HB1354ham001 97TH GENERAL ASSEMBLY

Rep. Karen May

Filed: 3/15/2011

09700HB1354ham001 LRB097 06590 PJG 52873 a

AMENDMENT TO HOUSE BILL 1354

AMENDMENT NO. ______. Amend House Bill 1354 by replacing everything after the enacting clause with the following:

"Section 5. The State Prompt Payment Act is amended by changing Section 3-2 as follows:

(30 ILCS 540/3-2)

Sec. 3-2. Beginning July 1, 1993, in any instance where a State official or agency is late in payment of a vendor's bill or invoice for goods or services furnished to the State, as defined in Section 1, properly approved in accordance with rules promulgated under Section 3-3, the State official or agency shall pay interest to the vendor in accordance with the following:

(1) Any bill, except a bill submitted under Article V of the Illinois Public Aid Code, approved for payment under this Section must be paid or the payment issued to the payee within 60 days of receipt of a proper bill or invoice. If payment is not issued to the payee within this 60-day 60 day period, an interest penalty shall be applied to of 1.0% of any amount approved and unpaid, beginning on the first day after the 60-day period and shall be added for each month or fraction thereof after the end of this 60 day period, until final payment is made. Interest shall be calculated as the average prime commercial rate plus 1.0% and shall be applied to the unpaid portion of the bill at the rate of 1/360th for each day the payment remains due and unpaid. For purposes of this Section, "average prime commercial rate" means the average of the preceding 12 months' prime commercial rate as published in the Wall Street Journal, calculated as of each July 1. As soon as is practical after each July 1, the Comptroller shall calculate the average prime commercial rate and the daily prompt payment rate and publish the daily rate on its official Internet website. The new rate shall become effective each July 1 for each new fiscal year. The interest rate applicable to any late payment shall be the rate in effect for the fiscal year from which the appropriations supporting the original vendor payment are drawn. The Comptroller may promulgate rules to implement this Section. Any bill, except a bill for pharmacy or nursing facility services or goods, submitted under Article V of the Illinois Public Aid Code approved for payment under this Section must be paid or the payment issued to the payee within 60 days after receipt of a proper bill or invoice, and, if payment is not issued to the payee within this 60-day period, an interest penalty of 2.0% of any amount approved and unpaid shall be added for each month or fraction thereof after the end of this 60-day period, until final payment is made. Any bill for pharmacy or nursing facility services or goods submitted under Article V of the Illinois Public Aid Code, approved for payment under this Section must be paid or the payment issued to the payee within 60 days of receipt of a proper bill or invoice. If payment is not issued to the payee within this 60-day 60 day period, an interest penalty of 1.0% of any amount approved and unpaid shall be added for each month or fraction thereof after the end of this 60-day 60 day period, until final payment is made.

(1.1) A State agency shall review in a timely manner each bill or invoice after its receipt. If the State agency determines that the bill or invoice contains a defect making it unable to process the payment request, the agency shall notify the vendor requesting payment as soon as possible after discovering the defect pursuant to rules promulgated under Section 3-3; provided, however, that the notice for construction related bills or invoices must be given not later than 30 days after the bill or invoice was first submitted. The notice shall identify the defect and any additional information necessary to correct the defect. If one or more items on a construction related bill or invoice are disapproved, but not the entire bill or invoice, then the portion that is not disapproved shall be paid.

(2) Where a State official or agency is late in payment of a vendor's bill or invoice properly approved in accordance with this Act, and different late payment terms are not reduced to writing as a contractual agreement, the State official or agency shall automatically pay interest penalties required by this Section amounting to $50 or more to the appropriate vendor. Each agency shall be responsible for determining whether an interest penalty is owed and for paying the interest to the vendor. Interest due to a vendor that amounts to less than $50 shall not be paid but shall be accrued until all interest due the vendor for all similar warrants exceeds $50, at which time the accrued interest shall be payable and interest will begin accruing again, except that interest accrued as of the end of the fiscal year that does not exceed $50 shall be payable at that time. In the event an individual has paid a vendor for services in advance, the provisions of this Section shall apply until payment is made to that individual.

(3) (Blank). The provisions of this amendatory Act of the 96th General Assembly reducing the interest rate on pharmacy claims under Article V of the Illinois Public Aid Code to 1.0% per month shall apply to any pharmacy bills for services and goods under Article V of the Illinois Public Aid Code received on or after the date 60 days before the effective date of this amendatory Act of the 96th General Assembly.

(Source: P.A. 96-555, eff. 8-18-09; 96-802, eff. 1-1-10; 96-959, eff. 7-1-10; 96-1000, eff. 7-2-10; 96-1501, eff. 1-25-11; 96-1530, eff. 2-16-11; revised 2-22-11.)

Section 99. Effective date. This Act takes effect July 1, 2011.".