NY State Senate Bill 2025-S9761

Current Bill Status - In Senate Committee Procurement And Contracts 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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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Apr 06, 2026	referred to procurement and contracts

2025-S9761 (ACTIVE) - Details

See Assembly Version of this Bill:: A10741
Current Committee:: Senate Procurement And Contracts
Law Section:: State Finance Law
Laws Affected:: Amd §§179-q, 179-s, 179-z, 179-aa & 179-f, St Fin L

2025-S9761 (ACTIVE) - Summary

Relates to provisions governing contracting between state agencies and not-for-profit organizations including new, renewal, and extension contracts.

2025-S9761 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S9761

SPONSOR: MAYER
 
TITLE OF BILL:

An act to amend the state finance law, in relation to contracting
between state agencies and not-for-profit organizations

 
PURPOSE OF BILL:

To make targeted statutory clarifications and procedural improvements to
strengthen the administration of the Prompt Contracting Law, improve
transparency in written directives, expand access to the existing not-
forprofit short-term revolving loan fund, and reduce unnecessary payment
delays

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 amends subdivisions 9 and 14 of section 179-q of the state
finance law to clarify that the definition of "renewal contract"
includes new contracts between a state agency and a not-for-profit
organization to provide the same or similar services as were provided

under a previously approved contract. This section also requires that
all written directives include a schedule for the submission of
invoices, the agency's scheduled payment dates for such invoices, and
instructions on how to access the not-for-profit short-term revolving
loan fund.

Section 2 amends section 179-s of the state finance law to require that
when a state agency requests that a not-for-profit organization commence
services prior to full execution of a contract, the written directive
must include a commencement date for services, a procedure and schedule
for submission of invoices, and a schedule under which the organization
can expect payment.

Section 3 amends section 179-z of the state finance law to increase the
maximum loan amount available under the not-for-profit short-term
revolving loan fund from one-half of the first quarter payment to the
full payment of the subject contract. This section also requires that
instructions on how to access the loan fund be provided to every not-
for-profit organization receiving a written directive, contract, or
renewal contract, and that such information be posted conspicuously on
relevant state websites.

Section 4 amends section 179-aa of the state finance law to require the
not-for-profit contracting advisory committee to comment and report on
the implementation and operation of the revolving loan fund, evaluate
improvements to the statewide financial system, and ensure that annual
reports are made publicly available.

Section 5 amends section 179-f of the state finance law to clarify that
only material defects in delivered goods, services, or invoices may
pause the statutory payment clock. It further specifies that minor cler-
ical or rounding errors resulting in a variance of less than one hundred
dollars shall not constitute material defects and clarifies subcontrac-
tor payment procedures.

Section 6 sets the effective date.

 
JUSTIFICATION:

New York State has long contracted with not-for-profit organizations to
provide critical services in communities throughout the state from early
childhood education and mental health services to homeless housing
programs and substance abuse treatment. These essential social safety
net services are delivered as an extension of the state to millions of
New Yorkers every day.

However, delays in payment and a cumbersome contracting process have
long challenged not-for-profit providers. A recent statewide survey
found that 33 percent of not-for-profit organizations awarded state
funds reported being owed more than $58 million for services already
delivered. Reimbursement delays regularly last for months and, in some
cases, more than a year. As a result, not-for-profits are often forced
to draw on lines of credit and incur interest costs simply to meet
payroll and maintain operations. In a recent survey conducted by the New
York Council of Nonprofits, 65 percent of respondents reported concern
about funding basic operations in 2025, up from 62 percent the prior
year.

These challenges are exacerbated when not-for-profit organizations are
directed to begin or continue providing services prior to full contract
execution, often without clear timelines for invoicing or payment. The
absence of predictable payment schedules and consistent procedures
creates uncertainty for providers and increases administrative burdens
for both not-for-profits and state agencies.

This bill seeks to make targeted clarifications and procedural improve-
ments to the Prompt Contracting Law to improve transparency and predict-
ability in the contracting process. The Governor vetoed a similar bill
in 2025 (Veto  94), citing concerns related to advance payments and
automatic interest provisions.

This legislation directly addresses those concerns by removing
provisions mandating automatic advance payments and automatic interest
adjustments, and instead focuses on targeted procedural reforms that
enhance transparency without creating new fiscal mandates. Specifically,
the bill requires written directives to include clear schedules for
invoice submission and payment, ensures that not-for-profit organiza-
tions receive information on accessing the not-for-profit short-term
revolving loan fund, and clarifies the operation of statutory payment
timelines and invoice review procedures.

By promoting greater clarity, consistency, and predictability in the
contracting process, this legislation will help ensure that not-for-pro-
fit organizations can continue to provide critical services without
disruption, reduce administrative inefficiencies, and strengthen
accountability in state contracting practices.

