NY State Assembly Bill 2023-A1194A

Assembly Bill A1194A

2023-2024 Legislative Session

Prohibits the retention of any amount of payment due and owing for materials delivered and accepted for a public or private construction project

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Current Bill Status - In Senate Committee Rules 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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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jun 03, 2024	referred to rules delivered to senate passed assembly ordered to third reading rules cal.300 rules report cal.300 reported reported referred to rules
May 29, 2024	reported referred to ways and means
May 24, 2024	print number 1194a
May 24, 2024	amend and recommit to governmental operations
Jan 03, 2024	referred to governmental operations
Jan 13, 2023	referred to governmental operations

Bill Amendments

Original

A (Active)

co-Sponsors

multi-Sponsors

2023-A1194 - Details

See Senate Version of this Bill:: S6855
Current Committee:: Senate Rules
Law Section:: State Finance Law
Laws Affected:: Amd §139-f, St Fin L; amd §106-b, Gen Muni L; amd §756-c, Gen Bus L
Versions Introduced in Other Legislative Sessions:: 2011-2012: A8473, S6158
2013-2014: A725, S980
2015-2016: A796, A10275, S2931, S7652
2017-2018: A358, S4467
2019-2020: A574, S5498
2021-2022: A494, S1387

2023-A1194 - Summary

Prohibits the retention of any amount of payment due and owing for materials delivered and accepted for a public or private construction project.

2023-A1194 - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1194
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 13, 2023
                                ___________
 
 Introduced by M. of A. BRAUNSTEIN, WOERNER, STECK, PAULIN -- Multi-Spon-
   sored by -- M.  of A. TAGUE -- 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 requiring full payment for delivered and accepted  materi-
   als pertaining to public work projects; and to amend the general busi-
   ness  law, in relation to prohibiting the retention of any payment due
   and owing a material supplier for a construction project
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Subdivisions 1 and 2 of section 139-f of the state finance
 law, 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:
   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] ITS agent a requisition for a progress payment
 for  the  work  performed  and/or materials furnished to the date of the
 requisition, less any amount previously  paid  to  the  contractor.  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 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, NOT INCLUDING ANY PAYMENT FOR MATE-
 RIALS PERTINENT TO THE PROJECT WHICH HAVE BEEN DELIVERED,  ACCEPTED  AND
 ARE  COVERED  BY  A  MANUFACTURER'S WARRANTY, AND/OR ARE GRADED TO  MEET
 INDUSTRY  STANDARDS,  to the contractor except that the public owner may
 retain in excess of five per centum but not more than ten per centum  of
 each progress payment, NOT INCLUDING ANY PAYMENT FOR MATERIALS PERTINENT
 TO  THE PROJECT WHICH HAVE BEEN DELIVERED, ACCEPTED AND ARE COVERED BY A
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01209-01-3

 A. 1194                             2
 
 MANUFACTURER'S WARRANTY, AND/OR ARE GRADED TO MEET  INDUSTRY  STANDARDS,
 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 IN FULL, upon requisition from the contractor, for ALL materi-
 als 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] ITS 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 to  subcontractors.  Within  seven  calendar
 days of the receipt of any payment from the public owner, the contractor
 shall  pay each of [his] ITS 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 reflect-
 ing  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, WITH REGARD TO SUBCONTRACTORS, less any retained amount
 as hereafter described. Failure by the contractor to pay any subcontrac-
 tor 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  interest  payment shall be the sole responsibility of the contrac-
 tor, 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  estab-
 lished  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
 A. 1194                             3
 
