S T A T E O F N E W Y O R K
________________________________________________________________________
2608
2015-2016 Regular Sessions
I N S E N A T E
January 26, 2015
___________
Introduced by Sens. SEWARD, DeFRANCISCO, FUNKE, LITTLE, ORTT, RITCHIE,
VENDITTO -- read twice and ordered printed, and when printed to be
committed to the Committee on Finance
AN ACT to amend the state finance law, in relation to prompt payments to
local governments of certain state aid associated with disaster relief
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. Section 179-d of the state finance law, as added by chapter
2 153 of the laws of 1984, is amended to read as follows:
3 S 179-d. Legislative intent. Firms and organizations that do business
4 with the state of New York expect and deserve to be paid in a prompt and
5 timely manner. Unjustified delays in paying vendors, construction
6 contractors, and providers of service may discourage such firms and
7 organizations from doing business with the state of New York and may
8 ultimately increase the costs to the state government of purchasing
9 materials, equipment, and supplies; undertaking construction and recon-
10 struction projects; and obtaining a wide variety of professional and
11 other specialized services including those that are provided to persons
12 in need. Consequently, this legislation sets standards for the payment
13 of bills incurred by state agencies within specified periods of time and
14 requires interest payments in situations where contract payments do not
15 conform to these standards. Consistent with accepted business practices
16 and with sound principles of fiscal management, it is the intent of this
17 legislation to encourage state agencies in all three branches of state
18 government to make payments at least as expeditiously as they currently
19 do and further to reduce existing payment processing times whenever
20 feasible, while at the same time permitting the state agencies to
21 perform proper and reasonable financial oversight activities designed to
22 ensure that the state government receives the quality of goods and
23 services to which it is entitled and to ensure that public funds are
24 spent in a prudent and responsible manner. ADDITIONALLY, THE PROMPT
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07538-01-5
S. 2608 2
1 PAYMENT OF AMOUNTS DUE TO LOCAL GOVERNMENT UNITS ASSOCIATED WITH STORM
2 RELIEF AND RECOVERY IS VITAL TO THE CONTINUED ECONOMIC VIABILITY OF THE
3 STATE AS A WHOLE. STORM-RAVAGED COMMUNITIES MUST BE PROVIDED RELIEF IN A
4 MANNER THAT ALLOWS FOR EXPEDITED REPAIR OF MUNICIPAL INFRASTRUCTURE SO
5 THAT RESIDENTS OF SUCH COMMUNITIES CAN CONTINUE THEIR DAY-TO-DAY LIVES.
6 S 2. Section 179-e of the state finance law is amended by adding a new
7 subdivision 11 to read as follows:
8 11. "UNIT OF LOCAL GOVERNMENT" MEANS COUNTIES, CITIES, TOWNS, VILLAGES
9 AND SCHOOL DISTRICTS.
10 S 3. Subdivisions 1 and 2 of section 179-f of the state finance law,
11 subdivision 1 as amended by chapter 332 of the laws of 1989 and subdivi-
12 sion 2 as amended by chapter 153 of the laws of 1984, are amended to
13 read as follows:
14 1. Each state agency which is required to make a payment from state
15 funds pursuant to a contract OR PURSUANT TO A STATE OR FEDERAL STATUTORY
16 OR REGULATORY OBLIGATION TO MAKE A PAYMENT TO A UNIT OF LOCAL GOVERNMENT
17 WHERE SUCH PAYMENT IS MEANT TO ASSIST SUCH UNIT WITH RECOVERY FROM A
18 NATURAL DISASTER and which does not make such [contract] payment by the
19 required payment date shall make an interest payment to the contractor
20 OR UNIT OF LOCAL GOVERNMENT in accordance with this article on the
21 amount of the [contract] payment which is due, unless failure to make
22 such [contract] payment is the result of a lien, attachment, or other
23 legal process against the money due said contractor OR UNIT OF LOCAL
24 GOVERNMENT, or unless the amount of the interest payment as computed in
25 accordance with the provisions of section one hundred seventy-nine-g of
26 this article is less than ten dollars. A pro rata share of such interest
27 shall be paid by the contractor or subcontractor, as the case may be, to
28 subcontractors and materialmen in a proportion equal to the percentage
29 of their pro rata share of the contract payment. Such pro rata share of
30 interest shall be due to such subcontractors and materialmen only for
31 those payments which are not paid to such subcontractors and materialmen
32 prior to the date upon which interest begins to accrue between the state
33 agency and the contractor. Such pro rata share of interest shall be
34 computed daily until such payments are made to the subcontractors and
35 materialmen.
