BILL NUMBER: AB 727	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Nielsen

                        FEBRUARY 26, 2009

   An act to amend Sections 927.2, 927.6, 927.7, and 927.11 of the
Government Code, relating to resource conservation districts.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 727, as introduced, Nielsen. Resource conservation districts:
California Prompt Payment Act.
   Existing law generally provides that a state agency that acquires
property or services pursuant to a contract with a business, but
fails to make payment to the person or business on the date required
by the contract, shall be subject to a late payment penalty, as
specified. Existing law provides that the penalty payable to a
certified small business, a nonprofit organization, or a nonprofit
public benefit corporation, as specified, is 1/4 of 1% of the amount
due, per calendar day, from the required payment date, except as
specified.
   This bill would include resource conservation districts within the
list of entities entitled to the late payment penalty described
above for the failure of a state agency to make payment for goods and
services to a resource conservation district pursuant to a contract,
as specified.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 927.2 of the Government Code is amended to
read:
   927.2.  The following definitions apply to this chapter:
   (a) "Claim schedule" means a schedule of invoices prepared and
submitted by a state agency to the Controller for payment to the
named claimant.
   (b) "Grant" means a signed final agreement between any state
agency and a local government agency or organization authorized to
accept grant funding for victim services or prevention programs
administered by any state agency  , or, for restoration
activities performed by a resource conservation district  .
 Any such   The  grant is a contract and
subject to this chapter.
   (c) "Invoice" means a bill or claim that requests payment on a
contract under which a state agency acquires property or services or
pursuant to a signed final grant agreement.
   (d) "Medi-Cal program" means the program established pursuant to
Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of
the Welfare and Institutions Code.
   (e) "Nonprofit public benefit corporation" means a corporation, as
defined by subdivision (b) of Section 5046 of the Corporations Code,
that has registered with the Department of General Services as a
small business.
   (f) "Nonprofit service organization" means a nonprofit entity that
is organized to provide services to the public.
   (g) "Reasonable cause" means a determination by a state agency
that any of the following conditions are present:
   (1) There is a discrepancy between the invoice or claimed amount
and the provisions of the contract or grant.
   (2) There is a discrepancy between the invoice or claimed amount
and either the claimant's actual delivery of property or services to
the state or the state's acceptance of those deliveries.
   (3) Additional evidence supporting the validity of the invoice or
claimed amount is required to be provided to the state agency by the
claimant.
   (4) The invoice has been improperly executed or needs to be
corrected by the claimant.
   (5) The state agency making the determination or the claimant
involved has been subject to a computing or accounting failure
related to the Year 2000 Problem.
   (h) "Received by a state agency" means the date an invoice is
delivered to the state location or party specified in the contract or
grant or, if a state location or party is not specified in the
contract or grant, wherever otherwise specified by the state agency.
   (i) "Required payment approval date" means the date on which
payment is due as specified in a contract or grant or, if a specific
date is not established by the contract or grant, 30 calendar days
following the date upon which an undisputed invoice is received by a
state agency. 
   (j) "Resource conservation district" means a resource conservation
district established pursuant to Division 9 (commencing with Section
9001) of the Public Resources Code.  
   (j) 
    (k)  "Revolving fund" means a fund established pursuant
to Article 5 (commencing with Section 16400) of  Chapter 2 of
Part 2 of  Division 4 of Title 2. 
   (k) 
    (l)  "Small business" means a business certified as a
"small business" in accordance with subdivision (d) of Section 14837.

   (l) 
    (m)  "Small business" and "nonprofit organization" mean,
in reference to providers under the Medi-Cal program, a business or
organization that meets all of the following criteria:
   (1) The principal office is located in California.
   (2) The officers, if any, are domiciled in California.
   (3) If a small business, it is independently owned and operated.
   (4) The business or organization is not dominant in its field of
operation.
   (5) Together with any affiliates, the business or organization has
gross receipts from business operations that do not exceed three
million dollars ($3,000,000) per year, except that the Director of
Health Services may increase this amount if the director deems that
this action would be in furtherance of the intent of this chapter.

