senate Bill S6003

2013-2014 Legislative Session

Relates to prompt payments to local governments of state aid payments associated with disaster relief

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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
Dec 06, 2013 referred to finance

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S6003 - Bill Details

Current Committee:
Law Section:
State Finance Law
Laws Affected:
Amd ยงยง179-d, 179-e, 179-f, 179-g, 179-h, 179-k, 179-m & 179-p, St Fin L

S6003 - Bill Texts

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Enacts procedures to ensure prompt payments to local governments of state aid payments associated with disaster relief.

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BILL NUMBER:S6003

TITLE OF BILL: An act to amend the state finance law, in relation to
prompt payments to local governments of certain state aid associated
with disaster relief

PURPOSE OR GENERAL IDEA OF BILL:

This bill would establish prompt payment requirements for certain aid
for local government units associated with storm relief and recovery.

SUMMARY OF SPECIFIC PROVISIONS:

This bill would amend section 179-d of the state finance law, to
provide that the prompt payment of funds due to local government units
associated with storm relief and recovery is vital to the continued
economic viability of the state as a whole. It further would provide
that storm-ravaged communities must be provided relief in a manner
that allows for expedited repair of municipal infrastructure so that
residents of such communities can continue their day-to-day lives.

This bill would additionally amend section 179-e of the state finance
law, to provide that a unit of local government eligible to receive
such prompt payment of aid would include counties, cities, towns,
villages and school districts.

This bill would further amend section 179-f of the state finance law
to provide that each state agency which is required to make a payment
from state funds pursuant to a contract or pursuant to a state or
federal statutory or regulatory obligation to make a payment to a unit
of local government where such payment is meant to assist such unit
with recovery from a natural disaster and which does not make such
payment by the required payment date shall make an interest payment to
the contractor or unit of local government in accordance with this
article on the amount of the payment which is due, unless failure to
make such payment is the result of a lien, attachment, or other legal
process against the money due said contractor or unit of local
government, or unless the amount of the interest payment is less than
ten dollars. The amendment proposed by this bill to section 179-f
would also provide that for purposes of a payment to a unit of local
government where such payment is meant to assist such unit with
recovery from a natural disaster, the required payment date shall be
no later than required by law.

Pursuant to this section, the required payment date shall be 30
calendar days, excluding legal holidays, or in the case of final
payments on highway contraction contracts 75 calendar days, excluding
legal holidays, after the receipt of an invoice for the amount due.

It would be the duty of the comptroller to develop and implement a
procedure for calculating the amount of interest, if any, due to a
unit of local government, and to submit a detailed special report to
the governor and the legislature within 60 days after the conclusion
of each fiscal year.

JUSTIFICATION:


There are a multitude of firms, organizations, and local government
units that do business and provide for storm relief and recovery with
the state of New York.

Unjustified delays in providing state funds associated with storm
relief and recovery, which require prompt payment in a timely manner
for services rendered to rebuild a disaster ravaged community
discourage rebuilding, recovery and relief efforts necessary to allow
such communities to continue their day-to-day lives.

Following a severe storm or natural disaster, the expedited repair of
municipal infrastructures, schools, roads, buildings and community
structures, is extremely necessary to allow residents of communities
to continue their day-to-day lives and futures and to ensure economic
stability and viability of the state as a whole. It is therefore
imperative that the state government provide for the prompt and timely
payment to local government, the aid funds necessary to permit storm
relief and recovery to take place in an expedited manner.

PRIOR LEGISLATIVE HISTORY:

This is a new bill.

FISCAL IMPLICATIONS

This program would be subject to budgetary appropriations.

EFFECTIVE DATE:

This act would take effect immediately.

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

                                  6003

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            December 6, 2013
                               ___________

Introduced  by  Sens.  SEWARD, GRIFFO, VALESKY, FARLEY -- 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:

