2241, 2257, 2462, 0230

Sources of Revenue:

General Fund,Special Fund

Legislation creates:

A New Program

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

    This bill creates "The Prompt Pay Act of 2011". It requires invoices be paid within sixty days. If bills are not paid within that time frame, state agencies will be required to pay interest of eight percent. The only agency we are aware of within the Department of Administration that would be impacted by the passage of this legislation is the General Services Division. Most Department of Administration agencies are able to pay all invoices within sixty days. However, due to cash flow issues the General Services Division is unable to pay all invoices within sixty days. It is estimated that the passage of this bill would require the General Services Division to pay approximately $114,000.00 per year in interest.

Fiscal Note Detail

Effect of Proposal Fiscal Year
Fiscal Year
(Upon Full
1. Estmated Total Cost 114,000 114,000 114,000
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0

Explanation of above estimates (including long-range effect):

    Based upon data available, General Servies would have been required to pay the following amounts in interest if this legislation had been in place during the past four years:
    2008 $126,000
    2009 $84,000
    2010 $186,000
    2011 $61,000
    The average of the past four years, based upon the invoices General Services did not pay within 60 days, is $114,000. That is the method used to determine the annual cost to the Department of Administration with the passage of this bill.


    The costs reflected above only pertains to the Department of Administration as that is the only data available to me. I believe that this would have a large fiscal impact on other agencies such as the Department of Highways, etc. I would suggest that a fiscal note request be sent to the Department of Highways and other agencies who pay large invoices. It may also be beneficial to send a fiscal note request to the State Auditor as he would have knowledge of how much money was paid by all spending units of the state.

    Person submitting Fiscal Note: donna lipscomb
    Email Address: