N.Y.
State Finance Law Section 18
Interest and collection fees assessed on debts owed to the state
1.
As used in this section:(a)
“state agency” shall mean any state department, board, bureau, division, commission, committee, public authority, public benefit corporation, council, office, or other governmental entity performing a governmental or proprietary function for the state;(b)
“debt” shall mean any liquidated sum due and owing any state agency which has accrued pursuant to law or through contract, subrogation, tort or other cause of action, except a liability resulting from taxes or other impositions administered by the state commissioner of taxation and finance, regardless of whether there is an outstanding judgment for that sum;(c)
“debtor” shall mean any individual, business, or other entity, which is not a state agency, municipal corporation or district corporation, having a debt with any state agency;(d)
“liquidated” shall mean an amount which is fixed or certain or capable of being readily calculated, whether or not the underlying liability or amount of the debt is disputed; and(e)
“outstanding” debt shall mean the amount set forth in the billing invoice or notice mailed to the debtor, together with late payment charges and interest, less any payments made by or on behalf of the debtor.2.
For the purposes of this section, a state agency shall mail a dated billing invoice or notice on or about the day it is dated, and receipt by the debtor of a billing invoice or notice is deemed to have occurred five days after its date.3.
Unless provided otherwise by contract, statute or regulation, a debtor owing a debt to any state agency shall pay such debt on or before the thirtieth day following such debtor’s receipt of any billing invoice or notice sent by the state agency that such debt is due and owing and that failure to make timely payment, as stated in the billing invoice or notice, will result in the assessment of interest or a late payment charge and may result in a charge to cover the cost of processing, handling, and collecting such debt.4.
Unless provided otherwise by contract, statute or regulation, a debtor that fails to make payment of a debt within the period set forth in subdivision three of this section shall pay, in addition to the amount of debt, interest on the outstanding balance of the debt, accruing on the date on which the receipt of the first billing invoice or first notice occurs, computed at the underpayment rate which is in effect on the date which the receipt of the first billing invoice or first billing notice occurs. For the purposes of this section, the underpayment rate shall be that rate set by the commissioner of taxation and finance and published in the state register pursuant to subsection (e) of Tax Law § 1096 (General powers of tax commission)section one thousand ninety-six of the tax law minus four percentage points. With respect to specific classes of debt collected by a state agency, the director of the budget or official of a state agency so designated by the director of the budget may approve the assessment of interest at a date later than the thirtieth day following such debtor’s receipt of any billing invoice or notice sent by the state agency.5.
In addition to the charges referred to in subdivision four of this section, and unless provided otherwise by contract, statute or regulation, a debtor that fails to make payment of a debt subject to this section within ninety days of receipt by the debtor of the first billing invoice or notice may be assessed an additional collection fee charge to cover the cost of processing, handling and collecting such debt, not to exceed twenty-two percent of the outstanding debt, which collection fee shall be added to and payable in the same manner as the outstanding debt. The assessed collection fee charge may not exceed the agency’s estimated cost of processing, handling and collecting such debt. 5-a. Notwithstanding any contrary provision of this section, no state agency shall assess the additional collection fee charge described in subdivision five of this section on any debt subject to this section owed by a debtor to a state agency for a liability resulting from tuition, fees, room and board, educational benefit overpayments, student loans, or other such charges incurred by a student in furtherance of such student’s education.6.
Any interest or late payment charges assessed pursuant to this section shall be paid upon notice and demand and shall be treated and collected in the same manner as the original debt which is due and owing and shall be collected by a state agency when such agency deems collection to be administratively practical and cost-effective. Any collection fee charges assessed pursuant to this section shall be paid upon notice and demand and shall be collected by a state agency when such agency deems collection to be administratively practical and cost-effective. In any action brought by or on behalf of a state agency to recover an outstanding debt, a demand for collection fee charges may be set forth in the statement of damages sought.7.
The state director of the budget shall promulgate such guidelines as the director deems necessary to carry out the provisions of this section.8.
The provisions of this section shall not supersede any provision of law or regulation or contract which provides for the imposition of interest or late payment or collection fee charges on debts not satisfied in a timely manner.9.
All contracts entered into or any regulation promulgated on or after the effective date of this section which waives the imposition of interest or late payment or collection fee charges or imposes interest or late payment charges or collection fee charges in a manner inconsistent with this section must be approved by the state division of the budget.10.
Every state agency to which this section is applicable is authorized to enter into written agreements with any debtor under which such debtor is allowed to satisfy liability for payment of any debt, including any interest imposed by this section on that portion of such debt as to which an extension is granted, in installment payments if the state agency determines that such agreement will facilitate collection of such liability. Provided further, that where such state agency determines that immediate collection of the debt would jeopardize the debtor’s fiscal viability and thereby pose a hardship to the public, such agency shall offer to enter into a written agreement to temporarily defer collection of the debt, collect the debt on an installment basis, or make other reasonable arrangements to reduce such hardship on the public of collecting the debt.
Source:
Section 18 — Interest and collection fees assessed on debts owed to the state, https://www.nysenate.gov/legislation/laws/STF/18 (updated May 3, 2024; accessed Oct. 26, 2024).
