N.Y. State Finance Law § 18: Interest and collection fees assessed on debts owed to the state

§ 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 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.