New York Senate Bill S02284

New York 2025-2026 Regular Session

• Introduced: 1/16/25
• Refer: 1/16/25
• Refer: 1/7/26

Caption

Requires contractors receiving public funds to pay amounts owed to small businesses and minority-owned business enterprises within 10 days of receipt of an undisputed invoice generated by a small business, minority-owned business enterprise or vendor management service and managed service provider on behalf of the small business or minority-owned business enterprise.

Summary

S02284 amends the state finance law to create a prompt-payment rule for certain subcontractors and vendors on publicly funded projects. The bill applies to “covered projects” that receive at least 30% public funding and have total costs over $25,000, but it excludes construction, reconstruction, rehabilitation, or repair of buildings or highways for or on behalf of a state agency. For those covered projects, a contractor or other entity receiving payment must pay a small business, minority-owned business enterprise, or certain vendor management/managed service providers within 10 business days after receiving an undisputed invoice for services rendered. The bill also provides that if a contractor fails to make required payments, including any remaining contract balance owed to a small business or minority-owned business enterprise, interest begins to accrue on the unpaid amount. The interest obligation is placed on the entity responsible for payment, and the bill states that the interest rate is the rate in effect on the date payment is made. The measure takes effect immediately and is intended to improve cash flow and payment timeliness for smaller firms working on publicly supported projects.

Impact

This bill would add a new section 149 to the state finance law, creating a statutory prompt-payment requirement for certain public-funded projects and expanding payment protections for small businesses and minority-owned business enterprises. It would affect contractors, subcontractors, public entities, and third parties acting for public entities on qualifying projects, while expressly excluding state-agency building and highway construction work. The practical effect is to impose a short payment deadline and an interest penalty for late payment, thereby strengthening enforcement of timely compensation for eligible subcontractors and vendors.

Sentiment

The bill’s purpose and framing suggest generally favorable treatment of small businesses and minority-owned business enterprises, with an emphasis on fairness, timely payment, and support for firms that may be more vulnerable to delayed cash flow. The available record does not include committee debate or recorded votes, so there is no direct evidence of opposition or support beyond the bill’s introduction and amendment history. The amended version and recommittal indicate the proposal was actively refined, but the overall tone of the measure is pro-payment and pro-small-business.

Contention

The main policy questions raised by the text are the scope of the projects covered, the exclusion of state-agency building and highway work, and the administrative burden on contractors and public entities to meet a 10-business-day payment deadline. Another possible point of contention is the definition of “public funds,” which includes not only direct government payments but also tax incentives, abatements, PILOTs, and other forms of public subsidy, potentially broadening the bill’s reach. Stakeholders likely to favor the bill are small businesses and minority-owned business enterprises; those most likely to scrutinize it are contractors, developers, and public entities concerned about compliance timing and interest liability.