HB411 Alabama 2011 Session

Summary

Primary Sponsor

William Roberts

Republican

Session

Regular Session 2011

Title

Contracts, payment of state contractors, state may not increase time for payment for completing work beyond 30 days, interest added to late payments, certification and proof of certification that state has funds available to pay contractors, attorney fees, costs, and reasonable expenses recoverable, Sec. 41-16-3 am'd.

Summary

HB411 would require the state to pay contractors within 30 days, add 1% monthly interest on late payments, certify funds are available, and let nonpaid contractors recover attorney fees and costs.

What This Bill Does

If passed, the state could not contractually extend payment beyond 30 days after a contractor finishes work and invoices. It would add 1% interest per month on unpaid amounts until final payment. The state would have to certify that funds are available and provide evidence of financing before work starts, and could not materially change those arrangements without notice. It also ensures payments to subcontractors are passed through promptly, with interest allocated to the subcontractor's portion when applicable, and allows withholding in bona fide disputes while enabling recovery of attorney fees and other costs if payment is not made.

Who It Affects

• State agencies and state financial officers who must certify funds, manage funding arrangements, and pay contractors within 30 days.
• Contractors, subcontractors, and sub-subcontractors working on state contracts who would receive faster payments, potential interest on late payments, and the right to recover attorney fees and costs if they are not paid.

Key Provisions

• Prohibits extending the state's payment time beyond 30 days after the contractor completes work and submits a proper invoice; if paid late, 1% per month interest is added to the unpaid amount.
• Contracts must include a certification that the state has funds available to fulfill obligations; before work begins, the state must provide reasonable evidence that funds are in place; after evidence is provided, the state cannot materially vary those financial arrangements without prior notice.
• Payments the state makes to a contractor must be passed through to subcontractors and sub-subcontractors in proportion to their interest; if payment terms are not agreed, payment to the subcontractor is due within seven days after receipt of payment, including interest related to the subcontractor's work.
• Interest is 1% per month and is paid from the same fund used to pay the contract principal; withholding of payments is allowed only in certain bona fide disputes (e.g., unsatisfactory work, defective construction, disputed work, third-party claims, or failure to pay labor, etc.).
• If there is a bona fide dispute over the amount due, payment can be withheld up to twice the disputed amount; notice requirements apply for disputed payments (owner must notify within 15 days; contractor/subcontractor must respond within 5 days).
• If payment is not made as required, the party owed may recover reasonable attorney fees, costs, and expenses incurred to collect the amount due.
• Effective date: becomes law on the first day of the third month after passage and governor approval.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

State Agencies