101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB2057

 

Introduced 2/15/2019, by Sen. Laura M. Murphy

 

SYNOPSIS AS INTRODUCED:
 
30 ILCS 540/3-2

    Amends the State Prompt Payment Act. Provides that by July 1, 2019, and by July 1 of each year thereafter, the State Comptroller shall determine the prompt payment interest rate for the fiscal year beginning on that July 1. Provides that any bill approved for payment on or after July 1, 2019 must be paid or the payment issued to the payee within 90 days of receipt of a proper bill or invoice. Provides that if payment is not issued to the payee within this 90-day period, an interest penalty calculated using the prompt payment interest rate shall be added for each month or fraction thereof after the end of this 90-day period until final payment is made. Provides for the prompt payment interest rate under the applicable provisions. Makes conforming and other changes. Effective immediately.


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A BILL FOR

 

SB2057LRB101 10798 RJF 55927 b

1    AN ACT concerning finance.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The State Prompt Payment Act is amended by
5changing Section 3-2 as follows:
 
6    (30 ILCS 540/3-2)
7    Sec. 3-2. Beginning July 1, 1993, in any instance where a
8State official or agency is late in payment of a vendor's bill
9or invoice for goods or services furnished to the State, as
10defined in Section 1, properly approved in accordance with
11rules promulgated under Section 3-3, the State official or
12agency shall pay interest to the vendor in accordance with the
13following:
14        (1) This paragraph (1) applies to bills approved for
15    payment on or after July 1, 2019. Any bill, except a bill
16    submitted under Article V of the Illinois Public Aid Code
17    and except as provided under paragraphs paragraph (1.05)
18    and (1.06) of this Section, approved for payment under this
19    Section must be paid or the payment issued to the payee
20    within 60 days of receipt of a proper bill or invoice. If
21    payment is not issued to the payee within this 60-day
22    period, an interest penalty of 1.0% of any amount approved
23    and unpaid shall be added for each month or fraction

 

 

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1    thereof after the end of this 60-day period, until final
2    payment is made. Any bill, except a bill for pharmacy or
3    nursing facility services or goods, and except as provided
4    under paragraphs paragraph (1.05) and (1.06) of this
5    Section, submitted under Article V of the Illinois Public
6    Aid Code approved for payment under this Section must be
7    paid or the payment issued to the payee within 60 days
8    after receipt of a proper bill or invoice, and, if payment
9    is not issued to the payee within this 60-day period, an
10    interest penalty of 2.0% of any amount approved and unpaid
11    shall be added for each month or fraction thereof after the
12    end of this 60-day period, until final payment is made. Any
13    bill for pharmacy or nursing facility services or goods
14    submitted under Article V of the Illinois Public Aid Code,
15    except as provided under paragraph (1.05) of this Section,
16    and approved for payment under this Section must be paid or
17    the payment issued to the payee within 60 days of receipt
18    of a proper bill or invoice. If payment is not issued to
19    the payee within this 60-day period, an interest penalty of
20    1.0% of any amount approved and unpaid shall be added for
21    each month or fraction thereof after the end of this 60-day
22    period, until final payment is made.
23        (1.05) For State fiscal year 2012 and through June 30,
24    2019 future fiscal years, any bill approved for payment
25    under this Section must be paid or the payment issued to
26    the payee within 90 days of receipt of a proper bill or

 

 

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1    invoice. If payment is not issued to the payee within this
2    90-day period, an interest penalty of 1.0% of any amount
3    approved and unpaid shall be added for each month, or
4    0.033% (one-thirtieth of one percent) of any amount
5    approved and unpaid for each day, after the end of this
6    90-day period, until final payment is made.
7        (1.06) This paragraph (1.06) applies to bills approved
8    for payment on or after July 1, 2019, except for bills for
9    nursing facility services submitted under Article V of the
10    Illinois Public Aid Code. By July 1, 2019, and by July 1 of
11    each year thereafter, the State Comptroller shall
12    determine the prompt payment interest rate for the fiscal
13    year beginning on that July 1. Any bill approved for
14    payment under this Section on or after July 1, 2019 must be
15    paid or the payment issued to the payee within 90 days of
16    receipt of a proper bill or invoice. If payment is not
17    issued to the payee within this 90-day period, an interest
18    penalty calculated using the prompt payment interest rate
19    shall be added for each month or fraction thereof after the
20    end of this 90-day period until final payment is made. For
21    the purposes of this paragraph (1.06), the prompt payment
22    interest rate shall be decreased from (i) 1% per month (or
23    0.033% per day) for bills approved for payment on or after
24    July 1, 2019 to (ii) the greater of (A) 0.25% per month (or
25    an annual rate of 3%) or (B) an annual rate of 2 times the
26    percentage increase, if any, in the Consumer Price Index

