2023 New York Laws › PBA - Public Authorities › Article 9 - General Provisions › Title 4 - Contracts of Public Authorities › 2880 - Prompt Payment.

§  2880.  Prompt payment. 1. Definitions. As used in this section, the
following terms shall have the following  meanings  unless  the  context
shall indicate another or different meaning or intent:
(a)  "Corporation"  means  every  public  authority and public benefit
corporation a majority of the  governing  board  members  of  which  are
either  appointed by the governor or serve as members by virtue of their
service as an officer of a state department, division, agency, board  or
bureau, or combination thereof.
(b)  "Contract"  means an enforceable agreement entered into between a
corporation and a contractor.
(c) "Contractor" means any person, partnership, private corporation or
association:
(i) selling materials, equipment, or supplies or leasing  property  or
equipment to a corporation;
(ii)   constructing,   reconstructing,   rehabilitating  or  repairing
buildings, highways  or  other  improvements  for  or  on  behalf  of  a
corporation; or
(iii)  rendering  or providing services to a corporation pursuant to a
contract.
(d) "Designated payment office" means the  office  designated  by  the
corporation  to  which  a  proper  invoice  is  to  be  submitted  by  a
contractor.
(e) "Prompt payment" means payment of  a  debt  due  and  owing  by  a
corporation  before  interest  accrues  thereon  pursuant to a statement
adopted in accordance with this section.
(f) "Proper invoice" means a written request for  a  contract  payment
that  is  submitted by a contractor setting forth the description, price
and quantity of goods, property, or services delivered or  rendered,  in
such  form  and  supported by such other substantiating documentation as
the corporation may reasonably require.
(g) "Receipt of an invoice" means (i)  the  date  on  which  a  proper
invoice  is  actually received in the designated payment office, or (ii)
the  date  on  which  the  corporation  receives  the  purchased  goods,
property, or services covered by the proper invoice, whichever is later.
(h)  "Set-off" means the reduction by the corporation of a payment due
to a contractor by an amount equal to the amount of  an  unpaid  legally
enforceable debt owed by the contractor to the corporation.
(i)   "Statement"  means  the  rules  and  regulations  adopted  by  a
corporation  pursuant  to  subdivision  two  of  this  section  and  any
amendments thereto.
2. Statement adoption. Within one hundred twenty days after either the
effective  date of this section or the beginning of the existence of the
respective corporation,  whichever  is  later,  each  corporation  shall
promulgate rules and regulations detailing its prompt payment policy.
3.  Statement  contents.  (a)  The statement shall include, but not be
limited to, a reference to this section and the following for each  type
or category of contract as determined by the corporation:
(i)  a  description of the procedure to be followed by a contractor in
requesting payment under a contract;
(ii) a schedule setting forth the time in which the  corporation  will
make prompt payment under a contract;
(iii)  a declaration that interest will be paid when prompt payment is
not made and a statement of the rate at which such interest will accrue;
(iv) a list of the sources of funds available to  the  corporation  to
pay an interest penalty on each type or category of contract; and
(v)  a  list  of  facts  and  conditions  which  in the opinion of the
corporation's governing body reasonably justify extension of the date by
which contract payment must be made in order for the corporation not  to

become liable for interest payments in accordance with subdivision seven
of this section.
(b)  Such  facts  and conditions may include, but shall not be limited
to, the following when:
(i) 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;
(ii)   the   necessary  state  government  appropriation  required  to
authorize payment has yet to be enacted;
(iii) a proper invoice must be  examined  by  the  federal  government
prior to payment; and
(iv)  such  date by which contract payment must be made is modified in
accordance with subdivision eight of this section.
4. Statement amendment. Each corporation shall have the power to amend
its statement by promulgating amended rules and regulations.
5. Statement filing. Each corporation shall, within thirty days  after
the  statement's adoption, file a copy of such statement, and amendments
thereto, with the state comptroller, the state director of  the  budget,
the  chairman  of  the senate finance committee, and the chairman of the
assembly ways and means committee.
6. Contract incorporation. The statement in  effect  at  the  time  of
creation  of  a  contract is hereby incorporated into and made a part of
that contract.
7.  Interest  eligibility  and  computation.  (a)  In  order  for  the
corporation  not  to  be  liable  for  the payment of interest, contract
payment must be  made  within  thirty  calendar  days,  excluding  legal
holidays, after the receipt of an invoice for the amount of the contract
payment  due;  except when the contract payment is of the type where the
facts and conditions are as defined  pursuant  to  subparagraph  (v)  of
paragraph  (a)  of  subdivision three of this section. Any time taken to
satisfy  or  rectify  any  of  the  facts  or  conditions  described  in
subdivision  three  (except  for  subparagraph  (iv) of paragraph (b) of
subdivision three) of this  section  shall  extend  the  date  by  which
contract payment must be made in order for the corporation not to become
liable for interest payments by an equal period of time.
(b)  A  corporation,  which  must  process  payments through the state
department of audit and control, the department of taxation and finance,
or some other entity not under the corporation's control, shall  not  be
liable for interest due to the process time taken by such entity.
(c)  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 pursuant to  subsection  (e)
of section one thousand ninety-six of the tax law.
(d)  A  corporation  shall  not be liable for payment of interest when
such interest as computed pursuant to the provisions of paragraph (c) of
this subdivision is less than ten dollars.
8. Each corporation shall have fifteen calendar days after receipt  of
an invoice by the corporation at its designated payment office 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
seven  of  this section. When a corporation fails to notify a contractor
of such defects or suspected improprieties within fifteen calendar  days
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 and the day that notification was transmitted to the

