Current through Register Vol. 46, No. 12, March 20, 2024
(a)
(1) A not-for-profit organization that
provides services to a State agency pursuant to a written directive prior to
the date that the contract for such services has been fully executed, shall,
once such contract has been approved and become fully executed, be entitled to
interest in accordance with, and to the extent authorized by, this section on
those moneys that would be due under the terms of a contract or a renewal
contract prior to the date on which the contract became fully
executed.
(2) For purposes of this
section, a State agency shall be deemed to have issued a written directive
where:
(i) with respect to a renewal contract
it has provided notice to the not-for-profit organization of its intent to
renew the contract which shall include the transmission of a proposed renewal
agreement to the not-for-profit organization; or
(ii) with respect to new contracts, it has
provided the not-for-profit organization with a proposed contract containing a
start date, in which case such start date shall be deemed the date of the
written directive.
(b) A not-for-profit organization that has
borrowed funds to provide services pursuant to a written directive may receive
interest under this section where the not-for-profit organization has:
(1) been denied an advance payment pursuant
to section
22.6
of this Part; and
(2) did not
obtain a loan from the Not-For-Profit Short Term Revolving Loan Fund.
(c) A not-for-profit organization
may not receive interest payments pursuant to this section where the
not-for-profit organization received an advance payment pursuant to section
22.6
of this Part, provided however that if the contract has not been fully executed
at the end of the period covered by such advance payment, the not-for-profit
organization shall be eligible for interest payments pursuant to this section
in respect to services performed after such period; or
(d)
(1)
Except as provided in paragraph (2) of this subdivision, any not-for-profit
organization eligible to receive an interest payment pursuant to subdivision
(a) or (b) of this section shall receive such interest payments at a rate equal
to the rate set by the Commissioner of Taxation and Finance for corporation
taxes pursuant to paragraph l of subsection (e) of section
1096 of the Tax Law.
(2) A not-for-profit organization eligible to
receive interest pursuant to subdivision (b) of this section shall submit to
the State agency the interest rate at which it borrowed funds and such other
documentation as prescribed under subdivision 2 of 179-v of the State Finance
Law. Such not-for-profit organization shall receive interest pursuant to this
section at a rate of interest equal to the rate it is paying on such borrowed
funds, provided the State agency has approved of such rate and the comptroller
determines such rate is reasonable.
(e)
(1)
Interest shall be due a not-for-profit organization for each payment that would
have been due if the contract had been fully executed before the scheduled
commencement date. Interest shall be calculated for the period commencing 30
days after the end of each billing period as specified in the contract and
ending on the date payment is actually made, except where under the terms of
the contract the not-for-profit organization is entitled to a payment or
payments on specified dates without the submission of an invoice or voucher, in
which case interest shall run from each such specified date or dates. Interest
shall be calculated separately with respect to each payment due under the
contract. For purposes of this section, if a contract does not specify billing
periods or a payment schedule, it shall be presumed that the not-for-profit is
authorized to submit invoices or vouchers at the end of each month for a pro
rata portion of the total contract amount. The State agency is responsible for
calculating interest due and preparing a separate voucher to pay such interest
consistent with this section. A State agency may not deny interest to a
not-for-profit organization on the basis that it failed to submit invoices or
vouchers during the period prior to final execution of the contract. However,
where the not-for-profit fails to submit an invoice or voucher for such payment
by the 30th day after the date the contract became fully executed, no
additional interest shall accrue after such 30th day.
(2) Once a late contract is fully executed,
interest on any late payments due subsequent to the date the contract is fully
executed shall be made in accordance with the requirements of the article XI-A
of the State Finance Law which relates to the prompt payment of
contracts.
(f) Any
interest payments made pursuant to subdivision (a) or (b) of this section shall
be made from appropriations for State operations that are available for the
administrative programs for the State agency which contracted with the
not-for-profit organization. Interest payments shall not be made from amounts
appropriated for program purposes. Any interest payments made to a
not-for-profit organization shall not reduce the amount of money that otherwise
would be payable to the not-for-profit organization under the terms of the
contract.
(g) No interest shall be
payable pursuant to the provisions of this section with respect to any contract
or renewal contract where such contract is required to be approved by the
attorney general and the comptroller, but is never approved.
(h) No interest shall be payable under this
section where a State agency and a not-for-profit organization have entered
into an agreement under section 179-v subdivision (7) waiving interest, and the
comptroller has determined that the waiver of interest is warranted. If the
comptroller determines the waiver of interest is unwarranted the State agency
shall immediately submit for the comptroller's approval a voucher requesting
payment of interest to such not-for-profit organization. If such voucher is not
received within 30 days after the date of the comptroller's written
determination, the comptroller will calculate the amount of unpaid interest due
to the not-for-profit organization pursuant to section
179-v of the State Finance Law and this
Part, and pay such amount to the not-for-profit organization as a charge
against the agency's appropriations.
(i)
(1)
Interest payable pursuant to the provisions of this section shall be suspended
where the State agency has, in accordance with section
179-w of the State Finance Law, determined
that significant and substantive differences exist between the State agency and
the not-for-profit organization in the negotiation of a contract or renewal
contract or that the not-for-profit organization is not negotiating in good
faith; and the State agency has provided written notice of such determination
to the not-for-profit organization and the comptroller, as required by section
179-w.
(2) Interest shall be
suspended only for the period during which the State agency has determined that
the significant and substantive differences existed or the not-for-profit was
not negotiating in good faith. Any State agency that has made a determination
under paragraph (1) of this subdivision shall, when it submits the contract to
the comptroller for approval, provide notice to the comptroller and the
not-for-profit organization of the date on which the conditions that justified
the suspension of interest, ceased to exist.
(j) A determination that extenuating
circumstances exist pursuant to section 179-w shall not suspend the accrual of
interest unless the State agency also determines, and such determination is
approved by the comptroller, that the circumstances are unusual which warrant
the denial of interest as prescribed by section
22.4
of this Part.
(k) No State agency
shall be liable for interest payments under this section on contracts executed
pursuant to appropriations made in whole or in part for liabilities incurred in
a prior fiscal year that were awarded without the use of competitive
process.
