# Local Government Prompt Payment Acts in 2027: When a County, School, or Transit Agency Pays Late

Canonical URL: https://nemtguide.com/guides/prompt-payment-laws/ · Updated 2026-10-02

A local government prompt payment act is a state law that sets how fast counties, cities, school districts, and other public buyers must pay your invoices, and the interest they owe when they pay late. Florida gives local buyers 45 days after a proper invoice, Illinois 30 days to approve plus 30 to pay, and Texas 30 days. The clock starts only when they receive a proper invoice.

- Prompt payment laws cover government buyers only. Brokers, health plans, and private facilities pay on the terms of your agreement.
- The clock starts when the buyer receives a proper invoice, so an invoice that misses one required item can cost you weeks.
- Florida local buyers pay 1 percent a month interest once a payment is 30 days past due, but you must invoice them for it.
- Texas buyers owe 7.75 percent a year on payments that become overdue from September 1, 2026 to August 31, 2027, paid with the late payment.
- Write down the day each invoice was received. Every deadline and every dollar of interest is counted from it.

A county ride program, a school district, a transit agency, or a VA medical center does not pay when it feels like it. Most run on a payment clock set by state or federal law, and most of those laws add interest when the clock runs out. The catch is that the clock usually starts only when the buyer receives a proper invoice, so the invoice you send is the tool that gets you paid. These laws cover government buyers only. For brokers and health plans, see [late broker payments](https://nemtguide.com/guides/nemt-broker-late-payment/).

## How long public buyers have to pay

The deadline and the interest rate depend on the state and on who the buyer is. Four state laws and the federal one, as of October 2026:

| Law | Who it covers | Pay by | Interest when late |
|---|---|---|---|
| Florida, ss. 218.70 to 218.80 | Counties, cities, school boards and districts, special districts, authorities | 45 days after a proper invoice | 1% a month, from 30 days after the due date |
| Illinois, 50 ILCS 505 | Counties, townships, cities, school districts, park and other local districts | 30 days to approve, then 30 days to pay | 1% a month or part of a month |
| Texas, Government Code ch. 2251 | State agencies, counties, cities, school districts, special districts | 30 days, or 45 if the board meets monthly or less | 7.75% a year if overdue Sept. 1, 2026 to Aug. 31, 2027 |
| Maryland, State Finance and Procurement 15-103 to 15-105 | State agencies and the contracts they sign | 30 days after a proper invoice | 9% a year, if you invoice for it |
| Federal Prompt Payment Act, 5 CFR part 1315 | Federal agencies, including VA medical centers | The contract date, or 30 days after a proper invoice | 4.75% a year for July 1 to Dec. 31, 2026 |

### Florida

The Local Government Prompt Payment Act covers any county or municipal government, school board, school district, authority, special taxing district, or other political subdivision, and their offices and departments (s. 218.72). For services other than construction, the clock starts when the chief disbursement officer receives a proper invoice, after the governing body approves it if approval is required (s. 218.73). Payment is due 45 days later (s. 218.74(2)).

Interest starts 30 days after the due date at 1 percent a month on the unpaid balance. You must invoice the buyer for the interest to receive it. A part of a month counts as a full month, and unpaid interest compounds monthly (s. 218.74(4)). No local contract may bar that interest (s. 218.75), and in a lawsuit to collect, the court awards costs and reasonable attorney's fees to the side that wins (s. 218.76(3)).

This reaches more ride work than you might expect. In Florida's transportation disadvantaged program, a county can be its own coordinator: Collier County's Board of County Commissioners is the designated coordinator under its 2026 service plan, so its operator contract is a county purchase. A private coordinator is not a local governmental entity under the act, so there your contract sets the terms. See [Collier County](https://nemtguide.com/states/florida/collier-county/).

### Illinois

The Local Government Prompt Payment Act applies to every county, township, municipality, school district, forest preserve, park, fire protection, and sanitary district, and every other local government, but not to the State itself. The official who receives the services must approve or disapprove your bill within 30 days after receiving it or after the services, whichever is later, and mail written notice at once if it is disapproved (505/3). An approved bill is paid within 30 days of approval. After that, a penalty of 1 percent of the unpaid amount is added for each month or part of a month (505/4). If nobody approves or disapproves the bill in time, the penalty runs from 60 days after the bill or the services were received, whichever is later (505/5).

Read the payment clause: the act lets a local government and a vendor agree to longer periods (505/6).