  Section 1. Section 179-d of the state finance law, as added by chapter
153 of the laws of 1984, is amended to read as follows:
  S 179-d. Legislative intent. Firms and organizations that do  business
with the state of New York expect and deserve to be paid in a prompt and
timely  manner.    Unjustified  delays  in  paying vendors, construction
contractors, and providers of service  may  discourage  such  firms  and
organizations  from  doing  business  with the state of New York and may
ultimately increase the costs to  the  state  government  of  purchasing
materials,  equipment, and supplies; undertaking construction and recon-
struction projects; and obtaining a wide  variety  of  professional  and
other  specialized services including those that are provided to persons
in need.  Consequently, this legislation sets standards for the  payment
of bills incurred by state agencies within specified periods of time and
requires  interest payments in situations where contract payments do not
conform to these standards. Consistent with accepted business  practices
and with sound principles of fiscal management, it is the intent of this
legislation  to  encourage state agencies in all three branches of state
government to make payments at least as expeditiously as they  currently
do  and  further  to  reduce  existing payment processing times whenever
feasible, while at the  same  time  permitting  the  state  agencies  to
perform proper and reasonable financial oversight activities designed to
ensure  that  the  state  government  receives  the quality of goods and
services to which it is entitled and to ensure  that  public  funds  are
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.
                                                           LBD13203-01-3

S. 6003                             2

PAYMENT OF AMOUNTS DUE TO LOCAL GOVERNMENT UNITS ASSOCIATED  WITH  STORM
RELIEF  AND RECOVERY IS VITAL TO THE CONTINUED ECONOMIC VIABILITY OF THE
STATE AS A WHOLE. STORM-RAVAGED COMMUNITIES MUST BE PROVIDED RELIEF IN A
MANNER  THAT  ALLOWS FOR EXPEDITED REPAIR OF MUNICIPAL INFRASTRUCTURE SO
THAT RESIDENTS OF SUCH COMMUNITIES CAN CONTINUE THEIR DAY-TO-DAY LIVES.
  S 2. Section 179-e of the state finance law is amended by adding a new
subdivision 11 to read as follows:
  11. "UNIT OF LOCAL GOVERNMENT" MEANS COUNTIES, CITIES, TOWNS, VILLAGES
AND SCHOOL DISTRICTS.
  S 3. Subdivisions 1 and 2 of section 179-f of the state  finance  law,
subdivision 1 as amended by chapter 332 of the laws of 1989 and subdivi-
sion  2  as  amended  by chapter 153 of the laws of 1984, are amended to
read as follows:
  1. Each state agency which is required to make a  payment  from  state
funds pursuant to a contract OR PURSUANT TO A STATE OR FEDERAL STATUTORY
OR REGULATORY OBLIGATION TO MAKE A PAYMENT TO A UNIT OF LOCAL GOVERNMENT
WHERE  SUCH  PAYMENT  IS  MEANT TO ASSIST SUCH UNIT WITH RECOVERY FROM A
NATURAL DISASTER and which does not make such [contract] payment by  the
required  payment  date shall make an interest payment to the contractor
OR UNIT OF LOCAL GOVERNMENT in  accordance  with  this  article  on  the
amount  of  the  [contract] payment which is due, unless failure to make
such [contract] payment is the result of a lien,  attachment,  or  other
legal  process  against  the  money due said contractor OR UNIT OF LOCAL
GOVERNMENT, or unless the amount of the interest payment as computed  in
accordance  with the provisions of section one hundred seventy-nine-g of
this article is less than ten dollars. A pro rata share of such interest
shall be paid by the contractor or subcontractor, as the case may be, to
subcontractors and materialmen in a proportion equal to  the  percentage
of  their pro rata share of the contract payment. Such pro rata share of
interest shall be due to such subcontractors and  materialmen  only  for
those payments which are not paid to such subcontractors and materialmen
prior to the date upon which interest begins to accrue between the state
agency  and  the  contractor.  Such  pro rata share of interest shall be
computed daily until such payments are made to  the  subcontractors  and
materialmen.
  2.  The required payment date shall be thirty calendar days, excluding
legal holidays, or in the case of final payments on highway construction
contracts seventy-five calendar days, excluding  legal  holidays,  after
receipt of an invoice for the amount of the contract payment due; except
when:
  (a)  the  state comptroller in the course of his audit determines that
there is reasonable cause to believe that payment may  not  properly  be
due, in whole or in part;
  (b)  in  accordance with specific statutory or contractual provisions,
payment must be preceded by an inspection  period  or  by  an  audit  to
determine  the  resources  applied or used by a contractor in fulfilling
the terms of the contract;
  (c) the necessary state government appropriation required to authorize
payment has yet to be enacted;
  (d) the cash balance of the fund or sub-fund from which the payment is
to be made is insufficient to finance the payment;
  (e) a proper invoice must be examined by the federal government  prior
to payment;
  (f) the goods or property have not been delivered or the services have
not  been  rendered  by  the  contractor in compliance with the terms or
conditions of the contract;