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect on the one hundred eightieth day after it
shall have become a law.

2025-S9761 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9761
 
                             I N  S E N A T E
 
                               April 6, 2026
                                ___________
 
 Introduced  by  Sen.  MAYER  -- read twice and ordered printed, and when
   printed to be committed to the Committee on Procurement and Contracts
 
 AN ACT to amend the  state  finance  law,  in  relation  to  contracting
   between state agencies and not-for-profit organizations
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. Subdivisions 9 and 14 of section 179-q of the state finance
 law, as added by chapter 166 of the laws of 1991, are amended to read as
 follows:
   9. "Renewal contract" means the documents  necessary  to  continue  in
 effect  an  existing  contract between a state agency and not-for-profit
 organization, including any simplified  contract  documents  in  a  form
 approved  by  the  office  of the state comptroller.  "RENEWAL CONTRACT"
 SHALL ALSO INCLUDE ANY NEW CONTRACT BETWEEN A STATE AGENCY  AND  A  NOT-
 FOR-PROFIT  ORGANIZATION TO PROVIDE THE SAME OR SIMILAR SERVICES AS WERE
 PROVIDED BY SUCH NOT-FOR-PROFIT ORGANIZATION TO THE STATE AGENCY UNDER A
 PREVIOUSLY APPROVED CONTRACT. SIMILAR SERVICES  ARE  SERVICES  THAT  ARE
 COMPARABLE  TO THOSE PROVIDED IN A PRIOR EXECUTED CONTRACT FROM THE SAME
 AGENCY.
   14. "Written directive" means a written request by a state agency to a
 not-for-profit organization  authorizing  such  organization  either  to
 begin  providing  services  during  the  negotiation of a contract or to
 continue  providing  services  during  the  negotiation  of  a   renewal
 contract.     ALL  WRITTEN  DIRECTIVES  SHALL  INCLUDE  A  SCHEDULE  FOR
 SUBMISSION OF INVOICES FOR WORK COMPLETED BY THE  NOT-FOR-PROFIT  ORGAN-
 IZATION  AND  THE  STATE  AGENCY'S SCHEDULED PAYMENT DATES FOR SUBMITTED
 INVOICES. All written  directives  shall  state  that  payment  for  the
 services  provided  is  subject  to  the availability of appropriations,
 execution of either the contract or renewal contract,  and  approval  of
 the  contract  or  renewal  contract by the comptroller and the attorney
 general.  ALL WRITTEN DIRECTIVES SHALL ALSO INCLUDE INSTRUCTIONS ON  HOW
 TO  ACCESS THE NOT-FOR-PROFIT SHORT-TERM REVOLVING LOAN FUND PURSUANT TO
 SECTION ONE HUNDRED SEVENTY-NINE-Z OF THIS ARTICLE.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10809-03-6

