Bill Amendment: IL SB3560 | 2017-2018 | 100th General Assembly
NOTE: For additional amemendments please see the Bill Drafting List
Bill Title: COMPTROLLER-VENDOR PAYMENT
Status: 2018-08-24 - Public Act . . . . . . . . . 100-1089 [SB3560 Detail]
Download: Illinois-2017-SB3560-House_Amendment_001.html
Bill Title: COMPTROLLER-VENDOR PAYMENT
Status: 2018-08-24 - Public Act . . . . . . . . . 100-1089 [SB3560 Detail]
Download: Illinois-2017-SB3560-House_Amendment_001.html
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1 | AMENDMENT TO SENATE BILL 3560
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2 | AMENDMENT NO. ______. Amend Senate Bill 3560 by replacing | ||||||
3 | everything after the enacting clause with the following:
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4 | "Section 5. The State Prompt Payment Act is amended by | ||||||
5 | adding Sections 3-3.5, 8, 9, 10, and 11 as follows:
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6 | (30 ILCS 540/3-3.5 new) | ||||||
7 | Sec. 3-3.5. Vendor payment contracts. Any contract | ||||||
8 | executed under the Vendor Payment Program specified in Section | ||||||
9 | 900.125 of Title 74 of the Illinois Administrative Code prior | ||||||
10 | to June 30, 2018 shall remain in effect until those contracts | ||||||
11 | have expired. Those parties with existing contracts shall | ||||||
12 | comply with additional reporting requirements established | ||||||
13 | under this amendatory Act of the 100th General Assembly or | ||||||
14 | rules adopted hereunder.
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15 | (30 ILCS 540/8 new) |
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1 | Sec. 8. Vendor Payment Program. | ||||||
2 | (a) As used in this Section: | ||||||
3 | "Applicant" means any entity seeking to be designated | ||||||
4 | as a qualified purchaser. | ||||||
5 | "Application period" means the time period when the | ||||||
6 | Program is accepting applications as determined by the | ||||||
7 | Department of Central Management Services. | ||||||
8 | "Assigned penalties" means penalties payable by the | ||||||
9 | State in accordance with this Act that are assigned to the | ||||||
10 | qualified purchaser of an assigned receivable. | ||||||
11 | "Assigned receivable" means the base invoice amount of | ||||||
12 | a qualified account receivable and any associated assigned | ||||||
13 | penalties due, currently and in the future, in accordance | ||||||
14 | with this Act. | ||||||
15 | "Assignment agreement" means an agreement executed and | ||||||
16 | delivered by a participating vendor and a qualified | ||||||
17 | purchaser, in which the participating vendor will assign | ||||||
18 | one or more qualified accounts receivable to the qualified | ||||||
19 | purchaser and make certain representations and warranties | ||||||
20 | in respect thereof. | ||||||
21 | "Base invoice amount" means the unpaid principal | ||||||
22 | amount of the invoice associated with an assigned | ||||||
23 | receivable. | ||||||
24 | "Department" means the Department of Central | ||||||
25 | Management Services. | ||||||
26 | "Medical assistance program" means any program which |
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1 | provides medical assistance under Article V of the Illinois | ||||||
2 | Public Aid Code, including Medicaid. | ||||||
3 | "Participating vendor" means a vendor whose | ||||||
4 | application for the sale of a qualified account receivable | ||||||
5 | is accepted for purchase by a qualified purchaser under the | ||||||
6 | Program terms. | ||||||
7 | "Program" means a Vendor Payment Program. | ||||||
8 | "Prompt payment penalties" means penalties payable by | ||||||
9 | the State in accordance with this Act. | ||||||
10 | "Purchase price" means 100% of the base invoice amount | ||||||
11 | associated with an assigned receivable minus: (1) any | ||||||
12 | deductions against the assigned receivable arising from | ||||||
13 | State offsets; and (2) if and to the extent exercised by a | ||||||
14 | qualified purchaser, other deductions for amounts owed by | ||||||
15 | the participating vendor to the qualified purchaser for | ||||||
16 | State offsets applied against other accounts receivable | ||||||
17 | assigned by the participating vendor to the qualified | ||||||
18 | purchaser under the Program. | ||||||
