S T A T E O F N E W Y O R K
________________________________________________________________________
523
2009-2010 Regular Sessions
I N A S S E M B L Y
(PREFILED)
January 7, 2009
___________
Introduced by M. of A. DESTITO, SCHROEDER -- read once and referred to
the Committee on Local Governments
AN ACT to amend the state finance law and the general municipal law, in
relation to requiring quality performance and payment bonds on public
work
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The section heading and subdivisions 1 and 2 of section 137
of the state finance law, the section heading as amended by chapter 700
of the laws of 1964, subdivision 1 as separately amended by section 17
of part MM of chapter 57 and chapter 619 of the laws of 2008 and subdi-
vision 2 as amended by chapter 137 of the laws of 1985, are amended and
a new subdivision 1-a is added to read as follows:
[Bond to secure payment of certain claims arising from a public
improvement; enforcement] BONDS COVERING PERFORMANCE PAYMENT ON PUBLIC
CONTRACTS.
1. [In addition to other bond or bonds, if any, required by law for
the completion of a work specified in a contract for the prosecution of
a public improvement for the state of New York a municipal corporation,
a public benefit corporation or a commission appointed pursuant to law,
or in the absence of any such requirement, the comptroller may or the
other appropriate official, respectively, shall nevertheless] NOTWITH-
STANDING ANY OTHER PROVISION OF LAW, ALL CONTRACTS MADE AND AWARDED BY
THE STATE, OR BY ANY PUBLIC DEPARTMENT, OR BY ANY PUBLIC BENEFIT CORPO-
RATION, OR BY ANY PUBLIC CORPORATION, OR BY ANY OFFICIAL THEREOF,
REFERRED TO IN THIS SECTION AS THE "PUBLIC OWNER", FOR CONSTRUCTION,
RECONSTRUCTION OR ALTERATION OF ANY PUBLIC WORK PROJECT SHALL require,
prior to the approval of any such contract, A BOND GUARANTEEING THE
FAITHFUL PERFORMANCE OF SUCH CONTRACT AND a bond guaranteeing prompt
payment of moneys due to all persons furnishing labor or materials to
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00828-02-9
A. 523 2
the contractor or any subcontractors in the prosecution of the work
provided for in such contract. Whenever a municipal corporation issues a
permit subject to compliance with section two hundred twenty of the
labor law, such permittee or its contractor or subcontractors furnishing
workers shall post a payment bond subject to this section. Provided,
however, that all performance bonds and payment bonds may, at the
discretion of the [head of the state agency, public benefit corporation
or commission, or his or her designee] PUBLIC OWNER, be dispensed with
for the completion of a work specified in a contract for the prosecution
of a public improvement for the state of New York for which bids are
solicited where the aggregate amount of the contract is under one
hundred thousand dollars and provided further, that in a case where the
contract is not subject to the multiple contract award requirements of
section one hundred thirty-five of this article, such requirements may
be dispensed with where the [head of the state agency, public benefit
corporation or commission] PUBLIC OWNER finds it to be in the public
interest and where the aggregate amount of the contract awarded or to be
awarded is less than two hundred thousand dollars. Provided further,
that in a case where a performance or payment bond is dispensed with,
twenty per centum may be retained from each progress payment or estimate
until the entire contract work has been completed and accepted, at which
time the [head of the state agency, public benefit corporation or
commission] PUBLIC OWNER shall, pending the payment of the final esti-
mate, pay not to exceed seventy-five per centum of the amount of the
retained percentage.
1-A. BONDS REQUIRED BY THIS SECTION SHALL BE WRITTEN WITH SURETY
COMPANIES LICENSED TO DO BUSINESS IN NEW YORK STATE, ON THE UNITED
STATES TREASURY LIST AND RATED "A-" OR BETTER BY BEST'S RATING SERVICE
OR AN EQUIVALENT RATING AS CERTIFIED BY THE SUPERINTENDENT OF INSURANCE.
2. [A copy] COPIES of such PERFORMANCE AND payment [bond] BONDS shall
be kept in the office of the head of the department or bureau having
charge of the public improvement in connection with which the bond was
given and a copy shall also be kept in the office of the comptroller or
other appropriate official; such copies shall be open to public
inspection.
