Alaska Legislature: House Finance, 4/2/26, 9am

Good morning.

I'm going to go ahead and call this meeting of the House Finance Committee to order.

Let the record reflect that the time is currently 9.08 a.m. on Thursday,

April 2,

2026.

No rest for the Finance Committee.

It seems like we were just here a few hours ago.

Present today we've got Representative,

let's see here, I know Representative Bynum is online.

We've got Representative Stapp.

Courtier Shragi, Courtier Josephson, uh myself, uh Courtier Foster, uh Representative Hannan, Representative Tomaszewski, Representative Galvin, Representative Jimmy, and let's see here.

And so just a reminder, folks can mute their cell phones. Um we have two items on the agenda this morning. That's House Bill one thirty three, that's payments

of contracts by Representative Henshoot.

We'll be taking public testimony on that bill,

and then we'll review the fiscal notes and set the bill aside.

Then we'll take up amendments for House Bill 91,

that's the marijuana tax bill,

by Representative Carrick.

And if it's the will of the committee,

we'll see if the committee is interested in moving the bill.

Uh starting off with House Bill 133, Payments of Contracts, I'd like to invite up uh Representative uh Himshoot as well as her staff, Ms Ella Lubin.

And if you could both put yourselves on the record. If you could give us uh a brief, a recap of the bill and then we'll go to public testimony and if time permits uh we'll take more detailed questions after we go through public testimony.

Um and then we'll be reviewing fiscal notes also after public testimony. So with that uh Representative Himshoot.

Thank you Chair Foster. And I wanna express my deepest gratitude to the entire committee for being here this morning. I know you had a very late night. So thank you for um hearing this bill this morning. Um House Bill 133 is basically a um

Prompt payment parity bill, what we're asking in this bill is for the state of Alaska to be the good business partner that we are to private contractors who complete public works projects.

So it sets a thirty day payment time line for um non-profits, municipalities and tribal entities.

And I'm happy to take any questions.

Okay, thank you. I think we've got everything covered on the recap, but I think we're going to jump right into public testimony.

And just a reminder,

if folks would like to submit written testimony,

they can do so by emailing us at house.finance at akleg.gov.

And one more time, that's house.finance at akleg.gov.

So let's see here. I might start here in the room with anyone who'd like to testify.

I am seeing, let's see, I think we've got a number of people that are marked as testimony, but I think they are with departments. I'm trying to get to the folks who I do not think are with departments.

In the room, it looks like I've got Brenda Stanfill. I've got

Let's see here.

I think maybe that might be the only person. If anyone else is interested in, okay, we do have another person. Okay, perfect.

Okay,

so that's why I wanted to check.

So maybe first if we could have Ms.

Brenda Stanfill come up and put yourself on the record. And I'm going to go ahead and open public testimony on HB 133.

Thank you so very much for being here and if you could put yourself on the record.

Thank you. Brenda Stanfield. I'm the executive director of the Alaska Network on Domestic Violence and Sexual Assault. I appreciate the opportunity to testify today on this very critical issue for our nonprofits across the state.

Our Alaskan nonprofits depend heavily on state and federal grants to provide the services requested of them by their communities.

And in addition to these state and federal grants,

they do fundraising from their communities to ensure there are enough funds to operate at the levels necessary to meet the needs.

And while this fundraising is helpful,

it's also hard, and in many communities where economies are depressed,

the fundraising may generate only a small amount of money.

Fundraising dollars are the only dollars that can be kept by a nonprofit to build a reserve bank to be able to sustain themselves during a time that state and federal pass-through funds are not timely received.

Many nonprofits need every fundraising dollar they get to provide the services each year, so many nonprofits do not have a reserve bank of money to be able to carry them when grants and funds are delayed.

When the state enters into a grant agreement with a nonprofit,

the expectation is that those services began at the time the grant award begins.

When no advance or timely reimbursement is received, this means the nonprofit does not have the funds to pay the staff who are already employed and they're providing the services.

Prior to becoming the director of the network,

I was with a nonprofit in Fairbanks for 25 years.

Delays in payments and advances began in 2018.

The department we were funded through was going through changes. The name was

They were unable to get the grant set up for payment to be issued. I began providing services on July one, and when I had still received no payments in September and had exhausted all of my reserves, I was forced to set up a line of credit to make the payroll. A line of credit charges interest for each day that line of credit is used. It charges a fee to set it up, and it charges a yearly fee to keep it in place. None of the set-up fees, the annual fees or the interest fees are an allowable expense to a grant.

changed to the Department of Justice.

grant.

So I had to use fundraising dollars to pay this added expense created from the state's lack of payment. What I found out through that experience is that when we got the commissioner of that department involved in the issue, they were able to work with the department to set an expectation of how advances and payments were to work. And after setting that expectation,

the staff of that department have continued to ensure timely advances and payments.

This really is a matter of how departments prioritize their work, and by passing H.B. 133 you are letting all departments know that the expectation is timely payments.

I believe the same thing that happened with the department I spoke of will happen statewide, and there will not be interest payments, there just will be a prioritization of getting payments out timely, and this issue will be corrected. I urge you to support and pass H.B. 133. Thank you.

Great, thanks very much. Do we have any questions of the committee?

I don't see any. And so with that, thank you very much. Uh Repesentative Boehner, can you hear us okay, by the way?

No, sorry, sir. Just a moment.

Okay.

Yes, Co-Chair Foster,

thank you.

Oh great, thank you. I just wanted to make sure that if you had any questions, we could also hear you. So thanks for joining us, being on the line with us. And next we've got Mr.

Sander I believe it's

Shyvens.

Oh, Shyvens. Thank you very much. Looks like we had made a little bit of a different spelling on here. Also you're listed as Fairbanks, so I'm guessing you've flown in or maybe not.

Oh, Juneau.

Oh.

Okay, oh great.

Yeah.

Okay,

Absolutely. Can

well

you hang

thanks

okay?

for thanks for joining us and if you could put us on the record, and we can hear you great.

Absolutely. So my name is Sandro Scheibens. I'm here to testify in support of House Bill 133. I'm the CEO of Wassman and Associates. We've got 35 staff and we provide IT consulting. You may have heard of a system called BASIS. We worked on that system in the past and many other systems for the state. So we provide IT consulting services.

I'm also the managing partner of the Alaska IT Group,

a group of Alaska businesses that provide IT consulting services in the state. So pretty much all the contracts we have have a 30-day payment clause that we perform work on for the state of Alaska. And it was in the fall of last year that I was in Sitka for a conference where Representative Himschoot was talking about House Bill 133 when that caught my attention because

one of the agencies was 5 months late in payments. As Tessa just mentioned, we too have staffing needs. Of course, people need to be paid timely. About 80% of my cost is staffing cost. And so it's very important for us to get timely payment from state agencies. We absolutely recognize that state agencies are oftentimes understaffed themselves and they

Hmm.

run behind on a variety of activities. So there's never been

any feelings or bad will. We never blame the agency. But I do think House Bill 133 will really help encourage agencies' timely payments. I think all contractors from state need that. We've got Alaska staff, Alaska interests, and yeah, we'd like to get paid on time. So I hope House Bill 133 makes it, and we appreciate your support.

Thank you very much. We've got a question, Representative Hannon.

Thank you, Co-Chair Foster. Mr. Scheibens, I want to just reprise so that it's clear on the record. You're a private sector, for-profit IT company.

Correct.