19 | "Qualified account receivable" means an account | ||||||
20 | receivable due and payable by the State that is outstanding | ||||||
21 | for 90 days or more, is eligible to accrue prompt payment | ||||||
22 | penalties under this Act and is verified by the relevant | ||||||
23 | State agency. A qualified account receivable shall not | ||||||
24 | include any account receivable related to medical | ||||||
25 | assistance program (including Medicaid) payments or any | ||||||
26 | other accounts receivable, the transfer or assignment of |
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1 | which is prohibited by, or otherwise prevented by, | ||||||
2 | applicable law. | ||||||
3 | "Qualified purchaser" means any entity that, during | ||||||
4 | any application period, is approved by the Department of | ||||||
5 | Central Management Services to participate in the Program | ||||||
6 | on the basis of certain qualifying criteria as determined | ||||||
7 | by the Department. | ||||||
8 | "State offsets" means any amount deducted from | ||||||
9 | payments made by the State in respect of any qualified | ||||||
10 | account receivable due to the State's exercise of any | ||||||
11 | offset or other contractual rights against a participating | ||||||
12 | vendor. For the purpose of this Section, "State offsets" | ||||||
13 | include statutorily required administrative fees imposed | ||||||
14 | under the State Comptroller Act. | ||||||
15 | "Sub-participant" means any individual or entity that | ||||||
16 | intends to purchase assigned receivables, directly or | ||||||
17 | indirectly, by or through an applicant or qualified | ||||||
18 | purchaser for the purposes of the Program. | ||||||
19 | "Sub-participant certification" means an instrument | ||||||
20 | executed and delivered to the Department of Central | ||||||
21 | Management Services by a sub-participant, in which the | ||||||
22 | sub-participant certifies its agreement, among others, to | ||||||
23 | be bound by the terms and conditions of the Program as a | ||||||
24 | condition to its participation in the Program as a | ||||||
25 | sub-participant. | ||||||
26 | (b) This Section reflects the provisions of Section 900.125 |
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1 | of Title 74 of the Illinois Administrative Code prior to | ||||||
2 | January 1, 2018. The requirements of this Section establish the | ||||||
3 | criteria for participation by participating vendors and | ||||||
4 | qualified purchasers in a Vendor Payment Program. Information | ||||||
5 | regarding the Vendor Payment Program may be found at the | ||||||
6 | Internet website for the Department of Central Management | ||||||
7 | Services. | ||||||
8 | (c) The State Comptroller and the Department of Central | ||||||
9 | Management Services are authorized to establish and implement | ||||||
10 | the Program under Section 3-3. This Section applies to all | ||||||
11 | qualified accounts receivable not otherwise excluded from | ||||||
12 | receiving prompt payment interest under Section 900.120 of | ||||||
13 | Title 74 of the Illinois Administrative Code. This Section | ||||||
14 | shall not apply to the purchase of any accounts receivable | ||||||
15 | related to payments made under a medical assistance program, | ||||||
16 | including Medicaid payments, or any other purchase of accounts | ||||||
17 | receivable that is otherwise prohibited by law. | ||||||
18 | (d) Under the Program, qualified purchasers may purchase | ||||||
19 | from participating vendors certain qualified accounts | ||||||
20 | receivable owed by the State to the participating vendors. A | ||||||
21 | participating vendor shall not simultaneously apply to sell the | ||||||
22 | same qualified account receivable to more than one qualified | ||||||
23 | purchaser. In consideration of the payment of the purchase | ||||||
24 | price, a participating vendor shall assign to the qualified | ||||||
25 | purchaser all of its rights to payment of the qualified account | ||||||
26 | receivable, including all current and future prompt payment |
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1 | penalties due to that qualified account receivable in | ||||||
2 | accordance with this Act. | ||||||
3 | (e) A vendor may apply to participate in the Program if: | ||||||
4 | (1) the vendor is owed an account receivable by the | ||||||
