Bill Text: CA SB399 | 2013-2014 | Regular Session | Enrolled

---

Bill Title: California Prompt Payment Act.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Vetoed) 2014-02-27 - Consideration of Governor's veto stricken from file. [SB399 Detail]

Download: California-2013-SB399-Enrolled.html

---

BILL NUMBER: SB 399	ENROLLED
	BILL TEXT

	PASSED THE SENATE  AUGUST 30, 2013
	PASSED THE ASSEMBLY  AUGUST 22, 2013
	AMENDED IN ASSEMBLY  JUNE 26, 2013
	AMENDED IN SENATE  MAY 14, 2013
	AMENDED IN SENATE  APRIL 1, 2013

INTRODUCED BY   Senator Wright

                        FEBRUARY 20, 2013

   An act to amend Section 927.6 of the Government Code, and to amend
Section 10101 of the Public Contract Code, relating to state
contracts.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 399, Wright. California Prompt Payment Act.
   The California Prompt Payment Act subjects a state agency that
acquires property or services pursuant to a contract with a business
to a late penalty payment, if it fails to make payment to the person
or business on the date required by the contract. Existing law
provides that the penalty payable to 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 is 10% above the United States
Prime Rate on June 30 of the prior fiscal year. The State Contract
Act prescribes the procedures and requirements applicable to various
state agency contracts, and exempts from these procedures and
requirements specified contracts for required emergency work or
remedial measures related to the accidental or unplanned release of
toxic substances.
   This bill would specify that contracts for emergency work or
remedial measures are subject to the California Prompt Payment Act,
and would include a contractor performing emergency work or remedial
measures related to the accidental or unplanned release of toxic
substances within the list of entities entitled to the late payment
penalty of 10% above the United States Prime Rate.


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 and
payment is not issued within 45 calendar days from the state agency
receipt of an undisputed invoice. The penalty shall cease to accrue
on the date the state agency submits the claim schedule to the
Controller for payment or pays the claimant directly, and shall be
paid for out of the state agency's support appropriation. If the
claimant is a certified small business, a contractor performing
emergency work or remedial measures pursuant to subdivision (b) of
Section 10101 of the Public Contract Code, 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 at a rate of 10 percent above the United States Prime Rate on
June 30 of the prior fiscal year. 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). If the amount of the penalty is ten
dollars ($10) or less, the penalty shall be waived and not paid by
the state agency.
   (b) For all other businesses, the state agency shall pay a penalty
at a rate of 1 percent above the Pooled Money Investment Account
daily rate on June 30 of the prior fiscal year, not to exceed a rate
of 15 percent. If the amount of the penalty is one hundred dollars
($100) 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 10101 of the Public Contract Code is amended to
read:
   10101.  (a) Contracts for the purchase of supplies or materials,
which are purchased pursuant to Chapter 2 (commencing with Section
10290), are not subject to this chapter, even though the seller is
required to perform some incidental work or service in connection
with the delivery of the material or supplies.
   (b) Contracts for which emergency work or remedial measures are
required are not subject to this chapter if the work or remedial
measures are necessary to immediately avert, alleviate, repair, or
mitigate destruction of property caused by the accidental or
unplanned release of toxic substances and are necessary to protect
the health, safety, and welfare of the general public. Contracts
pursuant to this subdivision are subject to the California Prompt
Payment Act (Chapter 4.5 (commencing with Section 927) of Part 3 of
Division 3.6 of Title 1 of the Government Code).