The Illinois Senate Executive Committee is deliberating Senate Committee Amendment 4 to HB4340, a bill that would improve the timeliness of state government contract payments, make the terms of grant agreements more clearly understandable, and modernize the Illinois Court of Claims process.
Background:
Forefront has been working on this legislation in collaboration with the Illinois Collaboration on Youth and the Illinois Health and Human Services Coalition for several years. Organizations with the smallest budgets and led by, or serving, Communities of Color are the most likely to face challenges with the State’s contracting and payment systems. Recent federal cuts have also targeted many minority and/or community of color serving organizations, which is exacerbating these challenges.
HB4340 makes changes to the Prompt Payment Act (PPA) and the Court of Claims Act as follows:
- Codifies Administrative Rule 74 ILAC 900.70(b) that states “An agency shall approve Proper Bills or deny bills with defects, in whole or in part, within 30 days after receipt," BUT
- Allows agencies to take more time when a bill is defective.
- Allows state grant-making agencies to use any permitted non-GRF to pay interest, which provides the agencies more flexibility in the cases where interest is owed.
- Requires state grant-making agencies to confirm or reject claims resulting from small (i.e., <$2,500) lapsed appropriations within 60 calendar days of being notified by AG and within 90 days for large (i.e., >$2,500) lapsed appropriation claims.
- Once confirmed, Court must enter award within 30 calendar days of being notified about small lapsed appropriation claims.
- State grant-making agencies must notify the vendor if a small claim is defective within 60 days of bill or invoice being submitted and provide a curing process.
- When a small lapsed appropriation claim is partially approved, approved amounts must be transmitted to Comptroller.
- The Court must make more detailed reports annually about lapsed-appropriation claims.
- Becomes effective on 7/1/27 to provide state grantmaking agencies more time to adjust to these new requirements.