CHAPTER 19

FORMERLY

SENATE BILL NO. 33

AS AMENDED BY HOUSE AMENDMENT NOS. 1, 3, AND 4

AN ACT TO AMEND CHAPTER 65, TITLE 29, DELAWARE CODE, RELATING TO PROMPT PAYMENT OF INVOICES BY AGENCIES OF THE STATE OF DELAWARE.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend §6516, Title 29, Delaware Code, by adding thereto a new subsection (d) to read as follows:

"(d) In the event that the State shall, within 30 days of the later of the presentment of a valid Invoice or bill on which a State agency (as defined in this Chapter) is liable to make payment or the receipt of the goods or services reflected in such invoice or bill, fail to make payment on such invoice or bill, the vendor presenting such invoice or bill may require the payment of interest by such State agency; provided, however, that:

(i) Presentment is deemed made when an invoice or bill is received by that agency provided that the invoice or bill is received in a form consistent with the State Accounting Manual and regulations issued by the Budget Director and the Secretary of Finance.

(II) The vendor may not require interest with respect to any portion of such invoice or bill if such portion is controverted on reasonable grounds by the State agency, provided that the agency notifies the vendor in writing, within the 30 day period specified in this subsection, of the reason or reasons for controverting the invoice or bill.

(III) A vendor may require that interest under this subsection commence from the end of the 30 day period and continue until payment. All interest charges under this chapter shall be paid by the agency receiving the goods or services from the vendor. Such interest shall be calculated by the vendor in dollar amounts and expressly billed as such to the agency receiving goods or services from the vendor.

(iv) A vendor may require that interest under this subsection accrue on the unpaid balance at a rate not to exceed an annualized rate of 12 percent.

(i) Agencies liable for interest payments under this subsection shall be authorized to make such payments from amounts appropriated for 'Contractual Services' in the event an unencumbered balance shall exist in such line. In the case of agencies of public or higher education, such payment shall be made from local funds or State general funds not restricted to another purpose. The Budget Office shall establish procedures according to which interest payments under this subsection recorded separately from other expenditures for Contractual Services.

(ii) The requirement that interest payments be made by the agency receiving goods or services be Imposed upon a different agency when, In the sound discretion of the Budget Director and the Controller General, the receiving agency demonstrates that some other agency or agencies bear greater responsibility for causing the delay which occasioned the payment of interest, in which case the responsible agency or agencies shall reimburse the receiving agency for interest charges.

(e) The Secretary of Finance shall transmit to the Controller General on January 15 and July 15 of each year a report which provides the following information:

(I) The name of any State agency which has, within the past six months, paid interest to a vendor in accordance with the provisions of subsection (d) of this section;

(ii) The number of such interest payments made by each agency; and

(iii) The total amount of interest paid by each agency."

Section 2. This Act shall not be effective with respect to any contract for payment of interest according to terms different from those set forth In this subsection, which was executed prior to the adoption of this Act.

herein.

Section 4. This At shall be effective six months following its enactment and only with respect to invoices or bills presented after the effective date.

Approved April 26, 1983.