00 CS FOR HOUSE BILL NO. 133(CRA) 01 "An Act establishing a 30-day deadline for the payment of contracts under the State 02 Procurement Code; relating to the calculation of interest owed to a prime contractor; 03 establishing deadlines for the payment of grants, contracts, and reimbursement 04 agreements to nonprofit organizations, municipalities, and Alaska Native organizations; 05 and providing for an effective date." 06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 07  * Section 1. AS 36.30 is amended by adding a new section to read:  08 Sec. 36.30.970. Payment deadline and interest. (a) An agency shall pay a 09 contractor for satisfactory performance on a contract within 30 calendar days after the 10 agency receives a payment request from the contractor that complies with the contract. 11 (b) If a contractor is not paid as required by (a) of this section, the agency 12 shall pay interest on the unpaid amount of the required payment from the 31st calendar 13 day after the date the agency receives a payment request under (a) of this section at an 01 interest rate that is equal to the rate set out in AS 45.45.010(a). 02 (c) If an agency withholds payment because of unsatisfactory performance or 03 if the payment request made under (a) of this section does not comply with the 04 requirements of the contract, within eight working days after receipt of the payment 05 request the agency shall notify the contractor in writing stating specifically why 06 payment is being withheld and what remedial actions may be taken by the contractor 07 to receive the full payment. 08 (d) If the notification by the agency required by (c) of this section does not 09 comply with (c) of this section, the agency shall pay interest on the withheld amount 10 from the eighth working day after receipt of the initial payment request until the 11 agency provides notice that does comply with (c) of this section. 12 (e) If payment is withheld under (c) of this section, the agency shall pay the 13 withheld amount within 30 calendar days after the contractor satisfactorily completes 14 the remedial actions identified in the notice. If the withheld amount is not paid within 15 the 30 calendar days, the agency shall pay interest on the withheld amount from the 16 30th calendar day at an interest rate that is equal to the rate set out in AS 45.45.010(a). 17 (f) The obligation to pay interest under this section does not apply to 18 retainage. 19 (g) This section does not apply to a public construction or public works 20 contract subject to AS 36.90.200 or an agreement subject to AS 36.90.310. 21 (h) In this section, "contractor" means a person who has been awarded a 22 contract with an agency. 23  * Sec. 2. AS 36.90.200(b) is amended to read: 24 (b) If the prime contractor is not paid as required by (a) of this section, the 25 state or political subdivision shall pay interest on the unpaid amount of the required 26 payment from the [21ST CALENDAR] day [AFTER THE DATE REQUIRED FOR] 27 payment is due under (a) of this section at an interest rate that is equal to the amount 28 set out in AS 45.45.010(a). 29  * Sec. 3. AS 36.90 is amended by adding a new section to article 4 to read: 30 Sec. 36.90.310. Payment deadline and interest for grants and  31 reimbursement agreements to nonprofit organizations, municipalities, and  01 Alaska Native organizations. (a) An agency shall pay a nonprofit organization, 02 municipality, or Alaska Native organization for satisfactory performance of a grant or 03 reimbursement agreement within 30 calendar days after the agency receives a payment 04 request from the nonprofit organization, municipality, or Alaska Native organization 05 that complies with the grant or reimbursement agreement. If the agency uses federal 06 funds to pay the grant or reimbursement agreement, the agency shall pay for 07 satisfactory performance within 30 calendar days after the agency receives a payment 08 request that complies with the grant or reimbursement agreement, or within 30 09 calendar days after the agency receives the federal funds, whichever is later. 10 (b) If a nonprofit organization, municipality, or Alaska Native organization is 11 not paid as required by (a) of this section, the agency shall pay interest on the unpaid 12 amount of the required payment at an interest rate that is equal to the rate set out in 13 AS 45.45.010(a) from 14 (1) the 30th calendar day after the date the agency receives a payment 15 request under (a) of this section if the agency uses federal funds to make the payment; 16 (2) the 30th calendar day after the date the agency receives a payment 17 request under (a) of this section for all other payments for grants and reimbursement 18 agreements. 19 (c) If an agency withholds payment because of unsatisfactory performance or 20 if the payment request made under (a) of this section does not comply with the 21 requirements of the grant or reimbursement agreement, within eight working days 22 after receipt of the payment request the agency shall notify the nonprofit organization, 23 municipality, or Alaska Native organization in writing stating specifically why the 24 payment is being withheld and what remedial actions may be taken by the nonprofit 25 organization, municipality, or Alaska Native organization to receive the full payment. 26 (d) If the notification by the agency required by (c) of this section does not 27 comply with (c) of this section, the agency shall pay interest on the withheld amount 28 from the eighth working day after receipt of the initial payment request until the 29 agency provides notice that does comply with (c) of this section. 30 (e) If payment is withheld under (c) of this section, the agency shall pay the 31 withheld amount within 30 calendar days after the nonprofit organization, 01 municipality, or Alaska Native organization satisfactorily completes the remedial 02 actions identified in the notice. If the withheld amount is not paid within the 30 03 calendar days, the agency shall pay interest on the withheld amount from the 30th 04 calendar day at an interest rate that is equal to the rate set out in AS 45.45.010(a). 05 (f) In this section, 06 (1) "agency" has the meaning given in AS 36.30.990; 07 (2) "Alaska Native organization" has the meaning given in 08 AS 18.66.020(d); 09 (3) "grant" means a legal instrument of financial assistance between an 10 agency and a nonstate entity that is used to enter into a relationship for which the 11 principal purpose is to provide funds to the nonstate entity; "grant" does not include 12 (A) a cooperative agreement that provides for substantial 13 involvement between the agency and the recipient in carrying out the activity 14 contemplated by the award; 15 (B) a legal instrument used by an agency to acquire property or 16 services for the direct benefit of an agency; 17 (C) cash assistance to an individual; 18 (D) a subsidy; 19 (E) a loan; 20 (F) a loan guarantee; 21 (G) insurance; 22 (H) state funding that is required annually and is calculated 23 through a formula set in statute; 24 (I) a permanent fund dividend; or 25 (J) a grant appropriated to a municipality under AS 37.05.315 26 or a named recipient under AS 37.05.316; 27 (4) "nonprofit organization" has the meaning given in 28 AS 38.05.097(c). 29  * Sec. 4. This Act takes effect July 1, 2026.