97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB3449

 

Introduced 2/24/2011, by Rep. Frank J. Mautino

 

SYNOPSIS AS INTRODUCED:
 
15 ILCS 405/9.03  from Ch. 15, par. 209.03
30 ILCS 540/3-2

    Amends the State Comptroller Act. Provides that all State payments for an employee's payroll, a retiree's pension, or an employee's expense reimbursement must be made through direct deposit. Provides that all State payments to a vendor that exceed a certain allowable limit of paper warrants in a fiscal year, by the same agency, must be made through direct deposit. Provides that, if a State agency fails to meet the direct deposit requirements, the Comptroller may charge the employee, retiree, or vendor a processing fee of $2.50 per paper warrant. Amends the State Prompt Payment Act. Provides that an individual interest penalty for a late payment owed by the State amounting to $5 or less shall not be paid by the State. Provides that the Comptroller may require all interest penalty payments to be made through direct deposit. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB3449LRB097 10811 PJG 51265 b

1    AN ACT concerning State government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The State Comptroller Act is amended by changing
5Section 9.03 as follows:
 
6    (15 ILCS 405/9.03)  (from Ch. 15, par. 209.03)
7    Sec. 9.03. Direct deposit of State payments.
8    (a) The Comptroller, with the approval of the State
9Treasurer, may provide by rule or regulation for the direct
10deposit of any payment lawfully payable from the State Treasury
11and in accordance with federal banking regulations including
12but not limited to payments to (i) persons paid from personal
13services, (ii) persons receiving benefit payments from him
14under the State pension systems, (iii) individuals who receive
15assistance under Articles III, IV, and VI of the Illinois
16Public Aid Code, (iv) providers of services under the Mental
17Health and Developmental Disabilities Administrative Act, (v)
18providers of community-based mental health services, and (vi)
19providers of services under programs administered by the State
20Board of Education, in the accounts of those persons or
21entities maintained at a bank, savings and loan association, or
22credit union, where authorized by the payee. The Comptroller
23also may deposit public aid payments for individuals who

 

 

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1receive assistance under Articles III, IV, VI, and X of the
2Illinois Public Aid Code directly into an electronic benefits
3transfer account in a financial institution approved by the
4State Treasurer as prescribed by the Illinois Department of
5Human Services and in accordance with the rules and regulations
6of that Department and the rules and regulation adopted by the
7Comptroller and the State Treasurer. The Comptroller, with the
8approval of the State Treasurer, may provide by rule for the
9electronic direct deposit of payments to public agencies and
10any other payee of the State. The electronic direct deposits
11may be made to the designated account in those financial
12institutions specified in this Section for the direct deposit
13of payments. Within 6 months after the effective date of this
14amendatory Act of 1994, the Comptroller shall establish a pilot
15program for the electronic direct deposit of payments to local
16school districts, municipalities, and units of local
17government. The payments may be made without the use of the
18voucher-warrant system, provided that documentation of
19approval by the Treasurer of each group of payments made by
20direct deposit shall be retained by the Comptroller. The form
21and method of the Treasurer's approval shall be established by
22the rules or regulations adopted by the Comptroller under this
23Section.
24    (b) All State payments for an employee's payroll, a
25retiree's pension benefit, or an employee's expense
26reimbursement must be made through direct deposit. It is the

 

 

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1responsibility of the paying State agency to ensure compliance
2with this mandate. If a State agency pays an employee's
3payroll, a retiree's pension benefit, or an employee's expense
4reimbursement without using direct deposit, the Comptroller
5may charge that employee a processing fee of $2.50 per paper
6warrant. The amount collected from the fee shall be deposited
7into the Comptroller's Administrative Fund.
8    (c) All State payments to a vendor that exceed the
9allowable limit of paper warrants in a fiscal year, by the same
10agency, must be made through direct deposit. It is the
11responsibility of the paying State agency to ensure compliance
12with this mandate. If a State agency pays a vendor more times
13than the allowable limit in a single fiscal year without using
14direct deposit, the Comptroller may charge the vendor a
15processing fee of $2.50 per paper warrant. The amount collected
16from the processing fee shall be deposited into the
17Comptroller's Administrative Fund. The Office of Comptroller
18shall define "vendor" and "allowable limit" in the Statewide
19Accounting Management Manual System (SAMS) manual and shall
20provide such notice to all State agencies.
21(Source: P.A. 88-641, eff. 9-9-94; 88-643, eff. 1-1-95; 89-235,
22eff. 8-4-95; 89-507, eff. 7-1-97.)
 
