§ 2880. Prompt payment. 1. Definitions. As used in this section, the
following terms shall have the following meanings unless the context
shall indicate another or different meaning or intent:

(a) "Corporation" means every public authority and public benefit
corporation a majority of the governing board members of which are
either appointed by the governor or serve as members by virtue of their
service as an officer of a state department, division, agency, board or
bureau, or combination thereof.

(b) "Contract" means an enforceable agreement entered into between a
corporation and a contractor.

(c) "Contractor" means any person, partnership, private corporation or
association:

(i) selling materials, equipment, or supplies or leasing property or
equipment to a corporation;

(ii) constructing, reconstructing, rehabilitating or repairing
buildings, highways or other improvements for or on behalf of a
corporation; or

(iii) rendering or providing services to a corporation pursuant to a
contract.

(d) "Designated payment office" means the office designated by the
corporation to which a proper invoice is to be submitted by a
contractor.

(e) "Prompt payment" means payment of a debt due and owing by a
corporation before interest accrues thereon pursuant to a statement
adopted in accordance with this section.

(f) "Proper invoice" means a written request for a contract payment
that is submitted by a contractor setting forth the description, price
and quantity of goods, property, or services delivered or rendered, in
such form and supported by such other substantiating documentation as
the corporation may reasonably require.

(g) "Receipt of an invoice" means (i) the date on which a proper
invoice is actually received in the designated payment office, or (ii)
the date on which the corporation receives the purchased goods,
property, or services covered by the proper invoice, whichever is later.

(h) "Set-off" means the reduction by the corporation of a payment due
to a contractor by an amount equal to the amount of an unpaid legally
enforceable debt owed by the contractor to the corporation.

(i) "Statement" means the rules and regulations adopted by a
corporation pursuant to subdivision two of this section and any
amendments thereto.

2. Statement adoption. Within one hundred twenty days after either the
effective date of this section or the beginning of the existence of the
respective corporation, whichever is later, each corporation shall
promulgate rules and regulations detailing its prompt payment policy.

3. Statement contents. (a) The statement shall include, but not be
limited to, a reference to this section and the following for each type
or category of contract as determined by the corporation:

(i) a description of the procedure to be followed by a contractor in
requesting payment under a contract;

(ii) a schedule setting forth the time in which the corporation will
make prompt payment under a contract;

(iii) a declaration that interest will be paid when prompt payment is
not made and a statement of the rate at which such interest will accrue;

(iv) a list of the sources of funds available to the corporation to
pay an interest penalty on each type or category of contract; and

(v) a list of facts and conditions which in the opinion of the
corporation's governing body reasonably justify extension of the date by
which contract payment must be made in order for the corporation not to
become liable for interest payments in accordance with subdivision seven
of this section.

(b) Such facts and conditions may include, but shall not be limited
to, the following when:

(i) in accordance with specific statutory or contractual provisions,
payment must be preceded by an inspection period or by an audit to
determine the resources applied or used by a contractor in fulfilling
the terms of the contract;

(ii) the necessary state government appropriation required to
authorize payment has yet to be enacted;

(iii) a proper invoice must be examined by the federal government
prior to payment; and

(iv) such date by which contract payment must be made is modified in
accordance with subdivision eight of this section.

4. Statement amendment. Each corporation shall have the power to amend
its statement by promulgating amended rules and regulations.

5. Statement filing. Each corporation shall, within thirty days after
the statement's adoption, file a copy of such statement, and amendments
thereto, with the state comptroller, the state director of the budget,
the chairman of the senate finance committee, and the chairman of the
assembly ways and means committee.

6. Contract incorporation. The statement in effect at the time of
creation of a contract is hereby incorporated into and made a part of
that contract.

7. Interest eligibility and computation. (a) In order for the
corporation not to be liable for the payment of interest, contract
payment must be made within thirty calendar days, excluding legal
holidays, after the receipt of an invoice for the amount of the contract
payment due; except when the contract payment is of the type where the
facts and conditions are as defined pursuant to subparagraph (v) of
paragraph (a) of subdivision three of this section. Any time taken to
satisfy or rectify any of the facts or conditions described in
subdivision three (except for subparagraph (iv) of paragraph (b) of
subdivision three) of this section shall extend the date by which
contract payment must be made in order for the corporation not to become
liable for interest payments by an equal period of time.

(b) A corporation, which must process payments through the state
department of audit and control, the department of taxation and finance,
or some other entity not under the corporation's control, shall not be
liable for interest due to the process time taken by such entity.

