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

                                  9740

                          I N  A S S E M B L Y

                              April 5, 2016
                               ___________

Introduced by M. of A. BICHOTTE -- read once and referred to the Commit-
  tee 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 and subdivision  1
as  added  by  chapter  769  of  the  laws of 1978, 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 agent a requisition for a progress payment for
the work performed and/or materials furnished to the date of the  requi-
sition  BY THE CONTRACTOR AND ALL SUBCONTRACTORS, less any amount previ-
ously 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 contractor OR SUBCON-
TRACTORS  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 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

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

                                                           LBD13135-04-6

A. 9740                             2

the  contractor  provided  that  there are no requirements 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 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  public  owner and the contractor 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  agent  a
requisition for payment of the remaining amount of the contract balance,
INCLUDING  BALANCES OWED TO SUBCONTRACTORS.  Upon receipt of such requi-
sition 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 HIS AGENT AND TO THE CONTRACTOR AND/OR HIS AGENT A
REQUISITION FOR A PROGRESS PAYMENT FOR THE WORK PERFORMED AND/OR MATERI-
ALS FURNISHED TO THE DATE OF THE REQUISITION, 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 mater-
ialman 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 begin-
ning 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  interest
payment 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

A. 9740                             3

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
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 HIS OR HER AGENT
A  REQUISITION  FOR  PAYMENT  OF  THE  REMAINING  AMOUNT OF THE CONTRACT
BALANCE. THE CONTRACTOR SHALL SUBMIT A CONTRACT  REQUISITION  CONTAINING
ALL  REQUISITIONS  FROM SUBCONTRACTORS 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 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

A. 9740                             4

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.
  S  2.  The opening paragraph and subdivisions 1 and 2 of section 106-b
of the general municipal law, the opening paragraph and subdivision 1 as
amended by chapter 661 of the laws of 1992, paragraphs (a)  and  (c)  of
subdivision 1 as amended by chapter 98 of the laws of 1995, and subdivi-
sion  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 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 contractor OR SUBCON-
TRACTORS  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 requirements 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 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 public owner and the  contractor  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 agent a
requisition for payment of the remaining amount of the contract  balance
INCLUDING  BALANCES OWED TO SUBCONTRACTORS.  Upon receipt of such requi-
sition 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  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

A. 9740                             5

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  forego-
ing,  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 holidays, of receipt  of  the  requisition  unless
such  requisition  is not approvable in accordance with the terms of the
contract.
  (b) 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.
  (c) 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  (b) of this subdivision shall not begin to accrue and payment
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 HIS AGENT AND TO THE CONTRACTOR AND/OR HIS AGENT A

A. 9740                             6

REQUISITION FOR A PROGRESS PAYMENT FOR THE WORK PERFORMED AND/OR MATERI-
ALS FURNISHED TO THE DATE OF THE REQUISITION, 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  subcontrac-
tor  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 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 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  subcon-
tractor  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 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 remain-
ing  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.] 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

A. 9740                             7

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 HIS OR HER AGENT A REQUISITION FOR PAYMENT OF THE
REMAINING AMOUNT OF THE CONTRACT BALANCE. THE CONTRACTOR SHALL SUBMIT  A
CONTRACT  REQUISITION CONTAINING ALL REQUISITIONS FROM SUBCONTRACTORS 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 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 SUBCONTRACTOR WHICH HAVE NOT  BEEN  SUIT-
ABLY  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.
  S 3. This act shall take effect immediately.