Bill Text: NY A05429 | 2019-2020 | General Assembly | Introduced
Bill Title: Provides for release of subcontractor's retainage held by a public owner or contractor sixty days after substantial completion of work.
Spectrum: Moderate Partisan Bill (Democrat 6-1)
Status: (Introduced - Dead) 2019-02-15 - enacting clause stricken [A05429 Detail]
Download: New_York-2019-A05429-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 5429 2019-2020 Regular Sessions IN ASSEMBLY February 12, 2019 ___________ Introduced by M. of A. CUSICK, PEOPLES-STOKES, COLTON, BICHOTTE, SANTA- BARBARA, D'URSO, MORINELLO -- 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: 1 Section 1. Subdivision 2 of section 139-f of the state finance law, as 2 amended by section 16 of part MM of chapter 57 of the laws of 2008, is 3 amended to read as follows: 4 2. Payment by contractors to subcontractors. Within seven calendar 5 days of the receipt of any payment from the public owner, the contractor 6 shall pay each of his subcontractors and materialmen the proceeds from 7 the payment representing the value of the work performed and/or materi- 8 als furnished by the subcontractor and/or materialman and reflecting the 9 percentage of the subcontractor's work completed or the materialman's 10 material supplied in the requisition approved by the owner and based 11 upon the actual value of the subcontract or purchase order less an 12 amount necessary to satisfy any claims, liens or judgments against the 13 subcontractor or materialman which have not been suitably discharged and 14 less any retained amount as hereafter described. Failure by the contrac- 15 tor to pay any subcontractor or materialman within seven calendar days 16 of the receipt of any payment from the public owner shall result in the 17 commencement and accrual of interest on amounts due to such subcontrac- 18 tor or materialman for the period beginning on the day immediately 19 following the expiration of such seven calendar day period and ending on 20 the date on which payment is made by the contractor to such subcontrac- 21 tor or materialman. Such interest payment shall be the sole responsibil- 22 ity of the contractor, and shall be paid at the rate of interest in 23 effect on the date payment is made by the contractor. Notwithstanding 24 any other provision of law to the contrary, interest shall be computed EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD08836-01-9A. 5429 2 1 at the rate established in paragraph (b) of subdivision one of section 2 seven hundred fifty-six-b of the general business law. The contractor 3 shall retain not more than five per centum of each payment to the 4 subcontractor and/or materialman except that the contractor may retain 5 in excess of five per centum but not more than ten per centum of each 6 payment to the subcontractor provided that prior to entering into a 7 subcontract with the contractor, the subcontractor is unable or unwill- 8 ing to provide a performance bond and a labor and material bond, both in 9 the full amount of the subcontract, at the request of the contractor. 10 However, the contractor shall retain nothing from those payments repres- 11 enting proceeds owed the subcontractor and/or materialman from the 12 public owner's payments to the contractor for the remaining amounts of 13 the contract balance as provided in subdivision one of this section. If 14 the contractor has failed to submit a requisition for payment of the 15 remaining amounts of the contract balance within ninety days of substan- 16 tial completion as provided in subdivision one of this section, then any 17 clause in the subcontract between the contractor and the subcontractor 18 or materialman which states that payment by the contractor to such 19 subcontractor or materialman is contingent upon payment by the owner to 20 the contractor shall be deemed invalid. Within seven calendar days of 21 the receipt of payment from the contractor, the subcontractor and/or 22 materialman shall pay each of his subcontractors and materialmen in the 23 same manner as the contractor has paid the subcontractor, including 24 interest as herein provided above. Nothing provided herein shall create 25 any obligation on the part of the public owner to pay or to see to the 26 payment of any moneys to any subcontractor or materialman from any 27 contractor nor shall anything provided herein serve to create any 28 relationship in contract or otherwise, implied or expressed, between the 29 subcontractor or materialman and the public owner. Notwithstanding any 30 other provision of this section or other law, any retainage held by a 31 public owner or contractor representing retainage for a subcontractor's 32 work shall be released, less two times the value of any remaining items 33 to be completed by the subcontractor and an amount