 of  the  subcontract,  at the request of the contractor.  THE CONTRACTOR
 SHALL PAY IN FULL, UPON PAYMENT BY THE PUBLIC OWNER, FOR  ALL  MATERIALS
 PERTINENT  TO  THE  PROJECT WHICH HAVE BEEN DELIVERED TO AND ACCEPTED AT
 THE  SITE  OR OFF-SITE BY A MATERIALMAN AND ARE COVERED BY A MANUFACTUR-
 ER'S WARRANTY, AND/OR ARE GRADED TO MEET  INDUSTRY  STANDARDS.  However,
 EXCEPT  IN THE CASE OF A MATERIALMAN WHO IS ALSO CONTRACTED TO INSTALL A
 PRODUCT HE/SHE DELIVERED, 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] ITS subcontrac-
 tors 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.
   § 2. Paragraph (a) of subdivision 1 and subdivision 2 of section 106-b
 of the general municipal law, paragraph (a) of 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:
   (a) The contractor shall periodically, in accordance with the terms of
 the contract, submit to the public owner and/or [his] ITS agent a requi-
 sition  for  a  progress payment for the work performed and/or materials
 furnished to the date of the requisition less any amount previously paid
 to the contractor. 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  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,  NOT  INCLUDING  ANY  PAYMENT  FOR  MATERIALS  PERTINENT TO THE
 PROJECT WHICH HAVE  BEEN  DELIVERED,  ACCEPTED  AND  ARE  COVERED  BY  A
 MANUFACTURER'S  WARRANTY,  AND/OR ARE GRADED TO MEET INDUSTRY STANDARDS,
 to the contractor except that the public owner may retain in  excess  of
 five  per  centum  but  not  more  than  ten per centum of each progress
 payment, NOT INCLUDING  ANY  PAYMENT  FOR  MATERIALS  PERTINENT  TO  THE
 PROJECT  WHICH  HAVE  BEEN  DELIVERED,  ACCEPTED  AND  ARE  COVERED BY A
 MANUFACTURER'S WARRANTY, AND/OR ARE GRADED TO MEET  INDUSTRY  STANDARDS,
 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 IN FULL, upon requisition from the contractor, for ALL materi-
 als pertinent to the project which have been delivered to  the  site  or
 off-site  by the contractor and/or subcontractor and suitably stored and
 A. 1194                             4
 
 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] ITS 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 items less an amount
 necessary to satisfy any claims, liens or judgments against the contrac-
 tor which have not been suitably discharged. Any claims, liens and judg-
 ments 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  holidays, of
 receipt of the requisition unless such requisition is not approvable  in
 accordance with the terms of the contract.
   2.  Payment  by  contractors  to subcontractors. Within seven calendar
 days of the receipt of any payment from the public owner, the contractor
 shall pay each of [his] ITS 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 reflect-
 ing  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, WITH REGARD TO SUBCONTRACTORS, 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  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 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-
 A. 1194                             5
 
 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. THE CONTRACTOR
 SHALL PAY IN FULL, UPON PAYMENT BY THE PUBLIC OWNER, FOR  ALL  MATERIALS
 PERTINENT  TO  THE  PROJECT WHICH HAVE BEEN DELIVERED TO AND ACCEPTED AT
 THE SITE OR OFF-SITE BY A MATERIALMAN AND ARE COVERED BY  A  MANUFACTUR-
 ER'S  WARRANTY,  AND/OR  ARE GRADED TO MEET INDUSTRY STANDARDS. However,
 EXCEPT IN THE CASE OF A MATERIALMAN WHO IS ALSO CONTRACTED TO INSTALL  A
 PRODUCT HE/SHE DELIVERED, 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] ITS subcontrac-
 tors  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.
   §  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. 1. By mutual agreement of the relevant parties  an
 owner may retain a reasonable amount of the contract sum as retainage. A
 contractor  or  subcontractor  may  also  retain a reasonable amount for
 retainage so long as the amount does not 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 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.
   2.  NOTWITHSTANDING THE PROVISIONS OF SUBDIVISION ONE OF THIS SECTION,
 NO PORTION OF ANY PAYMENT DUE AND OWING TO A MATERIAL SUPPLIER FOR MATE-
 RIALS WHICH HAVE BEEN DELIVERED, ACCEPTED AND ARE COVERED BY A  MANUFAC-
 TURER'S  WARRANTY,  AND/OR  GRADED  TO  MEET INDUSTRY STANDARDS SHALL BE
 RETAINED BY AN OWNER, CONTRACTOR OR SUBCONTRACTOR.
   § 4. This act shall take effect on the thirtieth day  after  it  shall
 have become a law and shall apply to materials delivered and accepted on
 or after such effective date.

co-Sponsors

View additional co-sponsors

multi-Sponsors

2023-A1194A (ACTIVE) - Details

See Senate Version of this Bill:: S6855
Current Committee:: Senate Rules
Law Section:: State Finance Law
Laws Affected:: Amd §139-f, St Fin L; amd §106-b, Gen Muni L; amd §756-c, Gen Bus L
Versions Introduced in Other Legislative Sessions:: 2011-2012: A8473, S6158
2013-2014: A725, S980
2015-2016: A796, A10275, S2931, S7652
2017-2018: A358, S4467
2019-2020: A574, S5498
2021-2022: A494, S1387

2023-A1194A (ACTIVE) - Summary

Prohibits the retention of any amount of payment due and owing for materials delivered and accepted for a public or private construction project.

