In 2001, the Texas Legislature enacted the “Prompt Payment Law” now codified in Government Code Section 2251. The law prescribes that a payment by a State governmental agency under a contract executed on or after September 1, 1987, is overdue on the 31st day after the later of:

the date the governmental entity receives the goods under the contract;
the date the performance of the service under the contract is completed; or
the date the governmental entity receives an invoice for the goods or service.

A payment begins to accrue interest on the date the payment becomes overdue.

The renewal, amendment, or extension of a contract executed on or before September 1, 1993, is considered to be the execution of a new contract; therefore, receipt of a new invoice under a revised contract begins another 30-day period during which the invoice must be paid before interest begins accruing.

Therefore, it is

imperative

that the Districts and ROW Division

make every effort to process utility payments in a timely manner

, and thereby

avoid payment of interest

. Please refer to .

Any payment resulting from an audit, or as a result of an LPA agreement, is not subject to the Prompt Payment Law.

For further information, refer to the .