Maine Mechanics Lien Overview

Maine’s prompt payment statutes set forth specific timeframes when general contractors, subcontractors, suppliers, and others involved with a construction project must be paid.  This page provides an overview of these regulations, and addresses some frequently asked questions related to the Maine prompt payment laws.

Maine Mechanics Lien FAQs

Prompt Payment Frequently Asked Questions

Do I Have To Send A Letter or File Anything To Qualify For Prompt Payment Penalties or Remedies in Maine?

In order for the Maine prompt pay statutes to apply, an invoice must be received or the billing period must end. In regard to subs, the prompt pay act applies after the GC receives payment from the property owner.

Can I Include Prompt Payment Fees In My Maine Mechanics Liens Claim or Bond Claim?

No. Maine doesn’t allow miscellaneous amounts to be included on the face of a mechanics lien.

What Happens To My Prompt Payment Penalties and Fees if I Get Paid Late? Can I Still Recover The Prompt Payment Penalty in Maine?

Maine law provides that interest accrues on late payments on the day after payment is due. Also noteworthy is that if arbitration or litigation is commenced to recover withheld payments, an amount equal to 1% per month of all wrongfully withheld funds shall be awarded as a penalty.

Are there reasons for which payment may be withheld past the general deadline?

Maine allows payments to be withheld for the following reasons:

  1. Unsatisfactory job progress;
  2. Defective construction or materials;
  3. Disputed work; and
  4. Third party claims
What is the best practice for making a demand to a non-paying party to get prompt payment fees?

Sending a notice of intent to lien and prompt payment demand is generally the best method for encouraging parties to make payment.

Maine

Prompt Payment Frequently Asked Questions

Do I Have To Send A Letter or File Anything To Qualify For Prompt Payment Penalties or Remedies in Maine?

In order for the Maine prompt pay statutes to apply, an invoice must be received or the billing period must end. In regard to subs, the prompt pay act applies after the GC receives payment from the property owner.

Can I Include Prompt Payment Fees In My Maine Mechanics Liens Claim or Bond Claim?

No. Maine doesn’t allow miscellaneous amounts to be included on the face of a bond claim.

What Happens To My Prompt Payment Penalties and Fees if I Get Paid Late? Can I Still Recover The Prompt Payment Penalty in Maine?

Maine law provides that interest accrues on late payments on the day after payment is due. Also noteworthy is that if arbitration or litigation is commenced to recover withheld payments, an amount equal to 1% per month of all wrongfully withheld funds shall be awarded as a penalty.

Are there reasons for which payment may be withheld past the general deadline?

Maine allows payments to be withheld for the following reasons:

  1. Unsatisfactory job progress;
  2. Defective construction or materials;
  3. Disputed work; and
  4. Third party claims

Maine Mechanics Lien Statutes

Getting informed about prompt payment laws is important. An examination of Maine’s prompt payment laws, the rules and regulations related to payment timing, is important to know your rights and responsibilities as a party on a construction project. Maine’s specific laws can be found in: 10 M.R.S.A. § 1111 et. seq. (Me. Rev. Stat., Title 10, §§ 1111 et seq.); Title 5, §§ 1551 et seq., and are reproduced below.

Prompt Payment Statute on Private Projects

10 § 1111: Definitions

As used in this chapter, unless the context otherwise indicates, the following terms have the following meanings. 