 

 

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1    For All Urban Consumers during the 12-month period
2    immediately preceding that July 1 for bills approved for
3    payment on or after July 1, 2019.
4        (1.1) A State agency shall review in a timely manner
5    each bill or invoice after its receipt. If the State agency
6    determines that the bill or invoice contains a defect
7    making it unable to process the payment request, the agency
8    shall notify the vendor requesting payment as soon as
9    possible after discovering the defect pursuant to rules
10    promulgated under Section 3-3; provided, however, that the
11    notice for construction related bills or invoices must be
12    given not later than 30 days after the bill or invoice was
13    first submitted. The notice shall identify the defect and
14    any additional information necessary to correct the
15    defect. If one or more items on a construction related bill
16    or invoice are disapproved, but not the entire bill or
17    invoice, then the portion that is not disapproved shall be
18    paid.
19        (2) Where a State official or agency is late in payment
20    of a vendor's bill or invoice properly approved in
21    accordance with this Act, and different late payment terms
22    are not reduced to writing as a contractual agreement, the
23    State official or agency shall automatically pay interest
24    penalties required by this Section amounting to $50 or more
25    to the appropriate vendor. Each agency shall be responsible
26    for determining whether an interest penalty is owed and for

 

 

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1    paying the interest to the vendor. Except as provided in
2    paragraph (4), an individual interest payment amounting to
3    $5 or less shall not be paid by the State. Interest due to
4    a vendor that amounts to greater than $5 and less than $50
5    shall not be paid but shall be accrued until all interest
6    due the vendor for all similar warrants exceeds $50, at
7    which time the accrued interest shall be payable and
8    interest will begin accruing again, except that interest
9    accrued as of the end of the fiscal year that does not
10    exceed $50 shall be payable at that time. In the event an
11    individual has paid a vendor for services in advance, the
12    provisions of this Section shall apply until payment is
13    made to that individual.
14        (3) The provisions of Public Act 96-1501 reducing the
15    interest rate on pharmacy claims under Article V of the
16    Illinois Public Aid Code to 1.0% per month shall apply to
17    any pharmacy bills for services and goods under Article V
18    of the Illinois Public Aid Code received on or after the
19    date 60 days before January 25, 2011 (the effective date of
20    Public Act 96-1501) except as provided under paragraph
21    (1.05) of this Section.
22        (4) Interest amounting to less than $5 shall not be
23    paid by the State, except for claims (i) to the Department
24    of Healthcare and Family Services or the Department of
25    Human Services, (ii) pursuant to Article V of the Illinois
26    Public Aid Code, the Covering ALL KIDS Health Insurance

 

 

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1    Act, or the Children's Health Insurance Program Act, and
2    (iii) made (A) by pharmacies for prescriptive services or
3    (B) by any federally qualified health center for
4    prescriptive services or any other services.
5    Notwithstanding any provision to the contrary, interest
6may not be paid under this Act when: (1) a Chief Procurement
7Officer has voided the underlying contract for goods or
8services under Article 50 of the Illinois Procurement Code; or
9(2) the Auditor General is conducting a performance or program
10audit and the Comptroller has held or is holding for review a
11related contract or vouchers for payment of goods or services
12in the exercise of duties under Section 9 of the State
13Comptroller Act. In such event, interest shall not accrue
14during the pendency of the Auditor General's review.
15(Source: P.A. 100-1064, eff. 8-24-18.)
 
16    Section 99. Effective date. This Act takes effect upon
17becoming law.