KentuckyHB 4802026 Regular SessionHouseWALLET

AN ACT relating to state contracts.

Sponsored By: Shawn McPherson (Republican)

Became Law

Administrative Regulations And ProceedingsContractsPublic ProcurementReports MandatedState Agencies

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Bill Overview

Analyzed Economic Effects

2 provisions identified: 2 benefits, 0 costs, 0 mixed.

Prompt pay and interest for state contractors

Undisputed amounts must be paid within 30 business days of delivery or invoice, or by the contract terms. After 30 business days, interest of 1% per month (or part of a month) is owed on undisputed amounts until paid, unless the contract sets different terms or KRS 371.405 applies. Agencies must tell you within 15 business days if an invoice is rejected and why. You have 10 calendar days to fix delivery or send a corrected invoice; fixing it on time keeps the original date for late-fee math, but missing it restarts the clock. Contracts must spell out invoice format, required documents, how to communicate, and milestone rules. Contracts must also say if partial payments are allowed and how they work, and they may include an upfront payment at signing to start work. Agencies must pay late-payment penalties themselves and cannot take them from contract funds. If you had to borrow to keep working after 30 business days without payment, you can recover the interest and financing costs until payment is issued.

State contract payment rules and dispute steps

The Finance and Administration Cabinet must adopt procurement rules on timely payments, partial payments, reimbursements, and how to resolve late payments. The rules must be issued by October 1, 2026 and include how to fix invoice errors when no rejection is sent, how partial payments work, and a step‑by‑step payment‑resolution process with timelines. By October 1, 2026, the Cabinet must also post the payment‑resolution steps and contractor instructions on its website.

Sponsors & Cosponsors

Sponsor

Shawn McPherson
Republican • House

Cosponsors

Adam Bowling
Republican • House
Anne Gay Donworth
Democrat • House
Chris Lewis
Republican • House
Daniel Grossberg
Democrat • House
Jason Petrie
Republican • House
Kim King
Republican • House
Nima Kulkarni
Democrat • House
Rachel Roarx
Democrat • House
Richard White
Republican • House
Steve Bratcher
Republican • House
Samara Heavrin
Republican • House
Sarah Stalker
Democrat • House
Vanessa Grossl
Republican • House

Roll Call Votes

All Roll Calls

Yes: 134 • No: 0

Senate vote • 3/31/2026

3rd reading, passed

Yes: 38 • No: 0

House vote • 2/17/2026