5 | State for which prompt payment penalties have commenced | ||||||
6 | accruing; | ||||||
7 | (2) the vendor's account receivable is eligible to | ||||||
8 | accrue prompt payment penalty interest under this Act; | ||||||
9 | (3) the vendor's account receivable is not for payments | ||||||
10 | under a medical assistance program; and | ||||||
11 | (4) the vendor's account receivable is not prohibited | ||||||
12 | by, or otherwise prevented by, applicable law from being | ||||||
13 | transferred or assigned under this Section. | ||||||
14 | (f) The Department shall review and approve or disapprove | ||||||
15 | each applicant seeking a qualified purchaser designation. | ||||||
16 | Factors to be considered by the Department in determining | ||||||
17 | whether an applicant shall be designated as a qualified | ||||||
18 | purchaser include, but are not limited to, the following: | ||||||
19 | (1) the qualified purchaser's agreement to commit a | ||||||
20 | minimum purchase amount as established from time to time by | ||||||
21 | the Department based upon the current needs of the Program | ||||||
22 | and the qualified purchaser's demonstrated ability to fund | ||||||
23 | its commitment; | ||||||
24 | (2) the demonstrated ability of a qualified | ||||||
25 | purchaser's sub-participants to fund their portions of a | ||||||
26 | qualified purchaser's minimum purchase commitment; |
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1 | (3) the ability of a qualified purchaser and its | ||||||
2 | sub-participants to meet standards of responsibility | ||||||
3 | substantially in accordance with the requirements of the | ||||||
4 | Standards of Responsibility found in subsection (b) of | ||||||
5 | Section 1.2046 of Title 44 of the Illinois Administrative | ||||||
6 | Code concerning government contracts, procurement, and | ||||||
7 | property management; | ||||||
8 | (4) the agreement of each qualified purchaser, at its | ||||||
9 | sole cost and expense, to administer and facilitate the | ||||||
10 | operation of the Program with respect to that qualified | ||||||
11 | purchaser, including, without limitation, assisting | ||||||
12 | potential participating vendors with the application and | ||||||
13 | assignment process; | ||||||
14 | (5) the agreement of each qualified purchaser, at its | ||||||
15 | sole cost and expense, to establish a website that is | ||||||
16 | determined by the Department to be sufficient to administer | ||||||
17 | the Program in accordance with the terms and conditions of | ||||||
18 | the Program; | ||||||
19 | (6) the agreement of each qualified purchaser, at its | ||||||
20 | sole cost and expense, to market the Program to potential | ||||||
21 | participating vendors; | ||||||
22 | (7) the agreement of each qualified purchaser, at its | ||||||
23 | sole cost and expense, to educate participating vendors | ||||||
24 | about the benefits and risks associated with participation | ||||||
25 | in the Program; | ||||||
26 | (8) the agreement of each qualified purchaser, at its |
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1 | sole cost and expense, to deposit funds into, release funds | ||||||
2 | from, and otherwise maintain all required accounts in | ||||||
3 | accordance with the terms and conditions of the Program. | ||||||
4 | Subject to the Program terms, all required accounts shall | ||||||
5 | be maintained and controlled by the qualified purchaser at | ||||||
6 | the qualified purchaser's sole cost and at no cost, whether | ||||||
7 | in the form of fees or otherwise, to the participating | ||||||
8 | vendors; | ||||||
9 | (9) the agreement of each qualified purchaser, at its | ||||||
10 | sole cost and expense, to submit a monthly written report, | ||||||
11 | in an acceptable electronic format, to the State | ||||||
12 | Comptroller or its designee and the Department or its | ||||||
13 | designee, within 10 days after the end of each month, | ||||||
14 | which, unless otherwise specified by the Department, at a | ||||||
15 | minimum, shall contain: | ||||||
16 | (A) a listing of each assigned receivable | ||||||
17 | purchased by that qualified purchaser during the | ||||||
18 | month, specifying the base invoice amount and invoice | ||||||
19 | date of that assigned receivable and the name of the | ||||||
20 | participating vendor, State contract number, voucher | ||||||
