Legislature(2025 - 2026)BELTZ 105 (TSBldg)
04/08/2025 01:30 PM Senate COMMUNITY & REGIONAL AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HJR5 | |
| SB129 | |
| SB111 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HJR 5 | TELECONFERENCED | |
| += | SB 129 | TELECONFERENCED | |
| += | SB 111 | TELECONFERENCED | |
SB 129-PAYMENT OF CONTRACTS
1:38:24 PM
CHAIR MERRICK reconvened the meeting and announced the
consideration of SENATE BILL NO. 129 "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."
1:38:44 PM
SENATOR SCOTT KAWASAKI, District P, Alaska State Legislature,
Juneau, Alaska, gave a brief re-introduction to SB 129, which
would ensure that non-profit organizations, municipalities, and
Alaska Native organizations receive prompt payment parity with
other businesses (e.g. construction companies) that have
contractual agreements with the State of Alaska.
1:39:52 PM
CHAIR MERRICK opened public testimony on SB 129.
1:40:15 PM
PAT BRANSON, representing self, Kodiak, Alaska, testified in
support of SB 129. She provided a hypothetical situation to
illustrate the need for the State of Alaska to make timely
payments to non-profit organizations (non-profits). She
emphasized that some non-profits provide vital services to
Alaskans and cannot pause those services due to lack of payment.
She pointed out that the State of Alaska is required to make
timely payments to for-profit businesses; however, this
requirement does not extend to non-profits. She emphasized that
this is highly problematic and causes many difficulties for non-
profits. She stated that outstanding bills may be up to $100,000
for operations and over $200,000 for capital projects. She said
there is no state law requiring the State of Alaska to make
timely payments to non-profits. SB 129 would fix this problem.
1:42:26 PM
MICHELE GIRAULT, Executive Director, Hope Community Resources,
Anchorage, Alaska, testified in support of SB 129. She stated
that it is unfortunate that timely bill payment requires
legislation. She emphasized that this is a critical need for
non-profits that rely on state grants in order to provide
services. She briefly described the grant process, noting that
grant recipients must often wait up to 90 days to receive
payment for services previously provided. SB 129 would correct
this error. She shared that late payments have impacted Hope
Community Resources (requiring the organization to shift money
in order to pay staff) and have significantly disrupted smaller,
sister organizations.
1:43:47 PM
DAVID WILSON, Director, Public Policy, Mat-Su Health Foundation,
Wasilla, Alaska, testified in support of SB 129. He paraphrased
from the following written testimony:
[Original punctuation provided.]
The MSHF is deeply invested and dedicated to
supporting the health and well-being of our community,
and we recognize the critical importance of timely
payments for services rendered. SB 129 addresses a
significant issue that affects many nonprofit
organizations, municipalities, and Alaska Native
organizations, including those we fund and collaborate
with. The establishment of a payment deadline will
ensure that these entities receive the funds they need
to continue their vital work without unnecessary
delays.
Timely payments are essential for the financial
stability of nonprofit organizations. Delays in
payment can disrupt operations, hinder project
progress, and create financial strain. SB 129 will
help provide a reliable payment schedule, allowing
these entities to plan and execute their programs
effectively.
Our organization has witnessed firsthand the
challenges faced by nonprofit organizations,
municipalities, and Alaska Native organizations due to
delayed payments. Through our partnerships and
initiatives, we have worked tirelessly to support
these entities in their efforts to provide critical
services to our communities. The passage of SB 129
will provide much-needed support and resources to
amplify these efforts and create lasting, positive
change.
We believe that SB 129 is a necessary and beneficial
measure that will greatly improve the efficiency and
effectiveness of nonprofit organizations,
municipalities, and Alaska Native organizations. We
urge the legislature to pass this bill and support the
timely payment of contracts and grants.
Thank you for considering our perspective and for your
commitment to improving the financial stability and
operational efficiency of organizations that serve our
community.
1:45:59 PM
SUSAN ANDERSON, Chief Executive Officer, Boys and Girls Clubs of
Southcentral Alaska, Anchorage, Alaska, testified in support of
SB 129. While payments from the State of Alaska are currently
averaging 65 days, the Boys and Girls Club of Southcentral
Alaska has experienced payment delays of up to 150 days. She
said the shorter payment delay is the result of calling and
emailing to follow-up on payments. She emphasized that delayed
payments disrupt essential services for children, families, and
caregivers. She explained that late payments create severe
hardships, and the Boys and Girls Club of Southcentral Alaska
has been forced to take on debt. In addition, late payments
negatively affect planning and vendor payments. She emphasized
the importance of SB 129, which would ensure that organizations
providing vital services do not take on unnecessary financial
instability due to slow reimbursement from state agencies. She
stated that the Boys and Girls Club of Alaska is a grant-funded
non-profit and cannot pause services or commitments to staff and
vendors while waiting to receive payments from the State of
Alaska; however, this may be necessary if the delayed payments
continue.