And follow up,

Follow.

many of your clients though are the kinds of clients

that are described in the bill. They are non-profits, they're local governments, they're tribal entities who've gone to the private sector, asked for a contract for work for services instead of expanding their bureaucracy, and your private sector bet business has to have lengthy delays in receiving the contracted obligations from those because they're not getting the payment from the state.

Correct.

I think it's both. My understanding is House Bill 133 is for all contractors, not just for nonprofits.

Okay. And uh

Okay.

And—

Follow up?

Follow-up?

Thank you. I would uh emphasise working on the I_T_ systems for all government entities like our basis systems, if we're looking for upgrades, if we can't have contractors doing that for us on a regular basis, doing our updates,

keeping us current, we all become non-functional. Um and expecting the private sector to function without prompt payment

You know, when we talk about working like private sector, well, at most private sector, you're charged interest if you can't pay on time. If I can't pay my visa bill, if I can't make my mortgage payment, I have additional fees. So um thank you for sharing. And thank you for continuing to live in the district, not moving to Fairbanks.

Of course.

Of course.

That makes this nicer.

We wish you would though.

Okay.

Thank you very much for your testimony.

Next we're

Okay,

going to go to the,

Foster.

oh, yes, Representative Bynum.

Thank you. I had a quick question for the gentleman that just testified.

Okay, go ahead.

Thank you. Thank you very much for being here today, sir.

I was just wanting to know from your perspective of where you currently are versus where maybe you've been in other roles.

Your relationship with working with the state with grants and or working with the state through contracts,

do you see any difference in the terms of those contracts and how the agreements are set up for payment?

Mr. Scheibens?

Do you expand on difference?

Because I'm not sure what the difference is referring to.

Representative Bynum?

Yes, thank you.

So we have a lot of grants that the state will put out, and so we are basically,

you know, have a nonprofit or an organization where they're going to get a grant from the state to perform some kind of an activity.

And then the state also does contractual work where they solicit for work to be done, and then the company comes in and they sign a contract.

If you experience that there's a difference between the states engaging in those two separate activities in the terms of the agreements that are in place.

So my experience is primarily through— I mean, the way my company gets paid is through contracts, not through grants. But having worked on a variety of grants-related systems for the state, is they typically, they're managed very differently, and there's a lot more stipulations in grants I've seen than typically is the case in— I think contracts are simpler.

Should

the This

follow-up?

follow-up?

So

So when we talk about the grant part of it, is there ever a desire from the grantees to want to put language in their applications or in their grants that would have a term of payment from the state?

I think my predecessor is better at speaking to that because he's on the nonprofit side,

but I...

I would like to say yes because, like, I mean, there must always be payment terms specified in any type of contract or grant agreement, so I'd like to believe yes.

Okay.

Thank you very much for your time.

Thank you.

Thank you.

Okay, Representative—

Actually,

rep.

Actually, I do have a question, if I may.

Sure, Representative Gelvin.

I feel like you're a great one to ask these questions of because you have such an open,

vast experience with both sides of this discussion and equation. And I think that's what we're trying to get at. So I just wanted to ask you, whether you're a grantee or a contractor of the state,

would you expect the...

funds to be delivered to you at in in a way that was promised on either side or do you think there should be more flexibility if it's one or the other?

Mr. Scheibens?

In comparing grants and contracts?

Yes.

I

Again, I think I really want to refer to my predecessor because she's more on the nonprofit side, but what I hear her say and what my own experience is I mean, we have staffing payment needs.

Right?

Oh

So we need money and, and cash flow is everything. And so what you typically carry as a business is at least 1 month of cash for— you get paid a month later than, than you have to pay your staff already.

So you always have a cash reserve build up that's equivalent to about a month of work that you perform.

Okay.

On the moment the agencies go 30 days behind, now you need 2 months, 3 months, 4 months.

And so banks don't typically lend you money past 60 or 90 days. So you have this weird issue where things that are 30 or 60 days late are fine, but as soon as it turns 60 or 90 days, it becomes really problematic as a business. And I think that's— I don't see how a nonprofit would be different. I mean, they

Hmm.

may have some means of fundraising, but you're going to have the same issue as any business.

Thank you. That clears it up for me. Thank you very much.

Okay. Thank you so very much, Mr. Scheibens. Next up, calling in from the Kodiak LIO, we have Mr. Pat Branson. If you can state your name and affiliation.

Good morning,

Health Finance Chair Foster. This is Ms. Pat Branson,

and I'm a board member of the Four Acre Group and retired CEO of the Senior Citizens of Kodiak who operate the Kodiak Area Transit System and who also provides much needed home and community-based senior services to people in Alaska over 60 years of age.

I've spoken through directly with public transit and human service.

providers.

To get information on delays with grant agreements,

reimbursement processing and payments,

Department of Transportation and Department of Health grant agreements and late payments from these state departments have caused multiple issues with non-profits being able to continue to provide valuable services to Alaskans of every age.

After speaking with several transit providers across the state, not just in one area, this is what I

What I have found what's not working with prompt reimbursable payments being made for services that have already been provided.

Grant agreements are continuously delayed and being loaded and finalized into the black cap system that DOT uses.

For one transit DOT provider,

the grant extended from 2008-25 to the FY26 grant agreements were delayed and this amendment was not completed until September of 2025,

more than 60 days into the new fiscal year. So the provider could not submit reimbursable documents to DOT causing cash flow issues.

With the department

The—

with the Department

With health and senior service providers,

reimbursements are not the same process. It's not reimbursable for receiving grant payments, but those grant payments have been delayed.

At the beginning of the fiscal year when amendments are made and the payments are not made until after quarterly reports have been reviewed and then the payments have been submitted.

This is how delays have affected nonprofits, whether they provide services under DOT or the Department of Health.

statewide.

Late payments mean cash flow issues across the board.

Payroll is not met for some executive directors.

One nonprofit had struggles with utility shutoff notices.

Vendor payments are delayed.

One nonprofit has one half million dollars outstanding in receivables.

Shutdowns are threatened and not being able to continue services to some of the most vulnerable Alaskans.

Federal audits are affected and when told what can be done with these delays and non-payment, some providers have been told to take out of line of credit.

Passing House Bill 133 brings parity to nonprofits,

municipalities, and tribal organizations and allows nonprofits to continue to provide valuable services to all Alaskans and respectfully puts nonprofits in the same arena as for the for-profit entities in receiving timely payments.

It's the right thing to do, and thank you for the opportunity to testify on this important bill.

Thank you very much, Ms.

Branson.

I don't see any questions. And so next we're going to go over to Ms. Stephanie Bergland calling in from Anchorage, if you can state your name and your affiliation.

Hello, thank you co-chairs and members of the committee.

I'm Stephanie Bergland, the CEO of Thread, Alaska's statewide child care resource and referral organization.

THREAD is a 40-year-old nonprofit,

primarily a direct service organization,

and our largest sources of funding come from partnership with the State Department of Health and Department of Education and Early Development.

THREAD strongly supports House Bill 133.

While we work very closely with the state and are thankful for the partnership,

the grant process,

namely timely payments,

has been a longstanding problem impacting consistent and reliable early care and education support services.

Threat encounters significant delays and uncertainty surrounding payments from the state.

Over the last five years, it's been the exception,

not the norm,

that Threads grants and contracts are processed and paid on time.

Threat is a strong nonprofit business but needs reliable payment processes to ensure consistent and timely service delivery.

Over all, these issues disrupt and delay services needing to be completed in a shortened period and fully spent by June 30th.

