Passed by House, ‘Payment Transparency Act’ aims to help subcontractors get paid

Helping small businesses get paid on time and creating better working relationships is the crux of a bill referenced as the “Payment Transparency Act.”

Sponsored in the House by Rep. Peggy Scott (R-Andover), the bill would increase payment transparency on state agency and political subdivision construction projects and it would give subcontractors not being paid the information necessary to enforce the Prompt Payment Act.

Passed, as amended, 133-0 Wednesday by the House, HF1234/SF1714* returns to the Senate for concurrence. It was first passed 63-0 by that body April 27.

Scott said 16 trade associations support the bill that would require, upon written request from the contractor or subcontractor, state and local governments to provide within seven calendar days, and without charge, specified information regarding any project payment made by the public contracting agency, including date of payment and the amount. Public contracting agencies would also be required to make contact information available to subcontractors and provide that information on their website.

“This way everyone on the job knows who has been paid and when they should be paid,” Scott said.

A contracting agency could request contractors and subcontractors use an automated internet-based system for requests if the agency has such a system.

Blake Nelson, a construction law attorney for more than 30 years, told the House State Government Finance and Policy Committee March 10 that current law requires subcontractors to be paid within 10 days of the contractor receiving payment from the public agency. However, Nelson said subcontractors often don’t know when payments are made or if the contractor lies to the subcontractor that they have been paid.