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1 | AN ACT concerning finance.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The State Prompt Payment Act is amended by | |||||||||||||||||||
5 | changing Section 3-2 as follows:
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6 | (30 ILCS 540/3-2)
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7 | Sec. 3-2. Beginning July 1, 1993, in any instance where a | |||||||||||||||||||
8 | State official or
agency is late in payment of a vendor's bill | |||||||||||||||||||
9 | or invoice for goods or services
furnished to the State, as | |||||||||||||||||||
10 | defined in Section 1, properly approved in
accordance with | |||||||||||||||||||
11 | rules promulgated under Section 3-3, the State official or
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12 | agency shall pay interest to the vendor in accordance with the | |||||||||||||||||||
13 | following:
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14 | (1) This paragraph (1) applies to bills approved for | |||||||||||||||||||
15 | payment on or after July 1, 2023. Any bill, except a bill | |||||||||||||||||||
16 | submitted under Article V of the Illinois Public Aid Code | |||||||||||||||||||
17 | and except as provided under paragraphs paragraph (1.05) | |||||||||||||||||||
18 | and (1.06) of this Section, approved for payment under | |||||||||||||||||||
19 | this Section must be paid
or the payment issued to the | |||||||||||||||||||
20 | payee within 60 days of receipt
of a proper bill or | |||||||||||||||||||
21 | invoice.
If payment is not issued to the payee within this | |||||||||||||||||||
22 | 60-day
period, an
interest penalty of 1.0% of any amount | |||||||||||||||||||
23 | approved and unpaid shall be added
for each month or |
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1 | fraction thereof after the end of this 60-day period,
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2 | until final payment is made. Any bill, except a bill for | ||||||
3 | pharmacy
or nursing facility services or goods, and except | ||||||
4 | as provided under paragraphs paragraph (1.05) and (1.06) | ||||||
5 | of this Section, submitted under Article V of the Illinois | ||||||
6 | Public Aid Code approved for payment under this Section | ||||||
7 | must be paid
or the payment issued to the payee within 60 | ||||||
8 | days after receipt
of a proper bill or invoice, and,
if | ||||||
9 | payment is not issued to the payee within this 60-day
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10 | period, an
interest penalty of 2.0% of any amount approved | ||||||
11 | and unpaid shall be added
for each month or fraction | ||||||
12 | thereof after the end of this 60-day period,
until final | ||||||
13 | payment is made. Any bill for pharmacy or nursing facility | ||||||
14 | services or
goods submitted under Article V of the | ||||||
15 | Illinois Public Aid
Code, except as provided under | ||||||
16 | paragraph (1.05) of this Section, and approved for payment | ||||||
17 | under this Section must be paid
or the payment issued to | ||||||
18 | the payee within 60 days of
receipt of a proper bill or | ||||||
19 | invoice. If payment is not
issued to the payee within this | ||||||
20 | 60-day period, an interest
penalty of 1.0% of any amount | ||||||
21 | approved and unpaid shall be
added for each month or | ||||||
22 | fraction thereof after the end of this 60-day period, | ||||||
23 | until final payment is made.
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24 | (1.05) For State fiscal year 2012 and through June 30, | ||||||
25 | 2023 future fiscal years , any bill approved for payment | ||||||
26 | under this Section must be paid
or the payment issued to |
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1 | the payee within 90 days of receipt
of a proper bill or | ||||||
2 | invoice.
If payment is not issued to the payee within this | ||||||
3 | 90-day
period, an
interest penalty of 1.0% of any amount | ||||||
4 | approved and unpaid shall be added
for each month, or | ||||||
5 | 0.033% (one-thirtieth of one percent) of any amount | ||||||
6 | approved and unpaid for each day, after the end of this | ||||||
7 | 90-day period,
until final payment is made. | ||||||
8 | (1.06) This paragraph (1.06) applies to bills approved | ||||||
9 | for payment on or after July 1, 2023, except for bills for | ||||||
10 | nursing facility services submitted under Article V of the | ||||||
11 | Illinois Public Aid Code. By July 1, 2023, and by July 1 of | ||||||
12 | each year thereafter, the State Comptroller shall | ||||||
13 | determine the prompt payment interest rate for the fiscal | ||||||
14 | year beginning on that July 1. Any bill approved for | ||||||
15 | payment under this Section on or after July 1, 2023 must be | ||||||
16 | paid
or the payment issued to the payee within 90 days of | ||||||
17 | receipt
of a proper bill or invoice.
