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1 AN ACT concerning finance.


2 Be it enacted by the People of the State of Illinois,

3represented in the General Assembly:



4 Section 5. The State Prompt Payment Act is amended by 
5adding Sections 3-3.5, 8, 9, 10, and 11 as follows:

6 (30 ILCS 540/3-3.5 new)
7 Sec. 3-3.5. Vendor payment contracts. Any contract 
8executed under the Vendor Payment Program specified in Section 
9900.125 of Title 74 of the Illinois Administrative Code prior 
10to June 30, 2018 shall remain in effect until those contracts 
11have expired. Those parties with existing contracts shall 
12comply with additional reporting requirements established 
13under this amendatory Act of the 100th General Assembly or 
14rules adopted hereunder.

15 (30 ILCS 540/8 new)
16 Sec. 8. Vendor Payment Program.
17 (a) As used in this Section:
18  "Applicant" means any entity seeking to be designated 
19 as a qualified purchaser.
20  "Application period" means the time period when the 
21 Program is accepting applications as determined by the 
22 Department of Central Management Services.
 
 
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1  "Assigned penalties" means penalties payable by the 
2 State in accordance with this Act that are assigned to the 
3 qualified purchaser of an assigned receivable.
4  "Assigned receivable" means the base invoice amount of 
5 a qualified account receivable and any associated assigned 
6 penalties due, currently and in the future, in accordance 
7 with this Act.
8  "Assignment agreement" means an agreement executed and 
9 delivered by a participating vendor and a qualified 
10 purchaser, in which the participating vendor will assign 
11 one or more qualified accounts receivable to the qualified 
12 purchaser and make certain representations and warranties 
13 in respect thereof.
14  "Base invoice amount" means the unpaid principal 
15 amount of the invoice associated with an assigned 
16 receivable.
17  "Department" means the Department of Central 
18 Management Services.
19  "Medical assistance program" means any program which 
20 provides medical assistance under Article V of the Illinois 
21 Public Aid Code, including Medicaid.
22  "Participating vendor" means a vendor whose 
23 application for the sale of a qualified account receivable 
24 is accepted for purchase by a qualified purchaser under the 
25 Program terms.
26  "Program" means a Vendor Payment Program.
 
 
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1  "Prompt payment penalties" means penalties payable by 
2 the State in accordance with this Act.
3  "Purchase price" means 100% of the base invoice amount 
4 associated with an assigned receivable minus: (1) any 
5 deductions against the assigned receivable arising from 
6 State offsets; and (2) if and to the extent exercised by a 
7 qualified purchaser, other deductions for amounts owed by 
8 the participating vendor to the qualified purchaser for 
9 State offsets applied against other accounts receivable 
10 assigned by the participating vendor to the qualified 
11 purchaser under the Program.
12  "Qualified account receivable" means an account 
13 receivable due and payable by the State that is outstanding 
14 for 90 days or more, is eligible to accrue prompt payment 
15 penalties under this Act and is verified by the relevant 
16 State agency. A qualified account receivable shall not 
17 include any account receivable related to medical 
18 assistance program (including Medicaid) payments or any 
19 other accounts receivable, the transfer or assignment of 
20 which is prohibited by, or otherwise prevented by, 
21 applicable law.
22  "Qualified purchaser" means any entity that, during 
23 any application period, is approved by the Department of 
24 Central Management Services to participate in the Program 
25 on the basis of certain qualifying criteria as determined 
26 by the Department.
 
 
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1  "State offsets" means any amount deducted from 
2 payments made by the State in respect of any qualified 
3 account receivable due to the State's exercise of any 
4 offset or other contractual rights against a participating 
5 vendor. For the purpose of this Section, "State offsets" 
6 include statutorily required administrative fees imposed 
7 under the State Comptroller Act.
8  "Sub-participant" means any individual or entity that 
9 intends to purchase assigned receivables, directly or 
10 indirectly, by or through an applicant or qualified 
11 purchaser for the purposes of the Program.
12  "Sub-participant certification" means an instrument 
13 executed and delivered to the Department of Central 
14 Management Services by a sub-participant, in which the 
15 sub-participant certifies its agreement, among others, to 
16 be bound by the terms and conditions of the Program as a 
17 condition to its participation in the Program as a 
18 sub-participant.
19 (b) This Section reflects the provisions of Section 900.125 
20of Title 74 of the Illinois Administrative Code prior to 
21January 1, 2018. The requirements of this Section establish the 
22criteria for participation by participating vendors and 
23qualified purchasers in a Vendor Payment Program. Information 
24regarding the Vendor Payment Program may be found at the 
25Internet website for the Department of Central Management 
26Services.
 
