S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7098
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              March 20, 2025
                                ___________
 
 Introduced  by M. of A. BICHOTTE HERMELYN, HYNDMAN, SEAWRIGHT, WALKER --
   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 payment by public owners to contractors and subcontractors

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The opening paragraph and subdivisions 1 and 2  of  section
 139-f  of the state finance law, the opening paragraph as added by chap-
 ter 769 of the laws of 1978, subdivision 1 as amended by chapter 128  of
 the  laws  of 2021 and subdivision 2 as amended by section 16 of part MM
 of chapter 57 of the laws of 2008, are amended to read as follows:
   Notwithstanding the provisions of  any  other  law  to  the  contrary,
 except  the  provisions  of section thirty-eight of the highway law, all
 contracts made and awarded by the state, or by any public department, or
 by any public benefit corporation or by any public corporation or  offi-
 cial   thereof,   hereafter   referred  to  as  the  public  owner,  for
 construction, reconstruction or alteration of any  public  work  project
 shall  provide  for  payment  by  the public owner to the contractor and
 [payment by the contractor] to the subcontractor  OR  SUBCONTRACTORS  in
 accordance with the following:
   1. Payment by public owners to contractors. The contractor shall peri-
 odically,  in  accordance  with the terms of the contract, submit to the
 public owner and/or [his] THE PUBLIC OWNER'S agent a requisition  for  a
 progress  payment  for  the work performed and/or materials furnished to
 the date of the requisition BY THE CONTRACTOR  AND  ALL  SUBCONTRACTORS,
 less any amount previously paid to the contractor OR SUBCONTRACTORS. The
 public  owner 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 contrac-
 tor OR SUBCONTRACTORS which have not been suitably discharged  and  less
 any  retained  amount  as  hereafter  described.  The public owner shall
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10966-01-5
              

 A. 7098                             2
 
 retain not more than five per centum of each  progress  payment  to  the
 contractor  AND  SUBCONTRACTORS, except that the public owner 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 require-
 ments by the public owner for the contractor to  provide  a  performance
 bond  and  a  labor  and  material  bond  both in the full amount of the
 contract. The public owner shall pay, upon requisition from the contrac-
 tor, for materials pertinent to the project which have been delivered to
 the site or off-site by the contractor [and/or subcontractor] and  suit-
 ably stored and secured as required by the public owner and the contrac-
 tor  provided,  the  public owner 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, INCLUDING BALANCES OWED TO
 SUBCONTRACTORS. When the work or major portions thereof as  contemplated
 by the terms of the contract are substantially completed, the contractor
 shall submit to the public owner and/or [his] THE PUBLIC OWNER'S agent a
 requisition for payment of the remaining amount of the contract balance.
 Upon  receipt  of  such  requisition  the public owner 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 public owner  shall  promptly
 pay,  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.
   2. Payment by [contractors] PUBLIC OWNERS to  subcontractors.  [Within
 seven calendar days of the receipt] (A) EACH SUBCONTRACTOR SHALL PERIOD-
 ICALLY,  IN  ACCORDANCE  WITH  THE  TERMS OF THE CONTRACT, SUBMIT TO THE
 PUBLIC OWNER AND/OR THE PUBLIC  OWNER'S  AGENT  AND  TO  THE  CONTRACTOR
 AND/OR  THE  CONTRACTOR'S AGENT A REQUISITION FOR A PROGRESS PAYMENT FOR
 THE WORK PERFORMED AND/OR MATERIALS FURNISHED TO THE DATE OF THE  REQUI-
 SITION,  LESS  ANY AMOUNT PREVIOUSLY PAID TO THE CONTRACTOR. AT THE TIME
 of any payment [from] BY  the  public  owner[,]  TO  the  contractor  AS
 PROVIDED  IN SUBDIVISION ONE OF THIS SECTION, THE PUBLIC OWNER shall pay
 each of [his] THE 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 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
 contractor 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  subcon-
 tractor  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-
 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
 A. 7098                             3

