said Ms. Wojtusik
may be able to speak to the mechanics about implementing this
amendment.
4:27:28 PM
CHAIR CARRICK asked Ms. Wojtusik whether Amendment 2 would bear
a cost to administer.
4:27:38 PM
GENEVIEVE WOJTUSIK, Director, Permanent Fund Dividend Division,
Department of Revenue (DOR), responded that she did not believe
that there would be any additional cost other than what was
already associated with the bill. She said that there is
already an indeterminate fiscal note with the required
programming. She cautioned that the PFD division does not do
any administration with tax and PFD division usually defers to
the tax division. She said that having a statement like this
would be a new piece to the PFD application.
4:28:32 PM
REPRESENTATIVE STORY commented that it would be helpful for the
public to be reminded that there are federal tax deductions on
the PFD. She said she was in favor of Amendment 2.
4:28:55 PM
REPRESENTATIVE HOLLAND explained that Amendment 2 uses the word
"may" and noted that it would not be "tax advice." He said the
wording was done this way to avoid confusion.
4:29:30 PM
CHAIR CARRICK removed her objection. There being no further
objection, Amendment 2 was adopted.
4:29:49 PM
REPRESENTATIVE HOLLAND moved to adopt Amendment 3 to HB 11,
labeled 34-LS0182\A.3, Nauman, 5/14/25, which read as follows:
Page 1, line 1, following "Act":
Insert "relating to the calculation of the
permanent fund dividend; relating to eligibility forms
and applications for the permanent fund dividend;
relating to appropriations from the dividend fund to
the general fund; and"
Page 1, following line 2:
Insert new bill sections to read:
"* Section 1. AS 43.23.005(a) is amended to read:
(a) An individual is eligible to receive one
permanent fund dividend each year in an amount to be
determined under AS 43.23.025 if the individual
(1) submits the eligibility form and
application for the dividend [APPLIES] to the
department;
(2) is a state resident on the date the
individual submits the eligibility form and [OF]
application;
(3) was a state resident during the entire
qualifying year;
(4) has been physically present in the
state for at least 72 consecutive hours at some time
during the prior two years before the current dividend
year;
(5) is
(A) a citizen of the United States;
(B) an alien lawfully admitted for
permanent residence in the United States;
(C) an alien with refugee status under
federal law; or
(D) an alien that has been granted asylum
under federal law;
(6) was, at all times during the qualifying
year, physically present in the state or, if absent,
was absent only as allowed in AS 43.23.008; and
(7) was in compliance during the qualifying
year with the military selective service registration
requirements imposed under 50 U.S.C. App. 453
(Military Selective Service Act), if those
requirements were applicable to the individual, or has
come into compliance after being notified of the lack
of compliance.
* Sec. 2. AS 43.23.005(c) is amended to read:
(c) A parent, guardian, or other authorized
representative may apply for and claim a permanent
fund dividend on behalf of an unemancipated minor or
on behalf of a disabled or an incompetent individual
who is eligible to receive a payment under this
section. Notwithstanding (a)(2) - (4) of this section,
a minor is eligible for a dividend if, during the two
calendar years immediately preceding the current
dividend year, the minor was born to or adopted by an
individual who is eligible for a dividend for the
current dividend year.
* Sec. 3. AS 43.23.005(h) is amended to read:
(h) If an individual who applied for and would
otherwise have been eligible for a permanent fund
dividend dies [AFTER APPLYING FOR THE DIVIDEND BUT]
before the dividend is paid, the department shall pay
the dividend to a personal representative of the
estate or to a successor claiming personal property
under AS 13.16.680. If an individual who would
otherwise have been eligible for a dividend and who
did not apply for the dividend dies during the
application period, a personal representative of the
estate or a successor claiming personal property under
AS 13.16.680 may apply for and receive the dividend.
If an individual who received a dividend for the year
immediately before the qualifying year and who would
otherwise have been eligible for a dividend dies
during the qualifying year after having been a state
resident for at least 180 days immediately before the
date of death, notwithstanding (a)(1) - (3) and (a)(6)
of this section, a personal representative of the
estate or a successor claiming personal property under
AS 13.16.680 may apply for and receive the dividend.
Notwithstanding AS 43.23.011, an application for a
dividend may be filed by the personal representative
or the successor under this subsection at any time
before the end of the application period for the next
dividend year.
* Sec. 4. AS 43.23.011(a) is amended to read:
(a) An eligibility form and application for a
permanent fund dividend shall be filed during the
period that begins January 1 and ends March 31 of that
dividend year.
* Sec. 5. AS 43.23.015(b) is amended to read:
(b) The department shall prescribe and furnish
an eligibility [APPLICATION] form for an individual
claiming a permanent fund dividend. The eligibility
form [APPLICATION] must include
(1) notice of the penalties provided for
under AS 43.23.270;
(2) a statement of eligibility and a
certification of residency;
(3) the means for an individual [APPLICANT]
eligible to vote under AS 15.05, or a person
authorized to act on behalf of the applicant, to
furnish information required by AS 15.07.060(a)(1) -
(4) and (7) - (9), and an attestation that the [SUCH]
information is true.
* Sec. 6. AS 43.23.015(c) is amended to read:
(c) Except as provided in (d) of this section or
as may be provided by regulations adopted by the
department, an individual must personally sign the
eligibility form [APPLICATION] for permanent fund
dividends, including the certification of residency
required under (b) of this section.
* Sec. 7. AS 43.23.015(d) is amended to read:
(d) The eligibility form, application, and
certification of residency of an unemancipated
individual under 18 years of age or of a disabled or
an incompetent individual must be signed by the
individual's parent, legal guardian, or other
authorized representative. An individual may complete,
sign, and file an eligibility form and application on
behalf of a member of the armed forces of the United
States who is serving on active duty outside of the
United States if the individual has a power of
attorney from the member of the armed forces that
authorizes, in specific or general terms, the
individual to file that eligibility form and
application.
