S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1925
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 23, 2023
                                ___________
 
 Introduced  by M. of A. BICHOTTE HERMELYN, HYNDMAN, SEAWRIGHT, WALKER --
   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 payment by public owners to contractors and subcontractors

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The opening paragraph and subdivisions 1 and 2  of  section
 139-f  of the state finance law, the opening paragraph as added by chap-
 ter 769 of the laws of 1978, subdivision 1 as amended by chapter 128  of
 the  laws  of 2021 and subdivision 2 as amended by section 16 of part MM
 of chapter 57 of the laws of 2008, are amended to read as follows:
   Notwithstanding the provisions of  any  other  law  to  the  contrary,
 except  the  provisions  of section thirty-eight of the highway law, all
 contracts made and awarded by the state, or by any public department, or
 by any public benefit corporation or by any public corporation or  offi-
 cial   thereof,   hereafter   referred  to  as  the  public  owner,  for
 construction, reconstruction or alteration of any  public  work  project
 shall  provide  for  payment  by  the public owner to the contractor and
 [payment by the contractor] to the subcontractor  OR  SUBCONTRACTORS  in
 accordance with the following:
   1. Payment by public owners to contractors. The contractor shall peri-
 odically,  in  accordance  with the terms of the contract, submit to the
 public owner and/or his agent a requisition for a progress  payment  for
 the  work performed and/or materials furnished to the date of the requi-
 sition BY THE CONTRACTOR AND ALL SUBCONTRACTORS, less any amount  previ-
 ously  paid  to the contractor OR SUBCONTRACTORS. The public owner shall
 in accordance with the terms of the contract approve  and  promptly  pay
 the  requisition  for  the  progress payment less an amount necessary to
 satisfy any claims, liens or judgments against the contractor OR SUBCON-
 TRACTORS which have not been suitably discharged and less  any  retained
 amount  as  hereafter  described. The public owner shall retain not more
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD03310-01-3
              

 A. 1925                             2
 
 than five per centum of each progress  payment  to  the  contractor  AND
 SUBCONTRACTORS,  except  that  the  public owner may retain in excess of
 five per centum but not more  than  ten  per  centum  of  each  progress
 payment to the contractor provided that there are no requirements by the
 public  owner  for  the  contractor  to provide a performance bond and a
 labor and material bond both in the full amount  of  the  contract.  The
 public  owner shall pay, upon requisition from the contractor, for mate-
 rials pertinent to the project which have been delivered to the site  or
 off-site  by  the  contractor [and/or subcontractor] and suitably stored
 and secured as required by the public owner and the contractor provided,
 the public owner may limit such payment to  materials  in  short  and/or
 critical  supply and materials specially fabricated for the project each
 as defined in the contract, INCLUDING BALANCES OWED  TO  SUBCONTRACTORS.
 When  the work or major portions thereof as contemplated by the terms of
 the contract are substantially completed, the contractor shall submit to
 the public owner and/or his agent  a  requisition  for  payment  of  the
 remaining amount of the contract balance.  Upon receipt of such requisi-
 tion  the  public  owner  shall  approve  and promptly pay the remaining
 amount of the contract balance less two times the value of any remaining
 items to be completed and an amount necessary  to  satisfy  any  claims,
 liens  or  judgments against the contractor which have not been suitably
 discharged. As the remaining items of work are satisfactorily  completed
 or  corrected,  the  public  owner shall promptly pay, upon receipt of a
 requisition, for these remaining  items  less  an  amount  necessary  to
 satisfy any claims, liens or judgments against the contractor which have
 not  been  suitably discharged. Any claims, liens and judgments referred
 to in this section shall pertain to the project and shall  be  filed  in
 accordance  with  the terms of the applicable contract and/or applicable
 laws.
   2. Payment by [contractors] PUBLIC OWNERS to  subcontractors.  [Within
 seven calendar days of the receipt] (A) EACH SUBCONTRACTOR SHALL PERIOD-
 ICALLY,  IN  ACCORDANCE  WITH  THE  TERMS OF THE CONTRACT, SUBMIT TO THE
 PUBLIC OWNER AND/OR HIS AGENT AND TO THE CONTRACTOR AND/OR HIS  AGENT  A
 REQUISITION FOR A PROGRESS PAYMENT FOR THE WORK PERFORMED AND/OR MATERI-
 ALS FURNISHED TO THE DATE OF THE REQUISITION, LESS ANY AMOUNT PREVIOUSLY
 PAID  TO THE CONTRACTOR. AT THE TIME of any payment [from] BY the public
 owner[,] TO the contractor  AS  PROVIDED  IN  SUBDIVISION  ONE  OF  THIS
 SECTION, THE PUBLIC OWNER shall pay each of [his] THE subcontractors and
 materialmen  the proceeds from the payment representing the value of the
 work performed and/or materials 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 contractor to pay any subcontractor or mater-
 ialman 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
 payment 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  contractor.    Notwithstanding  any  other  provision of law to the
 A. 1925                             3