necessary to satisfy 34 any claims, liens or judgments against the subcontractor or materialman 35 which have not been suitably discharged no later than sixty days from 36 the completion and acceptance by the public owner of the subcontractor's 37 work. 38 § 2. Subdivision 2 of section 106-b of the general municipal law, as 39 amended by section 15 of part MM of chapter 57 of the laws of 2008, is 40 amended to read as follows: 41 2. Payment by contractors to subcontractors. Within seven calendar 42 days of the receipt of any payment from the public owner, the contractor 43 shall pay each of his subcontractors and materialmen the proceeds from 44 the payment representing the value of the work performed and/or materi- 45 als furnished by the subcontractor and/or materialman and reflecting the 46 percentage of the subcontractor's work completed or the materialman's 47 material supplied in the requisition approved by the owner and based 48 upon the actual value of the subcontract or purchase order less an 49 amount necessary to satisfy any claims, liens or judgments against the 50 subcontractor or materialman which have not been suitably discharged and 51 less any retained amount as hereafter described. Failure by the contrac- 52 tor to make any payment, including any remaining amounts of the contract 53 balance as hereinafter described, to any subcontractor or materialman 54 within seven calendar days of the receipt of any payment from the public 55 owner shall result in the commencement and accrual of interest on 56 amounts due to such subcontractor or materialman for the period begin-A. 5429 3 1 ning on the day immediately following the expiration of such seven 2 calendar day period and ending on the date on which payment is made by 3 the contractor to such subcontractor or materialman. Such interest shall 4 be the sole responsibility of the contractor, and shall be paid at the 5 rate of interest in effect on the date payment is made by the contrac- 6 tor. Notwithstanding any other provision of law to the contrary, inter- 7 est shall be computed at the rate established in paragraph (b) of subdi- 8 vision one of section seven hundred fifty-six-b of the general business 9 law. The contractor shall retain not more than five per centum of each 10 payment to the subcontractor and/or materialman except that the contrac- 11 tor may retain in excess of five per centum but not more than ten per 12 centum of each payment to the subcontractor provided that prior to 13 entering into a subcontract with the contractor, the subcontractor is 14 unable or unwilling to provide a performance bond and a labor and mate- 15 rial bond both in the full amount of the subcontract at the request of 16 the contractor. However, the contractor shall retain nothing from those 17 payments representing proceeds owed the subcontractor and/or materialman 18 from the public owner's payments to the contractor for the remaining 19 amounts of the contract balance as provided in subdivision one of this 20 section. If the contractor has failed to submit a requisition for 21 payment of the remaining amounts of the contract balance within ninety 22 days of substantial completion as provided in subdivision one of this 23 section, then any clause in the subcontract between the contractor and 24 the subcontractor or materialman which states that payment by the 25 contractor to such subcontractor or materialman is contingent upon 26 payment by the owner to the contractor shall be deemed invalid. Within 27 seven calendar days of the receipt of payment from the contractor, the 28 subcontractor and/or materialman shall pay each of his subcontractors 29 and materialmen in the same manner as the contractor has paid the 30 subcontractor, including interest as herein provided above. Nothing 31 provided herein shall create any obligation on the part of the public 32 owner to pay or to see to the payment of any moneys to any subcontractor 33 or materialman from any contractor nor shall anything provided herein 34 serve to create any relationship in contract or otherwise, implied or 35 expressed, between the subcontractor or materialman and the public 36 owner. Notwithstanding any other provision of this section or other 37 law, any retainage held by a public owner or contractor representing 38 retainage for a subcontractor's work shall be released, less two times 39 the value of any remaining items to be completed by the subcontractor 40 and an amount necessary to satisfy any claims, liens or judgments 41 against the subcontractor or materialman which have not been suitably 42 discharged no later than sixty days from the completion and acceptance 43 by the public owner of the subcontractor's work. 44 § 3. This act shall take effect immediately and shall apply to all 45 contracts entered into on or after such effective date.