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S T A T E O F N E W Y O R K
________________________________________________________________________
7001
2025-2026 Regular Sessions
I N S E N A T E
March 28, 2025
___________
Introduced by Sen. MAYER -- read twice and ordered printed, and when
printed to be committed to the Committee on Procurement and Contracts
AN ACT to amend the state finance law, in relation to contracting
between state agencies and not-for-profit organizations; and to repeal
subdivision 7 of section 179-v of such law relating thereto
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subdivisions 9 and 14 of section 179-q of the state finance
law, as added by chapter 166 of the laws of 1991, are amended to read as
follows:
9. "Renewal contract" means the documents necessary to continue in
effect an existing contract between a state agency and not-for-profit
organization, including any simplified contract documents in a form
approved by the office of the state comptroller. "RENEWAL CONTRACT"
SHALL ALSO INCLUDE ANY NEW CONTRACT BETWEEN A STATE AGENCY AND A NOT-
FOR-PROFIT ORGANIZATION TO PROVIDE THE SAME OR SIMILAR SERVICES AS WERE
PROVIDED BY SUCH NOT-FOR-PROFIT ORGANIZATION TO THE STATE AGENCY UNDER A
PREVIOUSLY APPROVED CONTRACT. SIMILAR SERVICES ARE SERVICES THAT ARE
COMPARABLE TO THOSE PROVIDED IN A PRIOR EXECUTED CONTRACT FROM THE SAME
AGENCY.
14. "Written directive" means a written request by a state agency to a
not-for-profit organization authorizing such organization either to
begin providing services during the negotiation of a contract or to
continue providing services during the negotiation of a renewal
contract. ALL WRITTEN DIRECTIVES SHALL INCLUDE A SCHEDULE FOR
SUBMISSION OF INVOICES FOR WORK COMPLETED BY THE NOT-FOR-PROFIT ORGAN-
IZATION AND THE STATE AGENCY'S SCHEDULED PAYMENT DATES FOR SUBMITTED
INVOICES. All written directives shall state that payment for the
services provided is subject to the availability of appropriations,
execution of either the contract or renewal contract, and approval of
the contract or renewal contract by the comptroller and the attorney
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10809-02-5
S. 7001 2
general. ALL WRITTEN DIRECTIVES SHALL ALSO INCLUDE INSTRUCTIONS ON HOW
TO ACCESS THE NOT-FOR-PROFIT SHORT-TERM REVOLVING LOAN FUND PURSUANT TO
SECTION ONE HUNDRED SEVENTY-NINE-Z OF THIS ARTICLE.
§ 2. Subdivision 1 of section 179-s of the state finance law, as added
by chapter 166 of the laws of 1991, is amended and a new subdivision 4
is added to read as follows:
1. A state agency shall have not more than one hundred fifty days
following the latest date on which any of the appropriations covered by
the program plan become law to execute contracts with not-for-profit
organizations pursuant to the program plan. Upon execution of each
contract by the state agency and the not-for-profit organization, the
contract shall immediately be delivered to the attorney general for
approval. The attorney general shall within fifteen days of receipt
either approve such contract or disapprove and return the contract to
the state agency with reasons therefor. Upon approval, the contract
shall be delivered to the comptroller who shall within fifteen days of
receipt either approve and file such contract or disapprove and return
the contract to the state agency with [his] SUCH COMPTROLLER'S reasons
therefor.