* Sec. 8. AS 43.23.015(j) is amended to read:
(j) The eligibility [APPLICATION] form for
claiming a permanent fund dividend must include a
place for the individual [APPLICANT] to voluntarily
indicate that the individual [APPLICANT] is a veteran,
the branch of service, including the Alaska
Territorial Guard, and the dates of service.
Notwithstanding AS 43.23.110, the department shall
release information provided under this subsection to
the Department of Military and Veterans' Affairs and
may not otherwise release the information. The
Department of Military and Veterans' Affairs may only
release the information to congressionally chartered
veterans service organizations in the state. The
eligibility [APPLICATION] form must contain notice
that providing the information under this subsection
is voluntary, that the information will be released as
provided in this subsection, and that the veterans
service organizations are not required to keep it
confidential.
* Sec. 9. AS 43.23 is amended by adding a new
section to read:
Sec. 43.23.018. Eligibility form; application.
The department shall prepare an electronic Alaska
permanent fund eligibility form separate from the
dividend application. The eligibility form must allow
an individual to determine the individual's
eligibility for a dividend before applying for the
dividend payment. After the individual submits the
eligibility form, and before the individual applies
for the dividend, the department shall notify the
individual that a dividend not claimed by an eligible
individual is deposited into the general fund, subject
to appropriation.
* Sec. 10. AS 43.23 is amended by adding a new
section to read:
Sec. 43.23.023. Foregone dividends. (a) Each
year, the department shall determine the amount of
foregone dividends. The amount of foregone dividends
is the number of individuals, estates, and successors
that submitted an eligibility form and are eligible to
receive, but do not apply for, the permanent fund
dividend, multiplied by the amount of the dividend for
that year, as calculated under AS 43.23.025(a).
(b) Each fiscal year, the legislature may
appropriate from the dividend fund to the general fund
an amount equal to the amount of foregone dividends
determined under (a) of this section.
* Sec. 11. AS 43.23.025(a) is amended to read:
(a) By October 1 of each year, the commissioner
shall determine the value of each permanent fund
dividend for that year by
(1) determining the total amount available
for dividend payments, which equals
(A) the amount of income of the Alaska
permanent fund transferred to the dividend fund under
AS 37.13.145(b) during the current year;
(B) plus the unexpended and unobligated
balances of prior fiscal year appropriations that
lapse into the dividend fund under AS 43.23.045(d);
(C) less the amount necessary to pay prior
year dividends from the dividend fund in the current
year under AS 43.23.005(h), 43.23.021, and
43.23.055(3) and (7);
(D) less the amount necessary to pay
dividends from the dividend fund due to eligible
applicants who, as determined by the department, filed
for a previous year's dividend by the filing deadline
but who were not included in a previous year's
dividend computation;
(E) less appropriations from the dividend
fund during the current year, including amounts to pay
costs of administering the dividend program and the
hold harmless provisions of AS 43.23.240;
(2) determining the number of individuals
who have applied for and are eligible to receive a
dividend payment for the current year and the number
of estates and successors that have applied for and
are eligible to receive a dividend payment for the
current year under AS 43.23.005(h); and
(3) dividing the amount determined under
(1) of this subsection by the amount determined under
(2) of this subsection."
Page 1, line 3:
Delete "Section 1"
Insert "Sec. 12"
Renumber the following bill sections accordingly.
Page 3, following line 12:
Insert a new bill section to read:
"* Sec. 13. AS 43.23.110 is amended to read:
Sec. 43.23.110. Applicant information
confidential. (a) Except as provided in (c) of this
section, information provided by an individual on a
[EACH] permanent fund dividend eligibility form or
application, except the individual's [APPLICANT'S]
name, is confidential. The department may only release
information that is confidential under this section
(1) to a local, state, or federal
government agency;
(2) in compliance with a court order;
(3) to the individual who or agency that
files an eligibility form or application on behalf of
another;
(4) to a banking institution to verify the
direct deposit of a permanent fund dividend or correct
an error in that deposit;
(5) as directed to do so by the individual
[APPLICANT];
(6) to a contractor who has a contract with
a person entitled to obtain the information under (1)
- (5) of this section to receive, store, or manage the
information on that person's behalf; a contractor
receiving data under this paragraph may only use the
data as directed by and for the purposes of the person
entitled to obtain the information;
(7) to the division of elections as
required by AS 43.23.101.
(b) Notwithstanding (a) of this section, the
department may release the names and addresses of
individuals who have filed an eligibility form or
application for a permanent fund dividend [APPLICANTS]
to a legislator of this state and to the legislator's
office staff for official legislative purposes.
(c) Information submitted on a permanent fund
dividend eligibility form [APPLICATION] that is used
for the purpose of registering an individual
[APPLICANT] to vote under AS 43.23.101 shall be kept
confidential by the division of elections as provided
in AS 15.07.195."
Renumber the following bill sections accordingly.
Page 4, following line 4:
Insert new bill sections to read:
"* Sec. 15. AS 43.23.200(a) is amended to read:
(a) Except as provided in (b) of this section, a
person who has applied for and is eligible to receive
a permanent fund dividend may not assign the right to
the dividend. An attempted assignment of the right to
receive a permanent fund dividend is against public
policy and is void.
* Sec. 16. The uncodified law of the State of
Alaska is amended by adding a new section to read:
APPLICABILITY. This Act applies to the permanent fund
dividend 2024 qualifying year for the 2025 permanent
fund dividend."
CHAIR CARRICK objected for the purpose of discussion.
