2014 -- H 7882

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LC004722

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO LABOR AND LABOR RELATIONS

     Introduced By: Representatives Almeida, Marshall, Edwards, Canario, and Ucci

     Date Introduced: March 06, 2014

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 28 of the General Laws entitled "LABOR AND LABOR

RELATIONS" is hereby amended by adding thereto the following chapter:

CHAPTER 56

PROMPT PAY ACT

     28-56-1. Payments to private enterprises. – (a) As used in this chapter, “private

enterprise” means a business which provides goods or services and which is not a governmental

entity.

     (b) As used in this chapter, “change order” refers to a change in agreed upon work or

payment from the original contract created and agreed by both the private enterprise and state

department or agency.

     (c) Unless otherwise agreed in writing, any state department or agency shall take all steps

necessary to assure that:

     (1) Payment applications by private enterprises are submitted no later than thirty (30)

days after work is completed and must be approved or rejected within fifteen (15) days after

receiving payment application.

     (2) Payment for goods or services is mailed to a private enterprise within forty-five (45)

days after the state department or agency receives the goods or services, a complete invoice for

the goods or services, or a complete contract for goods or services, whichever is later.

     (d) If an invoice for goods or services received by a state department or agency is filled

out incorrectly or contains a defect or impropriety, the state department shall notify the private

enterprise, which submitted the invoice, within ten (10) days after the invoice is received.

     (e) If an invoice error, other defect or impropriety is corrected by a private enterprise

within five (5) days after receipt of the notice required by § 28-56-1(d), the state department or

agency shall make payment within the time period required by § 28-56-1(c).

     (f) Except as provided in § 28-56-1(h), if a payment owed by a state department or

agency to a private enterprise for goods or services is past due, a contractor or subcontractor can

cease continuation of work thirty (30) days after payment was due. Also, the state department or

agency shall pay an additional amount equal to one percent (1%) of the payment to the private

enterprise to which payment is due. The state department or agency shall pay this additional

amount equal to one percent (1%) of the payment due for the first month and each succeeding

month the payment remains past due.

     (g) A state department or agency shall not require a private enterprise to submit a

petition, bill, statement, or other additional notice in order to collect an amount due hereunder.

Only the payment application shall be submitted to collect amount due.

     (h) Subsection 28-56-1(f) shall not apply:

     (1) If a payment is delayed because of a good faith disagreement between a state

department or agency and a private enterprise, unless the dispute is resolved in favor of the

private enterprise in which case § 28-56-1(f) shall apply;

     (2) If a payment by a state department or agency is past due because of an executive

order budget cut; or

     (3) If a state department or agency instead pays a penalty or interest payment charged by

a private enterprise for late payment.

     (i) “Pay when paid” clauses will remain intact between state department or agency and a

private enterprise.

     (j) If a change order needs to be submitted by private enterprise to state department or

agency, it will be paid or rejected within thirty (30) days of change order submission or beginning

of new work, whichever is later.

     (k) Any disputes between parties regarding rejected payment applications or change order

requests can be resolved via arbitration, litigation or other procedure within sixty (60) days after

rejection.

     (l) This act will only be applied to private enterprises and not to municipal, state, or

federal enterprises and provided further, this act shall apply only to goods or services which are

received and for which a complete invoice is received by a state department or agency after the

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effective date of this act.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO LABOR AND LABOR RELATIONS

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     This act would provide for prompt payment by the state to private enterprises for goods

or services rendered to the state, and would prescribe penalties for delays in such payments.

     This act would take effect upon passage.

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LC004722

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