96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB6849

 

Introduced 4/15/2010, by Rep. Robert W. Pritchard

 

SYNOPSIS AS INTRODUCED:
 
30 ILCS 540/3-2
30 ILCS 540/3-2.1 new

    Amends the State Prompt Payment Act. Provides that interest penalties amounting to $50 or more (instead of interest and penalties in any amount) shall be paid automatically. Provides that, for interest of at least $5 but less than $50, the vendor must initiate a written request for the interest penalty when the interest is due and payable. Provides that the Department of Central Management Services and the State Comptroller shall jointly promulgate rules establishing the conditions under which interest of less than $5 may be claimed and paid. Provides that the State Comptroller, in conjunction with the Department of Central Management Services, shall submit a report concerning the processing of interest penalty payments to the General Assembly no later than January 31, 2011. Provides that the report must include certain information. Effective 30 days after becoming law.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1     AN ACT concerning State government.
 
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 and by adding Section 3-2.1 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 of 1.0% of any amount
20     approved and unpaid shall be added for each month or
21     fraction thereof after the end of this 60 day period, until
22     final payment is made. Any bill submitted under Article V
23     of the Illinois Public Aid Code approved for payment under

 

 

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1     this Section must be paid or the payment issued to the
2     payee within 60 days after receipt of a proper bill or
3     invoice, and, if payment is not issued to the payee within
4     this 60-day period, an interest penalty of 2.0% of any
5     amount approved and unpaid shall be added for each month or
6     fraction thereof after the end of this 60-day period, until
7     final payment is made.
8         (1.1) A State agency shall review in a timely manner
9     each bill or invoice after its receipt. If the State agency
10     determines that the bill or invoice contains a defect
11     making it unable to process the payment request, the agency
12     shall notify the vendor requesting payment as soon as
13     possible after discovering the defect pursuant to rules
14     promulgated under Section 3-3; provided, however, that the
15     notice for construction related bills or invoices must be
16     given not later than 30 days after the bill or invoice was
17     first submitted. The notice shall identify the defect and
18     any additional information necessary to correct the
19     defect. If one or more items on a construction related bill
20     or invoice are disapproved, but not the entire bill or
21     invoice, then the portion that is not disapproved shall be
22     paid.
23         (2) Where a State official or agency is late in payment
24     of a vendor's bill or invoice properly approved in
25     accordance with this Act, and different late payment terms
26     are not reduced to writing as a contractual agreement, the

 

 

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1     State official or agency shall automatically pay interest
2     penalties required by this Section amounting to $50 or more
3     to the appropriate vendor. Each agency shall be responsible
4     for determining whether an interest penalty is owed and for
5     paying the interest to the vendor. For interest of at least
6     $5 but less than $50, the vendor must initiate a written
7     request for the interest penalty when such interest is due
8     and payable. The Department of Central Management Services
9     and the State Comptroller shall jointly promulgate rules
10     establishing the conditions under which interest of less
11     than $5 may be claimed and paid. In the event an individual
12     has paid a vendor for services in advance, the provisions
13     of this Section shall apply until payment is made to that
14     individual.
15 (Source: P.A. 96-555, eff. 8-18-09; 96-802, eff. 1-1-10;
16 revised 11-25-09.)
 
17     (30 ILCS 540/3-2.1 new)
18     Sec. 3-2.1. Interest penalty report. The State
19 Comptroller, in conjunction with the Department of Central
20 Management Services, shall submit a report to the General
21 Assembly no later than January 31, 2011. The report shall
22 include the following information, which shall be broken down
23 by State agency and vendor:
24         (1) the number and total dollar amount of interest
25     penalty payment vouchers submitted to the Comptroller's

 

 

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1     office on or after August 18, 2009 and before January 1,
2     2011 for interest payments of less than $5;
3         (2) the number and total dollar amount of interest
4     penalty payment vouchers submitted to the Comptroller's
5     office on or after August 18, 2009 and before January 1,
6     2011 for interest payments of at least $5 but less than
7     $50; the report shall indicate the number and total dollar
8     amount of (i) those paid automatically and (ii) those
9     initiated by written request of the vendor; and
10         (3) the aggregate cost of processing the interest
11     penalty payment vouchers referenced in items (1) and (2).
12     The report shall also include recommendations regarding
13 establishing a minimum threshold for payment of interest
14 penalties to vendors and increased efficiencies, including,
15 but not limited to, consolidation of multiple payments to the
16 same vendor.
 
17     Section 99. Effective date. This Act takes effect 30 days
18 after becoming law.