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.


LRB103 26015 HLH 52369 b

 

 

A BILL FOR

 

SB0181LRB103 26015 HLH 52369 b

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
5changing Section 3-2 as follows:
 
6    (30 ILCS 540/3-2)
7    Sec. 3-2. Beginning July 1, 1993, in any instance where a
8State official or agency is late in payment of a vendor's bill
9or invoice for goods or services furnished to the State, as
10defined in Section 1, properly approved in accordance with
11rules promulgated under Section 3-3, the State official or
12agency shall pay interest to the vendor in accordance with the
13following:
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

 

 

SB0181- 2 -LRB103 26015 HLH 52369 b

1    fraction thereof after the end of this 60-day period,
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
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.
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

 

 

SB0181- 3 -LRB103 26015 HLH 52369 b

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

 

 

SB0181- 4 -LRB103 26015 HLH 52369 b

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.
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
25    penalties required by this Section amounting to $50 or
26    more to the appropriate vendor. Each agency shall be

 

 

SB0181- 5 -LRB103 26015 HLH 52369 b

1    responsible for determining whether an interest penalty is
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.
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.
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

 

 

SB0181- 6 -LRB103 26015 HLH 52369 b

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
7may not be paid under this Act when: (1) a Chief Procurement
8Officer has voided the underlying contract for goods or
9services under Article 50 of the Illinois Procurement Code; or
10(2) the Auditor General is conducting a performance or program
11audit and the Comptroller has held or is holding for review a
12related contract or vouchers for payment of goods or services
13in the exercise of duties under Section 9 of the State
14Comptroller Act. In such event, interest shall not accrue
15during the pendency of the Auditor General's review.
16(Source: P.A. 100-1064, eff. 8-24-18.)
 
17    Section 99. Effective date. This Act takes effect upon
18becoming law.