§ 3904. Limitations on discount payments

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1983

   Pub. L. 97–452 § 1(18)(A) · 96 Stat. 2467

   Enacted · 31 U.S.C. § 3904

   Added Pub. L. 97–452, § 1(18)(A), Jan. 12, 1983, 96 Stat. 2476

   Source evidence

   Code source credit
   Added Pub. L. 97–452, § 1(18)(A), Jan. 12, 1983, 96 Stat. 2476

   Enacted provision · exact public law section
   (A) Subtitle III is amended by adding at the end the following: “CHAPTER 39— PROMPT PAYMENT “Sec. “3901. Definitions and application. “3902. Interest penalties. “3903. Regulations. “3904. Limitations on discount payments. “3905. Reports. “3906. Relationship to other laws. “§ 3901. Definitions and application “(a) In this chapter— “(1) ‘agency has the same meaning given that term in section 551(1) of title 5 and includes an entity being operated, and the head of the agency identifies the entity as being operated, only as an instrumentality of the agency to carry out a program of the agency . “(2) ‘business concern’ means— “(A) a person carrying on a trade or business; and “(B) a nonprofit entity operating as a contractor. “(3) ‘proper invoice’ is an invoice containing or accompanied by substantiating documentation the Director of the Office of Management and Budget may require by regulation and the head of the appropriate agency may require by regulation or contract. “(4) the head of an agency is deemed to receive an invoice on the later of the dates that— “(A) the designated payment office or finance center of the agency actually receives a proper invoice; or “(B) the head of the agency accepts the applicable property or service. “(5) a payment is deemed to be made on the date a check for the payment is dated. “(6) a contract to rent property is deemed to be a contract to acquire the property. “(b) This chapter applies to the Tennessee Valley Authority. Tennessee Valley Authority. However, regulations prescribed under this chapter do not apply to the Authority, and the Authority alone is responsible for carrying out this chapter as it applies to contracts of the Authority. “§ 3902. Interest penalties “(a) Under regulations prescribed under section 3903 of this title, the head of an agency acquiring property or service from a business concern, who does not pay the concern for each complete delivered item of property or service by the required payment date, shall pay an interest penalty to the concern on the amount of the payment due. The interest shall be computed at the rate the Secretary of the Treasury establishes for interest payments under section 12 of the Contract Disputes Act of 1978 (41 U.S.C. 611). The Secretary shall Publication in Federal Roister. publish each rate in the Federal Register. “(b) Except as provided in section 3906 of this title, the interest penalty shall be paid for the period beginning on the day after the required payment date and ending on the date on which payment is made. However, a penalty may not be paid if payment for the item is made— “(1) when the item is a meat or meat food product described in section 3903(2)(A) of this title, before the 4th day after the required payment date; “(2) when the item is an agricultural commodity described in section 3903(2)(B) of this title, before the 6th day after the required payment date; or “(3) when the item is not an item referred to in clauses (1) and (2) of this subsection, before the 16th day after the required payment date. “(c) An amount of an interest penalty unpaid after any 30-day period shall be added to the principal amount of the debt, and a penalty accrues thereafter on the added amount. “(d) This section does not authorize the appropriation of additional amounts to pay an interest penalty. The head of an agency shall pay a penalty under this section out of amounts made available to carry out the program for which the penalty is incurred. “(e) A recipient of a grant from the head of an agency may provide in a contract for the acquisition of property or service from a business concern that, consistent with the usual business practices of the recipient and applicable State and local law, the recipient will pay an interest penalty on amounts overdue under the contract under conditions agreed to by the recipient and the concern. The recipient may not pay the penalty from amounts received from an agency. Amounts expended for the penalty may not be counted toward a matching requirement applicable to the grant. An obligation to pay the penalty is not an obligation of the United States Government. “§ 3903. Regulations “The Director of the Office of Management and Budget shall prescribe regulations to carry out section 3902 of this title. The regulations shall— “(1) provide that the required payment date is— “(A) the date payment is due under the contract for the item of property or service provided; or “(B) 30 days after a proper invoice for the amount due is received if a specific payment date is not