Bill Text: NY A04484 | 2017-2018 | General Assembly | Introduced
Bill Title: Enacts procedures to ensure prompt payments to local governments of state aid payments associated with disaster relief.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2018-01-03 - referred to governmental operations [A04484 Detail]
Download: New_York-2017-A04484-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 4484 2017-2018 Regular Sessions IN ASSEMBLY February 2, 2017 ___________ Introduced by M. of A. MAGEE -- read once and referred to the Committee on Governmental Operations 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 § 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 25 payment of amounts due to local government units associated with storm EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD04905-01-7A. 4484 2 1 relief and recovery is vital to the continued economic viability of the 2 state as a whole. Storm-ravaged communities must be provided relief in a 3 manner that allows for expedited repair of municipal infrastructure so 4 that residents of such communities can continue their day-to-day lives. 5 § 2. Section 179-e of the state finance law is amended by adding a new 6 subdivision 11 to read as follows: 7 11. "Unit of local government" means counties, cities, towns, villages 8 and school districts. 9 § 3. Subdivisions 1 and 2 of section 179-f of the state finance law, 10 subdivision 1 as amended by chapter 332 of the laws of 1989 and subdivi- 11 sion 2 as amended by chapter 548 of the laws of 2015, are amended to 12 read as follows: 13 1. Each state agency which is required to make a payment from state 14 funds pursuant to a contract or pursuant to a state or federal statutory 15 or regulatory obligation to make a payment to a unit of local government 16 where such payment is meant to assist such unit with recovery from a 17 natural disaster and which does not make such [contract] payment by the 18 required payment date shall make an interest payment to the contractor 19 or unit of local government in accordance with this article on the 20 amount of the [contract] payment which is due, unless failure to make 21 such [contract] payment is the result of a lien, attachment, or other 22 legal process against the money due said contractor or unit of local 23 government, or unless the amount of the interest payment as computed in 24 accordance with the provisions of section one hundred seventy-nine-g of 25 this article is less than ten dollars. A pro rata share of such interest 26 shall be paid by the contractor or subcontractor, as the case may be, to 27 subcontractors and materialmen in a proportion equal to the percentage 28 of their pro rata share of the contract payment. Such pro rata share of 29 interest shall be due to such subcontractors and materialmen only for 30 those payments which are not paid to such subcontractors and materialmen 31 prior to the date upon which interest begins to accrue between the state 32 agency and the contractor. Such pro rata share of interest shall be 33 computed daily until such payments are made to the subcontractors and 34 materialmen. 35 2. The required payment date shall be thirty calendar days, excluding 36 legal holidays, or in the case of final payments on highway construction 37 contracts seventy-five calendar days, excluding legal holidays, after 38 receipt of an invoice for the amount of the contract payment due; except 39 when: 40 (a) the state comptroller in the course of his audit determines that 41 there is reasonable cause to believe that payment may not properly be 42 due, in whole or in part; 43 (b) in accordance with specific statutory or contractual provisions, 44 payment must be preceded by an inspection period or by an audit to 45 determine the resources applied or used by a contractor in fulfilling 46 the terms of the contract; 47 (c) the necessary state government appropriation required to authorize 48 payment has yet to be enacted; 49 (d) a proper invoice must be examined by the federal government prior 50 to payment; 51 (e) the goods or property have not been delivered or the services have 52 not been rendered by the contractor in compliance with the terms or 53 conditions of the contract; 54 (f) the required payment date is modified in accordance with subdivi- 55 sion three of this section; orA. 4484 3 1 (g) in the case of final payments on highway construction contracts 2 the commissioner of transportation determines that the contractor has 3 failed to properly submit the necessary documents and other submissions 4 prescribed by the contract specifications and requirements, by the 5 provisions of subdivision eight of section thirty-eight of the highway 6 law, and by all other applicable state and federal laws in order to 7 enable the department of transportation to process the final payment 8 properly and expeditiously. 