REPRESENTATIVE HOLLAND explained that Amendment 3 was a follow-
up to the discussion from prior hearings. He talked about the
option for somebody to opt out of the PFD and roll it back into
the state general fund (GF). He explained that there would be
two potential issues to the idea. One was that currently, if
someone chooses not to take the PFD, their money will go into
the general PFD pool to increase other applicant dividends. He
said the way the application process is structured, if someone
were to somehow designate it to go to the GF, it would still be
considered a "taxable" personal decision. He commented on
previous discussions about how to avoid taxable debt. He said
simply put, Amendment 3 would split up the process of PFD
eligibility and PFD application. He said that by not filling
out the application, the Alaska Permanent Fund Corporation
(APFC) would be able to "sweep up" the eligible dividends that
were not received by anyone. He said that it is a plausible
pathway to avoid federal tax stipulations but said that this may
not be easy to implement.
CHAIR CARRICK said that the PFD Division could speak to
Amendment 3.
4:33:49 PM
MS. WOJTUSIK explained that the PFD Division has only begun
looking at Amendment 3 and would require some time to review it.
She said the current bill has an indeterminate fiscal note for
programming costs and Amendment 3 might need an additional
fiscal note for staffing. She said that as Representative
Holland alluded to, Amendment 3 would split the process up and
this may require some additional "manpower." She said the
division would need more time to evaluate and report on any
impact to the bill's fiscal note.
4:34:52 PM
MR. NYE said that he has looked extensively into this issue and
while he found that the proposed method may technically work, it
is not the solution that Representative Prax was looking for.
He said that this would provide Alaskans with an "all or
nothing" approach to donating to the GF and the intent is to
find a solution to the federal income tax that would allow for
donations in increments. He said that from what he found, such
a solution does not seem to exist. He said the bill sponsor
intended to "veer away" from this path.
4:35:39 PM
REPRESENTATIVE HIMSCHOOT asked why an Alaskan would bother to
establish eligibility if they did not want to receive a
dividend. She said that she was unsure how many people would do
this.
4:36:16 PM
REPRESENTATIVE HOLLAND responded that he knew many individuals
that would like to use the dividend to pay for things. He
talked about the legal ways for someone to give the dividend
back. He said someone would have to be motivated to help pay
for a particular state or all state services. He acknowledged
that there was uncertainty to the mechanics of this and it may
not be aligned with the bill sponsor's intent.
REPRESENTATIVE HOLLAND [moved to withdraw] Amendment 3, noting
appreciation for its consideration but acknowledged that it
would not address "what the sponsor is wanting to do."
CHAIR CARRICK noted, [there being no objection], Amendment 3 was
withdrawn. She remarked that a lot of Alaskans may be unaware
that the dividend is subject to federal tax, including the
donations. She said that this is a worthwhile issue to look at.
CHAIR CARRICK ascertained there was no further discussion on HB
11.
4:38:22 PM
REPRESENTATIVE STORY moved to report HB 11, as amended, out of
committee with individual recommendations and the accompanying
fiscal notes and to authorize Legislative Legal Services to make
any necessary technical and conforming changes. There being no
objection, CSHB 11 (STA) was reported out of the House State
Affairs Standing Committee.
4:38:55 PM
The committee took an at-ease from 4:38 p.m. to 4:41 p.m.
HB 1-SPECIE AS LEGAL TENDER
4:41:41 PM
CHAIR CARRICK announced that the next order of business would be
HOUSE BILL NO. 1, "An Act relating to specie as legal tender in
the state; and relating to borough and city sales and use taxes
on specie."
CHAIR CARRICK opened public testimony on HB 1.
4:42:22 PM
DANIEL DIAZ, Executive Director, Citizens for Sound Money,
testified in support of HB 1. He said that Citizens for Sound
Money promotes the use of sound money and protects people's
rights to do so. He said that the organization has been active
throughout the country, including Florida and Missouri. He
remarked that these states had recently passed legislation
supporting gold and silver as legal tender. He said that a
reason for this is because since 1971 the United States Dollar
(USD) has lost approximately 98 percent of purchasing power. He
said that given a study from the previous year, about 78 percent
of Americans are living "paycheck to paycheck." He said that he
has come across individuals who were struggling and gave an
example of an Uber driver he met in Missouri who was struggling
with retirement. He discussed a similar story in New Hampshire
regarding an individual's difficulty in making ends meet. He
said that given the loss of the purchasing power of the USD,
people are struggling to get by. He remarked that by bringing
gold and silver back as tender, it would give people the option
to save some "economic energy." He said that these precious
metals have consistently stored value that fights inflation. By
removing the sales tax on gold and silver, it would remove
penalties from people who are trying to preserve their wealth
and purchasing power. He commended Representative McCabe for
pushing the bill and others who have testified in support of
this legislation.
4:46:27 PM
NILLS ANDREASSEN, Executive Director, Alaska Municipal League
(AML), explained that he would seek answers to questions to
better understand the proposed legislation and its impact. He
said that to his understanding silver coins of the United States
that are legal tender already would include nickels, dimes, and
quarters and inquired what else would be included under the
bill. He said that the Coinage Act of 1965 already states that
these are legal tender for public debt and how exactly this
proposed legislation would intersect with pre-existing federal
legislation he did not know. He said that the legislation
states that people do not need to accept gold or silver specie
and asked about state and local governments since they are not
people. He asked whether this would apply to government and
whether there was a fiscal note for it. He opined that local
governments were not equipped to accommodate specie. He said
that Alaska Statute (AS) 01.10.060 definitions suggest that a
person could include corporations, company partnerships, firms,
associations, organizations, business trusts or society, and a
natural person. He explained definitions associated with
"persons." He asked whether the state would hire an assayer to
authenticate the weight and purity of the new tender and whether
local governments should do the same and, furthermore, whether
the state should start gathering a list of approved assayers.