   (m) 
    (n)  "Year 2000 Problem" has the same meaning as that
set forth in subdivision (a) of Section 3269 of the Civil Code.
  SEC. 2.  Section 927.6 of the Government Code is amended to read:
   927.6.  (a) State agencies shall pay applicable penalties, without
requiring that the claimant submit an additional invoice for these
amounts, whenever the state agency fails to submit a correct claim
schedule to the Controller by the required payment approval date. The
penalty shall cease to accrue on the date the state agency submits
the claim schedule to the Controller for payment, and shall be paid
for out of the state agency's funds. If the claimant is a 
resource conservation district, a  certified small business, a
nonprofit organization, a nonprofit public benefit corporation, or a
small business or nonprofit organization that provides services or
equipment under the Medi-Cal program, the state agency shall pay to
the claimant a penalty of one-quarter of 1 percent of the amount due,
per calendar day, from the required payment date. However, a
nonprofit organization shall only be eligible to receive a penalty
payment if it has been awarded a contract or grant in an amount less
than five hundred thousand dollars ($500,000).
   (b) For all other businesses, the state agency shall pay a penalty
at a rate of 1 percent above the rate accrued on June 30 of the
prior year by the Pooled Money Investment Account, not to exceed a
rate of 15 percent, except that, if the amount of the penalty is
seventy-five dollars ($75) or less, the penalty shall be waived and
not paid by the state agency. On an exception basis, state agencies
may avoid payment of penalties, for failure to submit a correct claim
schedule to the Controller by the required payment approval date, by
paying the claimant directly, from the state agency's revolving fund
within 45 calendar days following the date upon which an undisputed
invoice is received by the state agency.
  SEC. 3.  Section 927.7 of the Government Code is amended to read:
   927.7.  The Controller shall pay claimants within 15 calendar days
of receipt of a correct claim schedule from the state agency. If the
Controller fails to make payment within 15 calendar days of receipt
of the claim schedule from a state agency, the Controller shall pay
applicable penalties to the claimant without requiring that the
claimant submit an invoice for these amounts. Penalties shall cease
to accrue on the date full payment is made, and shall be paid for out
of the Controller's funds. If the claimant is a  resource
conservation district, a  certified small business, a nonprofit
organization, a nonprofit public benefit corporation, or a small
business or nonprofit organization that provides services or
equipment under the Medi-Cal program, the Controller shall pay to the
claimant a penalty of one-quarter of 1 percent of the amount due,
per calendar day, from the 16th calendar day following receipt of the
claim schedule from the state agency. However, a nonprofit
organization shall only be eligible to receive a penalty payment if
it has been awarded a contract or grant in an amount less than five
hundred thousand dollars ($500,000). For all other businesses, the
Controller shall pay penalties at a rate of 1 percent above the rate
accrued on June 30 of the prior year by the Pooled Money Investment
Account, not to exceed a rate of 15 percent, except that, if the
amount of the penalty is seventy-five dollars ($75) or less, the
penalty shall be waived and not paid by the Controller.
  SEC. 4.  Section 927.11 of the Government Code is amended to read:
   927.11.  (a) Except in the case of a contract with a  resource
conservation district, a  certified small business, a nonprofit
organization, or a nonprofit public benefit corporation, if an
invoice from a business under a contract with the Department of
Forestry and Fire Protection would become subject to late payment
penalties during the annually declared fire season, as declared by
the Director of Forestry and Fire Protection, then the required
payment approval date shall be extended by 30 calendar days.
   (b) No nonprofit public benefit corporation shall be eligible for
a late payment penalty if a state agency fails to make timely payment
because no Budget Act has been enacted.
   (c) If the Director of Finance determines that a state agency or
the Controller is unable to promptly pay an invoice as provided for
by this chapter due to a major calamity, disaster, or criminal act,
then otherwise applicable late payment penalty provisions contained
in Section 927.7 shall be suspended except as they apply to a
claimant that is either a  resource conservation district, a
 certified small business, a nonprofit organization, a nonprofit
public benefit corporation, or a small business or nonprofit
organization that provides services or equipment under the Medi-Cal
program. The suspension shall remain in effect until the Director of
Finance determines that the suspended late payment penalty provisions
of this section should be reinstated.
   (d) Except as provided in subdivision (b), in the event a state
agency fails to make timely payment because no Budget Act has been
enacted, penalties shall continue to accrue  to a resource
conservation district, a certified small business, or a nonprofit
organization  until the time that the invoice is paid.