S. 6003                             3

  (g) the required payment date is modified in accordance with  subdivi-
sion three of this section; or
  (h)  in  the  case of final payments on highway construction contracts
the commissioner of transportation determines that  the  contractor  has
failed  to properly submit the necessary documents and other submissions
prescribed by the  contract  specifications  and  requirements,  by  the
provisions  of  subdivision eight of section thirty-eight of the highway
law, and by all other applicable state and  federal  laws  in  order  to
enable  the  department  of  transportation to process the final payment
properly and expeditiously.
  Any time taken to satisfy or rectify any of the  types  of  conditions
described in paragraphs (a) through (f) or (h) of this subdivision shall
extend  the  required  payment  date  by  an equal period of time.   FOR
PURPOSES OF A PAYMENT TO A UNIT OF LOCAL GOVERNMENT WHERE  SUCH  PAYMENT
IS  MEANT TO ASSIST SUCH UNIT WITH RECOVERY FROM A NATURAL DISASTER, THE
REQUIRED PAYMENT DATE SHALL BE NO LATER THAN REQUIRED BY LAW.
  S 4. Section 179-g of the state finance law, as amended by chapter  61
of the laws of 1989, is amended to read as follows:
  S 179-g. Computation of interest payment. Interest payments on amounts
due  to a contractor, OR UNIT OF LOCAL GOVERNMENT pursuant to this arti-
cle shall be paid to the contractor, OR UNIT OF LOCAL GOVERNMENT for the
period beginning on the day after the required payment date  and  ending
on  the payment date for those payments required according to this arti-
cle and shall be paid at the rate of interest in effect on the date when
the interest payment is made. Notwithstanding any other provision of law
to the contrary, interest shall be computed at the  rate  equal  to  the
overpayment  rate set by the commissioner of taxation and finance pursu-
ant to subsection (e) of section one thousand ninety-six of the tax law.
  S 5. Section 179-h of the state finance law, as amended by chapter 153
of the laws of 1984, is amended to read as follows:
  S  179-h.  Determination  of  appropriations  against  which  interest
payments are to be charged. Except in situations when federal law or the
provisions of section one hundred seventy-nine-o of this article require
otherwise,  an  interest  payment required by this article shall be paid
from the same appropriation  as  that  from  which  the  related  proper
invoice, OR NATURAL DISASTER RELIEF ASSISTANCE is paid; provided, howev-
er,  (1)  that the interest payment shall not reduce the amount of money
that otherwise will be payable to  the  contractor,  OR  UNIT  OF  LOCAL
GOVERNMENT under the terms of the relevant contract, OR NATURAL DISASTER
RELIEF  ASSISTANCE RESPECTIVELY and, FOR PURPOSES OF AN INTEREST PAYMENT
OWED TO A CONTRACTOR (2) that if the  obligation  to  make  an  interest
payment  is incurred in whole or in part because it takes the department
of audit and control more than  eight  calendar  days,  excluding  legal
holidays,  from  the date it receives an approvable voucher from another
state agency to process a contract payment,  then  the  portion  of  the
total  interest payment that is attributable to delays by the department
of audit and control shall be paid from  funds  made  available  to  the
department  of audit and control. Notwithstanding any other provision of
law to the contrary, if the amount of  money  available  from  any  such
appropriation  to  the state agency which received the proper invoice is
insufficient to pay the interest and if for any reason it is not  feasi-
ble  for  the  director of the budget to exercise the transfer or inter-
change authority established by section  fifty-one  or  ninety-three  of
this  chapter,  the  director  of  the budget may issue a certificate or
certificates transferring or interchanging within a fund such amount  as
is  needed  to  pay  the interest to said appropriation within such fund