He said that assayers in other states have received a fiscal
note of between $61,000 and $193,000 and asked whether this
should be expected and the department to which they would
belong. He asked if there would be a licensing process for this
and a board to oversee this. He also asked what regulations
would be necessary to determine precious metal pricing. He
discussed complications with spot prices and the challenges with
market fluctuations. He said that the legislation does not
specify how the state would manage these fluctuations. He also
asked whether the Department of Revenue would be involved as
well, how local governments should account for gold specie,
cash, or assets, and what accounting standards should be used.
He talked about minted coins being already in circulation.
MR. ANDREASSEN said that the remaining questions pertain to
foreign coins, non-circulating legal tender, and coins in the
world catalog. Furthermore, he asked how the legislation would
intersect with other legal codes and there was a litany of other
questions that would need to be answered.
CHAIR CARRICK noted that she appreciated the questions and asked
for them to be forwarded to the committee members.
4:51:47 PM
LAWRENCE HILTON, General Counsel, United Precious Metals
Association, testified in support of HB 1. He remarked that
United Precious Metals is dedicated to helping people. He
discussed the Gold and Silver Coin Act of 1985, [a combination
of the Gold Bullion Coin Act of 1985 and the Liberty Coin Act],
which was adopted at the federal level during the Reagan
Administration. He said that the proposed legislation has some
important levels of consumer protection. Furthermore, he
described the issue of capital gains tax relative to gold and
silver. He said that when using gold and silver that is not
classified as legal tender, under Internal Revenue Code (IRC)
Section 1001(b) there would be a requirement to calculate the
capital gains. He said that by making gold and silver legal
tender, it becomes money and gets excluded from the laborious
and difficult capital gains calculation when transacting in gold
and silver. He pointed out that Alaska is the number two
producer of refined gold in the United States. He said that
Alaska has a large measure of gold in the economy, and the bill
would promote the use of gold and promote Alaska's economy.
MR. HILTON noted that there was some suggestion that
municipalities would be required to accept gold or silver as
payment. However, the bill explicitly states that no person
shall be required to do so, and participation is entirely
voluntary. He said it is important for the committee to
understand this point clearly. Additionally, the bill
references a Federal Criminal Statute, 18 U.S. Code 486, which
imposes liability on individuals who "utter or pass" precious
metal currency. There is, however, a critical qualifier:
"unless otherwise authorized by law". This bill would create a
legal safe harbor in which Alaskans can operate without fear of
federal prosecution under 486. This concern was raised
previously. During the Reagan Administration, there was a
reintroduction or re-mintage of gold and silver coins in
1985. A little known provision from that time requires the
Secretary of the Treasury to apply all proceeds from the sale of
gold toward reducing national debt. When asked how this
mechanism was intended to work, then-Treasury Secretary Donald
Regan explained to one of the board members that the idea was to
give Americans the ability to replace the current debt-based
monetary system with a solid, sound money currency. As people
adopted gold and silver coins, they would gradually retire from
the old system. He talked about consumer protection and said
that the proposed bill has many consumer protections. He then
talked about capital gains tax, if using non legal gold and
silver. He mentioned IRC code section 1001b and talked about
calculating capital gains tax.
4:56:46 PM
CHAIR CARRICK, after ascertaining there was no one else who
wished to testify, closed public testimony on HB 1.
4:57:01 PM
REPRESENTATIVE HOLLAND moved to adopt Amendment 1 to HB 1,
labeled 34-LS0001\A.1, Nauman, 5/8/25, which read as follows:
Page 2, line 3, following "the":
Insert "value of the gold or silver contained
within specie during the"
Page 2, line 13, following "the":
Insert "value of the gold or silver contained within
specie during the"
CHAIR CARRICK objected for the purpose of discussion.
REPRESENTATIVE HOLLAND said that Amendment 1 would insert
language regarding the value of gold and silver contained in the
specie, into the language of the bill. He said that this was
brought forward with his efforts and joint discussions with the
prime sponsor, Representative McCabe. He said this was to
clarify whether the sales tax would be on any sort of gold or
silver that might meet the page 3 definition of legal tender.
He said that it could be a Roman Coin from 2,000 years ago, in
which case, the sales tax might be exempted on the collectible
value of it, versus the intent of the bill which is to exempt
the use of specie as a form of value based on actual precious
metal content. He said that Amendment 1 is an attempt to
provide some clarification of what the sales tax is being
exempted on. He believed Amendment 1 would conform to the
intent of the bill and sales tax differences could be clarified
between monetary use based on precious metal value and
collection value. He said if it was a Roman Coin made from gold
that had a value beyond its precious metal price, then the
remaining value would be subject to sales tax. He allowed that
the proposed amendment may not be perfect, but it was an attempt
to clarify and protect the intent of the bill and he welcomed
any questions.
4:58:56 PM
REPRESENTATIVE MCCABE responded that this was discussed with The
Sound Money Group and Mr. Diaz. He said that Amendment 1 was
not necessary because if a $10,000 gold Roman coin were used, it
would be a barter as opposed to being used as a currency. He
said the amendment would not impair the original intent of the
bill and he was neither in opposition nor support of the
amendment.
5:00:41 PM
REPRESENTATIVE HIMSCHOOT said that she has continually been
troubled by when the Federal Government issues USDs and it is
counterfeit if anybody else issues it. She wondered that with
HB 1, whether there could be multiple sources of specie. She
said she may support the amendment because it pertains to the
value or the amount of gold or silver in the tender.
5:01:41 PM
REPRESENTATIVE MCCABE responded yes, when the government issues
a bill that is not gold and it is counterfeit, it would be a
crime. He told the committee to remember that when dealing with
gold, it has nothing to do with bill currency. He said that it
pertains to using metals under the U.S. Constitution as legal
tender. He talked about consumer protections associated with
counterfeiting gold and compared them to using a brown pen when
authenticating 100-dollar bills. He talked about using serial
numbers and other means of authentication for previous metals.
He said that conflating this issue with dollar bills would mean
that the legislation is not being thought of in the correct
terms.
