S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5491
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             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:
 
   Section 1. The state finance law is amended by adding  a  new  section
 149 to read as follows:
   §  149. PAYMENTS BY CONTRACTORS TO SMALL BUSINESSES AND MINORITY-OWNED
 BUSINESS ENTERPRISE SUBCONTRACTORS. 1. FOR THE PURPOSES OF THIS SECTION:
   (A) "COVERED PROJECT" MEANS A PROJECT WHICH IS PAID FOR IN WHOLE OR IN
 PART OUT OF PUBLIC FUNDS AS SUCH TERM IS DEFINED IN THIS  SECTION  WHERE
 THE AMOUNT OF ALL SUCH PUBLIC FUNDS, WHEN AGGREGATED, IS AT LEAST THIRTY
 PERCENT OF THE TOTAL PROJECT COSTS AND WHERE SUCH PROJECT COSTS ARE OVER
 FIVE MILLION DOLLARS.
   (B)  "PAID  FOR  IN WHOLE OR IN PART OUT OF PUBLIC FUNDS" MEANS ANY OF
 THE FOLLOWING:
   (I) THE PAYMENT OF MONEY, BY A PUBLIC ENTITY, OR A THIRD PARTY  ACTING
 ON  BEHALF  OF AND FOR THE BENEFIT OF A PUBLIC ENTITY, DIRECTLY TO OR ON
 BEHALF OF THE CONTRACTOR, SUBCONTRACTOR, DEVELOPER OR OWNER THAT IS  NOT
 SUBJECT TO REPAYMENT; OR
   (II)  THE  SAVINGS ACHIEVED FROM FEES, RENTS, INTEREST RATES, OR OTHER
 LOAN COSTS, OR INSURANCE COSTS THAT ARE LOWER THAN  MARKET  RATE  COSTS;
 SAVINGS  FROM  REDUCED TAXES AS A RESULT OF TAX CREDITS, TAX ABATEMENTS,
 TAX EXEMPTIONS OR TAX INCREMENT FINANCING; SAVINGS FROM PAYMENTS IN LIEU
 OF TAXES; AND ANY OTHER SAVINGS FROM REDUCED, WAIVED, OR FORGIVEN  COSTS
 THAT  WOULD  HAVE  OTHERWISE BEEN AT A HIGHER OR MARKET RATE BUT FOR THE
 INVOLVEMENT OF THE PUBLIC ENTITY.
   (C) "CONTRACT" MEANS  AN  ENFORCEABLE  AGREEMENT  ENTERED  INTO  BY  A
 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
 
   (D)  "CONTRACTOR" MEANS ANY PERSON, PARTNERSHIP, FIRM, CORPORATION, OR
 ASSOCIATION:
   (I)  SELLING  MATERIALS, EQUIPMENT, OR SUPPLIES OR LEASING PROPERTY OR
 EQUIPMENT TO A STATE AGENCY;
   (II) CONSTRUCTING, RECONSTRUCTING, REHABILITATING, OR REPAIRING BUILD-
 INGS OR HIGHWAYS FOR, OR ON BEHALF OF, A STATE AGENCY; OR
   (III) RENDERING OR PROVIDING SERVICES PURSUANT TO A  CONTRACT  WITH  A
 STATE AGENCY.
   (E)  "SUBCONTRACTOR" MEANS A PERSON ENGAGED BY A CONTRACTOR OR ANOTHER
 SUBCONTRACTOR TO PERFORM A PORTION OF THE CONTRACTOR'S OBLIGATIONS UNDER
 A CONTRACT.
   (F) "SMALL BUSINESS CONCERN" OR  "SMALL  BUSINESS"  MEANS  A  BUSINESS
 WHICH  IS  RESIDENT IN THIS STATE, INDEPENDENTLY OWNED AND OPERATED, NOT
 DOMINANT IN ITS FIELD AND EMPLOYS ONE HUNDRED OR LESS PERSONS.
   (G) "MINORITY-OWNED BUSINESS ENTERPRISE" HAS THE MEANING SET FORTH  IN
 SUBDIVISION SEVEN OF SECTION THREE HUNDRED TEN OF THE EXECUTIVE LAW.
   2. WITHIN SEVEN CALENDAR DAYS OF THE RECEIPT OF ANY PAYMENT FROM STATE
 AGENCIES,  THE  CONTRACTOR RECEIVING PAYMENT FOR A COVERED PROJECT SHALL
 PAY EACH OF THEIR SMALL BUSINESS AND MINORITY-OWNED BUSINESS  ENTERPRISE
 CONTRACTORS  AND/OR SUBCONTRACTORS THE PROCEEDS FROM THE PAYMENT REPRES-
 ENTING THE VALUE OF THE WORK PERFORMED AND/OR FURNISHED BY  THE  SUBCON-
 TRACTOR  AND  REFLECTING  THE  PERCENTAGE  OF  THE  SUBCONTRACTOR'S WORK
 COMPLETED OR THE SUPPLIED IN THE REQUISITION APPROVED BY THE  OWNER  AND
 BASED UPON THE ACTUAL VALUE OF THE SUBCONTRACT OR PURCHASE ORDER LESS AN
 AMOUNT  NECESSARY  TO SATISFY ANY CLAIMS, LIENS OR JUDGMENTS AGAINST THE
 SUBCONTRACTOR OR WHICH HAVE NOT BEEN SUITABLY DISCHARGED  AND  LESS  ANY
 RETAINED AMOUNT AS HEREAFTER DESCRIBED. THE CONTRACTOR RECEIVING PAYMENT
 FOR  A  COVERED PROJECT SHALL ALSO GENERATE INVOICES NO LATER THAN SEVEN
 DAYS OF DATE OF SERVICE. INVOICE SERVICE PERIOD AND DATE OF PAYMENT FROM
 RECEIPT OF UNDISPUTED INVOICE SHOULD NOT EXCEED THIRTY DAYS. FAILURE  BY
 THE  CONTRACTOR  TO MAKE ANY PAYMENT, INCLUDING ANY REMAINING AMOUNTS OF
 THE CONTRACT BALANCE OR GENERATE INVOICES NO LATER THAN  SEVEN  DAYS  OF
 DATE  OF  SERVICE  AS  HEREINAFTER  DESCRIBED,  TO ANY SMALL BUSINESS OR
 MINORITY-OWNED BUSINESS ENTERPRISE SUBCONTRACTOR OR WITHIN SEVEN  CALEN-
 DAR  DAYS OF THE RECEIPT OF ANY PAYMENT FROM STATE AGENCIES SHALL RESULT
 IN THE COMMENCEMENT AND ACCRUAL OF  INTEREST  ON  AMOUNTS  DUE  TO  SUCH
 SUBCONTRACTOR OR FOR THE PERIOD BEGINNING ON THE DAY IMMEDIATELY FOLLOW-
 ING  THE  EXPIRATION OF SUCH SEVEN CALENDAR DAY PERIOD AND ENDING ON THE
 DATE ON WHICH PAYMENT IS MADE BY THE CONTRACTOR TO  SUCH  SUBCONTRACTOR.
 SUCH  INTEREST  SHALL  BE THE SOLE RESPONSIBILITY OF THE CONTRACTOR, AND
 SHALL BE PAID AT THE RATE OF INTEREST IN EFFECT ON THE DATE  PAYMENT  IS
 MADE BY THE CONTRACTOR.
   § 2. This act shall take effect immediately.