Summary of Bill S 2284

Bill Number: S 2284

Title: Relates to providing for prompt payment by contractors receiving public funds of amounts owed to small businesses and minority-owned business enterprises

Status: PRINT NUMBER 2284A

Introduced: January 16, 2025

Classification: Bill

Purpose and Intent

Bill S 2284 aims to ensure that contractors who receive public funds are required to make prompt payments to small businesses and minority-owned business enterprises (MBEs) for services and goods provided. The intent of the bill is to enhance financial stability for these businesses, which often face cash flow challenges due to delayed payments.

Key Provisions

• Prompt Payment Requirement: The bill mandates that contractors must pay small businesses and MBEs within a specified timeframe after receiving payment from the government. This is intended to reduce the lag time that these smaller entities often experience.

• Penalties for Non-Compliance: Contractors who fail to comply with the prompt payment requirements may face penalties, which could include fines or restrictions on future contracts with public agencies.

• Reporting and Accountability: The bill may require contractors to report payment practices and timelines, thereby increasing transparency and accountability in the procurement process.

Affected Parties

• Small Businesses: The primary beneficiaries of this legislation will be small businesses that often rely on timely payments to maintain operations and manage cash flow.

• Minority-Owned Business Enterprises (MBEs): The bill specifically targets MBEs, aiming to support their growth and sustainability in a competitive market.

• Contractors: Contractors receiving public funds will be directly impacted by the new payment requirements and potential penalties for non-compliance.

Legislative Actions and Timeline

• Introduced: January 16, 2025, and referred to the Committee on Procurement and Contracts.

• Amendments: On May 9, 2025, the bill was amended and recommitted to the Procurement and Contracts committee, resulting in the updated PRINT NUMBER 2284A.

Related Bills

• S 8621: A prior-session bill that may have addressed similar issues.

• A 5491: A companion bill that could provide additional context or support for the objectives of S 2284.

Conclusion

Bill S 2284 represents a significant step towards improving the financial dynamics between public contractors and small businesses, particularly those owned by minorities. By enforcing prompt payment practices, the bill seeks to foster a more equitable business environment and support the growth of underrepresented enterprises in the public contracting space.