Illinois General Assembly - Full Text of SB1728
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Full Text of SB1728  97th General Assembly




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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 the
14Comptroller him under the State pension systems, (iii)
15individuals who receive assistance under Articles III, IV, and
16VI of the Illinois Public Aid Code, (iv) providers of services
17under the Mental Health and Developmental Disabilities
18Administrative Act, (v) providers of community-based mental
19health services, and (vi) providers of services under programs
20administered by the State Board of Education, in the accounts
21of those persons or entities maintained at a bank, savings and
22loan association, or credit union, where authorized by the
23payee. The Comptroller also may deposit public aid payments for



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



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1ensure compliance with this mandate. If a State agency pays an
2employee's payroll or an employee's expense reimbursement
3without using direct deposit, the Comptroller may charge that
4employee a processing fee of $2.50 per paper warrant. The
5processing fee may be withheld from the employee's payment or
6reimbursement. The amount collected from the fee shall be
7deposited into 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 processing fee
16may be withheld from the vendor's payment. The amount collected
17from the processing fee shall be deposited into the
18Comptroller's Administrative Fund. The Office of the
19Comptroller shall define "allowable limit" in the
20Comptroller's Statewide Accounting Management System (SAMS)
21manual, except that the allowable limit shall not be less than
2230 paper warrants. The Office of the Comptroller shall also
23provide reasonable notice to all State agencies of the
24allowable limit of paper warrants.
25    (d) State employees covered by provisions in collective
26bargaining agreements that do not require direct deposit of



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1paychecks are exempt from this mandate. No later than 60 days
2after the effective date of this amendatory Act of the 97th
3General Assembly, all State agencies must provide to the Office
4of the Comptroller a list of employees that are exempt under
5this subsection (d) from the direct deposit mandate. In
6addition, a State employee or vendor may file a hardship
7petition with the Office of the Comptroller requesting an
8exemption from the direct deposit mandate under this Section. A
9hardship petition shall be made available for download on the
10Comptroller's official Internet website.
11    (e) Notwithstanding any provision of law to the contrary,
12the direct deposit of State payments under this Section for an
13employee's payroll, an employee's expense reimbursement, or a
14State vendor's payment does not authorize the State to
15automatically withdraw funds from those accounts.
16    (f) For the purposes of this Section, "vendor" means a
17non-governmental entity with a taxpayer identification number
18issued by the Social Security Administration or Internal
19Revenue Service that receives payments through the
20Comptroller's commercial system. The term does not include
21State agencies.
22(Source: P.A. 88-641, eff. 9-9-94; 88-643, eff. 1-1-95; 89-235,
23eff. 8-4-95; 89-507, eff. 7-1-97.)
24    Section 10. The State Prompt Payment Act is amended by
25changing 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
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



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



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



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1    date 60 days before January 25, 2011 (the effective date of
2    Public Act 96-1501) this amendatory Act of the 96th General
3    Assembly.
4        (4) Interest amounting to less than $5 shall not be
5    paid by the State, except for claims for prescriptive
6    services or any other services submitted by a federally
7    qualified health center pursuant to Article V of the
8    Illinois Public Aid Code, the Covering ALL KIDS Health
9    Insurance Act, or the Children's Health Insurance Program
10    Act to the Department of Healthcare and Family Services.
11(Source: P.A. 96-555, eff. 8-18-09; 96-802, eff. 1-1-10;
1296-959, eff. 7-1-10; 96-1000, eff. 7-2-10; 96-1501, eff.
131-25-11; 96-1530, eff. 2-16-11; revised 2-22-11.)
14    Section 99. Effective date. This Act takes effect upon
15becoming law.