PENALTY REQUIREMENTS - 8474.2

(Revised: 02/2024)

 

Small Businesses and Nonprofits

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 agency/department or Controller shall pay the claimant a penalty at a rate of 10 percent above the United States Prime Rate on June 30 of the prior fiscal year. A nonprofit organization shall only be eligible to receive a penalty payment if it has been awarded a contract or grant for victim services and prevention programs in an amount less than $500,000. If the amount of the penalty is ten dollars ($10) or less, the penalty shall be waived and not paid by the agency/department nor the Controller.

Agencies/Departments shall verify the entity is a certified small business.

The Department of General Services (DGS) Office of Small Business and Disabled Veteran Business Enterprise Services (OSDS) shall verify which firms qualify as "small business" under the general provisions of California Code of Regulations, Title 2, Division 2, Chapter 3, Subchapter 8, section 1896 et seq. Any questions regarding whether a particular vendor contractor or service firm is a certified small business should be directed to the OSDS at osdshelp@dgs.ca.gov. This information may also be accessed by using the OSDS search engine located on the DGS website.

The Department of Health Care Services (DHCS) shall verify which providers under the Medi-Cal program qualify as a "small business." For more information on small business and nonprofit organization Medi-Cal providers criteria, see SAM Section 8474.01.

Other Businesses and Defined Grantees

For all other businesses and victim services and prevention program grantees, the agency/department or the Controller 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 $100 or less, the penalty shall be waived and not paid by the agency/department nor the Controller.

Refunds and Other Payments to Individuals

For refunds or other payments due to individuals, the agency/department or the Controller shall pay a penalty at a rate equal to the Pooled Money Investment Account (PMIA) daily rate on June 30 of the prior fiscal year minus 1 percent. If the amount of the penalty is ten dollars ($10) or less, the penalty shall be waived and not paid by the agency/department nor the Controller.

This section requires:

  • No penalty shall accrue on any refund or payment due to individuals that is the result of a federally mandated program or directly depends upon the receipt of federal funds.

This section does not apply to:

  • Late payments for goods and services covered under SAM Sections 8473 and 8473.1.
  • Income tax payments, refunds, or credits.
  • Reimbursement for health care services or mental health services provided under the Medi-Cal program, pursuant to the Welfare and Institutions Code section 14000 et seq.
  • Benefit payments to participants of public social service or public health programs.
  • Claims to the DGS.
  • Payments made by the Commission on State Mandates.
  • California Department of Human Resources payments pursuant to Government Code section 19823.

 

 

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