9 Any time taken to satisfy or rectify any of the types of conditions 10 described in paragraphs (a) through (e) or (g) of this subdivision shall 11 extend the required payment date by an equal period of time. For 12 purposes of a payment to a unit of local government where such payment 13 is meant to assist such unit with recovery from a natural disaster, the 14 required payment date shall be no later than required by law. 15 § 4. Subdivision 2 of section 179-f of the state finance law, as 16 amended by chapter 36 of the laws of 2016, is amended to read as 17 follows: 18 2. The required payment date shall be thirty calendar days, excluding 19 legal holidays, provided, however, that for a small business the 20 required payment date shall be fifteen calendar days, excluding legal 21 holidays, [absent a showing by the contracting agency of circumstances22beyond its control, provided that the small business submits its invoice23electronically, in conformance with the policies and procedures of the24accounting and financial management system of state government and iden-25tifies that it is seeking expedited payment as a small business,] or in 26 the case of final payments on highway construction contracts seventy- 27 five calendar days, excluding legal holidays, after receipt of an 28 invoice for the amount of the contract payment due; except when: 29 (a) the state comptroller in the course of his or her audit determines 30 that there is reasonable cause to believe that payment may not properly 31 be due, in whole or in part; 32 (b) in accordance with specific statutory or contractual provisions, 33 payment must be preceded by an inspection period or by an audit to 34 determine the resources applied or used by a contractor in fulfilling 35 the terms of the contract; 36 (c) the necessary state government appropriation required to authorize 37 payment has yet to be enacted; 38 (d) a proper invoice must be examined by the federal government prior 39 to payment; 40 (e) the goods or property have not been delivered or the services have 41 not been rendered by the contractor in compliance with the terms or 42 conditions of the contract; 43 (f) the required payment date is modified in accordance with subdivi- 44 sion three of this section; or 45 (g) in the case of final payments on highway construction contracts 46 the commissioner of transportation determines that the contractor has 47 failed to properly submit the necessary documents and other submissions 48 prescribed by the contract specifications and requirements, by the 49 provisions of subdivision eight of section thirty-eight of the highway 50 law, and by all other applicable state and federal laws in order to 51 enable the department of transportation to process the final payment 52 properly and expeditiously. 53 Any time taken to satisfy or rectify any of the types of conditions 54 described in paragraphs (a) through (e) or (g) of this subdivision shall 55 extend the required payment date by an equal period of time, provided, 56 however, that for small businesses, the required payment date shall beA. 4484 4 1 fifteen calendar days, excluding legal holidays, after such conditions 2 have been satisfied or rectified, and provided further that all reason- 3 able and practicable efforts shall be taken to satisfy or rectify such 4 conditions as soon as possible. For purposes of a payment to a unit of 5 local government where such payment is meant to assist such unit with 6 recovery from a natural disaster, the required payment date shall be no 7 later than required by law. 8 § 5. Section 179-g of the state finance law, as amended by chapter 61 9 of the laws of 1989, is amended to read as follows: 10 § 179-g. Computation of interest payment. Interest payments on amounts 11 due to a contractor, or unit of local government pursuant to this arti- 12 cle shall be paid to the contractor, or unit of local government for the 13 period beginning on the day after the required payment date and ending 14 on the payment date for those payments required according to this arti- 15 cle and shall be paid at the rate of interest in effect on the date when 16 the interest payment is made. Notwithstanding any other provision of law 17 to the contrary, interest shall be computed at the rate equal to the 18 overpayment rate set by the commissioner of taxation and finance pursu- 19 ant to subsection (e) of section one thousand ninety-six of the tax law. 20 § 6. Section 179-h of the state finance law, as amended by chapter 153 21 of the laws of 1984, is amended to read as follows: 22 § 179-h. Determination of appropriations against which interest 23 payments are to be charged. Except in situations when federal law or the 24 provisions of section one hundred seventy-nine-o of this article require 25 otherwise, an interest payment required by this article shall be paid 26 from the same appropriation as that from which the related proper 27 invoice, or natural disaster relief assistance is paid; provided, howev- 28 er, (1) that the interest payment shall not reduce the amount of money 29 that otherwise will be payable to the contractor, or unit of local 30 government under the terms of the relevant contract, or natural disaster 31 relief assistance respectively and, for purposes of an interest payment 32 owed to a contractor (2) that if the obligation to make an interest 33 payment is incurred in whole or in part because it takes the department 34 of audit and control more than eight calendar days, excluding legal 35 holidays, from the date it receives an approvable voucher from another 36 state agency to process a contract payment, then the portion of the 37 total interest payment that is attributable to delays by the department 38 of audit and control shall be paid from funds made available to the 39 department of audit and control. Notwithstanding any other provision of 40 law to the contrary, if the amount of money available from any such 41 appropriation to the state agency which received the proper invoice is 42 insufficient to pay the interest and if for any reason it is not feasi- 43 ble for the director of the budget to exercise the transfer or inter- 44 change authority established by section fifty-one or ninety-three of 45 this chapter, the director of the budget may issue a certificate or 46 certificates transferring or interchanging within