HB3172 102ND GENERAL ASSEMBLY

LRB102 12082 RJF 17419 b

102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB3172

Introduced 2/19/2021, by Rep. Michael Halpin

SYNOPSIS AS INTRODUCED:

30 ILCS 540/12 new

Amends the State Prompt Payment Act. Provides for the Flexible Vendor Payment Program. Provides minimum requirements for the Program. Provides for a Program administrator. Provides for capital providers to the Program. Provides that the Program shall be accessible to any State vendor that wishes to enter into the Program. Provides that a vendor shall assign its interest in a voucher to an eligible capital provider, and select a timeframe upon which the capital provider shall pay to the vendor 100% percent of the payable voucher, minus any fees that may be associated with how soon the vendor wants to be paid. Specifies payment timeframe. Provides for the payment of invoices by the State to capital providers. Establishes a variable interest rate. Authorizes late payment agreements. Provides for the adoption of rules.

A BILL FOR

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 adding Section 12 as follows:

(30 ILCS 540/12 new)

Sec. 12. Flexible Vendor Payment Program.

(a) In addition to the program established under Section 8, the State Comptroller and the Department of Central Management Services are authorized to establish and implement a Flexible Vendor Payment Program as provided under this Section.

(b) At a minimum, the Program established under this Section shall provide or allow for the following:

(1) Allow vendors to manage the timing of payments from the State to allow better management of their business and cash flow.

(2) Allow the State to manage its payment cycle based off of its own cash flow, without being a burden to its vendors, or adding any unnecessary cost to its vendors. The State shall also be able to maintain its current 90 day payment cycle, before it begins incurring any interest cost due to deferred vendor payments.

(3) Allow the State to reduce its interest expense with reduced interest rates.

(4) Create a more competitive bidding process for State contracts.

(c) For purposes of establishing the Program under this Section, the Comptroller shall contract with an external entity, to be known as the Program administrator, who, in consultation with the Comptroller, shall be capable of implementing the Program and capable of establishing the criteria for the Program provided under subsection (b). The Program administrator shall implement the Program without any cash requirement from the State and only be compensated by a transaction fee to implement and oversee the Program.

(d) The Comptroller shall establish by rule the requirements that any capital provider to the Program must meet in order to participate in the Program. The Program shall allow for a capital provider to the Program to be affiliated with, or be the Program administrator of, the Program if the capital provider meets the minimum requirements to be a capital provider that are established by the Comptroller. The Comptroller is authorized to, but not required to, contract exclusively with one entity that has the capability of designing, implementing, and providing the required capital necessary to implement the Program under this Section.

(e) The Program shall be accessible to any State vendor that wishes to enter into the Program. A vendor shall assign its interest in a voucher to an eligible capital provider, and select a timeframe upon which the capital provider shall pay to the vendor 100% percent of the payable voucher, minus any fees that may be associated with how soon the vendor wants to be paid. A vendor may select to be paid by the capital provider between 1 day and 90 days after an invoice is converted to a voucher.

(f) The State shall pay for invoices on a payment cycle that is suitable to the cash flow of the State or as may be otherwise established under State law. The State shall pay an interest rate on those invoices that shall be paid when the invoices are paid. Notwithstanding any other provision of law to the contrary, the interest rate shall be a variable interest rate tied to commercially published rates, and shall be lower than any other rate that may be charged for unpaid invoices under this Act. The Comptroller is authorized to enter into an agreement specifying late payment terms with eligible capital providers for the purposes of paying a bill or invoice under this Section.

(g) The Comptroller shall adopt all rules necessary for the implementation of the Program created under this Section.