The issue also affects thread clients.

Of the nearly 380 child care small businesses,

most are enrolled in the child care assistance program relying on state assistance payments to support their operations and business expenses. State child care assistance payment is paid as a reimbursement and has been inconsistent.

Child care programs work on very tight margins and need reliable reimbursement payments.

Payment delays put the sustainability of these child care programs at risk,

compromising the high-quality services they provide to families every day.

I strongly urge you to prioritize the passage of House Bill 133. Thank you.

Great, thank you, Representative Galvin.

Thank you. Thank you through the chair. Thank you very much, Ms.

Berglund, for being here this morning. And last night I shared some data around how many child care programs have closed.

Do you think that late payments may have played some role in the thin margins that

These organizations are already dealing with in terms of these closures.

Ms. Bergland.

Through the chair,

thank you, Representative Galvin.

Thank you for highlighting that.

Yes, we do have documentation and letters from child care programs that have closed.

Mainly,

you may recall the large local chain.

that we had here in the Anchorage and Eagle River area,

the Bright Beginnings,

and they very specifically noted that the inconsistency of late payments was one of the reasons that caused all five of their locations to permanently close.

So we have heard that anecdotally from others,

but have that documented from a few,

and it does contribute to the thin margins I mentioned.

Thank you.

This is for your question.

A follow-up, please.

Miss

Berglund,

if you would please send that to the committee, uh, for this bill so that we can have it on public record,

I think that would be helpful.

Uh, well, uh, I think what you just shared with regard to the documentation from comments given to you by Bright Beginnings, I think is what you said,

I think that would be helpful if you could please include that.

Thank you, I will.

Thank you.

I will.

Thank you.

Thank you.

Okay, thank you very much for your testimony.

I don't see any other questions. So next we're going to go over to Brittany Burkett calling from Fairbanks if you can state your name and your affiliation.

Hi,

Hi, good morning,

Mr.

Chair.

My name is Brittany Burkett. I am from Fairbanks and I'm representing Presbyterian Hospitality House.

I have been with Presbyterian Hospitality House for over 10 years and I have seen when the state follows up and pays or reimburses for the services we provide accurately and in a timely manner and I've seen when it hasn't and when it hasn't done that it has been incredibly stressful for the providers and then as well as us providing services for the youth.

I am in support or we are in support of House Bill 134.

33 due to the past experiences we've had with ASO not paying promptly and accurately as well as their currently grants that we typically receive have been reduced by over 75 percent right now the system is working and it's at least for us in our capacity and that is

Wonderful and it's honestly a relief and I think with the passing of House Bill 133 it will continue to have this extended working so that we can continue to provide these services for the youth and the families that we serve.

Ultimately I think if there's a continuation of services not being reimbursed in a timely manner,

sadly that's just going to trickle down into the...

You can say I believe that all these nonprofits serve.

Thank you.

Okay, Representative Hannon.

Thank you, Co-Chair Foster.

Ms. Bergen, I'm unfamiliar with the Presbyterian Hospitality House.

Could you just briefly describe what your agency or organization does?

the size and scope of its services.

Ms. Berkey.

Ms. Bergen?

Yeah, yes, absolutely.

Thank you.

So Presbyterian Hospitality House,

we're a residential treatment facility for severely emotionally disturbed youth.

We provide residential services to youth in the Anchorage-Watson area as well as here in Fairbanks.

We have a therapeutic treatment home and foster care homes in all across the state and we currently have

I would say upwards of 100 youth in our care and we are continuing to grow the need for services for these youth for this young men and women are needed.

We also have a program that we call Transition Independence for youth 18 to 22 to assist in youth that have previously been institutionalized or don't have the support of their home and community in the transition.

transitioning to adults where they can be out in the community and provide assistance one-on-one with with our direct care staff in terms of navigating public transportation or getting a job or working with public assistance so that they can have the support that they may not have in their home and community from our providers and so that they can be successful adults.

We have that program here in Fairbanks as well as in Wasilla.

Representative Pannen.

Thank you, Co-Chair Foster.

I am so sorry I did not recognize the scope and critical nature of the services that you provide.

Thank you for doing that.

You are one of the few programs serving kids in a residential way.

Boy, if we didn't have you,

I bet our corrections budget would continue to grow.

So thank you for continuing to provide services so vital for our at-risk kids.

Thank you. Thank you for your testimony.

Thank you.

Thank you.

Thank you for your testimony. I've got here also Ms.

Kaylee Morton, also with the Presbyterian Hospitality House.

Did you— I think you're calling from Fairbanks. Were you also wanting to testify, Ms. Morton?

Sure, I could just co-sign to what Brittany has also said, if you would like.

Um, I'll go ahead.

Go ahead.

Okay, my name is Kaylee Morton,

as stated.

I'm the billing director here at Presbyterian Hospitality House.

We are working with the most precious community members throughout Alaska.

Without our services,

these children could be left in dire and unsafe situations,

where the chairwoman...

add that our corrections budget would indeed continue to grow.

Asking providers to hold the financial burden for services already rendered longer than 30 days affects the services we provide.

Providers should not have to worry about if and when they may be reimbursed, but how can we grow,

protect,

and care for the communities we are serving.

PHH at one time had 1.2 million dollars in outstanding payments.

This is unacceptable.

Services were rendered and were not reimbursed in a timely manner or even consulted as to when payments would be made. With the unavoidable liability of subsidizing the state,

PHH was unable to hire new qualified staff,

grow our programs. We were enforced to change program location,

pull funds from reserves from other funding and caused a delay in our expansion and our new building.

That's affecting the care and the growth of the community we serve.

Upon learning that grant funds have diminished dramatically,

PHH is deeply concerned about how we are going to absorb that loss and still provide quality care for this fragile community.

We are looking at a 61.5 decrease in our grants.

For example, a grant we have is currently at $99,000. It will decrease.

decrease to $24,000.

However,

PHH has not seen catastrophic demise at the hands of late reimbursement.

PHH did have to absorb a smaller agency in Kenai that had suffered the fate of late payment.

We are watching providers close their doors.

Close their doors or limit services due to late or no payments while the communities we serve grow and continue to need services and support.

Thank you so much.

Thank you, Ms.

Thank you, Ms. Morton. I don't see any questions. And so next,

lastly, I believe we have Kyan Reeve calling in from Ketchikan. If you can state your name and your affiliation.

Yes, good morning, Honorable Chair and members of the committee.

Thanks for your service. My name is Kyne Reeve, the transit director down here in Ketchikan. I'm testifying in support of House Bill 133.

This bill addresses a real ongoing problem,

delayed payments from the state.

In Ketchikan,

transit is an essential infrastructure.

Last year, we delivered over half a million rides,

playing a big role in keeping our economy moving, and a lot of our system was recognized nationally.

nationally is the Community Transportation Association of America's small system of the year.

So we are a high performing system,

but we are operating within a funding structure that's just not functioning predictably and or sustainably.

Since about 2018,

we've experienced grant agreements delayed for many months at a time, reimbursements taking many months after submission,

and capital projects stalled for years due to administrative delays.

In some cases, funds have lapsed, even been lost to our state due to these delays.

For example, this year, our operating agreement wasn't executed until eight months into the fiscal year,

so we couldn't even request reimbursement during that time.

So this is really a funding issue. It's a timing issue.

And I do want to mention one key point as well.

The state of Alaska provides zero state match for rural transit, one of the few states in our nation that do not fund transit, yet the state controls the timing of federal funds.