4. WHEN A STATE AGENCY DEEMS IT NECESSARY FOR A NOT-FOR-PROFIT ORGAN-
IZATION TO COMMENCE THE PROVISION OF SERVICES PRIOR TO FULL EXECUTION OF
A NEW, RENEWAL, OR EXTENSION CONTRACT AND ISSUES A WRITTEN DIRECTIVE TO
THE NOT-FOR-PROFIT ORGANIZATION REQUESTING THE COMMENCEMENT OF SUCH
SERVICES, THE WRITTEN DIRECTIVE SHALL PROVIDE A SCHEDULE AND PROCEDURE
FOR THE NOT-FOR-PROFIT ORGANIZATION TO RECEIVE PAYMENT FOR WORK
PERFORMED, INCLUDING A COMMENCEMENT DATE FOR SERVICES THAT THE STATE
AGENCY IS REQUESTING, A SCHEDULE AND PROCEDURE FOR THE NOT-FOR-PROFIT
ORGANIZATION TO SUBMIT INVOICES TO THE STATE AGENCY FOR WORK PERFORMED,
AND A SCHEDULE UNDER WHICH THE NOT-FOR-PROFIT ORGANIZATION CAN EXPECT
PAYMENT FROM THE STATE AGENCY. ALL LATE PAYMENTS SHALL BE SUBJECT TO
INTEREST PURSUANT TO SECTION ONE HUNDRED SEVENTY-NINE-V OF THIS ARTICLE.
§ 3. Section 179-u of the state finance law, as added by chapter 166
of the laws of 1991, is amended to read as follows:
§ 179-u. Advance payments. 1. WHEN A STATE AGENCY ADMINISTERING A
CONTRACT ENTERS A NEW, RENEWAL OR EXTENSION CONTRACT WITH A NOT-FOR-PRO-
FIT ORGANIZATION, THE AGENCY SHALL PROVIDE WITHIN THIRTY DAYS OF EXECUT-
ING THE CONTRACT AN AUTOMATIC ADVANCE PAYMENT OF AN AMOUNT EQUAL TO
TWENTY-FIVE PERCENT OF THE TOTAL AWARD TO COVER EXPENSES INCURRED AND
SERVICES PROVIDED IN THE FIRST QUARTER. RECOUPMENT OF SUCH ADVANCES
SHALL BE RECOVERED IN THE FINAL QUARTER OF THE CONTRACT THROUGH A RECON-
CILIATION WITH THE FINAL VOUCHER OF THE CONTRACT. IF THE TOTAL AMOUNT
SUBMITTED IN THE VOUCHER FOR THE FINAL QUARTER OF THE CONTRACT IS LESS
THAN THE ADVANCE PAYMENT, THE NOT-FOR-PROFIT ORGANIZATION SHALL RETURN
THE AMOUNT OF THE DIFFERENCE BETWEEN THE ADVANCE AND THE FINAL VOUCHER
TO THE AGENCY WITHIN NINETY DAYS OF THE END OF THE CONTRACT.
2. When a state agency administering a contract shall advise the not-
for-profit organization of the agency's intention to renew the contract,
the not-for-profit organization[, may] SHALL, upon receipt of a written
directive, be entitled to an advance payment OF AN AMOUNT EQUAL TO TWEN-
TY-FIVE PERCENT OF THE TOTAL AWARD TO COVER EXPENSES INCURRED AND
SERVICES PROVIDED IN THE FIRST QUARTER pending execution of the renewal
contract if such contract is not fully executed by the commencement date
of the succeeding contract; the written directive shall specifically set
forth the dollar amount and the period of time covered by the advance
payment. Such advance payment shall offset future payments due to the
organization for services provided during the term of the prospective
S. 7001 3
renewal contract and shall not exceed the maximum contract amount set
forth in said renewal contract. IF THE CONTRACT HAS NOT YET BEEN
EXECUTED BY THE END OF EACH SUBSEQUENT QUARTER, THEN ADDITIONAL ADVANCES
EQUAL TO TWENTY-FIVE PERCENT OF THE TOTAL AWARD SHALL BE MADE WITHIN
FOURTEEN DAYS OF THE COMMENCEMENT OF EACH SUBSEQUENT QUARTER.
[2.] 3. A state agency providing an advance OF AN AMOUNT EQUAL TO
TWENTY-FIVE PERCENT OF THE TOTAL AWARD payment pursuant to subdivision
one of this section shall submit a written directive, a voucher and such
other documents as may be required to the comptroller for approval.
