senate Bill S1974

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

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 09 / Jan / 2013
    • REFERRED TO FINANCE
  • 16 / Apr / 2013
    • 1ST REPORT CAL.305
  • 17 / Apr / 2013
    • 2ND REPORT CAL.
  • 22 / Apr / 2013
    • ADVANCED TO THIRD READING
  • 21 / Jun / 2013
    • COMMITTED TO RULES
  • 08 / Jan / 2014
    • REFERRED TO FINANCE
  • 13 / May / 2014
    • 1ST REPORT CAL.715
  • 14 / May / 2014
    • 2ND REPORT CAL.
  • 19 / May / 2014
    • ADVANCED TO THIRD READING
  • 10 / Jun / 2014
    • PASSED SENATE
  • 10 / Jun / 2014
    • DELIVERED TO ASSEMBLY
  • 10 / Jun / 2014
    • REFERRED TO WAYS AND MEANS

Summary

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

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Bill Details

See Assembly Version of this Bill:
A1660
Versions:
S1974
Legislative Cycle:
2013-2014
Current Committee:
Law Section:
State Finance Law
Laws Affected:
Amd §139-f, St Fin L; amd §106-b, Gen Muni L
Versions Introduced in Previous Legislative Cycles:
2011-2012: S3181, A5024
2009-2010: S802A, A2347A

Sponsor Memo

BILL NUMBER:S1974

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 retain-
age on public jobs.

SUMMARY OF SPECIFIC PROVISIONS:

Section 1 amends section 1394(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 peri-
ods of time for payment. Line item listing and early release of retain-
age 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: 2011-12: S.3181/A.5024 ; 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.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

    S. 1974                                                  A. 1660

                       2013-2014 Regular Sessions

                      S E N A T E - A S S E M B L Y

                               (PREFILED)

                             January 9, 2013
                               ___________

IN  SENATE  --  Introduced by Sen. DeFRANCISCO -- 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  --  Multi-Spon-
  sored by -- M. of A. ROBINSON -- read once and referred to the Commit-
  tee 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-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD04997-01-3

S. 1974                             2                            A. 1660

tor or materialman. Such interest payment shall be the sole responsibil-
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

S. 1974                             3                            A. 1660

balance as hereinafter described, to 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 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 such effective date.

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