Bill Text: NY S05238 | 2017-2018 | General Assembly | Amended
Bill Title: Provides for release of subcontractor's retainage held by a public owner or contractor sixty days after substantial completion of work.
Spectrum: Slight Partisan Bill (Republican 2-1)
Status: (Engrossed - Dead) 2018-06-05 - REPORTED AND COMMITTED TO RULES [S05238 Detail]
Download: New_York-2017-S05238-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 5238--A 2017-2018 Regular Sessions IN SENATE March 16, 2017 ___________ Introduced by Sens. DeFRANCISCO, YOUNG -- read twice and ordered print- ed, and when printed to be committed to the Committee on Finance -- recommitted to the Committee on Finance in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee 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 EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD00257-03-7S. 5238--A 2 1 effect on the date payment is made by the contractor. Notwithstanding 2 any other provision of law to the contrary, interest shall be computed 3 at the rate established in paragraph (b) of subdivision one of section 4 seven hundred fifty-six-b of the general business law. The contractor 5 shall retain not more than five per centum of each payment to the 6 subcontractor and/or materialman except that the contractor may retain 7 in excess of five per centum but not more than ten per centum of each 8 payment to the subcontractor provided that prior to entering into a 9 subcontract with the contractor, the subcontractor is unable or unwill- 10 ing to provide a performance bond and a labor and material bond, both in 11 the full amount of the subcontract, at the request of the contractor. 12 However, the contractor shall retain nothing from those payments repres- 13 enting proceeds owed the subcontractor and/or materialman from the 14 public owner's payments to the contractor for the remaining amounts of 15 the contract balance as provided in subdivision one of this section. If 16 the contractor has failed to submit a requisition for payment of the 17 remaining amounts of the contract balance within ninety days of substan- 18 tial completion as provided in subdivision one of this section, then any 19 clause in the subcontract between the contractor and the subcontractor 20 or materialman which states that payment by the contractor to such 21 subcontractor or materialman is contingent upon payment by the owner to 22 the contractor shall be deemed invalid. Within seven calendar days of 23 the receipt of payment from the contractor, the subcontractor and/or 24 materialman shall pay each of his subcontractors and materialmen in the 25 same manner as the contractor has paid the subcontractor, including 26 interest as herein provided above. Nothing provided herein shall create 27 any obligation on the part of the public owner to pay or to see to the 28 payment of any moneys to any subcontractor or materialman from any 29 contractor nor shall anything provided herein serve to create any 30 relationship in contract or otherwise, implied or expressed, between the 31 subcontractor or materialman and the public owner. Notwithstanding any 32 other provision of this section or other law, any retainage held by a 33 public owner or contractor representing retainage for a subcontractor's 34 work shall be released, less two times the value of any remaining items 35 to be completed by the subcontractor and an amount necessary to satisfy 36 any claims, liens or judgments against the subcontractor or materialman 37 which have not been suitably discharged no later than sixty days from 38 the completion and acceptance by the public owner of the subcontractor's 39 work. 40 § 2. Subdivision 2 of section 106-b of the general municipal law, as 41 amended by section 15 of part MM of chapter 57 of the laws of 2008, is 42 amended to read as follows: 43 2. Payment by contractors to subcontractors. Within seven calendar 44 days of the receipt of any payment from the public owner, the contractor 45 shall pay each of his subcontractors and materialmen the proceeds from 46 the payment representing the value of the work performed and/or materi- 47 als furnished by the subcontractor and/or materialman and reflecting the 48 percentage of the subcontractor's work completed or the materialman's 49 material supplied in the requisition approved by the owner and based 50 upon the actual value of the subcontract or purchase order less an 51 amount necessary to satisfy any claims, liens or judgments against the 52 subcontractor or materialman which have not been suitably discharged and 53 less any retained amount as hereafter described. Failure by the contrac- 54 tor to make any payment, including any remaining amounts of the contract 55 balance as hereinafter described, to any subcontractor or materialman 56 within seven calendar days of the receipt of any payment from the publicS. 5238--A 3 1 owner shall result in the commencement and accrual of interest on 2 amounts due to such subcontractor or materialman for the period begin- 3 ning on the day immediately following the expiration of such seven 4 calendar day period and ending on the date on which payment is made by 5 the contractor to such subcontractor or materialman. Such interest shall 6 be the sole responsibility of the contractor, and shall be paid at the 7 rate of interest in effect on the date payment is made by the contrac- 8 tor. Notwithstanding any other provision of law to the contrary, inter- 9 est shall be computed at the rate established in paragraph (b) of subdi- 10 vision one of section seven hundred fifty-six-b of the general business 11 law. The contractor shall retain not more than five per centum of each 12 payment to the subcontractor and/or materialman except that the contrac- 13 tor may retain in excess of five per centum but not more than ten per 14 centum of each payment to the subcontractor provided that prior to 15 entering into a subcontract with the contractor, the subcontractor is 16 unable or unwilling to provide a performance bond and a labor and mate- 17 rial bond both in the full amount of the subcontract at the request of 18 the contractor. However, the contractor shall retain nothing from those 19 payments representing proceeds owed the subcontractor and/or materialman 20 from the public owner's payments to the contractor for the remaining 21 amounts of the contract balance as provided in subdivision one of this 22 section. If the contractor has failed to submit a requisition for 23 payment of the remaining amounts of the contract balance within ninety 24 days of substantial completion as provided in subdivision one of this 25 section, then any clause in the subcontract between the contractor and 26 the subcontractor or materialman which states that payment by the 27 contractor to such subcontractor or materialman is contingent upon 28 payment by the owner to the contractor shall be deemed invalid. Within 29 seven calendar days of the receipt of payment from the contractor, the 30 subcontractor and/or materialman shall pay each of his subcontractors 31 and materialmen in the same manner as the contractor has paid the 32 subcontractor, including interest as herein provided above. Nothing 33 provided herein shall create any obligation on the part of the public 34 owner to pay or to see to the payment of any moneys to any subcontractor 35 or materialman from any contractor nor shall anything provided herein 36 serve to create any relationship in contract or otherwise, implied or 37 expressed, between the subcontractor or materialman and the public 38 owner. Notwithstanding any other provision of this section or other 39 law, any retainage held by a public owner or contractor representing 40 retainage for a subcontractor's work shall be released, less two times 41 the value of any remaining items to be completed by the subcontractor 42 and an amount necessary to satisfy any claims, liens or judgments 43 against the subcontractor or materialman which have not been suitably 44 discharged no later than sixty days from the completion and acceptance 45 by the public owner of the subcontractor's work. 46 § 3. This act shall take effect immediately and shall apply to all 47 contracts entered into on or after such effective date.
