Full Text of HB1354 97th General Assembly
HB1354 97TH GENERAL ASSEMBLY |
| | 97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012 HB1354 Introduced 2/9/2011, by Rep. Karen May SYNOPSIS AS INTRODUCED: |
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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,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The State Prompt Payment Act is amended by | 5 | | changing Section 3-2 as follows:
| 6 | | (30 ILCS 540/3-2)
| 7 | | Sec. 3-2. Beginning July 1, 1993, in any instance where a | 8 | | State official or
agency is late in payment of a vendor's bill | 9 | | or invoice for goods or services
furnished to the State, as | 10 | | defined in Section 1, properly approved in
accordance with | 11 | | rules promulgated under Section 3-3, the State official or
| 12 | | agency shall pay interest to the vendor in accordance with the | 13 | | following:
| 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; | 22 | | 96-959, eff. 7-1-10; 96-1000, eff. 7-2-10.)
| 23 | | Section 99. Effective date. This Act takes effect upon | 24 | | becoming law.
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