S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  4521

                       2015-2016 Regular Sessions

                          I N  A S S E M B L Y

                            February 3, 2015
                               ___________

Introduced  by  M.  of  A.  CLARK,  BROOK-KRASNY, SCARBOROUGH, ROBINSON,
  WEPRIN -- Multi-Sponsored by -- M. of A. ARROYO, KEARNS --  read  once
  and referred to the Committee on Governmental Operations

AN ACT to amend the state finance law, in relation to requiring contrac-
  tors  on  public  works  projects  to  pay  their  subcontractors upon
  completion of work

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subdivision 2 of section 139-f of the state finance law, as
amended  by  section 16 of part MM of chapter 57 of the laws of 2008, is
amended to read as follows:
  2. Payment by contractors to subcontractors.  [Within  seven  calendar
days of the receipt of any payment from the public owner] PAYMENT BY THE
CONTRACTOR  TO  A  SUBCONTRACTOR  OR MATERIALMAN SHALL NOT BE CONTINGENT
UPON PAYMENT BY AN OWNER TO  THE  CONTRACTOR.  UPON  COMPLETION  OF  THE
PERFORMANCE OF WORK OR MATERIALS SUPPLIED, the contractor shall pay each
of  his  subcontractors  and materialmen the [proceeds from the] payment
representing the value of the work performed and/or materials  furnished
by the subcontractor and/or materialman and reflecting the percentage of
the   subcontractor's  work  completed  or  the  materialman's  material
supplied in the requisition approved by the owner  and  based  upon  the
actual  value of the subcontract or purchase order less an amount neces-
sary to satisfy any claims, liens or judgments against the subcontractor
or materialman which have not been  suitably  discharged  and  less  any
retained amount as hereafter described. Failure by the contractor to pay
any  subcontractor  or  materialman  [within  seven calendar days of the
receipt of any payment from the public owner]  UPON  COMPLETION  OF  THE
PERFORMANCE  OF WORK OR MATERIALS SUPPLIED shall result in the commence-
ment and accrual of interest on amounts due  to  such  subcontractor  or
materialman  for  the  period beginning on the day immediately following
the [expiration of such seven calendar day  period]  COMPLETION  OF  THE

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08676-01-5
              

A. 4521                             2

PERFORMANCE  OF  WORK  OR  MATERIALS  SUPPLIED and ending on the date on
which payment is made by the contractor to such subcontractor or materi-
alman. Such interest payment shall be the  sole  responsibility  of  the
contractor,  and  shall be paid at the rate of interest in effect on the
date payment is made by the contractor.
  Notwithstanding any other provision of law to the  contrary,  interest
shall  be  computed at the rate established in paragraph (b) of subdivi-
sion one of section seven hundred fifty-six-b of  the  general  business
law.  [The contractor shall retain not more than five per centum of each
payment to the subcontractor and/or materialman except that the contrac-
tor may retain in excess of five per centum but not more  than  ten  per
centum  of  each  payment  to  the  subcontractor provided that prior to
entering into a subcontract with the contractor,  the  subcontractor  is
unable  or unwilling to provide a performance bond and a labor and mate-
rial bond, both in the full amount of the subcontract, at the request of
the contractor. However, the contractor shall retain nothing from  those
payments representing proceeds owed the subcontractor and/or materialman
from  the  public  owner's  payments to the contractor for the remaining
amounts of the contract balance as provided in subdivision one  of  this
section.  If  the  contractor  has  failed  to  submit a requisition for
payment of the remaining amounts of the contract balance  within  ninety
days  of  substantial  completion as provided in subdivision one of this
section, then any clause in the subcontract between the  contractor  and
the  subcontractor  or  materialman  which  states  that  payment by the
contractor to such  subcontractor  or  materialman  is  contingent  upon
payment  by  the owner to the contractor shall be deemed invalid. Within
seven calendar days of the receipt of payment from the  contractor,  the
subcontractor  and/or  materialman  shall pay each of his subcontractors
and materialmen in the same  manner  as  the  contractor  has  paid  the
subcontractor,  including  interest  as  herein  provided above. Nothing
provided herein shall create any obligation on the part  of  the  public
owner to pay or to see to the payment of any moneys to any subcontractor
or  materialman  from  any contractor nor shall anything provided herein
serve to create any relationship in contract or  otherwise,  implied  or
expressed,  between  the  subcontractor  or  materialman  and the public
owner.]
  S 2. This act shall take effect immediately.