 contrary, interest shall be computed at the rate  established  in  para-
 graph (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 subcon-
 tractor is unable or unwilling 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 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.]   THE PUBLIC OWNER SHALL RETAIN NOT MORE THAN FIVE PER CENTUM OF
 EACH PROGRESS PAYMENT TO THE SUBCONTRACTOR EXCEPT THAT THE PUBLIC  OWNER
 MAY RETAIN IN EXCESS OF FIVE PER CENTUM BUT NOT MORE THAN TEN PER CENTUM
 OF EACH PROGRESS PAYMENT TO THE SUBCONTRACTOR PROVIDED THAT THERE ARE NO
 REQUIREMENTS  BY  THE  PUBLIC  OWNER  FOR THE SUBCONTRACTOR TO PROVIDE A
 PERFORMANCE BOND AND A LABOR AND MATERIAL BOND BOTH IN THE  FULL  AMOUNT
 OF  THE  CONTRACT. THE PUBLIC OWNER SHALL PAY, UPON REQUISITION FROM THE
 CONTRACTOR AS PROVIDED IN SUBDIVISION ONE OF THIS SECTION, FOR MATERIALS
 PERTINENT TO THE PROJECT WHICH HAVE BEEN DELIVERED TO THE SITE  OR  OFF-
 SITE BY THE SUBCONTRACTOR AND SUITABLY STORED AND SECURED AS REQUIRED BY
 THE  PUBLIC  OWNER  AND THE SUBCONTRACTOR PROVIDED, THE PUBLIC OWNER MAY
 LIMIT SUCH PAYMENT TO MATERIALS IN  SHORT  AND/OR  CRITICAL  SUPPLY  AND
 MATERIALS  SPECIALLY  FABRICATED  FOR THE PROJECT EACH AS DEFINED IN THE
 CONTRACT. WHEN THE WORK OR MAJOR PORTIONS THEREOF AS CONTEMPLATED BY THE
 TERMS OF THE CONTRACT ARE  SUBSTANTIALLY  COMPLETED,  THE  SUBCONTRACTOR
 SHALL SUBMIT TO THE CONTRACTOR AND/OR HIS OR HER AGENT A REQUISITION FOR
 PAYMENT  OF THE REMAINING AMOUNT OF THE CONTRACT BALANCE. THE CONTRACTOR
 SHALL SUBMIT A CONTRACT REQUISITION  CONTAINING  ALL  REQUISITIONS  FROM
 SUBCONTRACTORS TO THE PUBLIC OWNER. UPON RECEIPT OF SUCH REQUISITION THE
 PUBLIC  OWNER SHALL APPROVE AND PROMPTLY PAY THE REMAINING AMOUNT OF THE
 CONTRACT BALANCE LESS TWO TIMES THE VALUE OF ANY REMAINING ITEMS  TO  BE
 COMPLETED  AND AN AMOUNT NECESSARY TO SATISFY ANY CLAIMS, LIENS OR JUDG-
 MENTS AGAINST THE SUBCONTRACTOR WHICH HAVE NOT BEEN SUITABLY DISCHARGED.
 AS  THE  REMAINING  ITEMS  OF  WORK  ARE  SATISFACTORILY  COMPLETED   OR
 CORRECTED, THE PUBLIC OWNER SHALL PROMPTLY PAY, UPON RECEIPT OF A REQUI-
 SITION,  FOR  THESE  REMAINING ITEMS LESS AN AMOUNT NECESSARY TO SATISFY
 ANY CLAIMS, LIENS OR JUDGMENTS AGAINST THE SUBCONTRACTOR WHICH HAVE  NOT
 A. 1925                             4
 
