Bill Text: NY A10446 | 2015-2016 | General Assembly | Introduced

---

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

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2016-05-27 - referred to economic development [A10446 Detail]

Download: New_York-2015-A10446-Introduced.html

---

                STATE OF NEW YORK
        ________________________________________________________________________
                                          10446
                   IN ASSEMBLY
                                      May 27, 2016
                                       ___________
        Introduced by M. of A. CUSICK -- read once and referred to the Committee
          on Economic Development
        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:
     1    Section  1.  Section  756  of  the  general business law is amended by
     2  adding a new subdivision 7 to read as follows:
     3    7. "Substantial completion" means the state in  the  progress  of  the
     4  project  when  the  work  required by the construction contract with the
     5  project  owner  is  sufficiently  complete  in   accordance   with   the
     6  construction  contract  so  that the project owner may occupy or utilize
     7  the work for its  intended  use;  provided  further,  that  "substantial
     8  completion" shall apply to the entire project or a portion of the entire
     9  project if the construction contract with the project owner provides for
    10  occupancy or use of a portion of the project.
    11    §  2.  The  opening  paragraph  of  paragraph  (a) of subdivision 2 of
    12  section 756-a of the general business law, as amended by chapter 417  of
    13  the laws of 2009, is amended to read as follows:
    14    A  contractor  shall  be  entitled  to  invoice  the owner for interim
    15  payments at the end of the billing cycle. A contractor shall be entitled
    16  to submit a final invoice for payment in full [upon the  performance  of
    17  all  the  contractor's  obligation  under  the  contract]  upon reaching
    18  substantial completion under the construction contract.
    19    § 3. Section 756-c of the general business law, as  added  by  chapter
    20  127 of the laws of 2002, is amended to read as follows:
    21    §  756-c.  Retention.  By  mutual agreement of the relevant parties an
    22  owner may retain [a reasonable amount] no more than five per  centum  of
    23  the  contract  sum  as retainage. A contractor or subcontractor may also
    24  retain [a reasonable amount] no more than five per centum for  retainage
    25  [so  long  as the amount does not] and in no case shall retainage exceed
    26  the actual percentage retained by the owner. Retainage shall be released
    27  by the owner to the contractor no later than thirty days after the final
    28  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.
                                                                   LBD15589-01-6
        A. 10446                            2
     1  owner fails to release retainage as required by  this  article,  or  the
     2  contractor  or  subcontractor fails to release a proportionate amount of
     3  retainage to the relevant parties after receipt of  retainage  from  the
     4  owner,  the  owner,  contractor,  or  subcontractor, as the case may be,
     5  shall be subject to the payment of interest at the rate of  one  percent
     6  per month on the date retention was due and owing.
     7    §  4.  This  act  shall  take  effect  immediately  and shall apply to
     8  contracts entered into on or after such effective date.