contractor. If the corporation, in such  situations,  fails  to  provide
reasonable  grounds  for  its  contention  that  a defect or impropriety
exists, the date by which contract payment must be made in order for the
corporation  not  to  become  liable  for  interest  payments  shall  be
calculated from the date of receipt of an invoice.
9. Notwithstanding any provision of the  public  service  law  or  any
tariffs promulgated pursuant to that law to the contrary, the provisions
of  this section shall provide the sole basis for determining and making
interest  payments  on  invoices  submitted  by  public   utilities   to
corporations.
10.  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 and, for the  purposes
of  determining  eligibility  for payment of interest and subject to the
exception and time-to-rectify provisions of subdivisions three and seven
of this section, the date by which contract  payment  must  be  made  in
order  for  the  corporation  not to become liable for interest payments
shall be the payment due date specified in accordance with the contract.
11. Annual report. (a)  Each  corporation  shall  annually  prepare  a
report  on  the  scope  and  implementation of its prompt payment policy
which shall include, but not be limited to:
(i) A listing of the  types  or  categories  of  contracts  which  the
corporation  entered  into during the twelve month period covered by the
report, together with a brief indication of whether each  such  type  or
category  of  contract  was  subject  to the prompt payment requirements
promulgated by the corporation and, if not, why not;
(ii) The number and amounts of interest payments  made  for  contracts
arranged according to each such type or category;
(iii)  The  number of interest chargeable days and the total number of
days taken to process each late contract payment; and
(iv) A summary of  the  principal  reasons  that  such  late  payments
occurred.
(b)  Within  ninety days after the completion of its fiscal year, each
corporation shall file copies of the report required by paragraph (a) of
this subdivision with the state comptroller, the state director  of  the
budget,  the  chairman of the senate finance committee, and the chairman
of the assembly ways and means committee.
12. Public access. (a) Each corporation shall make  available  to  the
public,  upon a reasonable request therefor, copies of its statement and
annual report.
(b) Each contractor doing business with a corporation shall be given a
copy of that corporation's statement.
13. Inapplicability of section. The provisions of this  section  shall
not apply to payments due and owing by a corporation:
(a) under the eminent domain procedure law;
(b)  as  interest allowed on judgments rendered by a court pursuant to
any provision of law other than those contained in this section;
(c)  to  the  federal  government;  to  any  state   agency   or   its
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;
to any other public authority or public benefit corporation; or  to  its
employees  when  acting  in,  or  incidental to, their public employment
capacity;
(d) in situations where the corporation exercises a legally authorized
set-off against all or part of the payment due the contractor.
14. The provisions of this section shall not apply to  the  facilities
development corporation or the state university construction fund.
15.  Judicial review. Any determination made by a corporation pursuant
to this section which prevents the commencement of  the  time  in  which
interest  will  be  paid  shall  be  subject  to  judicial  review  in a
proceeding pursuant to article seventy-eight of the civil  practice  law
and  rules.  Such proceedings shall only be commenced in the absence, or
upon completion, of other review procedures specified in the contract or
by regulation.
16. Court action or other legal  processes.  (a)  Notwithstanding  any
other provisions of law to the contrary, the liability of a corporation,
insofar  as  incurring  an  obligation  to make an interest payment to a
contractor pursuant to the terms of this section is concerned, shall not
extend beyond the date of a notice of intention to  file  a  claim,  the
date  of  a notice of a claim, or the date commencing a legal action for
the payment of such interest, whichever occurs first.
(b) With respect to the court action or other legal processes referred
to in  paragraph  (a)  of  this  subdivision,  any  interest  obligation
incurred  by  a corporation after the date specified therein pursuant to
any provision of law other than this  section  shall  be  determined  as
prescribed  by such separate provision of law, shall be paid as directed
by the court, and shall be paid from any source of funds  available  for
that purpose.