BILL NUMBER: S2284A
SPONSOR: WEBB
 
TITLE OF BILL:
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
 
PURPOSE OR GENERAL IDEA OF BILL:
Relates to providing for prompt payment by contractors receiving public
funds of amounts owed to small businesses and minority-owned business
enterprises.
 
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 Creates a new section 149 within Article 9 of State Finance
Law on prompt contracting and payments for small business and minority
and women business enterprise subcontractors, adds prompt payment
language from Article 9 Section 139-F of the State Finance Law, includes
the definitions for covered project, paid for in whole or in part out of
public funds, contract, contractor, sub-contractor small business and
minority and women owned business enterprises, entity and public entity
to prompt payment language.
Section 2 stipulates the effective date.
 
JUSTIFICATION:
2024 MWBE Disparity Study, underscores the need for this legislation.
Slow Payment and Cash Flow Challenges:
Many Minority and Women-Owned Business Enterprises (MBEs) reported slow
payments as a significant barrier to doing business with the State.
These delays in payments often caused extreme cash flow problems, making
it difficult for these businesses to pay their employees and cover other
essential expenses.
Some firms reported waiting over 200 days to receive payments from the
State, leading to severe financial strain.
The study included multiple accounts of businesses struggling due to the
long wait times for payments. For example, a non-minority female-owned
professional services business highlighted how these payment delays are
detrimental to business stability, with one account noting that it took
between seven to nine months to get paid for contracts.
Several MBE firms mentioned that prime contractors often delay or with-
hold payments to them. These primes sometimes only fulfill their commit-
ments to MBEs for the first month and then withdraw their support, self-
performing the rest of the work instead.
 
PRIOR LEGISLATIVE HISTORY:
02/08/2024 referred to governmental operations
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
Immediately