23    Section 10. The State Prompt Payment Act is amended by
24changing Section 3-2 as follows:
 

 

 

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1    (30 ILCS 540/3-2)
2    Sec. 3-2. Beginning July 1, 1993, in any instance where a
3State official or agency is late in payment of a vendor's bill
4or invoice for goods or services furnished to the State, as
5defined in Section 1, properly approved in accordance with
6rules promulgated under Section 3-3, the State official or
7agency shall pay interest to the vendor in accordance with the
8following:
9        (1) Any bill, except a bill submitted under Article V
10    of the Illinois Public Aid Code, approved for payment under
11    this Section must be paid or the payment issued to the
12    payee within 60 days of receipt of a proper bill or
13    invoice. If payment is not issued to the payee within this
14    60-day 60 day period, an interest penalty of 1.0% of any
15    amount approved and unpaid shall be added for each month or
16    fraction thereof after the end of this 60-day 60 day
17    period, until final payment is made. Any bill, except a
18    bill for pharmacy or nursing facility services or goods,
19    submitted under Article V of the Illinois Public Aid Code
20    approved for payment under this Section must be paid or the
21    payment issued to the payee within 60 days after receipt of
22    a proper bill or invoice, and, if payment is not issued to
23    the payee within this 60-day period, an interest penalty of
24    2.0% of any amount approved and unpaid shall be added for
25    each month or fraction thereof after the end of this 60-day
26    period, until final payment is made. Any bill for pharmacy

 

 

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1    or nursing facility services or goods submitted under
2    Article V of the Illinois Public Aid Code and , approved for
3    payment under this Section must be paid or the payment
4    issued to the payee within 60 days of receipt of a proper
5    bill or invoice. If payment is not issued to the payee
6    within this 60-day 60 day period, an interest penalty of
7    1.0% of any amount approved and unpaid shall be added for
8    each month or fraction thereof after the end of this 60-day
9    60 day period, until final payment is made.
10        (1.1) A State agency shall review in a timely manner
11    each bill or invoice after its receipt. If the State agency
12    determines that the bill or invoice contains a defect
13    making it unable to process the payment request, the agency
14    shall notify the vendor requesting payment as soon as
15    possible after discovering the defect pursuant to rules
16    promulgated under Section 3-3; provided, however, that the
17    notice for construction related bills or invoices must be
18    given not later than 30 days after the bill or invoice was
19    first submitted. The notice shall identify the defect and
20    any additional information necessary to correct the
21    defect. If one or more items on a construction related bill
22    or invoice are disapproved, but not the entire bill or
23    invoice, then the portion that is not disapproved shall be
24    paid.
25        (2) Where a State official or agency is late in payment
26    of a vendor's bill or invoice properly approved in

 

 

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1    accordance with this Act, and different late payment terms
2    are not reduced to writing as a contractual agreement, the
3    State official or agency shall automatically pay interest
4    penalties required by this Section amounting to $50 or more
5    to the appropriate vendor. Each agency shall be responsible
6    for determining whether an interest penalty is owed and for
7    paying the interest to the vendor. An individual interest
8    payment amounting to $5 or less shall not be paid by the
9    State. Interest due to a vendor that amounts to greater
10    than $5 and less than $50 shall not be paid but shall be
11    accrued until all interest due the vendor for all similar
12    warrants exceeds $50, at which time the accrued interest
13    shall be payable and interest will begin accruing again,
14    except that interest accrued as of the end of the fiscal
15    year that does not exceed $50 shall be payable at that
16    time. In the event an individual has paid a vendor for
17    services in advance, the provisions of this Section shall
18    apply until payment is made to that individual.
19        (3) The provisions of Public Act 96-1501 this
20    amendatory Act of the 96th General Assembly reducing the
21    interest rate on pharmacy claims under Article V of the
22    Illinois Public Aid Code to 1.0% per month shall apply to
23    any pharmacy bills for services and goods under Article V
24    of the Illinois Public Aid Code received on or after the
25    date 60 days before January 25, 2011 (the effective date of
26    Public Act 96-1501) this amendatory Act of the 96th General

 

 

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1    Assembly.
2        (4) The Office Of Comptroller may require all interest
3    penalty payments made under item (2) to be made through
4    direct deposit. The Comptroller may charge a vendor a fee
5    of $2.50 per paper warrant issued. The fee must be
6    deposited into the Comptroller's Administrative Fund.
7(Source: P.A. 96-555, eff. 8-18-09; 96-802, eff. 1-1-10;
896-959, eff. 7-1-10; 96-1000, eff. 7-2-10; 96-1501, eff.
91-25-11; 96-1530, eff. 2-16-11; revised 2-22-11.)
 
10    Section 99. Effective date. This Act takes effect upon
11becoming law.