Prompt Payment:

State Laws Are Similar to the Federal Act but Less Comprehensive

AFMD-89-33BR: Published: Mar 10, 1989. Publicly Released: Apr 14, 1989.

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In response to a congressional report, GAO reviewed state prompt-payment laws and payment-timing practices.

GAO found that: (1) 47 states and the District of Columbia enacted laws requiring timely payments to private vendors and contractors for goods and services; (2) many states have provisions that are similar to the federal Prompt Payment Act, but less comprehensive; (3) about three-quarters of the states required payments within 30 or 45 days for goods and services, and most provided for interest penalties for late payments; (4) six states exempted federally funded state payments from their requirements, while Georgia, New Hampshire, and Vermont had no payment-timing laws; and (5) between 1987 and 1988, three states passed legislation reducing the number of days for agencies to pay their bills, four added provisions requiring prime contractors to timely pay subcontractors, and one reduced the number of days for prime contractors to pay subcontractors.

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