Assembly Actions -
Senate Actions - UPPERCASE
|Jan 21, 2020||
referred to consumer protection
Senate Bill S7352
2019-2020 Legislative Session
Archive: Last Bill Status - In Senate Committee Consumer Protection Committee
- In Committee Assembly
- On Floor Calendar Assembly
- Passed Assembly
- Delivered to Governor
- Signed By Governor
2019-S7352 (ACTIVE) - Details
2019-S7352 (ACTIVE) - Summary
Provides for a reasonable amount of construction contract sum to be deposited in a separate interest bearing escrow account with a third party escrow agent; provides further that the owner shall be subject to the payment of interest, in addition to the escrow interest, at the rate of one percent per month and the contractor or subcontractor shall be subject to payment of interest on the amount of retainage it holds at the rate of one percent per month.
2019-S7352 (ACTIVE) - Sponsor Memo
BILL NUMBER: S7352 SPONSOR: KAPLAN TITLE OF BILL: An act to amend the general business law, in relation to retention of construction contracts PURPOSE OF THE BILL: This bill would require retainage held on private construction projects to be placed in an interest-bearing escrow account for the benefit of the parties from whom the retainage is being held. SUMMARY OF SPECIFIC PROVISIONS: This bill accomplishes a much needed construction industry reform. Owners would continue to have added security of holding retain age on progress payments. However, the interest on the held money would be earned for the benefit of the parties, from whom retainage is being held, thus taking some of the sting out of having significant amounts of
2019-S7352 (ACTIVE) - Bill Text download pdf
S T A T E O F N E W Y O R K ________________________________________________________________________ 7352 I N S E N A T E January 21, 2020 ___________ Introduced by Sen. KAPLAN -- read twice and ordered printed, and when printed to be committed to the Committee on Consumer Protection AN ACT to amend the general business law, in relation to retention of construction contracts THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 756-c of the general business law, as added by chapter 127 of the laws of 2002, is amended to read as follows: § 756-c. Retention. By mutual agreement of the relevant parties an owner may retain a reasonable amount of the contract sum as retainage[. A] AND FOR ANY CONSTRUCTION CONTRACTS, EXCLUDING CONSTRUCTION CONTRACTS FINANCED BY A PUBLIC BENEFIT CORPORATION, SUCH RETAINAGE SHALL BE DEPOS- ITED IN A SEPARATE INTEREST BEARING ESCROW ACCOUNT WITH A THIRD PARTY ESCROW AGENT. AS OF THE TIME OF THE DEPOSIT OF THE RETAINAGE, THE RETAINED FUNDS SHALL BECOME THE SOLE AND SEPARATE PROPERTY OF THE CONTRACTOR. INTEREST ON THE RETAINED FUNDS SHALL ACCRUE AT AN INTEREST RATE AT LEAST EQUAL TO THE PREVAILING INTEREST RATE PAID ON DEPOSITS BY THE ESCROW AGENT. ALSO, A contractor or subcontractor may [also] retain a reasonable amount for retainage so long as the amount does not exceed the actual percentage [retained] DEPOSITED IN ESCROW by the owner. [Retainage] THE ESCROWED RETAINAGE shall be released by the [owner] OWNER'S WRITTEN DIRECTION TO THE ESCROW AGENT TO DELIVER THE ESCROWED RETAINAGE to the contractor no later than thirty days after the final approval of the work under a construction contract. In the event that an owner fails to release THE ESCROWED retainage as required by this arti- cle, or the contractor or subcontractor fails to release a proportionate amount of retainage to the relevant parties WITHIN FIVE DAYS after receipt of THE ESCROWED retainage from the owner, (I) the owner[, contractor, or subcontractor, as the case may be, shall be subject to the payment of interest at the rate of one percent per month on the date retention was due and owing] SHALL BE SUBJECT TO THE PAYMENT OF INTER- EST, IN ADDITION TO THE ESCROW INTEREST, AT THE RATE OF ONE PERCENT PER MONTH COMMENCING ON THE DATE THE RETAINAGE WAS DUE TO BE RELEASED FROM ESCROW; AND (II) THE CONTRACTOR OR SUBCONTRACTOR, AS THE CASE MAY BE, EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
Open Legislation is a forum for New York State legislation. All comments are subject to review and community moderation is encouraged.
Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity, hate or toxic speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Attempts to intimidate and silence contributors or deliberately deceive the public, including excessive or extraneous posting/posts, or coordinated activity, are prohibited and may result in the temporary or permanent banning of the user. Comment moderation is generally performed Monday through Friday. By contributing or voting you agree to the Terms of Participation and verify you are over 13.
Create an account. An account allows you to sign petitions with a single click, officially support or oppose key legislation, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.