 
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1 (c) The State Comptroller and the Department of Central 
2Management Services are authorized to establish and implement 
3the Program under Section 3-3. This Section applies to all 
4qualified accounts receivable not otherwise excluded from 
5receiving prompt payment interest under Section 900.120 of 
6Title 74 of the Illinois Administrative Code. This Section 
7shall not apply to the purchase of any accounts receivable 
8related to payments made under a medical assistance program, 
9including Medicaid payments, or any other purchase of accounts 
10receivable that is otherwise prohibited by law.
11 (d) Under the Program, qualified purchasers may purchase 
12from participating vendors certain qualified accounts 
13receivable owed by the State to the participating vendors. A 
14participating vendor shall not simultaneously apply to sell the 
15same qualified account receivable to more than one qualified 
16purchaser. In consideration of the payment of the purchase 
17price, a participating vendor shall assign to the qualified 
18purchaser all of its rights to payment of the qualified account 
19receivable, including all current and future prompt payment 
20penalties due to that qualified account receivable in 
21accordance with this Act.
22 (e) A vendor may apply to participate in the Program if:
23  (1) the vendor is owed an account receivable by the 
24 State for which prompt payment penalties have commenced 
25 accruing;
26  (2) the vendor's account receivable is eligible to 
 
 
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1 accrue prompt payment penalty interest under this Act;
2  (3) the vendor's account receivable is not for payments 
3 under a medical assistance program; and
4  (4) the vendor's account receivable is not prohibited 
5 by, or otherwise prevented by, applicable law from being 
6 transferred or assigned under this Section.
7 (f) The Department shall review and approve or disapprove 
8each applicant seeking a qualified purchaser designation. 
9Factors to be considered by the Department in determining 
10whether an applicant shall be designated as a qualified 
11purchaser include, but are not limited to, the following:
12  (1) the qualified purchaser's agreement to commit a 
13 minimum purchase amount as established from time to time by 
14 the Department based upon the current needs of the Program 
15 and the qualified purchaser's demonstrated ability to fund 
16 its commitment;
17  (2) the demonstrated ability of a qualified 
18 purchaser's sub-participants to fund their portions of a 
19 qualified purchaser's minimum purchase commitment;
20  (3) the ability of a qualified purchaser and its 
21 sub-participants to meet standards of responsibility 
22 substantially in accordance with the requirements of the 
23 Standards of Responsibility found in subsection (b) of 
24 Section 1.2046 of Title 44 of the Illinois Administrative 
25 Code concerning government contracts, procurement, and 
26 property management;
 
 
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1  (4) the agreement of each qualified purchaser, at its 
2 sole cost and expense, to administer and facilitate the 
3 operation of the Program with respect to that qualified 
4 purchaser, including, without limitation, assisting 
5 potential participating vendors with the application and 
6 assignment process;
7  (5) the agreement of each qualified purchaser, at its 
8 sole cost and expense, to establish a website that is 
9 determined by the Department to be sufficient to administer 
10 the Program in accordance with the terms and conditions of 
11 the Program;
12  (6) the agreement of each qualified purchaser, at its 
13 sole cost and expense, to market the Program to potential 
14 participating vendors;
15  (7) the agreement of each qualified purchaser, at its 
16 sole cost and expense, to educate participating vendors 
17 about the benefits and risks associated with participation 
18 in the Program;
19  (8) the agreement of each qualified purchaser, at its 
20 sole cost and expense, to deposit funds into, release funds 
21 from, and otherwise maintain all required accounts in 
22 accordance with the terms and conditions of the Program. 
23 Subject to the Program terms, all required accounts shall 
24 be maintained and controlled by the qualified purchaser at 
25 the qualified purchaser's sole cost and at no cost, whether 
26 in the form of fees or otherwise, to the participating 
 
 
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1 vendors;
2  (9) the agreement of each qualified purchaser, at its 
3 sole cost and expense, to submit a monthly written report, 
4 in an acceptable electronic format, to the State 
5 Comptroller or its designee and the Department or its 
6 designee, within 10 days after the end of each month, 
7 which, unless otherwise specified by the Department, at a 
8 minimum, shall contain:
9   (A) a listing of each assigned receivable 
10 purchased by that qualified purchaser during the 
11 month, specifying the base invoice amount and invoice 
12 date of that assigned receivable and the name of the 
13 participating vendor, State contract number, voucher 
14 number, and State agency associated with that assigned 
15 receivable;
16   (B) a listing of each assigned receivable with 
17 respect to which the qualified purchaser has received 
18 payment of the base invoice amount from the State 
19 during that month, including the amount of and date on 
20 which that payment was made and the name of the 
21 participating vendor, State contract number, voucher 
22 number, and State agency associated with the assigned 
23 receivable, and identifying the relevant application 
24 period for each assigned receivable;
25   (C) a listing of any payments of assigned penalties 
26 received from the State during the month, including the 
 