2023-A1194A (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  1194--A
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 13, 2023
                                ___________
 
 Introduced  by  M. of A. BRAUNSTEIN, WOERNER, STECK, PAULIN, BRABENEC --
   Multi-Sponsored by -- M. of A. TAGUE -- read once and referred to  the
   Committee  on  Governmental Operations -- recommitted to the Committee
   on Governmental Operations in accordance with Assembly Rule 3, sec.  2
   --  committee  discharged,  bill amended, ordered reprinted as amended
   and recommitted to said committee
 
 AN ACT to amend the state finance law and the general municipal law,  in
   relation  to requiring full payment for delivered and accepted materi-
   als pertaining to public work projects; and to amend the general busi-
   ness law, in relation to prohibiting the retention of any payment  due
   and owing a material supplier for a construction project
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivisions 1 and 2 of section 139-f of the state  finance
 law,  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:
   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] ITS agent a requisition for a progress payment
 for the work performed and/or materials furnished to  the  date  of  the
 requisition,  less  any  amount  previously  paid to the contractor. 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 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, NOT INCLUDING ANY PAYMENT FOR MATE-
 RIALS PERTINENT TO THE PROJECT WHICH HAVE BEEN DELIVERED,  ACCEPTED  AND
 ARE   COVERED  BY  A  MANUFACTURER'S WARRANTY, AND/OR ARE GRADED TO MEET
 INDUSTRY STANDARDS, to the contractor except that the public  owner  may
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01209-02-4

 A. 1194--A                          2
 
 retain  in excess of five per centum but not more than ten per centum of
 each progress payment, NOT INCLUDING ANY PAYMENT FOR MATERIALS PERTINENT
 TO THE PROJECT WHICH HAVE BEEN DELIVERED, ACCEPTED AND ARE COVERED BY  A
 MANUFACTURER'S  WARRANTY,  AND/OR ARE GRADED TO MEET INDUSTRY STANDARDS,
 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 IN FULL, upon requisition from the contractor, for ALL materi-
 als  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] ITS 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  to subcontractors. Within seven calendar
 days of the receipt of any payment from the public owner, the contractor
 shall pay each of [his] ITS 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 reflect-
 ing  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, WITH REGARD TO SUBCONTRACTORS, less any retained  amount
 as hereafter described. Failure by the contractor to pay any subcontrac-
 tor  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 interest payment shall be the sole responsibility of  the  contrac-
 tor,  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 estab-
 lished 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-
 A. 1194--A                          3
 
 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.  THE CONTRACTOR
 SHALL PAY IN FULL, UPON PAYMENT BY THE PUBLIC OWNER, FOR  ALL  MATERIALS
 PERTINENT  TO  THE  PROJECT WHICH HAVE BEEN DELIVERED TO AND ACCEPTED AT
 THE SITE OR OFF-SITE BY A MATERIALMAN AND ARE COVERED BY  A  MANUFACTUR-
 ER'S  WARRANTY,  AND/OR  ARE GRADED TO MEET INDUSTRY STANDARDS. However,
 EXCEPT IN THE CASE OF A MATERIALMAN WHO IS ALSO CONTRACTED TO INSTALL  A
 PRODUCT HE/SHE DELIVERED, 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] ITS subcontrac-
 tors  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.
   § 2. Paragraph (a) of subdivision 1 and subdivision 2 of section 106-b
 of  the general municipal law, paragraph (a) of 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:
   (a) The contractor shall periodically, in accordance with the terms of
 the contract, submit to the public owner and/or [his] ITS agent a requi-
 sition for a progress payment for the work  performed  and/or  materials
 furnished to the date of the requisition less any amount previously paid
 to  the  contractor. 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  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, NOT INCLUDING  ANY  PAYMENT  FOR  MATERIALS  PERTINENT  TO  THE
 PROJECT  WHICH  HAVE  BEEN  DELIVERED,  ACCEPTED  AND  ARE  COVERED BY A
 MANUFACTURER'S WARRANTY, AND/OR ARE GRADED TO MEET  INDUSTRY  STANDARDS,
 to  the  contractor except that the public owner may retain in excess of
 five per centum but not more  than  ten  per  centum  of  each  progress
 payment,  NOT  INCLUDING  ANY  PAYMENT  FOR  MATERIALS  PERTINENT TO THE
 PROJECT WHICH HAVE  BEEN  DELIVERED,  ACCEPTED  AND  ARE  COVERED  BY  A
 MANUFACTURER'S  WARRANTY,  AND/OR ARE GRADED TO MEET INDUSTRY STANDARDS,
 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
 A. 1194--A                          4
 
