Bill Text: NY S06315 | 2015-2016 | General Assembly | Amended
Bill Title: Relates to payment in construction contracts; specifies the meaning of "substantial completion" for the purposes of requisition payments in construction contracts.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Engrossed - Dead) 2016-06-17 - COMMITTED TO RULES [S06315 Detail]
Download: New_York-2015-S06315-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 6315--A Cal. No. 810 IN SENATE (Prefiled) January 6, 2016 ___________ Introduced by Sen. DeFRANCISCO -- read twice and ordered printed, and when printed to be committed to the Committee on Finance -- reported favorably from said committee, ordered to first and second report, ordered to a third reading, amended and ordered reprinted, retaining its place in the order of third reading AN ACT to amend the state finance law and the general municipal law, in relation to payment in construction contracts The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subdivision 1 of section 139-f of the state finance law, as 2 added by chapter 769 of the laws of 1978, is amended to read as follows: 3 1. Payment by public owners to contractors. The contractor shall peri- 4 odically, in accordance with the terms of the contract, submit to the 5 public owner and/or his agent a requisition for a progress payment for 6 the work performed and/or materials furnished to the date of the requi- 7 sition, less any amount previously paid to the contractor. The public 8 owner shall in accordance with the terms of the contract approve and 9 promptly pay the requisition for the progress payment less an amount 10 necessary to satisfy any claims, liens or judgments against the contrac- 11 tor which have not been suitably discharged and less any retained amount 12 as hereafter described. The public owner shall retain not more than five 13 per centum of each progress payment to the contractor except that the 14 public owner may retain in excess of five per centum but not more than 15 ten per centum of each progress payment to the contractor provided that 16 there are no requirements by the public owner for the contractor to 17 provide a performance bond and a labor and material bond both in the 18 full amount of the contract. The public owner shall pay, upon requisi- 19 tion from the contractor, for materials pertinent to the project which 20 have been delivered to the site or off-site by the contractor and/or 21 subcontractor and suitably stored and secured as required by the public 22 owner and the contractor provided, the public owner may limit such 23 payment to materials in short and/or critical supply and materials 24 specially fabricated for the project each as defined in the contract. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD13154-02-6S. 6315--A 2 1 When the work or major portions thereof as contemplated by the terms of 2 the contract [are substantially completed] has reached substantial 3 completion which, for the purposes of this section, shall mean the state 4 in the progress of the project when the work required by the contract 5 with the public owner is sufficiently complete in accordance with the 6 contract so that the public owner may occupy or utilize the work for its 7 intended use; provided further, that "substantial completion" shall 8 apply to the entire project or a portion of the entire project if the 9 contract with the public owner provides for occupancy or use of a 10 portion of the project, the contractor shall submit to the public owner 11 and/or his agent a requisition for payment of the remaining amount of 12 the contract balance. Upon receipt of such requisition the public owner 13 shall approve and promptly pay the remaining amount of the contract 14 balance less two times the value of any remaining items to be completed 15 and an amount necessary to satisfy any claims, liens or judgments 16 against the contractor which have not been suitably discharged. As the 17 remaining items of work are satisfactorily completed or corrected, the 18 public owner shall promptly pay, upon receipt of a requisition, for 19 these remaining items less an amount necessary to satisfy any claims, 20 liens or judgments against the contractor which have not been suitably 21 discharged. Any claims, liens and judgments referred to in this section 22 shall pertain to the project and shall be filed in accordance with the 23 terms of the applicable contract and/or applicable laws. 24 § 2. Subdivision 1-a of section 139-f of the state finance law is 25 renumbered 1-b and a new subdivision 1-a is added to read as follows: 26 1-a. Not later than fourteen calendar days after the date when the 27 project has reached substantial completion, the public owner shall 28 submit to the contractor a written list describing all remaining items 29 to be completed by the contractor. Not later than seven calendar days 30 after receiving a written list describing all remaining items to be 31 completed by the contractor, the contractor shall submit to each subcon- 32 tractor from whom the contractor is withholding retainage a written list 33 of all remaining items required to be completed by the subcontractor. 34 Such list may include items in addition to those items on the public 35 owner's list. 36 § 3. Subdivision 1 of section 106-b of the general municipal law, as 37 amended by chapter 661 of the laws of 1992, paragraphs (a) and (c) as 38 amended by chapter 98 of the laws of 1995, is amended to read as 39 follows: 40 1. Payment by public owners to contractors. (a) The contractor shall 41 periodically, in accordance with the terms of the contract, submit to 42 the public owner and/or his agent a requisition for a progress payment 43 for the work performed and/or materials furnished to the date of the 44 requisition less any amount previously paid to the contractor. The 45 public owner shall in accordance with the terms of the contract approve 46 and promptly pay the requisition for the progress payment less an amount 47 necessary to satisfy any claims, liens or judgments against the contrac- 48 tor which have not been suitably discharged and less any retained amount 49 as hereafter described. The public owner shall retain not more than five 50 per centum of each progress payment to the contractor except that the 51 public owner may retain in excess of five per centum but not more than 52 ten per centum of each progress payment to the contractor provided that 53 there are no requirements by the public owner for the contractor to 54 provide a performance bond and a labor and material bond both in the 55 full amount of the contract. The public owner shall pay, upon requisi- 56 tion from the contractor, for materials pertinent to the project whichS. 