Bill Text: IL HB3449 | 2011-2012 | 97th General Assembly | Chaptered

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Bill Title: Amends the State Comptroller Act. Provides that all State payments for an employee's payroll, a retiree's pension, or an employee's expense reimbursement must be made through direct deposit. Provides that all State payments to a vendor that exceed a certain allowable limit of paper warrants in a fiscal year, by the same agency, must be made through direct deposit. Provides that, if a State agency fails to meet the direct deposit requirements, the Comptroller may charge the employee, retiree, or vendor a processing fee of $2.50 per paper warrant. Amends the State Prompt Payment Act. Provides that an individual interest penalty for a late payment owed by the State amounting to $5 or less shall not be paid by the State. Provides that the Comptroller may require all interest penalty payments to be made through direct deposit. Effective immediately.

Sponsorship: Slight Partisan Bill (Republican 5-2)

Status: (Passed) 2011-08-12 - Public Act . . . . . . . . . 97-0348 [HB3449 Detail]

Download: Illinois-2011-HB3449-Chaptered.html

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Public Act 097-0348
HB3449 Enrolled LRB097 10811 PJG 51265 b
AN ACT concerning State government.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The State Comptroller Act is amended by changing
Section 9.03 as follows:
(15 ILCS 405/9.03) (from Ch. 15, par. 209.03)
Sec. 9.03. Direct deposit of State payments.
(a) The Comptroller, with the approval of the State
Treasurer, may provide by rule or regulation for the direct
deposit of any payment lawfully payable from the State Treasury
and in accordance with federal banking regulations including
but not limited to payments to (i) persons paid from personal
services, (ii) persons receiving benefit payments from the
Comptroller him under the State pension systems, (iii)
individuals who receive assistance under Articles III, IV, and
VI of the Illinois Public Aid Code, (iv) providers of services
under the Mental Health and Developmental Disabilities
Administrative Act, (v) providers of community-based mental
health services, and (vi) providers of services under programs
administered by the State Board of Education, in the accounts
of those persons or entities maintained at a bank, savings and
loan association, or credit union, where authorized by the
payee. The Comptroller also may deposit public aid payments for

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

ensure compliance with this mandate. If a State agency pays an
employee's payroll or an employee's expense reimbursement
without using direct deposit, the Comptroller may charge that
employee a processing fee of $2.50 per paper warrant. The
processing fee may be withheld from the employee's payment or
reimbursement. The amount collected from the fee shall be
deposited into the Comptroller's Administrative Fund.
(c) All State payments to a vendor that exceed the
allowable limit of paper warrants in a fiscal year, by the same
agency, must be made through direct deposit. It is the
responsibility of the paying State agency to ensure compliance
with this mandate. If a State agency pays a vendor more times
than the allowable limit in a single fiscal year without using
direct deposit, the Comptroller may charge the vendor a
processing fee of $2.50 per paper warrant. The processing fee
may be withheld from the vendor's payment. The amount collected
from the processing fee shall be deposited into the
Comptroller's Administrative Fund. The Office of the
Comptroller shall define "allowable limit" in the
Comptroller's Statewide Accounting Management System (SAMS)
manual, except that the allowable limit shall not be less than
30 paper warrants. The Office of the Comptroller shall also
provide reasonable notice to all State agencies of the
allowable limit of paper warrants.
(d) State employees covered by provisions in collective
bargaining agreements that do not require direct deposit of

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

Section 10. The State Prompt Payment Act is amended by
changing Section 3-2 as follows:
(30 ILCS 540/3-2)
Sec. 3-2. Beginning July 1, 1993, in any instance where a
State official or agency is late in payment of a vendor's bill
or invoice for goods or services furnished to the State, as
defined in Section 1, properly approved in accordance with
rules promulgated under Section 3-3, the State official or
agency shall pay interest to the vendor in accordance with the
following:
(1) Any bill, except a bill submitted under Article V
of the Illinois Public Aid Code, approved for payment under
this Section must be paid or the payment issued to the
payee within 60 days of receipt of a proper bill or
invoice. If payment is not issued to the payee within this
60-day 60 day period, an interest penalty of 1.0% of any
amount approved and unpaid shall be added for each month or
fraction thereof after the end of this 60-day 60 day
period, until final payment is made. Any bill, except a
bill for pharmacy or nursing facility services or goods,
submitted under Article V of the Illinois Public Aid Code
approved for payment under this Section must be paid or the
payment issued to the payee within 60 days after receipt of
a proper bill or invoice, and, if payment is not issued to
the payee within this 60-day period, an interest penalty of

2.0% of any amount approved and unpaid shall be added for
each month or fraction thereof after the end of this 60-day
period, until final payment is made. Any bill for pharmacy
or nursing facility services or goods submitted under
Article V of the Illinois Public Aid Code and , approved for
payment under this Section must be paid or the payment
issued to the payee within 60 days of receipt of a proper
bill or invoice. If payment is not issued to the payee
within this 60-day 60 day period, an interest penalty of
1.0% of any amount approved and unpaid shall be added for
each month or fraction thereof after the end of this 60-day
60 day period, until final payment is made.
(1.1) A State agency shall review in a timely manner
each bill or invoice after its receipt. If the State agency
determines that the bill or invoice contains a defect
making it unable to process the payment request, the agency
shall notify the vendor requesting payment as soon as
possible after discovering the defect pursuant to rules
promulgated under Section 3-3; provided, however, that the
notice for construction related bills or invoices must be
given not later than 30 days after the bill or invoice was
first submitted. The notice shall identify the defect and
any additional information necessary to correct the
defect. If one or more items on a construction related bill
or invoice are disapproved, but not the entire bill or
invoice, then the portion that is not disapproved shall be

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

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