 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.]   THE  PUBLIC  OWNER
 SHALL  RETAIN  NOT MORE THAN FIVE PER CENTUM OF EACH PROGRESS PAYMENT TO
 THE SUBCONTRACTOR EXCEPT THAT THE PUBLIC OWNER MAY RETAIN IN  EXCESS  OF
 FIVE  PER  CENTUM  BUT  NOT  MORE  THAN  TEN PER CENTUM OF EACH PROGRESS
 PAYMENT TO THE SUBCONTRACTOR PROVIDED THAT THERE ARE NO REQUIREMENTS  BY
 THE PUBLIC OWNER FOR THE SUBCONTRACTOR TO PROVIDE A PERFORMANCE BOND AND
 A  LABOR  AND MATERIAL BOND BOTH IN THE FULL AMOUNT OF THE CONTRACT. THE
 PUBLIC OWNER SHALL PAY, UPON REQUISITION FROM THE CONTRACTOR AS PROVIDED
 IN SUBDIVISION ONE OF THIS  SECTION,  FOR  MATERIALS  PERTINENT  TO  THE
 PROJECT WHICH HAVE BEEN DELIVERED TO THE SITE OR OFF-SITE BY THE SUBCON-
 TRACTOR  AND SUITABLY STORED AND SECURED AS REQUIRED BY THE PUBLIC OWNER
 AND THE SUBCONTRACTOR PROVIDED, THE PUBLIC OWNER 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 SUBCONTRACTOR SHALL SUBMIT  TO
 THE  CONTRACTOR  AND/OR THE CONTRACTOR'S AGENT A REQUISITION FOR PAYMENT
 OF THE REMAINING AMOUNT OF THE CONTRACT BALANCE.  THE  CONTRACTOR  SHALL
 SUBMIT  A  CONTRACT REQUISITION CONTAINING ALL REQUISITIONS FROM SUBCON-
 TRACTORS TO THE PUBLIC OWNER.  UPON  RECEIPT  OF  SUCH  REQUISITION  THE
 PUBLIC  OWNER 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 JUDG-
 MENTS AGAINST THE SUBCONTRACTOR WHICH HAVE NOT BEEN SUITABLY DISCHARGED.
 AS  THE  REMAINING  ITEMS  OF  WORK  ARE  SATISFACTORILY  COMPLETED   OR
 CORRECTED, THE PUBLIC OWNER SHALL PROMPTLY PAY, UPON RECEIPT OF A REQUI-
 SITION,  FOR  THESE  REMAINING ITEMS LESS AN AMOUNT NECESSARY TO SATISFY
 A. 7098                             4
 
 ANY CLAIMS, LIENS OR JUDGMENTS AGAINST THE SUBCONTRACTOR 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 ACCORD-
 ANCE WITH THE TERMS OF THE APPLICABLE CONTRACT AND/OR APPLICABLE LAWS.
   (B)  AS USED IN THIS SECTION, "SUBCONTRACTOR" MEANS ONLY THOSE SUBCON-
 TRACTORS THAT REPORT DIRECTLY TO  THE  MAIN  CONTRACTOR  WITH  WHOM  THE
 PUBLIC OWNER HAS ENTERED INTO THE CONTRACT, AND DOES NOT INCLUDE SUBCON-
 TRACTORS OF SUBCONTRACTORS.
   §  2.  The opening paragraph and subdivisions 1 and 2 of section 106-b
 of the general municipal law, the opening paragraph as amended by  chap-
 ter  661 of the laws of 1992, subdivision 1 as amended by chapter 128 of
 the laws of 2021 and subdivision 2 as amended by section 15 of  part  MM
 of chapter 57 of the laws of 2008, are amended to read as follows:
   Notwithstanding  the  provisions of any other law to the contrary, all
 contracts made and awarded by the appropriate officer, board  or  agency
 of  a  political  subdivision  or  of  any  district  therein, hereafter
 referred to as the public owner,  for  construction,  reconstruction  or
 alteration  of  any public work project shall provide for payment by the
 public owner to the contractor and [payment by the  contractor]  to  the
 subcontractor OR SUBCONTRACTORS in accordance with the following:
   1.  Payment  by public owners to contractors. (a) The contractor shall
 periodically, in accordance with the terms of the  contract,  submit  to
 the public owner and/or [his] THE PUBLIC OWNER'S agent a requisition for
 a  progress payment for the work performed and/or materials furnished to
 the date of the requisition BY THE  CONTRACTOR  AND  ALL  SUBCONTRACTORS
 less any amount previously paid to the contractor OR SUBCONTRACTORS. The
 public  owner 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 contrac-
 tor OR SUBCONTRACTORS which have not been suitably discharged  and  less
 any  retained  amount  as  hereafter  described.  The public owner shall
 retain not more than five per centum of each  progress  payment  to  the
 contractor  OR SUBCONTRACTORS except that the public owner 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 require-
 ments by the public owner for the contractor to  provide  a  performance
 bond  and  a  labor  and  material  bond  both in the full amount of the
 contract. The public owner shall pay, upon requisition from the contrac-
 tor, for materials pertinent to the project which have been delivered to
 the site or off-site by the contractor [and/or subcontractor] and  suit-
 ably stored and secured as required by the public owner and the contrac-
 tor  provided,  the  public owner 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 public owner and/or  [his]
 THE  PUBLIC  OWNER'S  agent  a  requisition for payment of the remaining
 amount of the contract balance, INCLUDING BALANCES OWED  TO  SUBCONTRAC-
 TORS.    Upon receipt of such requisition the public owner 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 contrac-
 tor which have not been suitably discharged. As the remaining  items  of
 work  are  satisfactorily completed or corrected, the public owner shall
 promptly pay, upon receipt of a requisition, for  these  items  less  an
 amount  necessary  to satisfy any claims, liens or judgments against the
 A. 7098                             5

