Requires contractors receiving public funds to pay amounts owed to small businesses and minority-owned business enterprises within 10 days of receipt of an undisputed invoice generated by a small business, minority-owned business enterprise or vendor management service and managed service provider on behalf of the small business or minority-owned business enterprise.
STATE OF NEW YORK
________________________________________________________________________
5491--B
2025-2026 Regular Sessions
IN ASSEMBLY
February 14, 2025
___________
Introduced by M. of A. BICHOTTE HERMELYN, RAGA, GONZALEZ-ROJAS, HOOKS,
O'PHARROW, LEVENBERG, HYNDMAN, TAYLOR, NOVAKHOV, SANTABARBARA -- read
once and referred to the Committee on Governmental Operations --
committee discharged, bill amended, ordered reprinted as amended and
recommitted to said committee -- again reported from said committee
with amendments, ordered reprinted as amended and recommitted to said
committee
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. Prompt contracting and payments for small business and minori-
4 ty-owned business enterprise subcontractors. 1. For the purposes of this
5 section:
6 (a) "Covered project" shall mean a project which is paid for in whole
7 or in part out of public funds as such term is defined in this section
8 where the amount of all such public funds, when aggregated, is at least
9 thirty percent of the total project costs and where such project costs
10 are over twenty-five thousand dollars. "Covered project" shall not
11 include a project which entails constructing, reconstructing, rehabili-
12 tating, or repairing buildings or highways for, or on behalf of, a state
13 agency.
14 (b) "Paid for in whole or in part out of public funds" means any of
15 the following:
16 (i) the payment of money, by a public entity, or a third party acting
17 on behalf of and for the benefit of a public entity, directly to or on
18 behalf of the contractor, subcontractor, developer or owner that is not
19 subject to repayment; or
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD03817-04-5
A. 5491--B 2
1 (ii) the savings achieved from fees, rents, interest rates, or other
2 loan costs, or insurance costs that are lower than market rate costs;
3 savings from reduced taxes as a result of tax credits, tax abatements,
4 tax exemptions or tax increment financing; savings from payments in lieu
5 of taxes; and any other savings from reduced, waived, or forgiven costs
6 that would have otherwise been at a higher or market rate but for the
7 involvement of the public entity.
8 (c) "Contract" means an enforceable agreement entered into by a
9 contractor and a subcontractor.
10 (d) "Contractor" means any person, partnership, firm, corporation, or
11 association: (i) selling materials, equipment, or supplies or leasing
12 property or equipment to a state agency; or (ii) rendering or providing
13 services pursuant to a contract with a state agency. "Contractor" shall
14 not mean any person constructing, reconstructing, rehabilitating, or
15 repairing buildings or highways for, or on behalf of, a state agency.
16 (e) "Subcontractor" means a person engaged by a contractor or another
17 subcontractor to perform a portion of the contractor's obligations under
18 a contract. "Subcontractor" shall not include any person constructing,
19 reconstructing, rehabilitating, or repairing buildings or highways for,
20 or on behalf of, a state agency.
21 (f) "Small business concern" or "small business" means a business
22 which is resident in this state, independently owned and operated, not
23 dominant in its field and employs one hundred or less persons.
24 (g) "Minority-owned business enterprise" has the meaning set forth in
25 subdivision seven of section three hundred ten of the executive law.
26 (h) "Entity" means a public entity or third party acting on behalf of
27 and for the benefit of a public entity.
28 (i) "Public entity" means any organization, body, or institution that
29 operates on behalf of the government and is involved in a covered
30 project.
31 2. Upon receipt of an undisputed invoice generated by a small busi-
32 ness, minority-owned business enterprise or vendor management service
33 and managed service provider on behalf of the small business or minori-
34 ty-owned business enterprise for services rendered, the entity receiving
35 payment for a covered project shall issue payment no later than ten
36 business days from receipt of such invoice. Date of invoice service
37 period shall not exceed ten business days. Failure by the contractor to
38 make any payment, including any remaining amounts of the contract
39 balance to any small business or minority-owned business enterprise,
40 shall result in the commencement and accrual of interest on amounts due
41 to such subcontractors. Such interest shall be the sole responsibility
42 of the entity, and shall be paid at the rate of interest in effect on
43 the date payment is made by the entity.
44 § 2. This act shall take effect immediately.