S 2. The general municipal law is amended by adding a new section
103-g to read as follows:
S 103-G. BONDS COVERING PERFORMANCE PAYMENT ON PUBLIC CONTRACTS. 1.
NOTWITHSTANDING ANY OTHER PROVISION OF LAW, ALL CONTRACTS MADE AND
AWARDED BY THE APPROPRIATE OFFICER, BOARD OR AGENCY OF A POLITICAL
SUBDIVISION OR OF ANY DISTRICT THEREIN, REFERRED TO IN THIS SECTION AS
THE "PUBLIC OWNER", FOR CONSTRUCTION, RECONSTRUCTION OR ALTERATION OF
ANY PUBLIC WORK PROJECT SHALL REQUIRE, PRIOR TO THE APPROVAL OF ANY SUCH
CONTRACT, A BOND GUARANTEEING THE FAITHFUL PERFORMANCE OF SUCH CONTRACT
AND A BOND GUARANTEEING PROMPT PAYMENT OF MONEYS DUE TO ALL PERSONS
FURNISHING LABOR OR MATERIALS TO THE CONTRACTOR OR HIS OR HER SUBCON-
TRACTORS IN THE PROSECUTION OF THE WORK PROVIDED FOR IN SUCH CONTRACT.
PROVIDED, HOWEVER, THAT ALL PERFORMANCE BONDS AND PAYMENT BONDS MAY, AT
THE DISCRETION OF THE PUBLIC OWNER, BE DISPENSED WITH FOR THE COMPLETION
OF A WORK SPECIFIED IN A CONTRACT FOR THE PROSECUTION OF SUCH CONTRACT
WHERE THE AGGREGATE AMOUNT OF THE CONTRACT IS UNDER ONE HUNDRED THOUSAND
DOLLARS AND PROVIDED FURTHER, THAT IN A CASE WHERE THE CONTRACT IS NOT
SUBJECT TO THE MULTIPLE CONTRACT AWARD REQUIREMENTS OF SECTION ONE
HUNDRED ONE OF THIS ARTICLE, SUCH REQUIREMENTS MAY BE DISPENSED WITH
WHERE THE PUBLIC OWNER FINDS IT TO BE IN THE PUBLIC INTEREST AND WHERE
THE AGGREGATE AMOUNT OF THE CONTRACT AWARDED OR TO BE AWARDED IS LESS
A. 523 3
THAN TWO HUNDRED THOUSAND DOLLARS. PROVIDED FURTHER, THAT IN A CASE
WHERE A PERFORMANCE OR PAYMENT BOND IS DISPENSED WITH, TWENTY PER CENTUM
MAY BE RETAINED FROM EACH PROGRESS PAYMENT OR ESTIMATE UNTIL THE ENTIRE
CONTRACT WORK HAS BEEN COMPLETED AND ACCEPTED, AT WHICH TIME THE PUBLIC
OWNER SHALL, PENDING THE PAYMENT OF THE FINAL ESTIMATE, PAY NOT TO
EXCEED SEVENTY-FIVE PER CENTUM OF THE AMOUNT OF THE RETAINED PERCENTAGE.
2. BONDS REQUIRED BY THIS SECTION SHALL BE WRITTEN WITH SURETY COMPA-
NIES LICENSED TO DO BUSINESS IN NEW YORK STATE, ON THE UNITED STATES
TREASURY LIST AND RATED "A-" OR BETTER BY BEST'S RATING SERVICE OR AN
EQUIVALENT RATING AS CERTIFIED BY THE SUPERINTENDENT OF INSURANCE.
3. COPIES OF SUCH PERFORMANCE AND PAYMENT BONDS SHALL BE KEPT BY THE
PUBLIC OWNER HAVING CHARGE OF THE PUBLIC IMPROVEMENT IN CONNECTION WITH
WHICH THE BOND WAS GIVEN.
S 3. This act shall take effect on the thirtieth day after it shall
have become a law and shall apply to all contracts advertised for bid on
or after such date.