21 | number, and State agency associated with that assigned | ||||||
22 | receivable; | ||||||
23 | (B) a listing of each assigned receivable with | ||||||
24 | respect to which the qualified purchaser has received | ||||||
25 | payment of the base invoice amount from the State | ||||||
26 | during that month, including the amount of and date on |
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1 | which that payment was made and the name of the | ||||||
2 | participating vendor, State contract number, voucher | ||||||
3 | number, and State agency associated with the assigned | ||||||
4 | receivable, and identifying the relevant application | ||||||
5 | period for each assigned receivable; | ||||||
6 | (C) a listing of any payments of assigned penalties | ||||||
7 | received from the State during the month, including the | ||||||
8 | amount of and date on which the payment was made, the | ||||||
9 | name of the participating vendor, the voucher number | ||||||
10 | for the assigned penalty receivable, and the | ||||||
11 | associated assigned receivable, including the State | ||||||
12 | contract number, voucher number, and State agency | ||||||
13 | associated with the assigned receivable, and | ||||||
14 | identifying the relevant application period for each | ||||||
15 | assigned receivable; | ||||||
16 | (D) the aggregate number and dollar value of | ||||||
17 | assigned receivables purchased by the qualified | ||||||
18 | purchaser from the date on which that qualified | ||||||
19 | purchaser commenced participating in the Program | ||||||
20 | through the last day of the month; | ||||||
21 | (E) the aggregate number and dollar value of | ||||||
22 | assigned receivables purchased by the qualified | ||||||
23 | purchaser for which no payment by the State of the base | ||||||
24 | invoice amount has yet been received, from the date on | ||||||
25 | which the qualified purchaser commenced participating | ||||||
26 | in the Program through the last day of the month; |
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1 | (F) the aggregate number and dollar value of | ||||||
2 | invoices purchased by the qualified purchaser for | ||||||
3 | which no voucher has been submitted; and | ||||||
4 | (G) any other data the State Comptroller and the | ||||||
5 | Department may reasonably request from time to time; | ||||||
6 | (10) the agreement of each qualified purchaser to use | ||||||
7 | its reasonable best efforts, and for any sub-participant to | ||||||
8 | cause a qualified purchaser to use its reasonable best | ||||||
9 | efforts, to diligently pursue receipt of assigned | ||||||
10 | penalties associated with the assigned receivables, | ||||||
11 | including, without limitation, by promptly notifying the | ||||||
12 | relevant State agency that an assigned penalty is due and, | ||||||
13 | if necessary, seeking payment of assigned penalties | ||||||
14 | through the Illinois Court of Claims; and | ||||||
15 | (11) the agreement of each qualified purchaser and any | ||||||
16 | sub-participant to use their reasonable best efforts to | ||||||
17 | implement the Program terms and to perform their | ||||||
18 | obligations under the Program in a timely fashion. | ||||||
19 | (g) Each qualified purchaser's performance and | ||||||
20 | implementation of its obligations under subsection (f) shall be | ||||||
21 | subject to review by the Department and the State Comptroller | ||||||
22 | at any time to confirm that the qualified purchaser is | ||||||
23 | undertaking those obligations in a manner consistent with the | ||||||
24 | terms and conditions of the Program. A qualified purchaser's | ||||||
25 | failure to so perform its obligations including, without | ||||||
26 | limitation, its obligations to diligently pursue receipt of |
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1 | assigned penalties associated with assigned receivables, shall | ||||||
2 | be grounds for the Department and the State Comptroller to | ||||||
3 | terminate the qualified purchaser's participation in the | ||||||
4 | Program under subsection (i). Any such termination shall be | ||||||
5 | without prejudice to any rights a participating vendor may have | ||||||
6 | against that qualified purchaser, in law or in equity, | ||||||
7 | including, without limitation, the right to enforce the terms | ||||||
