Bill S1974-2013

Provides for release of subcontractor's retainage held by a public owner or contractor sixty days after substantial completion of work

Provides for release of subcontractor's retainage held by a public owner or contractor sixty days after substantial completion of work.

Details

Actions

  • Jan 8, 2014: REFERRED TO FINANCE
  • Jun 21, 2013: COMMITTED TO RULES
  • Apr 22, 2013: ADVANCED TO THIRD READING
  • Apr 17, 2013: 2ND REPORT CAL.
  • Apr 16, 2013: 1ST REPORT CAL.305
  • Jan 9, 2013: REFERRED TO FINANCE

Votes

Memo

BILL NUMBER:S1974

TITLE OF BILL: An act to amend the state finance law and the general municipal law, in relation to release of subcontractor's retainage

PURPOSE OR GENERAL IDEA OF BILL: This bill amends the general municipal law and the state finance law to provide for an early release of retainage on public jobs.

SUMMARY OF SPECIFIC PROVISIONS:

Section 1 amends section 1394(2) of the state finance law by adding the sentence, Notwithstanding any other provision of this section or other law, any retainage held by a public owner or contractor representing retainage for a subcontractors work shall be released no later than 60 days from the completion and acceptance by the public owner of the subcontractor's work."

Section 2 amends section 106-b (2) of the general municipal law by adding the sentence, "Notwithstanding any other provision of this section or other law, any retainage held by a public owner or contractor representing retainage for a subcontractor's work shall be released no later than 60 days from the completion and acceptance by the public owner of the subcontractor's work."

JUSTIFICATION: Currently, subcontractors who have finished their work on a public job must wait until the entire project is complete before receiving their retainage. This creates hardships for subcontractors who must finance their work in advance and wait for unreasonably long periods of time for payment. Line item listing and early release of retainage will cure this unfairness and will insure subcontractor's payment within a reasonable time, thereby avoiding potential payment disputes and liens on the job.

PRIOR LEGISLATIVE HISTORY: 2011-12: S.3181/A.5024 ; 2010: A.2347 - Died in Assembly Governmental Operations.

FISCAL IMPLICATIONS: None,

EFFECTIVE DATE: This act shall take effect immediately and shall apply to all contracts entered into after the effective date.


Text

STATE OF NEW YORK ________________________________________________________________________ S. 1974 A. 1660 2013-2014 Regular Sessions S E N A T E - A S S E M B L Y (PREFILED) January 9, 2013 ___________
IN SENATE -- Introduced by Sen. DeFRANCISCO -- read twice and ordered printed, and when printed to be committed to the Committee on Finance IN ASSEMBLY -- Introduced by M. of A. CUSICK, GABRYSZAK -- Multi-Spon- sored by -- M. of A. ROBINSON -- read once and referred to the Commit- tee on Governmental Operations AN ACT to amend the state finance law and the general municipal law, in relation to release of subcontractor's retainage 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, the contractor shall pay each of his subcontractors and materialmen the proceeds from the payment representing the value of the work performed and/or materi- als 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 necessary 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 contrac- tor to pay any subcontractor or materialman within seven calendar days of the receipt of any payment from the public owner shall result in the commencement and accrual of interest on amounts due to such subcontrac- tor or materialman for the period beginning on the day immediately following the expiration of such seven calendar day period and ending on the date on which payment is made by the contractor to such subcontrac-
tor or materialman. Such interest payment shall be the sole responsibil- ity 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 subdivision 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 contractor 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 unwill- ing to provide a performance bond and a labor and material bond, both in the full amount of the subcontract, at the request of the contractor. However, the contractor shall retain nothing from those payments repres- enting 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 substan- tial 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. NOTWITHSTANDING ANY OTHER PROVISION OF THIS SECTION OR OTHER LAW, ANY RETAINAGE HELD BY A PUBLIC OWNER OR CONTRACTOR REPRESENTING RETAINAGE FOR A SUBCONTRACTOR'S WORK SHALL BE RELEASED, LESS AN AMOUNT NECESSARY TO SATISFY ANY CLAIMS, LIENS OR JUDGMENTS AGAINST THE SUBCONTRACTOR OR MATERIALMAN WHICH HAVE NOT BEEN SUITABLY DISCHARGED AND LESS AN AMOUNT NECESSARY TO SATISFY ANY CHARGES FOR UNFINISHED PUNCH LIST ITEMS, NO LATER THAN SIXTY DAYS FROM THE COMPLETION AND ACCEPTANCE BY THE PUBLIC OWNER OF THE SUBCONTRACTOR'S WORK. S 2. Subdivision 2 of section 106-b of the general municipal law, as amended by section 15 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, the contractor shall pay each of his subcontractors and materialmen the proceeds from the payment representing the value of the work performed and/or materi- als 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 necessary 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 contrac- tor to make any payment, including any remaining amounts of the contract
balance as hereinafter described, to any subcontractor or materialman within seven calendar days of the receipt of any payment from the public owner shall result in the commencement and accrual of interest on amounts due to such subcontractor or materialman for the period begin- ning on the day immediately following the expiration of such seven calendar day period and ending on the date on which payment is made by the contractor to such subcontractor or materialman. Such interest 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 contrac- tor. Notwithstanding any other provision of law to the contrary, inter- est shall be computed at the rate established in paragraph (b) of subdi- vision 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. NOTWITHSTANDING ANY OTHER PROVISION OF THIS SECTION OR OTHER LAW, ANY RETAINAGE HELD BY A PUBLIC OWNER OR CONTRACTOR REPRESENTING RETAINAGE FOR A SUBCONTRACTOR'S WORK SHALL BE RELEASED, LESS AN AMOUNT NECESSARY TO SATISFY ANY CLAIMS, LIENS OR JUDGMENTS AGAINST THE SUBCON- TRACTOR OR MATERIALMAN WHICH HAVE NOT BEEN SUITABLY DISCHARGED AND LESS AN AMOUNT NECESSARY TO SATISFY ANY CHARGES FOR UNFINISHED PUNCH LIST ITEMS, NO LATER THAN SIXTY DAYS FROM THE COMPLETION AND ACCEPTANCE BY THE PUBLIC OWNER OF THE SUBCONTRACTOR'S WORK. S 3. This act shall take effect immediately and shall apply to all contracts entered into on or after such effective date.

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