BILL NUMBER: SB 553 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Wiggins
FEBRUARY 27, 2009
An act to amend Sections 927.2 and 927.11 of the Government Code,
relating to claims against state agencies.
LEGISLATIVE COUNSEL'S DIGEST
SB 553, as introduced, Wiggins. Payment of state claims: grants:
nonprofit public benefit corporations.
The California Prompt Payment Act generally governs the payment of
invoices by state agencies. The act requires a state agency that
awards a grant, as defined, to make payment to the person or business
that is the recipient of the grant on the date required by the grant
and within a specified period from the receipt of an undisputed
invoice, or be subject to a late payment penalty. Existing law
defines a grant for the purposes of these provisions as 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.
This bill would apply the above requirement regarding the timely
payment of grants to any signed final agreement between any state
agency and a local government agency or organization authorized to
accept grant funding administered by any state agency.
The act provides that, in the event a state agency fails to make
timely payment because no Budget Act has been enacted, penalties
shall continue to accrue until the time that the invoice is paid.
Existing law provides that a nonprofit public benefit corporation is
not eligible for a late payment penalty in those circumstances.
This bill would delete the above eligibility provision regarding
nonprofit public benefit corporations, thereby making those
corporations eligible for late payment penalties under the act.
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. Any such 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) "Revolving fund" means a fund established pursuant to Article
5 (commencing with Section 16400) of Division 4 of Title 2.
(k) "Small business" means a business certified as a "small
business" in accordance with subdivision (d) of Section 14837.
(l) "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) "Year 2000 Problem" has the same meaning as that set forth in
subdivision (a) of Section 3269 of the Civil Code.
SEC. 2. Section 927.11 of the Government Code is amended to read:
927.11. (a) Except in the case of a contract with 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)
(b ) 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 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)
(c) Except as provided in subdivision (b), in
In the event a state agency fails to make timely
payment because no Budget Act has been enacted, penalties shall
continue to accrue until the time that the invoice is paid.