That leaves local governments and nonprofits fronting the costs and carrying the cash flow burden.

HB 133 helps correct that by requiring timely payment, clear communication, and accountability,

and ensures that funds move when they're supposed to so services can...

This can continue without disruption.

We strongly support the bill down here,

and I thank you so much for your time.

Great.

Great, thank you very much, Mr.

Reeve. I don't see any questions of the committee.

Is there anyone?

Go ahead, Chair Foster.

Yes,

go ahead.

Oh, thank you, Co-Chair Foster.

Thank you through the chair to Mr.

Reeve.

Thank you very much for testifying, sir,

as Representative Bynum here.

I just wanted to say appreciate you bringing your perspective to the committee and the hard work that you guys are doing here in the community and keeping the transit system operational. So just want to say thank you for taking your time to testify today.

Thank you so much.

Thank you so much for observing.

Thanks for all you do. We sure appreciate it.

Thank you very much, Mr.

Reeve.

And is there anyone else in the audience who would like to testify?

Seeing none,

is there anyone else online who would like to testify?

We just got a council,

we just called in.

Oh, we have somebody else who just called in.

I believe Ramey Matyshevsky is here to do the fiscal notes for maybe DNR, I believe.

So yes, I'm seeing a head nod,

so I think that's the case.

And I don't believe there's anyone else who would like to testify, but if somebody else calls in here.

Actually, we'll close public testimony for now and we can always come back to this when we bring the bill up later.

So I'm going to go ahead and close public testimony on H.B. 133.

And just a reminder, if anyone would like to submit public testimony via email, they can do so by emailing us at house.finance at akleg.gov.

And so with that, do we have any other questions for the sponsor before we move on to, or actually,

let's see, we've got fiscal notes.

I was going to jump over to the next bill, but we've got quite a few fiscal notes. Actually, we've got 10 departments and 15 fiscal notes.

So we'll jump right into it here.

So first up we have the Assistant Commissioner for the Department of Health, Ms. Pam Halloran, and it looks like uh we have uh six fiscal notes if you could uh put yourself on the record. Thanks for being here today and um go ahead and

Describe the fiscal notes.

Okay, good morning. Uh Co-chair Foster, for the record, Pam Halloran, Assistant Commissioner for the Department of Health. We have a number of fiscal notes, they're all money notes, so I thought if with your permission I would do a quick overview of our methodology that we utilise in det in determining these notes, um and just to say that these numbers reflect our reality and they surely do not reflect where we want to be as a department. So

So, and in building our fiscal notes, we used a methodology where we did request positions for some of our divisions,

but if the penalties as we calculated them from invoice date to payment date applying the methodology in the bill, if it was less than the cost of the position,

then we requested money that would comprise of the penalty based on actual.

uh data from F_Y_ two thousand twenty five. So for three divisions we requested a position. We believe that interest would be a G_F_ only expenditure. So we wouldn't be able to use our federal fund sources to pay for fines and penalties. So that's why for some of our divisions it was much more beneficial to pay for a position to make sure that in the future we can pay timely

and leverage those federal dollars that way.

So with that, I will s

Let's see here. Representative Galvin.

Thank you, I appreciate you allowing me to ask a question about her very general statement, which I think I wanna make sure I understand y you're I think

being as transparent as possible here, and I appreciate that, but I d I just wanna make sure I heard you properly that um

This is representing the reality,

but not necessarily where you want to be is what I heard.

And by that, I just want to make sure we all understand here at the committee that they are really working hard in that department.

And unfortunately,

we couldn't hear,

I would just say for my own perspective,

it would have been nice to hear.

Five years ago, four years ago, three years ago,

two years ago, that there's some struggles in terms of having enough people power to process these,

whether they're grants or contracts or whatever it is, getting them out soon enough.

And so I just want to acknowledge that,

that I think many of us at the table, whether it's Snap or anything else, we're here to support you and make sure that you're aware that had you.

had the department made the ass I think that we've, all of us in a bipartisan way, have been there to um make sure you get your needs whether it's computers or people. And um so I just wanted that to be on the record.

Sure.

Thank you.

And we also have a comment from Representative Hannan or a question?

A question. Thank you, Coach Chair Foster. Ms. Halloran, I'd asked you about this uh when you were last here, so I wanna know if in developing these fiscal notes, you've taken to account the

the accounting positions and payroll services that are coming back to the department or are these based on the status and staffing you have now? Um so because if the budget and approvals go through you're going to have some accounting people return to your department, so.

Alright.

Ms. Halloran?

Alright. Through the chair, Representative Hannon, that's a

It's a very good question. The department will receive a total of 5 positions from Shared Services Alaska. We've actually requested 2 more. We plan to put one in every single one of our divisions, and we plan to put one within our fiscal section. We— these fiscal notes did not take that into effect. These fiscal notes were based off of actual data from FY25.

So they don't take into effect those positions.

Hmm.

We do not believe that the positions, when they went over to Shared Services Alaska, those positions are trained in a single function.

So

they're— so those positions are coming to us knowing how to process purchase cards, or they know how to process travel or invoices.

They're not coming fully trained, so there's going to be a transition period.

Shared Services of Alaska is working on training those staff and giving them exposure to all things before they send them to us, but they're still going to need to practice those things.

So we, we don't anticipate that will be an immediate

fix right out of the gate for us.

Representative Hannon, follow-up.

Follow-up. Um thank you, Chair Foster and Ms Halloran. With that, uh can I deduct or deduce that some of these where you're saying you'll need more staffing we're actually already covering those if our budget for Department of Health and that redistribution of shared services back to the agencies comes through. Not that they're

double accounted for because you have to d give us a fiscal note based on how you are staffed currently, but we have in our proposed budget

Mm-hmm.

uh approved in I think all departments subcommittee reports in the operating budget those shared services redistribution of staff. And granted there'll be a learning curve for everybody. But can I deduce that much of this fiscal note

The staffing will already be coming to you when

within a fiscal year should be up on step to do those jobs.

Ms Halloran.

Through the chair, Representative Hannin, thank you for the question.

Partially. In our fiscal notes, the positions we have requested are accountant threes, because in the accounting technicians that are coming to us in shared services Alaska,

they're actually

You know, paying the invoices within the accounting system. Accountant three's handle our very complex financial situation that we're in. The department has over two hundred federal programs and those programs have to be managed within the accounting system in a very specific way.

So these accounting technicians, by the answer is yes, I hope so.

But also the accountant threes are going to be the ones that are balancing the budgets and putting the money where we actually need it to be when we need to pay our vendors so we can pay them timely.

Thank you.

Thank

Okay.

you.

Okay, and it looks like you've got six fiscal notes. And so if you'd like to go ahead and kick it off.

For the appropriation behavioral health, the allocation is behavioral health administration.

Yes.

The control code is ILKOR.

Was that correct?

I haven't done this for a while. Moving on to the next fiscal note. The appropriation is healthcare services. The allocation is Medical Assistance Administration. The control code is MWHFW.

Okay.

And maybe on the first fiscal note, if you could just walk us through uh the impact of that. So I see there's um services uh if you could just

Absolutely.

uh maybe describe each fiscal note.

Moving back to the fiscal note, the first fiscal note for the Division of Behavioral Health, Behavioral Health Administration.

This division

on average is taking 46 days to pay its invoices, at least in FY25.

That didn't account for a position, so we requested $57,500 to cover the penalties.

Okay.

