Bill Text: IL SB2255 | 2017-2018 | 100th General Assembly | Introduced

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Bill Title: Amends the State Prompt Payment Act. Provides that, for bills approved for payment on or after July 1, 2018, the prompt payment interest rate for the fiscal year shall be the greater of (i) 3% or (ii) 2 times the percentage increase, if any, in the Consumer Price Index For All Urban Consumers during the 12-month period immediately preceding the first day of the fiscal year (currently, 1% generally and 2% for certain bills submitted under Article V of the Illinois Public Aid Code). Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2019-01-09 - Session Sine Die [SB2255 Detail]

Download: Illinois-2017-SB2255-Introduced.html

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100TH GENERAL ASSEMBLY State of Illinois 2017 and 2018 SB2255 Introduced 11/1/2017, by Sen. Laura M. Murphy SYNOPSIS AS INTRODUCED:
30 ILCS 540/3-2
Amends the State Prompt Payment Act. Provides that, for bills approved for payment on or after July 1, 2018, the prompt payment interest rate for the fiscal year shall be the greater of (i) 3% or (ii) 2 times the percentage increase, if any, in the Consumer Price Index For All Urban Consumers during the 12-month period immediately preceding the first day of the fiscal year (currently, 1% generally and 2% for certain bills submitted under Article V of the Illinois Public Aid Code). Effective immediately.
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FISCAL NOTE ACT MAY APPLY
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 prior to July 1, 2018. 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 fraction

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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 paragraphs paragraph (1.05) and
(1.06) 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,
2018 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, 2018. By July 1, 2018, 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, 2018 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. As
used in this paragraph (1.06), "prompt payment interest
rate" means the greater of (i) 3% or (ii) 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.
(1.1) A State agency shall review in a timely manner
each bill or invoice after its receipt. If the State agency

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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

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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
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;

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96-959, eff. 7-1-10; 96-1000, eff. 7-2-10; 96-1501, eff.
1-25-11; 96-1530, eff. 2-16-11; 97-72, eff. 7-1-11; 97-74, eff.
6-30-11; 97-348, eff. 8-12-11; 97-813, eff. 7-13-12; 97-932,
eff. 8-10-12; 97-1142, eff. 12-28-12.)
Section 99. Effective date. This Act takes effect upon
becoming law.