 S. 9761                             2
 
   § 2. Subdivision 1 of section 179-s of the state finance law, as added
 by chapter 166 of the laws of 1991, is amended and a new  subdivision  4
 is added to read as follows:
   1.  A  state  agency  shall  have not more than one hundred fifty days
 following the latest date on which any of the appropriations covered  by
 the  program  plan  become  law to execute contracts with not-for-profit
 organizations pursuant to the  program  plan.  Upon  execution  of  each
 contract  by  the  state agency and the not-for-profit organization, the
 contract shall immediately be delivered  to  the  attorney  general  for
 approval.    The  attorney  general shall within fifteen days of receipt
 either approve such contract or disapprove and return  the  contract  to
 the  state  agency  with  reasons  therefor. Upon approval, the contract
 shall be delivered to the comptroller who shall within fifteen  days  of
 receipt  either  approve and file such contract or disapprove and return
 the contract to the state agency with [his] SUCH  COMPTROLLER'S  reasons
 therefor.
   4.  WHEN A STATE AGENCY DEEMS IT NECESSARY FOR A NOT-FOR-PROFIT ORGAN-
 IZATION TO COMMENCE THE PROVISION OF SERVICES PRIOR TO FULL EXECUTION OF
 A NEW, RENEWAL, OR EXTENSION CONTRACT AND ISSUES A WRITTEN DIRECTIVE  TO
 THE  NOT-FOR-PROFIT  ORGANIZATION  REQUESTING  THE  COMMENCEMENT OF SUCH
 SERVICES, THE WRITTEN DIRECTIVE SHALL PROVIDE A SCHEDULE  AND  PROCEDURE
 FOR   THE  NOT-FOR-PROFIT  ORGANIZATION  TO  RECEIVE  PAYMENT  FOR  WORK
 PERFORMED, INCLUDING A COMMENCEMENT DATE FOR  SERVICES  THAT  THE  STATE
 AGENCY  IS  REQUESTING,  A SCHEDULE AND PROCEDURE FOR THE NOT-FOR-PROFIT
 ORGANIZATION TO SUBMIT INVOICES TO THE STATE AGENCY FOR WORK  PERFORMED,
 AND  A  SCHEDULE  UNDER WHICH THE NOT-FOR-PROFIT ORGANIZATION CAN EXPECT
 PAYMENT FROM THE STATE AGENCY.
   § 3. Subdivisions 1 and 4 of section 179-z of the state  finance  law,
 as  added  by  chapter  166  of  the laws of 1991, are amended and a new
 subdivision 5 is added to read as follows:
   1. The state comptroller is authorized to provide loans from the  not-
 for-profit  short-term  revolving loan fund established by section nine-
 ty-seven-jj of  this  chapter  to  any  not-for-profit  organization  in
 receipt  of  a  written  directive  from a state agency. The state comp-
 troller may provide such a loan to a  not-for-profit  organization  upon
 receipt of a written agreement providing reasonable assurances of repay-
 ment  that  is satisfactory to the comptroller. Such loan shall not bear
 interest and repayment of such loan may be prorated over the term of the
 expected or renewal contract, provided the term of  the  loan  does  not
 exceed one year. The amount of each such loan shall not exceed [one-half
 of the first quarter] THE FULL payment of the subject contract.
   4.  Any not-for-profit organization receiving a loan from the not-for-
 profit short-term revolving loan fund shall be  ineligible  [to  receive
 interest  from a state agency, notwithstanding the provisions of section
 one hundred seventy-nine-v of this article and shall be  ineligible]  to
 receive  advance payments FOR THE AMOUNT THAT THEY RECEIVED IN THE LOAN,
 notwithstanding section one hundred seventy-nine-u of this article.
   5. INSTRUCTIONS ON HOW TO ACCESS THE NOT-FOR-PROFIT SHORT-TERM REVOLV-
 ING LOAN FUND SHALL BE PROVIDED  TO  EVERY  NOT-FOR-PROFIT  ORGANIZATION
 THAT  RECEIVES A WRITTEN DIRECTIVE, CONTRACT, OR RENEWAL CONTRACT FROM A
 STATE AGENCY. SUCH INSTRUCTIONS SHALL ALSO BE POSTED  IN  A  CONSPICUOUS
 MANNER  ON  THE WEBSITES OF THE STATE COMPTROLLER AND THE NEW YORK STATE
 NONPROFIT UNIT.
   § 4. Section 179-aa of the state finance law, as  amended  by  chapter
 672 of the laws of 2019, is amended to read as follows:
 S. 9761                             3
 
   §  179-aa.  Advisory committee. There is hereby established a not-for-
 profit contracting advisory  committee.  The  advisory  committee  shall
 consist  of sixteen members which shall include eight appointed members,
 four to be appointed by the governor who  shall  be  representatives  of
 not-for-profit  organizations  providing  services in the state, and two
 each to be appointed by the governor upon recommendation of  the  tempo-
 rary  president  of the senate and speaker of the assembly, and eight ex
 officio members of the committee, one each designated from the  division
 of  the  budget,  the  department  of law, the office of the state comp-
 troller, and the education department. The governor shall also designate
 four members from among the following agencies: the department of state,
 the office of children and family services, the office of temporary  and
 disability  assistance,  the  department of health, the office of mental
 hygiene, the office for people with developmental disabilities, and  the
 department  of labor. The governor shall designate an appointee to serve
 as chair of the committee. The advisory committee shall  meet  at  least
 quarterly  and  [upon its own initiative may] SHALL:  comment and report
 on the implementation and operation  of  the  not-for-profit  short-term
 revolving  loan  fund;  advise  the  governor, comptroller, LEGISLATURE,
 ATTORNEY GENERAL and state agencies on the implementation and  operation
 of  this  article; evaluate the benefits of requiring all state agencies
 to use standard contract language  and  the  extent  to  which  standard
 language  may  be  effectively included in contracts with not-for-profit
 organizations; EVALUATE AND PROVIDE  FEEDBACK  ON  IMPROVEMENTS  TO  THE
 STATEWIDE  FINANCIAL SYSTEM; review annually the report of the office of
 the state comptroller made pursuant to section one hundred seventy-nine-
 bb of this article; and propose any legislation they deem  necessary  to
 improve  the  fund  and  this article. The committee shall report to the
 COMPTROLLER'S OFFICE, THE OFFICE OF THE ATTORNEY GENERAL,  THE  governor
 and  the  legislature  with recommendations on improving the contracting
 procedures with not-for-profit organizations which receive  state  funds
 through  the  intermediary of municipalities.  Such reports shall be due
 annually not later than December first, AND SHALL BE MADE  AVAILABLE  TO
 THE  GENERAL  PUBLIC,  INCLUDING A CONSPICUOUS POSTING ON THE WEBSITE OF
 THE NEW YORK STATE NONPROFIT UNIT.
   § 5. Paragraphs (a) and (e) of subdivision  2  and  subdivision  3  of
 section 179-f of the state finance law, paragraphs (a) and (e) of subdi-
 vision  2 as amended by chapter 36 of the laws of 2016 and subdivision 3
 as amended by chapter 568 of the laws of 2015, are amended  to  read  as
 follows:
   (a)  the  state  comptroller  in the course of [his or her] SUCH COMP-
 TROLLER'S audit determines that there is  reasonable  cause  to  believe
 that payment may not properly be due, in whole or in part;
   (e) 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, EXCEPT THAT WHERE THE CONTRACTOR PRESENTS AN
 INVOICE OF A SUBCONTRACTOR AS PROOF OF THE COST AND MAY PAY  SUBCONTRAC-
 TORS  UPON  RECEIPT  OF PAYMENT ON THE INVOICE OR VOUCHER BY THE AGENCY,
 PROOF OF SUCH PAYMENT BY THE CONTRACTOR TO THE  SUBCONTRACTOR  SHALL  BE
 PROVIDED BY THE CONTRACTOR TO THE STATE AGENCY WITHIN THIRTY DAYS OF THE
 RECEIPT OF THE VOUCHER PAYMENT;
   3. Each state agency shall have fifteen calendar days after receipt of
 an  invoice  by the state agency at its designated payment office, or in
 the case of an invoice received from a small  business,  seven  calendar
 days,  to notify the contractor of (a) MATERIAL defects in the delivered
 goods, property, or services, (b) MATERIAL defects in  the  invoice,  or
 S. 9761                             4
 
