PROMPT PAYMENT POLICY Re-Adopted by the NYSTAR Board June 2010 This Policy is intended to establish rules and regulations as required under §2880 of the Public Authorities law describing the Prompt Payment Policy of the New York State Foundation for Science, Technology and Innovation for the payment of bills. Subject to the conditions and exceptions set forth in §2880 of the Public Authorities law herein, in the event any proper invoice is not paid promptly the Foundation shall be liable for the payment of interest on late payments. Definitions For the purposes of this Policy these terms shall have the following meaning: 1. “Contract” means an enforceable agreement entered into between the Foundation and a contractor. 2. “Comptroller” means the New York State Comptroller 3. “Contractor” means any person, partnership, university, non-for-profit, private corporation or association: a. Selling materials, equipment or supplies or leasing property or equipment to the Foundation; or b. Rendering or providing services specifically to the Foundation pursuant to a contract. For purposes of this policy Contractor shall not mean someone who has applied and received a grant award. 4. “Designated Payment Office” means the office designated by the Foundation to which a proper invoice is to be submitted by a contractor at 30 South Pearl Street, 11th Floor, Albany, NY12207. 5. “Foundation” means the New York State Foundation for Science, Technology and Innovation. 6. “Payment Date” shall mean the date on which a check for payment pursuant to an invoice is made. 7. “Prompt Payment” means payment of a debt due and owing by the Foundation within 30 days before interest may accrue. 8. “Proper Invoice” means a written request for a contract payment that is submitted by a contractor to the Foundation’s designated payment office setting forth the description, price and quantity of goods, property or services delivered or rendered in accordance with the terms of the contract, in such form and supported by such other substantiating documentation as the Foundation may reasonably require. 9. “Receipt of a Proper Invoice” shall: a. Be the date on which an invoice is actually received in the designated payment office; or b. The date on which the Foundation receives the purchased goods, property or services covered by the proper invoice and which are acceptable to the Foundation. 10. “Setoff” means the reduction by the Foundation of a payment due a contractor by an amount equal to the amount of an unpaid legally enforceable debt owed by the contractor to the Foundation. Responsibility The Chief Financial Officer shall have the responsibility for the implementation of the Prompt Payment Policy and the prompt payment of all proper invoices. He or she shall have 30 days to file the policy with appropriate government officials. Prompt Payment Procedure and Schedule a) A contractor shall request payment under a contract by submitting a proper invoice to the Foundation at its designated payment office at the time and in the manner specified in the contract. b) The Foundation shall have 15 calendar days after receipt of a proper invoice at its designated payment office to notify the contractor of certain facts and conditions, including but not limited to those listed below, which in the opinion of the Foundation, justify a delay of the prompt payment: 1) there is a defect in the delivered goods, property or services; 2) there is a defect in the invoice; 3) there are suspected improprieties of any kind; 4) prior to payment a statutory or contractual provision requires an inspection period or an audit to determine the resources applied or used by the contractor in fulfilling the contract terms; 5) a proper invoice must be examined by the Federal government prior to payment; 6) the Foundation is prevented from making payment by reason of the existence of a lien attachment, or other legal restriction; 7) the necessary State government appropriation required to authorize payment has yet to be enacted; or 8) the contractor has failed to submit a proper invoice or other material in accordance with the terms of the contract. Any time taken to satisfy or rectify any of the above facts or conditions or any delay in submission of required material shall extend the date by which prompt payment must be made by an equal period of time. c) Should the Foundation fail to notify a contractor of such facts and conditions within 15 calendar days of the receipt of an invoice, the number of days allowed for payment of the corrected proper invoice will be reduced by the number of days between the 15th day and the day that notification was transmitted to the contractor. Should the Foundation, in such situations, fail to provide reasonable grounds for its contention that a fact or condition justifying a time extension exists, the date by which contract payment must be made in order for the Foundation not to become liable for interest payments shall be calculated from the invoice received date. d) The Foundation shall make payment on a proper invoice within 30 calendar days after receipt of the proper invoice, excluding holidays. e) For those payments made by the Office of the State Comptroller, the Foundation shall process payment within 22 days of receipt of proper invoice and OSC shall have 8 days to make payment. f) Except for payments described in subdivision (b) of this Policy and under Exceptions below, every payment by the Foundation to a contractor pursuant to a proper invoice is eligible for interest should the Foundation fail to make such payment within 30 days after the receipt of the proper invoice, excluding legal holidays. g) The Foundation shall not be liable for interest on any retention amounts withheld by the Foundation in accordance with the terms of the contract. Declaration of Interest Interest shall be computed at the rate set by the State Tax Commission for corporate taxes when such interest exceeds $25. Exceptions and extension of payment due date Payments are not eligible for interest when they are due and owing by the Foundation: a) under the Eminent Domain Procedure Law; b) as interest allowed on a judgment by a court pursuant to any provision of law other than §2880 of the Public Authorities Law; c) to the Federal government; to any State agency or its instrumentalities; to any duly constituted unit of local government, including but not limited to counties, cities, towns, villages, school districts, or any of their related instrumentalities; to any other public authority or public benefit corporation; or to its employees when acting in, or incidental to, their public employment capacity; or d) in situations where the Foundation exercises a legally authorized setoff against all or part of the payment due the contractor; e) in the awarding of grants or reimbursable expenses associated with such grants. f) If appropriated funds from which payment is to be made have not yet been appropriated or, if appropriated, not yet been made available to the Foundation, then the payment due date shall be extended by the number of calendar days from the date of receipt of an invoice to the date when such funds are made available to the authority; g) If an inspection, performance verification, audit or other review or documentation independent of the contractor is specifically required by the contract or by other State, Federal, or local mandate, whether to be performed by or on behalf of the Foundation or another entity, or is specifically permitted by the contract or by other State, federal or local provision and the Foundation with the right to do so elects to have such activity or documentation undertaken, then the payment due date shall be extended by the number of calendar days from the date of receipt of an invoice to the date when any such activity or documentation has been completed, the Foundation has actually received the results of such activity or documentation conducted by another entity, and any deficiencies identified or issues raised as a result of such activity or documentation have been correct or otherwise resolved. h) If an invoice must be examined by a State or Federal agency, or by another party contributing to funding of the contract, prior to payment, then the payment due date shall be extended by the number of calendar days from the date of receipt of an invoice to the date when the State or Federal agency, or other contributing party to the contract, has completed the inspection, advised the Foundation of the results of the inspection, and any deficiencies identified or issues raised as a result of such inspection have been corrected or otherwise resolved. i) If the case of a payment which a contract provides will be made on a specific date or at a predetermined interval, without having to submit a written invoice, if any documentation, supporting data, performance verification, or notice specifically required by the contract or other State of Federal mandate has not been submitted to the Foundation on a timely basis, then the payment due date shall be extended by the number of calendar days from the date by which all such matter was to be submitted to the Foundation and the date when it has actually received such matter; and j) If appropriated funds from which payment is to be made have not yet been appropriated or, if appropriated, not yet been made available to the Foundation, then the payment due date shall be extended by the number of calendar days from the date of receipt of an invoice to the date when such funds are made available to the Foundation. k) To State or Foundation employees performing services in their public employment capacity (e.g. public employee travel). l) To contractors of third party payment agreement (the MMIS fiscal agent). Failure to pay contractor in a 30 day period and should it incur costs as a result; contractor shall be reimbursed for reasonable expenses. The provisions here shall be incorporated into and made a part of such contract and shall apply to all payments as they become due and owing pursuant to the terms and conditions of such contract, notwithstanding that the authority may subsequently amend.