State Payee Payment Resources

State Payment Requirements

The Comptroller’s office may not:

• Make a payment without a payment request from an agency via the statewide accounting system or
• Create or alter another agency’s payment request in any way.

For assistance with payments, payees should call the paying agency listed on the Paying Agency Contact List.

When the State Can Pay

Texas has a payment scheduling law, Government Code, Chapter 2155.382, that requires state agencies to schedule payments so the state receives the most benefit. This means that state agencies are not allowed to pay vendors before the payments are due unless:

• The invoice is less than $5,000 or
• The state has a business reason for paying early.

For example, agencies can make early payments to vendors if:

• The vendor gives a substantial discount for paying early or
• There is a contract stipulating the payment timelines.

To maximize the time that funds are held by the state, agencies are required to schedule their payments in the statewide accounting system. Payments will automatically be made just before the payment becomes late unless the agency justifies a request to make the payment earlier.

When Payments Are Due

Texas also has a prompt payment law, Government Code, Chapter 2251, that defines when certain payment types are due. A state agency’s payment is due on the 30th day after the latest of:

• The date the agency receives the goods under a contract,
• The date the vendor completes performing its services for the agency or
• The date the agency receives an invoice for the goods or services.

Here is an example:

A state agency ordered and received 50 chairs that cost $125 each. The chairs are received on Jan 3. The state agency receives a correct invoice for all 50 chairs on Jan. 10. The payment is legally due on Feb. 9, which is 30 days after the date the agency received the invoice. Since the invoice is over $5,000 ($6,250) and no discount for early payment is offered, the agency may not pay for the chairs until Feb. 9.

Agencies must ensure each payment complies with the prompt payment law.

Interest Due on Late Payments

The prompt payment law also states that interest is due to a vendor for goods and services when payments are late. Interest starts accruing the first day the payment is late. The interest rate the state pays is calculated on an annual basis. The interest calculation is one percentage point higher than the prime rate published in the Wall Street Journal on the first business day of July.

The statewide accounting system automatically computes and adds interest to a late payment. Any interest included in a payment will be noted in the direct deposit payment information or on the last line of the warrant stub. In the rare case that interest is legally due but not included in your payment, you may submit a claim for interest due as follows:

• Pursue the claim not later than the sixth month after the date that the late payment is received.
• Contact the paying agency; procedures for filing claims for interest vary from agency to agency.
• Be prepared to show banking information with the direct deposit transaction date or the postmark date on the envelope for the warrant.
• Submit the claim to the paying agency.

Calculators

Prompt Payment Due Date and Interest Rate Calculator

Calculates the due date of a payment and the interest rate that would apply if the payment were late.

Prompt Payment Interest Calculator

Calculates the amount of interest due on a late payment.