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

                                  10501

                          I N  A S S E M B L Y

                              May 29, 2012
                               ___________

Introduced  by M. of A. CLARK -- read once and referred to the Committee
  on Governmental Operations

AN ACT to amend the state finance law, in relation to requiring contrac-
  tors on  public  works  projects  to  pay  their  subcontractors  upon
  completion of work

  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] PAYMENT BY THE
CONTRACTOR TO A SUBCONTRACTOR OR MATERIALMAN  SHALL  NOT  BE  CONTINGENT
UPON  PAYMENT  BY  AN  OWNER  TO  THE CONTRACTOR. UPON COMPLETION OF THE
PERFORMANCE OF WORK OR MATERIALS SUPPLIED, the contractor shall pay each
of his 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  neces-
sary 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 materialman [within  seven  calendar  days  of  the
receipt  of  any  payment  from the public owner] UPON COMPLETION OF THE
PERFORMANCE OF WORK OR MATERIALS SUPPLIED shall result in the  commence-
ment  and  accrual  of  interest on amounts due to such subcontractor or
materialman for the period beginning on the  day  immediately  following
the  [expiration  of  such  seven calendar day period] COMPLETION OF THE
PERFORMANCE OF WORK OR MATERIALS SUPPLIED and  ending  on  the  date  on
which payment is made by the contractor to such subcontractor or materi-
alman.  Such  interest  payment  shall be the sole responsibility of the

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD16055-01-2
              

A. 10501                            2

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  subdivi-
sion  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.]
  S 2. This act shall take effect immediately.