HB5898eng 95TH GENERAL ASSEMBLY

HB5898 Engrossed LRB095 18934 BDD 45088 b

AN ACT concerning finance.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The State Budget Law of the Civil Administrative Code of Illinois is amended by changing Section 50-5 as follows:

(15 ILCS 20/50-5) (was 15 ILCS 20/38)

Sec. 50-5. Governor to submit State budget. The Governor shall, as soon as possible and not later than the first Wednesday in March in 2007 (March 7, 2007) and the third Wednesday in February of each year beginning in 2008, except as otherwise provided in this Section, submit a State budget, embracing therein the amounts recommended by the Governor to be appropriated to the respective departments, offices, and institutions, and for all other public purposes, the estimated revenues from taxation, the estimated revenues from sources other than taxation, and an estimate of the amount required to be raised by taxation, and the amount and description of overdue bills and invoices under the State Prompt Payment Act. In 2004 only, the Governor shall submit the capital development section of the State budget not later than the fourth Tuesday of March (March 23, 2004). The amounts recommended by the Governor for appropriation to the respective departments, offices and institutions shall be formulated according to the various functions and activities for which the respective department, office or institution of the State government (including the elective officers in the executive department and including the University of Illinois and the judicial department) is responsible. The amounts relating to particular functions and activities shall be further formulated in accordance with the object classification specified in Section 13 of the State Finance Act.

The amount and description of overdue bills and invoices under the State Prompt Payment Act must include:

(1) the total number of and amount of bills or invoices that were not paid within 30 days after submission during the prior fiscal year;

(2) the total number of and amount of bills or invoices that were not paid within 60 days after submission during the prior fiscal year;

(3) the total amount of interest penalties that the State incurred during the prior fiscal year under Section 3-2 of the State Prompt Payment Act; and

(4) the estimated amount of all moneys that will be due under Section 3-2 of the State Prompt Payment Act as of May 31 of the current year.

The Governor shall not propose expenditures and the General Assembly shall not enact appropriations that exceed the resources estimated to be available, as provided in this Section.

For the purposes of Article VIII, Section 2 of the 1970 Illinois Constitution, the State budget for the following funds shall be prepared on the basis of revenue and expenditure measurement concepts that are in concert with generally accepted accounting principles for governments:

(1) General Revenue Fund.

(2) Common School Fund.

(3) Educational Assistance Fund.

(4) Road Fund.

(5) Motor Fuel Tax Fund.

(6) Agricultural Premium Fund.

These funds shall be known as the "budgeted funds". The revenue estimates used in the State budget for the budgeted funds shall include the estimated beginning fund balance, plus revenues estimated to be received during the budgeted year, plus the estimated receipts due the State as of June 30 of the budgeted year that are expected to be collected during the lapse period following the budgeted year, minus the receipts collected during the first 2 months of the budgeted year that became due to the State in the year before the budgeted year. Revenues shall also include estimated federal reimbursements associated with the recognition of Section 25 of the State Finance Act liabilities. For any budgeted fund for which current year revenues are anticipated to exceed expenditures, the surplus shall be considered to be a resource available for expenditure in the budgeted fiscal year.

Expenditure estimates for the budgeted funds included in the State budget shall include the costs to be incurred by the State for the budgeted year, to be paid in the next fiscal year, excluding costs paid in the budgeted year which were carried over from the prior year, where the payment is authorized by Section 25 of the State Finance Act. For any budgeted fund for which expenditures are expected to exceed revenues in the current fiscal year, the deficit shall be considered as a use of funds in the budgeted fiscal year.

Revenues and expenditures shall also include transfers between funds that are based on revenues received or costs incurred during the budget year.

By March 15 of each year, the Commission on Government Forecasting and Accountability shall prepare revenue and fund transfer estimates in accordance with the requirements of this Section and report those estimates to the General Assembly and the Governor.

For all funds other than the budgeted funds, the proposed expenditures shall not exceed funds estimated to be available for the fiscal year as shown in the budget. Appropriation for a fiscal year shall not exceed funds estimated by the General Assembly to be available during that year.

(Source: P.A. 93-1, eff. 2-6-03; 93-662, eff. 2-11-04; 93-1067, eff. 1-15-05; 94-1108, eff. 2-16-07.)

Section 10. The State Prompt Payment Act is amended by changing Section 3-2 as follows:

(30 ILCS 540/3-2) (from Ch. 127, par. 132.403-2)

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) Any bill approved for payment under this Section must be paid or the payment issued to the payee within 30 days after the 60 days of receipt of a proper bill or invoice. If payment is not issued to the payee within this 30-day 60 day period, then 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 30-day 60 day period, until the earlier of (i) the date that final payment is made or (ii) 60 days after the receipt of the bill or invoice. If payment is not issued to the payee within 60 days after the receipt of the bill or invoice, then an interest penalty of 1.5% of any amount approved and unpaid is added for each month or fraction thereof after the end of this 60-day period until final payment is made.

(1.1) A State agency shall review in a timely manner each bill or invoice after its receipt. If the State agency 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. For interest of at least $5 but less than $50, the vendor must initiate a written request for the interest penalty when such interest is due and payable. The Department of Central Management Services and the State Comptroller shall jointly promulgate rules establishing the conditions under which interest of less than $5 may be claimed and paid. 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.

(Source: P.A. 94-972, eff. 7-1-07.)

Section 999. Effective date. This Act takes effect upon becoming law.