2019 -- H 5638

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LC001786

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- PROMPT PAYMENT BY

DEPARTMENT OF ADMINISTRATION

     Introduced By: Representatives Edwards, Canario, Phillips, Almeida, and Maldonado

     Date Introduced: February 27, 2019

     Referred To: House Finance

     (Dept. of Administration)

It is enacted by the General Assembly as follows:

     SECTION 1. Section 42-11.1-3 of the General Laws in Chapter 42-11.1 entitled "Prompt

Payment by Department of Administration" is hereby amended to read as follows:

     42-11.1-3. Time period for payment.

     (a) All bills shall be paid within thirty (30) working calendar days of receipt of a proper

invoice or other contractual dates for periodic payments, except when a contractor has failed to

submit a bill in accordance with contractually imposed time frames.

     (b) Each contractor shall make payment to subcontractors within ten (10) five (5)

calendar days of receipt of payment by the state; provided, however, that the contractor may

setoff a payment due to a subcontractor by an amount equal to the amount of an unpaid legally

enforceable debt owed by the subcontractor to the contractor or any amount which the contractor

is entitled to withhold under the terms of the contract entered into by the contractor and

subcontractor, or any amount owed by the subcontractor to the contractor by way of a statutory

obligation, or enforceable lien, of which the contractor or subcontractor had previous knowledge

or notice, or has reason to believe exists.

     (c) The director of the department of administration shall have the power to impose

sanctions upon a contractor that has failed to comply with subsection (b) of this section or upon a

subcontractor who has failed to comply with subsection (c) of this section. Such sanctions may

include, but are not limited to, the sanctions set forth in § 37-14.1-8. The division of purchases, in

consultation with the office of diversity, equity, and opportunity, shall establish, by rule and

regulations promulgated in accordance with chapter 35 of title 42, standards for enforcement and

procedures for receiving and reviewing inquiries regarding a contractor’s noncompliance with

subsections (b) and (c) of this section.

     (c)(d) This section shall not apply to contractors or subcontractors performing work

pursuant to a contract awarded by the department of transportation unless the subcontractor

provides a payment and performance bond in an amount equal to the contract between the

contractor and subcontractor.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- PROMPT PAYMENT BY

DEPARTMENT OF ADMINISTRATION

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     This act would amend the provisions for the timely payment of monies owed by the

department of administration to contractors and would further require prompt payment by the

contractors to their subcontractors and payments by subcontractors to lower tier subcontractors

and would allow the department to impose sanctions for failure to comply with any prompt

payment provisions.

     This act would take effect upon passage.

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