97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB1354

 

Introduced 2/9/2011, by Rep. Karen May

 

SYNOPSIS AS INTRODUCED:
 
30 ILCS 540/3-2

    Amends the State Prompt Payment Act. Provides that, for any bill not paid by the State within 60 days of receipt, an interest penalty equal to the prime commercial rate of interest (rather than 1.0%) on any amount approved and unpaid shall be added for each month or fraction thereof after the end of the 60 day period. Defines "prime commercial rate". Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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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) Any bill, except a bill submitted under Article V
15    of the Illinois Public Aid Code, approved for payment under
16    this Section must be paid or the payment issued to the
17    payee within 60 days of receipt of a proper bill or
18    invoice. If payment is not issued to the payee within this
19    60 day period, an interest penalty equal to the prime
20    commercial rate of interest on of 1.0% of any amount
21    approved and unpaid shall be added for each month or
22    fraction thereof after the end of this 60 day period, until
23    final payment is made. Any bill submitted under Article V

 

 

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1    of the Illinois Public Aid Code approved for payment under
2    this Section must be paid or the payment issued to the
3    payee within 60 days after receipt of a proper bill or
4    invoice, and, if payment is not issued to the payee within
5    this 60-day period, an interest penalty equal to the prime
6    commercial rate of interest on of 2.0% of any amount
7    approved and unpaid shall be added for each month or
8    fraction thereof after the end of this 60-day period, until
9    final payment is made. For the purposes of this Section,
10    "prime commercial rate" means the prime rate that from time
11    to time is publicly announced by the largest commercial
12    banking institution located in this State, measured in
13    terms of total assets.
14        (1.1) A State agency shall review in a timely manner
15    each bill or invoice after its receipt. If the State agency
16    determines that the bill or invoice contains a defect
17    making it unable to process the payment request, the agency
18    shall notify the vendor requesting payment as soon as
19    possible after discovering the defect pursuant to rules
20    promulgated under Section 3-3; provided, however, that the
21    notice for construction related bills or invoices must be
22    given not later than 30 days after the bill or invoice was
23    first submitted. The notice shall identify the defect and
24    any additional information necessary to correct the
25    defect. If one or more items on a construction related bill
26    or invoice are disapproved, but not the entire bill or

 

 

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1    invoice, then the portion that is not disapproved shall be
2    paid.
3        (2) Where a State official or agency is late in payment
4    of a vendor's bill or invoice properly approved in
5    accordance with this Act, and different late payment terms
6    are not reduced to writing as a contractual agreement, the
7    State official or agency shall automatically pay interest
8    penalties required by this Section amounting to $50 or more
9    to the appropriate vendor. Each agency shall be responsible
10    for determining whether an interest penalty is owed and for
11    paying the interest to the vendor. Interest due to a vendor
12    that amounts to less than $50 shall not be paid but shall
13    be accrued until all interest due the vendor for all
14    similar warrants exceeds $50, at which time the accrued
15    interest shall be payable and interest will begin accruing
16    again, except that interest accrued as of the end of the
17    fiscal year that does not exceed $50 shall be payable at
18    that time. In the event an individual has paid a vendor for
19    services in advance, the provisions of this Section shall
20    apply until payment is made to that individual.
21(Source: P.A. 96-555, eff. 8-18-09; 96-802, eff. 1-1-10;
2296-959, eff. 7-1-10; 96-1000, eff. 7-2-10.)
 
23    Section 99. Effective date. This Act takes effect upon
24becoming law.