Clarifies the definition of the term liabilities with respect to the period for which an appropriation remains in full force and effect

Summary of provisions

Section one of the bill amends paragraph (c) of subdivision 3 of section 40 of the state finance law by clarifying that the term liability includes the value of contracts that were let, but not awarded, during the fiscal year.

Section two clarifies that the Department of Transportation has the authority to award contracts for highway construction or improvements, even if the appropriation for such work was made during the preceding fiscal year.

Section three clarifies that public authorities may award procurement contracts, even if the appropriation for such work was made during the preceding fiscal year.

Section four clarifies that the Office of General Services may award construction or improvement contracts, even if the appropriation for such work was made during the preceding fiscal year.

Section five clarifies that the State University Construction Fund may award procurement contracts, even if the appropriation for such work was made during the preceding fiscal year.

Section six states the effective date.

Justification

Section 40 of the State Finance Law outlines the timeframe for which appropriations included in the State budget remain in full force and effect and the date by which such appropriations shall lapse. Pursuant to subdivision 3 of such section, all appropriations made for any purpose currently cease to have force and effect - except for any liabilities already incurred at the close of the fiscal year. In the case of existing liabilities incurred pursuant to a capital projects appropriation, paragraph (c) of subdivision 3 provides that the final lapse date for such appropriations is the 15th of September following the close of the fiscal year. Thus, liabilities for capital projects

made pursuant to existing budget appropriations may continue to be paid out until September at the following fiscal year. However, current law provides no clear definition of the term "liabilities" as utilized in subdivision 3 of Section 40 of the State Finance Law. As a result 01 this ambiguity, it is unclear exactly what types of obligations may be construed as a liability against an existing capital projects budget appropriation. The provisions 01 this bill would clarify that liabil- ities shall include payments for work performed or materials furnished both during the fiscal year and in the timeframe prior to the official lapse of the capital projects appropriations under which such liabil- ities are made, and will include the value of contracts that have been let but are not yet awarded. By defining the liabilities that are to be included in the exception for capital projects, this bill provides clar- ity for both contractors and the state about which liabilities may be paid and which have officially lapsed.

Moreover, this legislation clarifies that public authorities and agen- cies, including DOT and OGS, may award contracts that were let during the preceding fiscal year. This is a logical clarification since the term liability includes the value 01 contracts that were let during the fiscal year, even if they were not awarded until sometime after April 1, but before September 15 of the following year.

Since April 1, 2010 projects that were put out to bid in the previous fiscal year have not been awarded by state agencies. This lack of award has created a backlog 01 over 200 projects worth over $1.1 billion In construction. In order to continue New York's economic recovery, these projects must be awarded immediately. By federal estimates, every $1 billion invested in construction projects creates 34,700 jobs.

Legislative history

New Bill.

Fiscal implications

The provisions of this bill would result in no additional costs to the State.

Effective date

Immediate and shall be deemed to have been in full force and effect on and after March 31, 2010.