1. Billing period.  “Billing period” means the time period for payment agreed to by 2 parties or, in the absence of an agreement, the calendar month within which work is performed.
2. Construction contract.  “Construction contract” means any agreement, whether written or oral, to perform or to supply materials for work on any real property.
3. Contractor.  “Contractor” means a person or entity that contracts with an owner to perform work on real property.
4. Delivery.  “Delivery” means receipt by addressee, including, but not limited to, by first class, registered or certified mail, or by hand delivery or transmitted by facsimile machine. Properly addressed mail is deemed delivered 3 days from the day it was sent.
5. Material supplier.  “Material supplier” means any person or entity that has furnished or contracted to furnish materials or supplies in connection with a construction contract.
6. Owner.  “Owner” means a person or entity having an interest in real property on which work is performed or to which materials for performing work are delivered, if the person or entity has agreed to or requested that work. “Owner” includes successors in interest of the owner and agents of the owner acting within their authority. “Owner” also includes the State and instrumentalities and subdivisions of the State including municipalities, school districts and school administrative districts having an interest in that real property.
7. Real property.  “Real property” means real estate, including lands, leaseholds, tenements and hereditaments and improvements placed on real estate.
8. Subcontractor.  “Subcontractor” means any person or entity that has contracted to perform work for or provide services to a contractor or another subcontractor in connection with a construction contract.
9. Work.  “Work” means to build, alter, repair or demolish any improvement on, connected with or beneath the surface of any real property, or to excavate, clear, grade, fill or landscape any real property, to construct driveways, private roadways, highways and bridges, drilled wells, septic systems, sewage systems or utilities, to furnish materials for any of those purposes or to perform labor upon real property. “Work” also includes any design or other professional or skilled services rendered by architects, engineers, land surveyors, landscape architects and construction engineers.
10 § 1112: Application:

This chapter does not apply to contracts entered into by the Department of Transportation.

10 § 1113: Owner's Payment Obligations

Payment to a contractor for work is subject to the following terms. 

1. Contractual agreements.  The owner shall pay the contractor strictly in accordance with the terms of the construction contract.
2. Invoices.  If the construction contract does not contain a provision governing the terms of payment, the contractor may invoice the owner for progress payments at the end of the billing period. The contractor may submit a final invoice for payment in full upon completion of the agreed upon work.
3. Invoice payment terms.  Except as otherwise agreed, payment of interim and final invoices is due from the owner 20 days after the end of the billing period or 20 days after delivery of the invoice, whichever is later.
4. Delayed payments.  Except as otherwise agreed, if any progress or final payment to a contractor is delayed beyond the due date established in subsection 3, the owner shall pay the contractor interest on any unpaid balance due beginning on the 21st day, at an interest rate equal to that specified in Title 14, section 1602-C.
10 § 1114: Contractor's and Subcontractor's Payment Obligations

Payment to a subcontractor for work is subject to the following conditions. [1993, c. 461, §1 (NEW).]

1. Contractual agreements.  The contractor or subcontractor shall pay a subcontractor or material supplier strictly in accordance with the terms of the subcontractor’s or material supplier’s contract.
2. Disclosure.  Notwithstanding any contrary agreement, a contractor or subcontractor shall disclose to a subcontractor or material supplier the due date for receipt of payments from the owner before a contract between those parties is entered. Notwithstanding any other provision of this chapter, if a contractor or subcontractor fails to accurately disclose the due date to a subcontractor or material supplier, the contractor or subcontractor is obligated to pay the subcontractor or material supplier as though the 20-day due dates in section 1113, subsection 3 were met.
3. Invoices.  Notwithstanding any contrary agreement, when a subcontractor or material supplier has performed in accordance with the provisions of a contract, a contractor shall pay to the subcontractor or material supplier, and each subcontractor shall in turn pay to its subcontractors or material suppliers, the full or proportional amount received for each subcontractor’s work and materials based on work completed or service provided under the subcontract, 7 days after receipt of each progress or final payment or 7 days after receipt of the subcontractor’s or material supplier’s invoice, whichever is later.
4. Delayed payments.  Notwithstanding any contrary agreement, if any progress or final payment to a subcontractor or material supplier is delayed beyond the due date established in subsection 2 or 3, the contractor or subcontractor shall pay its subcontractor or material supplier interest on any unpaid balance due beginning on the next day, at an interest rate equal to that specified in Title 14, section 1602-C.
10 § 1115: Errors in Documentation
1. Invoice errors.  If an invoice is filled out incorrectly or incompletely or if there is any defect or impropriety in an invoice submitted, the owner, contractor or subcontractor must contact the person submitting the invoice in writing within 10 working days of receiving the invoice. If the contractor or subcontractor does not notify the person submitting the invoice within 10 days, the documentary errors are deemed waived.
2. Timely payment requirements.  All timely payment requirements of this chapter apply, regardless of the dates invoices are corrected, whenever the person submitting the invoice has completed the work in a timely manner.
3. New billing period.  If an error on the invoice is corrected by the person submitting the invoice, the date on which the corrected invoice is delivered is the end of the billing period.
10 § 1116: Retainage
1. Payment.  If payments under a construction contract are subject to retainage, any amounts retained during the performance of the contract and due to be released to the contractor upon completion must be paid within 30 days after final acceptance of the work.
2. Retainage for subcontractors.  If an owner is not withholding retainage for a subcontractor’s work, a contractor may withhold retainage from its subcontractor or material supplier in accordance with their agreement. The retainage must be paid within 30 days of final acceptance of the work.
3. Payment of retainage to subcontractors.  Notwithstanding any contrary agreement, a contractor shall pay to its subcontractors or material suppliers and each subcontractor shall in turn pay to its subcontractors or material suppliers, within 7 days after receipt of the retainage, the full amount due to each subcontractor or material supplier.
4. Withholding retainage.  If a contractor or subcontractor unreasonably withholds acceptance of the work or materials or fails to pay retainage as required by this section, the owner, contractor or subcontractor is subject to the interest, penalty and attorney’s fees provisions of this chapter.
10 § 1117: Prepayment or Advance Payment