 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. Where the public owner is other than
 the city of New York, the term "promptly pay" shall mean payment  within
 thirty  days,  excluding  legal  holidays, of receipt of the requisition
 unless such requisition is not approvable in accordance with  the  terms
 of  the  contract. Notwithstanding the foregoing, where the public owner
 is other than the city of New York and is a municipal corporation  which
 requires  an  elected  official  to approve progress payments, "promptly
 pay" shall mean payment within forty-five days,  excluding  legal  holi-
 days,  of  receipt  of  the  requisition  unless such requisition is not
 approvable in accordance with the terms of the contract.
   (b) Not later than forty-five business days after the  date  when  the
 project  has  reached substantial completion, as such term is defined in
 the contract or as it is contemplated by the terms of the contract,  the
 public  owner  shall  submit to the contractor a written list describing
 all remaining items to be completed by the contractor.  Not  later  than
 five business days after receiving a written list describing all remain-
 ing items to be completed by the contractor, the contractor shall submit
 to  each subcontractor from whom the contractor is withholding retainage
 a written list of all remaining items required to be  completed  by  the
 subcontractor. Such list may include items in addition to those items on
 the public owner's list.
   (c)  Each  public  owner  other  than  the  city  of New York which is
 required to make a payment from public funds pursuant to a contract  and
 which  does  not make such contract payment by the required payment date
 shall make an interest payment to the contractor on the  amount  of  the
 contract  payment  which  is  due  unless  failure to make such contract
 payment is the result of a lien,  attachment,  or  other  legal  process
 against  the  money  due  said  contractor,  or unless the amount of the
 interest payment as computed in accordance with the provisions set forth
 hereinafter is less than ten dollars. Interest payments on  amounts  due
 to a contractor pursuant to this paragraph shall be paid to the contrac-
 tor  for the period beginning on the day after the required payment date
 and ending on the payment date for those payments required according  to
 this  section and shall be paid at the rate of interest in effect on the
 date when the  interest  payment  is  made.  Notwithstanding  any  other
 provision of law to the contrary, interest shall be computed at the rate
 equal  to  the  overpayment rate set by the commissioner of taxation and
 finance pursuant to subsection (e) of section one thousand ninety-six of
 the tax law. A pro rata share of such interest  shall  be  paid  by  the
 contractor  or  subcontractor, as the case may be, to subcontractors and
 materialmen in a proportion equal to the percentage of  their  pro  rata
 share  of the contract payment. Such pro rata share of interest shall be
 due to such subcontractors and materialmen only for those payments which
 are not paid to such subcontractors and materialmen prior  to  the  date
 upon  which  interest  begins to accrue between the public owner and the
 contractor.  Such pro rata shares of interest shall  be  computed  daily
 until such payments are made to the subcontractors and materialmen.
   (d) For projects of a public owner other than the city of New York, if
 state  funds  directly  related  to and which have been budgeted for the
 construction of the project for which the payment is due have  not  been
 received prior to the expiration of the thirty or forty-five days speci-
 fied  in paragraph (a) of this subdivision, the interest provided for in
 paragraph (c) of this subdivision shall not begin to accrue and  payment
 A. 7098                             6
 