Also,

No.

I'm so sorry, I just want to note that we also have with us Representative Moore. Thanks for joining us, Representative Moore.

We have a question on that first fiscal note, Representative Josephson.

Thank you, Mr.

Chairman.

Ms.

Halloran, A.C. Halloran, so you're saying rather than asking for a body in this section within behavioral health to make this work, you just will pay a fine?

Is that the approach?

Through the chair, Representative Josephson,

that is what we're doing in this fiscal note.

A position would have cost more general fund than paying the fines.

So that's the methodology that we used for this particular fiscal note. We were considering the fiscal situation and choosing the lower dollar figure on the general fund spend.

Boy, that seems like a lose-lose.

Thank you.

I think there might be more questions for Representative Hannon.

Thank you, Co-Chair Foster.

Ms. Halloran, though, I'm going to go back to my original line of questioning,

which would, so let's presume in the first fiscal year of implementation, it's going to take a while to train that person and you're accruing fines.

But after a year, they're now up on step,

the systems are in place, and in the second year,

this would not be an ongoing cost because now we have caught up.

caught up with our backlog, and we are on a regular basis training and staff to a position that we're able to pay in a timely fashion.

From if things go well, that's the intention and plan, correct?

From—

Ms. Halloran?

Through the chair, Representative Hannon,

we absolutely want to pay all of our invoices on time. We built our fiscal notes based on FY 25 and what we know now.

Representative Galvin.

Thank you, Co-Chair Foster.

Was there any consideration when you were walking through this, and I understand where your mindset was, but in your kind of going over this, I'm wondering if the multiplier effect of paying fines and what would that, how would that affect these multiple organizations who were now either not able to deliver their services for a period of time, perhaps losing staff?

aft.

And but I think more importantly some of them even closing down as I've just heard which shocked me. Um and what that multiplier effect then would mean to the whole of all of this body of work right.

And I I know you are aware of what I'm talking about, um even if it becomes lawsuits and how much more expensive all of this would be if we end up unfortunately

you know, not delivering a service that is super critical. Um just wanted to hear your thoughts on that.

Ms. Halloran.

Through the chair, Representative Galvin, um I should probably go back to the methodology that we used to build our fiscal notes.

Mm-hmm.

Um at the time we built the methodology we s we cho chose the entire arena of our invoice date to payment date. So the invoice date to payment date

is reflects our entire arena. So that is payments to the telecom companies. That is payments to contracts. It only just recently did we integrate our grant system into IRIS. And so those, that data specifically to non-profits is not truly reflected in our fiscal notes. It's the data of all, our entire arena, anything in our accounting system that has an invoice date and a payment date.

In regard to our granting agencies,

What I can say and what I ha wish I had said last time I was here in front of you in regard to this fiscal note is that I would love to know. I know that they're afraid to call, but I would love to know if we're not paying them timely. Because we can fix things, we can I can nudge and I can prod from my seat. And I um so the situations that I heard this morning from our testifiers was very alarming to me.

Our grants are advanced. And so if we I realize that there's a time that it takes for them to do a report for the prior quarter and have that report approved before we can send the next quarter advance.

But if there's problems,

I just I

Please, I would like our nonprofits to call me and let me know.

Representative

Thank you.

Gelvin.

Thank you. I'm not sure if there is a system by which you are able to track how the timing is going along.

There must be some system because you have a sense of what the annualized interest rate might be versus having a body there,

a person there to do the work.

I hope that there's a system wherein someone could report to you what's happening.

I mean, it could be that they've lost hope, I guess, that they're going to get a response. I'm not sure.

But I know that you're busy and likely overwhelmed. And perhaps this is becoming more of a snowball effect as it.

continues to grow, I'm not sure. But I've wondered my question is what is your system by which somebody you're keeping track of

Hmm.

the timeliness of these payments?

Ms. Halloran,

through the chair, Representative Galvin.

Being that our grant system was just interfaced with the IRS system just within the past month,

Okay.

I'm just getting access to that data and I will have access to that data and I will watch.

I will roll that in. Last hearing I spoke about the scorecards that I'm doing for divisions now where they have eyes every month on their timely payment or non-timely payment and they're appreciating that so they can.

coach their staff and they can work with their staff and find those gaps. So we're trying to f find transparency within the department, but we also now have access to new data specific to grants.

Thank you.

Okay, representative Stout.

Thank you, Co-chair Foster. Through the Chair to Ms. Halloran, thank you for being here. I am probably going to be a little less polite than Co-chair Josephson was about the fiscal note. The fiscal note says

Hey, it's just cheaper for us to pay interest than pay you on time. And I think I won't speak for the sponsor or the staff, the sponsor, but I believe the objective is the bill is to sufficiently motivate the department to to pay its bills on time. That's why there's a penalty.

So my question to you is if I make the penalty uh thirty five percent interest rate, is that sufficiently motivating you to submit a fiscal note of how you would actually deliver?

of the payments to contractors and vendors on time. Is it a cost based motivation? 'Cause when I see a fiscal note that says it's cheaper for me just to pay penalties, um I feel like maybe the incentive structure of the bill is not adequate through the chair.

Through the chair, Ms. Halloran?

Through the chair, Representative Stout, if, if the penalty was higher, you would likely very much see a position on the fiscal note as opposed to interested.

Yeah, follow-up, Mr.

Co-chair.

Representative Stahl.

And, you know, I'll kind of reiterate my feelings on the bill.

I—

we shouldn't need a bill.

To pay our vendors on relatively time and you know that's different in the private sector Sometimes it's net 30 sometimes it's net 60 sometimes it's net 90 obviously the state of historically has been net 30 with most of our other vendors and I want to do what is

required to help you guys

pay more reliably, more consistently, and ideally on time. And I really do not want to vote for a bill that puts a law in saying I need to pay bills on time.

I really do not want to do that.

And I'm just going to reiterate,

it's just, I understand that it's cheaper to pay interest than it is to hire somebody,

but I just think that's a terrible message that we're sending to our vendors.

Um and I hope that maybe uh before this bill leaves the committee we we'll get a fiscal note that says, hey what what do we actually need to resource to kind of do those things. Thank you.

Okay, thank you. Ms. Halloran, any comments before we move on to the next? None.

I don't see any other questions. So I think that's the first fiscal note. If we can move over to the next one which is the Medical Assistance Administration.

Okay.

We're moving on to the health care services appropriation. The allocation is Medical Assistance Administration. Control code is MWHFW. This fiscal note is $136,200. Again, we're not asking for a position

because it was less GF to pay the interest than to request a position.

The division is currently paying their invoices on an average of 39 days.

Coach here, Foster.

Representative Bynum.

What was the fiscal note number?

The OMB component number is 242 with a control code of MWHFW.

Thank you.

Okay. And next we've got a question, Representative Sharkey.

Thank you, Coach Foster.

So when I, I mean, these, the, both the first fiscal notes, uh the first fiscal note and the second fiscal note are both Department of Health, and if you add up the fees that we're saying or that we should be paying because they're cheaper than a position, it the the fees become more than a position. Wh what prevents us from hiring someone and being able to process payments in both these allocations?

Ms. Halloran?

Uh through the chair, Representative Schroge.

We didn't consider that adding,

I mean doing the d the the sum we we did our fiscal notes by division. You have a very good point

that we could circle back and we could look at the overall cost and look at positions at the department level.

Follow-up?

Follow-up.

