Bill Text: NY S08848 | 2017-2018 | General Assembly | Introduced

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Bill Title: Relates to payment and retainage in construction contracts; authorizes contractors to invoice owners upon substantial completion of a project.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2018-05-24 - REFERRED TO CONSUMER PROTECTION [S08848 Detail]

Download: New_York-2017-S08848-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________
                                          8848
                    IN SENATE
                                      May 24, 2018
                                       ___________
        Introduced  by  Sen. BRESLIN -- read twice and ordered printed, and when
          printed to be committed to the Committee on Consumer Protection
        AN ACT to amend the general business law, in  relation  to  payment  and
          retainage in construction contracts
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. Section 756 of the  general  business  law  is  amended  by
     2  adding a new subdivision 7 to read as follows:
     3    7.  "Substantial  completion"  means  the state in the progress of the
     4  project when the work required by the  construction  contract  with  the
     5  project   owner   is   sufficiently  complete  in  accordance  with  the
     6  construction contract so that the project owner may  occupy  or  utilize
     7  the  work  for  its  intended  use;  provided further, that "substantial
     8  completion" shall apply to the entire project or a portion of the entire
     9  project if the construction contract with the project owner provides for
    10  occupancy or use of a portion of the project.
    11    § 2. The opening paragraph  of  paragraph  (a)  of  subdivision  2  of
    12  section  756-a of the general business law, as amended by chapter 417 of
    13  the laws of 2009, is amended to read as follows:
    14    A contractor shall be  entitled  to  invoice  the  owner  for  interim
    15  payments at the end of the billing cycle. A contractor shall be entitled
    16  to  submit  a final invoice for payment in full [upon the performance of
    17  all the  contractor's  obligation  under  the  contract]  upon  reaching
    18  substantial completion under the construction contract.
    19    §  3.  Section  756-c of the general business law, as added by chapter
    20  127 of the laws of 2002, is amended to read as follows:
    21    § 756-c. Retention. By mutual agreement of  the  relevant  parties  an
    22  owner  may  retain [a reasonable amount] no more than five per centum of
    23  the contract sum as retainage. A contractor or  subcontractor  may  also
    24  retain  [a reasonable amount] no more than five per centum for retainage
    25  [so long as the amount does not] and in no case shall  retainage  exceed
    26  the actual percentage retained by the owner. Retainage shall be released
    27  by the owner to the contractor no later than thirty days after the final
    28  approval of the work under a construction contract. In the event that an
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00510-01-7
        S. 8848                             2
     1  owner  fails  to  release  retainage as required by this article, or the
     2  contractor or subcontractor fails to release a proportionate  amount  of
     3  retainage  to  the  relevant parties after receipt of retainage from the
     4  owner,  the  owner,  contractor,  or  subcontractor, as the case may be,
     5  shall be subject to the payment of interest at the rate of  one  percent
     6  per month on the date retention was due and owing.
     7    §  4.  This  act  shall  take  effect  immediately  and shall apply to
     8  contracts entered into on or after such effective date.