(c) Notwithstanding any other provision of law to the contrary,
interest shall be computed at the rate equal to the overpayment rate set
by the commissioner of taxation and finance pursuant to subsection (e)
of section one thousand ninety-six of the tax law.

(d) A corporation shall not be liable for payment of interest when
such interest as computed pursuant to the provisions of paragraph (c) of
this subdivision is less than ten dollars.

8. Each corporation shall have fifteen calendar days after receipt of
an invoice by the corporation at its designated payment office to notify
the contractor of (a) defects in the delivered goods, property, or
services, (b) defects in the invoice, or (c) suspected improprieties of
any kind; and the existence of such defects or improprieties shall
prevent the commencement of the time period specified in subdivision
seven of this section. When a corporation fails to notify a contractor
of such defects or suspected improprieties within fifteen calendar days
of receiving the invoice, the number of days allowed for payment of the
corrected proper invoice will be reduced by the number of days between
the fifteenth day and the day that notification was transmitted to the
contractor. If the corporation, in such situations, fails to provide
reasonable grounds for its contention that a defect or impropriety
exists, the date by which contract payment must be made in order for the
corporation not to become liable for interest payments shall be
calculated from the date of receipt of an invoice.

9. Notwithstanding any provision of the public service law or any
tariffs promulgated pursuant to that law to the contrary, the provisions
of this section shall provide the sole basis for determining and making
interest payments on invoices submitted by public utilities to
corporations.

10. A proper invoice submitted by the contractor shall be required to
initiate any payment, except where the contract provides that the
contractor will be paid at predetermined intervals without having to
submit an invoice for each such scheduled payment and, for the purposes
of determining eligibility for payment of interest and subject to the
exception and time-to-rectify provisions of subdivisions three and seven
of this section, the date by which contract payment must be made in
order for the corporation not to become liable for interest payments
shall be the payment due date specified in accordance with the contract.

11. Annual report. (a) Each corporation shall annually prepare a
report on the scope and implementation of its prompt payment policy
which shall include, but not be limited to:

(i) A listing of the types or categories of contracts which the
corporation entered into during the twelve month period covered by the
report, together with a brief indication of whether each such type or
category of contract was subject to the prompt payment requirements
promulgated by the corporation and, if not, why not;

(ii) The number and amounts of interest payments made for contracts
arranged according to each such type or category;

(iii) The number of interest chargeable days and the total number of
days taken to process each late contract payment; and

(iv) A summary of the principal reasons that such late payments
occurred.

(b) Within ninety days after the completion of its fiscal year, each
corporation shall file copies of the report required by paragraph (a) of
this subdivision with the state comptroller, the state director of the
budget, the chairman of the senate finance committee, and the chairman
of the assembly ways and means committee.

12. Public access. (a) Each corporation shall make available to the
public, upon a reasonable request therefor, copies of its statement and
annual report.

(b) Each contractor doing business with a corporation shall be given a
copy of that corporation's statement.

13. Inapplicability of section. The provisions of this section shall
not apply to payments due and owing by a corporation:

(a) under the eminent domain procedure law;

(b) as interest allowed on judgments rendered by a court pursuant to
any provision of law other than those contained in this section;

(c) to the federal government; to any state agency or its
instrumentalities; to any duly constituted unit of local government
including, but not limited to, counties, cities, towns, villages, school
districts, special districts, or any of their related instrumentalities;
to any other public authority or public benefit corporation; or to its
employees when acting in, or incidental to, their public employment
capacity;

(d) in situations where the corporation exercises a legally authorized
set-off against all or part of the payment due the contractor.

14. The provisions of this section shall not apply to the facilities
development corporation or the state university construction fund.

15. Judicial review. Any determination made by a corporation pursuant
to this section which prevents the commencement of the time in which
interest will be paid shall be subject to judicial review in a
proceeding pursuant to article seventy-eight of the civil practice law
and rules. Such proceedings shall only be commenced in the absence, or
upon completion, of other review procedures specified in the contract or
by regulation.

16. Court action or other legal processes. (a) Notwithstanding any
other provisions of law to the contrary, the liability of a corporation,
insofar as incurring an obligation to make an interest payment to a
contractor pursuant to the terms of this section is concerned, shall not
extend beyond the date of a notice of intention to file a claim, the
date of a notice of a claim, or the date commencing a legal action for
the payment of such interest, whichever occurs first.

(b) With respect to the court action or other legal processes referred
to in paragraph (a) of this subdivision, any interest obligation
incurred by a corporation after the date specified therein pursuant to
any provision of law other than this section shall be determined as
prescribed by such separate provision of law, shall be paid as directed
by the court, and shall be paid from any source of funds available for
that purpose.