Section 179-F. Determination of eligibility for payment of interest on amounts owed to contractors

1. Each state agency which is  required  to
  make  a  payment  from state funds pursuant to a contract and which does
  not make such contract payment by the required payment date  shall  make
  an interest payment to the contractor in accordance with this article on
  the  amount of the contract payment which is due, unless failure to make
  such contract payment is the result of  a  lien,  attachment,  or  other
  legal  process  against  the  money  due  said contractor, or unless the
  amount of the interest  payment  as  computed  in  accordance  with  the
  provisions of section one hundred seventy-nine-g of this article is less
  than ten dollars. A pro rata share of such interest shall be paid by the
  contractor  or  subcontractor, as the case may be, to subcontractors and
  materialmen in a proportion equal to the percentage of  their  pro  rata
  share  of the contract payment. Such pro rata share of interest shall be
  due to such subcontractors and materialmen only for those payments which
  are not paid to such subcontractors and materialmen prior  to  the  date
  upon  which  interest  begins to accrue between the state agency and the
  contractor. Such pro rata share of  interest  shall  be  computed  daily
  until such payments are made to the subcontractors and materialmen.
    2.  The required payment date shall be thirty calendar days, excluding
  legal holidays, or in the case of final payments on highway construction
  contracts seventy-five calendar days, excluding  legal  holidays,  after
  receipt of an invoice for the amount of the contract payment due; except
  when:
    (a)  the  state comptroller in the course of his audit determines that
  there is reasonable cause to believe that payment may  not  properly  be
  due, in whole or in part;
    (b)  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;
    (c) the necessary state government appropriation required to authorize
  payment has yet to be enacted;
    (d) the cash balance of the fund or sub-fund from which the payment is
  to be made is insufficient to finance the payment;
    (e) a proper invoice must be examined by the federal government  prior
  to payment;
    (f) 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;
    (g)  the  required  payment  date  is  modified  in  accordance   with
  subdivision three of this section; or
    (h)  in  the  case of final payments on highway construction contracts
  the commissioner of transportation determines that  the  contractor  has
  failed  to properly submit the necessary documents and other submissions
  prescribed by the  contract  specifications  and  requirements,  by  the
  provisions  of  subdivision eight of section thirty-eight of the highway
  law, and by all other applicable state and  federal  laws  in  order  to
  enable  the  department  of  transportation to process the final payment
  properly and expeditiously.
    Any time taken to satisfy or rectify any of the  types  of  conditions
  described in paragraphs (a) through (f) or (h) of this subdivision shall
  extend the required payment date by an equal period of time.
    3. Each state agency shall have fifteen calendar days after receipt of
  an  invoice  by  the  state  agency  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 two
  of  this  section.  When  a state agency 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 state agency, in such situations,  fails  to  provide
  reasonable  grounds  for  its  contention  that  a defect or impropriety
  exists, the required payment date shall be calculated from the  date  of
  receipt of an invoice.
    4.  Notwithstanding  any  provision  of  the public service law or any
  tariffs promulgated pursuant to that law to the contrary, the provisions
  of this article shall provide the sole basis for determining and  making
  interest  payments  on  invoices  submitted by public utilities to state
  agencies.
    5. 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, in which case the
  state agency  responsible  for  making  the  purchase  shall  submit  an
  approvable  voucher to the state comptroller for the payment that is due
  and, for the purposes of determining eligibility for payment of interest
  and  subject  to  the  exception  and  time-to-rectify   provisions   of
  subdivision  two of this section, the required payment date shall be the
  payment due date specified in accordance with the contract.