S3181-2011 - NY Senate Open Legislation - 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.

Sponsor: DEFRANCISCO / Co-sponsor(s): JOHNSON, LARKIN, O'MARA / Committee: RULES
Law Section: State Finance Law / Law: Amd S139-f, St Fin L; amd S106-b, Gen Muni L

S3181-2011 Actions

Jun 21, 2012: COMMITTED TO RULES
May 7, 2012: ADVANCED TO THIRD READING
May 2, 2012: 2ND REPORT CAL.
May 1, 2012: 1ST REPORT CAL.666
Jan 4, 2012: REFERRED TO FINANCE
Jan 4, 2012: returned to senate
Jan 4, 2012: died in assembly
Jun 22, 2011: referred to governmental operations
Jun 22, 2011: DELIVERED TO ASSEMBLY
Jun 22, 2011: PASSED SENATE
May 4, 2011: ADVANCED TO THIRD READING
May 3, 2011: 2ND REPORT CAL.
May 2, 2011: 1ST REPORT CAL.419
Feb 10, 2011: REFERRED TO FINANCE

S3181-2011 Meetings

Finance: May 1, 2012, Finance: May 2, 2011

S3181-2011 Calendars

S3181-2011 Votes

VOTE: COMMITTEE VOTE: - Finance - May 2, 2011

Ayes (27): DeFrancisco, Johnson, Alesi, Bonacic, Farley, Flanagan, Fuschillo, Golden, Lanza, Larkin, LaValle, Little, Marcellino, Nozzolio, Robach, Seward, Young, Krueger, Breslin, Diaz, Dilan, Gianaris, Montgomery, Parker, Perkins, Rivera, Stewart-Cousins
Ayes W/R (6): Hannon, Saland, Duane, Kruger, Peralta, Stavisky
Excused (1): Oppenheimer

VOTE: FLOOR VOTE: - Jun 22, 2011

Ayes (62): Adams, Addabbo, Alesi, Avella, Ball, Bonacic, Breslin, Carlucci, DeFrancisco, Diaz, Dilan, Duane, Espaillat, Farley, Flanagan, Fuschillo, Gallivan, Gianaris, Golden, Griffo, Grisanti, Hannon, Hassell-Thomps, Huntley, Johnson, Kennedy, Klein, Krueger, Kruger, Lanza, Larkin, LaValle, Libous, Little, Marcellino, Martins, Maziarz, McDonald, Montgomery, Nozzolio, O'Mara, Oppenheimer, Parker, Peralta, Perkins, Ranzenhofer, Ritchie, Rivera, Robach, Saland, Sampson, Savino, Serrano, Seward, Skelos, Smith, Squadron, Stavisky, Stewart-Cousin, Valesky, Young, Zeldin

VOTE: COMMITTEE VOTE: - Finance - May 1, 2012

Ayes (25): DeFrancisco, Johnson, Alesi, Bonacic, Farley, Flanagan, Fuschillo, Griffo, Lanza, Larkin, LaValle, Little, Marcellino, Nozzolio, Robach, Saland, Young, Breslin, Diaz, Gianaris, Montgomery, Oppenheimer, Peralta, Perkins, Stavisky
Ayes W/R (9): Golden, Seward, Krueger, Dilan, Duane, Parker, Rivera, Stewart-Cousins, Squadron
Excused (1): Hannon

S3181-2011 Memo

BILL NUMBER:S3181

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 139-f(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:
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.

S3181-2011 Text

 S T A T E   O F   N E W   Y O R K
 
 S. 3181                                                  A. 5024
 2011-2012 Regular Sessions
 SENATE - ASSEMBLY
 February 10, 2011
 
 IN  SENATE  --  Introduced by Sens. DeFRANCISCO, JOHNSON, O'MARA -- 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 -- read once and
 referred to the Committee 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
 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD00503-01-1
        S. 3181                             2                            A. 5024
 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
        S. 3181                             3                            A. 5024
 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 its effective date.

S3181-2011: Provides for release of subcontractor's retainage held by a public owner or contractor sixty days after substantial completion of work