Bill Text: IL SB0181 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Amends the State Prompt Payment Act. Provides that, by July 1, 2023, and by July 1 of each year thereafter, the State Comptroller shall determine the prompt payment interest rate for the fiscal year that begins on that date. Provides that any bill approved for payment on or after July 1, 2023 must be paid or the payment issued to the payee within 90 days of receipt of a proper bill or invoice. Provides that if payment is not issued to the payee within this 90-day period, an interest penalty calculated using the prompt payment interest rate shall be added for each month or fraction thereof after the end of this 90-day period until final payment is made. Provides for the prompt payment interest rate under the applicable provisions. Makes conforming and other changes. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2024-03-15 - Rule 3-9(a) / Re-referred to Assignments [SB0181 Detail]

Download: Illinois-2023-SB0181-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB0181 Introduced 1/31/2023, by Sen. Laura M. Murphy SYNOPSIS AS INTRODUCED:
30 ILCS 540/3-2
Amends the State Prompt Payment Act. Provides that, by July 1, 2023, and by July 1 of each year thereafter, the State Comptroller shall determine the prompt payment interest rate for the fiscal year that begins on that begins on that date. Provides that any bill approved for payment on or after July 1, 2023 must be paid or the payment issued to the payee within 90 days of receipt of a proper bill or invoice. Provides that if payment is not issued to the payee within this 90-day period, an interest penalty calculated using the prompt payment interest rate shall be added for each month or fraction thereof after the end of this 90-day period until final payment is made. Provides for the prompt payment interest rate under the applicable provisions. Makes conforming and other changes. Effective immediately.
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A BILL FOR
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AN ACT concerning finance.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. 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) This paragraph (1) applies to bills approved for
payment on or after July 1, 2023. Any bill, except a bill
submitted under Article V of the Illinois Public Aid Code
and except as provided under paragraphs paragraph (1.05)
and (1.06) of this Section, 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 period, an interest penalty of 1.0% of any amount
approved and unpaid shall be added for each month or

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fraction thereof after the end of this 60-day period,
until final payment is made. Any bill, except a bill for
pharmacy or nursing facility services or goods, and except
as provided under paragraphs paragraph (1.05) and (1.06)
of this Section, 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, except as provided under
paragraph (1.05) of this Section, 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 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 period,
until final payment is made.
(1.05) For State fiscal year 2012 and through June 30,
2023 future fiscal years, any bill approved for payment
under this Section must be paid or the payment issued to

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the payee within 90 days of receipt of a proper bill or
invoice. If payment is not issued to the payee within this
90-day period, an interest penalty of 1.0% of any amount
approved and unpaid shall be added for each month, or
0.033% (one-thirtieth of one percent) of any amount
approved and unpaid for each day, after the end of this
90-day period, until final payment is made.
(1.06) This paragraph (1.06) applies to bills approved
for payment on or after July 1, 2023, except for bills for
nursing facility services submitted under Article V of the
Illinois Public Aid Code. By July 1, 2023, and by July 1 of
each year thereafter, the State Comptroller shall
determine the prompt payment interest rate for the fiscal
year beginning on that July 1. Any bill approved for
payment under this Section on or after July 1, 2023 must be
paid or the payment issued to the payee within 90 days of
receipt of a proper bill or invoice. If payment is not
issued to the payee within this 90-day period, an interest
penalty calculated using the prompt payment interest rate
shall be added for each month or fraction thereof after
the end of this 90-day period until final payment is made.
For the purposes of this paragraph (1.06), the prompt
payment interest rate shall be decreased from (i) 1% per
month (or 0.033% per day) for bills approved for payment
on or after July 1, 2023 to (ii) the greater of (A) 0.25%
per month (or an annual rate of 3%) or (B) an annual rate

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of 2 times the percentage increase, if any, in the
Consumer Price Index For All Urban Consumers during the
12-month period immediately preceding that July 1 for
bills approved for payment on or after July 1, 2023.
(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

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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 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) except as provided under paragraph
(1.05) of this Section.
(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

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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.
Notwithstanding any provision to the contrary, interest
may not be paid under this Act when: (1) a Chief Procurement
Officer has voided the underlying contract for goods or
services under Article 50 of the Illinois Procurement Code; or
(2) the Auditor General is conducting a performance or program
audit and the Comptroller has held or is holding for review a
related contract or vouchers for payment of goods or services
in the exercise of duties under Section 9 of the State
Comptroller Act. In such event, interest shall not accrue
during the pendency of the Auditor General's review.
(Source: P.A. 100-1064, eff. 8-24-18.)
Section 99. Effective date. This Act takes effect upon
becoming law.