Louisiana House Bill HB1128

Louisiana 2016 Regular Session

• Introduced: 4/5/16
• Refer: 4/6/16

Caption

Requires certain entities to make payments pursuant to certain contracts in a timely fashion (OR SEE FISC NOTE GF EX)

Impact

The bill's implementation is expected to have significant effects on how obligations under public contracts are managed at the state level. By requiring prompt payment, it intends to foster a more reliable financial environment for subcontractors who often depend on timely payments to maintain operations. Furthermore, it lays down provisions for vendors that detail the penalties, such as accruing interest on unpaid amounts, thereby incentivizing compliance and reducing potential disputes related to payment delays.

Summary

House Bill 1128 aims to establish clear requirements regarding payment obligations between governmental entities and vendors within Louisiana. The proposed legislation mandates that vendors who receive payments from government entities must pay their subcontractors the proper share of those payments within ten days of receiving such payments. Additionally, the bill specifies that payments become overdue after this ten-day period, which is designed to promote timely financial transactions in public contracts.

Sentiment

The sentiment surrounding HB 1128 appears overall supportive, particularly from stakeholders in the contracting community who seek improved payment timelines from governmental agencies. However, there are concerns raised regarding the practicality of enforcing such requirements. Advocates argue that the bill could significantly aid small businesses, while critics question if the new regulations might lead to heightened administrative burdens for governmental entities.

Contention

Debate on this bill highlights the tension between ensuring prompt payment for subcontractors and the broader implications for government operations. Some members express concern that stipulating strict payment deadlines could complicate the contractual processes and could potentially lead to disputes if entities fail to meet these obligations. Additionally, provisions that allow vendors to suspend work on contracts for overdue payments are contentious, especially regarding critical projects associated with the Department of Transportation and Development.