4. WHEN THE FULL EXECUTION OF A CONTRACT IS DELAYED MORE THAN THIRTY
CALENDAR DAYS, THE STATE AGENCY SHALL PROVIDE THE NOT-FOR-PROFIT ORGAN-
IZATION WITH A WRITTEN DIRECTIVE ALONG WITH AN AUTOMATIC ADVANCE PAYMENT
OF AN AMOUNT EQUAL TO TWENTY-FIVE PERCENT OF THE TOTAL AWARD TO COVER
EXPENSES INCURRED AND SERVICES PROVIDED IN THE FIRST QUARTER. THE NOT-
FOR-PROFIT ORGANIZATION MAY REQUEST, AND THE AGENCY SHALL PROVIDE, ADDI-
TIONAL ADVANCE PAYMENTS WHEN THE FULL EXECUTION OF A CONTRACT IS
DELAYED, AT QUARTERLY INTERVALS, UNTIL SUCH TIME THE CONTRACT IS FULLY
EXECUTED. THE WRITTEN DIRECTIVE SHALL SPECIFICALLY SET FORTH THE DOLLAR
AMOUNT AND THE PERIOD OF TIME COVERED BY THE ADVANCE PAYMENT OF AN
AMOUNT EQUAL TO TWENTY-FIVE PERCENT OF THE TOTAL AWARD. SUCH ADVANCE
PAYMENT SHALL OFFSET FUTURE PAYMENTS DUE TO THE ORGANIZATION FOR
SERVICES PROVIDED DURING THE TERM OF THE PROSPECTIVE RENEWAL CONTRACT
AND SHALL NOT EXCEED THE MAXIMUM CONTRACT AMOUNT SET FORTH IN THE
RENEWAL CONTRACT.
§ 4. Subdivision 7 of section 179-v of the state finance law is
REPEALED and subdivisions 1 and 2, as added by chapter 166 of the laws
of 1991, are amended to read as follows:
1. A not-for-profit organization shall be entitled to interest
payments pursuant to this section: (a) on those moneys that would be due
under the terms of the contract [or], EXTENSION CONTRACT, renewal
contract OR WRITTEN DIRECTIVE from the scheduled commencement date or
the date the organization begins to provide services, whichever is
later, until the date the payment is made under the contract [or],
EXTENSION CONTRACT, renewal contract OR WRITTEN DIRECTIVE; or (b) if a
not-for-profit organization borrows funds to provide services pursuant
to a CONTRACT, EXTENSION CONTRACT, RENEWAL CONTRACT OR written directive
by a state agency, provided however that a not-for-profit organization
may only receive interest payments on such funds when such not-for-pro-
fit organization [has received a written directive but has been denied
payment pursuant to section one hundred seventy-nine-u of this article
or] did not obtain a loan from the not-for-profit short-term revolving
loan fund. ALL INTEREST DUE AND OWING SHALL BE PAID IN FULL WITH THE
FIRST PAYMENT MADE TO A NOT-FOR-PROFIT ORGANIZATION UNDER A CONTRACT,
EXTENSION CONTRACT OR RENEWAL CONTRACT.
2. Such organizations shall receive such interest payments at a rate
equal to the [rate set by the commissioner of taxation and finance for
corporate taxes pursuant to paragraph one of subsection (e) of section
one thousand ninety-six of the tax law] CURRENT PRIME INTEREST RATE.
THE COMMISSIONER OF TAXATION AND FINANCE, ON A QUARTERLY BASIS, SHALL
COMMUNICATE THE CURRENT PRIME INTEREST RATE IN EFFECT TO THE COMPTROLLER
AND ALL STATE AGENCIES AND NOT-FOR-PROFIT ORGANIZATIONS CURRENTLY UNDER
CONTRACT, EXTENSION CONTRACT, RENEWAL CONTRACT, OR WRITTEN DIRECTIVE.
