NY State Senate Bill 2011-S6205

Senate Bill S6205

2011-2012 Legislative Session

Relates to interest and collection fees assessed on debts owed by the state to municipalities

download bill text pdf

Archive: Last Bill Status - In Senate Committee Finance Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 12, 2012	referred to finance

2011-S6205 (ACTIVE) - Details

Current Committee:: Senate Finance
Law Section:: State Finance Law
Laws Affected:: Add §16-a, St Fin L
Versions Introduced in 2013-2014 Legislative Session:: S2010

2011-S6205 (ACTIVE) - Summary

Relates to interest and collection fees assessed on debts owed by the state to municipalities; requires payment for debt to be made on or before the thirtieth day following receipt of any billing invoice or notice sent by the municipality; the rate shall be calculated based on the underpayment rate minus four percentage points; provides exceptions where more information is required, funds are being provided by another entity and they have not been received by the state or the expenditure has not been approved by the state.

2011-S6205 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S6205

TITLE OF BILL:
An act
to amend the state finance law, in relation to interest and collection
fees assessed on debts owed by the state to municipalities

PURPOSE:
This bill would entitle municipalities to interest and
collection fees when the state fails to pay amounts due within thirty
days after submission of bills.

SUMMARY OF PROVISIONS:
Section 1 creates a new section 16-a of the State Finance Law.

1. includes definitions
2. relates to submitting a bill from a municipality to the state
3. provides that the State shall pay such
bill within thirty days after receiving a bill from a municipality.
4. provides that except under certain circumstances, interest will be
due if payment is not made within thirty days.
5. provides that State will be liable for costs of collection if
payment is not made within thirty days
6. provides that interest and
late payment charges will be paid upon notice to State
7. directs the Director of Budget to promulgate any necessary

regulations
8.provides that this law will not supercede any contract
provision calling for interest or late payments
9. provides that any contract
term which attempts to waive this section shall be void
10. provides that municipalities may enter into agreements
for payment with the State
11. Indicates when the time limits in this section are tolled,
including when the billing is incomplete, and the municipality is
advised within thirty days that the bill is incomplete, until the
billing is complete; when the State is being reimbursed from another
source, until the State receives such funds; or when the State is not
authorized or approved to make such expenditure, until such
authorization or approval is made.

Section 2. This act shall take effect on the ninetieth day after it
shall have become law.

JUSTIFICATION:
Local governments expend funds that are often to be
reimbursed by the State, many times due to mandates for service made
by the State. When the State delays payment of amounts due to schools
and local governments, these municipalities are often forced to
borrow funds to carry on their responsibilities. Section 18 of the
State Finance Law grants the State a right to interest and other

charges when a payment to it is delinquent, and local governments are
entitled to the same rights to interest and other charges. The bill
does recognize that sometimes a billing submitted by a municipality
may not be complete, and provides to a tolling of the thirty day time
limit until the billing is submitted correctly. Also, many times
funds that will go from the State to municipalities is being passed
through from another source, often the federal government, and the
bill provides that payment will not be due until these pass through
funds are received. Finally, when a budget has not been passed, or
when third party approval is also required, the State may not be
authorized to make payment, and in such case time for payment is
tolled until authorization has been received.

LEGISLATIVE HISTORY:
New bill.

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
This act shall take place on the ninetieth day after
it shall have become law.

2011-S6205 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  6205

                            I N  S E N A T E

                            January 12, 2012
                               ___________

Introduced  by  Sen.  RANZENHOFER -- 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  interest  and
  collection fees assessed on debts owed by the state to municipalities