Yeah, thank you. Just going through, I mean there's another

appropriation that also has a forty thousand in fees, we'll get there in a moment, but just it it would be nice to have maybe these fiscal notes reconsidered by the departments, because to representative Stapp's point, the point is to pay timely and it just doesn't make sense to me that we would pay more than a position in fees across these different appropriations and still not pay timely. So thank you.

Representative Tomaszewski.

Yes, thank you, co-chair. So within this department, how many vacancies for this particular— who would do this work? How many vacancies do you have?

Ms. Halloran?

Uh through the chair, Representative Tomaszewski, I would have to get back to you on that. I don't know exactly the vacancy factor. I know that they've been recruiting and they've had significant turnover, but I can't give you the exact number at this time.

Yes. So for each— follow-up. Follow-up.

Okay.

For each of these, I would like to see and consider how many vacancies you have in these divisions that would be processing this paperwork, and I think that is pertinent to the discussion here. So yes, I would like to get that information. Thank you.

Through the chair, we would be happy to follow up.

Okay, next

fiscal notes.

The next appropriation is the Division of Public Assistance. The allocation is Public Assistance Administration. The OMB component number is 233. The control code is O_M_T_D_M_ This fiscal note is in the amount of $162,500.

We're requesting one position here. The Division of Public Assistance is processing its invoices based on FY25 data on an average of 65 days.

Okay.

Moving on to the Division of Public Health,

allocation Public Health Administrative Services,

OMB component number 292, control code

I

IWUL. Is that first one an I?

I think so.

The total dollar amount is $162,500 for the Division of Public Health. We're also requesting a PCN. Public Health is paying its invoices on average in FY25, an average of 33 days.

Moving on to the Division of Senior and Disability Services. The allocation is Senior and Disability Services Administration. The OMB component number is 2663.

The division is requesting $40,700.

Within the Senior Disability Services in FY25, they paid their invoices on an average timeline of 45 days.

Representative Tomaszewski.

I miss the control number code on that fiscal note.

Ms Halloran.

ISXKG.

I think that's ISXKG.

Oh, yes sir.

Thank you.

Okay,

apologies.

Next fiscal notes.

Moving on to the Departmental Support Services, Administrative Support Services,

OMB component number 320.

The control code is UNCP. We're asking for a position here at $162,500 for the Department Support Services. They have an average payment timeline in FY25 of 98 days.

Representative Tomashevsky.

Thank you, Co-Chair Foster. That seems like a significantly higher average in days of getting those contract invoices paid. Is there a particular reason for that?

Ms. Halloran?

Through the chair,

Representative Tomaszewski, yes, there has been significant turnover, 100% turnover within the department support services administrative group. There's currently one vacancy, but all staff are brand new within the past 6 months.

Jesus.

This data was for last year, and so that doesn't really help explain that situation, does it? So—

Follow-up. I think it does actually give quite a bit of insight. I mean, if you had 100% turnover of that, did you just tip the building up and drop them all out at the same time, or what happened there?

The reason why, through the chair, representative

Tom Laskowski,

the reason why I'm second guessing my response is that we've had turnover in the current fiscal year.

So the pro and the data that we built our fiscal note off of was the prior fiscal year.

And so and so we did, there was not a turnover problem. The turnover problem is related to this fiscal year,

the data is built on last fiscal year.

So, so there was still a problem with the division of support services.

that we're looking at resolving.

I can't speak to exactly what the contributing factor was except for overall staffing capacity,

very complex financial structure within the department are both contributing factors. Department support services

InRate is responsible for a number of budget components, all the contracts and payments related to information technology,

public affairs,

the office of rate review,

our quality assurance group.

So they do that work on top of running a very complex interdepartmental chargeback mechanism for inter and intradepartmental chargeback. So there's a significant body of work.

we have addressed some of that in FY26. We've added an accounting sh position to this unit. Um we have new staff they're coming on board they're learning their job. Things are looking better.

A follow-up.

Follow-up.

Follow-up.

Follow-up.

So you know the private sector, um when someone doesn't perform they just they just um

are gone.

Do you, in your department, are you able to, I mean if you see gross incompetence on a employee,

are you able to remove that person from their position or is there something holding you back from maybe releasing those who are not performing?

Is

We

that one?

Yeah, through the chair, Representative Foster, we have a unit within the Department of Administration Division of Personnel called Employee Relations that we work very closely with when we have performance issues with our employees. And there is a structure for that, a tiered structure that takes us through different letters and different weights that we can manage. But we would, in those situations, we would consult

with our, with the Department of Administration. Follow-up.

Follow up, follow up. So it sounds like a lengthy and complicated process to work through those types of issues.

Do you find that a difficult process to go through?

Is it, I mean, do you have good resolutions when you get to the end of those processes?

Ms. Halloran?

the chair representative Tomaszewski it's

It it it does feel lengthy sometimes,

but it's important to give the employees every opportunity to be successful.

So we start with what's referred to as a letter of instruction where it clearly is not a punitive document. It doesn't go into the employee's record and it basically clarifies our expectations and allows us to to reiterate our expectations and set a timeline to see improvement.

Then at that point we can move on to higher level disciplinary action. But it's important to give the employee every opportunity to succeed.

Okay, just a quick follow-up.

Representative

Tomaszewski.

Kind

of

changing gear

on the 98 days. So your contract invoices were paid within 98 days. What does the contract say when you're dealing with a vendor, you have a contract?

You're saying in this fiscal note says it's paid within an average of 98 days.

What does the contract say that those services are supposed to be paid for?

Is there a timeline?

What timeline do we have in your current regulations?

Ms. Hellerin?

There are current regulations, and I believe they're 30.

Days.

So that is a net 30 on this particular—

Right. There is Section 3705.285 for payment for state purchases.

Quickly scanning this document, it says 30 days after receipt of proper billing.

Okay, thank you.

Okay. Any further questions on this fiscal note? And let's see here. I think— does that—

that is the last of the fiscal notes, Ms. Hellerin. Any further questions for Ms. Hellerin before we move on to the next?

Appreciate you being here. Thank you so much. And so with that, I do want to take a quick, not an at ease, but just a moment to check with the Committee, we have—

we've got 15 fiscal notes, so we just dispensed with 6 of them. So we have a little ways to go on this bill, but we do have another bill up today, and that is HB 91, the marijuana tax bill. And we do have 8 amendments for that. Our allotted time this morning was from 9 to 10 a.m., so I was hoping to at least get through the fiscal notes. My question to the committee is, are folks— do they have other commitments

and they need to leave, in which case we would try to maybe take up the bill this afternoon, or would people like to power through and try to do both this bill and the amendments on the marijuana tax bill?

Mr. Chairman, I'm free.

I'm free for you.

Okay,

Okay.

Okay, and if folks just happen to think of something, pass me a note. We won't decide, I guess, right now, but

maybe as soon as we get through the fiscal notes. Representative Tomaszewski.

Co-chair, it looks like we're missing quite a few folks.

Yeah, Representative Bynum and Moore, are you still online?

Yes, Co-chair Foster,

I am here.

Okay, and Representative Moore, are you there?

Good afternoon.

I am here present.

Okay.

I was just doing a survey of the committee to see if folks were able to stay through amendments for the next bill or do folks have other commitments or either of you able to stay on for

the next bill?

Co-Chair Foster,

this is Representative Bynum.

I'll make myself available for whatever's necessary.

Co-Chair Foster,

I'm also available for whatever is necessary today.

Okay.

Sounds like we're going to try to power through and get through the amendments on the next bill this morning.

