Be it enacted by the Senate and House of Representatives
in General Court assembled, and by the authority of the same,
SECTION 1. Chapter 7 of the General Laws is hereby amended by inserting after section 14A, as appearing in the 1986 Official Edition, the following section:-
Section 14B. The comptroller shall adopt rules and regulations, subject to the approval of the commissioner of administration, providing for the payment by the commonwealth of late penalty interest in accordance with the provisions of section twenty-nine B of chapter twenty-nine.
SECTION 2. Chapter 29 of the General Laws is hereby amended by inserting after section 20B, as so appearing, the following section:-
Section 20C. Any commercial vendor to whom any state agency of the commonwealth is liable for late penalty interest under the provisions of section twenty-nine B shall, prior to payment of said interest, submit to said state agency an invoice for said interest in accordance with applicable rules and regulations of the comptroller.
SECTION 3. Said chapter 29 is hereby further amended by inserting after section 29B, as so appearing, the following section:-
Section 29C. Except as otherwise provided for by law, the general court or any agency of the executive or judicial branches of the government which acquires property or services from a commercial vendor, including both profit and not for profit corporations, excluding state employees, recipients of public assistance, cities and towns and other municipal forms of government, but which does not make full payment by the required payment date for each such complete and appropriate item of property or service delivered in accordance with an applicable purchase order contract, shall be liable for late penalty interest to said commercial vendor on the amount which is due in accordance with the following provisions:-
(a) that the required payment date shall be the date on which payment is due under the terms of the contract for the provision of said property or services; or, if a specific date on which payment is due is not established by contract, not more than forty-five days after receipt of a properly authorized, approved and submitted invoice for the amount of payment due, unless the usual and customary time for payment is longer;
(b) that the late penalty interest provided for under this section shall be computed at a rate to be set semi-annually by the commissioner of administration on January first and July first of each year; provided, however, that said rate shall be equal to the discount rate charged on said dates by the Federal Reserve Bank of Boston;
(c) that the provisions of this section shall apply to any late penalty interest which may be due in accordance with the provisions of this section;
(d) that the provisions of this section shall not apply to the delivery of any property or services made at the beginning of any fiscal year unless a general appropriation act is in effect for said fiscal year. Upon the passage of a general appropriation act, a required payment date may be set or the forty-five day period as provided in paragraph (a) may be commenced;
(e) that, within fifteen days after the date on which any invoice is received, state agencies notify any such commercial vendors of any defect or impropriety in such invoice which would prevent the running of the time period.
Any state agency required to pay interest under the provisions of this section shall pay any amount required out of funds appropriated for the administration or operation of the program for which the interest was incurred.
The commissioner of administration shall, not more than sixty days after the conclusion of each fiscal year, file with the house and senate committees on ways and means a summary report on any interest penalties made under this section during the preceding fiscal year. Such report shall include the number, amounts, frequency of interest penalty payments, and reasons such interest payments were made, summarized by state agency and secretariat, where applicable.
A copy of rules and regulations promulgated pursuant to this section, or any amendment or repeal of any such rules and regulations, shall be filed with the house and senate committees on ways and means at least thirty days prior to implementation.
SECTION 4. The provisions of this act shall apply to property and services delivered after the effective date of this act.