senate Bill S3181

2011-2012 Legislative Session

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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Archive: Last Bill Status - In Committee


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

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jun 21, 2012 committed to rules
May 07, 2012 advanced to third reading
May 02, 2012 2nd report cal.
May 01, 2012 1st report cal.666
Jan 04, 2012 referred to finance
returned to senate
died in assembly
Jun 22, 2011 referred to governmental operations
delivered to assembly
passed senate
May 04, 2011 advanced to third reading
May 03, 2011 2nd report cal.
May 02, 2011 1st report cal.419
Feb 10, 2011 referred to finance

Votes

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May 1, 2012 - Finance committee Vote

S3181
25
0
committee
25
Aye
0
Nay
9
Aye with Reservations
0
Absent
1
Excused
0
Abstained
show Finance committee vote details

May 2, 2011 - Finance committee Vote

S3181
27
0
committee
27
Aye
0
Nay
6
Aye with Reservations
0
Absent
1
Excused
0
Abstained
show Finance committee vote details

Co-Sponsors

S3181 - Bill Details

See Assembly Version of this Bill:
A5024
Current Committee:
Senate Rules
Law Section:
State Finance Law
Laws Affected:
Amd §139-f, St Fin L; amd §106-b, Gen Muni L
Versions Introduced in 2009-2010 Legislative Session:
S802A, A2347A

S3181 - Bill Texts

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

view sponsor memo
BILL NUMBER:S3181

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 retainage on public jobs.

SUMMARY OF SPECIFIC PROVISIONS:
Section 1 amends section 139-f(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
periods of time for payment. Line item listing and early release of
retainage 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:
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.


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

    S. 3181                                                  A. 5024

                       2011-2012 Regular Sessions

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

                            February 10, 2011
                               ___________

IN  SENATE  --  Introduced by Sens. DeFRANCISCO, JOHNSON, O'MARA -- 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 -- 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 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-
tor or materialman. Such interest payment shall be the sole responsibil-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00503-01-1

S. 3181                             2                            A. 5024

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
balance  as  hereinafter  described, to any subcontractor or materialman

S. 3181                             3                            A. 5024

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 its effective date.

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