THE COMMISSIONER OF TAXATION AND FINANCE SHALL ALSO PUBLISH THE CURRENT
APPLICABLE PRIME INTEREST RATE PROMINENTLY ON THE DEPARTMENT OF TAXATION
AND FINANCE'S WEBSITE. In order for a state agency to approve
reimbursement of a not-for-profit organization at a rate other than the
S. 7001 4
interest rate stated in this section the not-for-profit organization
shall submit documentation indicating the rate at which such funds were
borrowed, the lender of such funds and any other information requested
by the state agency, attorney general or the comptroller. The comp-
troller may disallow such portions of the interest that the comptroller
deems unreasonable.
§ 5. Subdivisions 1 and 4 of section 179-z of the state finance law,
as added by chapter 166 of the laws of 1991, are amended and a new
subdivision 5 is added to read as follows:
1. The state comptroller is authorized to provide loans from the not-
for-profit short-term revolving loan fund established by section nine-
ty-seven-jj of this chapter to any not-for-profit organization in
receipt of a written directive from a state agency. The state comp-
troller may provide such a loan to a not-for-profit organization upon
receipt of a written agreement providing reasonable assurances of repay-
ment that is satisfactory to the comptroller. Such loan shall not bear
interest and repayment of such loan may be prorated over the term of the
expected or renewal contract, provided the term of the loan does not
exceed one year. The amount of each such loan shall not exceed [one-half
of the first quarter] THE FULL payment of the subject contract.
4. Any not-for-profit organization receiving a loan from the not-for-
profit short-term revolving loan fund shall be ineligible [to receive
interest from a state agency, notwithstanding the provisions of section
one hundred seventy-nine-v of this article and shall be ineligible] to
receive advance payments FOR THE AMOUNT THAT THEY RECEIVED IN THE LOAN,
notwithstanding section one hundred seventy-nine-u of this article.
5. INSTRUCTIONS ON HOW TO ACCESS THE NOT-FOR-PROFIT SHORT-TERM REVOLV-
ING LOAN FUND SHALL BE PROVIDED TO EVERY NOT-FOR-PROFIT ORGANIZATION
THAT RECEIVES A WRITTEN DIRECTIVE, CONTRACT, OR RENEWAL CONTRACT FROM A
STATE AGENCY. SUCH INSTRUCTIONS SHALL ALSO BE POSTED IN A CONSPICUOUS
MANNER ON THE WEBSITES OF THE STATE COMPTROLLER AND THE NEW YORK STATE
NONPROFIT UNIT.
§ 6. Section 179-aa of the state finance law, as amended by chapter
672 of the laws of 2019, is amended to read as follows:
§ 179-aa. Advisory committee. There is hereby established a not-for-
profit contracting advisory committee. The advisory committee shall
consist of sixteen members which shall include eight appointed members,
four to be appointed by the governor who shall be representatives of
not-for-profit organizations providing services in the state, and two
each to be appointed by the governor upon recommendation of the tempo-
rary president of the senate and speaker of the assembly, and eight ex
officio members of the committee, one each designated from the division
of the budget, the department of law, the office of the state comp-
troller, and the education department. The governor shall also designate
four members from among the following agencies: the department of state,
the office of children and family services, the office of temporary and
disability assistance, the department of health, the office of mental
hygiene, the office for people with developmental disabilities, and the
department of labor. The governor shall designate an appointee to serve
as chair of the committee. The advisory committee shall meet at least
quarterly and [upon its own initiative may] SHALL: comment and report
on the implementation and operation of the not-for-profit short-term
revolving loan fund; advise the governor, comptroller, LEGISLATURE,
ATTORNEY GENERAL and state agencies on the implementation and operation
of this article; evaluate the benefits of requiring all state agencies
to use standard contract language and the extent to which standard
S. 7001 5
language may be effectively included in contracts with not-for-profit
organizations; EVALUATE AND PROVIDE FEEDBACK ON IMPROVEMENTS TO THE
STATEWIDE FINANCIAL SYSTEM; review annually the report of the office of
the state comptroller made pursuant to section one hundred seventy-nine-
bb of this article; and propose any legislation they deem necessary to
improve the fund and this article. The committee shall report to the
COMPTROLLER'S OFFICE, THE OFFICE OF THE ATTORNEY GENERAL, THE governor
and the legislature with recommendations on improving the contracting
procedures with not-for-profit organizations which receive state funds
through the intermediary of municipalities. Such reports shall be due
annually not later than December first, AND SHALL BE MADE AVAILABLE TO
THE GENERAL PUBLIC, INCLUDING A CONSPICUOUS POSTING ON THE WEBSITE OF
THE NEW YORK STATE NONPROFIT UNIT.