### Texas

Chapter 2251 covers state agencies and political subdivisions: counties, cities, public school districts, and special-purpose districts and authorities. A payment is overdue on the 31st day after the later of the date the service is completed or the date the buyer receives the invoice. A political subdivision whose governing body meets only once a month or less has until the 46th day (2251.021).

Interest runs from the day the payment becomes overdue, at 1 percent plus the prime rate published on the first weekday of July (2251.025). For fiscal 2027, the Comptroller puts it at 7.75 percent for payments that become late between September 1, 2026 and August 31, 2027, because the prime rate was 6.75 percent on July 1, 2026. A political subdivision must compute the interest and pay it with the principal, and may not make you ask for it, wait an extra day, or waive it as a condition of the contract (2251.027).

### Maryland

Maryland's Medicaid rides run through county programs, most of them local health departments (see [Maryland](https://nemtguide.com/states/maryland/)). The Washington County Health Department buys under state procurement law, and the contract in its April 2026 request for proposals pays within 30 days after it receives a proper invoice. Under State Finance and Procurement 15-104 and 15-105, an amount still unpaid more than 37 days after the invoice arrives earns interest of 9 percent a year, counted from the 31st day. You get it only if you send an invoice for the interest within 30 days after the date on the state's check. No interest is owed for more than one year, or on unpaid interest.

### Federal agencies

When a contract names no payment date, a federal agency pays 30 days after it receives a proper invoice (5 CFR 1315.4(g)). Interest is paid whether or not you ask for it (5 CFR 1315.10(b)), at the Treasury rate in effect the day after the due date: 4.75 percent for July 1 through December 31, 2026. For VA ride contracts, see [VA transportation contracts](https://nemtguide.com/guides/va-transportation-contracts/).

## What makes an invoice proper

Florida's definition shows how this works: a proper invoice conforms to the law and to every requirement the buyer wrote into the contract (s. 218.72(8)). So the contract's invoicing section is your checklist. Washington County's 2026 RFP, for example, will not process an invoice unless it shows, without error:

- your name and address, and the address for payment
- your federal employer ID or Social Security number
- the invoice period, invoice date, and invoice number
- the department's contract number
- the services provided and the amount due
- any other documentation the contract requires, such as monthly trip manifests

It also wants each month's invoice by the 15th of the next month. Build these fields into the free [NEMT invoice template](https://nemtguide.com/templates/nemt-invoice-template/), and keep the same leg-by-leg detail you would show any payer.

Where you send it matters too. Texas excludes an invoice from the act's protection when it is not mailed to the person it is addressed to, following any instruction on the purchase order (2251.002). A federal agency counts from the later of the day its designated office receives the invoice or the seventh day after the service is completed (5 CFR 1315.4(b)). Use the exact office, email, or portal the contract names, and keep proof of the day it arrived.

When an invoice is wrong, the buyer must say so within a deadline: 10 days for a Florida local buyer, in writing, with the fix it needs (s. 218.76(1)), 21 days for a Texas buyer, with a detailed statement of the disputed amount (2251.042), and 7 days for a federal agency (5 CFR 1315.4(c)). Correct and resend the same day.

## How to track the clock and claim interest

1. **Record the day each proper invoice was received.** Use the portal's timestamp, the email reply, or a delivery receipt. Florida buyers must mark each invoice with the date it is delivered (s. 218.74(1)).
2. **Put two dates on your calendar.** The due date, and the day interest starts.
3. **Call accounts payable the day after the due date.** Ask whether the invoice is approved, waiting for a board meeting, or disputed, and write down the answer and the name.
4. **Send a written notice that payment is late.** Name the invoice, the date received, the amount, and the law.
5. **Claim the interest the way the law requires.** In Florida, send an interest invoice. In Maryland, send it within 30 days after you are paid. In Texas and from federal agencies, check that the interest came with the payment.
6. **Use the dispute process when there is one.** A Florida local buyer must start its dispute process within 30 days after receiving the invoice and decide within 45 days (s. 218.76(2)).

Here is how the interest adds up on a hypothetical $8,000 invoice for a month of rides, received March 2, 2027:

- **Florida.** Due 45 days later, on April 16. Interest starts 30 days after that, on May 16. If the county pays on June 20, the late period is one month and four days, which counts as two months. Interest is $80.00 for the first month and $80.80 for the second, after compounding: $160.80. You invoice the county for it.
- **Texas.** The last on-time day is April 1. If the county pays on May 1, the payment is 30 days late. At 7.75 percent, the interest is 30 ÷ 365 × 0.0775 × $8,000 = $50.96, the method the Comptroller uses. The county must include it with the payment.

