[NYAPRS Enews] Spitzer Signs Timely Payments Bill For Non-Profits

[Harvey Rosenthal]

GOVERNOR SIGNS PROMPT CONTRACTING LEGISLATION RELATING TO
NOT-FOR-PROFITS

Brings Greater Financial Stability To Not-For-Profits 

 

Text of July 26 Spitzer Press Release

 

Governor Spitzer today announced that he has signed legislation
reforming the handling of state agency contracts with not-for-profits.
The intent is to bring greater accountability and timeliness to the
procedures used by state agencies in contracting with not-for-profit
organizations to help ensure that these organizations are able to
continue providing the invaluable services they do for the public each
day.

 

"Not-for-profits often operate within tight budgets and have limited
resources to devote to their public service missions," said Governor
Spitzer. "We cannot allow their invaluable services and assistance to be
jeopardized by cumbersome government contracting. This bill will help
ensure greater economic stability for countless organizations serving
the public good."

 

Assembly Speaker Sheldon Silver said: "Not-for profit organizations
operate important and much-needed social service programs throughout New
York State. This legislation will support these organizations by helping
to ensure that they will not face unnecessarily harsh financial
consequences when contract payments are late or contracts are ended. I
want to recognize Assemblyman Bing for addressing this vital issue and I
am pleased that the Governor acknowledges the role that this legislation
will play in the delivery of social services around the state."

 

Senate Minority Leader Malcolm A. Smith said: "I am pleased to see the
governor sign this bill. It gives not-for-profit organizations time to
make alternate plans in the event an agency decides not to renew their
services. I believe that it is important for agencies to maintain a
level of trust with organizations they do business with, and this
legislation is one way to ensure that trust."

 

Senator Joseph Robach said: "As government works in conjunction with
not-for-profit organizations to provide valuable services that enhance
the lives of all New Yorkers, the prompt renewal of these contracts is
vital to ensure that these critical resources are delivered in a timely
fashion to those in need. I want to thank all my partners in government
and the not-for-profit community who helped to make this bill a
reality."

 

Assemblyman Jonathan L. Bing said: "By signing this legislation that was
vetoed twice under the prior administration, Governor Spitzer has shown
a tremendous commitment to reform and improving the delivery of social
service programs around this state. Now, not-for-profits will know with
an appropriate amount of time whether their contracts will be renewed by
state agencies and they will not be forced to give up interest and
penalties under prior contracts that they rightfully deserve. I am proud
to have Governor Spitzer as my constituent and applaud his efforts to
better the lives of all New Yorkers."

 

President and CEO of United Way of New York State, Susan Hager, said:
"Governor Spitzer campaigned on a platform promoting greater
transparency and accountability in government. Signing this bill into
law demonstrates his commitment to those principles and the essential
services provided by this state's not-for-profit agencies to thousands
of New Yorkers. Moreover, this bill would not have passed without the
leadership of two dedicated champions: Senator Robach and Assemblyman
Bing provided a welcome example of bipartisan cooperation and support
for over three years, resulting in unanimous passage of this
legislation."

 

Executive Director of the New York State Catholic Conference, Richard E.
Barnes, said: "This Prompt Contracting Law is a magnificent example of
government working well and working together to take care of those in
need of services in our Empire State. Issues of 'contracting' may seem
minor at first glance, but, in reality, this law will have a positive
impact on how non-profit agencies provide state-funded services to all
those in need. We thank the bill sponsors, Assemblymember Jonathan Bing
and Senator Joseph Robach, for their persistent, multi-year effort. We
thank the Legislature for its unanimous vote in both Houses. And we
thank Governor Spitzer for his recognition of the vital importance of
this law to the people of New York. Today we stand together as partners,
representatives of the nonprofit community with leaders of our state.
Today we take yet another step, united, together, building a stronger,
better New York State for all our residents."

 

The legislation will strengthen provisions of the 1991 not-for-profit
"prompt contracting law" and help provide timely notice of a state
agency's intent to renew a contract. The 1991 law instituted significant
improvements to the state's contracting process with not-for-profits,
creating standards and timeframes for the execution of contracts. The
new law improves on this statute by requiring the state to provide
not-for-profit providers with more prompt information about whether
current contracts will be renewed to allow for better financial
planning.

 

In the past, many not-for-profit agencies were left in limbo when
nearing the end of their contracts with state agencies. Often, they were
not given clear indications whether or not their contracts would be
renewed. The state comptroller has reported that in FY 2005-2006, 62
percent of not-for-profit contracts with state agencies did not meet
agreed upon timelines for approval. When these contracts are cancelled
with little notice, not-for-profits are often required to forfeit
interest penalties to which they would otherwise be entitled.

 

In order to remedy these problems, the reform legislation the governor
is signing today will:

*	Require that state agencies inform not-for-profits of whether or
not it intends to renew contracts in a timely fashion. This notification
must be given 90 days prior to the end of the contract if the state
budget has been passed on time. If the state budget is late, the
not-for-profit must be informed no later than 30 days after the budget
is passed or 90 days before the end of the contract, whichever is later;
*	Require that waivers of contracting and payment timeframes only
be granted in "unusual circumstances;
*	Ensure that a non-profit organization is not required to waive
its right to interest payments from an agency as a condition of signing
a contract with the state;
*	Compel the comptroller to publish an annual report detailing the
effectiveness of the prompt contracting law and any suggestions for
improvement; and
*	Reestablish a joint advisory committee of 16 total
representatives from state agencies and not-for-profits, which will
evaluate and promote adherence to the prompt contracting law.

 

This legislation will take effect January 1, 2008.

 

 

 

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