What's happening
This bill requires state agencies to pay interest to county governments for late payments under contracts, similar to current contractor provisions.
Why it matters
Levels the financial playing field between counties and private contractors. by ensuring counties, like private businesses, are compensated for delays—helping local governments better manage cash flow and budgeting when state payments are late.
Reduces financial strain on county governments. that rely on timely state funds to provide essential services (such as social services, emergency response, or infrastructure), thus potentially minimizing service disruptions or the need for short-term borrowing.
Creates an incentive for state agencies to process payments promptly,. as accruing interest on late payments could increase state costs—potentially improving administrative efficiency and accountability in intergovernmental financial transactions.
Acknowledges counties as critical state partners. by formally recognizing their right to fair treatment in financial dealings with the state, which may strengthen state-local relationships and set a precedent for similar reforms with other local government entities.
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Who cares
Headline styles
Pay Counties On Time
Plain English, a few words. Used as the page title.
Sponsors
History
- Referred to finance
- Returned to senate
- Died in assembly
- Referred to governmental operations
- Delivered to assembly
- Passed senateVote 62–0
- Ordered to third reading cal.1379
- Committee discharged and committed to rules
- Referred to finance
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Pay Counties On Time
In Assembly Committee · Governmental Operations · Sponsor Kenneth Blankenbush
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
869
2017-2018 Regular Sessions
IN SENATE
January 5, 2017
Introduced by Sens. RITCHIE, CROCI, DeFRANCISCO, MARCHIONE, RANZENHOFER, SEWARD -- read twice and ordered printed, and when printed to be committed to the Committee on Finance
AN ACT to amend the state finance law, in relation to prompt payment to counties from the state
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision 1 of section 179-f of the state finance law, as amended by chapter 332 of the laws of 1989, is amended to read as follows:
1. Each state agency which is required to make a payment from state funds pursuant to a contract and which does not make such contract payment by the required payment date shall make an interest payment to the contractor or county government in accordance with this article, or other provisions of law, on the amount of the contract payment which is due, unless failure to make such contract payment is the result of a lien, attachment, or other legal process against the money due said contractor or county government, or unless the amount of the interest payment as computed in accordance with the provisions of section one hundred seventy-nine-g of this article is less than ten dollars. A pro rata share of such interest shall be paid by the contractor or subcontractor, as the case may be, to subcontractors and materialmen in a proportion equal to the percentage of their pro rata share of the contract payment. Such pro rata share of interest shall be due to such subcontractors and materialmen only for those payments which are not paid to such subcontractors and materialmen prior to the date upon which interest begins to accrue between the state agency and the contractor. Such pro rata share of interest shall be computed daily until such payments are made to the subcontractors and materialmen.
§ 2. This act shall take effect on the ninetieth day after it shall have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06836-01-7
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the state finance law, in relation to prompt payment to counties from the state
Purpose
To ensure that counties receive reimbursements from the State for mandated programs within a reasonable timeframe.
Summary
Section 1 amends subdivision 1 of section 179-f of the state finance law to add county governments to the state's prompt payment law.
Section 2 provides the effective date.
Justification
As counties across the State face increasing budget challenges in already difficult economic times, it is imperative that the legislature take action to ensure timely reimbursements for State mandated programs. At times, fiscal challenges at the State level lead to the delay in payment or withholding of reimbursement funds from the counties as a way to mitigate shortfalls for the State. Currently, payments from the state to a contractor or subcontractor under § 179-f of the Finance Law must be paid by the required payment date or are subject to interest payments. This legislation adds county governments to the entities requiring prompt payment under this section of the Finance Law, known as the Prompt Payment Law.
The Prompt Payment Law was enacted in 1995 at the bequest of private businesses and nonprofit agencies that contract with the state and where constantly subject to delayed payments. The law requires interest payments after a set deadline and also forces the state to pay interest on income tax refunds that are delayed more than 45 days after the April 15 due date. Interest rates are set by the Commissioner of Taxation and Finance, and currently range from 2 percent to 12.
It is essential that these provisions of the Prompt Payment Law apply to counties. Under the current law, counties must pay up front for mandated services while the State may delay payment for monies owed to counties. Some counties have turned to expensive borrowing to balance their books because of delays in State payments. St. Lawrence County recently announced it was borrowing up to $8.5 million, with interest charges nearing thousands of dollars, to help cover its annual expenses. Franklin County is also considering short-term borrowing, as it is owed $3.8 million by the state. Clinton County is owed $6.1 million.
If counties are late with payments they owe to the State, they have to pay interest. Analogously, the State should have to meet its obligations owed to counties or face interest payment consequences, just as it must do with private entities. While these payments remain unpaid local taxpayers are left footing the bill. The legislature must hold the State accountable for its owed payments and foster the financial wellbeing of our counties. The enactment of this legislation will achieve those dual objectives.
Legislative history
2015-2016: S332 - referred to finance/ A.5101- referred to governmental operations 2013-2014: S.3695 - referred to finance / A.4907 - referred to governmental operations 2011-2012: S.5909 - referred to finance / A.9519 - referred to governmental operations
Fiscal implications
None to the state.
Effective date
This act shall take effect ninety days after it shall have become a law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.