002_Exhibit_B_-_Budget_and_Payment.docx

I. STANDARD BUDGET DETAIL AND PAYMENT PROVISIONS

1. Invoicing and Payment

A. For services satisfactorily rendered, and upon receipt and approval of the itemized invoices, the State agrees to compensate the Contractor for services rendered in accordance with the fee schedules and any additional terms or conditions specified herein.

B. Invoices shall include the Agreement Number and shall be submitted not more frequently than weekly in arrears to:

PO Box 980790 West Sacramento, CA 95798-0790 accountspayable@cirm.ca.gov

2. Budget Contingency Clause

A. It is mutually agreed that if the Budget of the current year and/or any subsequent years covered under this Agreement does not appropriate sufficient funds for the program, this Agreement shall be of no further form and effect. In this event, the State shall have no liability to pay any funds whatsoever to Contractor or to furnish any other considerations under this Agreement and Contractor shall not be obligated to perform any provisions of this Agreement.

B. If funding for any fiscal year is reduced or deleted by the Budget for purposes of this program, the State shall have the option to either cancel this Agreement with no liability occurring to the State, or offer an Agreement amendment to Contractor to reflect the reduced amount.

3. Prompt Payment Clause

State of California payment terms for all contracts and agreements is NET 45 days.

Payment will be made in accordance with, and within the time specified in, Government Code, Chapter 4.5, commencing with Section 927.

II. SPECIAL BUDGET DETAIL AND PAYMENT PROVISIONS

1. Submissions of Invoices/Claims

A. All invoices/claims must be completed accurately, thoroughly, and legibly, with all applicable fields completed. Invoices/claims that are submitted to the appropriate location but have been altered, or are inaccurate, or do not provide all necessary information will not be accepted and will be returned to the Contractor for correction.

B. Any changes to this provision relating to the invoice/claim submittal process, including but not limited to an address, form, or process change, shall be an administrative change managed through the CIRM Business office and shall not require a contract amendment.

C. Invoices/claims submitted shall include the following information in order to be considered complete and acceptable for processing, or the invoice/claim will be returned:

1.) Contractor’s Company name 2.) Contractor’s Company address, phone number and e-mail 3.) Agreement Number 4.) Date of invoice/claim 5.) Invoice/claim number 6.) Date(s) of Service 7.) Type(s) of Service – itemize each service provided and rate of reimbursement 8.) Total dollar amount being billed

D. Invoice Categories/Amounts

a. Invoice must indicate the line item being charged on the purchase order.

b. Sum of all invoices must not exceed the total amount of the Purchase Order.

c. Any adjustments, edits, or changes must be discussed with the Department Head and the CIRM Business Office prior to adding them to the invoice.

E. Invoice disputes – Any invoice submitted that cannot be routed for signature will be disputed using the State STD Form 209 – Invoice Dispute Notification form.

F. California Prompt Payment Act – Government code section 927. A copy of the Prompt Payment Act starts on page three (3) of Exhibit B – Budget and Payment Terms.

CHAPTER 4.5. Prompt Payment of Claims [927 - 927.13] ( Chapter 4.5 added by Stats. 1998, Ch. 916, Sec. 5. )

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 provision of 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.

(Amended by Stats. 2010, Ch. 719, Sec. 13. (SB 856) Effective October 19, 2010.)

927.1.

(a) (1) A state agency that acquires property or services pursuant to a contract with a business, including any approved change order or contract amendment, shall make payment to the person or business on the date required by the contract and as required by Section 927.4 or be subject to a late payment penalty.

(2) A state agency that awards a grant, as defined in subdivision (b) of Section 927.2, shall make payment to the person or business that is the recipient of the grant on the date required by the grant and as required by Section 927.4 or be subject to a late payment penalty.

(b) Except in the event of an emergency as provided in Section 927.11, effective January 1, 1999, the late payment penalties specified in this chapter may not be waived, altered, or limited by either of the following:

(1) A state agency acquiring property or services pursuant to a contract or that awards a grant.

(2) Any person or business contracting with a state agency to provide property or services or that is the recipient of a grant.

(Amended by Stats. 2006, Ch. 861, Sec. 1. Effective January 1, 2007.)

