Alaska Retainage Guide and FAQs

Alaska does not have a statute outlining retainage for private projects.

(a) The prime contractor and a subcontractor on a public construction or public works contract must include in a subcontract between the prime contractor and subcontractor for the public construction or public works a clause that requires the prime contractor to pay
(1) the subcontractor for satisfactory performance under the subcontract within eight working days after receiving payment from which the subcontractor is to be paid;
(2) the subcontractor all retainage due under the subcontract within eight working days after final payment is received from the state or political subdivision or after the notice period under AS 36.25.020(b) expires, whichever is later;
(3) the subcontractor interest on an amount that is not paid in accordance with (1) of this subsection for the period beginning on the day after the required payment date and ending on the day on which payment of the amount due is made; the interest shall be computed at an interest rate that is equal to the amount set out in AS 45.45.010(a);
(4) interest on retainage withheld from the subcontractor at an interest rate that is equal to the amount set out in AS 45.45.010(a).
(b) A subcontractor on a public construction or public works contract must include in each subcontract under which a person agrees to provide the subcontractor with services, other than as an employee, or supplies to be used in the public construction or public works project a clause that requires the subcontractor to pay
(1) the person for satisfactory performance under the subcontract within eight working days after receiving payment from which the person is to be paid;
(2) the person all retainage due under the subcontract with the person within eight working days after the subcontractor receives its share of the state-held retainage from the prime contractor or another subcontractor;
(3) the person interest on an amount that is not paid in accordance with (1) of this subsection for the period beginning on the day after the required payment date and ending on the day on which payment of the amount due is made; the interest shall be computed at an interest rate that is equal to the amount set out in AS 45.45.010(a);
(4) interest on retainage withheld from the person at an interest rate that is equal to the amount set out in AS 45.45.010(a).

(a) The state or a political subdivision of the state shall pay to the prime contractor interest on retainage, including warranty retainage, on a contract for public construction or public works at an interest rate that is equal to the amount set out in AS 45.45.010(a). Interest on retainage accrues from the date of approval of a pay request until the date of payment to the contractor.
(b) A political subdivision that has a population of 500 or less is exempt from the payment of interest under (a) of this section.

(a) The rate of interest in the state is 10.5 percent a year and no more on money after it is due except as provided in (b) of this section.
(b) Interest may not be charged by express agreement of the parties in a contract or loan commitment that is more than the greater of 10 percent or five percentage points above the annual rate charged member banks for advances by the 12th Federal Reserve District on the day on which the contract or loan commitment is made. A contract or loan commitment in which the principal amount exceeds $25,000 is exempt from the limitation of this subsection.
(c) to (e) Repealed.
(f) A bank, credit union, savings and loan institution, pension fund, insurance company, or mortgage company may not require or accept any percent of ownership or profits above its interest rate. This subsection does not apply to a loan if the principal amount of the loan is $1,000,000 or more and the term of the loan is five years or more, or to a negatively amortizing loan secured by owner-occupied real property originated under a program approved or sponsored by
(1) the federal government, including congressionally chartered national corporations; or
(2) the state if
(A) the real property that secures the loan is not subject to forced sale provided the owner has not violated the terms of the loan agreement including terms regarding
(i) payment of property taxes;
(ii) payment of hazard or fire insurance premiums;
(iii) keeping the property in reasonable repair;
(iv) not vacating the property for a period longer than 12 months;
(B) the owner may not be evicted from the real property that secures the loan unless a term of the loan agreement regarding a matter listed in (A)(i)–(iv) of this paragraph has been violated;
(C) neither the estate nor any heir of the former owner may be compelled to pay a deficiency judgment related to the loan; and
(D) the estate or an heir of the former owner has a right of first refusal and may either pay off the loan balance in full, if the former owner had equity in the property, or pay a sum not to exceed 95 percent of the value of the property at the time of exercise of the right of first refusal as determined by an independent real estate appraiser licensed under AS 08.87.
(g) Loan contracts and commitments covering one- to four-family dwellings may be prepaid without penalty, except federally insured loans that require a prepayment penalty.
(h) If the limitations on interest rates provided for in this section are inconsistent with the provisions of any other statute covering maximum interest, service charges, or discount rates, then the provisions of the other statute prevail.