senate Bill S2010

2013-2014 Legislative Session

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

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Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 08, 2014 referred to finance
Jan 09, 2013 referred to finance

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S2010 - Bill Details

Current Committee:
Senate Finance
Law Section:
State Finance Law
Laws Affected:
Add ยง16-a, St Fin L
Versions Introduced in 2011-2012 Legislative Session:
S6205

S2010 - Bill Texts

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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.

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BILL NUMBER:S2010

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

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 regu-
lations

8. provides that this law will not supersede 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 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 reim-
bursed 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 munici-
palities 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: 2012 - S.6205 -- FINANCE

FISCAL IMPLICATIONS: None.

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

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

                                  2010

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced by Sens. RANZENHOFER, ZELDIN -- read twice and ordered print-
  ed, 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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05247-01-3

S. 2010                             2

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.
  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

S. 2010                             3

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-
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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