State government: California Prompt Payment Act: Public Utilities Commission: State Energy Resources Conservation and Development Commission.

Plain English Breakdown

The bill summary does not provide specific penalties or enforcement mechanisms, leaving some aspects open to interpretation.

California Prompt Payment Act for Public Utilities and Energy Commission

The California Prompt Payment Act requires the Public Utilities Commission (PUC) and State Energy Resources Conservation and Development Commission to make timely payments when they award grants or acquire property or services through contracts, with penalties for late payment.

What This Bill Does

• Requires the PUC and Energy Commission to pay invoices within 45 days of receiving them.
• Imposes penalties on the PUC and Energy Commission if they do not make timely payments.
• Ensures that small businesses, nonprofits, community-based organizations, and certain certified suppliers can participate in state programs without unreasonable restrictions.
• Requires the PUC and Energy Commission to provide a minimum advance payment of 25% for contracts, with full advance payment possible under specific conditions.

Who It Names or Affects

• The Public Utilities Commission (PUC) and State Energy Resources Conservation and Development Commission
• Businesses that receive grants or contracts from the PUC or Energy Commission
• Nonprofit organizations and community-based organizations working with state programs

Terms To Know

Public Utilities Commission (PUC)

A government agency responsible for regulating public utilities such as electricity, gas, water, and telecommunications.

State Energy Resources Conservation and Development Commission

An organization that develops and implements energy policies in California.

Limits and Unknowns

• The bill does not specify the exact penalties for late payments.
• It is unclear how the PUC and Energy Commission will enforce these requirements.

Official Summary Text

SB 1366, as amended, Rubio.
California Prompt Payment Act.
State government: California Prompt Payment Act: Public Utilities Commission: State Energy Resources Conservation and Development Commission.
The California Prompt Payment Act requires a state agency that awards a grant or that acquires property or services pursuant to a contract to make timely payments pursuant to the grant or contract. If a state agency fails to take certain timely actions and payment is not issued within 45 calendar days from the state agency’s receipt of an undisputed invoice, the act requires the state agency to pay certain penalties.
Existing law vests the Public Utilities Commission (PUC) with regulatory authority over public utilities, including every common carrier, toll bridge corporation, pipeline corporation, gas corporation, electrical corporation, telephone corporation, telegraph corporation, water corporation, sewer system corporation, and heat corporation, as
specified.
Existing law vests the State Energy Resources Conservation and Development Commission (Energy Commission) with various responsibilities for developing and implementing the state’s energy policies.
This bill would require the PUC and the Energy Commission, in administering or approving programs, to comply with the California Prompt Payment Act and to ensure that payment timelines, advance payment structures, and accountability measures required under the act are incorporated into program designs, implementation plans, and cost recovery authorizations. The bill would require the PUC and the Energy Commission to provide a minimum advance payment of 25%, and, if the nonprofit organization has been in good standing with the state for at least 3 years, to provide an advanced payment of 100%, except as provided. The bill would prohibit the PUC and the Energy Commission from structuring procurement or payment terms in a
way that unreasonably restricts participation by small businesses, nonprofit organizations, community-based organizations, or certain certified suppliers, as specified. The bill would require the PUC and the Energy Commission to annually submit a report to the Legislature with information related to the payment of invoices.
Under existing law, a violation of an order, decision, rule, direction, demand, or requirement of the PUC is a crime.
Because a violation of a PUC action implementing this bill’s requirements would be a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no
reimbursement is required by this act for a specified reason.
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 or be subject to a late payment penalty, as specified. The act requires a state agency that awards a grant to make payment to the person or business that is the recipient of the grant on the date required by the grant or be subject to a late payment penalty, as specified. The act provides that, 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.
This bill would state the intent of the Legislature to enact legislation relating to the act.

Current Bill Text

Download Bill PDF