So with that, next up in terms of fiscal notes for this bill,

HB 133,

we've got Military and Veterans Affairs Legislative Liaison Ms.

Angela LaFlamme, if you could please come up and put yourself on the record and walk us through your fiscal notes.

Thank you. Good morning. For the record,

Thank you.

Angela Flam,

Legislative Liaison for Department of Military and Veterans Affairs.

I'm hoping you got my amended fiscal note over the weekend. I didn't see it online,

but I'm looking at control.

Allocation for Homeland Security and Emergency Management fiscal note with control code MREDWD. Sorry.

That's what we have.

Okay. Awesome.

So just as a note,

this fiscal note was amended to reflect the correct fund source.

When I updated the fiscal notes from 25 to 26,

I didn't catch that.

So it's actually instead of previously showing for general fund mental health.

Health budget,

it's actually CIP receipts for one of those lines.

So in our fiscal note,

we are requesting four additional staff as part of our grants administration section within the division of Homeland Security and Emergency Management due to the way that we process disaster response grants and federal grants that we receive from a variety of federal entities.

And I can, I'm happy to answer questions or go through anything additional.

Okay, representative Hannon.

Thank you, co-chair Foster.

Ms.

Laflame, how many grants administrators do you currently have in that department?

Thank you. Through the chair, Representative Hannon,

we have seven currently in the grants administrative section,

no vacancies, and one supervisor that is over that section as well as the administrative support.

section within the division.

Follow

Oh,

-up?

and in the redistribution of shared services,

are you getting back some accounting people and would they be able to serve in the grants administration positions?

Thank you through the chair Representative Hannon.

The Department of Military and Veterans Affairs was not part of shared services prior to this due to our master cooperative agreements with

With the National Guard so many of our all of our accounting positions have been in our department and we are not getting any back

And for

Follow-up.

So it seems to me in the quick at-the-table math,

it is a 50% increase in your grants administration office.

And I am just wondering

if you believe this is really a 50% increase in your workload, because the grant is already there, so, you know, the department before you chose to give us details about

how long it takes them to pay them. I understand that much of yours is federal grants coming in and then distributing. So is there a substantial backlog from the feds to you that creates this 50% increase?

increase in the workload for that distribution.

Thank you. Through the chair, Representative Hannon, we do get compounded with processing grants depending on how many disasters are going on at the same time.

We prioritize payments to individuals through our individual assistance programs when we have disasters,

and that creates cascading effect for other grants. The way that the legislation is written,

it's a process that is required when you receive a payment request.

It doesn't clarify that that request.

That request must be fully complete.

We have many of our grants are very complex and require a lot of documentation for federal reimbursement. And that's typically what takes a long time to process and make sure that we have a complete package.

Before that,

we can take that to the federal agencies to request reimbursement for that.

Okay, Representative Tomaszewski.

Yes, thank you.

So do you have an average

of how long it takes to pay your grants? I don't see it in this

fiscal note like I saw in the previous fiscal notes. Do you have averages?

Yes,

averages?

thank you.

Representative Tomachewski through the chair,

we don't.

We,

because of the way that we process and prioritize depending on what's happening at any given time,

that was more information than I could kind of tease out of my team right now with ongoing disaster response that we're doing right now.

So we just had to have a best guess of we know that we're.

We know that we do not pay within a 30-day time period depending on how many grants we're processing at the same time.

A follow-up follow-up? Do you have an estimate?

Is it like four months or I mean, or is it just like, well,

we get it in a month and a half?

You can kind of get a feel of.

Yeah, through the chair represented to Hamacheski, it really depends on the type of grant that we're paying.

As I stated,

our individual assistance grants are going to be prioritized and we try to get those out the door as quickly as possible.

It's not typically the payment process that takes.

takes a long time. It is that sort of documentation and making sure that everything is recorded properly before we can submit that payment for processing.

So that's why it's kind of hard to tell how long some are going to take longer than others based on how many times we have to go back and forth to make sure that we have all the proper documentation before that payment can actually be submitted for processing,

if that makes sense.

And follow up.

And so do you, I imagine you probably keep pretty good track of the people that are working on these grants.

Do you have key performance indicators that you...

have built in to make sure that everybody's doing what they're supposed to be doing and when you find some that maybe are lacking do you have a disciplinary set of standards that you go through and do you have an ability to release those who are not really performing or maybe not able to perform to do the jobs that they have

Thank you through the Chair Representative Tomachewski. We do, we follow the same.

employer relations guidelines for classified positions within our department and so if there were issues it depends on where an employee is at within the hiring and a process being brought into a position so depending on the range of the position there's a probationary period if we and issues can be addressed within that period and if

If we do not meet a certain level of expectation at the end of that period,

that person can be let go.

Once that person becomes a permanent employee,

there are additional ways to address disciplinary issues.

However,

that does become more lengthy due to working through the union process and making sure that everybody is cared for.

Thank you.

Thank you. Okay. Next up, I've got Representative Galvin and then staff. Representative Galvin. Thank you, Co-Chair Foster.

Thank you um co-chair Foster through the chair. Uh thank you for being here and thank you for your important work. And it sounds like you're doing it very much on a shoestring during the big disasters where all of a sudden you're flooded. And I appreciate that you're prioritising the individual disbursements first very much. What I don't really have a picture of, because I'm not in your shoes, is the organisations that are also serving the individuals, I imagine,

imagine are the ones who are perhaps getting delayed payments because their paperwork, if you will,

is much more extensive to work through,

or maybe that you just simply don't have enough staff at that given surprise point.

And so my question is,

if you would give us a sense of

who the organizations are who may not be receiving payments within,

let's say, 30 days and what those organizations are offering during a post-emergency time, if you could paint that picture a bit.

Absolutely, for the record, Angela Lamb through the chair,

Representative Galvin.

It can depend.

So in a disaster response and recovery situation,

we're typically going to be working with the local municipality,

city,

community government.

They're typically going to be the ones who are going to be receiving those grant dollars from the state in a disaster response situation.

Most people understa most most organisations understand that these our grant programs are primarily reimbursable and if it does become a federal disaster that does add extra layers of complexity to that process and so

There are some grants that we have that nonprofits or non-governmental organizations are eligible for.

Certain ones,

there's criteria laid out for that on who's eligible for some of those grants,

but they're all federal pass-through grants.

And so again,

that process for reimbursement, it's reimbursable and typically requires a lot of paperwork and a lot of times.

Those are going to be towards the bottom of processing when we're doing active disaster recovery response.

Follow-up. Follow-up.

Thank you. So when I think about Halong and Murdoch and other ones where all of a sudden you're flooded with the work and

I appreciate, again,

the immediate disbursement to the individuals. I also appreciate why AML would care about this bill because it's asking a lot. Although for those munis or larger organizations that have a reserve,

then they likely can float for a bit.

My question is,

is there an organization that comes in to help you with some of this work at this time?

I'm I it would make sense to me that there may be if there's a federal disaster that they could come in and help you with the processing of this work but I I don't know what that entity would be and I just wondered if that's possible in lieu of or in addition to the extra fte's that you're asking for here.

Thank you through the chair representative Galvin.

I mean we do work with FEMA but they have their own processes that you know in managing things so I don't there are organizations that we work with on a contract basis so like you know

Yes.

for example for sheltering we have a contract with Red Cross and they you know manage their processes and are the experts in certain things so

I don't know that there would be an organization or contracting.

