Assembly Bill A11223

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   11223
 
                           I N  A S S E M B L Y
 
                                May 1, 2026
                                ___________
 
 Introduced by M. of A. HUNTER -- read once and referred to the Committee
   on Governmental Operations
 
 AN  ACT to amend the general business law, in relation to increasing the
   interest rate for late payments due on construction contracts; and  to
   repeal  section  756-e  of  the  general  business  law,  relating  to
   exceptions for construction contracts in lower Manhattan

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Subdivision 1 of section 756 of the general business law,
 as amended by chapter 417 of the laws of 2009,  is  amended  and  a  new
 subdivision 7 is added to read as follows:
   1.  "Construction contract" means a written or oral agreement, INCLUD-
 ING A CHANGE ORDER TO A WRITTEN OR ORAL AGREEMENT, for the construction,
 reconstruction, alteration, maintenance, moving  or  demolition  of  any
 building,  structure or improvement, or relating to the excavation of or
 other development or improvement to land, and where the  aggregate  cost
 of the construction project including all labor, services, materials and
 equipment  to be furnished, equals or exceeds one hundred fifty thousand
 dollars. For the purposes of this article a construction contract  shall
 not  include any such contract made and awarded by the state, any public
 department, any public benefit corporation, any  public  corporation  or
 official  thereof,  or  a  municipal corporation or official thereof for
 construction, reconstruction, alteration, repair, maintenance, moving or
 demolition of any public works project nor any contract with a  contrac-
 tor or subcontractor which is part of such project; or any such contract
 the  purpose  of  which is the construction, reconstruction, alteration,
 repair, maintenance, moving or demolition of an individual one,  two  or
 three  family residential dwelling or a residential tract development of
 one hundred or less one or two  family  dwellings,  or  any  residential
 construction  project  where  the aggregate size of such project is four
 thousand five hundred square feet or less, or any residential project of
 fewer than seventy-five units which receives financial  assistance  from
 the  federal  government,  the  state or a municipal entity designed for
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD15537-01-6
              

 A. 11223                            2
 
 households earning an average of one hundred twenty-five percent of  the
 housing and urban development agency area median income.
   7.  "CHANGE  ORDER"  MEANS  AN  AMENDMENT OR ALTERATION TO AN EXISTING
 CONSTRUCTION CONTRACT THAT MODIFIES THE  ORIGINAL  CONTRACT  TERMS  WITH
 RESPECT TO THE SCOPE OF WORK, PROJECT TIMELINE OR CONTRACT AMOUNT AGREED
 TO  BY THE PARTIES THERETO, OR BETWEEN A CONTRACTOR AND A SUBCONTRACTOR.
 A CHANGE ORDER MAY MODIFY PROVISIONS RELATING TO THE SCOPE OF  THE  WORK
 TO  BE  PERFORMED,  INCLUDING  BUT  NOT LIMITED TO ADDITIONAL WORK TO BE
 PERFORMED, OR REMOVAL OF WORK TO BE PERFORMED, A COST ADJUSTMENT WHETHER
 IT INCREASES OR DECREASES THE CONTRACT PRICE, A SCHEDULE  ADJUSTMENT  TO
 THE  TIMELINE  AGREED  TO  IN THE INITIAL CONTRACT FOR THE COMPLETION OF
 WORK TO BE PERFORMED, OR ANY OTHER  CHANGES  TO  THE  ORIGINAL  CONTRACT
 NECESSITATED  BY  CONDITIONS  UNFORESEEN AT THE TIME OF THE EXECUTION OF
 THE CONTRACT.
   § 2. Paragraph (a) of subdivision 1 of section 756-b  of  the  general
 business  law, as amended by chapter 417 of the laws of 2009, is amended
 to read as follows:
   (a) If any interim or final payment to a contractor is delayed  beyond
 the  due  date  established  in  paragraph  (a)  of subdivision three of
 section seven hundred fifty-six-a of this article, the owner  shall  pay
 the  contractor  interest beginning on the next day at the rate of [one]
 TWO percent per month or fraction of a month on the unpaid  balance,  or
 at a higher rate consistent with the construction contract.
   § 3. Section 756-e of the general business law is REPEALED.
   §  4.  This  act shall take effect on the ninetieth day after it shall
 have become a law and shall apply  to  all  construction  contracts  and
 change  orders  to construction contracts entered into on and after such
 date.