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Okay. I will call this meeting the House Finance Committee to order. Let the record reflect that the time is currently 9:17 a.m. on Thursday,

April 9th, 2026. And present today we have Representative Allard, Representative Stapp, Representative Moore, Representative Co-Chair Schrage,

Co-Chair Josephson, Representative Galvin, Representative Tom Szeski, Representative Hannon,

myself,

Co-Chair Foster. And just a reminder, folks commute their cell phones.

We have only one bill in front of us today and that is House Bill 133, payment of contracts by a representative of him shoots.

Uh so with that uh let's see we've heard the bell two times. We've taken invited testimony, public testimony. Um we've reviewed the fiscal notes. Uh we do have one amendment this morning uh for the bill. If we could have Representative uh Himschoot uh come up as well as her trusty staff Ms. Ella Lubin. And if you could put yourself on the record and uh just give us a brief recap of the bill.

Thank you, Chair Foster and uh

I'm Rebecca Himshoot, House District two. With my staff member

For the record,

Ella Lubin, staff to Rep Himshoot.

and House Bill 133 is basically a good governance bill.

The bill seeks to set a payment standard to match the standard that we already have in statute for private.

Um contractors providing public works for the state of Alaska and so this would bring the same payment requirements to our state government contracting or providing grants to tribes municipality or I should say tribal organizations municipalities and non-profits.

Thank you so very much. Before we go into the amendment, just want to make sure, do folks have any questions?

Seeing none, Representative Hannan, would you like to make a motion for your amendment?

I move Amendment 1,

Thank you.

Chair

Yeah,

Foster.

I'll object for purpose of discussion. Was somebody—

I thought I heard my name.

Representative Hannan.

Thank you, Co-Chair Foster. Um Amendment 1 addresses concerns that we talked about here at the table and the sponsor is supportive and encouraging of,

which is um to add

A report due to us from the departments about

how long it is taking them to pay contractors. We had in some fiscal notes a variety of dates, but we don't have them from all departments, so we don't have the comprehensive information of the breadth and depth of the problem. Um it continues

Except for that new section being added, the report to us, which has an immediate effective date starting in the new fiscal year, and then a report to us due in January. The rest of the bill has delayed implementation till twenty twenty seven. That continues that of that change was made in state affairs, but it continues in this amendment. So compliance and the carrot stick

that the bill would implement does not go into effect until 27, July first of 2027. And that's the summation of the amendment.

Representative Josephson. Yes.

Representative Hannan, the current version, the state affairs version, says this act takes effect July 2027. So what did we change on the effective date?

So what did we change on the effective date?

On the pen end.

Nothing, uh nothing but

In the drafting, my understanding is they wanted it included because we were changing the sections and the renumbering.

Okay.

So for the stick portion of the bill,

penalty paid by agencies not compliant, that is a year out, FY '27, but the report has an immediate effective date.

Okay.

And just for the record, we also have with us Representative Jimmy.

And do we have any questions?

Okay, Representative Tomaszewski.

Yeah, thank you, Co-chair Foster. So I believe when we talked about this bill at the last hearing, we were talking about extending that effective date of the overall bill for two years.

I thought I heard the sponsor of the bill say,

but then it's this hasn't changed it. So I understand there's we're putting in a

report that effects that is effective immediately but I was under the impression that maybe we wanted to back off the effective date of the overall bill by two years so maybe you can clarify that

Representative Humphrey?

Thank you, through the chair.

Thank you for the question,

Representative Tomaszewski.

What we're hearing is the departments are already aware of the situation, and so delaying the remedy is is not really necessary. So by adding the report that allows them to sort of I don't know what the right term is to organise themselves to be able to come to us if there are additional asks that they have in order to meet the the intent of the bill. And so delaying it two years is just unnecessary.

Okay, thank you.

Further questions?

Rebecca,

or sorry,

Representative Henshoot,

do you have any comments on the amendment?

Chair Foster,

Chair Foster, no,

we are supportive of the amendment.

Okay, seeing no further comments or questions,

I will remove my objection. Are there any further objections?

Okay, seeing none, um well I think that takes us through the entirety of the process for this bill. Um if it is the desire of the committee, I would entertain a motion to move the bill out of committee.

Coach McAllister,

I move House Bill 133,

Work Order 34-LS0114 backslash S_ out of committee as amended with individual recommendations and attached fiscal notes.

Okay.

Object.

We have an objection. Would you like to speak to your objection, Representative Ballard?

I appreciate the bill, but the fiscal notes are outrageously high,

Sure.

and being on finance and trying to cut a few things here and there,

I wouldn't be able to support at this time.

Representative Stout.

Yeah, thank you, Coach Foster.

Yes, this is a tough bill. I think it's a good bill, actually. I mean, I think the intent's in the right place. I think we should pay our bills on time.

I know Rep.

