A 5491: 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 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.