S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    241
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              January 5, 2017
                                ___________
 
 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD02127-01-7

 A. 241                              2
 
 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 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

 A. 241                              3

 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
 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 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
 ANY CLAIMS, LIENS OR JUDGMENTS AGAINST THE SUBCONTRACTOR WHICH HAVE  NOT

 A. 241                              4
 
 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 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

 A. 241                              5
 
 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 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

 A. 241                              6
 
 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
 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

 A. 241                              7

 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 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.
   § 3. This act shall take effect immediately.