Sponsored by:
Senator JOSEPH P. CRYAN
District 20 (Union)
SYNOPSIS
Increases amount of partial payment withheld by contracting unit for certain contracts entered into from two percent to 10 percent.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the withholding of partial payments for certain contracts entered into by contracting units and amending P.L.1979, c.464.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 2 of P.L.1979, c.464 (C.40A:11-16.3) is amended to read as follows:
2. a. With respect to any contract entered into by a contracting unit pursuant to section 1 of P.L.1979, c.464 (C.40A:11-16.2) for which the contractor shall agree to the withholding of payments pursuant to P.L.1979, c.152 (C.40A:11-16.1), [2%] 10 percent of the amount due on each partial payment shall be withheld by the contracting unit pending completion of the contract.
b. Upon acceptance of the work performed pursuant to the contract for which the contractor has agreed to the withholding of payments pursuant to subsection a. of this section, all amounts being withheld by the contracting unit shall be released and paid in full to the contractor within 45 days of the final acceptance date agreed upon by the contractor and the contracting unit, without further withholding of any amounts for any purpose whatsoever, provided that the contract has been completed as indicated. If the contracting unit requires maintenance security after acceptance of the work performed pursuant to the contract, [such] the security shall be obtained in the form of a maintenance bond. The maintenance bond shall be no longer than two years and shall be no more than [100%] 100 percent of the project costs.
(cf: P.L.1999, c.440, s.26)
2. This act shall take effect immediately and shall apply to contracts entered into by a contracting unit pursuant to section 1 of P.L.1979, c.464 (C.40A:11-16.2) after the effective date of P.L. , c. (pending before the Legislature as this bill).
STATEMENT
Under current law, for certain contracts entered into by a contracting unit, the total price of which exceeds $100,000, involves the construction, reconstruction, alteration, repair or maintenance of any building, structure, facility or other improvement to real property, and for which the contractor agrees to the withholding of payments, the contracting unit is required to withhold two percent of the amount due on each partial payment pending completion of the contract. This bill amends the law to increase the amount of partial payment withheld by contracting unit from two percent to 10 percent.
The bill also makes technical revisions.