Relates to providing timely and up-front payments from the state to small not-for-profit corporations; enables the competitiveness of smaller not-for-profit corporations serving the state.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5650
SPONSOR: Zinerman TITLE OF BILL:
An act to amend the state finance law, in relation to providing timely
and up-front payments from the state to small not-for-profit corpo-
rations and enabling the competitiveness of smaller not-for-profit
corporations serving the state
PURPOSE OR GENERAL IDEA OF BILL:
This bill is designed to address the financial challenges faced by small
not-for-profit corporations in the State of New York. Nonprofit organ-
izations already bear a large financial hurdle, and the lack of timely
payments from the State only exacerbates this issue. This legislation
aims to bridge the gap between smaller not-for-profit corporations and
larger, better-capitalized ones by altering the structure and schedule
of payments from the state.
SUMMARY OF PROVISIONS:
Section 1: Amendment to Section 179-e. Defines "Small not-for-profit
corporation" as having an annual budget of one million five hundred
thousand dollars or less.
Section 3: Amendment to Section 179-t
Subdivision 6: Requires the Attorney General to publish a list of eligi-
ble not-for-profit corporations based on compliance paperwork.
Allows for addendums for late submissions.
Subdivision 7: Mandates state agencies to disburse funds to small not-
for-profit corporations within sixty days after receiving funding.
Provides options for payment, including a single disbursement or alter-
native arrangements.
Allows corporations not receiving timely payments to petition the
contracting agency and, if necessary, take legal action.
Section 4: Effective Date
JUSTIFICATION:
This proposed legislation aims to address the pressing financial chal-
lenges faced by small not-for-profit corporations in the State of New
York. The legislative findings recognize the unique struggles of these
organizations in attracting talent, making timely payments, and covering
operating expenses, particularly in the context of the post-pandemic
economic landscape, inflation, and labor shortages. By amending
Sections 179-e and 179-t of the state finance law, the legislation seeks
to redefine and streamline the payment processes for small not-for-pro-
fit corporations. The inclusion of a defined threshold for "Small not-
for-profit corporation" ensures that the benefits of the amendments are
directed to organizations with limited financial resources. The
provisions in Section 3, Subdivision 7, are particularly designed to
expedite the disbursement of funds, offering flexibility in payment
options and recourse mechanisms for not-for-profit corporations facing
delays. This legislation is crucial for fostering a more supportive
financial environment for small not-for-profit corporations, enabling
them to adapt their budgets, make timely payments, and compete more
effectively with larger entities.
PRIOR LEGISLATIVE HISTORY:
2023-2024: A9317 Died in Committee
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
N/A
EFFECTIVE DATE:
This act shall take effect ninety days after it shall have become a law.
STATE OF NEW YORK
________________________________________________________________________
5650
2025-2026 Regular Sessions
IN ASSEMBLY
February 19, 2025
___________
Introduced by M. of A. ZINERMAN, BUTTENSCHON, WOERNER -- read once and
referred to the Committee on Governmental Operations
AN ACT to amend the state finance law, in relation to providing timely
and up-front payments from the state to small not-for-profit corpo-
rations and enabling the competitiveness of smaller not-for-profit
corporations serving the state
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Legislative findings. The Legislature acknowledges the New
2 York Council of Nonprofits' first State of the Sector and finds that
3 small not-for-profit corporations in the State of New York are struggl-
4 ing to attract new talent, make timely payments, and cover their annual
5 operating expenses, further exacerbated by financial difficulties stem-
6 ming from the shifting post-pandemic economic landscape. Inflation and
7 labor shortages have harmed the not-for-profit community in ways
8 disproportionate to the for-profit community. In particular, these
9 economic trends have harmed small not-for-profit corporations more
10 acutely than larger not-for-profit corporations.
11 The purpose of this legislation is to address that gap by altering the
12 structure and schedule of payments from the state to small not-for-pro-
13 fit corporations, helping them to better adapt their budgets and expend-
14 itures and compete more effectively with larger, better-capitalized
15 not-for-profit corporations who can more easily absorb large costs.
16 Uncertain budgeting for not-for-profit corporations results in less
17 action, unstable employment, less clarity with timelines, general stress
18 and anguish for employees, and more. Helping small not-for-profit corpo-
19 rations budget better will help the entire economy and society.
20 § 2. Section 179-e of the state finance law is amended by adding a new
21 subdivision 11 to read as follows:
22 11. "Small not-for-profit corporation" means any not-for-profit corpo-
23 ration, as defined by section one hundred two of the not-for-profit
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD09280-01-5
A. 5650 2
1 corporation law, whose annual budget is one million five hundred thou-
2 sand dollars or less.
3 § 3. Section 179-t of the state finance law is amended by adding two
4 new subdivisions 6 and 7 to read as follows:
5 6. Every calendar year, on or before January thirty-first, the attor-
6 ney general shall publish a list of not-for-profit corporations in good
7 standing with the state and eligible to receive funding from the state.
8 Such list shall be constructed based upon the compliance paperwork of
9 not-for-profit corporations submitted for the previous calendar year.
10 For not-for-profit corporations who submit their compliance paperwork
11 after January thirty-first and before April first, the attorney general
12 shall publish addendums to said list including not-for-profit corpo-
13 rations that are in good standing and eligible to receive funding from
14 the state. Any agency executing contract renewals for not-for-profit
15 corporations on such list shall not be required to submit said renewal
16 contract to the comptroller for review.
17 7. (a) Notwithstanding the time frame requirements set forth in this
18 section, a state agency administering a contract renewal with a small
19 not-for-profit corporation as defined in this article shall make best
20 efforts to ensure the disbursement of moneys to the small not-for-profit
21 corporation within sixty days after the agency receives the appropri-
22 ation or funding for the contract unless the agency receives the funding
23 more than sixty days before the effective date of the contract. If the
24 agency receives the applicable funding more than sixty days before the
25 effective date of the contract, the agency shall disburse the money to
26 the small not-for-profit corporation prior to the effective date of the
27 contract. The agency shall disburse the entire sum of money in a single
28 disbursement.
29 (b) A small not-for-profit corporation may opt not to receive funds in
30 a single disbursement by attaching a statement with their compliance
31 paperwork requesting payment under the provisions of this chapter which
32 would otherwise be applicable.
33 (c) Small not-for-profit corporations which do not receive their
34 contractual disbursements within the time frames provided by this subdi-
35 vision may petition the contracting agency to disburse any moneys owed
36 within twenty days of receipt of such petition. If the contracting agen-
37 cy has not disbursed such moneys within twenty days, the small not-for-
38 profit corporation affected may bring an article seventy-eight proceed-
39 ing in a court of competent jurisdiction to enforce such contract and
40 the provisions of this article.
41 § 4. This act shall take effect on the first of January next succeed-
42 ing the date on which it shall have become a law.
