2006 New York Code - 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.