NY State Senate Bill 2023-S6855A

Senate Bill S6855A

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 Procurement And Contracts 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
May 30, 2024	print number 6855a
May 30, 2024	amend and recommit to procurement and contracts
Jan 03, 2024	referred to procurement and contracts
May 11, 2023	referred to procurement and contracts

Bill Amendments

Original

A (Active)

co-Sponsors

2023-S6855 - Details

See Assembly Version of this Bill:: A1194
Current Committee:: Senate Procurement And Contracts
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: S6158, A8473
2013-2014: S980, A725
2015-2016: S2931, S7652, A796, A10275
2017-2018: S4467, A358
2019-2020: S5498, A574
2021-2022: S1387, A494

2023-S6855 - 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-S6855 - Sponsor Memo

2023-S6855 - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6855
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                               May 11, 2023
                                ___________
 
 Introduced  by Sen. MARTINEZ -- read twice and ordered printed, and when
   printed to be committed to the Committee on Procurement and Contracts
 
 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
 MANUFACTURER'S  WARRANTY,  AND/OR ARE GRADED TO MEET INDUSTRY STANDARDS,
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01209-01-3

 S. 6855                             2
 
 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
 of the subcontract, at the request of the contractor.    THE  CONTRACTOR
 S. 6855                             3
 
 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
 secured  as  required  by the public owner and the contractor [provided,
 S. 6855                             4

 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-
 tractor  provided  that  prior  to  entering into a subcontract with the
 S. 6855                             5
 
 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

2023-S6855A (ACTIVE) - Details

See Assembly Version of this Bill:: A1194
Current Committee:: Senate Procurement And Contracts
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: S6158, A8473
2013-2014: S980, A725
2015-2016: S2931, S7652, A796, A10275
2017-2018: S4467, A358
2019-2020: S5498, A574
2021-2022: S1387, A494

2023-S6855A (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-S6855A (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S6855A

SPONSOR: MARTINEZ
 
TITLE OF BILL:

An act to amend the state finance law and the general municipal law, in
relation to requiring full payment for delivered and accepted materials
pertaining to public work projects; and to amend the general business
law, in relation to prohibiting the retention of any payment due and
owing a material supplier for a construction project

 
PURPOSE:

This bill amends the state finance and general municipal laws, in
relation to requiring full payment for delivered materials pertaining to
public works projects; and to amend the general business law, in
relation to prohibiting the retention of any payment due and owing a
material supplierfor a construction project.

 
SUMMARY OF PROVISIONS:

Section 1. amends subdivision 1 and 2 of section 139-f of the state

finance law to clarify that mate rialmen are not subject to retainage.

Section 2. amends paragraph (a) of subdivision 1 and 2 of section 106-b
of the General Municipal Law to clarify that materialmen are not subject
to retainage.

Section 3. amends section 756-c of the general business law to clarify
that an owner, contractor, or subcontractor may not retain more than
five percent of the contract sum for retainage.

Section 4: establishes the enacting clause.

 
JUSTIFICATION:

Currently, retainage is withheld on construction jobs to ensure that the
owner is happy with the finished product. Retainage is withheld by the
owner from the contractor, who, as a result of not receiving funds from
the owner, withholds payment from the subcontractors and materialmen.
Once a material supplier has delivered its goods and has been accepted
by the contractor or subcontractor, the supplier has completed its job
and should not be held liable for subsequent work performance. This
legislation would remove materialmen from inclusion under current
retainage laws.

 
FISCAL IMPUCATIONS:

None.

 
EFFECTIVE DATE:
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 an effective date.

2023-S6855A (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6855--A
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                               May 11, 2023
                                ___________
 
 Introduced  by Sens. MARTINEZ, GRIFFO, MARTINS, TEDISCO, WALCZYK -- read
   twice and ordered printed, and when printed to  be  committed  to  the
   Committee on Procurement and Contracts -- recommitted to the Committee
   on  Procurement and Contracts in accordance with Senate Rule 6, sec. 8
   -- 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.
                                                            LBD01209-03-4

 S. 6855--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-
 S. 6855--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
 S. 6855--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
 S. 6855--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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Senate Bill S6855A

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Current Bill Status - In Senate Committee Procurement And Contracts Committee

Bill Amendments

co-Sponsors

2023-S6855 - Details

2023-S6855 - Summary

2023-S6855 - Sponsor Memo

2023-S6855 - Bill Text download pdf

co-Sponsors

2023-S6855A (ACTIVE) - Details

2023-S6855A (ACTIVE) - Summary

2023-S6855A (ACTIVE) - Sponsor Memo

2023-S6855A (ACTIVE) - Bill Text download pdf

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