 BEEN SUITABLY DISCHARGED. ANY CLAIMS, LIENS AND JUDGMENTS REFERRED TO IN
 THIS  SECTION SHALL PERTAIN TO THE PROJECT AND SHALL BE FILED IN ACCORD-
 ANCE WITH THE TERMS OF THE APPLICABLE CONTRACT AND/OR APPLICABLE LAWS.
   (B)  AS USED IN THIS SECTION, "SUBCONTRACTOR" MEANS ONLY THOSE SUBCON-
 TRACTORS THAT REPORT DIRECTLY TO  THE  MAIN  CONTRACTOR  WITH  WHOM  THE
 PUBLIC OWNER HAS ENTERED INTO THE CONTRACT, AND DOES NOT INCLUDE SUBCON-
 TRACTORS OF SUBCONTRACTORS.
   §  2.  The opening paragraph and subdivisions 1 and 2 of section 106-b
 of the general municipal law, the opening paragraph as amended by  chap-
 ter  661 of the laws of 1992, subdivision 1 as amended by chapter 128 of
 the laws of 2021, and subdivision 2 as amended by section 15 of part  MM
 of chapter 57 of the laws of 2008, are amended to read as follows:
   Notwithstanding  the  provisions of any other law to the contrary, all
 contracts made and awarded by the appropriate officer, board  or  agency
 of  a  political  subdivision  or  of  any  district  therein, hereafter
 referred to as the public owner,  for  construction,  reconstruction  or
 alteration  of  any public work project shall provide for payment by the
 public owner to the contractor and [payment by the  contractor]  to  the
 subcontractor OR SUBCONTRACTORS in accordance with the following:
   1.  Payment  by public owners to contractors. (a) The contractor shall
 periodically, in accordance with the terms of the  contract,  submit  to
 the  public  owner and/or his agent a requisition for a progress payment
 for the work performed and/or materials furnished to  the  date  of  the
 requisition  BY  THE  CONTRACTOR  AND ALL SUBCONTRACTORS less any amount
 previously paid to the contractor OR SUBCONTRACTORS.  The  public  owner
 shall  in accordance with the terms of the contract approve and promptly
 pay the requisition for the progress payment less an amount necessary to
 satisfy any claims, liens or judgments against the contractor OR SUBCON-
 TRACTORS which have not been suitably discharged and less  any  retained
 amount  as  hereafter  described. The public owner shall retain not more
 than five per centum of each  progress  payment  to  the  contractor  OR
 SUBCONTRACTORS except that the public owner may retain in excess of five
 per  centum but not more than ten per centum of each progress payment to
 the contractor provided that there are no  requirements  by  the  public
 owner  for  the contractor to provide a performance bond and a labor and
 material bond both in the full amount of the contract. The public  owner
 shall pay, upon requisition from the contractor, for materials pertinent
 to  the project which have been delivered to the site or off-site by the
 contractor [and/or subcontractor] and suitably  stored  and  secured  as
 required  by  the  public  owner and the contractor provided, the public
 owner may limit such payment  to  materials  in  short  and/or  critical
 supply  and  materials  specially  fabricated  for  the  project each as
 defined in the contract. When the work  or  major  portions  thereof  as
 contemplated  by  the terms of the contract are substantially completed,
 the contractor shall submit to the  public  owner  and/or  his  agent  a
 requisition for payment of the remaining amount of the contract balance,
 INCLUDING  BALANCES OWED TO SUBCONTRACTORS.  Upon receipt of such requi-
 sition the public owner shall approve and  promptly  pay  the  remaining
 amount of the contract balance less two times the value of any remaining
 items  to  be  completed  and an amount necessary to satisfy any claims,
 liens or judgments against the contractor which have not  been  suitably
 discharged.  As the remaining items of work are satisfactorily completed
 or corrected, the public owner shall promptly pay,  upon  receipt  of  a
 requisition,  for  these  items  less an amount necessary to satisfy any
 claims, liens or judgments against the contractor which  have  not  been
 suitably discharged. Any claims, liens and judgments referred to in this
 A. 1925                             5
 
