BILL NUMBER: AB 1294 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 26, 2015
INTRODUCED BY Assembly Member Holden
FEBRUARY 27, 2015
An act to amend Section 927 927.2 of
the Government Code, relating to state government.
LEGISLATIVE COUNSEL'S DIGEST
AB 1294, as amended, Holden. State government.
government: prompt payment of claims.
The California Prompt Payment Act dictates that a state agency
that fails to make a timely payment for goods or services acquired
pursuant to a contract with a specified business or organization is
subject to a late payment penalty, and dictates that the act
applies to all state agencies, including, but not limited to, the
Public Employees' Retirement System. penalty. The act
does not apply to claims for reimbursement for health care services
provided under the Medi-Cal program, unless the Medi-Cal health care
services provider is a small business or nonprofit organization. The
act defines the terms "small business" and "nonprofit organization,"
in reference to providers under the Medi-Cal program, to mean a
business or organization that meets specified criteria,
including that, except as specified, together with any affiliates,
the business or organization has gross receipts from business
operations that do not exceed $3,000,000 per year.
This bill would make a nonsubstantive change to this provision.
This bill would increase that gross receipts maximum to
$4,000,000.
Vote: majority. Appropriation: no. Fiscal committee: no
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 payment requests 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) "Notice of refund or other payment due" means a state agency
provides notice to the person that a refund or payment is owed to
that person or the state agency receives notice from the person that
a refund or undisputed payment is due.
(h) "Payment" means any form of the act of paying, including, but
not limited to, the issuance of a warrant or a registered warrant by
the Controller, or the issuance of a revolving fund check by a state
agency, to a claimant in the amount of an undisputed invoice.
(i) "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) There is a discrepancy between the refund or other payment due
as calculated by the person to whom the money is owed and by the
state agency.
(j) "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.
(k) "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.
(l) "Revolving fund" means a fund established pursuant to Article
5 (commencing with Section 16400) of Division 4 of Title 2.
(m) "Small business" means a business certified as a "small
business" in accordance with subdivision (d) of Section 14837,
including certified small businesses engaged in the development,
design, and construction of California's high-speed rail system
pursuant to the California High-Speed Rail Act (Division 19.5
(commencing with Section 185000) of the Public Utilities Code).
(n) "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 four million dollars ($3,000,000)
($4,000,000) 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.
SECTION 1. Section 927 of the Government Code
is amended to read:
927. (a) This chapter shall be known and may be cited as the
California Prompt Payment Act.
(b) It is the intent of the Legislature that state agencies pay
properly submitted, undisputed invoices, refunds, or other undisputed
payments due to individuals within 45 days of receipt or
notification thereof, or automatically calculate and pay the
appropriate late payment penalties as specified in this chapter.
(c) Notwithstanding any other law, this chapter shall apply to all
state agencies, including, but not limited to, the Public Employees'
Retirement System, the State Teachers' Retirement System, the
Treasurer, and the Department of General Services.