100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB2255

 

Introduced 11/1/2017, by Sen. Laura M. Murphy

 

SYNOPSIS AS INTRODUCED:
 
30 ILCS 540/3-2

    Amends the State Prompt Payment Act. Provides that, for bills approved for payment on or after July 1, 2018, the prompt payment interest rate for the fiscal year shall be the greater of (i) 3% or (ii) 2 times the percentage increase, if any, in the Consumer Price Index For All Urban Consumers during the 12-month period immediately preceding the first day of the fiscal year (currently, 1% generally and 2% for certain bills submitted under Article V of the Illinois Public Aid Code). 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) This paragraph (1) applies to bills approved for
15    payment prior to July 1, 2018. 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 paragraphs paragraph (1.05) and
16    (1.06) of this Section, and approved for payment under this
17    Section must be paid or the payment issued to the payee
18    within 60 days of receipt of a proper bill or invoice. If
19    payment is not issued to the payee within this 60-day
20    period, an interest penalty of 1.0% of any amount approved
21    and unpaid shall be added for each month or fraction
22    thereof after the end of this 60-day period, until final
23    payment is made.
24        (1.05) For State fiscal year 2012 and through June 30,
25    2018 future fiscal years, any bill approved for payment
26    under this Section must be paid or the payment issued to

 

 

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1    the payee within 90 days of receipt of a proper bill or
2    invoice. If payment is not issued to the payee within this
3    90-day period, an interest penalty of 1.0% of any amount
4    approved and unpaid shall be added for each month, or
5    0.033% (one-thirtieth of one percent) of any amount
6    approved and unpaid for each day, after the end of this
7    90-day period, until final payment is made.
8        (1.06) This paragraph (1.06) applies to bills approved
9    for payment on or after July 1, 2018. By July 1, 2018, and
10    by July 1 of each year thereafter, the State Comptroller
11    shall determine the prompt payment interest rate for the
12    fiscal year beginning on that July 1. Any bill approved for
13    payment under this Section on or after July 1, 2018 must be
14    paid or the payment issued to the payee within 90 days of
15    receipt of a proper bill or invoice. If payment is not
16    issued to the payee within this 90-day period, an interest
17    penalty calculated using the prompt payment interest rate
18    shall be added for each month or fraction thereof after the
19    end of this 90-day period until final payment is made. As
20    used in this paragraph (1.06), "prompt payment interest
21    rate" means the greater of (i) 3% or (ii) 2 times the
22    percentage increase, if any, in the Consumer Price Index
23    For All Urban Consumers during the 12-month period
24    immediately preceding that July 1.
25        (1.1) A State agency shall review in a timely manner
26    each bill or invoice after its receipt. If the State agency

 

 

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

 

 

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1    due the vendor for all similar warrants exceeds $50, at
2    which time the accrued interest shall be payable and
3    interest will begin accruing again, except that interest
4    accrued as of the end of the fiscal year that does not
5    exceed $50 shall be payable at that time. In the event an
6    individual has paid a vendor for services in advance, the
7    provisions of this Section shall apply until payment is
8    made to that individual.
9        (3) The provisions of Public Act 96-1501 reducing the
10    interest rate on pharmacy claims under Article V of the
11    Illinois Public Aid Code to 1.0% per month shall apply to
12    any pharmacy bills for services and goods under Article V
13    of the Illinois Public Aid Code received on or after the
14    date 60 days before January 25, 2011 (the effective date of
15    Public Act 96-1501) except as provided under paragraph
16    (1.05) of this Section.
17        (4) Interest amounting to less than $5 shall not be
18    paid by the State, except for claims (i) to the Department
19    of Healthcare and Family Services or the Department of
20    Human Services, (ii) pursuant to Article V of the Illinois
21    Public Aid Code, the Covering ALL KIDS Health Insurance
22    Act, or the Children's Health Insurance Program Act, and
23    (iii) made (A) by pharmacies for prescriptive services or
24    (B) by any federally qualified health center for
25    prescriptive services or any other services.
26(Source: P.A. 96-555, eff. 8-18-09; 96-802, eff. 1-1-10;

 

 

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196-959, eff. 7-1-10; 96-1000, eff. 7-2-10; 96-1501, eff.
21-25-11; 96-1530, eff. 2-16-11; 97-72, eff. 7-1-11; 97-74, eff.
36-30-11; 97-348, eff. 8-12-11; 97-813, eff. 7-13-12; 97-932,
4eff. 8-10-12; 97-1142, eff. 12-28-12.)
 
5    Section 99. Effective date. This Act takes effect upon
6becoming law.