 shall pay IN FULL, upon requisition from the contractor, for ALL materi-
 als  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] ITS 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  items  less  an  amount
 necessary to satisfy any claims, liens or judgments against the contrac-
 tor which have not been suitably discharged. Any claims, liens and judg-
 ments 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  holidays,  of
 receipt  of the requisition unless such requisition is not approvable in
 accordance with the terms of the contract.
   2. Payment by contractors to  subcontractors.  Within  seven  calendar
 days of the receipt of any payment from the public owner, the contractor
 shall  pay each of [his] ITS 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 reflect-
 ing  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, WITH REGARD TO SUBCONTRACTORS, 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 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 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
 A. 1194--A                          5
 
 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.  THE  CONTRACTOR
 SHALL  PAY  IN FULL, UPON PAYMENT BY THE PUBLIC OWNER, FOR ALL MATERIALS
 PERTINENT TO THE PROJECT WHICH HAVE BEEN DELIVERED TO  AND  ACCEPTED  AT
 THE  SITE  OR OFF-SITE BY A MATERIALMAN AND ARE COVERED BY A MANUFACTUR-
 ER'S WARRANTY, AND/OR ARE GRADED TO MEET  INDUSTRY  STANDARDS.  However,
 EXCEPT  IN THE CASE OF A MATERIALMAN WHO IS ALSO CONTRACTED TO INSTALL A
 PRODUCT HE/SHE DELIVERED, 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] ITS subcontrac-
 tors 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.
   § 3. Section 756-c of the general business law, as amended by  chapter
 657 of the laws of 2023, is amended to read as follows:
   §  756-c. Retention. 1. By mutual agreement of the relevant parties an
 owner may retain no more than five per centum of  the  contract  sum  as
 retainage.  A  contractor  or subcontractor may also retain no more than
 five per centum for retainage 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
 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.
   2. NOTWITHSTANDING THE PROVISIONS OF SUBDIVISION ONE OF THIS  SECTION,
 NO PORTION OF ANY PAYMENT DUE AND OWING TO A MATERIAL SUPPLIER FOR MATE-
 RIALS  WHICH HAVE BEEN DELIVERED, ACCEPTED AND ARE COVERED BY A MANUFAC-
 TURER'S WARRANTY, AND/OR GRADED TO  MEET  INDUSTRY  STANDARDS  SHALL  BE
 RETAINED BY AN OWNER, CONTRACTOR OR SUBCONTRACTOR.
   §  4.  This  act shall take effect on the thirtieth day after it shall
 have become a law and shall apply to materials delivered and accepted on
 or after such effective date.

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Assembly Bill A1194A

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Sponsored By

BRAUNSTEIN

Current Bill Status - In Senate Committee Rules Committee

Bill Amendments

co-Sponsors

Carrie Woerner

Phil Steck

Amy Paulin

Karl Brabenec

multi-Sponsors

Chris Tague

2023-A1194 - Details

2023-A1194 - Summary

2023-A1194 - Bill Text download pdf

co-Sponsors

Carrie Woerner

Phil Steck

Amy Paulin

Karl Brabenec

multi-Sponsors

Chris Tague

2023-A1194A (ACTIVE) - Details

2023-A1194A (ACTIVE) - Summary

2023-A1194A (ACTIVE) - Bill Text download pdf

Comments