5:02:58 PM
REPRESENTATIVE HIMSCHOOT commented on the specie example that
was previously brought to the committee. She said that if
someone had a different instrument and claimed there was a
certain amount of gold in it, someone may not know how much was
in it unless they had the appropriate equipment or tools. She
was unsure whether the sentiment had to do with just
counterfeiting but assuring consumer protection when trading in
the new legal tender.
REPRESENTATIVE MCCABE responded that Mr. Hilton could better
address this. He said that someone could absolutely use a Loony
or Krugerrand, and it would require stamping and weight. He
opined that Goldback specie is less counterfeitable due to
protections that Goldbacks have.
5:04:48 PM
MR. HILTON explained gold and silver are valued based on form,
weight, and purity, which means the monetary worth of a unit
depends on its physical characteristics and associated premiums.
For example, a 400-ounce gold bar used by central banks carries
a different metal value than a Goldback, which contains just
one-thousandth of an ounce. He commented that states often
address this by exempting the value of gold or silver
instruments from taxation up to a certain percentage above the
spot price, typically based on the 400-ounce bar standard. He
noted that collectibles or jewelry may be worth many times more
than the raw metal value, so a capsuch as 100 percent over the
spot priceis suggested to maintain fairness. He commented that
the London Bullion Market Association (LBMA) publishes a daily
fix based on the 400-ounce delivery bar, while the United
Precious Metals Association (UPMA) provides a rate based on U.S.
minted gold coins, each reflecting different premiums.
Therefore, a reasonable approach is to define value as a
percentage over the most recent LBMA daily fix.
5:07:25 PM
CHAIR CARRICK removed her objection to Amendment 1. There being
no further objection, Amendment 1 was adopted.
5:07:38 PM
CHAIR CARRICK moved to adopt Amendment 2 to HB 1, labeled 34-
LS0001\A.2, Nauman, 5/14/25, which read as follows:
Page 3, line 11, following "state.":
Insert "The committee shall also study consumer
protections and consumer behavior related to the sale
and use of specie."
CHAIR CARRICK stated that she would object to Amendment 2 for
the purpose of discussion. She said that Amendment 2 would
simply add to the last section of the proposed legislation. She
said that it would include a Joint Legislative Budget and Audit
Committee study regarding consumer protection, consumer behavior
related to sale and use of specie. It was to her understanding
that this type of tender is already being used in Alaska, and a
study could help illustrate circulation. Her intent is to have
the scope of the study look at this type of information and help
develop a better specie market in Alaska.
CHAIR CARRICK responded to a previous concern from
Representative Story regarding consumer protection. She said
that when embarking on this legislative route, she wanted the
scope of the study to also include what types of consumer
protection issues may have arisen and what would be done to
mitigate any outstanding issues. She deferred to Representative
McCabe, bill sponsor, for any comments.
5:09:11 PM
REPRESENTATIVE MCCABE said that he was fine with Amendment 2 and
remarked that he thinks this type of study is what the Joint
Legislative Budget and Audit Committee would typically conduct;
the amendment would clarify what was being requested.
5:09:36 PM
REPRESENTATIVE VANCE said that perhaps when conducting this
study, cryptocurrencies such as Bitcoin could be evaluated as
well.
CHAIR CARRICK removed her objection to the motion to adopt
Amendment 2. There being no further objection, Amendment 2 was
adopted.
5:10:11 PM
The committee took an at-ease from 5:10 p.m. to 5:13 p.m.
5:13:08 PM
CHAIR CARRICK noted that HB 1, as amended, was before the
committee.
5:13:28 PM
REPRESENTATIVE STORY sought clarification regarding the timeline
of the study. She explained that language on page 3,
[subsection (c), beginning on line 9], led her to think the
study would happen first; however, further review of the bill
indicated that "something would be enacted and then they're
studying it." Next, she inquired how much lost revenue due to
tax changes would impact municipalities. Finally, she asked for
feedback regarding the statements of previous testifiers:
elaboration on the premium that would be added depending on
daily pricing and any adverse impacts to municipalities there
may be with a value percentage and exemptions in place.
5:15:15 PM
REPRESENTATIVE MCCABE proffered that when running a previous
version of the bill, AML suggested that there would be several
million dollars in lost revenue to the state but did not provide
any data to support that. He said as sponsor, when collecting
data and speaking to several cities that had a sales tax, he
found that many cities like Wasilla could not "parse it out." He
said it is hard to distinguish the difference between a store
that sells teddy bears and one that sells gold coins. The tax
estimates were not that granular in detail and made impact
assessments difficult. He said that estimations were based on
other states that did have data and were of an equal population.
He said the result of this study was that $27,000 in lost tax
revenue across the state was estimated. He felt that this lost
tax revenue would be mitigated by gaining resilience to any
strong negative downturns of the USD. He said people would have
stable stored value and this would be a more important benefit
than the loss of $27,000 in tax revenue in a state of over
700,000 people. He said that he was happy to share these
calculations with the committee.
REPRESENTATIVE MCCABE, in response to previous comments from Mr.
Andreassen, said that nickels, dimes, and quarters are not made
from silver unless they were made prior to 1964. He urged
caution in making this kind of misclassification. He offered
his understanding that the State of Alaska would not be required
to accept this type of new payment and, thus, there would be no
assayer and need for additional staff. He said that the bill
would not create a repository, and this was not part of the
legislation. He said all that HB 1 would do is allow specie to
be used as legal tender, which he said was allowed under the
U.S. Constitution. He referred to legal codes previously
mentioned in testimony. He said that any Internal Revenue
Service (IRS) tax liability would be between the person and the
IRS.
CHAIR CARRICK said that she would like to see questions answered
regarding this legislation at an upcoming committee meeting.
CHAIR CARRICK announced that HB 1, as amended, was held over.