S. 6003                             4

from the unspent balance of any appropriation that is available  to  the
same  state  agency.  In  exercising  the latter transfer or interchange
authority, the director of the  budget  shall  transfer  or  interchange
amounts  that  are  not  needed to accomplish the purposes for which the
appropriation was made, except, however, the director of the budget may,
to the extent he deems it practicable, transfer or  interchange  amounts
from  appropriations  that otherwise would be available for the adminis-
tration and operations of the state agency which incurred  the  interest
payment.  Any such certificate or certificates issued by the director of
the budget shall be sent to the state comptroller and  copies  shall  be
filed with the chairman of the senate finance committee and the chairman
of the assembly ways and means committee.
  S  6.  Section 179-k of the state finance law, as added by chapter 153
of the laws of 1984, is amended to read as follows:
  S 179-k. Acceptance of payment. The acceptance of payment, in whole or
in part, by a contractor, OR UNIT  OF  LOCAL  GOVERNMENT  shall  not  be
deemed  to  constitute  a  waiver  of  interest  otherwise due under the
provisions of this article nor to supersede the  provisions  of  section
one hundred forty-five of this chapter.
  S 7. Subdivision 1 of section 179-m of the state finance law, as added
by  chapter  153  of the laws of 1984, paragraph d as amended by chapter
618 of the laws of 1994, is amended to read as follows:
  1. The state comptroller shall:
  a. Promulgate such rules and regulations as may be necessary to  carry
out the comptroller's responsibilities under this article.
  b.  Develop  and  implement  a procedure for calculating the amount of
interest, if any, due to any contractor, OR  UNIT  OF  LOCAL  GOVERNMENT
pursuant  to  the  provisions of this article. [Such] FOR PURPOSES OF AN
INTEREST PAYMENT OWED TO A  CONTRACTOR,  SUCH  procedure  shall  include
provisions  for  calculating  (i)  the amount of time, in calendar days,
between the date of receipt of a proper invoice by the state agency  and
the date on which an approvable voucher was delivered to the state comp-
troller; (ii) the amount of time between the date on which an approvable
voucher  was  delivered  to  the state comptroller and the payment date;
(iii) the amount of interest, if any, chargeable  to  the  state  agency
involved  pursuant  to this article; and (iv) the amount of interest, if
any, chargeable to the department of audit and control pursuant to  this
article.
  c. [Develop] FOR PURPOSES OF AN INTEREST PAYMENT OWED TO A CONTRACTOR,
DEVELOP  and  implement a procedure for paying such interest in not more
than seven days from the payment date on those proper invoices for which
interest is due and for which the director of the budget does not  issue
a certificate or certificates increasing, transferring, or interchanging
funds so that an interest payment can be made [pusuant] PURSUANT to this
article.    The comptroller shall also develop and implement a procedure
for paying such interest in not more than fourteen days from the payment
date on those proper invoices for which interest is due  and  for  which
the  director  of  the  budget  does issue a certificate or certificates
increasing, transferring, or interchanging funds  so  that  an  interest
payment can be made pursuant to this article.
  d. [Develop] FOR PURPOSES OF AN INTEREST PAYMENT OWED TO A CONTRACTOR,
DEVELOP and implement a procedure by which every state agency will noti-
fy  contractors  promptly  and  directly  whenever the state comptroller
rejects a voucher and returns it to the state agency due to an error  or
omission in the voucher by the contractor.

S. 6003                             5

  S  8.  Section 179-p of the state finance law, as added by chapter 153
of the laws of 1984, is amended to read as follows:
  S  179-p.  Inapplicability  of  the provisions. The provisions of this
article shall not apply to payments due and owing by the state:
  1. under the eminent domain procedure law;
  2. as interest allowed on judgments rendered by a  court  pursuant  to
any provision of law other than those provisions contained in this arti-
cle;
  3.  to  the  federal  government;  to  any state agency or its related
instrumentalities; to any duly  constituted  unit  of  local  government
including, but not limited to, counties, cities, towns, villages, school
districts,  special districts, or any of their related instrumentalities
EXCEPT IN THE CASE IN WHICH STATE PAYMENTS ARE MADE FOR EXPENSES RELATED
TO DAMAGE RESULTING FROM A NATURAL DISASTER; to any public authority  or
public  benefit  corporation;  or  to  employees  of state agencies when
acting in, or incidental to, their public employment capacity;
  4. to contractors of third party payment agreements including, but not
limited to, the fiscal agent or fiscal intermediary designated  pursuant
to section three hundred sixty-seven-b of the social services law;
  5.  to  entities  which  receive  state funds through any intermediary
organization other than a state agency; or
  6. in situations where the comptroller exercises a legally  authorized
set-off against all or part of the payment due the contractor.
  S 9. This act shall take effect immediately.

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