Requires contractors receiving public funds to pay amounts owed to small businesses and minority-owned business enterprises within seven days of receipt of payment from state agencies.
STATE OF NEW YORK
________________________________________________________________________
5491
2025-2026 Regular Sessions
IN ASSEMBLY
February 14, 2025
___________
Introduced by M. of A. BICHOTTE HERMELYN, RAGA -- read once and referred
to the Committee on Governmental Operations
AN ACT to amend the state finance law, in relation to providing for
prompt payment by contractors receiving public funds of amounts owed
to small businesses and minority-owned business enterprises
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The state finance law is amended by adding a new section
2 149 to read as follows:
3 § 149. Payments by contractors to small businesses and minority-owned
4 business enterprise subcontractors. 1. For the purposes of this section:
5 (a) "Covered project" means a project which is paid for in whole or in
6 part out of public funds as such term is defined in this section where
7 the amount of all such public funds, when aggregated, is at least thirty
8 percent of the total project costs and where such project costs are over
9 five million dollars.
10 (b) "Paid for in whole or in part out of public funds" means any of
11 the following:
12 (i) the payment of money, by a public entity, or a third party acting
13 on behalf of and for the benefit of a public entity, directly to or on
14 behalf of the contractor, subcontractor, developer or owner that is not
15 subject to repayment; or
16 (ii) the savings achieved from fees, rents, interest rates, or other
17 loan costs, or insurance costs that are lower than market rate costs;
18 savings from reduced taxes as a result of tax credits, tax abatements,
19 tax exemptions or tax increment financing; savings from payments in lieu
20 of taxes; and any other savings from reduced, waived, or forgiven costs
21 that would have otherwise been at a higher or market rate but for the
22 involvement of the public entity.
23 (c) "Contract" means an enforceable agreement entered into by a
24 contractor and a subcontractor.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD03817-01-5
A. 5491 2
1 (d) "Contractor" means any person, partnership, firm, corporation, or
2 association:
3 (i) selling materials, equipment, or supplies or leasing property or
4 equipment to a state agency;
5 (ii) constructing, reconstructing, rehabilitating, or repairing build-
6 ings or highways for, or on behalf of, a state agency; or
7 (iii) rendering or providing services pursuant to a contract with a
8 state agency.
9 (e) "Subcontractor" means a person engaged by a contractor or another
10 subcontractor to perform a portion of the contractor's obligations under
11 a contract.
12 (f) "Small business concern" or "small business" means a business
13 which is resident in this state, independently owned and operated, not
14 dominant in its field and employs one hundred or less persons.
15 (g) "Minority-owned business enterprise" has the meaning set forth in
16 subdivision seven of section three hundred ten of the executive law.
17 2. Within seven calendar days of the receipt of any payment from state
18 agencies, the contractor receiving payment for a covered project shall
19 pay each of their small business and minority-owned business enterprise
20 contractors and/or subcontractors the proceeds from the payment repres-
21 enting the value of the work performed and/or furnished by the subcon-
22 tractor and reflecting the percentage of the subcontractor's work
23 completed or the supplied in the requisition approved by the owner and
24 based upon the actual value of the subcontract or purchase order less an
25 amount necessary to satisfy any claims, liens or judgments against the
26 subcontractor or which have not been suitably discharged and less any
27 retained amount as hereafter described. The contractor receiving payment
28 for a covered project shall also generate invoices no later than seven
29 days of date of service. Invoice service period and date of payment from
30 receipt of undisputed invoice should not exceed thirty days. Failure by
31 the contractor to make any payment, including any remaining amounts of
32 the contract balance or generate invoices no later than seven days of
33 date of service as hereinafter described, to any small business or
34 minority-owned business enterprise subcontractor or within seven calen-
35 dar days of the receipt of any payment from state agencies shall result
36 in the commencement and accrual of interest on amounts due to such
37 subcontractor or for the period beginning on the day immediately follow-
38 ing the expiration of such seven calendar day period and ending on the
39 date on which payment is made by the contractor to such subcontractor.
40 Such interest shall be the sole responsibility of the contractor, and
41 shall be paid at the rate of interest in effect on the date payment is
42 made by the contractor.
43 § 2. This act shall take effect immediately.
