HB 1506: 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 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.

• 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.

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.

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.

• 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.

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

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

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