Full Text of SB3560 100th General Assembly
SB3560eng 100TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning finance.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The State Prompt Payment Act is amended by | 5 | | adding 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 | 8 | | executed under the Vendor Payment Program specified in Section | 9 | | 900.125 of Title 74 of the Illinois Administrative Code prior | 10 | | to June 30, 2018 shall remain in effect until those contracts | 11 | | have expired. Those parties with existing contracts shall | 12 | | comply with additional reporting requirements established | 13 | | under this amendatory Act of the 100th General Assembly or | 14 | | rules 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 | 20 | | of Title 74 of the Illinois Administrative Code prior to | 21 | | January 1, 2018. The requirements of this Section establish the | 22 | | criteria for participation by participating vendors and | 23 | | qualified purchasers in a Vendor Payment Program. Information | 24 | | regarding the Vendor Payment Program may be found at the | 25 | | Internet website for the Department of Central Management | 26 | | Services. |
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| 1 | | (c) The State Comptroller and the Department of Central | 2 | | Management Services are authorized to establish and implement | 3 | | the Program under Section 3-3. This Section applies to all | 4 | | qualified accounts receivable not otherwise excluded from | 5 | | receiving prompt payment interest under Section 900.120 of | 6 | | Title 74 of the Illinois Administrative Code. This Section | 7 | | shall not apply to the purchase of any accounts receivable | 8 | | related to payments made under a medical assistance program, | 9 | | including Medicaid payments, or any other purchase of accounts | 10 | | receivable that is otherwise prohibited by law. | 11 | | (d) Under the Program, qualified purchasers may purchase | 12 | | from participating vendors certain qualified accounts | 13 | | receivable owed by the State to the participating vendors. A | 14 | | participating vendor shall not simultaneously apply to sell the | 15 | | same qualified account receivable to more than one qualified | 16 | | purchaser. In consideration of the payment of the purchase | 17 | | price, a participating vendor shall assign to the qualified | 18 | | purchaser all of its rights to payment of the qualified account | 19 | | receivable, including all current and future prompt payment | 20 | | penalties due to that qualified account receivable in | 21 | | accordance 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) Factors to be considered by the Department in | 8 | | determining whether an applicant shall be designated as a | 9 | | qualified purchaser include, but are not limited to, the | 10 | | following: | 11 | | (1) the qualified purchaser's agreement to commit a | 12 | | minimum purchase amount as established from time to time by | 13 | | the Department based upon the current needs of the Program | 14 | | and the qualified purchaser's demonstrated ability to fund | 15 | | its commitment; | 16 | | (2) the demonstrated ability of a qualified | 17 | | purchaser's sub-participants to fund their portions of a | 18 | | qualified purchaser's minimum purchase commitment; | 19 | | (3) the ability of a qualified purchaser and its | 20 | | sub-participants to meet standards of responsibility | 21 | | substantially in accordance with the requirements of the | 22 | | Standards of Responsibility found in Section 1.2046 of | 23 | | Title 44 of the Illinois Administrative Code concerning | 24 | | government contracts, procurement, and property | 25 | | management; | 26 | | (4) the agreement of each qualified purchaser, at its |
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| 1 | | sole cost and expense, to administer and facilitate the | 2 | | operation of the Program with respect to that qualified | 3 | | purchaser, including, without limitation, assisting | 4 | | potential participating vendors with the application and | 5 | | assignment process; | 6 | | (5) the agreement of each qualified purchaser, at its | 7 | | sole cost and expense, to establish a website that is | 8 | | determined by the Department to be sufficient to administer | 9 | | the Program in accordance with the terms and conditions of | 10 | | the Program; | 11 | | (6) the agreement of each qualified purchaser, at its | 12 | | sole cost and expense, to market the Program to potential | 13 | | participating vendors; | 14 | | (7) the agreement of each qualified purchaser, at its | 15 | | sole cost and expense, to educate participating vendors | 16 | | about the benefits and risks associated with participation | 17 | | in the Program; | 18 | | (8) the agreement of each qualified purchaser, at its | 19 | | sole cost and expense, to deposit funds into, release funds | 20 | | from, and otherwise maintain all required accounts in | 21 | | accordance with the terms and conditions of the Program. | 22 | | Subject to the Program terms, all required accounts shall | 23 | | be maintained and controlled by the qualified purchaser at | 24 | | the qualified purchaser's sole cost and at no cost, whether | 25 | | in the form of fees or otherwise, to the participating | 26 | | vendors; |
