§ 18 — Interest and collection fees assessed on debts owed to the state

New York § 18

• Jurisdiction: New York
• Law STF: State Finance
• Art. 2: General Fiscal Provisions

Text

§ 18. Interest and collection fees assessed on debts owed to the\nstate. 1. As used in this section: (a) "state agency" shall mean any\nstate department, board, bureau, division, commission, committee, public\nauthority, public benefit corporation, council, office, or other\ngovernmental entity performing a governmental or proprietary function\nfor the state; (b) "debt" shall mean any liquidated sum due and owing\nany state agency which has accrued pursuant to law or through contract,\nsubrogation, tort or other cause of action, except a liability resulting\nfrom taxes or other impositions administered by the state commissioner\nof taxation and finance, regardless of whether there is an outstanding\njudgment for that sum; (c) "debtor" shall mean any individual, business,\nor other entity, which is not a state agency, municipal corporation or\ndistrict corporation, having a debt with any state agency; (d)\n"liquidated" shall mean an amount which is fixed or certain or capable\nof being readily calculated, whether or not the underlying liability or\namount of the debt is disputed; and (e) "outstanding" debt shall mean\nthe amount set forth in the billing invoice or notice mailed to the\ndebtor, together with late payment charges and interest, less any\npayments made by or on behalf of the debtor.\n 2. For the purposes of this section, a state agency shall mail a dated\nbilling invoice or notice on or about the day it is dated, and receipt\nby the debtor of a billing invoice or notice is deemed to have occurred\nfive days after its date.\n 3. Unless provided otherwise by contract, statute or regulation, a\ndebtor owing a debt to any state agency shall pay such debt on or before\nthe thirtieth day following such debtor's receipt of any billing invoice\nor notice sent by the state agency that such debt is due and owing and\nthat failure to make timely payment, as stated in the billing invoice or\nnotice, will result in the assessment of interest or a late payment\ncharge and may result in a charge to cover the cost of processing,\nhandling, and collecting such debt.\n 4. Unless provided otherwise by contract, statute or regulation, a\ndebtor that fails to make payment of a debt within the period set forth\nin subdivision three of this section shall pay, in addition to the\namount of debt, interest on the outstanding balance of the debt,\naccruing on the date on which the receipt of the first billing invoice\nor first notice occurs, computed at the underpayment rate which is in\neffect on the date which the receipt of the first billing invoice or\nfirst billing notice occurs. For the purposes of this section, the\nunderpayment rate shall be that rate set by the commissioner of taxation\nand finance and published in the state register pursuant to subsection\n(e) of section one thousand ninety-six of the tax law minus four\npercentage points. With respect to specific classes of debt collected by\na state agency, the director of the budget or official of a state agency\nso designated by the director of the budget may approve the assessment\nof interest at a date later than the thirtieth day following such\ndebtor's receipt of any billing invoice or notice sent by the state\nagency.\n 5. In addition to the charges referred to in subdivision four of this\nsection, and unless provided otherwise by contract, statute or\nregulation, a debtor that fails to make payment of a debt subject to\nthis section within ninety days of receipt by the debtor of the first\nbilling invoice or notice may be assessed an additional collection fee\ncharge to cover the cost of processing, handling and collecting such\ndebt, not to exceed twenty-two percent of the outstanding debt, which\ncollection fee shall be added to and payable in the same manner as the\noutstanding debt. The assessed collection fee charge may not exceed the\nagency's estimated cost of processing, handling and collecting such\ndebt.\n 5-a. Notwithstanding any contrary provision of this section, no state\nagency shall assess the additional collection fee charge described in\nsubdivision five of this section on any debt subject to this section\nowed by a debtor to a state agency for a liability resulting from\ntuition, fees, room and board, educational benefit overpayments, student\nloans, or other such charges incurred by a student in furtherance of\nsuch student's education.\n 6. Any interest or late payment charges assessed pursuant to this\nsection shall be paid upon notice and demand and shall be treated and\ncollected in the same manner as the original debt which is due and owing\nand shall be collected by a state agency when such agency deems\ncollection to be administratively practical and cost-effective. Any\ncollection fee charges assessed pursuant to this section shall be paid\nupon notice and demand and shall be collected by a state agency when\nsuch agency deems collection to be administratively practical and\ncost-effective. In any action brought by or on behalf of a state agency\nto recover an outstanding debt, a demand for collection fee charges may\nbe set forth in the statement of damages sought.\n 7. The state director of the budget shall promulgate such guidelines\nas the director deems necessary to carry out the provisions of this\nsection.\n 8. The provisions of this section shall not supersede any provision of\nlaw or regulation or contract which provides for the imposition of\ninterest or late payment or collection fee charges on debts not\nsatisfied in a timely manner.\n 9. All contracts entered into or any regulation promulgated on or\nafter the effective date of this section which waives the imposition of\ninterest or late payment or collection fee charges or imposes interest\nor late payment charges or collection fee charges in a manner\ninconsistent with this section must be approved by the state division of\nthe budget.\n 10. Every state agency to which this section is applicable is\nauthorized to enter into written agreements with any debtor under which\nsuch debtor is allowed to satisfy liability for payment of any debt,\nincluding any interest imposed by this section on that portion of such\ndebt as to which an extension is granted, in installment payments if the\nstate agency determines that such agreement will facilitate collection\nof such liability. Provided further, that where such state agency\ndetermines that immediate collection of the debt would jeopardize the\ndebtor's fiscal viability and thereby pose a hardship to the public,\nsuch agency shall offer to enter into a written agreement to temporarily\ndefer collection of the debt, collect the debt on an installment basis,\nor make other reasonable arrangements to reduce such hardship on the\npublic of collecting the debt.\n