Requires prompt payment for goods and services provided under contracts with the State; failure to make prompt payment shall result in a penalty payable to the individual in the amount of a certain percentage rate or a specified penalty amount.

A BILL FOR AN ACT

SECTION 1. Section 103-10, Hawaii Revised Statutes, is amended by amending the title and subsection (a) to read as follows:

"§103-10 [Payment] Prompt payment for goods and services[.]; penalties. (a) Any person who renders a proper statement for goods delivered or services performed, pursuant to contract, to any agency of the State or any county, shall be paid no later than thirty calendar days following receipt of the statement or satisfactory delivery of the goods or performance of the services. In the event circumstances prevent the paying agency from complying with this section, the person shall be entitled to either interest from the paying agency on the principal amount remaining unpaid at a rate equal to the prime rate for each calendar quarter plus [two] ___ per cent[,] or to a payment in the form of a penalty assessed against the paying agency in the amount of $      , commencing on the thirtieth day following receipt of the statement or satisfactory delivery of the goods or performance of the services, whichever is later, and ending on the date of the check. As used in this subsection, "prime rate" means the prime rate as posted in the Wall Street Journal on the first business day of the month preceding the calendar quarter."

SECTION 2. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect on approval, provided that it shall apply to public contracts entered into on or after July 1, 2006.