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| 1 | | (9) the agreement of each qualified purchaser, at its | 2 | | sole cost and expense, to submit a monthly written report, | 3 | | in both hard copy and Excel format, to the State | 4 | | Comptroller or its designee and the Department or its | 5 | | designee, within 10 days after the end of each month, | 6 | | which, unless otherwise specified by the Department, at a | 7 | | minimum, shall contain: | 8 | | (A) a listing of each assigned receivable | 9 | | purchased by that qualified purchaser during the | 10 | | month, specifying the base invoice amount and invoice | 11 | | date of that assigned receivable and the name of the | 12 | | participating vendor, State contract number, voucher | 13 | | number, and State agency associated with that assigned | 14 | | receivable; | 15 | | (B) a listing of each assigned receivable with | 16 | | respect to which the qualified purchaser has received | 17 | | payment of the base invoice amount from the State | 18 | | during that month, including the amount of and date on | 19 | | which that payment was made and the name of the | 20 | | participating vendor, State contract number, voucher | 21 | | number, and State agency associated with the assigned | 22 | | receivable, and identifying the relevant application | 23 | | period for each assigned receivable; | 24 | | (C) a listing of any payments of assigned penalties | 25 | | received from the State during the month, including the | 26 | | amount of and date on which the payment was made, the |
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| 1 | | name of the participating vendor, the voucher number | 2 | | for the assigned penalty receivable, and the | 3 | | associated assigned receivable, including the State | 4 | | contract number, voucher number, and State agency | 5 | | associated with the assigned receivable, and | 6 | | identifying the relevant application period for each | 7 | | assigned receivable; | 8 | | (D) the aggregate number and dollar value of | 9 | | assigned receivables purchased by the qualified | 10 | | purchaser from the date on which that qualified | 11 | | purchaser commenced participating in the Program | 12 | | through the last day of the month; | 13 | | (E) the aggregate number and dollar value of | 14 | | assigned receivables purchased by the qualified | 15 | | purchaser for which no payment by the State of the base | 16 | | invoice amount has yet been received, from the date on | 17 | | which the qualified purchaser commenced participating | 18 | | in the Program through the last day of the month; and | 19 | | (F) any other data the State Comptroller and the | 20 | | Department may reasonably request from time to time; | 21 | | (10) the agreement of each qualified purchaser to use | 22 | | its reasonable best efforts, and for any sub-participant to | 23 | | cause a qualified purchaser to use its reasonable best | 24 | | efforts, to diligently pursue receipt of assigned | 25 | | penalties associated with the assigned receivables, | 26 | | including, without limitation, by promptly notifying the |
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| 1 | | relevant State agency that an assigned penalty is due and, | 2 | | if necessary, seeking payment of assigned penalties | 3 | | through the Illinois Court of Claims; and | 4 | | (11) the agreement of each qualified purchaser and any | 5 | | sub-participant to use their reasonable best efforts to | 6 | | implement the Program terms and to perform their | 7 | | obligations under the Program in a timely fashion. | 8 | | (g) Each qualified purchaser's performance and | 9 | | implementation of its obligations under subsection (f) shall be | 10 | | subject to review by the Department and the State Comptroller | 11 | | at any time to confirm that the qualified purchaser is | 12 | | undertaking those obligations in a manner consistent with the | 13 | | terms and conditions of the Program. A qualified purchaser's | 14 | | failure to so perform its obligations including, without | 15 | | limitation, its obligations to diligently pursue receipt of | 16 | | assigned penalties associated with assigned receivables, shall | 17 | | be grounds for the Department and the State Comptroller to | 18 | | terminate the qualified purchaser's participation in the | 19 | | Program under subsection (i). Any such termination shall be | 20 | | without prejudice to any rights a participating vendor may have | 21 | | against that qualified purchaser, in law or in equity, | 22 | | including, without limitation, the right to enforce the terms | 23 | | of the assignment agreement and of the Program against the | 24 | | qualified purchaser. | 25 | | (h) In determining whether any applicant shall be | 26 | | designated as a qualified purchaser, the Department shall have |