 section  shall  pertain  to the project and shall be filed in accordance
 with the terms of the applicable contract and/or applicable laws.  Where
 the  public owner is other than the city of New York, the term "promptly
 pay" shall mean payment within thirty days, excluding legal holidays, of
 receipt  of the requisition unless such requisition is not approvable in
 accordance with the terms of the contract. Notwithstanding  the  forego-
 ing,  where the public owner is other than the city of New York and is a
 municipal corporation which requires  an  elected  official  to  approve
 progress  payments,  "promptly pay" shall mean payment within forty-five
 days, excluding legal holidays, of receipt  of  the  requisition  unless
 such  requisition  is not approvable in accordance with the terms of the
 contract.
   (b) Not later than forty-five business days after the  date  when  the
 project  has  reached substantial completion, as such term is defined in
 the contract or as it is contemplated by the terms of the contract,  the
 public  owner  shall  submit to the contractor a written list describing
 all remaining items to be completed by the contractor.  Not  later  than
 five business days after receiving a written list describing all remain-
 ing items to be completed by the contractor, the contractor shall submit
 to  each subcontractor from whom the contractor is withholding retainage
 a written list of all remaining items required to be  completed  by  the
 subcontractor. Such list may include items in addition to those items on
 the public owner's list.
   (c)  Each  public  owner  other  than  the  city  of New York which is
 required to make a payment from public funds pursuant to a contract  and
 which  does  not make such contract payment by the required payment date
 shall make an interest payment to the contractor on the  amount  of  the
 contract  payment  which  is  due  unless  failure to make such contract
 payment is the result of a lien,  attachment,  or  other  legal  process
 against  the  money  due  said  contractor,  or unless the amount of the
 interest payment as computed in accordance with the provisions set forth
 hereinafter is less than ten dollars. Interest payments on  amounts  due
 to a contractor pursuant to this paragraph shall be paid to the contrac-
 tor  for the period beginning on the day after the required payment date
 and ending on the payment date for those payments required according  to
 this  section and shall be paid at the rate of interest in effect on the
 date when the  interest  payment  is  made.  Notwithstanding  any  other
 provision of law to the contrary, interest shall be computed at the rate
 equal  to  the  overpayment rate set by the commissioner of taxation and
 finance pursuant to subsection (e) of section one thousand ninety-six of
 the tax law. A pro rata share of such interest  shall  be  paid  by  the
 contractor  or  subcontractor, as the case may be, to subcontractors and
 materialmen in a proportion equal to the percentage of  their  pro  rata
 share  of the contract payment. Such pro rata share of interest shall be
 due to such subcontractors and materialmen only for those payments which
 are not paid to such subcontractors and materialmen prior  to  the  date
 upon  which  interest  begins to accrue between the public owner and the
 contractor.  Such pro rata shares of interest shall  be  computed  daily
 until such payments are made to the subcontractors and materialmen.
   (d) For projects of a public owner other than the city of New York, if
 state  funds  directly  related  to and which have been budgeted for the
 construction of the project for which the payment is due have  not  been
 received prior to the expiration of the thirty or forty-five days speci-
 fied  in paragraph (a) of this subdivision, the interest provided for in
 paragraph (c) of this subdivision shall not begin to accrue and  payment
 shall not be due, until ten days after receipt of the state funds. Noth-
 A. 1925                             6
 
 ing  in this paragraph shall prevent the public owner from approving the
 requisition, subject to receipt of the state funds.  State  funds  shall
 mean  monies  provided  to  the public owner by the state, its officers,
 boards, departments, commissions, or a public authority and public bene-
 fit  corporation, a majority of the members of which have been appointed
 by the governor or who serve as members by virtue  of  holding  a  civil
 office of the state, or a combination thereof.
   2.  Payment  by [contractors] PUBLIC OWNERS to subcontractors. [Within
 seven calendar days of the receipt] (A) EACH SUBCONTRACTOR SHALL PERIOD-
 ICALLY, IN ACCORDANCE WITH THE TERMS OF  THE  CONTRACT,  SUBMIT  TO  THE
 PUBLIC  OWNER  AND/OR HIS AGENT AND TO THE CONTRACTOR AND/OR HIS AGENT A
 REQUISITION FOR A PROGRESS PAYMENT FOR THE WORK PERFORMED AND/OR MATERI-
 ALS FURNISHED TO THE DATE OF THE REQUISITION, LESS ANY AMOUNT PREVIOUSLY
 PAID TO THE CONTRACTOR.  AT THE TIME of any payment [from] BY the public
 owner[,] TO the contractor  AS  PROVIDED  IN  SUBDIVISION  ONE  OF  THIS
 SECTION, THE PUBLIC OWNER shall pay each of [his] THE subcontractors and
 materialman  the proceeds from the payment representing the value of the
 work performed and/or materials furnished by  the  subcontractor  and/or
 materialmen  and  reflecting  the percentage of the subcontractor's work
 completed or the materialmen'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 contractor to make any payment, including any
 remaining amounts of the contract 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 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-
 tor 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 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 subcon-
 tractor 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 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   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 remain-
 ing 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
 A. 1925                             7