36 2. The required payment date shall be thirty calendar days, excluding
37 legal holidays, or in the case of final payments on highway construction
38 contracts seventy-five calendar days, excluding legal holidays, after
39 receipt of an invoice for the amount of the contract payment due; except
40 when:
41 (a) the state comptroller in the course of his audit determines that
42 there is reasonable cause to believe that payment may not properly be
43 due, in whole or in part;
44 (b) in accordance with specific statutory or contractual provisions,
45 payment must be preceded by an inspection period or by an audit to
46 determine the resources applied or used by a contractor in fulfilling
47 the terms of the contract;
48 (c) the necessary state government appropriation required to authorize
49 payment has yet to be enacted;
50 (d) the cash balance of the fund or sub-fund from which the payment is
51 to be made is insufficient to finance the payment;
52 (e) a proper invoice must be examined by the federal government prior
53 to payment;
54 (f) the goods or property have not been delivered or the services have
55 not been rendered by the contractor in compliance with the terms or
56 conditions of the contract;
S. 2608 3
1 (g) the required payment date is modified in accordance with subdivi-
2 sion three of this section; or
3 (h) in the case of final payments on highway construction contracts
4 the commissioner of transportation determines that the contractor has
5 failed to properly submit the necessary documents and other submissions
6 prescribed by the contract specifications and requirements, by the
7 provisions of subdivision eight of section thirty-eight of the highway
8 law, and by all other applicable state and federal laws in order to
9 enable the department of transportation to process the final payment
10 properly and expeditiously.
11 Any time taken to satisfy or rectify any of the types of conditions
12 described in paragraphs (a) through (f) or (h) of this subdivision shall
13 extend the required payment date by an equal period of time. FOR
14 PURPOSES OF A PAYMENT TO A UNIT OF LOCAL GOVERNMENT WHERE SUCH PAYMENT
15 IS MEANT TO ASSIST SUCH UNIT WITH RECOVERY FROM A NATURAL DISASTER, THE
16 REQUIRED PAYMENT DATE SHALL BE NO LATER THAN REQUIRED BY LAW.
17 S 4. Section 179-g of the state finance law, as amended by chapter 61
18 of the laws of 1989, is amended to read as follows:
19 S 179-g. Computation of interest payment. Interest payments on amounts
20 due to a contractor, OR UNIT OF LOCAL GOVERNMENT pursuant to this arti-
21 cle shall be paid to the contractor, OR UNIT OF LOCAL GOVERNMENT for the
22 period beginning on the day after the required payment date and ending
23 on the payment date for those payments required according to this arti-
24 cle and shall be paid at the rate of interest in effect on the date when
25 the interest payment is made. Notwithstanding any other provision of law
26 to the contrary, interest shall be computed at the rate equal to the
27 overpayment rate set by the commissioner of taxation and finance pursu-
28 ant to subsection (e) of section one thousand ninety-six of the tax law.
29 S 5. Section 179-h of the state finance law, as amended by chapter 153
30 of the laws of 1984, is amended to read as follows:
31 S 179-h. Determination of appropriations against which interest
32 payments are to be charged. Except in situations when federal law or the
33 provisions of section one hundred seventy-nine-o of this article require
34 otherwise, an interest payment required by this article shall be paid
35 from the same appropriation as that from which the related proper
36 invoice, OR NATURAL DISASTER RELIEF ASSISTANCE is paid; provided, howev-
37 er, (1) that the interest payment shall not reduce the amount of money
38 that otherwise will be payable to the contractor, OR UNIT OF LOCAL
39 GOVERNMENT under the terms of the relevant contract, OR NATURAL DISASTER
40 RELIEF ASSISTANCE RESPECTIVELY and, FOR PURPOSES OF AN INTEREST PAYMENT
41 OWED TO A CONTRACTOR (2) that if the obligation to make an interest
42 payment is incurred in whole or in part because it takes the department
43 of audit and control more than eight calendar days, excluding legal
44 holidays, from the date it receives an approvable voucher from another
45 state agency to process a contract payment, then the portion of the
46 total interest payment that is attributable to delays by the department
47 of audit and control shall be paid from funds made available to the
48 department of audit and control. Notwithstanding any other provision of
49 law to the contrary, if the amount of money available from any such
50 appropriation to the state agency which received the proper invoice is
51 insufficient to pay the interest and if for any reason it is not feasi-
52 ble for the director of the budget to exercise the transfer or inter-
53 change authority established by section fifty-one or ninety-three of
54 this chapter, the director of the budget may issue a certificate or
55 certificates transferring or interchanging within a fund such amount as
56 is needed to pay the interest to said appropriation within such fund
S. 2608 4
1 from the unspent balance of any appropriation that is available to the
2 same state agency. In exercising the latter transfer or interchange
3 authority, the director of the budget shall transfer or interchange
4 amounts that are not needed to accomplish the purposes for which the
5 appropriation was made, except, however, the director of the budget may,
6 to the extent he deems it practicable, transfer or interchange amounts
7 from appropriations that otherwise would be available for the adminis-
8 tration and operations of the state agency which incurred the interest
9 payment. Any such certificate or certificates issued by the director of
10 the budget shall be sent to the state comptroller and copies shall be
11 filed with the chairman of the senate finance committee and the chairman
12 of the assembly ways and means committee.