8 | of the assignment agreement and of the Program against the | ||||||
9 | qualified purchaser. | ||||||
10 | (h) In determining whether any applicant shall be | ||||||
11 | designated as a qualified purchaser, the Department shall have | ||||||
12 | the right to review or approve sub-participants that intend to | ||||||
13 | purchase assigned receivables, directly or indirectly, by or | ||||||
14 | through the applicant. The Department reserves the right to | ||||||
15 | reject or terminate the designation of any applicant as a | ||||||
16 | qualified purchaser or require an applicant to exclude a | ||||||
17 | proposed sub-participant in order to become or remain a | ||||||
18 | qualified purchaser on the basis of a review, whether prior to | ||||||
19 | or after the designation. Each applicant and each qualified | ||||||
20 | purchaser has an affirmative obligation to promptly notify the | ||||||
21 | Department of any change or proposed change in the identity of | ||||||
22 | the sub-participants that it disclosed to the Department no | ||||||
23 | later than 3 business days after that change. Each | ||||||
24 | sub-participant shall be required to execute a sub-participant | ||||||
25 | certification that will be attached to the corresponding | ||||||
26 | qualified purchaser designation. Sub-participants shall meet, |
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1 | at a minimum, the requirements of paragraphs (2), (3), (10), | ||||||
2 | and (11) of subsection (f). | ||||||
3 | (i) The Program, as codified under this Section, shall | ||||||
4 | continue until terminated or suspended as follows: | ||||||
5 | (1) The Program may be terminated or suspended: (A) by | ||||||
6 | the State Comptroller, after consulting with the | ||||||
7 | Department, by giving 10 days prior written notice to the | ||||||
8 | Department and the qualified purchasers in the Program; or | ||||||
9 | (B) by the Department, after consulting with the State | ||||||
10 | Comptroller, by giving 10 days prior written notice to the | ||||||
11 | State Comptroller and the qualified purchasers in the | ||||||
12 | Program. | ||||||
13 | (2) In the event a qualified purchaser or | ||||||
14 | sub-participant breaches or fails to meet any of the terms | ||||||
15 | or conditions of the Program, that qualified purchaser or | ||||||
16 | sub-participant may be terminated from the Program: (A) by | ||||||
17 | the State Comptroller, after consulting with the | ||||||
18 | Department. The termination shall be effective immediately | ||||||
19 | upon the State Comptroller giving written notice to the | ||||||
20 | Department and the qualified purchaser or sub-participant; | ||||||
21 | or (B) by the Department, after consulting with the State | ||||||
22 | Comptroller. The termination shall be effective | ||||||
23 | immediately upon the Department giving written notice to | ||||||
24 | the State Comptroller and the qualified purchaser or | ||||||
25 | sub-participant. | ||||||
26 | (3) A qualified purchaser or sub-participant may |
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1 | terminate its participation in the Program, solely with | ||||||
2 | respect to its own participation in the Program, in the | ||||||
3 | event of any change to this Act from the form that existed | ||||||
4 | on the date that the qualified purchaser or the | ||||||
5 | sub-participant, as applicable, submitted the necessary | ||||||
6 | documentation for admission into the Program if the change | ||||||
7 | materially and adversely affects the qualified purchaser's | ||||||
8 | or the sub-participant's ability to purchase and receive | ||||||
9 | payment on receivables on the terms described in this | ||||||
10 | Section. | ||||||
11 | If the Program, a qualified purchaser, or a sub-participant | ||||||
12 | is terminated under paragraphs (1) or (2) of this subsection | ||||||
13 | (i), the Program, qualified purchaser, or sub-participant may | ||||||
14 | be reinstated only by written agreement of the State | ||||||
15 | Comptroller and the Department. No termination or suspension | ||||||
16 | under paragraphs (1), (2), or (3) of this subsection (i) shall | ||||||
17 | alter or affect the qualified purchaser's or sub-participant's | ||||||
18 | obligations with respect to assigned receivables purchased by | ||||||
19 | or through the qualified purchaser prior to the termination.
