Texas House Bill HB2670

Texas 2009 - 81st Regular

• Out of House Committee: 5/1/09

Caption

Relating to governmental liability for interest resulting from a claim for payment for goods or services.

Impact

If enacted, HB 2670 would significantly affect the way governmental entities handle payment claims and liabilities, particularly in scenarios where disputes with vendors arise. By clarifying exemptions from liability in scenarios of genuine disputes, the bill aims to protect governmental entities from financial penalties that occur due to delays caused by conflicts over the terms of contracts or services rendered. This could encourage a more cautious approach to entering service agreements by vendors, knowing there's potential for delayed payments without accruing interest liabilities.

Summary

House Bill 2670 addresses the issue of governmental liability regarding interest accrued from late payments for goods and services. The bill modifies existing provisions under the Government Code that govern the conditions under which a governmental entity is liable for interest on late payments. It specifically outlines circumstances under which a governmental entity may not be held accountable for interest due to bona fide disputes related to the delivery of goods or services or circumstances beyond their control, such as invoice mailing errors or federal restrictions.

Contention

There could be points of contention surrounding the bill based on its implications for vendors. Critics may argue that the bill could foster an environment where governmental entities might take advantage of the exemptions, delaying payments without accountability, ultimately affecting vendors' cash flow. Proponents argue that the measure would balance the needs of government entities, which sometimes face legitimate disputes that delay payments, against the rights of vendors, potentially leading to fair outcomes in these financial interactions.