AB-2272 • 2026

State contracting: subcontractors: prompt payment.

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Caloza
Last action: 2026-05-27
Official status: Referred to Com. on G.O.
Effective date: Not listed

Plain English Breakdown

The official source material does not provide details on how the law will affect small businesses that are both prime contractors and subcontractors.

State Contracting: Prompt Payment for Subcontractors

This law requires prime contractors who receive payment from the state to pay their subcontractors, suppliers, and other vendors within a specific time frame.

What This Bill Does

Requires prime contractors to pay subcontractors, suppliers, and other vendors within 45 days after receiving payment from the state for contracts starting on or after January 1, 2027.
For payments made before January 1, 2027, but not yet paid out by January 1, 2027, prime contractors must pay subcontractors and others by February 15, 2027.
Sets up a system where the Department of General Services monitors if prime contractors follow these rules.
If a prime contractor does not comply with the payment requirements, they can lose eligibility for state contracts or have existing contracts canceled.
Allows subcontractors and suppliers to ask the awarding agency about payment status from the prime contractor.

Who It Names or Affects

Prime contractors who work on state contracts
Subcontractors, suppliers, and other vendors working with prime contractors

Terms To Know

prime contractor: The main company that gets a contract from the government to do work or provide services.
subcontractor: A smaller company hired by the prime contractor to help complete part of their job for the state.

Limits and Unknowns

The bill does not specify what happens if a subcontractor or supplier fails to meet payment deadlines.
It is unclear how this law will affect small businesses that are both prime contractors and subcontractors.
There may be additional rules and regulations created by the Department of General Services to enforce these requirements.

Bill History

2026-05-27 California Legislative Information
Referred to Com. on G.O.
2026-05-14 California Legislative Information
In Senate. Read first time. To Com. on RLS. for assignment.
2026-05-14 California Legislative Information
Read third time. Passed. Ordered to the Senate. (Ayes 77. Noes 0.)
2026-05-07 California Legislative Information
Read second time. Ordered to Consent Calendar.
2026-05-06 California Legislative Information
From committee: Do pass. To Consent Calendar. (Ayes 14. Noes 0.) (May 6).
2026-04-23 California Legislative Information
From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 21. Noes 0.) (April 22). Re-referred to Com. on APPR.
2026-04-20 California Legislative Information
Re-referred to Com. on G.O.
2026-04-16 California Legislative Information
From committee chair, with author's amendments: Amend, and re-refer to Com. on G.O. Read second time and amended.
2026-04-08 California Legislative Information
In committee: Set, first hearing. Hearing canceled at the request of author.
2026-03-09 California Legislative Information
Referred to Com. on G.O.
2026-02-20 California Legislative Information
From printer. May be heard in committee March 22.
2026-02-19 California Legislative Information
Read first time. To print.

Official Summary Text

AB 2272, as amended, Caloza.
State contracting: subcontractors: prompt payment.
Existing law, the California Prompt Payment Act, requires a state agency that acquires property or services pursuant to a contract with a business to make payment to the person or business on the date required by the contract and as specified, or be subject to a late payment
penalty.
Existing
penalty. Existing
law requires state agencies to encourage claimants to promptly pay their subcontractors and suppliers, especially those that are small businesses.
This bill would recast those provisions to instead require prime contractors to pay, for payments by the state to prime contractors made on or after January 1, 2027, their subcontractors, suppliers, and other vendors within 45 days of receiving payment from the state. For payments made by the state to prime contractors made prior to January 1, 2027, but that have not been
remitted to subcontractors, suppliers, and other vendors as of January 1, 2027, the bill would require prime contractors to remit payment by February 15, 2027.
This bill would require the Department of General Services to monitor compliance with this requirement, as specified. The bill would impose a demerit system, in which noncompliant prime contractors lose eligibility for state contracts for a specified period of time, as described. For contracts entered into or renewed with the state on or after January 1, 2027, the bill would authorize the department to review and rescind a prime contractor’s existing contracts if the prime contractor repeatedly fails to comply. The bill would require the department to adopt rules and regulations to administer these provisions, and would make conforming changes.
This bill would authorize a subcontractor or supplier performing work under a state contract to request payment status information from the awarding state agency regarding invoices submitted by the prime contractor, and would require a prime contractor to provide confirmation to the awarding agency, upon the agency’s request, regarding payments made to subcontractors.

Current Bill Text

Read the full stored bill text

Download Bill PDF