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This entry was published on 2014-09-22
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SECTION 18
Interest and collection fees assessed on debts owed to the state
State Finance (STF) CHAPTER 56, ARTICLE 2
§ 18. Interest and collection fees assessed on debts owed to the
state. 1. As used in this section: (a) "state agency" shall mean any
state department, board, bureau, division, commission, committee, public
authority, public benefit corporation, council, office, or other
governmental entity performing a governmental or proprietary function
for the state; (b) "debt" shall mean any liquidated sum due and owing
any state agency which has accrued pursuant to law or through contract,
subrogation, tort or other cause of action, except a liability resulting
from taxes or other impositions administered by the state commissioner
of taxation and finance, regardless of whether there is an outstanding
judgment for that sum; (c) "debtor" shall mean any individual, business,
or other entity, which is not a state agency, municipal corporation or
district corporation, having a debt with any state agency; (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
debtor, together with late payment charges and interest, less any
payments made by or on behalf of the debtor.

2. For the purposes of this section, a state agency shall mail a dated
billing invoice or notice 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. Unless provided otherwise by contract, statute or regulation, a
debtor owing a debt to any state agency shall pay such debt on or before
the thirtieth day following such debtor's receipt of any billing invoice
or notice sent by the state agency that such debt is due and owing and
that failure to make timely payment, as stated in the billing invoice or
notice, will result in the assessment of interest or a late payment
charge and may result in a charge to cover the cost of processing,
handling, and collecting such debt.

4. Unless provided otherwise by contract, statute or regulation, a
debtor that fails to make payment of a debt within the period set forth
in subdivision three of this section shall pay, in addition to the
amount of debt, the greater of: (a) 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; or (b) a late payment
charge of ten dollars. For the purposes of this section, the
underpayment 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. With respect to specific classes of debt collected by
a state agency, the director of the budget or official of a state agency
so designated by the director of the budget may approve the assessment
of interest or late payment charges at a date later than the thirtieth
day following such debtor's receipt of any billing invoice or notice
sent by the state agency.

5. In addition to the charges referred to in subdivision four of this
section, and unless provided otherwise by contract, statute or
regulation, a debtor that fails to make payment of a debt subject to
this section within ninety days of receipt by the debtor of the first
billing invoice or notice 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. 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
and shall be collected by a state agency when such agency deems
collection to be administratively practical and cost-effective. Any
collection fee charges assessed pursuant to this section shall be paid
upon notice and demand and shall be collected by a state agency when
such agency deems collection to be administratively practical and
cost-effective. In any action brought by or on behalf of a state agency
to recover an outstanding debt, a demand for collection fee charges may
be set forth in the statement of damages sought.

7. The state 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
satisfied in a timely manner.

9. All contracts entered into or any regulation promulgated on or
after the effective date of this section which waives 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 must be approved by the state division of
the budget.

10. Every state agency to which this section is applicable is
authorized to enter into written agreements with any debtor under which
such debtor 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
state agency determines that such agreement will facilitate collection
of such liability. Provided further, that where such state agency
determines that immediate collection of the debt would jeopardize the
debtor's fiscal viability and thereby pose a hardship to the public,
such agency shall offer to enter into a written agreement to temporarily
defer collection of the debt, collect the debt on an installment basis,
or make other reasonable arrangements to reduce such hardship on the
public of collecting the debt.