a fund such amount as 47 is needed to pay the interest to said appropriation within such fund 48 from the unspent balance of any appropriation that is available to the 49 same state agency. In exercising the latter transfer or interchange 50 authority, the director of the budget shall transfer or interchange 51 amounts that are not needed to accomplish the purposes for which the 52 appropriation was made, except, however, the director of the budget may, 53 to the extent he deems it practicable, transfer or interchange amounts 54 from appropriations that otherwise would be available for the adminis- 55 tration and operations of the state agency which incurred the interest 56 payment. Any such certificate or certificates issued by the director ofA. 4484 5 1 the budget shall be sent to the state comptroller and copies shall be 2 filed with the chairman of the senate finance committee and the chairman 3 of the assembly ways and means committee. 4 § 7. Section 179-k of the state finance law, as added by chapter 153 5 of the laws of 1984, is amended to read as follows: 6 § 179-k. Acceptance of payment. The acceptance of payment, in whole or 7 in part, by a contractor, or unit of local government shall not be 8 deemed to constitute a waiver of interest otherwise due under the 9 provisions of this article nor to supersede the provisions of section 10 one hundred forty-five of this chapter. 11 § 8. Subdivision 1 of section 179-m of the state finance law, as added 12 by chapter 153 of the laws of 1984, paragraph d as amended by chapter 13 618 of the laws of 1994, is amended to read as follows: 14 1. The state comptroller shall: 15 a. Promulgate such rules and regulations as may be necessary to carry 16 out the comptroller's responsibilities under this article. 17 b. Develop and implement a procedure for calculating the amount of 18 interest, if any, due to any contractor, or unit of local government 19 pursuant to the provisions of this article. [Such] For purposes of an 20 interest payment owed to a contractor, such procedure shall include 21 provisions for calculating (i) the amount of time, in calendar days, 22 between the date of receipt of a proper invoice by the state agency and 23 the date on which an approvable voucher was delivered to the state comp- 24 troller; (ii) the amount of time between the date on which an approvable 25 voucher was delivered to the state comptroller and the payment date; 26 (iii) the amount of interest, if any, chargeable to the state agency 27 involved pursuant to this article; and (iv) the amount of interest, if 28 any, chargeable to the department of audit and control pursuant to this 29 article. 30 c. [Develop] For purposes of an interest payment owed to a contractor, 31 develop and implement a procedure for paying such interest in not more 32 than seven days from the payment date on those proper invoices for which 33 interest is due and for which the director of the budget does not issue 34 a certificate or certificates increasing, transferring, or interchanging 35 funds so that an interest payment can be made [pusuant] pursuant to this 36 article. The comptroller shall also develop and implement a procedure 37 for paying such interest in not more than fourteen days from the payment 38 date on those proper invoices for which interest is due and for which 39 the director of the budget does issue a certificate or certificates 40 increasing, transferring, or interchanging funds so that an interest 41 payment can be made pursuant to this article. 42 d. [Develop] For purposes of an interest payment owed to a contractor, 43 develop and implement a procedure by which every state agency will noti- 44 fy contractors promptly and directly whenever the state comptroller 45 rejects a voucher and returns it to the state agency due to an error or 46 omission in the voucher by the contractor. 47 § 9. Section 179-p of the state finance law, as added by chapter 153 48 of the laws of 1984, is amended to read as follows: 49 § 179-p. Inapplicability of the provisions. The provisions of this 50 article shall not apply to payments due and owing by the state: 51 1. under the eminent domain procedure law; 52 2. as interest allowed on judgments rendered by a court pursuant to 53 any provision of law other than those provisions contained in this arti- 54 cle; 55 3. to the federal government; to any state agency or its related 56 instrumentalities; to any duly constituted unit of local governmentA. 4484 6 1 including, but not limited to, counties, cities, towns, villages, school 2 districts, special districts, or any of their related instrumentalities 3 except in the case in which state payments are made for expenses related 4 to damage resulting from a natural disaster; to any public authority or 5 public benefit corporation; or to employees of state agencies when 6 acting in, or incidental to, their public employment capacity; 7 4. to contractors of third party payment agreements including, but not 8 limited to, the fiscal agent or fiscal intermediary designated pursuant 9 to section three hundred sixty-seven-b of the social services law; 10 5. to entities which receive state funds through any intermediary 11 organization other than a state agency; or 12 6. in situations where the comptroller exercises a legally authorized 13 set-off against all or part of the payment due the contractor. 14 § 10. This act shall take effect immediately; provided however, that 15 section four of this act shall take effect on the same date and in the 16 same manner as section 2 of chapter 568 of the laws of 2015, as amended, 17 takes effect.