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20 | (30 ILCS 540/9 new) | ||||||
21 | Sec. 9. Vendor Payment Program financial backer | ||||||
22 | disclosure. | ||||||
23 | (a) Within 60 days after the effective date of this | ||||||
24 | amendatory Act of the 100th General Assembly, at the time of | ||||||
25 | application, and annually on July 1 of each year, each |
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1 | qualified purchaser shall submit to the Department and the | ||||||
2 | State Comptroller the following information about each person, | ||||||
3 | director, owner, officer, association, financial backer, | ||||||
4 | partnership, other entity, corporation, or trust with an | ||||||
5 | indirect or direct financial interest in each qualified | ||||||
6 | purchaser: | ||||||
7 | (1) percent ownership; | ||||||
8 | (2) type of ownership; | ||||||
9 | (3) first name, middle name, last name, maiden name (if | ||||||
10 | applicable), including aliases or former names; | ||||||
11 | (4) mailing address; | ||||||
12 | (5) type of business entity, if applicable; | ||||||
13 | (6) dates and jurisdiction of business formation or | ||||||
14 | incorporation, if applicable; | ||||||
15 | (7) names of controlling shareholders, class of stock, | ||||||
16 | percentage ownership; | ||||||
17 | (8) any indirect earnings resulting from the Program; | ||||||
18 | and | ||||||
19 | (9) any earnings associated with the Program to any | ||||||
20 | parties not previously disclosed. | ||||||
21 | (b) Within 60 days after the effective date of this | ||||||
22 | amendatory Act of the 100th General Assembly, at the time of | ||||||
23 | application, and annually on July 1 of each year, each trust | ||||||
24 | associated with the qualified purchaser shall submit to the | ||||||
25 | Department and the State Comptroller the following | ||||||
26 | information: |
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1 | (1) names, addresses, dates of birth, and percentages | ||||||
2 | of interest of all beneficiaries; | ||||||
3 | (2) any indirect earnings resulting from the Program; | ||||||
4 | and | ||||||
5 | (3) any earnings associated with the Program to any | ||||||
6 | parties not previously disclosed. | ||||||
7 | (c) Each qualified purchaser must submit a statement to the | ||||||
8 | State Comptroller and the Department of Central Management | ||||||
9 | Services disclosing whether such qualified purchaser or any | ||||||
10 | related person, director, owner, officer, or financial backer | ||||||
11 | has previously or currently retained or contracted with any | ||||||
12 | registered lobbyist, lawyer, accountant, or other consultant | ||||||
13 | to prepare the disclosure required under this Section.
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14 | (30 ILCS 540/10 new) | ||||||
15 | Sec. 10. Vendor Payment Program audit. The Office of the | ||||||
16 | Auditor General shall perform a performance audit of the | ||||||
17 | Program established under Section 8. The audit shall include, | ||||||
18 | but not
be limited to, a review of the administration of the | ||||||
19 | Program and compliance with requirements
applicable to | ||||||
20 | participating vendors, qualified purchasers, qualified | ||||||
21 | accounts receivable, and
financial backer disclosures. The | ||||||
22 | audit shall cover the Program's operations for fiscal years | ||||||
23 | 2019 and 2020. Upon its completion and release, the Auditor | ||||||
24 | General's report shall be posted on the Internet website of the | ||||||
25 | Auditor General.
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1 | (30 ILCS 540/11 new) | ||||||
2 | Sec. 11. Vendor Payment Program accountability portal. The | ||||||
3 | Department of Central Management Services and the State | ||||||
4 | Comptroller shall publish on their respective Internet | ||||||
5 | websites: (1) the monthly report information submitted under | ||||||
6 | paragraph 9 of subsection (f) of Section 8; and (2) the | ||||||
7 | information required to be submitted under Section 9.
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8 | Section 99. Effective date. This Act takes effect upon | ||||||
9 | becoming law.".
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