West Virginia Bill Aims to Speed Up Payments to State Vendors

Charleston, WV — A bill designed to expedite payments to private vendors by West Virginia state agencies cleared a key hurdle this week, advancing toward a full House vote. House Bill 2152, teh Prompt Payment Act of 2025, passed the House Government Management Subcommittee on Tuesday and now heads to the full House government Institution Committee.

This legislation mandates that state agencies pay legitimate, uncontested invoices from registered vendors within 45 days. Delays beyond this timeframe would trigger a 3% weekly compounded interest penalty, beginning on day 46. The bill also establishes a 10-business-day processing limit for each agency involved in payment processing.

The impetus for HB 2152 stems from widespread complaints about late payments from state agencies, including the Division of Highways and the Department of Human Services. The problem, according to witnesses testifying before the subcommittee, has created important financial hardship for many vendors.

Brian Hoylman,president and CEO of the Associated Builders and Contractors,highlighted the issue’s persistence. “I think it is relatively straightforward what the goal of the legislation is,” Hoylman said. “This is somthing we worked closely wiht the previous auditor and his office on over the last couple of years. And this is after a lot of examples really started to come over my desk more and more of late payments by a variety of different agencies.” He further emphasized the pervasiveness of the problem: “this happens across multiple different agencies…I think one of the reasons for that is there’s not anything in statute like this that requires them to pay within a certain time period.”

While a State Auditor’s Office review indicated many agencies meet the 45-day payment goal, some have reportedly taken six to eight months to process invoices, even for substantial contracts exceeding six figures. This unpredictability has left vendors in precarious financial positions.

Jason Pizatella, CEO of the Contractors Association of West Virginia, underscored the bill’s importance in creating financial certainty.“A recurring issue that we spent a lot of time on…is tracking down payments with the State Auditor’s Office, but more often with the state agency itself that’s responsible for submitting a warrant to the Auditor’s Office for payment,” Pizatella stated. “We think it’s vital that we codify a bill of this nature for predictability and for certainty within not just the construction industry, but all vendors for the state of West Virginia.” He noted that most of West Virginia’s neighboring states, excluding Virginia, already have similar prompt payment laws.

The impact of late payments extends beyond construction. Mia Johnson, CEO of Burlington United methodist Family Services, described how delayed payments from the Department of Human Services (DoHS) for grant payouts sometimes stretched to seven months.“I want to be able to keep my doors open, and I want to be able to keep helping people in West Virginia,” Johnson testified. “We have always had problems with payments, but after the pandemic, it increased…to the potential that we may have to consider closing our doors.” Her organization, with three residential campuses, 18 offices, and 325 employees, served over 5,000 West Virginians in 2023.

HB 2152 will now proceed to the House Government Organization Committee for further review. The committee will hold two days of hearings, the first focusing on the bill’s clarification, agency responses, and public input, and the second on amendments and discussion before a proposal to the full House.

Navigating Change: How Will West Virginia’s Prompt Payment Act Transform Vendor-State Relations?

The Hidden Toll of Late Payments: Unpacking West Virginia’s Legislative Push for Efficiency

Imagine the strain on your finances if a piece of your business income mysteriously dragged on for months, leaving you in limbo. This question reveals the underlying urgency behind West Virginia’s introduction of House Bill 2152. It’s more than a legislative maneuver; it’s an acknowledgment of a critical issue in vendor-state relationships. But what does this mean for the state’s economic health and its private vendors?

Senior Editor: With HB 2152 adding a financial penalty for delayed payments from state agencies to vendors, what could this mean for the operational frameworks within those agencies?

Expert Analysis: At its core, HB 2152 is designed to introduce a outcome for inefficiencies in handling vendor payments. By imposing a 3% weekly compounded interest penalty for late payments, state agencies are encouraged to streamline their processes. This necessitates a cultural shift where delays are treated as anomalies rather than the norm. Agencies may need to adopt digital invoice processing solutions to minimize human errors and speed up transaction times.

• Encourages Efficiency: The bill incentivizes faster processing times.
• Promotes Digital Transformation: Tailored solutions may reduce manual errors and processing times.
• Cultural Change: Remolding organizational attitudes towards timeliness and accountability.

Senior Editor: The bill sets a 10-business-day limit for agencies involved in processing payments. How practical is this target given the current state of agency workflows?

Expert analysis: Setting a hard 10-business-day processing limit creates a tangible deadline, but it also presents challenges. Agencies will need to reassess and possibly revamp their workflows to ensure adherence. implementing workflow automation could significantly enhance task management. Though, this transition requires strategic planning and phased implementation to avoid disruption.

• Workflow Restructuring: A practical possibility with strategic implementation.
• Use of Automation: Digital tools can considerably enhance task management.
• Phased Introduction: Necessary to facilitate smooth transitions and prevent system disruption.

Senior Editor: Vendors have highlighted an urgency in receiving timely payments, especially exacerbated during the post-pandemic era.How does this bill aim to restore confidence and financial stability in wholesale business engagements?

Expert Analysis: The pandemic exposed the fragile nature of small businesses reliant on predictable cash flows. Late payments can lead to significant financial distress. HB 2152 aims to restore stability by ensuring predictability. With guaranteed payment timelines, vendors can better plan their expenses and manage their payroll. This reliability allows for sustained growth and operational continuity. This could also attract more businesses to engage with state contracts, enhancing economic growth.

• Predictability in Cash Flow: Allows businesses to manage finances more efficiently.
• Strategic Trust Building: Improved state-vendor relationships can lead to economic growth.
• economic Growth Catalyst: could attract more vendors through positive experiences.

A Call to Reform: HB 2152 as a Stepping Stone

As HB 2152 moves to the House Government Organization Committee for further review and hearings, it stands not just as legislation but as a symbol of fiscal accountability and progressive change. It provides a blueprint that could inspire similar reforms beyond West Virginia’s borders.Stakeholders await the impact this bill will deliver in creating a more financially responsible and operationally efficient state.