NY State Senate Bill 2017-S8848

Archive: Last Bill Status - In Senate Committee Consumer Protection Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
May 24, 2018	referred to consumer protection

2017-S8848 (ACTIVE) - Details

See Assembly Version of this Bill:: A9637
Current Committee:: Senate Consumer Protection
Law Section:: General Business Law
Laws Affected:: Amd §§756, 756-a & 756-c, Gen Bus L
Versions Introduced in Other Legislative Sessions:: 2015-2016: A10446
2019-2020: S981, A3558
2021-2022: S5482, A6985
2023-2024: S3539, A4167

2017-S8848 (ACTIVE) - Summary

Relates to payment and retainage in construction contracts; authorizes contractors to invoice owners upon substantial completion of a project.

2017-S8848 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S8848

SPONSOR: BRESLIN
 
TITLE OF BILL:

An act to amend the general business law, in relation to payment and
retainage in construction contracts

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill amends the general business law to provide for the timely
release of retainage on private construction jobs when such job has met
the requirements of "substantial completion."

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 amends section 756 of the general business law by adding a
definition for the term "substantial completion." Such "substantial
completion" shall mean that when the work is sufficiently completed in
accordance with the construction contract that the project owner may
occupy or utilize the work for its intended use.

Section 2 amends subdivision (2) of Section 756-a of the General Busi-
ness Law stating that a contractor shall be entitled to submit a final
invoice for payment upon reaching such substantial completion and
removes language stating that a contractor may shall be entitled to
submit a final invoice "upon the performance of all the contractor's
obligation under the contract."

Section 3 amends Section 756-c of the General Business Law limiting the
retainage permitted to "no more than five per centum" of the contract
sum. Existing law does not state a maximum amount of retainage and
leaves it to the mutual agreement of the relevant parties.

Section 4 states that the act shall take effect immediately and shall
apply to contracts entered into on or after such effective date.

 
JUSTIFICATION:

Currently, subcontractors who have finished their work on a private job
must wait until the entire project is complete before receiving their
retainage. This creates hardships for subcontractors who must finance
their work in advance and sometimes wait for unreasonably long periods
of time for payment. This bill creates a new definition for "substantial
completion" of a construction contract and permits a contractor to issue
a final invoice upon such completion. It also limits retainage to no
more than 5% of the contract. This bill ensures that all parties under-
stand when a project is completed for invoicing purposes as well as
limiting the amount of retainage that can be withheld to a reasonable
amount.

 
PRIOR LEGISLATIVE HISTORY:

New Bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to all contracts
entered into on or after such effective date.

2017-S8848 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8848
 
                             I N  S E N A T E
 
                               May 24, 2018
                                ___________
 
 Introduced  by  Sen. BRESLIN -- 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  payment  and
   retainage in construction contracts
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. Section 756 of the  general  business  law  is  amended  by
 adding a new subdivision 7 to read as follows:
   7.  "SUBSTANTIAL  COMPLETION"  MEANS  THE STATE IN THE PROGRESS OF THE
 PROJECT WHEN THE WORK REQUIRED BY THE  CONSTRUCTION  CONTRACT  WITH  THE
 PROJECT   OWNER   IS   SUFFICIENTLY  COMPLETE  IN  ACCORDANCE  WITH  THE
 CONSTRUCTION CONTRACT SO THAT THE PROJECT OWNER MAY  OCCUPY  OR  UTILIZE
 THE  WORK  FOR  ITS  INTENDED  USE;  PROVIDED FURTHER, THAT "SUBSTANTIAL
 COMPLETION" SHALL APPLY TO THE ENTIRE PROJECT OR A PORTION OF THE ENTIRE
 PROJECT IF THE CONSTRUCTION CONTRACT WITH THE PROJECT OWNER PROVIDES FOR
 OCCUPANCY OR USE OF A PORTION OF THE PROJECT.
   § 2. The opening paragraph  of  paragraph  (a)  of  subdivision  2  of
 section  756-a of the general business law, as amended by chapter 417 of
 the laws of 2009, is amended to read as follows:
   A contractor shall be  entitled  to  invoice  the  owner  for  interim
 payments at the end of the billing cycle. A contractor shall be entitled
 to  submit  a final invoice for payment in full [upon the performance of
 all the  contractor's  obligation  under  the  contract]  UPON  REACHING
 SUBSTANTIAL COMPLETION UNDER THE CONSTRUCTION CONTRACT.
   §  3.  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] NO MORE THAN FIVE PER CENTUM of
 the contract sum as retainage. A contractor or  subcontractor  may  also
 retain  [a reasonable amount] NO MORE THAN FIVE PER CENTUM for retainage
 [so long as the amount does not] AND IN NO CASE SHALL  RETAINAGE  exceed
 the actual percentage retained by the owner. Retainage shall be released
 by the owner to the contractor no later than thirty days after the final
 approval of the work under a construction contract. In the event that an
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                       [ ] is old law to be omitted.
                                                            LBD00510-01-7

 S. 8848                             2
 
 owner  fails  to  release  retainage as required by this article, or the
 contractor or subcontractor fails to release a proportionate  amount  of
 retainage  to  the  relevant parties after receipt of retainage from the
 owner,  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.
   §  4.  This  act  shall  take  effect  immediately  and shall apply to
 contracts entered into on or after such effective date.

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Senate Bill S8848

Sponsored By

Archive: Last Bill Status - In Senate Committee Consumer Protection Committee

2017-S8848 (ACTIVE) - Details

2017-S8848 (ACTIVE) - Summary

2017-S8848 (ACTIVE) - Sponsor Memo

2017-S8848 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S8848

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Sponsored By

Neil D. Breslin

Archive: Last Bill Status - In Senate Committee Consumer Protection Committee

2017-S8848 (ACTIVE) - Details

2017-S8848 (ACTIVE) - Summary

2017-S8848 (ACTIVE) - Sponsor Memo

2017-S8848 (ACTIVE) - Bill Text download pdf

Comments