This chapter in no way may be construed to prohibit an owner, contractor or subcontractor from making advance payments, progress payments or from prepaying if agreements or other circumstances make those payments appropriate. All such payments must be made promptly and are subject to the interest, penalty and other provisions of this chapter. 

10 § 1118: Disputes; Penalties; Attorney's Fees
1. Withholding payment.  Nothing in this chapter prevents an owner, contractor or subcontractor from withholding payment in whole or in part under a construction contract in an amount equalling the value of any good faith claims against an invoicing contractor, subcontractor or material supplier, including claims arising from unsatisfactory job progress, defective construction or materials, disputed work or 3rd-party claims.
2. Penalty.  If arbitration or litigation is commenced to recover payment due under the terms of this chapter and it is determined that an owner, contractor or subcontractor has failed to comply with the payment terms of this chapter, the arbitrator or court shall award an amount equal to 1% per month of all sums for which payment has wrongfully been withheld, in addition to all other damages due and as a penalty.
3. Wrongful withholding.  A payment is not deemed to be wrongfully withheld if it bears a reasonable relation to the value of any claim held in good faith by the owner, contractor or subcontractor against which an invoicing contractor, subcontractor or material supplier is seeking to recover payment.
4. Attorney’s fees.  Notwithstanding any contrary agreement, the substantially prevailing party in any proceeding to recover any payment within the scope of this chapter must be awarded reasonable attorney’s fees in an amount to be determined by the court or arbitrator, together with expenses.
10 § 1119: Contracts Involving Federal Funds

Notwithstanding any provision of this chapter, language at variance to the requirements of this chapter may be included in contracts when that variance is required by any law, regulation or grant agreement conditioning the receipt or expenditure of federal aid. 

10 § 1120: Owner Exclusion

This chapter does not apply to contracts for the purchase of materials by a person performing work on that person’s own real property.

5 § 1551: Purpose

The purpose of this chapter is to promote prompt payment of obligations incurred by agencies of State Government. It is the intent of the Legislature to prevent hardship for any business concern due to late payment of proper invoices for obligations incurred by state agencies. It is also the intent of the Legislature to encourage business concerns to provide prompt, dependable services and products of a high quality and at a reasonable cost to State Government.

5 § 1552: Definitions

As used in this chapter, unless the context otherwise indicates, the following terms have the following meanings. 

