S T A T E O F N E W Y O R K
________________________________________________________________________
914
2011-2012 Regular Sessions
I N A S S E M B L Y
(PREFILED)
January 5, 2011
___________
Introduced by M. of A. DESTITO, SCHROEDER -- read once and referred to
the Committee on Local Governments
AN ACT to amend 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 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
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
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01251-01-1
A. 914 2
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.
4. ALL BONDS SHALL BE DEPOSITED BY THE PUBLIC OWNER IN AN
INTEREST-BEARING INSTRUMENT. ANY INTEREST GAINED SHALL BE RETURNED TO
THE CONTRACTING ENTITY WHICH POSTED THE PERFORMANCE BOND.
5. FOR THE PURPOSES OF THIS SECTION, THE TERM "PUBLIC OWNER" SHALL
MEAN ALL CONTRACTS MADE AND AWARDED BY THE STATE, OR BY ANY PUBLIC
DEPARTMENT, OR ANY PUBLIC BENEFIT CORPORATION, OR BY ANY PUBLIC CORPO-
RATION, MUNICIPALITY OR POLITICAL SUBDIVISION THEREOF, OR BY ANY OFFI-
CIAL THEREOF, FOR CONSTRUCTION, RECONSTRUCTION OR ALTERATION OF ANY
PUBLIC WORK CONTRACT.
6. THE PUBLIC OWNER SHALL BE HELD HARMLESS AND SHALL INDEMNIFY ANY
OFFICER OR EMPLOYEE FOR ANY LOSS IN INTEREST OR THE AMOUNT OF THE
PERFORMANCE BOND AS A RESULT OF THE INVESTMENT OF SUCH BOND PURSUANT TO
SUBDIVISION FOUR OF THIS SECTION.
S 2. 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.