If payment is not | ||||||
18 | issued to the payee within this 90-day
period, an
interest | ||||||
19 | penalty calculated using the prompt payment interest rate | ||||||
20 | shall be added
for each month or fraction thereof after | ||||||
21 | the end of this 90-day period until final payment is made. | ||||||
22 | For the purposes of this paragraph (1.06), the prompt | ||||||
23 | payment interest rate shall be decreased from (i) 1% per | ||||||
24 | month (or 0.033% per day) for bills approved for payment | ||||||
25 | on or after July 1, 2023 to (ii) the greater of (A) 0.25% | ||||||
26 | per month (or an annual rate of 3%) or (B) an annual rate |
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1 | of 2 times the percentage increase, if any, in the | ||||||
2 | Consumer Price Index For All Urban Consumers during the | ||||||
3 | 12-month period immediately preceding that July 1 for | ||||||
4 | bills approved for payment on or after July 1, 2023. | ||||||
5 | (1.1) A State agency shall review in a timely manner | ||||||
6 | each bill or
invoice after its receipt. If the
State | ||||||
7 | agency determines that the bill or invoice contains a | ||||||
8 | defect making it
unable to process the payment request, | ||||||
9 | the agency
shall notify the vendor requesting payment as | ||||||
10 | soon as possible after
discovering the
defect pursuant to | ||||||
11 | rules promulgated under Section 3-3; provided, however, | ||||||
12 | that the notice for construction related bills or invoices | ||||||
13 | must be given not later than 30 days after the bill or | ||||||
14 | invoice was first submitted. The notice shall
identify the | ||||||
15 | defect and any additional information
necessary to correct | ||||||
16 | the defect. If one or more items on a construction related | ||||||
17 | bill or invoice are disapproved, but not the entire bill | ||||||
18 | or invoice, then the portion that is not disapproved shall | ||||||
19 | be paid.
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20 | (2) Where a State official or agency is late in | ||||||
21 | payment of a
vendor's bill or invoice properly approved in | ||||||
22 | accordance with this Act, and
different late payment terms | ||||||
23 | are not reduced to writing as a contractual
agreement, the | ||||||
24 | State official or agency shall automatically pay interest
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25 | penalties required by this Section amounting to $50 or | ||||||
26 | more to the appropriate
vendor. Each agency shall be |
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1 | responsible for determining whether an interest
penalty
is
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2 | owed and
for paying the interest to the vendor. Except as | ||||||
3 | provided in paragraph (4), an individual interest payment | ||||||
4 | amounting to $5 or less shall not be paid by the State.
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5 | Interest due to a vendor that amounts to greater than $5 | ||||||
6 | and less than $50 shall not be paid but shall be accrued | ||||||
7 | until all interest due the vendor for all similar warrants | ||||||
8 | exceeds $50, at which time the accrued interest shall be | ||||||
9 | payable and interest will begin accruing again, except | ||||||
10 | that interest accrued as of the end of the fiscal year that | ||||||
11 | does not exceed $50 shall be payable at that time. In the | ||||||
12 | event an
individual has paid a vendor for services in | ||||||
13 | advance, the provisions of this
Section shall apply until | ||||||
14 | payment is made to that individual.
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15 | (3) The provisions of Public Act 96-1501 reducing the | ||||||
16 | interest rate on pharmacy claims under Article V of the | ||||||
17 | Illinois Public Aid Code to 1.0% per month shall apply to | ||||||
18 | any pharmacy bills for services and goods under Article V | ||||||
19 | of the Illinois Public Aid Code received on or after the | ||||||
20 | date 60 days before January 25, 2011 (the effective date | ||||||
21 | of Public Act 96-1501) except as provided under paragraph | ||||||
22 | (1.05) of this Section. | ||||||
23 | (4) Interest amounting to less than $5 shall not be | ||||||
24 | paid by the State, except for claims (i) to the Department | ||||||
25 | of Healthcare and Family Services or the Department of | ||||||
26 | Human Services, (ii) pursuant to Article V of the Illinois |
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1 | Public Aid Code, the Covering ALL KIDS Health Insurance | ||||||
2 | Act, or the Children's Health Insurance Program Act, and | ||||||
3 | (iii) made (A) by pharmacies for prescriptive services or | ||||||
4 | (B) by any federally qualified health center for | ||||||
5 | prescriptive services or any other services. | ||||||
6 | Notwithstanding any provision to the contrary, interest | ||||||
7 | may not be paid under this Act when: (1) a Chief Procurement | ||||||
8 | Officer has voided the underlying contract for goods or | ||||||
9 | services under Article 50 of the Illinois Procurement Code; or | ||||||
10 | (2) the Auditor General is conducting a performance or program | ||||||
11 | audit and the Comptroller has held or is holding for review a | ||||||
12 | related contract or vouchers for payment of goods or services | ||||||
13 | in the exercise of duties under Section 9 of the State | ||||||
14 | Comptroller Act. In such event, interest shall not accrue | ||||||
15 | during the pendency of the Auditor General's review. | ||||||
16 | (Source: P.A. 100-1064, eff. 8-24-18.)
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17 | Section 99. Effective date. This Act takes effect upon | ||||||
18 | becoming law.
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