We do have contracts with some entities who can do some of the work for us,

especially when it's like damage assessment type things, but not really the actual processing of those payment requests or reimbursement requests.

Okay, thank you.

Representative Stout.

Oh, thank you, Co-Chair. Okay, I'm trying to kind of mentally think of the mechanics of this disaster management system you have through the chair. So I guess my first question is how long is just the federal process on doing a grant, and

is that affected by our current timeline? So for example, if I say you have a 30-day payment to a vendor, and you're getting federal money, maybe we have to match and there's a pass-through, what is the actual processing time on that, and does it affect our ability to pay promptly? Through the chair.

Thank you through the chair, Representative Stapp. So

Our applications for reimbursement submitted to FEMA don't have a timeline.

So we have a certain period of time that we have to submit those to FEMA,

but there's not a certain period of time where FEMA turns around and pays us for those.

So that's sometimes why we have.

disasters

Yeah.

open for multiple

Yeah.

years.

Yeah, follow-up, Mr.

Kachur.

Follow-up?

So on that, so you're submitting this, so let's say we submit the paperwork to FEMA, we want to do this, and they just don't get back to us. Are you going to be penalized under this bill for not having a deliverable? Through the chair.

Um thank

you through the chair representative staff there is language in the current bill that does state that it's payment within 30 days of receipt of the federal funds but there is a portion of the legislation that also allows for a penalty if a entity is not notified within eight days of their payment request

that then interest can be accrued at that point and that would be the concern that we wouldn't be able to process applications or payment requests within eight days to meet that notification that there may be a delay in payment.

Okay.

Uh, follow-up, Mr.

Co-Chair.

Follow-up?

And I apologize if this was just asked a moment ago.

I was trying to read the statute book regarding the existing contractual payments.

Are you subject to that?

um through these disaster grants already through the chair.

Through the chair representative staff, yes. All of our contracts and every— all of our payments within the department are subject to the regular 30-day payments.

Um in thought?

Follow-up.

And apologize if it was asked a moment ago too. Have you been paying a lot of interest on those payments through the chair?

um through the chair representative staff now.

Through the chair, representative staff, no.

Okay. Alright. Um thank you.

Okay.

All right. Thank you.

Okay. Any further questions for Ms. LaFlamme? Seeing none, thank you very much.

The next fiscal note that we have is— let's see here— from the Department of Family and Community Services. The senior policy advisor is Chrissy Vogli. If you could put yourself on the record and walk us through the fiscal note.

Good morning. My name is Christy Vogeli. I'm the Senior Policy Advisor for the Department of Family and Community Services.

The fiscal note I have in front of me is for our departmental support services OMB component number 3305, control code NRG08.

Yes, let's

And

do it now.

let's see here. I think, just make sure everybody's got that. I think we're okay. And so go ahead.

Wonderful.

Wonderful. So we have a zero fiscal note.

Currently, the average length of time it takes for us to issue payments is 10 days.

So we feel that the 30-day deadline is well above what we currently do and we don't anticipate any costs.

Great.

Uh go ahead, Representative Galvin.

Yes, I would love it if you would please write that instructional manual. And thank you, thank you, thank you. I know it's so hard for many of the different departments we're hearing from. I'm not belittling the work that they're doing. They're doing very hard work, but golly gee, it's time to celebrate when we're seeing government

on time, and so I'm just so grateful. Thank you. Thanks for some good news today.

Woohoo!

Any other questions?

Seeing none, thank you very much.

Thank you.

Also with the Department of Family and Community Services, we've got Ms. Hannah Lager. And— oh no, we don't. Okay.

Is she online? Maybe she is online, I believe.

And she's Commerce.

Okay.

I've read

Hello.

Oh, my script is a little off today.

Ms.

Honolager,

I know that you're with Commerce.

Oops,

now the script was right.

If you could go ahead and put yourself on the record.

Perfect.

Perfect, thank you. For the record,

my name is Hannah Lager. I'm the Administrative Services Director for the Department of Commerce,

Community,

and Economic Development.

Our fiscal note is for component number 1028,

control code E-L-C-A-W.

It is a zero fiscal note. We,

of course, endeavor to pay all contracts on time and grant payments,

current averages under 18 days for those.

Okay, do we have any questions of the committee representative Galvin?

I'm just not sure if you can hear me clapping, but I am, and I'm saying thank you.

Good news again.

Thank you.

Okay, thank you for your presentation of the fiscal note.

Next, we'll move over to the Department of Labor,

and it looks like that is Mr.

Dan DiBartolo. If you could put yourself on the record.

Yes, thank you, Co-Chair Foster and members of the committee.

My name is Andy Bartolo.

I'm the Administrative Services Director for the Department of Labor and I am referring to a fiscal note for OMB component number 340 for Commissioners Office Administrative Services that is control code QB as in boy,

E as in Edward V as in Victor G.

Our department has a zero fiscal note.

My costs that I explained in the analysis section were based on if this bill was in effect in FY25 when I looked at our average aging of our contracts over contract payments,

we are at just about 34 days.

We were just missing the mark.

for the 30 that this bill targets.

And so I indicated that honestly we can make internal adjustments to make sure that we're under 30. We are indeed having shared services positions coming back into the department and we're reworking some of our processes to ensure that everything flows cleanly.

The other part of this is of course granting.

I if indeed we were to face any kind of future penalty or interest related to grant dollars we would pay that out of general funds out of this component within commissioners office administrative services the reason being is many of our grants are federal and we can't pay obviously use federal dollars for penalty and interest however my goal is to just ensure that we are noticing award at the beginning

I—

beginning of the fiscal year and then after we notice award for those grants that once payment is requested as this bill indicates that we are hitting within the 30-day target and we believe that it's absolutely achievable by the time this bill is enacted.

Okay,

Okay, thank you very much. I don't see any questions,

so appreciate your being here.

And next up we have, let's see, I think the rest of— well, actually, we've got two.

Before we go to Mr.

Anderson, DNR, we've got Remy Matushowski,

if you could put yourself on the record.

Good morning, Co-Chair Foster.

For the record,

my name is Randy Matyszewski. I'm the legislative liaison for the Department of Natural Resources.

The fiscal note I'm presenting today is for OMB Component Number 424.

The control code is WVWHX.

The support services division does not anticipate a fiscal or operational impact with the implementation of this bill,

and we expect to have our policies implemented and finalized within 180 days of the passage.

We currently routinely hit the 30-day mark on this bill, so we don't anticipate any impacts.

Okay, thank you.

I don't see any questions from the committee,

so thank you for presenting that.

Next we've got Department of Public Safety,

it's Diana Thornton.

Hello, this is Diana Barton, Administrative Services Director for the Department of Public Safety,

and I am speaking to fiscal note control code CYFOZ for OMD component 525 for the appropriation statewide support for Administrative Services.

The Department of Public Safety does not expect a cost to this bill.

It doesn't create any new programs in the department or create any new enforcement activities.

We are currently averaging about 10 days for our payments and we don't see any concerns with compliance as well.

Okay, Representative Hannon.

Thank you Chair Foster. Um Ms Thornton, does the Alaska Council on Domestic Violence Network grants comes through the Department of Public Safety?

Through the Chair, Representative Hannan, yes they do.

Follow?

Representative Hannon.

Um

Your testimony regarding this fiscal note is incongruent with testimony we've heard from the recipients of those grants, that they on a regular basis receive substantive delays in receiving those grants.

Can you help me reconcile that?

Ms. Thornton?