Track your public buyers in the same aging report you use for everyone else (see [NEMT accounts receivable](https://nemtguide.com/guides/nemt-accounts-receivable/)), and plan cash for the gap with the [cash flow guide](https://nemtguide.com/guides/nemt-cash-flow/).

## When the clock pauses or does not apply

- **A real dispute.** Texas's payment deadlines do not apply while a bona fide dispute about the services causes the delay (2251.002). If a Texas dispute is settled in your favor, interest runs from the original overdue date. If it is settled for the buyer, you send a corrected invoice and a new clock starts (2251.042). Florida works the same way: interest starts 15 days after a final decision for the buyer, or from the original due date if the decision goes your way (s. 218.76(2)).
- **Federal money that has not arrived.** A Texas payment made with federal funds is exempt when the terms of a federal contract, grant, rule, or statute prevent the buyer from paying on time (2251.002). A Florida local buyer whose payment depends on federal funds must say so in the solicitation and the contract (s. 218.77). Check for that clause before you bid on a grant-funded program.
- **Longer terms in the contract.** Illinois allows them. Read the payment clause in every contract and ask about it before the questions deadline. The [bid or no-bid checklist](https://nemtguide.com/templates/bid-no-bid-checklist/) has a row for it.
- **Payers that are not government.** Brokers, Medicaid health plans, private coordinators, hospitals, and senior living communities pay on the terms you signed. When a private customer stops paying, see [NEMT collections](https://nemtguide.com/guides/nemt-collections/).

Texas adds one more lever. If a buyer does not pay an undisputed amount on time, you may suspend work after written notice that payment has not arrived and that you intend to suspend, no sooner than 10 days after the notice (2251.051). Use it carefully: riders on dialysis and chemotherapy schedules depend on those trips, and your contract may set its own notice terms.

## Frequently asked questions

### Does a prompt payment law apply to my NEMT broker?

No. These laws bind government buyers such as counties, cities, school districts, special districts, and state agencies. A broker or Medicaid health plan pays on the terms of your provider agreement, its own claims policy, and any state rule for health plans. See the broker late payment guide for that path.

### How long does a Florida county have to pay my invoice?

For services other than construction, 45 days after it receives a proper invoice, counted from receipt by the chief disbursement officer after any board approval the county requires (Florida Statutes 218.73 and 218.74, 2026). Interest of 1 percent a month starts 30 days after that due date. You must invoice the county for the interest to receive it.

### Do I have to ask for the interest, or is it paid automatically?

It depends on the law. Florida requires you to invoice for it. Maryland pays it only if you invoice for it within 30 days after you are paid. Texas political subdivisions must compute it and pay it with the late payment, and may not make you ask or wait. Federal agencies pay it without a request.

### Can the contract give the buyer longer than the law allows?

Sometimes. Illinois lets a local government and a vendor agree to longer time periods than the act sets (50 ILCS 505/6). Florida forbids any local contract from barring the late payment interest the act allows (218.75), and Texas bars political subdivisions from making you waive interest as a condition of the contract (2251.027). Read the payment clause before you sign.

### What can I do if a Texas county still will not pay?

If the county has not paid an undisputed amount on time, you may suspend work after giving written notice that payment has not been received and that you intend to suspend, no sooner than the 10th day after the notice (Government Code 2251.051). In a formal action to collect, the losing side pays the winner's reasonable attorney fees (2251.043). Plan for riders who depend on you before you stop service.

### Does the buyer have to tell me if my invoice is wrong?

Yes, within a deadline. A Florida local buyer must tell you in writing within 10 days what to fix. A Texas buyer must give a detailed statement of the disputed amount within 21 days. Federal agencies return an improper invoice within 7 days. Fix and resend at once, because the clock usually runs from the day the corrected invoice arrives.

## Official resources

- [Florida Statutes: Local Government Prompt Payment Act, section 218.74](https://www.flsenate.gov/Laws/Statutes/2026/218.74)
- [Illinois: Local Government Prompt Payment Act, 50 ILCS 505](https://www.ilga.gov/Legislation/ILCS/Articles?ActID=725&ChapterID=11)
- [Texas Government Code chapter 2251](https://tcss.legis.texas.gov/resources/GV/htm/GV.2251.htm)
- [Texas Comptroller: Prompt payment due date and interest calculator](https://fmx.cpa.texas.gov/fm/usas/prompay/duedate.php)
- [Bureau of the Fiscal Service: Prompt Payment for federal vendors](https://fiscal.treasury.gov/prompt-payment/rates.html)