Ballard to my left kind of mentioned the astronomical cost, uh which is sad because that shows you how bad we are with not paying our bills on time. That's why it costs so much money. Um I will say, you know, I I just

I think that because you have departments that are basically saying they're not gonna do this and they're gonna just pay a fine, if you pass the bill what'll end up happening is they will prioritise the big contracts they have and they will pay the smaller people, uh the non-profit, small non-profits, Meals on Wheels and stuff like that at the very end. So they will probably pay them

even more delayed than they are currently. Um but uh yeah, so I'm I'm I'm gonna be hesitant to not support the bill even though I like the bill and it tries to fix the problem, I'm just not sure how we fix the problem other than getting different people in charge of the places that they need to be who will actually ask for the resources to fix the problems. So thanks.

Okay, Representative Galvin, then Hannan.

Yes, thank you.

Yes, thank you.

I will be supporting this bill and I want to mention that I was very pleased to see the conversation among all of us when we had departments who were struggling.

And I want to add that I think because of this bill,

we saw one department come forward and very forthrightly say,

yeah, for the first time we're really looking at this.

And this is a problem and we're looking into why it's a problem.

So to me, I don't think that this is going to get in the way of paying our bills on time, instead I think it may be the impetus that's needed to move us ahead and really operate as good government and grow the integrity that we all aspire to.

Thank you.

Senator Hannon.

Thank you, Co-Chair Foster. And I guess one of my questions is for you as co-chairs, because of the delayed implementation date in the bill, it would seem to me that the FY 27 fiscal notes

don't need to be applied. And we heard from at least one department that had you know six separate divisions that had multiple fiscal notes their belief and hope. They designed the fiscal notes based on their current staffing and capacity, but they are a department that is receiving back accounting positions. And their hope is to over the course of a year stand those folks up and have a more systemic approach to

paying their bills, and doing other processes internally. So I don't know whether we can um bifurcate their fiscal notes and say only the future going back or not adopt the fiscal notes. The largest fiscal notes comes from DMV-A, and I think their rationale was these are massive federal programs and we just don't get it in a timely fashion.

So that's a department that I want to see sort of the reporting on, and we we know that, but that's also one of those where getting emergency grants out is pretty darn critical in a timely fashion, you know, to people who are supposed to be receiving emergency monies. Um so

So

I don't know if we can say no fiscal notes for F Y twenty seven um because it's not going into effect until the following fiscal year or how we do that, um I know that we have some latitude as the finance committee when legislation goes forward with fiscal notes. But to me, the reason we put the report in was to address that issue and

All those departments were reporting on F_Y_ twenty five data of how long it had taken them, 'cause they don't have twenty six data and we know that their staffing changes are gonna change for F_Y_ twenty seven. So um

I'm supportive of the bill, I want us to be paying our bills on time. But we don't want to just default to I'd rather pay tardy penalties than pay my bills.

Um would like to recognise that we have with us also Representative Bainum um representative Hannon, what you're saying sounds very reasonable to me. Um we do have that latitude and we do have two of our members of the conference committee um um which at the end uh uh rolls in the fiscal notes and and uh I'm sure there's some latitude as to how they move forward with that. Um I guess my preference in answering that question for sure would be it has somebody

Woody, from pledge finance or the departments, but it sounds pretty reasonable. I don't know if Representative Josephson is the operating um chair, and um I think this year the Senate has the gavel in terms of the conference committee, but do you have any thoughts on this?

Well, one thought is to call Mr. Anderson up and see. I think what Rep. Hannon is saying is that could we zero out the fiscal notes and give them an effective date of July 1st, '27? Is that the essence of—

Representative Hannon?

Thank you, Co-Chair Foster to Co-Chair Josephson. Yes, but I— and I— but I don't necessarily want to fund their full fiscal note for FY '27 till we see that report.

Because they're saying based on FY '25 staffing, this is what it'll cost us. But we know that at least in the Department of Health, their staffing in their accounts payable is going to change by 7— well, if the budget goes forward, 5 positions transferred, then they've asked for 2 more. So 7 additional positions.

And systemically, their deputy commissioner said they're setting out to make sure that they are more systemically paying them all in a uniform process. And that, you know, because we saw from their 6 fiscal notes, wide range of I think one was 15 days average and the other was 46 days average. So—

Hmm.

M mr Chairman I like this proposal. I mean one idea is to bring up Mr Anderson and telephone Mr Painter.

Yeah.

And the combination of the two might give us a pathway.

Let's first bring up Mr. Anderson, and then I do have in the line Representative Bynum, Representative Stapp, Representative Allard.

Just a minute.

Mr.

Anderson,

if you could come up and I think real quick,

Representative Bynum, you have a thing.

Thank

statement.

Thank you, Co-Chair Foster.

I just wanted to apologize for being late to the committee. I was at a bill hearing presenting,

and I am up to speed with where we currently are with the amendment and

that we are on the process of the bill moving.

So I just wanted to say thank you. Great.

No, thank you.

Yep.

Mr.

Anderson?

For the record,

Brodie Anderson,

staff to Representative Foster. Um before

Mm-hmm.

the committee is the question about the fiscal notes and the relationship to the operating budget. Um this bill as uh the committee has a couple options today before it. Move the bill out with attached fiscal notes, the bill will continue on in on its course.

threw over into the other body.

