Bill Text: NY S00880 | 2021-2022 | General Assembly | Introduced
Bill Title: Relates to payment in construction contracts; specifies the meaning of "substantial completion" for the purposes of requisition payments in construction contracts.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2021-06-11 - SIGNED CHAP.128 [S00880 Detail]
Download: New_York-2021-S00880-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 880 2021-2022 Regular Sessions IN SENATE (Prefiled) January 6, 2021 ___________ Introduced by Sen. BRESLIN -- read twice and ordered printed, and when printed to be committed to the Committee on Rules AN ACT to amend the state finance law and the general municipal law, in relation to payment in construction contracts The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subdivision 1 of section 139-f of the state finance law, as 2 amended by a chapter of the laws of 2020, amending the state finance law 3 and the general municipal law relating to payment in construction 4 contracts, as proposed in legislative bills numbers S.7664 and A.9117, 5 is amended to read as follows: 6 1. Payment by public owners to contractors. The contractor shall peri- 7 odically, in accordance with the terms of the contract, submit to the 8 public owner and/or his agent a requisition for a progress payment for 9 the work performed and/or materials furnished to the date of the requi- 10 sition, less any amount previously paid to the contractor. The public 11 owner shall in accordance with the terms of the contract approve and 12 promptly pay the requisition for the progress payment less an amount 13 necessary to satisfy any claims, liens or judgments against the contrac- 14 tor which have not been suitably discharged and less any retained amount 15 as hereafter described. The public owner shall retain not more than five 16 per centum of each progress payment to the contractor except that the 17 public owner may retain in excess of five per centum but not more than 18 ten per centum of each progress payment to the contractor provided that 19 there are no requirements by the public owner for the contractor to 20 provide a performance bond and a labor and material bond both in the 21 full amount of the contract. The public owner shall pay, upon requisi- 22 tion from the contractor, for materials pertinent to the project which 23 have been delivered to the site or off-site by the contractor and/or 24 subcontractor and suitably stored and secured as required by the public EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD07166-01-1S. 880 2 1 owner and the contractor provided, the public owner may limit such 2 payment to materials in short and/or critical supply and materials 3 specially fabricated for the project each as defined in the contract. 4 When the work or major portions thereof as contemplated by the terms of 5 the contract [has reached substantial completion which, for the purposes6of this section, shall mean the state in the progress of the project7when the work required by the contract with the public owner is suffi-8ciently complete in accordance with the contract so that the public9owner may occupy or utilize the work for its intended use; provided10further, that "substantial completion" shall apply to the entire project11or a portion of the entire project if the contract with the public owner12provides for occupancy or use of a portion of the project] are substan- 13 tially completed, the contractor shall submit to the public owner and/or 14 his agent a requisition for payment of the remaining amount of the 15 contract balance. Upon receipt of such requisition the public owner 16 shall approve and promptly pay the remaining amount of the contract 17 balance less two times the value of any remaining items to be completed 18 and an amount necessary to satisfy any claims, liens or judgments 19 against the contractor which have not been suitably discharged. As the 20 remaining items of work are satisfactorily completed or corrected, the 21 public owner shall promptly pay, upon receipt of a requisition, for 22 these remaining items less an amount necessary to satisfy any claims, 23 liens or judgments against the contractor which have not been suitably 24 discharged. Any claims, liens and judgments referred to in this section 25 shall pertain to the project and shall be filed in accordance with the 26 terms of the applicable contract and/or applicable laws. 27 § 2. Subdivision 1-a of section 139-f of the state finance law, as 28 added by a chapter of the laws of 2020, amending the state finance law 29 and the general municipal law relating to payment in construction 30 contracts, as proposed in legislative bills numbers S.7664 and A.9117, 31 is amended to read as follows: 32 1-a. Not later than forty-five business days after the date when the 33 project has reached substantial completion, as such term is defined in 34 the contract or as it is contemplated by the terms of the contract, the 35 public owner shall submit to the contractor a written list describing 36 all remaining items to be completed by the contractor. Not later than 37 [seven calendar] five business days after receiving a written list 38 describing all remaining items to be completed by the contractor, the 39 contractor shall submit to each subcontractor from whom the contractor 40 is withholding retainage a written list of all remaining items required 41 to be completed by the subcontractor. Such list may include items in 42 addition to those items on the public owner's list. 43 § 3. Subdivision 1 of section 106-b of the general municipal law, as 44 amended by a chapter of the laws of 2020, amending the state finance law 45 and the general municipal law relating to payment in construction 46 contracts, as proposed in legislative bills numbers S.7664 and A.9117, 47 is amended to read as follows: 48 1. Payment by public owners to contractors. (a) The contractor shall 49 periodically, in accordance with the terms of the contract, submit to 50 the public owner and/or his agent a requisition for a progress payment 51 for the work performed and/or materials furnished to the date of the 52 requisition less any amount previously paid to the contractor. The 53 public owner shall in accordance with the terms of the contract approve 54 and promptly pay the requisition for the progress payment less an amount 55 necessary to satisfy any claims, liens or judgments against the contrac- 56 tor which have not been suitably discharged and less any retained amountS. 880 3 1 as hereafter described. The public owner shall retain not more than five 2 per centum of each progress payment to the contractor except that the 3 public owner may retain in excess of five per centum but not more than 4 ten per centum of each progress payment to the contractor provided that 5 there are no requirements by the public owner for the contractor to 6 provide a performance bond and a labor and material bond both in the 7 full amount of the contract. The public owner shall pay, upon requisi- 8 tion from the contractor, for materials pertinent to the project which 9 have been delivered to the site or off-site by the contractor and/or 10 subcontractor and suitably stored and secured as required by the public 11 owner and the contractor provided, the public owner may limit such 12 payment to materials in short and/or critical supply and materials 13 specially fabricated for the project each as defined in the contract. 