HB71 Alabama 2012 Session

Summary

Primary Sponsor

William Roberts

Republican

Session

Regular Session 2012

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, Secs. 39-2-12, 41-16-3 am'd.

Summary

HB71 requires the state to pay public works contractors promptly, certify funds before starting work, apply interest on late payments, and allow recovery of certain costs when the state delays or withholds payments.

What This Bill Does

It sets payment timelines for public works, with partial payments due as work progresses and not later than 45 days after acceptance of estimates, and final payments due within about 40–45 days after completion and acceptance, while prohibiting any later extensions beyond 45 days. It requires the awarding authority to certify and prove available funds before payment and to disclose funding sources, with protections that funds won’t be materially changed after work starts. It strengthens contractor and subcontractor protections by allowing reasonable attorney’s fees for nonpayment, sets retainage limits (up to 5% until 50% completion), allows escrow or other secure methods, and requires subcontractors to be paid promptly after the state’s payment. It also provides dispute procedures, allows withholding up to twice the disputed amount in bona fide disputes, and includes carve-outs for certain agencies and conditions.

Who It Affects

• Contractors and subcontractors: gain more predictable payment timing, a defined retainage framework, the ability to recover attorney’s fees and costs if they are not paid, and requirements that prime contractors pay subcontractors promptly after state payments.
• State awarding authorities and related government entities: must certify funds, adhere to defined payment timelines, manage escrow or retainage arrangements, handle disputes, and follow new rules for funding disclosures and timely payments.

Key Provisions

• Partial payments to be made as work progresses, with payments due no later than 45 days after acceptance of the estimate.
• Final payment due within about 40–45 days after completion and acceptance; any agreement to extend beyond 45 days is not enforceable; interest applies to late payments.
• Awarding authority must certify and prove availability of funds before work begins and disclose funding sources; funds cannot be materially varied after work starts.
• Contractors may recover reasonable attorney's fees, costs, and expenses if the state does not pay as required.
• Retainage limited to 5% of the estimated work value, with no further retainage after 50% completion; options for escrow accounts in lieu of retainage with detailed rules.
• Subcontractors must be paid by the contractor within seven days after the state’s payment is received, with interest applied if applicable.
• If a bona fide dispute exists, payment may be withheld up to twice the disputed amount; prevailing party may recover attorney's fees and court costs.
• Notable exemptions: provisions do not apply to contracts administered by the Alabama Building Commission or certain state agencies under Title 33 Chapter 1, and not to government contracts arising from specific recovery conditions.

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

Subjects

State Agencies