§ 7. Subdivision 3 of section 179-ee of the state finance law, as
added by section 38 of part L of chapter 55 of the laws of 2012, is
amended and two new subdivisions 4 and 5 are added to read as follows:
3. A modification to a contract that would result in a transfer of
funds among program activities or budget cost categories but does not
affect the amount, consideration, scope or other terms of such contract
shall not, by itself, require such contract and modification to be
submitted to the comptroller for review; provided, however, where the
amount of such modification is, as a portion of the total value of the
contract, equal to or greater than ten percent for contracts of less
than five million dollars, or five percent for contracts of more than
five million dollars, the comptroller may require that such modification
be submitted to [him or her] SUCH COMPTROLLER for review. ALL MODIFICA-
TIONS THAT DO NOT REQUIRE COMPTROLLER REVIEW SHALL BE APPROVED WITHIN
THIRTY DAYS, AND ALL MODIFICATIONS THAT REQUIRE COMPTROLLER REVIEW SHALL
BE APPROVED WITHIN SIXTY DAYS. A FAILURE BY THE AGENCY TO RESPOND TO A
REQUEST FOR MODIFICATION DURING THE TIME PERIOD SHALL BE DEEMED AN
APPROVAL OF THE PROPOSED MODIFICATION. WHEN A CONTRACTOR SUBMITS THEIR
FINAL VOUCHERS OR INVOICE, IF SUCH VOUCHER OR INVOICE WOULD RESULT IN A
MODIFICATION BETWEEN BUDGET CATEGORIES OF, AS A PORTION OF THE TOTAL
VALUE OF THE CONTRACT, EQUAL TO OR LESSER THAN TEN PERCENT FOR CONTRACTS
OF LESS THAN FIVE MILLION DOLLARS, OR FIVE PERCENT FOR CONTRACTS OF MORE
THAN FIVE MILLION DOLLARS, THEN THE AGENCY SHALL CONSIDER THE VOUCHER OR
INVOICE A REQUEST FOR CONTRACT MODIFICATION AND SHALL PROCESS THE
MODIFICATION AS SUCH.
4. NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS ARTICLE, A MINIMUM
INDIRECT COST RATE OF AT LEAST FIFTEEN PERCENT OR THE NOT-FOR-PROFIT
ORGANIZATION'S FEDERALLY-APPROVED DE MINIMIS INDIRECT COST RATE OR THE
NOT-FOR-PROFIT ORGANIZATION'S ACTUAL INDIRECT COSTS RELATED TO ALLOWABLE
EXPENSES UNDER THE CONTRACT, WHICHEVER IS HIGHER, SHALL BE INCLUDED IN
ALL NOT-FOR-PROFIT ORGANIZATION CONTRACTS WITH STATE AGENCIES. INDIRECT
COSTS MAY BE INCURRED AT A HIGHER RATE THAN FIFTEEN PERCENT IN ANY BUDG-
ETED PERIOD SO LONG AS THE YEAR-TO-DATE INDIRECT COST DOES NOT EXCEED
FIFTEEN PERCENT AT THAT TIME. EXPENSES INCLUDING PURCHASE OF FURNITURE,
TECHNOLOGY, AND EQUIPMENT, AND EXPENSES RELATED TO OFFICE SPACE NECES-
SARY FOR THE PROGRAM STAFF TO PERFORM THEIR DUTIES UNDER THE GRANT, AND
TRAINING AND CERTIFICATION NECESSARY TO MAINTAIN CREDENTIALS REQUIRED TO
PERFORM THEIR DUTIES UNDER THE GRANT, SHALL BE CONSIDERED DIRECT
EXPENSES IN ALL NOT-FOR-PROFIT ORGANIZATION CONTRACTS.