1. Business concern.  “Business concern” means a person, partnership or corporation engaged in providing property, products or services for the purpose of gain, benefit or advantage, either direct or indirect, whether or not the concern is organized for profit or not for profit.
2. Commissioner.  “Commissioner” means the Commissioner of Administrative and Financial Services.
3. Controller.  “Controller” means the State Controller.
4. Improper invoice.  “Improper invoice” means an invoice which is:
A. Incorrectly calculated;
B. Received for property, products or services that are unsatisfactory with respect to quantity or quality; or 
C. Received for property, products or services for which there is no request. 
5. Proper invoice.  “Proper invoice” means an invoice for property, products or services deemed to be satisfactory in quality and quantity, in conformance with the request of the state agency and on which the amount due has been correctly calculated.
6. State agency.  “State agency” means any body of State Government authorized by law to adopt rules, to issue licenses or to take final action in adjudicatory proceedings, including, but not limited to, every authority, board, bureau, commission, department or officer of the State Government so authorized; but the term does not include the Governor, courts, University of Maine System, Maine Maritime Academy, school districts, special purpose districts or municipalities, counties or other political subdivisions of the State.
5 § 1553: Standards

The commissioner shall require state agencies to assure prompt payment by means of the following standards.

1. Required payment date.  The required payment date for any proper invoice for which a state agency has incurred an obligation to a business concern shall be no more than 25 working days from the date the state agency receives a proper invoice or from the date of receipt of the property, products or services, whichever is later, unless the agency and the business concern have agreed to another payment date.
2. Notice of receipt of improper invoice.  In the event the state agency receives an improper invoice, the agency shall immediately notify the business concern in writing. This written notice shall reasonably describe why the invoice is deemed to be improper. Disputes shall be handled under section 1510-A.
3. Specifications of a required payment date for corrected invoices.  In the event that an improper invoice is received by a state agency, it shall be returned within 15 days of receipt to the business concern for correction. Upon receiving a corrected invoice, payment shall be made in accordance with subsection 1.
4. Procedure for submitting invoices to controller.  An expeditious procedure shall be developed for the submission of invoices received by a state agency to the controller. In the event that obligations of an agency are not paid through the controller, a procedure shall be developed by the commissioner to ensure prompt payment.
5. Duties of the state agency.  It shall be the responsibility of the state agency that incurs a late fee pursuant to this chapter to calculate the amount of the late fee and add that fee to the amount of the invoice prior to submission of the invoice to the controller. In calculating the amount of the late fee which will be added to the invoice, the state agency shall assume and calculate an additional late fee equivalent to the 10 working days necessary for the invoice to be processed by the controller.
5 § 1554: Payment of Late Fees

In the event that a proper invoice is not paid within 25 working days after receipt of the invoice, or within 15 days following another date agreed to by the state agency and the business concern, the agency shall be liable to pay a reasonable late fee that shall not exceed the normal late charge that the business concern levies on the amount due on the invoice. [1983, c. 655, (NEW).]

In the event that federal moneys are the budgeted source of funds for payment to business concerns for state agency purchases of goods, property or services, and these moneys are unexpectedly withheld and delayed from reaching the State in time to pay proper invoices without incurring a late fee, the state agency which made the purchases and the State of Maine shall not be liable for any late fees on overdue payments.

5 § 1555: Period of Time for Which Late Fees Are Imposed

The late fee shall apply to the period beginning on the day after the required payment date and ending on the date on which payment of the amount due on the invoice is made. An amount of a late fee which remains unpaid at the end of any 30-day period, after the required payment date, shall be added to the principal amount of the debt and, thereafter, late fees shall accrue on the added amount.

5 § 1556: Source of Payment for Late Fees

Any late fee authorized by this chapter to be applied to a proper invoice shall be paid from funds made available for the administration or operation of the program or state agency for which the obligation was incurred.

5 § 1557: Late Fees and Improper Invoices

With respect to an improper invoice, the late fee shall apply to the period beginning on the day after the required payment date is due as specified on the corrected and proper invoice and ending on the date on which payment of the amount due on the invoice is made.

5 § 1558: Annual Report

The State Controller shall annually report on the amount of late fees incurred by the various state agencies.

Prompt Payment Statute on Public Projects

10 § 1111: Definitions

As used in this chapter, unless the context otherwise indicates, the following terms have the following meanings. 

