Bill Text: OR HB3442 | 2013 | Regular Session | Introduced
Bill Title: Relating to prompt payments to contractors in connection with public contracts; declaring an emergency.
Spectrum: Slight Partisan Bill (Republican 3-1)
Status: (Failed) 2013-07-08 - In committee upon adjournment. [HB3442 Detail]
Download: Oregon-2013-HB3442-Introduced.html
77th OREGON LEGISLATIVE ASSEMBLY--2013 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 3727
House Bill 3442
Sponsored by Representative FREEMAN; Representatives KENNEMER,
THOMPSON, Senator BATES
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Requires contracting agency to pay contractor promptly for
goods or services contractor provides in connection with public
contract. Specifies conditions under which contracting agency
must pay interest to contractor on progress payments or overdue
payments. Specifies rate of interest for late or overdue
payments.
Becomes operative 91 days after effective date of Act.
Declares emergency, effective on passage.
A BILL FOR AN ACT
Relating to prompt payments to contractors in connection with
public contracts; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Section 2 of this 2013 Act is added to and made
a part of ORS chapter 279B. + }
SECTION 2. { + (1) The State of Oregon requires as a matter of
policy that all contracting agencies pay promptly all amounts due
a contractor in connection with a public contract.
(2)(a) A contracting agency shall make monthly progress
payments to a contractor as work progresses on a public contract
unless the public contract provides otherwise or unless progress
payments are not appropriate for the scope or type of work
specified in the public contract. Unless the public contract
provides otherwise, the contracting agency shall base the amount
of each progress payment on the contracting agency's estimate of
the amount of work the contractor has completed since the
previous payment.
(b) A progress payment under paragraph (a) of this subsection
does not constitute a contracting agency's acceptance or approval
of a contractor's work or a waiver of any defects in the
contractor's work.
(3)(a) A contracting agency shall pay interest to a contractor
on a progress payment due the contractor if the contracting
agency has not made the progress payment within 30 days after the
contracting agency received an invoice from the contractor or 15
days after the contracting agency approved the payment, whichever
date is earlier. The contracting agency shall pay interest on the
amount due at a rate that is equal to three times the discount
rate on 90-day commercial paper in effect at the Federal Reserve
Bank in the Federal Reserve district that includes Oregon, but
the rate of interest may not exceed 30 percent.
(b) A contracting agency shall pay interest to a contractor
automatically once a payment required in connection with the
public contract becomes overdue. A payment is overdue if the
contracting agency has not made the payment within 45 days after
receiving an invoice from the contractor. The contracting agency,
at the time the contracting agency pays the principal, shall
document, calculate and pay interest due beginning on the 30th
day after the contracting agency received the invoice and ending
on the date the contracting agency pays the principal. A
contracting agency may not require a contractor to petition,
invoice, bill or wait additional days to receive interest due.
(4)(a) If a contractor has submitted an invoice that has a
defect or that is otherwise incorrect or if the contracting
agency and the contractor have a good faith dispute, the
contracting agency shall notify the contractor within 15 days
after receiving the invoice or after grounds arise for the
dispute and shall state in the notice the reason the invoice is
defective or incorrect or the reason for the dispute. If a
contractor corrects an incorrect invoice within seven days after
the contracting agency gave the contractor notice, the
contracting agency may not make a payment later than specified in
this section unless the contracting agency also pays interest.
(b) A contracting agency may postpone paying interest if the
contracting agency has delayed paying the principal because of a
dispute between the contracting agency and the contractor.
(5)(a) After a settlement or judgment in favor of a contractor
in a dispute as to the compensation a contractor is due for work
the contractor performed under the terms of a public contract, a
contracting agency shall pay the amount due plus interest at a
rate that is equal to two times the discount rate on 90-day
commercial paper in effect at the Federal Reserve Bank in the
Federal Reserve district that includes Oregon on the date of the
settlement or judgment, which may not exceed 30 percent. The
interest accrues from the later of:
(A) The due date of any progress payment received under the
contract for the period in which work was performed; or
(B) Thirty days after the date on which the contractor
presented, in writing or otherwise in accordance with applicable
provisions of the public contract, a claim for the payment that
the contracting agency disputed.
(b) The contracting agency shall pay interest in addition to
and not as part of the settlement or judgment.
(c) The prevailing party in a formal administrative or judicial
action to collect interest due under this section is entitled to
costs and reasonable attorney fees.
(6) Notwithstanding ORS 293.462 (6), a contracting agency shall
pay interest in accordance with this section from appropriations
the contracting agency received during the fiscal year or
biennium, as appropriate, during which the contractor provided
the goods or services the contracting agency procured under the
public contract. + }
SECTION 3. { + Section 2 of this 2013 Act applies to public
contracts into which a contracting agency entered on or after
July 1, 2011. + }
SECTION 4. { + (1) Section 2 of this 2013 Act becomes
operative 91 days after the effective date of this 2013 Act.
(2) The Attorney General, the Director of the Oregon Department
of Administrative Services, the Director of Transportation or a
contracting agency that adopts rules under ORS 279A.065 may take
any action before the operative date specified in subsection (1)
of this section that is necessary to enable the Attorney General,
the director or the contracting agency to exercise, on and after
the operative date specified in subsection (1) of this section,
all of the duties, functions and powers conferred on the Attorney
General, the director or the contracting agency by section 2 of
this 2013 Act. + }
SECTION 5. { + This 2013 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2013 Act takes effect on its
passage. + }
----------
