Senate Bill S7613

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

                                  7613

                            I N  S E N A T E

                              May 11, 2016
                               ___________

Introduced  by  Sen. MARTINS -- read twice and ordered printed, and when
  printed to be committed to the Committee on Judiciary

AN ACT to amend the general obligations law, in relation to  payment  on
  construction contracts

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 5-322.2 of the general obligations law  is  amended
by adding a new subdivision 2-a to read as follows:
  2-A.  THE  CONTRACTOR SHALL PERIODICALLY, IN ACCORDANCE WITH THE TERMS
OF THE CONTRACT, SUBMIT TO THE OWNER  OR  OWNERS  A  REQUISITION  FOR  A
PROGRESS  PAYMENT  FOR  THE WORK PERFORMED AND/OR MATERIALS FURNISHED TO
THE DATE OF THE REQUISITION, LESS ANY  AMOUNT  PREVIOUSLY  PAID  TO  THE
CONTRACTOR.  THE  CONTRACTOR  SHALL  INCLUDE  IN EACH SUCH REQUISITION A
REQUEST FOR PAYMENT FOR ALL WORK  PERFORMED  AND  MATERIAL  PROVIDED  BY
SUBCONTRACTORS  AND/OR MATERIALMEN FOR WHICH THE CONTRACTOR HAS RECEIVED
A REQUEST FOR PAYMENT AND WHICH THE  CONTRACTOR  HAS  NOT  REJECTED,  IN
WHOLE  OR IN PART. EACH SUBCONTRACTOR'S AND/OR MATERIALMAN'S REQUEST FOR
PAYMENT SHALL BE ACCEPTED OR REJECTED, IN  WHOLE  OR  IN  PART,  BY  THE
CONTRACTOR  NOT  LESS  THAN  THIRTY  BUT  NOT  MORE THAN FORTY-FIVE DAYS
FOLLOWING THE DATE OF THE CONTRACTOR'S RECEIPT OF  SAID  SUBCONTRACTOR'S
AND/OR  MATERIALMAN'S  REQUEST  FOR PAYMENT. IN THE EVENT THE CONTRACTOR
DETERMINES TO REJECT SUCH SUBCONTRACTOR'S AND/OR  MATERIALMAN'S  REQUEST
FOR PAYMENT, IN WHOLE OR IN PART, IT SHALL PROVIDE WRITTEN NOTICE OF THE
REJECTION TO THE APPLICABLE SUBCONTRACTOR AND/OR MATERIALMAN ACCOMPANIED
BY  A  REASONED ELABORATION IN SUPPORT OF THE CONTRACTOR'S REJECTION, IN
WHOLE OR IN PART, TOGETHER WITH A WRITTEN DESCRIPTION OF THE WORK, MATE-
RIALS, SUPPORTING DOCUMENTATION OR OTHER INFORMATION REQUIRED  IN  ORDER
FOR  THE  REQUEST  FOR  PAYMENT  TO  BE APPROVED; PROVIDED, HOWEVER, THE
CONTRACTOR SHALL INCLUDE IN ITS NEXT REQUISITION  ANY  PORTION  OF  SUCH
SUBCONTRACTOR'S  OR  MATERIALMAN'S  REQUEST  FOR  PAYMENT  WHICH  IS NOT
REJECTED BY THE CONTRACTOR; AND NO SUCH NOTICE OR ELABORATION  SHALL  BE
REQUIRED  FOR  PURPOSES  OF RETAINAGE AS AUTHORIZED BY THIS SECTION. THE
CONTRACTOR'S ACCEPTANCE OR REJECTION OF A REQUEST FOR PAYMENT  FOR  WORK
PERFORMED  AND  MATERIAL  PROVIDED  BY SUBCONTRACTORS AND/OR MATERIALMEN

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

                                                           LBD15187-01-6

S. 7613                             2

SHALL IN NO WAY AFFECT THE OWNER'S OR OWNERS' LEGAL RIGHTS TO APPROVE OR
REJECT, IN WHOLE OR IN PART, THE CONTRACTOR'S REQUEST FOR  PAYMENT.  THE
OWNER  OR  OWNERS  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  WHICH  HAVE  NOT  BEEN SUITABLY DISCHARGED AND LESS ANY
RETAINED AMOUNT AS HEREAFTER DESCRIBED. THE OWNER OR OWNERS SHALL RETAIN
NOT MORE THAN FIVE PER CENTUM OF EACH PROGRESS PAYMENT TO THE CONTRACTOR
EXCEPT THAT THE OWNER OR OWNERS 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  OWNER  OR
OWNERS  FOR THE CONTRACTOR TO PROVIDE A PERFORMANCE BOND AND A LABOR AND
MATERIAL BOND BOTH IN THE FULL AMOUNT OF  THE  CONTRACT.  THE  OWNER  OR
OWNERS  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 OWNER OR OWNERS AND THE CONTRACTOR  PROVIDED,
THE  OWNER OR OWNERS 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 OWNER OR OWNERS A REQUISITION FOR
PAYMENT OF THE REMAINING AMOUNT OF THE CONTRACT BALANCE. UPON RECEIPT OF
SUCH REQUISITION THE OWNER OR OWNERS 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 OWNER OR OWNERS  SHALL  PAY,  IN  ACCORDANCE
WITH THE TERMS OF THE CONTRACT, 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.
  S 2. This act shall take effect on the ninetieth day  after  it  shall
have become a law.