6315--A 3 1 have been delivered to the site or off-site by the contractor and/or 2 subcontractor and suitably stored and secured as required by the public 3 owner and the contractor provided, the public owner may limit such 4 payment to materials in short and/or critical supply and materials 5 specially fabricated for the project each as defined in the contract. 6 When the work or major portions thereof as contemplated by the terms of 7 the contract [are substantially completed] has reached substantial 8 completion which, for the purposes of this section, shall mean, for 9 public owners other than school districts and boards of cooperative 10 educational services, the state in the progress of the project when the 11 work required by the contract with the public owner is sufficiently 12 complete in accordance with the contract so that the public owner may 13 occupy or utilize the work for its intended use and shall mean, for 14 school districts and boards of cooperative educational services, is the 15 date the partial or final certificate of substantial completion of the 16 project which is the date certified by the architect or engineer when 17 the construction is code compliant and substantially complete in accord- 18 ance with the contract documents so the school district can occupy or 19 utilize the project or portion thereof for its intended use, the 20 contractor shall submit to the public owner and/or his agent a requisi- 21 tion for payment of the remaining amount of the contract balance. Upon 22 receipt of such requisition the public owner shall approve and promptly 23 pay the remaining amount of the contract balance less two times the 24 value of any remaining items to be completed and an amount necessary to 25 satisfy any claims, liens or judgments against the contractor which have 26 not been suitably discharged. As the remaining items of work are satis- 27 factorily completed or corrected, the public owner shall promptly pay, 28 upon receipt of a requisition, for these items less an amount necessary 29 to satisfy any claims, liens or judgments against the contractor which 30 have not been suitably discharged. Any claims, liens and judgments 31 referred to in this section shall pertain to the project and shall be 32 filed in accordance with the terms of the applicable contract and/or 33 applicable laws. Where the public owner is other than the city of New 34 York, the term "promptly pay" shall mean payment within thirty days, 35 excluding legal holidays, of receipt of the requisition unless such 36 requisition is not approvable in accordance with the terms of the 37 contract. Notwithstanding the foregoing, where the public owner is other 38 than the city of New York and is a municipal corporation which requires 39 an elected official to approve progress payments, "promptly pay" shall 40 mean payment within forty-five days, excluding legal holidays, of 41 receipt of the requisition unless such requisition is not approvable in 42 accordance with the terms of the contract. 43 (b) Not later than fourteen calendar days after the date when the 44 project has reached substantial completion, the public owner shall 45 submit to the contractor a written list describing all remaining items 46 to be completed by the contractor. Not later than seven calendar days 47 after receiving a written list describing all remaining items to be 48 completed by the contractor, the contractor shall submit to each subcon- 49 tractor from whom the contractor is withholding retainage a written list 50 of all remaining items required to be completed by the subcontractor. 51 Such list may include items in addition to those items on the public 52 owner's list. 53 (c) Each public owner other than the city of New York which is 54 required to make a payment from public funds pursuant to a contract and 55 which does not make such contract payment by the required payment date 56 shall make an interest payment to the contractor on the amount of theS. 6315--A 4 1 contract payment which is due unless failure to make such contract 2 payment is the result of a lien, attachment, or other legal process 3 against the money due said contractor, or unless the amount of the 4 interest payment as computed in accordance with the provisions set forth 5 hereinafter is less than ten dollars. Interest payments on amounts due 6 to a contractor pursuant to this paragraph shall be paid to the contrac- 7 tor for the period beginning on the day after the required payment date 8 and ending on the payment date for those payments required according to 9 this section and shall be paid at the rate of interest in effect on the 10 date when the interest payment is made. Notwithstanding any other 11 provision of law to the contrary, interest shall be computed at the rate 12 equal to the overpayment rate set by the commissioner of taxation and 13 finance pursuant to subsection (e) of section one thousand ninety-six of 14 the tax law. A pro rata share of such interest shall be paid by the 15 contractor or subcontractor, as the case may be, to subcontractors and 16 materialmen in a proportion equal to the percentage of their pro rata 17 share of the contract payment. Such pro rata share of interest shall be 18 due to such subcontractors and materialmen only for those payments which 19 are not paid to such subcontractors and materialmen prior to the date 20 upon which interest begins to accrue between the public owner and the 21 contractor. Such pro rata shares of interest shall be computed daily 22 until such payments are made to the subcontractors and materialmen. 23 [(c)] (d) For projects of a public owner other than the city of New 24 York, if state funds directly related to and which have been budgeted 25 for the construction of the project for which the payment is due have 26 not been received prior to the expiration of the thirty or forty-five 27 days specified in paragraph (a) of this subdivision, the interest 28 provided for in paragraph [(b)] (c) of this subdivision shall not begin 29 to accrue and payment shall not be due, until ten days after receipt of 30 the state funds. Nothing in this paragraph shall prevent the public 31 owner from approving the requisition, subject to receipt of the state 32 funds. State funds shall mean monies provided to the public owner by the 33 state, its officers, boards, departments, commissions, or a public 34 authority and public benefit corporation, a majority of the members of 35 which have been appointed by the governor or who serve as members by 36 virtue of holding a civil office of the state, or a combination thereof. 37 § 4. This act shall take effect immediately and shall apply to 38 contracts entered into on and after such effective date.