 (c)  suspected  improprieties  of  any kind[; and the]. THE existence of
 such MATERIAL defects or improprieties shall [prevent  the  commencement
 of]  PAUSE  THE  CALCULATION OF the time period specified in subdivision
 two  of  this  section UNTIL SUCH MATERIAL DEFECTS OR IMPROPRIETIES HAVE
 BEEN CORRECTED. [When a state agency fails to  notify  a  contractor  of
 such defects or suspected improprieties within fifteen calendar days, or
 seven calendar days if such contractor is a small business, of receiving
 the  invoice,  the  number  of days allowed for payment of the corrected
 proper invoice will be  reduced  by  the  number  of  days  between  the
 fifteenth day, or seventh day if payment of such proper invoice is for a
 small  business,  and  the  day that notification was transmitted to the
 contractor.] IF THE AGENCY NOTIFIES THE CONTRACTOR OF A MATERIAL  DEFECT
 OR  IMPROPRIETY  THAT  WAS  PRESENT  IN  THE  ORIGINAL INVOICE AFTER THE
 INITIAL FIFTEEN CALENDAR DAYS  FROM  WHEN  THE  INVOICE  WAS  ORIGINALLY
 SUBMITTED,  THEN  THE  TIME  PERIOD SPECIFIED IN SUBDIVISION TWO OF THIS
 SECTION SHALL CONTINUE TO RUN AND SHALL NOT BE AFFECTED BY SUCH  NOTIFI-
 CATION.  If  the  state  agency,  in  such  situations, fails to provide
 reasonable grounds for its contention that a MATERIAL defect  or  impro-
 priety  exists,  the  required payment date shall be calculated from the
 date of receipt of an invoice. SCRIVENER'S  ERRORS  OR  ROUNDING  ERRORS
 THAT  RESULT IN A VARIANCE OF LESS THAN ONE HUNDRED DOLLARS SHALL NOT BE
 CONSIDERED MATERIAL DEFECTS FOR THE PURPOSES OF THIS SECTION.
   § 6. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.

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Senate Bill S9761

Sponsored By

Current Bill Status - In Senate Committee Procurement And Contracts Committee

Actions

2025-S9761 (ACTIVE) - Details

2025-S9761 (ACTIVE) - Summary

2025-S9761 (ACTIVE) - Sponsor Memo

2025-S9761 (ACTIVE) - Bill Text download pdf

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Sponsored By

Shelley B. Mayer

Current Bill Status - In Senate Committee Procurement And Contracts Committee

Actions

2025-S9761 (ACTIVE) - Details

2025-S9761 (ACTIVE) - Summary

2025-S9761 (ACTIVE) - Sponsor Memo

2025-S9761 (ACTIVE) - Bill Text download pdf

Comments