HB 133-PAYMENT OF CONTRACTS
5:19:00 PM
CHAIR CARRICK announced that the next order of business would be
HOUSE BILL NO. 133, "An Act establishing a 30-day deadline for
the payment of contracts under the State Procurement Code;
establishing deadlines for the payment of grants, contracts, and
reimbursement agreements to nonprofit organizations,
municipalities, and Alaska Native organizations; relating to
payment of grants to named recipients that are not
municipalities; and providing for an effective date." [Before
the committee was CSHB 133(CRA).]
5:19:36 PM
REPRESENTATIVE HIMSCHOOT, as prime sponsor, introduced CSHB
133(CRA). She said that the issue that the proposed legislation
seeks to address is Alaska's longstanding challenges to fulfill
financial commitments to the nonprofit, municipal, and tribal
partners. She said that this is not a new issue, nor was it
attributed to any single administration, but it has taken place
over many years. She remarked that the state struggles to meet
payment obligations in a timely manner.
REPRESENTATIVE HIMSCHOOT commented that as the committee
understood, the state relies heavily on these various partners
to deliver essential services to state residents, including
services not provided by the State of Alaska. She said that
when the state fails to make payments, especially grant funding,
there can be consequences for the benefactor. She said that the
standard payment window is 30 days and, when missed, it can
impair organizations, especially ones with small budgets. She
said that a small municipality, nonprofit or tribal organization
could have services disrupted or be forced to withdraw emergency
funds to cover expenses while awaiting state commitments. She
said that the strain can impact payroll, infrastructure
projects, and service continuity.
REPRESENTATIVE HIMSCHOOT noted that in many rural areas, the
cost associated with demobilizing projects due to delays is
significant. Failure for scheduled payment increases the
overall cost of projects and even reduces investment returns.
She said that the bill strives for parity in treatment of
private contractors and nonprofit, municipal, and tribal groups.
She said the proposed legislation would establish a prompt
payment required for the State of Alaska. She said that
affected partners would receive interest much like private
sector contracts. In conclusion, she explained that the
proposed legislation is about accountability.
CHAIR CARRICK noted that the sectional analysis to CSHB 133(CRA)
could be saved for after testimony.
5:23:28 PM
CHAIR CARRICK announced that the committee would hear invited
testimony.
5:23:55 PM
NILS ANDREASSEN, Executive Director, Alaska Municipal League
(AML), began his invited testimony in support of CSHB 133(CRA).
He remarked that CSHB 133(CRA) would make significant strides to
leveling the playing field and ensuring that local government,
tribes, and nonprofits are paid on a timely manner. He remarked
that community assistance program funding is one such sector
where government payments have been consistently delayed and was
an issue for local governments. He said that historically these
payments were available as early as July, but that timeline has
not consistently been met. He said that AML understood that
[the Department of Commerce, Community & Economic Development's
(DCCED's)] Division of Community and Regional Affairs (DCRA)
requirements often affect the timing of payments for some
municipalities. However, given changes, prompt payments could
occur early enough in the year to be effective. He discussed
the timeline for community assistance applications and that DCRA
recently switched to a new system. He was looking forward to
ensuring local government access.
MR. ANDREASSEN expressed optimism in working through issues seen
as barriers to fund distribution and encouraged the committee
and administration to explore solutions, whether it was adding
support staff or even technological solutions. He asked what
could be done to strengthen the information flow between
agencies so that documentation and payment schedules can be
prompt. He argued that it had to do with increasing capacity
and removing both barriers and complexity. He raised questions
regarding how much of the process is established by law and what
has been added through regulation where complexities may have
been added. However, he acknowledged that removing safeguards
was not ideal and there would have to be other areas of
streamlining worth attention.
MR. ANDREASSEN noted that the effect of past due payments can be
challenging for local government. He discussed complications
with payroll, workers compensation, and property insurance. He
said that delays can cause cancellations for non-payment, and it
is stressful when delays affect payroll for community members.
He asked for consideration how this would affect the provision
of services to residents and highlighted plowing, potholes,
sewage, and other services.
MR. ANDREASSEN noted that cash management can become crucial for
organizations and other priorities often get deferred, all of
which would limit the benefit and services provided to customers
and taxpayers. He said that the system lacks the capacity to
meet current obligations, let alone do more.
MR. ANDREASSEN acknowledged fiscal notes and the limited state
budget due to revenue shortfalls. He argued at the very least
the state should try to provide service across all types of
contractors or grantees with a level of parity. He remarked
that strengthening the state would require additional resources
and it was something not to run from but to plan for. He said
that CSHB 133(CRA) is good government, and it asks to put prompt
payment into law so the State of Alaska can be a dependable
partner.
5:29:21 PM
LAURIE WOLF, The Foraker Group, began her invited testimony in
support of CSHB 133(CRA). She noted that the bill establishes
prompt payment parity for Alaska nonprofits, municipalities, and
tribal organizations for grants, contracts, and reimbursements
from the State of Alaska as well as federal pass-through
funding. She stated that this is one of the most important
pieces of legislation for Alaska's nonprofit sector since the
"Pick, Click, Give" initiative 15 years ago.
MS. WOLF said that organizations are experiencing payment delays
ranging from several months to over a year with amounts varying
from a few hundred dollars to over one million dollars. She
said that delays affect every department in the state and impact
a wide range of services, including senior care, childcare,
domestic violence support, housing, food security,
transportation, public safety, and other services. She said
that the State of Alaska relies on nonprofit sectors to deliver
these essential services and payment benefactors were state
partners. She said when it comes to cash flow, these
partnerships were broken. She said many nonprofits are asked to
report on funding delays to receive the next payment, which is
often also delayed. She said that delayed payments have become
normalized or even accepted, despite funds in question already
being approved by an appropriate body. She argued that if
monetary funds were budgeted, approved, and allocated, then
spending should occur promptly. She noted that prompt payment
is already required by AS 36.90.200 for transactions with for-
profit businesses, but it did not include rules for non-profit
entities.