established by contract; “(2) for the acquisition of meat or a meat food product (as defined in section 2(a)(3) of the Packers and Stockyards Act, 1921 (7 U.S.C. 182(3))), provide a required payment date of not later than 7 days after the meat or meat food product is delivered; and “(3) for the acquisition of a perishable agricultural commodity (as defined in section 1(4) of the Perishable Agricultural Commodities Act, 1930 (7 U.S.C. 499a(4))), provide a required payment date consistent with that Act; “(4) provide separate required payment dates for a contract under which property or service is provided in a series of partial executions or deliveries to the extent the contract provides for separate payments for partial execution or delivery; and “(5) require that, within 15 days after an invoice is received, the head of an agency notify the business concern of a defect or impropriety in the invoice that would prevent the running of the time period specified in clause (i)(B) of this section. “§ 3904. Limitations on discount payments “The head of an agency offered a discount by a business concern from an amount due under a contract for property or service in exchange for payment within a specified time may pay the discounted amount only if payment is made within the specified Penalty. time. The head of the agency shall pay an interest penalty on an amount remaining unpaid in violation of this section. The penalty accrues as provided under sections 3902 and 3903 of this title, except that the required payment date for the unpaid amount is the last day specified in the contract that the discounted amount may be paid. “§ 3905. Reports “(a) By the 60th day after the end of each fiscal year, the head of each agency shall submit to the Director of the Office of Management and Budget a report on interest penalty payments made under this chapter during that fiscal year. The report shall include the number, amounts, and frequency of the payments and the reasons the payments were not avoided by prompt payment. “(b) By the 120th day after the end of each fiscal year, the Director shall submit to the Committees on Governmental Affairs, Appropriations, and Small Business of the Senate and the Committees on Government Operations, Appropriations, and Small Business of the House of Representatives a report on agency compliance with this chapter. The report shall include a summary of the report of each agency submitted under subsection (a) of this section and an analysis of progress made in reducing interest penalty payments by that agency from prior years. “§ 3906. Relationship to other laws “(a) A claim for an interest penalty not paid under this chapter may be filed under section 6 of the Contract Disputes Act of 1978 (41 U.S.C. 605). “(b) (1) An interest penalty under this chapter does not continue to accrue— “(A) after a claim for a penalty is filed under the Contract Disputes Act of 1978 (41 U.S.C. 601 et seq.); or “(B) for more than one year. “(2) Paragraph (1) of this subsection does not prevent an interest penalty from accruing under section 12 of the Contract Disputes Act of 1978 (41 U.S.C. 611) after a penalty stops accruing under this chapter. A penalty accruing under section 12 may accrue on an unpaid contract payment and on the unpaid penalty under this chapter. “(c) Except as provided in section 3904 of this title, this chapter does not require an interest penalty on a payment that is not made because of a dispute between the head of an agency and a business concern over the amount of payment or compliance with the contract. A claim related to the dispute, and interest payable for the period during which the dispute is being resolved, is subject to the intract Disputes Act of 1978 (41 U.S.C. 601 et seq.).”.

2. 1988

   Prompt Payment Act Amendments of 1988

   Pub. L. 100–496 § 8 · 102 Stat. 2455

   Inserted · 31 U.S.C. § 3904

   Pub. L. 100–496 inserted after first sentence “For the purpose of the preceding sentence, the specified time shall be determined from the date of the invoice.”

   Source evidence

   Code amendment note
   Pub. L. 100–496 inserted after first sentence “For the purpose of the preceding sentence, the specified time shall be determined from the date of the invoice.”

   Enacted provision · exact public law section
   Sec. 8. limitations on discount payments Section 3904 of title 31, United States Code, is amended by inserting after the first sentence the following: “For the purpose of the preceding sentence, the specified time shall be determined from the date of the invoice.”.

   Effective date note
   Amendment by Pub. L. 100–496 applicable to payments under contracts awarded, contracts renewed, and contract options exercised during or after the first fiscal quarter which begins more than 90 days after Oct. 17, 1988, see section 14(a) of Pub. L. 100–496, set out as a note under section 3902 of this title.

2 of 2 references resolved to an enrolled provision