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December 1, 1994

COMPTROLLER'S MEMORANDUM NO. 09 (1994-95)

SUBJECT: INTEREST RATE FOR 1995


Section 55.03(1), Florida Statutes, was amended by Chapter 94-239, Laws of Florida, to require the Comptroller, on December 1 of each year beginning in 1994, to set the rate of interest that shall be payable on judgments and decrees for the year beginning the following January 1. Additionally, Sections 215.422(3)(a), 337.141(3) and 687.01, Florida Statutes, were amended to require the use of interest at the rate established in Section 55.03(1), Florida Statutes, for the late payment to vendors for goods and services purchased by the State, for late payments on applicable construction or maintenance contracts administered by the Department of Transportation, and for cases where a rate of interest is not specified in a contract, respectively. The interest rate for payments to health care providers pursuant to Section 215.422(13), Florida Statutes, remains at 1% per month or .03333% per day.

Rule 3A-25, Florida Administrative Code, has been promulgated effective November 30, 1994, to establish the procedures for computing the interest rate on an annual basis. The 1995 interest rate established pursuant to Section 55.03, Florida Statutes, has been set at 8.0% per annum or .02192% per day and shall be payable as set forth in the preceding paragraph.

The Prompt Payment System will be modified to begin using the new interest rate effective January 1, 1995. Additionally, Section 215.422(5), Florida Statutes, requires that all purchasing agreements between a State agency and a vendor, applicable to this section shall include a statement of the vendor's rights and the State's responsibilities under this section. The vendor's rights shall include being provided with the name and telephone number of the Vendor Ombudsman within the Department of Banking and Finance, which information shall also be placed on all agency purchase orders. The following is suggested language for inclusion in purchase orders and contracts after December 31, 1994, to provide for compliance with this law:

Section 215.422, F.S., provides that agencies have 5 working days to inspect and approve goods and services, unless bid specifications or the P.O. specifies otherwise. With the exception of payments to health care providers for hospital, medical, or other health care services, if payment is not available within 40 days, measured from the latter of the date the invoice is received or the goods or services are received, inspected and approved, a separate interest penalty of .02192% per day will be due and payable in addition to the invoice amount. Payments to health care providers for hospital, medical or other health care services, shall be made not more than 35 days from the date eligibility for payment is determined, and the daily interest rate is .03333%. Invoices returned to a vendor due to preparation errors will result in a payment delay. Invoice payment requirements do not start until a properly completed invoice is provided to the agency. A Vendor Ombudsman, whose duties include acting as an advocate for vendors who may be experiencing problems in obtaining timely payment(s) from a State agency, may be contacted at (904) 488-2924 or by calling the State Comptroller's Hotline, 1-800-848-3792.

Agencies are reminded to include an agency telephone number on all purchase orders issued, to ensure vendor accessibility to purchasing offices.

If additional information is needed, please contact the Bureau of Special Programs at 488-1951, Suncom 278-1951.