HB1506: HB1506 Contracts; payment terms for business to business transactions; provide

Georgia's prompt payment law (O.C.G.A. Chapter 11 of Title 13) currently sets payment deadlines mainly for construction contracts between owners, contractors, and subcontractors. This bill adds a new category called a 'business to business transaction,' defined broadly as any financial exchange of goods, services, or information for payment between two or more businesses. The bill adds a new section, Code Section 13-11-4.1, saying that in any business to business transaction where one business has performed its part of a contract, it must be paid within 30 days of receipt for work completed or services provided. The bill also renumbers existing definitions in Code Section 13-11-2 to make room for the new term. It repeals any conflicting laws but does not state a specific effective date beyond the general rule that new laws take effect when signed unless stated otherwise.

• Adds a new legal definition of 'business to business transaction' covering any financial exchange of goods, services, or information for payment between businesses.
• Creates a new Code section, 13-11-4.1, requiring payment within 30 days of receipt when a business has completed contracted work or services.
• Renumbers the existing list of definitions in Code Section 13-11-2 to insert the new term without changing the substance of the other definitions.
• Repeals any existing Georgia laws that conflict with the new 30-day payment requirement.

Georgia businesses that buy from or sell to other businesses under contract, including suppliers, service providers, and their business customers, are affected. The existing construction industry participants covered by the prompt payment law, such as contractors, subcontractors, and property owners, remain covered as well.

If enacted, businesses that complete contracted work or deliver services to another business could legally require payment within 30 days, giving smaller vendors and suppliers a clearer, faster payment timeline and a potential legal claim if a business customer pays late.

• Section 1 revises Code Section 13-11-2 to add 'business to business transaction' as a defined term and renumbers the chapter's other definitions accordingly.
• Section 2 adds new Code Section 13-11-4.1, requiring payment within 30 days of receipt for completed work or services under a business to business contract.
• Section 3 repeals any state laws that conflict with these new requirements.

1. 2026-03-09House Second Readers (House)
2. 2026-03-06House First Readers (House)
3. 2026-03-04House Hopper (House)

• Jasmine Clark (D, HD-108)Primary sponsor
• Samuel Park (D, HD-107)
• Dar'shun Kendrick (D, HD-095)
• Solomon Adesanya (D, HD-043)

• prompt payment law
• business contracts
• payment deadlines
• small business
• commercial law