1. Billing period.  “Billing period” means the time period for payment agreed to by 2 parties or, in the absence of an agreement, the calendar month within which work is performed.
2. Construction contract.  “Construction contract” means any agreement, whether written or oral, to perform or to supply materials for work on any real property.
3. Contractor.  “Contractor” means a person or entity that contracts with an owner to perform work on real property.
4. Delivery.  “Delivery” means receipt by addressee, including, but not limited to, by first class, registered or certified mail, or by hand delivery or transmitted by facsimile machine. Properly addressed mail is deemed delivered 3 days from the day it was sent.
5. Material supplier.  “Material supplier” means any person or entity that has furnished or contracted to furnish materials or supplies in connection with a construction contract.
6. Owner.  “Owner” means a person or entity having an interest in real property on which work is performed or to which materials for performing work are delivered, if the person or entity has agreed to or requested that work. “Owner” includes successors in interest of the owner and agents of the owner acting within their authority. “Owner” also includes the State and instrumentalities and subdivisions of the State including municipalities, school districts and school administrative districts having an interest in that real property.
7. Real property.  “Real property” means real estate, including lands, leaseholds, tenements and hereditaments and improvements placed on real estate.
8. Subcontractor.  “Subcontractor” means any person or entity that has contracted to perform work for or provide services to a contractor or another subcontractor in connection with a construction contract.
9. Work.  “Work” means to build, alter, repair or demolish any improvement on, connected with or beneath the surface of any real property, or to excavate, clear, grade, fill or landscape any real property, to construct driveways, private roadways, highways and bridges, drilled wells, septic systems, sewage systems or utilities, to furnish materials for any of those purposes or to perform labor upon real property. “Work” also includes any design or other professional or skilled services rendered by architects, engineers, land surveyors, landscape architects and construction engineers.
10 § 1112: Application:

This chapter does not apply to contracts entered into by the Department of Transportation.

10 § 1113: Owner's Payment Obligations

Payment to a contractor for work is subject to the following terms. 

1. Contractual agreements.  The owner shall pay the contractor strictly in accordance with the terms of the construction contract.
2. Invoices.  If the construction contract does not contain a provision governing the terms of payment, the contractor may invoice the owner for progress payments at the end of the billing period. The contractor may submit a final invoice for payment in full upon completion of the agreed upon work.
3. Invoice payment terms.  Except as otherwise agreed, payment of interim and final invoices is due from the owner 20 days after the end of the billing period or 20 days after delivery of the invoice, whichever is later.
4. Delayed payments.  Except as otherwise agreed, if any progress or final payment to a contractor is delayed beyond the due date established in subsection 3, the owner shall pay the contractor interest on any unpaid balance due beginning on the 21st day, at an interest rate equal to that specified in Title 14, section 1602-C.
10 § 1114: Contractor's and Subcontractor's Payment Obligations

Payment to a subcontractor for work is subject to the following conditions. [1993, c. 461, §1 (NEW).]