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The state finance law is amended by adding  a  new  section
16-a to read as follows:
  S  16-A.  INTEREST  AND  COLLECTION FEES ASSESSED ON DEBTS OWED BY THE
STATE TO MUNICIPALITIES. 1. AS USED IN THIS SECTION: (A)  "STATE"  SHALL
MEAN  ANY STATE DEPARTMENT, BOARD, BUREAU, DIVISION, COMMISSION, COMMIT-
TEE, PUBLIC AUTHORITY, PUBLIC BENEFIT CORPORATION, COUNCIL,  OFFICE,  OR
OTHER GOVERNMENTAL ENTITY PERFORMING A GOVERNMENTAL OR PROPRIETARY FUNC-
TION  FOR  THE  STATE;  (B)  "MUNICIPALITY"  SHALL  MEAN A COUNTY, TOWN,
VILLAGE OR SCHOOL DISTRICT AND ANY DEPARTMENT, BOARD, BUREAU,  DIVISION,
COMMISSION,  COMMITTEE,  PUBLIC  BENEFIT CORPORATION, COUNCIL, OFFICE OR
OTHER GOVERNMENTAL ENTITY PERFORMING A GOVERNMENTAL OR PROPRIETARY FUNC-
TION FOR SUCH COUNTY, TOWN, VILLAGE OR SCHOOL DISTRICT; (C) "DEBT" SHALL
MEAN ANY LIQUIDATED SUM DUE AND OWING  ANY  MUNICIPALITY  BY  THE  STATE
WHICH  HAS ACCRUED PURSUANT TO LAW OR THROUGH CONTRACT SUBROGATION, TORT
OR OTHER CAUSE OF ACTION, REGARDLESS OF WHETHER THERE IS AN  OUTSTANDING
JUDGMENT  FOR  THAT  SUM; (D) "LIQUIDATED" SHALL MEAN AN AMOUNT WHICH IS
FIXED OR CERTAIN OR CAPABLE OF BEING READILY CALCULATED, WHETHER OR  NOT
THE  UNDERLYING  LIABILITY  OR  AMOUNT  OF THE DEBT IS DISPUTED; AND (E)
"OUTSTANDING DEBT" SHALL MEAN  THE  AMOUNT  SET  FORTH  IN  THE  BILLING
INVOICE OR NOTICE MAILED TO THE STATE, TOGETHER WITH LATE PAYMENT CHARG-
ES AND INTEREST, LESS ANY PAYMENTS MADE BY OR ON BEHALF OF THE DEBTOR.
  2.  FOR  THE  PURPOSES  OF THIS SECTION, A MUNICIPALITY SHALL MAIL, OR
OTHERWISE NOTIFY AS MAY BE PERMITTED OR REQUIRED BY CONTRACT BETWEEN THE
MUNICIPALITY AND THE STATE, A DATED BILLING INVOICE  OR  NOTICE  TO  THE
STATE  ON  OR  ABOUT THE DAY IT IS DATED, AND RECEIPT BY THE DEBTOR OF A
BILLING INVOICE OR NOTICE IS DEEMED TO HAVE OCCURRED FIVE DAYS AFTER ITS
DATE.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13607-01-1