14 When the work or major portions thereof as contemplated by the terms of 15 the contract [has reached substantial completion which, for the purposes16of this section, shall mean, for public owners other than school17districts and boards of cooperative educational services, the state in18the progress of the project when the work required by the contract with19the public owner is sufficiently complete in accordance with the20contract so that the public owner may occupy or utilize the work for its21intended use and shall mean, for school districts and boards of cooper-22ative educational services, is the date the partial or final certificate23of substantial completion of the project which is the date certified by24the architect or engineer when the construction is code compliant and25substantially complete in accordance with the contract documents so the26school district can occupy or utilize the project or portion thereof for27its intended use] are substantially completed, the contractor shall 28 submit to the public owner and/or his agent a requisition for payment of 29 the remaining amount of the contract balance. Upon receipt of such 30 requisition the public owner shall approve and promptly pay the remain- 31 ing amount of the contract balance less two times the value of any 32 remaining items to be completed and an amount necessary to satisfy any 33 claims, liens or judgments against the contractor which have not been 34 suitably discharged. As the remaining items of work are satisfactorily 35 completed or corrected, the public owner shall promptly pay, upon 36 receipt of a requisition, for these items less an amount necessary to 37 satisfy any claims, liens or judgments against the contractor which have 38 not been suitably discharged. Any claims, liens and judgments referred 39 to in this section shall pertain to the project and shall be filed in 40 accordance with the terms of the applicable contract and/or applicable 41 laws. Where the public owner is other than the city of New York, the 42 term "promptly pay" shall mean payment within thirty days, excluding 43 legal holidays, of receipt of the requisition unless such requisition is 44 not approvable in accordance with the terms of the contract. Notwith- 45 standing the foregoing, where the public owner is other than the city of 46 New York and is a municipal corporation which requires an elected offi- 47 cial to approve progress payments, "promptly pay" shall mean payment 48 within forty-five days, excluding legal holidays, of receipt of the 49 requisition unless such requisition is not approvable in accordance with 50 the terms of the contract. 51 (b) Not later than forty-five business days after the date when the 52 project has reached substantial completion, as such term is defined in 53 the contract or as it is contemplated by the terms of the contract, the 54 public owner shall submit to the contractor a written list describing 55 all remaining items to be completed by the contractor. Not later than 56 [seven calendar] five business days after receiving a written listS. 880 4 1 describing all remaining items to be completed by the contractor, the 2 contractor shall submit to each subcontractor from whom the contractor 3 is withholding retainage a written list of all remaining items required 4 to be completed by the subcontractor. Such list may include items in 5 addition to those items on the public owner's list. 6 (c) Each public owner other than the city of New York which is 7 required to make a payment from public funds pursuant to a contract and 8 which does not make such contract payment by the required payment date 9 shall make an interest payment to the contractor on the amount of the 10 contract payment which is due unless failure to make such contract 11 payment is the result of a lien, attachment, or other legal process 12 against the money due said contractor, or unless the amount of the 13 interest payment as computed in accordance with the provisions set forth 14 hereinafter is less than ten dollars. Interest payments on amounts due 15 to a contractor pursuant to this paragraph shall be paid to the contrac- 16 tor for the period beginning on the day after the required payment date 17 and ending on the payment date for those payments required according to 18 this section and shall be paid at the rate of interest in effect on the 19 date when the interest payment is made. Notwithstanding any other 20 provision of law to the contrary, interest shall be computed at the rate 21 equal to the overpayment rate set by the commissioner of taxation and 22 finance pursuant to subsection (e) of section one thousand ninety-six of 23 the tax law. A pro rata share of such interest shall be paid by the 24 contractor or subcontractor, as the case may be, to subcontractors and 25 materialmen in a proportion equal to the percentage of their pro rata 26 share of the contract payment. Such pro rata share of interest shall be 27 due to such subcontractors and materialmen only for those payments which 28 are not paid to such subcontractors and materialmen prior to the date 29 upon which interest begins to accrue between the public owner and the 30 contractor. Such pro rata shares of interest shall be computed daily 31 until such payments are made to the subcontractors and materialmen. 32 (d) For projects of a public owner other than the city of New York, if 33 state funds directly related to and which have been budgeted for the 34 construction of the project for which the payment is due have not been 35 received prior to the expiration of the thirty or forty-five days speci- 36 fied in paragraph (a) of this subdivision, the interest provided for in 37 paragraph (c) of this subdivision shall not begin to accrue and payment 38 shall not be due, until ten days after receipt of the state funds. Noth- 39 ing in this paragraph shall prevent the public owner from approving the 40 requisition, subject to receipt of the state funds. State funds shall 41 mean monies provided to the public owner by the state, its officers, 42 boards, departments, commissions, or a public authority and public bene- 43 fit corporation, a majority of the members of which have been appointed 44 by the governor or who serve as members by virtue of holding a civil 45 office of the state, or a combination thereof. 46 § 4. This act shall take effect on the same date and in the same 47 manner as a chapter of the laws of 2020, amending the state finance law 48 and the general municipal law relating to payment in construction 49 contracts, as proposed in legislative bills numbers S.7664 and A.9117, 50 takes effect.