1. Contractual agreements.  The contractor or subcontractor shall pay a subcontractor or material supplier strictly in accordance with the terms of the subcontractor’s or material supplier’s contract.
2. Disclosure.  Notwithstanding any contrary agreement, a contractor or subcontractor shall disclose to a subcontractor or material supplier the due date for receipt of payments from the owner before a contract between those parties is entered. Notwithstanding any other provision of this chapter, if a contractor or subcontractor fails to accurately disclose the due date to a subcontractor or material supplier, the contractor or subcontractor is obligated to pay the subcontractor or material supplier as though the 20-day due dates in section 1113, subsection 3 were met.
3. Invoices.  Notwithstanding any contrary agreement, when a subcontractor or material supplier has performed in accordance with the provisions of a contract, a contractor shall pay to the subcontractor or material supplier, and each subcontractor shall in turn pay to its subcontractors or material suppliers, the full or proportional amount received for each subcontractor’s work and materials based on work completed or service provided under the subcontract, 7 days after receipt of each progress or final payment or 7 days after receipt of the subcontractor’s or material supplier’s invoice, whichever is later.
4. Delayed payments.  Notwithstanding any contrary agreement, if any progress or final payment to a subcontractor or material supplier is delayed beyond the due date established in subsection 2 or 3, the contractor or subcontractor shall pay its subcontractor or material supplier interest on any unpaid balance due beginning on the next day, at an interest rate equal to that specified in Title 14, section 1602-C.
10 § 1115: Errors in Documentation
1. Invoice errors.  If an invoice is filled out incorrectly or incompletely or if there is any defect or impropriety in an invoice submitted, the owner, contractor or subcontractor must contact the person submitting the invoice in writing within 10 working days of receiving the invoice. If the contractor or subcontractor does not notify the person submitting the invoice within 10 days, the documentary errors are deemed waived.
2. Timely payment requirements.  All timely payment requirements of this chapter apply, regardless of the dates invoices are corrected, whenever the person submitting the invoice has completed the work in a timely manner.
3. New billing period.  If an error on the invoice is corrected by the person submitting the invoice, the date on which the corrected invoice is delivered is the end of the billing period.
10 § 1116: Retainage
1. Payment.  If payments under a construction contract are subject to retainage, any amounts retained during the performance of the contract and due to be released to the contractor upon completion must be paid within 30 days after final acceptance of the work.
2. Retainage for subcontractors.  If an owner is not withholding retainage for a subcontractor’s work, a contractor may withhold retainage from its subcontractor or material supplier in accordance with their agreement. The retainage must be paid within 30 days of final acceptance of the work.
3. Payment of retainage to subcontractors.  Notwithstanding any contrary agreement, a contractor shall pay to its subcontractors or material suppliers and each subcontractor shall in turn pay to its subcontractors or material suppliers, within 7 days after receipt of the retainage, the full amount due to each subcontractor or material supplier.
4. Withholding retainage.  If a contractor or subcontractor unreasonably withholds acceptance of the work or materials or fails to pay retainage as required by this section, the owner, contractor or subcontractor is subject to the interest, penalty and attorney’s fees provisions of this chapter.
10 § 1117: Prepayment or Advance Payment

This chapter in no way may be construed to prohibit an owner, contractor or subcontractor from making advance payments, progress payments or from prepaying if agreements or other circumstances make those payments appropriate. All such payments must be made promptly and are subject to the interest, penalty and other provisions of this chapter. 

10 § 1118: Disputes; Penalties; Attorney's Fees
1. Withholding payment.  Nothing in this chapter prevents an owner, contractor or subcontractor from withholding payment in whole or in part under a construction contract in an amount equalling the value of any good faith claims against an invoicing contractor, subcontractor or material supplier, including claims arising from unsatisfactory job progress, defective construction or materials, disputed work or 3rd-party claims.
2. Penalty.  If arbitration or litigation is commenced to recover payment due under the terms of this chapter and it is determined that an owner, contractor or subcontractor has failed to comply with the payment terms of this chapter, the arbitrator or court shall award an amount equal to 1% per month of all sums for which payment has wrongfully been withheld, in addition to all other damages due and as a penalty.
3. Wrongful withholding.  A payment is not deemed to be wrongfully withheld if it bears a reasonable relation to the value of any claim held in good faith by the owner, contractor or subcontractor against which an invoicing contractor, subcontractor or material supplier is seeking to recover payment.
4. Attorney’s fees.  Notwithstanding any contrary agreement, the substantially prevailing party in any proceeding to recover any payment within the scope of this chapter must be awarded reasonable attorney’s fees in an amount to be determined by the court or arbitrator, together with expenses.
10 § 1119: Contracts Involving Federal Funds

Notwithstanding any provision of this chapter, language at variance to the requirements of this chapter may be included in contracts when that variance is required by any law, regulation or grant agreement conditioning the receipt or expenditure of federal aid. 

10 § 1120: Owner Exclusion

This chapter does not apply to contracts for the purchase of materials by a person performing work on that person’s own real property.

5 § 1551: Purpose

The purpose of this chapter is to promote prompt payment of obligations incurred by agencies of State Government. It is the intent of the Legislature to prevent hardship for any business concern due to late payment of proper invoices for obligations incurred by state agencies. It is also the intent of the Legislature to encourage business concerns to provide prompt, dependable services and products of a high quality and at a reasonable cost to State Government.

5 § 1552: Definitions

As used in this chapter, unless the context otherwise indicates, the following terms have the following meanings. 

