HB204 Alabama 2011 Session

Summary

Primary Sponsor

Kerry Rich

Republican

Co-Sponsors

William RobertsLynn GreerDan WilliamsRichard BaughnWayne JohnsonPaul Beckman

Session

Regular Session 2011

Title

Public contracts, waiver of payment within 30 days prohibited, interest added on any dollar amount approved and unpaid, certification and proof of certification of availability of funds, attorney fees and court costs, Sec. 41-16-3 am'd.

Summary

HB204 would require timely payment on Alabama public contracts, impose interest on late payments, require proof funds are available, and let prevailing parties recover attorney fees and costs.

What This Bill Does

It would prohibit waiving payment within 30 days after completing a public contract and add 1% interest per month on any unpaid approved amount. It would require certification and proof that funds are available to remit payment once responsibilities under the contract are fulfilled. It would allow the winning party in a civil case to recover reasonable attorney fees and court costs. It would also outline pass-through payment requirements to subcontractors, potential withholdings in disputed payments, and retainage rules.

Who It Affects

• State/agency contract owners: must pay within 30 days for undisputed amounts, certify that funds are secured, and may withhold or manage disputed payments with specific notice rules.
• Prime contractors, subcontractors, and sub-subcontractors: must receive timely payments and, in turn, pass payments through to subs; may be entitled to passed-through interest and attorney fees if they prevail in disputes; subject to dispute withholding and retainage provisions.

Key Provisions

• Prohibits waiver of 30-day payment after completion of a public contract and imposes 1% interest per month (or fraction) on unpaid, approved amounts.
• Requires contract certification that funds have been secured to remit payment and requires proof of availability of funds before responsibilities are assumed.
• Entitles the prevailing party in civil actions to recover reasonable attorneys' fees and court costs.
• If the state pays, requires pass-through payment to subcontractors/sub-subcontractors proportional to their interest, with interest included if applicable; payment terms for pass-through are specified (within seven days if terms are not agreed).
• Allows withholding of disputed amounts up to twice the disputed amount; requires written notices regarding disputed payments (owner within 15 days; contractor/subcontractor within 5 days).
• Retainage provisions: retainage withheld by the contractor to subcontractors shall not exceed the state's retainage unless interest is applied; modifications allowed in cases of disputes.
• Effective date: becomes law on the first day of the third month after passage and approval by the Governor.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Contracts