 shall not be due, until ten days after receipt of the state funds. Noth-
 ing  in this paragraph shall prevent the public owner from approving the
 requisition, subject to receipt of the state funds.  State  funds  shall
 mean  monies  provided  to  the public owner by the state, its officers,
 boards, departments, commissions, or a public authority and public bene-
 fit corporation, a majority of the members of which have been  appointed
 by  the  governor  or  who serve as members by virtue of holding a civil
 office of the state, or a combination thereof.
   2. Payment by [contractors] PUBLIC OWNERS to  subcontractors.  [Within
 seven calendar days of the receipt] (A) EACH SUBCONTRACTOR SHALL PERIOD-
 ICALLY,  IN  ACCORDANCE  WITH  THE  TERMS OF THE CONTRACT, SUBMIT TO THE
 PUBLIC OWNER AND/OR THE PUBLIC  OWNER'S  AGENT  AND  TO  THE  CONTRACTOR
 AND/OR  THE  CONTRACTOR'S AGENT A REQUISITION FOR A PROGRESS PAYMENT FOR
 THE WORK PERFORMED AND/OR MATERIALS FURNISHED TO THE DATE OF THE  REQUI-
 SITION,  LESS ANY AMOUNT PREVIOUSLY PAID TO THE CONTRACTOR.  AT THE TIME
 of any payment [from] BY  the  public  owner[,]  TO  the  contractor  AS
 PROVIDED  IN SUBDIVISION ONE OF THIS SECTION, THE PUBLIC OWNER shall pay
 each of [his] THE subcontractors and materialman the proceeds  from  the
 payment  representing  the  value of the work performed and/or materials
 furnished by the subcontractor and/or  materialmen  and  reflecting  the
 percentage  of  the  subcontractor's work completed or the materialmen'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
 contractor to make any payment, including any remaining amounts  of  the
 contract  balance  as  hereinafter  described,  to  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 subcontractor  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 subcontractor or materialman. Such inter-
 est 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 contractor. Notwithstanding  any  other  provision  of  law  to  the
 contrary,  interest  shall  be computed at the rate established in para-
 graph (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  subcon-
 tractor is unable or unwilling 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 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
 A. 7098                             7

 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.]  THE  PUBLIC OWNER SHALL RETAIN NOT MORE THAN FIVE PER CENTUM OF
 EACH PROGRESS PAYMENT TO THE SUBCONTRACTOR EXCEPT THAT THE PUBLIC  OWNER
 MAY RETAIN IN EXCESS OF FIVE PER CENTUM BUT NOT MORE THAN TEN PER CENTUM
 OF EACH PROGRESS PAYMENT TO THE SUBCONTRACTOR PROVIDED THAT THERE ARE NO
 REQUIREMENTS  BY  THE  PUBLIC  OWNER  FOR THE SUBCONTRACTOR TO PROVIDE A
 PERFORMANCE BOND AND A LABOR AND MATERIAL BOND BOTH IN THE  FULL  AMOUNT
 OF  THE  CONTRACT. THE PUBLIC OWNER SHALL PAY, UPON REQUISITION FROM THE
 CONTRACTOR AS PROVIDED IN SUBDIVISION ONE OF THIS SECTION, FOR MATERIALS
 PERTINENT TO THE PROJECT WHICH HAVE BEEN DELIVERED TO THE SITE  OR  OFF-
 SITE BY THE SUBCONTRACTOR AND SUITABLY STORED AND SECURED AS REQUIRED BY
 THE  PUBLIC  OWNER  AND THE SUBCONTRACTOR PROVIDED, THE PUBLIC OWNER 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  SUBCONTRACTOR
 SHALL  SUBMIT TO THE CONTRACTOR AND/OR THE CONTRACTOR'S AGENT A REQUISI-
 TION FOR PAYMENT OF THE REMAINING AMOUNT OF THE  CONTRACT  BALANCE.  THE
 CONTRACTOR  SHALL  SUBMIT  A  CONTRACT REQUISITION CONTAINING ALL REQUI-
 SITIONS FROM SUBCONTRACTORS TO THE PUBLIC OWNER. UPON  RECEIPT  OF  SUCH
 REQUISITION  THE PUBLIC OWNER SHALL APPROVE AND PROMPTLY PAY THE REMAIN-
 ING 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 SUBCONTRACTOR WHICH HAVE NOT BEEN
 SUITABLY DISCHARGED. AS THE REMAINING ITEMS OF WORK  ARE  SATISFACTORILY
 COMPLETED  OR  CORRECTED,  THE  PUBLIC  OWNER  SHALL  PROMPTLY PAY, UPON
 RECEIPT OF A REQUISITION, FOR  THESE  REMAINING  ITEMS  LESS  AN  AMOUNT
 NECESSARY  TO SATISFY ANY CLAIMS, LIENS OR JUDGMENTS AGAINST THE SUBCON-
 TRACTOR 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.
   (B)  AS USED IN THIS SECTION, "SUBCONTRACTOR" MEANS ONLY THOSE SUBCON-
 TRACTORS THAT REPORT DIRECTLY TO  THE  MAIN  CONTRACTOR  WITH  WHOM  THE
 PUBLIC OWNER HAS ENTERED INTO THE CONTRACT, AND DOES NOT INCLUDE SUBCON-
 TRACTORS OF SUBCONTRACTORS.
   §  3.  This  act shall take effect immediately.  Effective immediately
 the addition, amendment and/or repeal of any rule or  regulation  neces-
 sary  for  the  implementation  of  this  act  on its effective date are
 authorized to be made and completed on or before such date.