California Prompt Payment Act

The act governs the timeliness of payments owed by government agencies on their contracts, setting deadlines by which amounts must be paid and requiring that overdue amounts accrue interest at a prescribed rate. It extends the same discipline down the contracting chain, fixing the time within which contractors must pay their subcontractors and suppliers and requiring interest on amounts withheld beyond it. It also bounds its own reach: payments the agency disputes are exempt where it gives notice of the dispute, interest below a minimum amount is not paid, agencies may not seek additional appropriations to fund interest, and transactions between government agencies fall outside the act entirely.

Editorial summary generated from the text of this act. It is not part of the statute — read the sections below for the operative language.