13 S 6. Section 179-k of the state finance law, as added by chapter 153
14 of the laws of 1984, is amended to read as follows:
15 S 179-k. Acceptance of payment. The acceptance of payment, in whole or
16 in part, by a contractor, OR UNIT OF LOCAL GOVERNMENT shall not be
17 deemed to constitute a waiver of interest otherwise due under the
18 provisions of this article nor to supersede the provisions of section
19 one hundred forty-five of this chapter.
20 S 7. Subdivision 1 of section 179-m of the state finance law, as added
21 by chapter 153 of the laws of 1984, paragraph d as amended by chapter
22 618 of the laws of 1994, is amended to read as follows:
23 1. The state comptroller shall:
24 a. Promulgate such rules and regulations as may be necessary to carry
25 out the comptroller's responsibilities under this article.
26 b. Develop and implement a procedure for calculating the amount of
27 interest, if any, due to any contractor, OR UNIT OF LOCAL GOVERNMENT
28 pursuant to the provisions of this article. [Such] FOR PURPOSES OF AN
29 INTEREST PAYMENT OWED TO A CONTRACTOR, SUCH procedure shall include
30 provisions for calculating (i) the amount of time, in calendar days,
31 between the date of receipt of a proper invoice by the state agency and
32 the date on which an approvable voucher was delivered to the state comp-
33 troller; (ii) the amount of time between the date on which an approvable
34 voucher was delivered to the state comptroller and the payment date;
35 (iii) the amount of interest, if any, chargeable to the state agency
36 involved pursuant to this article; and (iv) the amount of interest, if
37 any, chargeable to the department of audit and control pursuant to this
38 article.
39 c. [Develop] FOR PURPOSES OF AN INTEREST PAYMENT OWED TO A CONTRACTOR,
40 DEVELOP and implement a procedure for paying such interest in not more
41 than seven days from the payment date on those proper invoices for which
42 interest is due and for which the director of the budget does not issue
43 a certificate or certificates increasing, transferring, or interchanging
44 funds so that an interest payment can be made [pusuant] PURSUANT to this
45 article. The comptroller shall also develop and implement a procedure
46 for paying such interest in not more than fourteen days from the payment
47 date on those proper invoices for which interest is due and for which
48 the director of the budget does issue a certificate or certificates
49 increasing, transferring, or interchanging funds so that an interest
50 payment can be made pursuant to this article.
51 d. [Develop] FOR PURPOSES OF AN INTEREST PAYMENT OWED TO A CONTRACTOR,
52 DEVELOP and implement a procedure by which every state agency will noti-
53 fy contractors promptly and directly whenever the state comptroller
54 rejects a voucher and returns it to the state agency due to an error or
55 omission in the voucher by the contractor.
S. 2608 5
1 S 8. Section 179-p of the state finance law, as added by chapter 153
2 of the laws of 1984, is amended to read as follows:
3 S 179-p. Inapplicability of the provisions. The provisions of this
4 article shall not apply to payments due and owing by the state:
5 1. under the eminent domain procedure law;
6 2. as interest allowed on judgments rendered by a court pursuant to
7 any provision of law other than those provisions contained in this arti-
8 cle;
9 3. to the federal government; to any state agency or its related
10 instrumentalities; to any duly constituted unit of local government
11 including, but not limited to, counties, cities, towns, villages, school
12 districts, special districts, or any of their related instrumentalities
13 EXCEPT IN THE CASE IN WHICH STATE PAYMENTS ARE MADE FOR EXPENSES RELATED
14 TO DAMAGE RESULTING FROM A NATURAL DISASTER; to any public authority or
15 public benefit corporation; or to employees of state agencies when
16 acting in, or incidental to, their public employment capacity;
17 4. to contractors of third party payment agreements including, but not
18 limited to, the fiscal agent or fiscal intermediary designated pursuant
19 to section three hundred sixty-seven-b of the social services law;
20 5. to entities which receive state funds through any intermediary
21 organization other than a state agency; or
22 6. in situations where the comptroller exercises a legally authorized
23 set-off against all or part of the payment due the contractor.
24 S 9. This act shall take effect immediately.