2023 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.