ASSEMBLY STATE AND LOCAL GOVERNMENT COMMITTEE

STATEMENT TO

ASSEMBLY, No. 3808

with committee amendments

STATE OF NEW JERSEY

DATED:  MAY 23, 2018

      The Assembly State and Local Government Committee reports favorably and with committee amendments Assembly Bill No. 3808.

      As amended, this bill amends the “New Jersey Prompt Payment Act” to require a State agency that is delinquent in making payment to a business concern that provides goods or services to make a penalty payment to that firm after 45 days following the required payment date instead of after 60 days as at present.  The bill also extends this prompt payment policy to independent State authorities, local government contracting units, and boards of education.  A penalty will consist of interest on the late payment, at a rate established by the State Treasurer, to be paid to the business concern for the period beginning on the day after the required payment date and ending on the date on which the check for payment is drawn.  Interest may be paid by separate payment to a business concern, but must be paid within 30 days of the late payment.  A public entity may waive the interest payment for a delinquency due to circumstances beyond the entity’s control, including but not limited to strikes or natural disasters.

COMMITTEE AMENDMENTS

      The committee amended the bill to provide that division will have 20, rather than 13, calendar days from the date the request for payment is submitted by the using agency to make the required payment to a business concern.  This gives the using agency and the division the full 45 days allotted in subsection b. of section 1 of the bill to make the required payment to a business concern.