California Prompt Payment Act.

The California Prompt Payment Act subjects a state agency that acquires property or services pursuant to a contract with a business to a late penalty payment, if it fails to make payment to the person or business on the date required by the contract. Existing law provides that the penalty payable to a certified small business, a nonprofit organization, a nonprofit public benefit corporation, or a small business or nonprofit organization that provides services or equipment under the Medi-Cal program is 10% above the United States Prime Rate on June 30 of the prior fiscal year. The State Contract Act prescribes the procedures and requirements applicable to various state agency contracts, and exempts from these procedures and requirements specified contracts for required emergency work or remedial measures related to the accidental or unplanned release of toxic substances. This bill would specify that contracts for emergency work or remedial measures are subject to the California Prompt Payment Act, and would include a contractor performing emergency work or remedial measures related to the accidental or unplanned release of toxic substances within the list of entities entitled to the late payment penalty of 10% above the United States Prime Rate.