S. 6205                             2

  3. THE STATE SHALL PAY SUCH  DEBT  ON  OR  BEFORE  THE  THIRTIETH  DAY
FOLLOWING  RECEIPT  OF ANY BILLING INVOICE OR NOTICE SENT BY THE MUNICI-
PALITY THAT SUCH DEBT IS DUE AND OWING.
  4.  EXCEPT  AS  PROVIDED IN SUBDIVISION ELEVEN OF THIS SECTION, IF THE
STATE FAILS TO MAKE PAYMENT OF A DEBT TO A MUNICIPALITY WITHIN THE PERI-
OD SET FORTH IN SUBDIVISION THREE OF THIS SECTION IT SHALL PAY, IN ADDI-
TION TO THE AMOUNT OF DEBT, INTEREST ON THE OUTSTANDING BALANCE  OF  THE
DEBT,  ACCRUING  ON  THE  DATE ON WHICH THE RECEIPT OF THE FIRST BILLING
INVOICE OR FIRST NOTICE OCCURS, COMPUTED AT THE UNDERPAYMENT RATE  WHICH
IS  IN EFFECT ON THE DATE WHICH THE RECEIPT OF THE FIRST BILLING INVOICE
OR FIRST BILLING NOTICE OCCURS. FOR PURPOSES OF THIS SECTION, THE UNDER-
PAYMENT RATE SHALL BE THAT RATE SET BY THE COMMISSIONER OF TAXATION  AND
FINANCE  AND  PUBLISHED IN THE STATE REGISTER PURSUANT TO SUBSECTION (E)
OF SECTION ONE THOUSAND NINETY-SIX OF THE TAX LAW MINUS FOUR  PERCENTAGE
POINTS.
  5.  EXCEPT AS PROVIDED IN SUBDIVISION ELEVEN OF THIS SECTION, IN ADDI-
TION TO THE CHARGES REFERRED TO IN SUBDIVISION FOUR OF THIS SECTION,  IF
THE STATE FAILS TO MAKE PAYMENT OF A DEBT SUBJECT TO THIS SECTION WITHIN
NINETY  DAYS  OF  RECEIPT  BY  THE STATE OF THE FIRST BILLING INVOICE OR
NOTICE, THE STATE MAY BE ASSESSED AN ADDITIONAL COLLECTION FEE CHARGE TO
COVER THE COST OF PROCESSING, HANDLING AND COLLECTING SUCH DEBT, NOT  TO
EXCEED  TWENTY-TWO PERCENT OF THE OUTSTANDING DEBT, WHICH COLLECTION FEE
SHALL BE ADDED TO AND PAYABLE IN THE  SAME  MANNER  AS  THE  OUTSTANDING
DEBT.  THE  ASSESSED  COLLECTION  FEE CHARGE MAY NOT EXCEED THE AGENCY'S
ESTIMATED COST OF PROCESSING, HANDLING AND COLLECTING SUCH DEBT.
  6. (A) ANY INTEREST OR LATE PAYMENT CHARGES ASSESSED PURSUANT TO  THIS
SECTION  SHALL  BE  PAID UPON NOTICE AND DEMAND AND SHALL BE TREATED AND
COLLECTED IN THE SAME MANNER AS THE  ORIGINAL  DEBT  WHICH  IS  DUE  AND
OWING.
  (B) IN ANY ACTION BROUGHT BY OR ON BEHALF OF A MUNICIPALITY TO RECOVER
AN  OUTSTANDING  DEBT,  A  DEMAND  FOR COLLECTION FEE CHARGES MAY BE SET
FORTH IN THE STATEMENT OF DAMAGES SOUGHT.
  7. THE DIRECTOR OF THE BUDGET SHALL PROMULGATE SUCH GUIDELINES AS  THE
DIRECTOR DEEMS NECESSARY TO CARRY OUT THE PROVISIONS OF THIS SECTION.
  8. THE PROVISIONS OF THIS SECTION SHALL NOT SUPERSEDE ANY PROVISION OF
LAW  OR  REGULATION  OR  CONTRACT  WHICH  PROVIDES FOR THE IMPOSITION OF
INTEREST OR LATE PAYMENT OR COLLECTION FEE CHARGES ON DEBTS  NOT  SATIS-
FIED IN A TIMELY MANNER.
  9.  ANY  CONTRACTS  ENTERED  INTO  OR ANY REGULATION PROMULGATED ON OR
AFTER THE EFFECTIVE DATE OF THIS SECTION WHICH  PURPORTS  TO  WAIVE  THE
IMPOSITION  OF  INTEREST  OR  LATE  PAYMENT OR COLLECTION FEE CHARGES OR
IMPOSES INTEREST OR LATE PAYMENT CHARGES OR COLLECTION FEE CHARGES IN  A
MANNER INCONSISTENT WITH THIS SECTION SHALL BE VOID.
  10.  EVERY MUNICIPALITY TO WHICH THIS SECTION IS APPLICABLE IS AUTHOR-
IZED TO ENTER INTO WRITTEN AGREEMENTS WITH THE  STATE  UNDER  WHICH  THE
STATE IS ALLOWED TO SATISFY LIABILITY FOR PAYMENT OF ANY DEBT, INCLUDING
ANY  INTEREST IMPOSED BY THIS SECTION ON THAT PORTION OF SUCH DEBT AS TO
WHICH AN EXTENSION IS GRANTED, IN INSTALLMENT PAYMENTS  IF  THE  MUNICI-
PALITY DETERMINES THAT SUCH AGREEMENT WILL FACILITATE COLLECTION OF SUCH
LIABILITY.
  11. FOR PURPOSES OF THIS SECTION, THE TIME OF BILLING SHALL BE TOLLED:
(A)  IF THE STATE SHALL NOTIFY THE MUNICIPALITY IN WRITING WITHIN THIRTY
DAYS OF RECEIPT OF THE BILLING THAT SUCH BILLING REQUIRES SUBMISSION  OF
ADDITIONAL  INFORMATION OR THE STATE OTHERWISE HAS OBJECTION TO THE FORM
OR CONTENT OF SUCH BILLING REQUIRING CLARIFICATION, UNTIL SUCH  TIME  AS
THE  MUNICIPALITY  SHALL RESPOND TO SUCH REQUEST FOR ADDITIONAL INFORMA-

S. 6205                             3

TION OR MODIFICATION; (B) IF THE FUNDS FOR  PAYMENT  BY  THE  STATE  ARE
BEING  PROVIDED  BY ANOTHER ENTITY, UNTIL SUCH FUNDS ARE RECEIVED BY THE
STATE FROM SUCH ENTITY; OR (C) IF THE EXPENDITURE FOR  SUCH  BILLING  BY
THE  STATE  HAS NOT BEEN AUTHORIZED OR APPROVED BY THE STATE, UNTIL SUCH
EXPENDITURE HAS BEEN AUTHORIZED OR APPROVED.
  S 2. This act shall take effect on the ninetieth day  after  it  shall
have become a law.

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