---
title: HB 1506. Contracts; payment terms for business to business transactions; provide
collection: bills
id: 2025-2026/hb1506
cite_as: HB 1506, 2025-2026 Regular Session (Ga.)
canonical_url: https://georgiacommons.org/bills/2025-2026/hb1506
md_url: https://georgiacommons.org/bills/2025-2026/hb1506.md
text_url: https://georgiacommons.org/bills/2025-2026/hb1506/text
source_url: https://www.legis.ga.gov/legislation/73875
date: 2026-03-09
status: introduced
corpus_version: bills-2026-09-13
license: Public record of the Georgia General Assembly, via LegiScan; see about.md
publisher: Georgia Commons, an independent project of Georgia Civic Data. Not the State of Georgia. Not legal advice.
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next: https://georgiacommons.org/bills/2025-2026/hb1507.md
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omitted: votes and history
omitted_chars: 129
omitted_url: https://georgiacommons.org/bills/2025-2026/hb1506.md?full=1
bill_number: HB 1506
session: 2025-2026 Regular Session
session_slug: 2025-2026
chamber: House
bill_type: bill
status_date: 2026-03-04
last_action: House Second Readers
sponsors:
  - Jasmine Clark
  - Samuel Park
  - Dar'shun Kendrick
  - Solomon Adesanya
text_version: Introduced
has_text: true
legiscan_url: https://legiscan.com/GA/bill/HB1506/2025
upstream_id: 2129500
summaries_model: claude-sonnet-5
topic_tags:
  - prompt payment law
  - business contracts
  - small business
  - payment deadlines
---

# HB 1506. Contracts; payment terms for business to business transactions; provide

## Text

House Bill 1506
By: Representatives Clark of the 108th, Park of the 107th, Kendrick of the 95th, and Adesanya
of the 43rd
A BILL TO BE ENTITLED
AN ACT
To amend Chapter 11 of Title 13 of the Official Code of Georgia Annotated, relating to
prompt payment, so as to provide for payment terms for business to business transactions;
to provide for definitions; to provide for related matters; to repeal conflicting laws; and for
other purposes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION 1.
Chapter 11 of Title 13 of the Official Code of Georgia Annotated, relating to prompt
payment, is amended by revising Code Section 13-11-2, relating to definitions, as follows:
"13-11-2.
As used in this chapter, the term:
<ins>(1) 'Business to business transaction' means a financial exchange of goods, services, or
information for payment between two or more businesses.
</ins> <del>(1)(2)</del> 'Contractor' means a person who contracts with an owner to improve real property,
to perform construction services, or to perform construction management services for an
owner.
<del>(2)(3)</del> 'Improve' means to build, effect, alter, repair, or demolish any improvement upon,
connected with, or on or beneath the surface of any real property or to excavate, clear,
grade, fill, or landscape any real property or to construct driveways and private roadways
or to furnish materials, including trees and shrubbery, for any of such purposes or to
perform any labor upon such improvements.
<del>(3)(4)</del> 'Improvement' means all or any part of any building, structure, erection, alteration,
demolition, excavation, clearing, grading, filling, or landscaping, including trees and
shrubbery, driveways, and roadways, on real property.
<del>(4)(5)</del> 'Owner' means a person who has an interest in the real property improved and for
whom an improvement is made and who ordered the improvement to be made. <del>'Owner'
</del> <ins>The term 'owner'</ins> includes private persons and entities and state, local, or municipal
government agencies, instrumentalities, or entities; provided, however, that the provisions
of this chapter shall not apply when the owner is a county having a population of less
than 10,000 according to the United States decennial census of 1990 or any such future
census or when the owner is a municipality having a population of less than 2,500
according to the United States decennial census of 1990 or any such future census.
<del>(5)(6)</del> 'Owner's representative' means the architect or engineer in charge of the project
for the owner or such other contract representative or officer as designated in the contract
documents as the party representing the owner's interest regarding administration and
oversight of the project.
<del>(6)(7)</del> 'Real property' means the real estate that is improved, including lands, leaseholds,
tenements, and improvements placed on the real property.
<del>(7)(8)</del> 'Receipt' means actual receipt of cash or funds in the contractor's or subcontractor's
bank account.
<del>(8)(9)</del> 'Subcontractor' means any person who has contracted to furnish labor or materials
to, or has performed labor or supplied materials for, a contractor or another subcontractor
in connection with a contract to improve real property. For purposes of this chapter, the
term 'subcontractor' shall also include materialmen as defined in Code Section
44-14-360."
SECTION 2.
Said chapter is further amended by adding a new Code section to read as follows:
<ins>"13-11-4.1.
In any business to business transaction where a business has performed in accordance with
the provisions of a contract, such business shall within 30 days of receipt be paid for any
work completed or service provided under the contract."
</ins> SECTION 3.
All laws and parts of laws in conflict with this Act are repealed.

## Summaries written by Georgia Commons

The following was written by claude-sonnet-5 from the text above and is not part of the bill. Quote the text, not the summary.

A Georgia House bill would require businesses to pay other businesses within 30 days of receiving completed work or services under a contract, and adds a new legal definition for business-to-business transactions.

### Plain-language summary

Georgia's prompt payment law (O.C.G.A. Chapter 11 of Title 13) currently sets payment timing rules mainly for construction contracts between owners, contractors, and subcontractors. This bill adds a new category of covered transactions: general business-to-business deals involving the exchange of goods, services, or information for payment.
The bill amends the law's definitions section to define 'business to business transaction' and adds a new Code section, 13-11-4.1, stating that when a business has performed under a contract, it must be paid within 30 days of receipt for the work or service completed. The bill does not specify a separate effective date, so it would take effect under Georgia's standard rules once signed into law, and it repeals any conflicting laws.

### What it does

- Adds a new definition for 'business to business transaction' meaning an exchange of goods, services, or information for payment between two or more businesses.
- Creates a new Code section (13-11-4.1) requiring payment within 30 days of receipt when a business has performed under a contract with another business.
- Extends prompt payment obligations, previously focused on construction contracting relationships, to general business-to-business contracts.
- Repeals any existing Georgia laws that conflict with the new 30-day payment requirement.

### Who it affects

Georgia businesses that enter contracts with other businesses for goods, services, or information, including vendors, suppliers, and service providers, as well as the businesses that owe them payment. Contractors, subcontractors, and property owners already covered by the existing prompt payment law may also see clarified definitions.

### Why it matters

Businesses waiting on payment from other businesses would gain a clear 30-day deadline after receipt of goods or services, giving them a legal basis to expect timely payment. Businesses that pay slowly for goods or services would need to adjust to meet the new deadline or risk violating the law.

### Key provisions

- Section 1 revises Code Section 13-11-2 by adding a new definition of 'business to business transaction' and renumbering existing definitions such as contractor, improvement, owner, and subcontractor.
- Section 1 also clarifies that the term 'owner' includes private persons, entities, and government agencies, with existing exceptions for very small counties and municipalities.
- Section 2 adds new Code Section 13-11-4.1, requiring payment within 30 days of receipt for work or services completed under a business-to-business contract.
- Section 3 repeals any laws in conflict with the new requirements.

## Status

- Status: Introduced (2026-03-04)
- Last action: House Second Readers (2026-03-09)
- Sponsors: Jasmine Clark, Samuel Park, Dar'shun Kendrick, Solomon Adesanya
- Official page: https://www.legis.ga.gov/legislation/73875

> The history, votes, and amendments (129 characters) are at https://georgiacommons.org/bills/2025-2026/hb1506.md?full=1