 
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1 amount of and date on which the payment was made, the 
2 name of the participating vendor, the voucher number 
3 for the assigned penalty receivable, and the 
4 associated assigned receivable, including the State 
5 contract number, voucher number, and State agency 
6 associated with the assigned receivable, and 
7 identifying the relevant application period for each 
8 assigned receivable;
9   (D) the aggregate number and dollar value of 
10 assigned receivables purchased by the qualified 
11 purchaser from the date on which that qualified 
12 purchaser commenced participating in the Program 
13 through the last day of the month;
14   (E) the aggregate number and dollar value of 
15 assigned receivables purchased by the qualified 
16 purchaser for which no payment by the State of the base 
17 invoice amount has yet been received, from the date on 
18 which the qualified purchaser commenced participating 
19 in the Program through the last day of the month;
20   (F) the aggregate number and dollar value of 
21 invoices purchased by the qualified purchaser for 
22 which no voucher has been submitted; and 
23   (G) any other data the State Comptroller and the 
24 Department may reasonably request from time to time;
25  (10) the agreement of each qualified purchaser to use 
26 its reasonable best efforts, and for any sub-participant to 
 
 
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1 cause a qualified purchaser to use its reasonable best 
2 efforts, to diligently pursue receipt of assigned 
3 penalties associated with the assigned receivables, 
4 including, without limitation, by promptly notifying the 
5 relevant State agency that an assigned penalty is due and, 
6 if necessary, seeking payment of assigned penalties 
7 through the Illinois Court of Claims; and
8  (11) the agreement of each qualified purchaser and any 
9 sub-participant to use their reasonable best efforts to 
10 implement the Program terms and to perform their 
11 obligations under the Program in a timely fashion.
12 (g) Each qualified purchaser's performance and 
13implementation of its obligations under subsection (f) shall be 
14subject to review by the Department and the State Comptroller 
15at any time to confirm that the qualified purchaser is 
16undertaking those obligations in a manner consistent with the 
17terms and conditions of the Program. A qualified purchaser's 
18failure to so perform its obligations including, without 
19limitation, its obligations to diligently pursue receipt of 
20assigned penalties associated with assigned receivables, shall 
21be grounds for the Department and the State Comptroller to 
22terminate the qualified purchaser's participation in the 
23Program under subsection (i). Any such termination shall be 
24without prejudice to any rights a participating vendor may have 
25against that qualified purchaser, in law or in equity, 
26including, without limitation, the right to enforce the terms 
 
 
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1of the assignment agreement and of the Program against the 
2qualified purchaser.
3 (h) In determining whether any applicant shall be 
4designated as a qualified purchaser, the Department shall have 
5the right to review or approve sub-participants that intend to 
6purchase assigned receivables, directly or indirectly, by or 
7through the applicant. The Department reserves the right to 
8reject or terminate the designation of any applicant as a 
9qualified purchaser or require an applicant to exclude a 
10proposed sub-participant in order to become or remain a 
11qualified purchaser on the basis of a review, whether prior to 
12or after the designation. Each applicant and each qualified 
13purchaser has an affirmative obligation to promptly notify the 
14Department of any change or proposed change in the identity of 
15the sub-participants that it disclosed to the Department no 
16later than 3 business days after that change. Each 
17sub-participant shall be required to execute a sub-participant 
18certification that will be attached to the corresponding 
19qualified purchaser designation. Sub-participants shall meet, 
20at a minimum, the requirements of paragraphs (2), (3), (10), 
21and (11) of subsection (f).
22 (i) The Program, as codified under this Section, shall 
23continue until terminated or suspended as follows:
24  (1) The Program may be terminated or suspended: (A) by 
25 the State Comptroller, after consulting with the 
26 Department, by giving 10 days prior written notice to the 
 
