Lawmaker to file prompt vendor payment bill

Published 1:25 pm Tuesday, August 5, 2025

Charities and nonprofits who provide critical services to state agencies would receive money they are owed faster, as Rep. Shawn McPherson, R-Scottsville, says he plans to file legislation in the 2026 session requiring prompt payments to vendors under government contracts and impose penalties for late payments.

The measure would ultimately seek to create a framework for a more efficient government by ensuring all parties involved in a government contract are held to its terms.

“It’s really disheartening to know that these nonprofits are still waiting far too long to be paid for services they provide to the state,” McPherson said. “They have expenses and operate on tight budgets, underscoring the importance of prompt payments. While regulations can help address this issue, the simple fact remains that regulations do not carry the weight of law.”

Provisions of the proposed measure would:

–Require that vendor rights to prompt payment and late penalties are included in contracts to ensure accountability of all parties.

–Allow the state to make partial payments on invoices for services that have been properly delivered and billed so that one error does not block the entire payment.

–Direct the Finance and Administration Cabinet to promulgate regulations establishing a formal dispute resolution process addressing overdue payments.

–Allow the state to consider making whole vendors who have incurred additional financing costs due to late payments.

–Require reporting to the General Assembly by the Finance and Administration Cabinet to help policymakers better understand the scope and volume of this issue and continue dismantling barriers to prompt payments.

“This is a nonpartisan, commonsense measure that would create a framework for a more efficient government and ensure taxpayer dollars are spent properly,” McPherson added. “Establishing a framework for the prompt payment of vendors under government contracts would not only benefit the vendors, but also the Commonwealth and the residents paying taxes and accessing services.”

Lawmakers passed a version of the proposal earlier this year as House Bill 622, but it was line-item vetoed by the governor. To view HB 622, you can click here.