1:48:34 PM
DEEPIKA RAMESH PERUMAL, Executive Director, Alaska Literacy
Program, Anchorage, Alaska, testified in support of SB 129. She
said the Alaska Literacy Program (ALP) relies on state funding
to keep classes running and to maintain support services. She
briefly discussed the impact of late payments, emphasizing that
ALP must stretch already limited resources. She explained that
ALP has chosen to forgo certain grants (for which the
organization is eligible) because of the financial strain late
payments cause. She stated that non-profits deserve timely
payments. She emphasized the importance of prompt, timely
payments, which create greater stability for non-profits across
the state.
1:50:55 PM
JEN GRIFFIS, Vice President, Policy and Advocacy, Alaska
Children's Trust, Anchorage, Alaska, testified in support of SB
129. She said this would strengthen Alaska's communities and
families by ensuring both state and federal funds are promptly
dispersed to non-profits, local governments, and tribal
organizations. She emphasized the many challenges that long
delays in payment cause and stated that timely payments are
essential for these organizations to execute state policy in an
efficient manner. This includes policies that protect and
support Alaska's children, youth, and families. She briefly
discussed the number of families who depend on public assistance
in Alaska, which is equal to 21 percent of Alaska's families
with children. She surmised that those families likely also
depend on services provided by non-profit, municipal, and tribal
organizations across the state. She listed the many programs
that have been negatively impacted by delayed payments,
including child care and domestic violence services, among
others. She emphasized the importance of these programs, which
play an important role in preventing child abuse and neglect.
She said SB 129 would support the organizations that provide
these services to Alaska's families.
1:52:58 PM
LAURIE MEAD, representing self, Kenai, Alaska, testified in
support of SB 129. She said she has been a licensed childcare
provider for 40 years. She said she has experienced 60-90 day
delayed payments. She emphasized that delayed payments mean she
is unable to pay staff and/or utility bills. She shared a
personal anecdote to illustrate how delayed payments have
impacted her business. She stated that timely payments for
completed work are necessary to keep Alaska running.
1:55:09 PM
TOM HIRATSUKA, Chief Financial Officer, Hope Community
Resources, Anchorage, Alaska, testified in support of SB 129. He
said Hope Community Resources (HCR) receives three operating
grants from the State of Alaska. During the previous fiscal year
(FY), while the grants started July 1, HCR did not receive
payment until October. During that time, HCR had to redistribute
funds (over $100,000) in order to pay staff and program costs.
He noted potential threats to future funding and reiterated
support for SB 129.
1:56:10 PM
SARAH HOLLISTER, Executive Director, United Way of the Tanana
Valley, Fairbanks, Alaska, testified in support of SB 129. She
said that United Way of the Tanana Valley manages a suicide
prevention and drug misuse grant for Fairbanks Wellness
Coalition. She stated that, in the first year of the grant, they
didn't receive payment until after the first quarter. This was
after reports were due and meant that the Fairbanks Wellness
Coalition (FWC) was not able to provide services for the first
quarter. She explained that because the FWC did not receive
payment for the first quarter, the grant amount was cut by the
amount they should have received during that time. She opined
that SB 129 is common sense and emphasized that small
organizations that do not have internal funding sources are
negatively impacted by delayed payments.
1:57:51 PM
ELIA PETERSON, Operations Director, Open Arms Child Development
Center, Fairbanks, Alaska, testified in support of SB 129. She
emphasized the importance of timely payments, which enable
businesses to cover financial responsibilities. She stated that
currently, 25 children who attend her facility receive child
care assistance. Delayed payments result in late fees and an
unpredictable budget.
1:59:34 PM
CHAIR MERRICK closed public testimony on SB 129.
2:00:00 PM
SENATOR KAWASAKI made closing comments pertaining to fiscal
notes. He directed attention to the fiscal note from the
Department of Health, [OMB Component Number 2665], which
estimates a cost of $150,000 to create a new position that would
ensure timely payments. This cost is based on prior contracts
and grants. He expressed hope that the Senate Finance Committee
would scrub excessive costs from the fiscal notes that accompany
SB 129. He then directed attention to the fiscal note from the
Department of Labor and Workforce Development, OMB Component
Number 340, which indicates that the department would make every
effort to change program processes to ensure prompt payments and
avoid any interest. He opined that this is ideal.
2:01:38 PM
[CHAIR MERRICK held SB 129 in committee.]