 
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1 Department and the qualified purchasers in the Program; or 
2 (B) by the Department, after consulting with the State 
3 Comptroller, by giving 10 days prior written notice to the 
4 State Comptroller and the qualified purchasers in the 
5 Program.
6  (2) In the event a qualified purchaser or 
7 sub-participant breaches or fails to meet any of the terms 
8 or conditions of the Program, that qualified purchaser or 
9 sub-participant may be terminated from the Program: (A) by 
10 the State Comptroller, after consulting with the 
11 Department. The termination shall be effective immediately 
12 upon the State Comptroller giving written notice to the 
13 Department and the qualified purchaser or sub-participant; 
14 or (B) by the Department, after consulting with the State 
15 Comptroller. The termination shall be effective 
16 immediately upon the Department giving written notice to 
17 the State Comptroller and the qualified purchaser or 
18 sub-participant.
19  (3) A qualified purchaser or sub-participant may 
20 terminate its participation in the Program, solely with 
21 respect to its own participation in the Program, in the 
22 event of any change to this Act from the form that existed 
23 on the date that the qualified purchaser or the 
24 sub-participant, as applicable, submitted the necessary 
25 documentation for admission into the Program if the change 
26 materially and adversely affects the qualified purchaser's 
 
 
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1 or the sub-participant's ability to purchase and receive 
2 payment on receivables on the terms described in this 
3 Section.
4 If the Program, a qualified purchaser, or a sub-participant 
5is terminated or suspended under paragraphs (1) or (2) of this 
6subsection (i), the Program, qualified purchaser, or 
7sub-participant may be reinstated only by written agreement of 
8the State Comptroller and the Department. No termination or 
9suspension under paragraphs (1), (2), or (3) of this subsection 
10(i) shall alter or affect the qualified purchaser's or 
11sub-participant's obligations with respect to assigned 
12receivables purchased by or through the qualified purchaser 
13prior to the termination.

14 (30 ILCS 540/9 new)
15 Sec. 9. Vendor Payment Program financial backer 
16disclosure.
17 (a) Within 60 days after the effective date of this 
18amendatory Act of the 100th General Assembly, at the time of 
19application, and annually on July 1 of each year, each 
20qualified purchaser shall submit to the Department and the 
21State Comptroller the following information about each person, 
22director, owner, officer, association, financial backer, 
23partnership, other entity, corporation, or trust with an 
24indirect or direct financial interest in each qualified 
25purchaser:
 
 
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1  (1) percent ownership;
2  (2) type of ownership;
3  (3) first name, middle name, last name, maiden name (if 
4 applicable), including aliases or former names;
5  (4) mailing address;
6  (5) type of business entity, if applicable;
7  (6) dates and jurisdiction of business formation or 
8 incorporation, if applicable; 
9  (7) names of controlling shareholders, class of stock, 
10 percentage ownership;
11  (8) any indirect earnings resulting from the Program; 
12 and
13  (9) any earnings associated with the Program to any 
14 parties not previously disclosed.
15 (b) Within 60 days after the effective date of this 
16amendatory Act of the 100th General Assembly, at the time of 
17application, and annually on July 1 of each year, each trust 
18associated with the qualified purchaser shall submit to the 
19Department and the State Comptroller the following 
20information:
21  (1) names, addresses, dates of birth, and percentages 
22 of interest of all beneficiaries;
23  (2) any indirect earnings resulting from the Program; 
24 and
25  (3) any earnings associated with the Program to any 
26 parties not previously disclosed.
 
 
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1 (c) Each qualified purchaser must submit a statement to the 
2State Comptroller and the Department of Central Management 
3Services disclosing whether such qualified purchaser or any 
4related person, director, owner, officer, or financial backer 
5has previously or currently retained or contracted with any 
6registered lobbyist, lawyer, accountant, or other consultant 
7to prepare the disclosure required under this Section.

8 (30 ILCS 540/10 new)
9 Sec. 10. Vendor Payment Program audit. The Office of the 
10Auditor General shall perform a performance audit of the 
11Program established under Section 8. The audit shall include, 
12but not
be limited to, a review of the administration of the 
13Program and compliance with requirements
applicable to 
14participating vendors, qualified purchasers, qualified 
15accounts receivable, and
financial backer disclosures. The 
16audit shall cover the Program's operations for fiscal years 
172019 and 2020. Upon its completion and release, the Auditor 
18General's report shall be posted on the Internet website of the 
19Auditor General.

20 (30 ILCS 540/11 new)
21 Sec. 11. Vendor Payment Program accountability portal. The 
22Department of Central Management Services and the State 
23Comptroller shall publish on their respective Internet 
24websites: (1) the monthly report information submitted under 
 
 
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1paragraph 9 of subsection (f) of Section 8; and (2) the 
2information required to be submitted under Section 9.


3 Section 99. Effective date. This Act takes effect upon 
4becoming law.