BILL NUMBER: SB 643 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Denham
FEBRUARY 27, 2009
An act to amend Sections 927.6 and 927.7 of the Government Code,
relating to the California Prompt Payment Act.
LEGISLATIVE COUNSEL'S DIGEST
SB 643, as introduced, Denham. California Prompt Payment Act:
disabled veteran business enterprises.
Existing law, the California Prompt Payment Act, requires a state
agency that acquires property or services pursuant to a contract with
a business to make payment to the person or business on the date
required by the contract and as specified, or be subject to a late
payment penalty. These provisions require a state agency to pay
specified penalties to a claimant if the agency fails to submit a
correct claim schedule to the Controller by the required payment
approval date. These provisions also require the Controller to pay a
specified penalty to a claimant if the Controller fails to make a
payment within 15 calendar days of receipt of the claim schedule from
a state agency, as specified. Those penalties accrue at a higher
rate if the claimant is 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, as specified.
Existing law establishes the California Disabled Veteran Business
Enterprise Program. This program requires, among other things, that
state agencies, departments, officers, and entities, as specified,
have statewide participation goals of not less than 3% for disabled
veteran business enterprises for contracts entered into during the
year, except as specified. Existing law defines a disabled veteran
business enterprise for purposes of these provisions.
This bill would include a disabled veteran business enterprise, as
defined under the California Disabled Veteran Business Enterprise
Program, among the entities to whom those higher penalties are
payable under the California Prompt Payment Act, as described above.
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 927.6 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 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, or a disabled veteran business enterprise, as defined
in subparagraph (A) of paragraph (7) of subdivision (b) of Section
999 of the Military and Veterans Code, 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. 2. 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 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, or a disabled veteran business enterprise, as defined
in subparagraph (A) of paragraph (7) of subdivision (b) of Section
999 of the Military and Veterans Code, 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.