At that point,

the next body that would probably have the ability to address these fiscal notes would be Senate Finance, and they could address them.

You could also hold the bill today to

redraft and submit our own house finance fiscal notes to address any concerns,

but that would, the bill would have to remain in our possession while we worked on those to get them drafted and then move the bill out with attached fiscal notes coming from house finance. But then the third option is to wait until conference committee,

let the bill go through with the department fiscal note.

notes as drafted.

At the point of conference committee there will be a reconciliation of fiscal notes that will be added to the operating budget.

At that point, the conference committee does have the ability to address not really conflicts, but funding mechanisms between what was funded in the operating budget and what was funded in fiscal notes and the fiscal note package that the conference committee puts together could address the likeness and differences and adjust fiscal notes accordingly.

to what will be passed as the final version of the operating budget. So you have the committee has a few options moving forward.

I think I do have a line, but I think you still had a question. We ended with— I think you actually had the original question. So let's go back to Representative Hannon.

Okay.

Let's see.

Thank

you Representative Foster. And I wanted to just confirm.

So Mr. Anderson, if we move the bill as it is,

by the time it went to Senate Finance, they would then have fiscal notes produced to the version they have, which has this delayed implementation and 1-year study. So the FY27 issues would sort of be resolved in those new fiscal notes, correct?

Through the chair, thank you. Sorry. Through the chair, that is correct,

Mr.

Representative.

Follow up on that.

Let's see, I should probably get— let me, let me get back into the— and I'll put you in the queue here. We've got Representative Stapp, Allard, and Josephson. Representative Stapp.

Yeah, I think, good chair. Just on the topic of the fiscal notes. So the effective date is basically the first day now in FY28, right? July 1st. So in theory, like, you probably actually still want to have FY27 appropriations because they are hiring people for jobs, right? So if

they are going to have to pay penalties July 1, 2027, it would make sense that they have the ability to hire people, right, before July 1, 2027. So my opinion, maybe let the fiscal note people process when the bill goes over to the other body and then if they need to make corrections, they can probably do it there. But there are just reasons why I would see that you would still maintain 27 appropriations if the bill passed.

Representative Allard. Representative Allard. No. Representative Josephson.

Just a question through the chair for Mr.

Anderson. So so you think that the agencies a couple of weeks from now.

God willing, when this is in Senate Finance,

would update their fiscal notes to reflect that maybe they don't need all these resources. Maybe they need some, as Representative Stapp said,

they would likely issue new fiscal notes. Is that your expectation?

Mr. Anderson.

Through the chair, that is my understanding that the departments update fiscal notes as amended at the next bill hearing request.

So the next time this bill is scheduled in a committee, you the department would be required to update a fiscal note if it's changed from the previous version.

Mr.

Mr. Chairman, just a comment that I would be in support of moving this bill out today with that knowledge.

Okay. I don't see any further comments, questions. We did have an objection to moving. Representative Tomczewski.

Thank you, Co-Chair. So in regards to this bill, I'm not

Yeah, thank you, Co-Chair.

I'm certainly wanting the state of Alaska to pay its contracts on time.

But this, this bill adds 7 full-time employees, over $1 million in

cost to those.

It doesn't address the number of late payments that it's going to be incurring per department. That's going to be on top of this. And we have to understand that these departments already have

many vacancies in them.

So adding more full-time employees into departments that currently have vacancies, I don't think it's a good look.

I think we should be holding these departments accountable.

And the people accountable who are supposed to be doing this work, and if they can't do the work, I think, you know, there should be some consequences in that. And so I'm not in favour of moving this bill out and I think that the costs at this particular time are pretty high and we have a lot of variables that we don't.

Yet, no and we don't know what the penalties how many penalties they're going to have, which is just going to add to our budget. So uh I will be not be in favour of moving this out. Thank you.

Okay. I don't see any further comments or questions. Representative Allard, do you maintain your objection?

I do.

Okay, the objection is maintained. Uh Madam Clerk, if you could please call the roll on House Bill one thirty three, version S.

Representative Hannon.

Yes. Representative Tomaszewski?

No.

No.

Representative Moore?

No.

Representative Allard?

No.

Representative Stapp?

Uh, no.

Representative Galvin?

Yes.

Representative Jimmy?

Yes.

Representative Bainum?

Yes.

Representative Josephson?

Yes.

Yes.

Representative Schragg?

Yes.

Yes.

Representative Foster?

Yes.

Yes.

Yes.

Seven yea, four nay.

And so on a vote of seven yea to four nay, House Bill 133, which is version LS0114/S, moves out of committee as amended with individual recommendations and attached fiscal note.

If folks could stick around to sign the committee report. Thank you so very much for presenting this, Representative Hemschulte. And in terms of announcements,

Two things. The first is our next meeting is scheduled for today at 1:30, and at that meeting we're supposed to hear a presentation from the Department of Education and Early Development on bond reimbursement grant review. However, the second part is we may very well be on the floor, and if that's the case, then this meeting will either be delayed or canceled. So we'll let folks know. So if there's nothing else to come before the committee, we'll be adjourned at 9:38

AM. Thank you.