Bill Text: CA SB399 | 2013-2014 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: California Prompt Payment Act.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Vetoed) 2014-02-27 - Consideration of Governor's veto stricken from file. [SB399 Detail]

Download: California-2013-SB399-Amended.html

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BILL NUMBER: SB 399	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MAY 14, 2013
	AMENDED IN SENATE  APRIL 1, 2013

INTRODUCED BY   Senator Wright

                        FEBRUARY 20, 2013

   An act to  add   amend  Section 
927.14to   927.6 of  the Government Code, relating
to state contracts.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 399, as amended, Wright.  State contracts: expedited
payment procedure.   California Prompt Payment Act.
 
   The California Prompt Payment Act provides that a state agency
that fails to make a timely payment for goods or services acquired
pursuant to a contract with a specified business or organization is
subject to a late payment penalty.  
   This bill would require, if a state agency receives an invoice for
the successful completion of a contract for which emergency work or
remedial measures were necessary to immediately avert, alleviate,
repair, or mitigate destruction of property, the state agency to
submit the invoice to the Controller for payment not more than 15
days from receipt of the invoice.  
   The California Prompt Payment Act subjects a state agency that
acquires property or services pursuant to a contract with a business
to a late penalty payment, if it fails to make payment to the person
or business on the date required by the contract. Existing law
provides that the penalty payable to a certified small business, a
nonprofit organization, a nonprofit public benefit corporation, or a
small business or nonprofit organization that provides services or
equipment under the Medi-Cal program is 10% above the United States
Prime Rate on June 30 of the prior fiscal year. The State Contract
Act prescribes the procedures and requirements applicable to various
state agency contracts, and exempts from these procedures and
requirements specified contracts for required emergency work or
remedial measures related to the accidental or unplanned release of
toxic substances.  
   This bill would include a contractor performing emergency work or
remedial measures related to the accidental or unplanned release of
toxic substances within the list of entities entitled to the late
payment penalty of 10% above the United States Prime Rate. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 927.6 of the  
Government Code   is amended to read: 
   927.6.  (a) State agencies shall pay applicable penalties, without
requiring that the claimant submit an additional invoice for these
amounts, whenever the state agency fails to submit a correct claim
schedule to the Controller by the required payment approval date and
payment is not issued within 45 calendar days from the state agency
receipt of an undisputed invoice. The penalty shall cease to accrue
on the date the state agency submits the claim schedule to the
Controller for payment or pays the claimant directly, and shall be
paid for out of the state agency's support appropriation. If the
claimant is a certified small business,  a contractor performing
emergency work or remedial measures pursuant to subdivision (b) of
Section 10101 of the Public   Contract Code,  a
nonprofit organization, a nonprofit public benefit corporation, or a
small business or nonprofit organization that provides services or
equipment under the Medi-Cal program, the state agency shall pay to
the claimant a penalty at a rate of 10 percent above the United
States Prime Rate on June 30 of the prior fiscal year. However, a
nonprofit organization shall only be eligible to receive a penalty
payment if it has been awarded a contract or grant in an amount less
than five hundred thousand dollars ($500,000). If the amount of the
penalty is ten dollars ($10) or less, the penalty shall be waived and
not paid by the state agency.
   (b) For all other businesses, the state agency shall pay a penalty
at a rate of 1 percent above the Pooled Money Investment Account
daily rate on June 30 of the prior fiscal year, not to exceed a rate
of 15 percent. If the amount of the penalty is one hundred dollars
($100) or less, the penalty shall be waived and not paid by the state
agency. On an exception basis, state agencies may avoid payment of
penalties for failure to submit a correct claim schedule to the
Controller by the required payment approval date by paying the
claimant directly from the state agency's revolving fund within 45
calendar days following the date upon which an undisputed invoice is
received by the state agency. 
  SECTION 1.    Section 927.14 is added to the
Government Code, to read:
   927.14.  Notwithstanding any other provision of law, except where
payment is made directly by a state agency pursuant to Section 927.6,
if a state agency receives an invoice for the successful completion
of a contract for which emergency work or remedial measures were
necessary to immediately avert, alleviate, repair, or mitigate
destruction of property, the state agency shall submit the invoice to
the Controller for payment not more than 15 days from receipt of the
invoice.