5. INTEREST ACCRUED DUE TO BORROWING FUNDS TO PROVIDE SERVICES PURSU-
ANT TO A WRITTEN DIRECTIVE, CONTRACT, RENEWAL CONTRACT OR EXTENSION
CONTRACT IS A DIRECT REIMBURSABLE COST UNDER ALL NOT-FOR-PROFIT
CONTRACTS.
S. 7001 6
§ 8. Paragraphs (a) and (e) of subdivision 2 and subdivision 3 of
section 179-f of the state finance law, paragraphs (a) and (e) of subdi-
vision 2 as amended by chapter 36 of the laws of 2016 and subdivision 3
as amended by chapter 568 of the laws of 2015, are amended to read as
follows:
(a) the state comptroller in the course of [his or her] SUCH COMP-
TROLLER'S audit determines that there is reasonable cause to believe
that payment may not properly be due, in whole or in part;
(e) the goods or property have not been delivered or the services have
not been rendered by the contractor in compliance with the terms or
conditions of the contract, EXCEPT THAT WHERE THE CONTRACTOR PRESENTS AN
INVOICE OF A SUBCONTRACTOR AS PROOF OF THE COST AND MAY PAY SUBCONTRAC-
TORS UPON RECEIPT OF PAYMENT ON THE INVOICE OR VOUCHER BY THE AGENCY,
PROOF OF SUCH PAYMENT BY THE CONTRACTOR TO THE SUBCONTRACTOR SHALL BE
PROVIDED BY THE CONTRACTOR TO THE STATE AGENCY WITHIN THIRTY DAYS OF THE
RECEIPT OF THE VOUCHER PAYMENT;
3. Each state agency shall have fifteen calendar days after receipt of
an invoice by the state agency at its designated payment office, or in
the case of an invoice received from a small business, seven calendar
days, to notify the contractor of (a) MATERIAL defects in the delivered
goods, property, or services, (b) MATERIAL defects in the invoice, or
(c) suspected improprieties of any kind[; and the]. THE existence of
such MATERIAL defects or improprieties shall [prevent the commencement
of] PAUSE THE CALCULATION OF the time period specified in subdivision
two of this section UNTIL SUCH MATERIAL DEFECTS OR IMPROPRIETIES HAVE
BEEN CORRECTED. [When a state agency fails to notify a contractor of
such defects or suspected improprieties within fifteen calendar days, or
seven calendar days if such contractor is a small business, 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, or seventh day if payment of such proper invoice is for a
small business, and the day that notification was transmitted to the
contractor.] IF THE AGENCY NOTIFIES THE CONTRACTOR OF A MATERIAL DEFECT
OR IMPROPRIETY THAT WAS PRESENT IN THE ORIGINAL INVOICE AFTER THE
INITIAL FIFTEEN CALENDAR DAYS FROM WHEN THE INVOICE WAS ORIGINALLY
SUBMITTED, THEN THE TIME PERIOD SPECIFIED IN SUBDIVISION TWO OF THIS
SECTION SHALL CONTINUE TO RUN AND SHALL NOT BE AFFECTED BY SUCH NOTIFI-
CATION. If the state agency, in such situations, fails to provide
reasonable grounds for its contention that a MATERIAL defect or impro-
priety exists, the required payment date shall be calculated from the
date of receipt of an invoice. SCRIVENER'S ERRORS OR ROUNDING ERRORS
THAT RESULT IN A VARIANCE OF LESS THAN ONE HUNDRED DOLLARS SHALL NOT BE
CONSIDERED MATERIAL DEFECTS FOR THE PURPOSES OF THIS SECTION.
§ 9. This act shall take effect on the one hundred eightieth day after
it shall have become a law.Every fact on this page links to its source, starting with the official bill record.