NY State Fin L § 179-F (2021)
2021 New York Laws STF - State Finance Article 11-A - Interest Payments on Certain Amounts Owed by State 179-F - Determination of Eligibility for Payment of Interest on Amounts Owed to Contractors.

§  179-f.  Determination  of  eligibility  for  payment of interest on amounts owed to contractors. 1. Each state agency which is  required  to make  a  payment  from state funds pursuant to a contract and which does not make such contract payment by the required payment date  shall  make an interest payment to the contractor 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 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,  provided,  however,  that  for  a  small  business  the required  payment  date  shall be fifteen calendar days, excluding legal holidays, absent a showing by the contracting  agency  of  circumstances beyond its control, provided that the small business submits its invoice electronically,  in  conformance with the policies and procedures of the accounting and financial  management  system  of  state  government  and identifies  that it is seeking expedited payment as a small business, 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 or her 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) a proper invoice must be examined by the federal government  prior to payment;  (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;  (f)  the  required  payment  date  is  modified  in  accordance   with subdivision three of this section; or  (g)  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 (e) or (g) of this subdivision shall extend  the  required payment date by an equal period of time, provided, however, that for small businesses, the required payment date  shall  be  fifteen  calendar  days, excluding legal holidays, after such conditions have  been  satisfied  or  rectified,  and  provided  further  that  all reasonable  and practicable efforts shall be taken to satisfy or rectify such conditions as soon as possible.   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) defects in the delivered goods, property, or services, (b) defects in  the  invoice,  or  (c)  suspected improprieties  of  any  kind;  and  the  existence  of  such  defects or improprieties  shall  prevent  the  commencement  of  the  time   period specified  in subdivision two of this section. 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 state agency, in such  situations, fails  to provide reasonable grounds for its contention that a defect or impropriety exists, the required payment date shall be  calculated  from the date of receipt of an invoice.   4.  Notwithstanding  any  provision  of  the public service law or any tariffs promulgated pursuant to that law to the contrary, the provisions of this article shall provide the sole basis for determining and  making interest  payments  on  invoices  submitted by public utilities to state agencies.   5. A proper invoice submitted by the contractor shall be  required  to initiate  any  payment,  except  where  the  contract  provides that the contractor will be paid at predetermined  intervals  without  having  to submit  an  invoice  for  each such scheduled payment, in which case the state agency  responsible  for  making  the  purchase  shall  submit  an approvable  voucher to the state comptroller for the payment that is due and, for the purposes of determining eligibility for payment of interest and  subject  to  the  exception  and  time-to-rectify   provisions   of subdivision  two of this section, the required payment date shall be the payment due date specified in accordance with the contract.   6. As used in this section, "small business"  shall  mean  a  business whose  primary place of business is in New York state, has a significant business presence in the state, is independently owned and operated, not dominant in its field, and employs no more than two hundred employees at the time of payment. The small business shall, upon request, provide the contracting entity with sufficient documentation to reflect and  confirm its status as a small business.