BILL NUMBER: S4877A
SPONSOR: MAYER
 
TITLE OF BILL:
An act to amend the state finance law, in relation to state agency
contracts with not-for-profit corporations
 
PURPOSE:
To require agencies with significantly delayed renewal contracts to
report on the status of delayed contracts and obstacles to contracts
being executed in a timely manner.
 
SUMMARY OF PROVISIONS:
Section one of the bill amends section 179-q of the state finance law to
define "noncompliant state agency."
Section two of the bill amends section 179-t of the state finance law to
specify what makes a state agency noncompliant.
Section three amends section 179-bb of the state finance law by provid-
ing steps noncompliant state agencies are required to take, including
reporting.
Section four amends the definition of written directive. Section five
provides the effective date.
 
JUSTIFICATION:
New York State often outsources crucial programs to non-profits, includ-
ing early childhood education programs, mental health counseling, and
shelter for the homeless. The state relies on non-profit organizations
to provide these vital social services. However, non-profit organiza-
tions that contract with the state have expressed concerns for years
about the slow contract and procurement process. In an effort to address
these concerns, the state enacted the Prompt Contracting Law in 1991 to
help expedite contracts and reduce the fiscal stress on not for profits.
Thirty years later, the problem persists and non-profits are facing
immense financial hardships as a result.
In May of 2020, the Office of the NYS Comptroller released their "Not-
For Profit Prompt Contracting Annual Report" that found 50% of contracts
in 2019 had not been approved until after the start date of such
contracts, compared to 47% of contracts in 2018. A non-profit cannot
receive payment from the state until the contract is formally approved
by the state comptroller. So, while non-profits are required to start
providing services by the start date of their contracts, the state is
not required to pay them within the same timeframe.
In order for non-profits to begin their work, they often have to take
out lines of credit to finance their operations. The May 2020 NYS Comp-
troller report notes, "the failure of the state agencies to process
contracts on time harms not for profit service providers, which in turn
erodes service delivery to vulnerable populations." The report recom-
mends that state agencies "take responsibility for their critical roles,
and make prompt contracting a priority."
This bill seeks to address this issue by requiring state agencies to
report to the Comptroller on the status of significantly late contracts
and barriers to the agency executing contracts in a timely manner.
 
PRIOR LEGISLATIVE HISTORY:
S8792/ A9741A: Passed Senate; Referred to Governmental Operations in
Assembly
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
This act shall take effect immediately.

Statutes affected:
S4877: 179-q state finance law, 179-t state finance law, 179-bb state finance law, 179-q(14) state finance law
S4877A: 179-q state finance law, 179-t state finance law, 179-bb state finance law, 179-q(14) state finance law