Relates to the disqualification of tax delinquent bidders with some exceptions; provides that no agency shall be permitted to enter into a contract with a bidder or subcontractor who has an unsatisfied warrant filed against him or her pursuant to provisions of the tax law.
Ayes (31): DeFrancisco, Alesi, Bonacic, Farley, Flanagan, Fuschillo, Golden, Griffo, Hannon, Lanza, Larkin, LaValle, Little, Marcellino, Nozzolio, Robach, Saland, Seward, Young, Krueger, Breslin, Duane, Gianaris, Montgomery, Oppenheimer, Peralta, Perkins, Rivera, Stavisky, Stewart-Cousins, Squadron
Ayes W/R (1): Dilan
Nays (1): Parker
Excused (2): Johnson, Diaz
TITLE OF BILL:
An act to amend the state finance law, in relation to the disqualification of tax delinquent bidders and certain exceptions
PURPOSE OR GENERAL IDEA OF BILL:
The bill requires all state agencies, including public authorities, and public benefit corporations to check on the tax delinquency status of each vendor prior to entering into a contract or subcontract to insure that contracts and subcontracts are awarded or approved only to those firms in good standing with the New York State Department of Taxation and Finance, with exceptions to be made for certain circumstances.
SUMMARY OF SPECIFIC PROVISIONS:
Section one of the bill adds a new §169 to the State Finance Law as follows:
* Subdivision 1 of § 169 provides that no state agency, public authority, or public benefit corporation can award a contract or subcontract to any vendor until it has verified that the bidder is free of tax warrants by the Department of Taxation and Finance.
* Subdivision 2, paragraph (a) allows for an exception in cases where there exists an emergency condition which requires immediate action.
* Subdivision 2, paragraph (b) allows for an exception in cases where the tax delinquent bidder is the only available source of the item to be purchased.
* Subdivision 2, paragraph (c) allows for an exception in cases where the tax delinquent bidder has entered into a repayment agreement or the Department of Taxation and Finance has declared the outstanding tax warrant to be de minimis.
* Subdivision 3 defines an "emergency condition" as a condition caused by a natural disaster, fire, or other casualty, or another unanticipated and unexpected occurrence.
* Subdivision 4 requires that an agency shall inform the Comptroller of instances in which it awards a contract based upon a determination that an emergency condition exists and that the Comptroller may void such contracts if the agency has not satisfied the conditions for awarding a contract under such a determination.
* Subdivision 5 grants authority to the Comptroller to determine whether proof is sufficient to satisfy the tax warrant for purposes of subdivision 2, paragraph (c).
Section two of the bill specifies the effective date.
The Department of Taxation and Finance provides the Department of State with continuous notice of tax warrants filed against any business entity for failure to pay tax. Warrants are filed at the end of the taxpayer's appeal process, after the taxpayer has exhausted all opportunities to legitimately challenge the tax liability. A pre-award check of this database would allow any contracting entity to immediately determine whether or not the law bidder or proposed subcontractor is in good standing with the Tax Department and Department of State. Those bidders and subcontractors that have outstanding warrants against them could remedy their problem by paying in full to the Department of Taxation and Finance all back taxes, penalties, and interest awed. A version of this bill was passed by the Assembly and Senate in 2007 and vetoed by the Governor due to technical issues. These issues have been addressed through new provisions that provide exceptions far emergency conditions, sale source providers, and instances where the bidder is attempting in good faith to satisfy the tax warrant or where the amount of the delinquency is de minimus.
PRIOR LEGISLATIVE HISTORY:
1999-00: A.7338 Passed Assembly 2001-02: A.7053 Passed Assembly 2003-04: A.6505 Passed Assembly/S.4216 Senate 3rd Reading Cal. 2006: A.10377-A Assembly 3rd Reading Cal./S.2791-A Passed Senate 2007: A.7476/S.836 Veto 18 of 2007 2008: A.10241/S.7568 Veto 31 of 2008 2009-10: S.4185 Finance Cmte./A.6061 Passed Assembly
This legislation will result in an increase in the amount and the timeliness of tax collections, interest, and penalties.
This act shall take effect an the 120th day after it shall have became law.