MS. WOLF commented that efforts to address this issue have
occurred for multiple years and administrations. She noted that
a former commissioner suggested that nonprofits secure lines of
credit to manage delayed payments, implying that it was their
responsibility to subsidize the state. She said many nonprofits
lack the collateral required for such credit lines and it was
not their job to do this.
MS. WOLF commented that the Foraker Group surveyed Alaska
nonprofit sectors and studied cash flow disruptions and how they
affect administrative operations, financial planning, staff,
business, and other nonprofit activities. She reiterated that
nonprofits do not have the financial reserves to cover major
state grants or contracts while waiting for allocated funds.
She said that these delays can impair local economies and result
in vendors not getting paid. She noted that the study would be
shared with the committee.
MS. WOLF stated that unlike businesses or contractors working on
public projects, nonprofit payment schedules are not protected
by statutes that guarantee timely payment. She said that
stopping services without pay has profound consequences. She
acknowledged that the state may have some workforce shortages
and technological hangups, but the nonprofit sector could not
remain silent when a broken system is burdensome to its
organizations. She urged support for CSHB 133(CRA).
5:36:20 PM
SAM CHANAR, Mayor, City of Toksook Bay, began his invited
testimony in support of CSHB 133(CRA). He said that Toksook Bay
plays a waiting game: The city receives a letter from the State
of Alaska; the city waits for another letter regarding Community
Assistance Program payments; the city then enacts an ordinance
providing for the budget of the upcoming fiscal year; the city
then passes a resolution certifying a financial statement;
applications are submitted to comply with payment requirements;
and the city then waits for payments. He discussed
complications with insurance contributions and renewal
processes. He said that come July, the waiting game starts
regarding whether coverage would be in place. He said that if
the July 31 deadline cannot be met then the city would be sent a
30-day notice of nonpayment that requires payment in full or a
payment plan for the end of August. This requires additional
fees and interest. He said that the city regularly risks losing
its insurance coverage. He discussed challenges in Toksook Bay
such as the absence of commercial fisheries, tourism unlike
other areas in Alaska, and the challenges given funding holds.
He said that last year Toksook Bay received Community Assistance
Program funding in October, over three months after the
insurance renewal deadline. He said that the City of Toksook
Bay is in full support of the passage of CSHB 133(CRA).
5:41:11 PM
CHAIR CARRICK opened public testimony on HB 133.
5:41:38 PM
The committee took a brief at-ease at 5:41 p.m.
5:42:19 PM
CHAIR CARRICK said that there was a slight technical delay.
5:42:32 PM
SUSAN ANDERSON, CEO, Boys & Girls Club of Southcentral Alaska,
testified in support of HB 133. She said that the Boys & Girls
Club of Southcentral Alaska serves over 4,000 youth in twenty-
one locations across Alaska. She said that it serves youth in
nearly every legislative district. She said that the proposed
legislation would create a 30-day deadline for state contracts,
grants, and reimbursement agreements and a 21-day payment
deadline for federal pass-through funding. She said that HB 133
would provide reliability, transparency, and accountability for
payment of state obligations. She shared that in January 2024,
the state owed more than $1,000,000 to the Boys & Girls Club and
it took 150 days to receive the payment. She said that January
2025 was better, but funding still took about 65 days to reach
the organization. She echoed Ms. Wolf's previous testimony that
delayed funding disrupts services to children, families, and
caregivers. Organizations either take on debt or face fines
when dealing with delayed payments. Further, delays impair
planning and strain relationships with vendors and providers of
services. She said that there had been positive developments as
a recent payment from the state took only 10 days.
MS. ANDERSON noted that The Boys & Girls Club was a grant funded
organization with an annual budget of about $12 million and it
did not have the flexibility to float payments on behalf of the
state. She said that services cannot be paused because of the
youth and families being supported by services. She remarked
that if pay dates are missed, negative adjustments need to be
made. She stated that HB 133 would support organizations such
as The Boys & Girls Club and the youth affected by their
services.
5:45:53 PM
TREVOR STORRS, President & CEO, Alaska Children's Trust,
testified in support of HB 133. He said that the proposed
legislation would ensure timely payment schedules from the State
of Alaska to all the parties that provide essential services
under state agreements. He said that the Alaska Children's
Trust is a leading statewide organization focused on the
prevention of both child abuse and neglect and supports policies
that strengthen Alaska's communities and families. Ensuring
that partners are paid on time is one such policy. He said that
the proposed legislation would ensure that both state and
federal pass-through funding would be available. He said that
the nonprofit sector continues to experience systemic challenges
with lengthy delays in payments which have adversely impacted
the state's communities and economy. He said that prompt
payments are crucial for nonprofits and partners to execute
state policy efficiently, including policies designed to protect
children.
MR. STORRS remarked that according to Kids Count, in 2023,
37,000 families accessed public assistance which accounted for
21 percent of Alaska families with children. He said that
families who access public assistance are also likely to access
services provided by nonprofit, tribal, and community-based
organizations that partner with the State of Alaska. He
remarked that delays have affected services ranging from
childcare, domestic violence support, housing, food security,
public safety, and more. Accessing these services plays an
essential role in preventing child abuse and neglect. He
encouraged support for HB 133.
5:48:07 PM
CHAIR CARRICK, after ascertaining there was no one else who
wished to testify, closed public testimony on HB 133.
5:48:34 PM
REPRESENTATIVE STORY said that there was compelling testimony
regarding the need for timely payment. She noted that she had
read the report from the Foraker Group and she knew there was an
updated fiscal note regarding the bill. She inquired about how
many entities such as nonprofits were not getting paid on time.