1. Business concern.  “Business concern” means a person, partnership or corporation engaged in providing property, products or services for the purpose of gain, benefit or advantage, either direct or indirect, whether or not the concern is organized for profit or not for profit.
2. Commissioner.  “Commissioner” means the Commissioner of Administrative and Financial Services.
3. Controller.  “Controller” means the State Controller.
4. Improper invoice.  “Improper invoice” means an invoice which is:
A. Incorrectly calculated;
B. Received for property, products or services that are unsatisfactory with respect to quantity or quality; or 
C. Received for property, products or services for which there is no request. 
5. Proper invoice.  “Proper invoice” means an invoice for property, products or services deemed to be satisfactory in quality and quantity, in conformance with the request of the state agency and on which the amount due has been correctly calculated.
6. State agency.  “State agency” means any body of State Government authorized by law to adopt rules, to issue licenses or to take final action in adjudicatory proceedings, including, but not limited to, every authority, board, bureau, commission, department or officer of the State Government so authorized; but the term does not include the Governor, courts, University of Maine System, Maine Maritime Academy, school districts, special purpose districts or municipalities, counties or other political subdivisions of the State.
5 § 1553: Standards

The commissioner shall require state agencies to assure prompt payment by means of the following standards.

1. Required payment date.  The required payment date for any proper invoice for which a state agency has incurred an obligation to a business concern shall be no more than 25 working days from the date the state agency receives a proper invoice or from the date of receipt of the property, products or services, whichever is later, unless the agency and the business concern have agreed to another payment date.
2. Notice of receipt of improper invoice.  In the event the state agency receives an improper invoice, the agency shall immediately notify the business concern in writing. This written notice shall reasonably describe why the invoice is deemed to be improper. Disputes shall be handled under section 1510-A.
3. Specifications of a required payment date for corrected invoices.  In the event that an improper invoice is received by a state agency, it shall be returned within 15 days of receipt to the business concern for correction. Upon receiving a corrected invoice, payment shall be made in accordance with subsection 1.
4. Procedure for submitting invoices to controller.  An expeditious procedure shall be developed for the submission of invoices received by a state agency to the controller. In the event that obligations of an agency are not paid through the controller, a procedure shall be developed by the commissioner to ensure prompt payment.
5. Duties of the state agency.  It shall be the responsibility of the state agency that incurs a late fee pursuant to this chapter to calculate the amount of the late fee and add that fee to the amount of the invoice prior to submission of the invoice to the controller. In calculating the amount of the late fee which will be added to the invoice, the state agency shall assume and calculate an additional late fee equivalent to the 10 working days necessary for the invoice to be processed by the controller.
5 § 1554: Payment of Late Fees

In the event that a proper invoice is not paid within 25 working days after receipt of the invoice, or within 15 days following another date agreed to by the state agency and the business concern, the agency shall be liable to pay a reasonable late fee that shall not exceed the normal late charge that the business concern levies on the amount due on the invoice. [1983, c. 655, (NEW).]

In the event that federal moneys are the budgeted source of funds for payment to business concerns for state agency purchases of goods, property or services, and these moneys are unexpectedly withheld and delayed from reaching the State in time to pay proper invoices without incurring a late fee, the state agency which made the purchases and the State of Maine shall not be liable for any late fees on overdue payments.

5 § 1555: Period of Time for Which Late Fees Are Imposed

The late fee shall apply to the period beginning on the day after the required payment date and ending on the date on which payment of the amount due on the invoice is made. An amount of a late fee which remains unpaid at the end of any 30-day period, after the required payment date, shall be added to the principal amount of the debt and, thereafter, late fees shall accrue on the added amount.

5 § 1556: Source of Payment for Late Fees

Any late fee authorized by this chapter to be applied to a proper invoice shall be paid from funds made available for the administration or operation of the program or state agency for which the obligation was incurred.

5 § 1557: Late Fees and Improper Invoices

With respect to an improper invoice, the late fee shall apply to the period beginning on the day after the required payment date is due as specified on the corrected and proper invoice and ending on the date on which payment of the amount due on the invoice is made.

5 § 1558: Annual Report

The State Controller shall annually report on the amount of late fees incurred by the various state agencies.