8474.2      PENALTY REQUIREMENTS        
(Revised 06/08)

1. Small Businesses and Nonprofits 
   1. If the claimant is 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 State agency shall pay the claimant a penalty of 0.25 percent of the amount due, per calendar day, from the required payment approval date. However, a nonprofit organization shall only be eligible to receive a penalty payment if it has been awarded a contract or specific grant in an amount less than five hundred thousand dollars ($500,000).
      
      
   2. If the claimant is 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 SCO shall pay the claimant a penalty of 0.25 percent of the amount subject to penalty, per calendar day, from the 16th calendar day following receipt of a correct claim schedule 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 specific grant in an amount less than five hundred thousand dollars ($500,000).
      
      
   It is the responsibility of each State agency to determine whether or not a claim has been submitted by a qualified small business.
   
   It is the responsibility of the DGS, Office of Small Business and Disabled Veteran Business Enterprise Services (OSDS), to verify/certify which firms qualify as "small business" under the general provisions, California Code of Regulations, Title 2, 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 DGS, OSDS, at (916) 375-4940.  This information may also be accessed by using the OSDS search engine located on the DGS web site at:  https://www.apps.dgs.ca.gov/OSDSSearch/OSDSBasicSearch.aspx 
   
   It is the responsibility of the DHCS to verify/certify which providers under the Medi-Cal program qualify as a "small business."  See SAM Section 8474.4, paragraph (o)(5).
   
   
2. Other Businesses and Defined Grantees 
   1. For all other businesses and defined grantees, the State agency shall pay, from the required payment approval date, a penalty at a rate of one percent above the rate accrued on June 30 of the prior year by the Pooled Money Investment Account (PMIA), not to exceed a rate of 15 percent.  However, if the amount of the penalty is seventy-five dollars ($75) or less, the penalty shall be waived and not paid by the State agency.
      
      
   2. The SCO shall pay, commencing on calendar day 16 following receipt of a correct claim schedule from the State agency, a penalty at a rate of one percent above the rate accrued on June 30 of the prior year by the PMIA, not to exceed a rate of 15 percent.  However, if the amount of the penalty is seventy-five dollars ($75) or less, the penalty shall be waived and not paid by the SCO.