927.2.

The following definitions apply to this chapter:

(a) “Claim” means payment requests prepared and submitted by a state agency to the Controller for payment to the named claimant.

(b) (1) “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, or restoration activities performed by a resource conservation district.

(2) A grant defined by this subdivision 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) “Resource conservation district” means a resource conservation district established pursuant to Division 9 (commencing with Section 9001) of the Public Resources Code.

(m) “Revolving fund” means a fund established pursuant to Article 5 (commencing with Section 16400) of Chapter 2 of Part 2 of Division 4 of Title 2.

(n) “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).

(o) “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.

(p) “Department of FISCal” means the organization responsible for operating and maintaining the Financial Information System for California integrating statewide accounting, budgeting, cash management, and procurement pursuant to subdivision (b) of Section 11890.

(Amended by Stats. 2022, Ch. 455, Sec. 1. (AB 1776) Effective January 1, 2023.)

927.3.

(a) Except where payment is made directly by a state agency pursuant to Section 927.6, an undisputed invoice received by a state agency shall be submitted to the Controller for payment by the required payment approval date. A state agency may dispute an invoice submitted by a claimant for reasonable cause if the state agency notifies the claimant within 15 working days from receipt of the invoice, or delivery of property or services, whichever is later. No state employee shall dispute an invoice, on the basis of minor or technical defects, in order to circumvent or avoid the general intent or any of the specific provisions of this chapter.

(b) Except where payment is made directly by a state agency pursuant to Section 927.13, a notice of refund or other payment due received by a state agency shall be submitted to the Controller within 30 calendar days of the agency’s receipt of the notice. A state agency may dispute a refund request for reasonable cause if the state agency notifies the claimant within 15 working days after the state agency receives notice from the individual that the refund is due.

(Amended by Stats. 2010, Ch. 719, Sec. 15. (SB 856) Effective October 19, 2010.)

927.4.

Except as otherwise provided in this chapter, to avoid late payment penalties, the maximum time from state agency receipt of an undisputed invoice to the date of payment is 45 calendar days. If payment is not issued within 45 calendar days from the state agency receipt of an undisputed invoice, late payment penalties shall be paid to the claimant in accordance with Sections 927.6 and 927.7.

(Amended by Stats. 2009, 4th Ex. Sess., Ch. 23, Sec. 5. Effective July 28, 2009.)

927.5.

This chapter shall 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. In applying this section to claims submitted to the state, or its fiscal intermediary, by providers of services or equipment under the Medi-Cal program, payment for claims shall be due 30 days after a claim is received by the state or its fiscal intermediary, unless reasonable cause for nonpayment exists. With regard to Medi-Cal claims, reasonable cause shall include review of claims to determine medical necessity, review of claims for providers subject to special prepayment fraud and abuse controls, and claims that require review by the fiscal intermediary or State Department of Health Care Services due to special circumstances. Claims requiring special review as specified above shall not be eligible for a late payment penalty.

(Amended by Stats. 2010, Ch. 719, Sec. 16. (SB 856) Effective October 19, 2010.)

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 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 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 resource conservation district, 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 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 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.

(Amended by Stats. 2022, Ch. 455, Sec. 2. (AB 1776) Effective January 1, 2023.)

927.7.

(a) The Controller shall pay claimants within 15 calendar days of receipt of a correct claim from the state agency. If the Controller fails to make payment within 15 calendar days of receipt of the claim from a state agency, and payment is not issued within 45 calendar days from state agency receipt of an undisputed invoice, 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 resource conservation district, 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 Controller 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, from the 16th calendar day following receipt of the claim 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). If the amount of the penalty is ten dollars ($10) or less, the penalty shall be waived and not paid by the Controller. For all other businesses, the Controller shall pay penalties 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 Controller.

(b) The Department of FISCal shall be responsible for applicable penalties if the Financial Information System for California delays the delivery of a correct claim from the state agency to the Controller, preventing the Controller from making payment within 15 calendar days and payment is not issued within 45 calendar days from state agency receipt of an undisputed invoice.

(Amended by Stats. 2022, Ch. 455, Sec. 3. (AB 1776) Effective January 1, 2023.)

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