 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.]  THE  PUBLIC  OWNER
 SHALL  RETAIN  NOT MORE THAN FIVE PER CENTUM OF EACH PROGRESS PAYMENT TO
 THE SUBCONTRACTOR EXCEPT THAT THE PUBLIC OWNER MAY RETAIN IN  EXCESS  OF
 FIVE  PER  CENTUM  BUT  NOT  MORE  THAN  TEN PER CENTUM OF EACH PROGRESS
 PAYMENT TO THE SUBCONTRACTOR PROVIDED THAT THERE ARE NO REQUIREMENTS  BY
 THE PUBLIC OWNER FOR THE SUBCONTRACTOR TO PROVIDE A PERFORMANCE BOND AND
 A  LABOR  AND MATERIAL BOND BOTH IN THE FULL AMOUNT OF THE CONTRACT. THE
 PUBLIC OWNER SHALL PAY, UPON REQUISITION FROM THE CONTRACTOR AS PROVIDED
 IN SUBDIVISION ONE OF THIS  SECTION,  FOR  MATERIALS  PERTINENT  TO  THE
 PROJECT WHICH HAVE BEEN DELIVERED TO THE SITE OR OFF-SITE BY THE SUBCON-
 TRACTOR  AND SUITABLY STORED AND SECURED AS REQUIRED BY THE PUBLIC OWNER
 AND THE SUBCONTRACTOR PROVIDED, THE PUBLIC OWNER MAY LIMIT SUCH  PAYMENT
 TO  MATERIALS  IN  SHORT  AND/OR CRITICAL SUPPLY AND MATERIALS SPECIALLY
 FABRICATED FOR THE PROJECT EACH AS DEFINED IN  THE  CONTRACT.  WHEN  THE
 WORK  OR  MAJOR  PORTIONS  THEREOF  AS  CONTEMPLATED BY THE TERMS OF THE
 CONTRACT ARE SUBSTANTIALLY COMPLETED, THE SUBCONTRACTOR SHALL SUBMIT  TO
 THE  CONTRACTOR AND/OR HIS OR HER AGENT A REQUISITION FOR PAYMENT OF THE
 REMAINING AMOUNT OF THE CONTRACT BALANCE. THE CONTRACTOR SHALL SUBMIT  A
 CONTRACT  REQUISITION CONTAINING ALL REQUISITIONS FROM SUBCONTRACTORS TO
 THE PUBLIC OWNER. UPON RECEIPT OF  SUCH  REQUISITION  THE  PUBLIC  OWNER
 SHALL  APPROVE  AND  PROMPTLY  PAY  THE REMAINING AMOUNT OF THE CONTRACT
 BALANCE LESS TWO TIMES THE VALUE OF ANY REMAINING ITEMS TO BE  COMPLETED
 AND  AN  AMOUNT  NECESSARY  TO  SATISFY  ANY  CLAIMS, LIENS OR JUDGMENTS
 AGAINST THE SUBCONTRACTOR WHICH HAVE NOT BEEN  SUITABLY  DISCHARGED.  AS
 THE  REMAINING  ITEMS OF WORK ARE SATISFACTORILY COMPLETED OR CORRECTED,
 THE PUBLIC OWNER SHALL PROMPTLY PAY, UPON RECEIPT OF A REQUISITION,  FOR
 THESE  REMAINING  ITEMS  LESS AN AMOUNT NECESSARY TO SATISFY ANY CLAIMS,
 LIENS OR JUDGMENTS AGAINST THE SUBCONTRACTOR WHICH HAVE NOT  BEEN  SUIT-
 ABLY  DISCHARGED.  ANY  CLAIMS,  LIENS AND JUDGMENTS REFERRED TO IN THIS
 SECTION SHALL PERTAIN TO THE PROJECT AND SHALL BE  FILED  IN  ACCORDANCE
 WITH THE TERMS OF THE APPLICABLE CONTRACT AND/OR APPLICABLE LAWS.
   (B)  AS USED IN THIS SECTION, "SUBCONTRACTOR" MEANS ONLY THOSE SUBCON-
 TRACTORS THAT REPORT DIRECTLY TO  THE  MAIN  CONTRACTOR  WITH  WHOM  THE
 PUBLIC OWNER HAS ENTERED INTO THE CONTRACT, AND DOES NOT INCLUDE SUBCON-
 TRACTORS OF SUBCONTRACTORS.
   §  3.  This  act shall take effect immediately.  Effective immediately
 the addition, amendment and/or repeal of any rule or  regulation  neces-
 sary  for  the  implementation  of  this  act  on its effective date are
 authorized to be made and completed on or before such date.