California Prompt Payment Act: late payment penalties.

Plain English Breakdown

The bill's text does not provide specific details about peak fire protection staffing periods.

California Prompt Payment Act: Late Payment Penalties

This law modifies when state agencies must approve payments to businesses under contracts with Cal Fire during peak fire protection staffing periods, extending the deadline by 30 days if late payment penalties would apply.

What This Bill Does

• Modifies the date by which state agencies must approve payments to businesses under contracts with Cal Fire.
• Extends the required payment approval date by 30 calendar days if an invoice from a business under a contract with Cal Fire would become subject to late payment penalties during the peak fire protection staffing period.

Who It Names or Affects

• State agencies that have contracts with businesses through Cal Fire.
• Businesses under contract with Cal Fire providing goods and services during peak fire protection staffing periods.

Terms To Know

Peak fire protection staffing period

A specific time determined by the Director of Forestry and Fire Protection when extra staff is needed for fire protection.

Late payment penalties

Fines that state agencies must pay if they do not make payments to businesses on time as required by their contracts.

Limits and Unknowns

• The bill does not specify the exact dates of peak fire protection staffing periods.
• It only applies to contracts with Cal Fire, not other state departments or agencies.

Official Summary Text

AB 1177, Connolly.
California Prompt Payment Act: late payment penalties.
Existing law, the California Prompt Payment Act, generally provides that a state agency that acquires property or services pursuant to a contract with a business but fails to make payment to the person or business on the date required by the contract is subject to a late payment penalty, as specified. The act also requires the required payment approval date, as defined, to be extended by 30 calendar days if an invoice from a business under a contract with the Department of Forestry and Fire Protection (department) would become subject to late payment penalties during the annually declared fire season, as declared by the Director of Forestry and Fire Protection (director), except if the contract is with a certified small business, a nonprofit organization, or a nonprofit public benefit corporation.
This bill would, instead, require the required payment approval date to be extended by 30 calendar days if an invoice from a business under a contract with the department would become subject to late payment penalties during the peak fire protection staffing period, as determined by the director, subject to the exceptions described above.

Current Bill Text

Download Bill PDF