House Finance weighs bill to standardize state payment timelines

The House Finance Committee examined legislation Tuesday that would require Alaska to pay nonprofits, municipalities and tribal organizations within 30 days, the same timeline currently required for private contractors. House Bill 133, sponsored by Representative Rebecca Himschoot, aims to address what advocates call systemic payment delays that have left some organizations waiting months for reimbursement. The bill would impose interest penalties on the state for late payments, mirroring existing statute that covers private contractors. A representative from the Faith and Community-Based Initiative testified that nearly half of surveyed nonprofits feared putting their names on complaints about delayed payments, citing concerns about state retribution. "Nonprofits are long-standing partners performing essential services that the state cannot do as efficiently," Himschoot said. The Department of Health submitted six fiscal notes, one per division, acknowledging payment struggles averaging 98 days. Assistant Commissioner Pam Halloran attributed delays to COVID-19 impacts, staff turnover and training gaps. She said the department is implementing monthly scorecards and adding five new positions to improve timelines. Representative Jamie Allard questioned whether taxpayers should bear the cost of interest penalties. Representative Will Stapp challenged claims about state retribution against organizations. Himschoot clarified the state would likely assume liability for interest penalties on federal funds if the bill passes. Executive Director Niels Andresen supported the measure. He argued the 30-day payment clock should start when the state determines an invoice is eligible for payment. The committee took no action on the bill Tuesday.