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SB 1823

Public Contracts - As introduced, requires a state department, agency, or official who contracts with a business to acquire property or services to make payments under the contract to the business within 30 days rather than 45 days after receipt of the invoice from the business; requires such state departments, agencies, and officials to annually report to the chairs of the appropriate standing committees of the senate and house of representatives by January 10 of each year the number and aggregate amount of late payments made for the preceding calendar year and the amount of interest paid and outstanding on such late payments. - Amends TCA Title 12, Chapter 4.

114th Regular Session (2025-2026) Introduced by Adam Lowe

Requires Tennessee state government to pay contractors within 30 days instead of 45 days and mandates annual reporting on late payments and interest costs.

Signed by Governor.
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Bill Summary · SB 1823

Legislative bill overview

SB 1823 shortens the payment timeline for state government contracts from 45 days to 30 days after invoice receipt. The bill also mandates annual reporting to legislative committees documenting late payments, including aggregate amounts and interest paid on overdue invoices.

Why is this important

Faster payment cycles improve cash flow for small businesses and contractors working with the state, reducing their need for external financing or lines of credit. Transparency reporting on late payments creates accountability and reveals whether the state is meeting its payment obligations, potentially exposing systemic budget or administrative issues.

Potential points of contention

  • Implementation feasibility: State agencies may lack sufficient accounting infrastructure or budget coordination to consistently meet a 30-day deadline, particularly for complex or high-value contracts requiring verification
  • Cost to the state: Accelerated payment schedules could create cash flow pressure on state treasuries and require agencies to prioritize payment processing over other operations
  • Reporting burden: Requiring annual reporting across all departments adds administrative overhead and may reveal politically sensitive information about governmental efficiency and payment failures

Compiled from official sources — confirm details with the bill’s official record.

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