STATE OF NEW YORK ________________________________________________________________________ 4671 2011-2012 Regular Sessions IN SENATE April 14, 2011 ___________Introduced by Sen. FLANAGAN -- read twice and ordered printed, and when printed to be committed to the Committee on Finance AN ACT to amend the state finance law, in relation to the disqualifica- tion of tax delinquent bidders and certain exceptions THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The state finance law is amended by adding a new section 169 to read as follows: S 169. DISQUALIFICATION OF TAX DELINQUENT BIDDERS. 1. SUBSEQUENT TO RECEIVING BIDS AND PRIOR TO ENTERING INTO A CONTRACT WITH A BIDDER, WHERE THAT BIDDER HAS OR WILL CONDUCT BUSINESS IN NEW YORK STATE, OR PRIOR TO FORMALLY APPROVING A CONTRACT BETWEEN A BIDDER AND A SUBCON- TRACTOR, EACH AGENCY, AS DEFINED IN SECTION NINETY-TWO OF THE PUBLIC OFFICERS LAW, SHALL REVIEW THE LIST OF WARRANTS TRANSMITTED TO THE DEPARTMENT OF STATE BY THE DEPARTMENT OF TAXATION AND FINANCE PURSUANT TO SECTION SIX OF THE TAX LAW TO DETERMINE WHETHER THE BIDDER OR SUBCON- TRACTOR HAS AN UNSATISFIED TAX WARRANT FILED AGAINST HIM OR HER WITH THE DEPARTMENT OF STATE. NO AGENCY, AS DEFINED IN SECTION NINETY-TWO OF THE PUBLIC OFFICERS LAW, SHALL BE PERMITTED TO ENTER INTO A CONTRACT WITH, OR FORMALLY APPROVE A SUBCONTRACT TO, A BIDDER OR SUBCONTRACTOR WHO HAS AN UNSATISFIED TAX WARRANT FILED AGAINST HIM OR HER PURSUANT TO SECTION SIX OF THE TAX LAW. 2. NOTWITHSTANDING THE PROVISIONS OF SUBDIVISION ONE OF THIS SECTION, A CONTRACT MAY BE ENTERED INTO WITH A BIDDER WHO HAS AN OUTSTANDING TAX WARRANT IF: A. THE AGENCY DETERMINES THAT AN EMERGENCY CONDITION EXISTS INVOLVING DANGER TO THE LIFE, HEALTH, OR SAFETY OF ANY PERSON OR THE SAFETY OF ANY STRUCTURE THAT REQUIRES IMMEDIATE ACTION AND THE NATURE OF THE WORK IS SUCH THAT IT WOULD BE IMPRACTICAL AND AGAINST THE PUBLIC INTEREST TO HAVE PUBLIC LETTING OF THE CONTRACT, OR THE ITEM TO BE PURCHASED IS ESSENTIAL TO THE EFFICIENT OPERATION OR THE ADEQUATE PROVISION OFEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD01013-01-1 S. 4671 2
SERVICE AND AS A CONSEQUENCE OF AN EMERGENCY CONDITION SUCH PURCHASE CANNOT AWAIT COMPETITIVE BIDDING; OR B. THE ITEM TO BE PURCHASED IS AVAILABLE ONLY FROM A SINGLE SOURCE AND THAT SOURCE IS THE BIDDER WITH THE OUTSTANDING TAX WARRANT; OR C. THE BIDDER HAS DISCLOSED THE EXISTENCE OF THE TAX WARRANT PRIOR TO OFFERING HIS OR HER BID, HAS PROVIDED THE AGENCY WITH PROOF SUFFICIENT TO THE COMPTROLLER THAT THE BIDDER IS, IN GOOD FAITH, ATTEMPTING TO SATISFY THE TAX WARRANT, AND/OR THE DEPARTMENT OF TAXATION AND FINANCE HAS DECLARED THE OUTSTANDING TAX WARRANT TO BE DE MINIMIS IN NATURE AND THUS DOES NOT WARRANT THE DISQUALIFICATION OF THE BIDDER. 3. FOR THE PURPOSES OF PARAGRAPH A OF SUBDIVISION TWO OF THIS SECTION, THE TERM "EMERGENCY CONDITION" SHALL MEAN A CONDITION CAUSED BY A NATURAL DISASTER, FIRE, OR OTHER CASUALTY, OR ANOTHER UNANTICIPATED, SUDDEN, AND UNEXPECTED OCCURRENCE THAT REQUIRES THE IMMEDIATE ATTENTION AND ACTION OF THE AGENCY. 4. PRIOR TO AWARDING A CONTRACT UNDER THE PROVISIONS OF PARAGRAPH A OF SUBDIVISION TWO OF THIS SECTION, THE AGENCY SHALL NOTIFY THE COMPTROLLER OF ITS INTENT TO AWARD THE CONTRACT AND SHALL SPECIFY THE REASONS USED BY THE AGENCY TO MAKE THE REQUIRED DETERMINATIONS. THE COMPTROLLER SHALL REVIEW THE DETERMINATIONS OF THE AGENCY AND IF, IN THE DETERMI- NATION OF THE COMPTROLLER, THE REASONS SPECIFIED BY THE AGENCY DO NOT SATISFY THE REQUIREMENTS OF PARAGRAPH A OF SUBDIVISION TWO OF THIS SECTION, THE COMPTROLLER SHALL HAVE THE AUTHORITY TO DEEM THE AWARDED CONTRACT NULL AND VOID AND UNENFORCEABLE AND TO REQUIRE THE AGENCY TO USE THE COMPETITIVE BIDDING PROCESS FOR THE CONTRACT. 5. FOR PURPOSES OF PARAGRAPH C OF SUBDIVISION TWO OF THIS SECTION, THE COMPTROLLER SHALL HAVE THE AUTHORITY TO MAKE A DETERMINATION OF WHETHER PROOF SUFFICIENT EXISTS TO SATISFY THE TAX WARRANT. S 2. This act shall take effect on the one hundred twentieth day after it shall have become a law; provided that all state agencies, as defined in paragraph (g) of subdivision 1 of section 73 of the public officers law, are authorized to promulgate any and all rules and regulations and take any other measures necessary to implement this act on its effective date on or before such date.