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| 1 | | the right to review or approve sub-participants that intend to | 2 | | purchase assigned receivables, directly or indirectly, by or | 3 | | through the applicant. The Department reserves the right to | 4 | | reject or terminate the designation of any applicant as a | 5 | | qualified purchaser or require an applicant to exclude a | 6 | | proposed sub-participant in order to become or remain a | 7 | | qualified purchaser on the basis of a review, whether prior to | 8 | | or after the designation. Each applicant and each qualified | 9 | | purchaser has an affirmative obligation to promptly notify the | 10 | | Department of any change or proposed change in the identity of | 11 | | the sub-participants that it disclosed to the Department no | 12 | | later than 3 business days after that change. Each | 13 | | sub-participant shall be required to execute a sub-participant | 14 | | certification that will be attached to the corresponding | 15 | | qualified purchaser designation. Sub-participants shall meet, | 16 | | at a minimum, the requirements of paragraphs (2), (3), (10), | 17 | | and (11) of subsection (f). | 18 | | (i) The Program, as codified under this Section, shall | 19 | | commence July 1, 2018, and shall continue until terminated as | 20 | | follows: | 21 | | (1) The Program may be terminated: (A) by the State | 22 | | Comptroller, after consulting with the Department, by | 23 | | giving 10 days prior written notice to the Department and | 24 | | the qualified purchasers in the Program; or (B) by the | 25 | | Department, after consulting with the State Comptroller, | 26 | | by giving 10 days prior written notice to the State |
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| 1 | | Comptroller and the qualified purchasers in the Program. | 2 | | (2) In the event a qualified purchaser or | 3 | | sub-participant breaches or fails to meet any of the terms | 4 | | or conditions of the Program, that qualified purchaser or | 5 | | sub-participant may be terminated from the Program: (A) by | 6 | | the State Comptroller, after consulting with the | 7 | | Department. The termination shall be effective immediately | 8 | | upon the State Comptroller giving written notice to the | 9 | | Department and the qualified purchaser or sub-participant; | 10 | | or (B) by the Department, after consulting with the State | 11 | | Comptroller. The termination shall be effective | 12 | | immediately upon the Department giving written notice to | 13 | | the State Comptroller and the qualified purchaser or | 14 | | sub-participant. | 15 | | (3) A qualified purchaser or sub-participant may | 16 | | terminate its participation in the Program, solely with | 17 | | respect to its own participation in the Program, in the | 18 | | event of any change to this Act from the form that existed | 19 | | on the date that the qualified purchaser or the | 20 | | sub-participant, as applicable, submitted the necessary | 21 | | documentation for admission into the Program if the change | 22 | | materially and adversely affects the qualified purchaser's | 23 | | or the sub-participant's ability to purchase and receive | 24 | | payment on receivables on the terms described in this | 25 | | Section. | 26 | | If the Program, a qualified purchaser, or a sub-participant |
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| 1 | | is terminated under paragraphs (1) or (2) of this subsection | 2 | | (i), the Program, qualified purchaser, or sub-participant may | 3 | | be reinstated only by written agreement of the State | 4 | | Comptroller and the Department. No termination under | 5 | | paragraphs (1), (2), or (3) of this subsection (i) shall alter | 6 | | or affect the qualified purchaser's or sub-participant's | 7 | | obligations with respect to assigned receivables purchased by | 8 | | or through the qualified purchaser prior to the termination. | 9 | | (30 ILCS 540/9 new) | 10 | | Sec. 9. Vendor Payment Program financial backer | 11 | | disclosure. | 12 | | (a) The Department of Central Management Services shall | 13 | | collect and certify the following information from each | 14 | | qualified purchaser about each person, director, owner, | 15 | | officer, association, financial backer, partnership, other | 16 | | entity, corporation, or trust with an indirect or direct | 17 | | financial interest in each qualified purchaser: | 18 | | (1) percent ownership; | 19 | | (2) type of ownership; | 20 | | (3) first name, middle name, last name, maiden name (if | 21 | | applicable), including aliases or former names; and | 22 | | (4) resident mailing address, work mailing address, | 23 | | work telephone, and work email address. | 24 | | (b) If a corporation or other entity associated with the | 25 | | qualified purchaser, the Department of Central Management |