Additionally, she asked how many staff could be added to ensure
timeliness and what processes could be changed. She inquired as
to the current process for paying benefactors. She was aware
that some private contractors were not paid on time either,
despite current statute. . She raised concerns given any
interest fees that are having to be paid to contractors for
untimely payment.
CHAIR CARRICK noted that some testifiers were available online
to field some of these types of questions.
5:50:44 PM
REPRESENTATIVE HIMSCHOOT remarked that relevant departments
would be available online for questions in the upcoming
committee hearing on the proposed legislation. She remarked
that she has worked with many departments to determine causes of
these delays. She said it often stems from staff turnover and
challenges related to computers and technology. She said that
most departments have acknowledged the 30-day requirement and
expressed a powerful desire to meet these deadlines. Some
departments use centralized email addresses to avoid staffing
change complications and facilitated contact with benefactors.
She said that another issue was the lack of uniform grant
management software. She said some states use a single software
whereas Alaska departments use different systems, potentially
resulting in lost efficiency. She said efforts are underway to
better understand these types of challenges and that CSHB
133(CRA) was not intended to accuse departments of negligence.
She acknowledged that the 30-day deadline can often be difficult
to meet; however, the burden often shifts to benefacting
organizations not equipped to manage delays.
REPRESENTATIVE STORY said that this explanation did help clarify
the process and potential impediments to payment deadlines. She
asked whether it may be appropriate to move the timeline to 45
days and how adversely it may affect contractors. She affirmed
that parity across the board was ideal and asked how an
effective timeline could be established. She said that she was
interested to hear more about interest payments made by the
state due to delays, what the approximate costs were, and
approaches to mitigate the problem. She said that she was
hesitant to include a timeline with the bill if it was an
unrealistic timeline and asked what would be considered
reasonable.
5:54:41 PM
REPRESENTATIVE MCCABE said that he appreciates the proposed
bill. He said it encourages the state to do the job that it is
supposed to do. He said there is a 30-day standard for
contractors and delayed payments are inappropriate. He raised
alarm given a one-year delay of $1,000,000 to a village or small
Native corporation and noted that current delays impact villages
poorly.
REPRESENTATIVE MCCABE said that one reason he supports the bill
is from his personal work experience. He said that he worked
for a company that flew a significant amount of hours for the
State of Alaska, and he did not know whether they had ever been
paid, and they may have given up seeking payment. He said that
he knew some contractors that would not do business with the
State of Alaska because of the reputation regarding payments.
He agreed with Mr. Andreassen that there needs to be a way to
prevent the departments from "weaponizing" fiscal notes.
REPRESENTATIVE HIMSCHOOT urged caution in placing blame on
anyone as she believed the issues were systemic in nature. She
said that this topic would require evaluation of the processes.
5:56:59 PM
CHAIR CARRICK noted that the testimonies were compelling and
asked Representative Himschoot what processes occur in other
states when doing state to state comparisons. She raised
concern about any potential interest payments from delayed
payment schedules. She asked what type of remediation could be
done for the issue.
REPRESENTATIVE HIMSCHOOT responded to Chair Carrick that there
is an Alaska Statute that requires 30-day prompt payment for the
private sector, and it comes with a 10.5 percent interest
penalty for past due payment. She said that she had reached out
to the Department of Transportation & Public Facilities (DOT&PF)
regarding late fees and was awaiting a response. She said that
she would need more information for better understanding of
state-to-state comparisons regarding payment schedules.
CHAIR CARRICK asked for elaboration on the 10.5 percent interest
fees.
REPRESENTATIVE HIMSCHOOT responded that she was unsure where the
10.5 percent figure came from, but it was in statute. She
imagined it was to "make an entity whole" for any additional
costs incurred.
5:59:27 PM
REPRESENTATIVE HOLLAND remarked that he thought the fiscal note
should include a statement by the departments regarding how much
money they are making "on the float" - money made while holding
the corpus - which he explained concerned him because it is an
unfair practice. He spoke about the challenge of determining
when an organization is paid, noting that in this regard,
consistency would lead to better management of cash flow,
whether on a 30- or 60-day payment schedule. He asked whether
there was a way to improve the expectation for payment
consistency and communication.
REPRESENTATIVE HIMSCHOOT responded that understanding the
"float" was a reasonable request. She said there were
accountability measures built into a lot of these grants for
performance. She acknowledged that consistency matters but
understood that making a new "floor" for payments could be
tricky, for instance if a 60-day payment became 70 days, rather
than a 30-day payment becoming 40 days. She suggested one
solution to this could be improved communication with partners.
She reminded the committee of the Foraker Group study,
[available in the committee file].
6:04:41 PM
CHAIR CARRICK announced that CSHB 133(CRA) was held over.
HB 4-PRESIDENTIAL WRITE-IN VOTES
6:05:04 PM
CHAIR CARRICK announced that the final order of business would
be HOUSE BILL NO. 4, "An Act relating to write-in candidates for
President and Vice-President of the United States."
6:05:29 PM
REPRESENTATIVE DAN SADDLER, Alaska State Legislature, as prime
sponsor, reintroduced HB 4. He said the proposed legislation
simply allows Alaskans to cast write-in candidates for President
or Vice President, just as they can for any other office. He
pointed out that state ballots provide write-in candidate
listings for state and federal legislative seats, as well as for
governor and lieutenant governor. He explained that the
prohibition for Presidential write-ins are under regulations of
the Division of Elections, not under statute. He opined that
Alaskans deserve the full freedom to vote for candidates who
reflect their values, even if not printed on the ballots.
6:06:34 PM
CHAIR CARRICK opened public testimony on HB 4. After
ascertaining there was no one who wished to testify, she closed
public testimony.
6:06:49 PM
CHAIR CARRICK announced that HB 4 was held over.
6:08:07 PM
ADJOURNMENT
There being no further business before the committee, the House
State Affairs Committee meeting was adjourned at 6:08 p.m.