Payment Terms Legislation In United States
The Prompt Payment Act is federal law governing payment terms from government agencies. In general terms from the government are limited to 30 days, with 7 days for meat and poultry, 10 days for dairy and perishables, and 15 days for ‘ast pay’ terms aimed at SMEs.
The act also covers government construction projects requiring payment to the prime contractor within 14 days and further payments to the sub-contractors by 7 days after this payment.
All but 15 US states have also enacted laws covering prompt payment in private construction projects.
United States Department of Agriculture – ‘Packers and stockyards act 1921’ requires livestock sold on a grade-and-yield basis to be paid by the end of the next business day after the final purchase price is determined. Live poultry obtained under a poultry growing arrangement must be paid for by the close of the 15th day following the week in which the poultry is slaughtered.
Californian Food and Agricultural Code 56302 states that if no payment period is agreed in contract between a dealer and the producer of a farm product the due date is 30 days from delivery.
Florida General Agricultural Laws 604.3 require non-stored grain to be paid for within 6 months of the date of the contract or delivery.
Idaho Commodity Dealer Law requires a commodity dealer to pay for agricultural commodities upon delivery or demand by the owner or agent, but not later than 30 days after delivery, unless otherwise agreed to by the parties in writing.
Iowa State Code 203.8 requires grain dealers to pay within 30 days of delivery unless a credit-sale contract, with a maximum of 12 months, is used.
Louisiana State Legislature Title 3, 3414:1-4 requires grain dealers for spot price contracts as well as purchases of rice and cotton to be paid within 10 days of delivery.
Minnesota Statute 223.17 subdivision 5 requires payment for grain purchases by close of business on the day following sales or within 48 hours of the sale, whichever is later.
Missouri State law 276.461 requires grain dealers to make payment on delivery unless a written purchase contract or deferred payment contract is used.
Montana State code 80-4-608 requires grain dealers to pay 90% on delivery with the remaining 10% no later than 30 days from delivery.
Oregon State Law 576.705 requires agricultural commodities including seeds, animals, sugar beet and fish or seafood to be paid within 30 days of delivery.
Washington State Legislature 22-09-620 requires all agricultural commodities to be paid within 30 days of delivery unless otherwise specified in contract.
Nebraska State Statute 75-905 requires grain to be paid within 30 days of delivery.
The Federal Milk Marketing Order sets out payment timelines for milk associations and producers across areas of the United States. In general partial payments to dairy producers are on the 26th or 27th of the month with final payment by the 15th of the month following.
California is not covered by federal milk law and the Californian Federal Milk Marketing Order has a schedule of payments through cooperatives to producers with partial payments by the last day of the month and the final payment by the 19th of the month following delivery.
In 2014 the US Government launched the SupplierPay Initiative with 26 large companies, pledging to pay smaller suppliers earlier and provide more affordable working capital financing.
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