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| 1 | | Services shall also collect and certify the following | 2 | | information from each qualified purchaser: | 3 | | (1) business name, mailing address, telephone number, | 4 | | and website, if any; | 5 | | (2) type of business entity; | 6 | | (3) dates and jurisdiction of business formation or | 7 | | incorporation; | 8 | | (4) names of controlling shareholders, class of stock, | 9 | | percentage ownership; | 10 | | (5) any indirect earnings resulting from the Program; | 11 | | and | 12 | | (6) any earnings associated with the Program to any | 13 | | parties not previously disclosed. | 14 | | (c) If a trust associated with the qualified purchaser, the | 15 | | Department of Central Management Services shall also collect | 16 | | and certify the following information: | 17 | | (1) names, addresses, dates of birth, and percentages | 18 | | of interest of all beneficiaries; | 19 | | (2) any indirect earnings resulting from the Program; | 20 | | and | 21 | | (3) any earnings associated with the Program to any | 22 | | parties not previously disclosed. | 23 | | (d) Each person, director, owner, officer, or financial | 24 | | backer of a qualified purchaser must submit a statement to the | 25 | | Department of Central Management Services disclosing whether | 26 | | he or she has previously or currently retained or contracted |
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| 1 | | with any registered lobbyist, lawyer, or consultant to prepare | 2 | | the disclosure required under this Section. | 3 | | (e) The Department of Central Management Services shall | 4 | | file information collected under subsections (a), (b), (c), and | 5 | | (d) of this Section with the Office of the Comptroller in a | 6 | | manner and form prescribed by the Office of the Comptroller. | 7 | | The Office of the Comptroller shall make information collected | 8 | | under this Section publicly available. The Office of the | 9 | | Comptroller shall adopt rules and policies to govern the | 10 | | reporting requirements of this Section. These rules and | 11 | | policies may be made effective no earlier than July 1, 2018. | 12 | | (30 ILCS 540/10 new) | 13 | | Sec. 10. Vendor Payment Program audit. The Office of the | 14 | | Auditor General shall perform a performance audit of the | 15 | | Program established under Section 8. The audit shall include, | 16 | | but not
be limited to, a review of the administration of the | 17 | | Program and compliance with requirements
applicable to | 18 | | participating vendors, qualified purchasers, qualified | 19 | | accounts receivable, and
financial backer disclosures. The | 20 | | audit shall cover the Program's operations for fiscal years | 21 | | 2019 and 2020. Upon its completion and release, the Auditor | 22 | | General's report shall be posted on the Internet website of the | 23 | | Auditor General. | 24 | | (30 ILCS 540/11 new) |
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| 1 | | Sec. 11. Vendor Payment Program accountability portal. The | 2 | | Department of Central Management Services shall publish on its | 3 | | Internet website a monthly report disclosing the following: | 4 | | (1) a listing of each assigned receivable with respect | 5 | | to which the qualified purchaser has received payment of | 6 | | the base invoice amount from the State during that month, | 7 | | including the amount of and date on which that payment was | 8 | | made and the name of the participating vendor, State | 9 | | contract number, voucher number, and State agency | 10 | | associated with the assigned receivable, and identifying | 11 | | the relevant application period for each assigned | 12 | | receivable; | 13 | | (2) a listing of any payments of assigned penalties | 14 | | received from the State during the month, including the | 15 | | amount of and date on which the payment was made, the name | 16 | | of the participating vendor, the voucher number for the | 17 | | assigned penalty receivable, and the associated assigned | 18 | | receivable, including the State contract number, voucher | 19 | | number, and State agency associated with the assigned | 20 | | receivable, and identifying the relevant application | 21 | | period for each assigned receivable; | 22 | | (3) the aggregate number and dollar value of assigned | 23 | | receivables purchased by the qualified purchaser from the | 24 | | date on which that qualified purchaser commenced | 25 | | participating in the Program through the last day of the | 26 | | month; |
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| 1 | | (4) the aggregate number and dollar value of assigned | 2 | | receivables purchased by the qualified purchaser for which | 3 | | no payment by the State of the base invoice amount has yet | 4 | | been received, from the date on which the qualified | 5 | | purchaser commenced participating in the Program through | 6 | | the last day of the month; | 7 | | (5) the aggregate number and dollar value of invoices | 8 | | purchased by the qualified purchaser for which no | 9 | | appropriation has been authorized; and | 10 | | (6) any other data the State Comptroller and the | 11 | | Department of Central Management Services may reasonably | 12 | | request from time to time.
| 13 | | Section 99. Effective date. This Act takes effect upon | 14 | | becoming law.
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