Maryland SB 336: State and Local Procurement - Payment Practices

Bill Text

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*sb0336*

SENATE BILL 336
P2, L6 1lr0613
SB 933/20 – EHE (PRE–FILED) CF 1lr0604
By: Senator Hayes
Requested: September 22, 2020
Introduced and read first time: January 13, 2021
Assigned to: Education, Health, and Environmental Affairs

A BILL ENTITLED

AN ACT concerning 1

State and Local Procurement – Payment Practices 2

FOR the purpose of altering a State policy regarding the payment of certain funds after 3
receipt of a proper invoice; requiring each county and municipality to adopt a certain 4
policy; reducing the number of days following receipt of an invoice after which the 5
State owes interest on unpaid amounts and interest begins to accrue on unpaid 6
amounts; repealing a requirement that a contractor submit an invoice within a 7
certain amount of time in order to receive interest payments; and generally relating 8
to the payment practices of the State and local governments for amounts owed under 9
procurement contracts. 10

BY repealing and reenacting, with amendments, 11
Article – State Finance and Procurement 12
Section 15–103 through 15–105 13
Annotated Code of Maryland 14
(2015 Replacement Volume and 2020 Supplement) 15

BY adding to 16
Article – Local Government 17
Section 1–404 18
Annotated Code of Maryland 19
(2013 Volume and 2020 Supplement) 20

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 21
That the Laws of Maryland read as follows: 22

Article – State Finance and Procurement 23

15–103. 24

2 SENATE BILL 336

It is the policy of the State to make a payment under a procurement contract within 1
[30] 15 days: 2

(1) after the day on which the payment becomes due under the 3
procurement contract; or 4

(2) if later, after the day on which the unit receives an invoice. 5

15–104. 6

(a) Except as provided in § 15–105 of this subtitle, interest shall accrue at the 7
rate of 9% per annum on any amount that: 8

(1) is due and payable by law and under the written procurement contract; 9
and 10

(2) remains unpaid more than [45] 15 days after a unit receives an invoice. 11

(b) Interest shall accrue beginning on the [31st] 16TH day after: 12

(1) the day on which payment becomes due under a procurement contract; 13
or 14

(2) if later, the day on which the unit receives an invoice. 15

15–105. 16

A unit is not liable under § 15–104 of this subtitle for interest: 17

[(1) unless within 30 days after the date on the State’s check for the amount 18
on which the interest accrued, the contractor submits an invoice for the interest; 19

(2)] (1) if a contract claim has been filed under Subtitle 2 of this title; 20

[(3)] (2) accruing more than 1 year after the [31st] 16TH day after the 21
unit receives an invoice; or 22

[(4)] (3) on an amount that represents unpaid interest. 23

Article – Local Government 24

1–404. 25

NOTWITHSTANDING ANY OTHER LAW, EACH COUNTY AND MUNICIPALITY 26
SHALL ADOPT THE POLICY ESTABLISHED UNDER § 15–103 OF THE STATE FINANCE 27
AND PROCUREMENT ARTICLE WITH REGARD TO PAYMENT FOR GOODS AND 28

SENATE BILL 336 3

SERVICES PROCURED BY THE COUNTY OR MUNICIPALITY. 1

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 2
October 1, 2021. 3