2006 New York Code - Payment On Public Work Projects.

 
    §   106-b.  Payment  on  public  work  projects.  Notwithstanding  the
  provisions of any other law to the  contrary,  all  contracts  made  and
  awarded  by  the  appropriate  officer,  board  or agency of a political
  subdivision or of any district therein, hereafter  referred  to  as  the
  public  owner,  for  construction,  reconstruction  or alteration of any
  public work project shall provide for payment by the public owner to the
  contractor and  payment  by  the  contractor  to  the  subcontractor  in
  accordance with the following:
    1.  Payment by public owners to contractors.  (a) The contractor shall
  periodically, in accordance with the terms of the  contract,  submit  to
  the  public  owner and/or his 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
  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 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 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,
  upon  requisition  from  the  contractor, for materials 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 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
  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. 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.
    (b) Each public owner other  than  the  city  of  New  York  which  is
  required  to make a payment from public funds pursuant to a contract and
  which does not make such contract payment by the required  payment  date
  shall  make  an  interest payment to the contractor on the amount of the
  contract payment which is due  unless  failure  to  make  such  contract
  payment  is  the  result  of  a lien, attachment, or other legal process
  against  the  money  due  said  contractor,  or unless the amount of the
  interest payment as computed in accordance with the provisions set forth
  hereinafter is less than ten dollars. Interest payments on  amounts  due
  to  a  contractor  pursuant  to  this  paragraph  shall  be  paid to the
  contractor for the period  beginning  on  the  day  after  the  required
  payment  date and ending on the payment date for those payments required
  according to this section and shall be paid at the rate of  interest  in
  effect  on  the  date when the interest payment is made. Notwithstanding
  any other provision of law to the contrary, interest shall  be  computed
  at  the  rate  equal  to the overpayment rate set by the commissioner of
  taxation and finance pursuant to subsection (e) of section one  thousand
  ninety-six  of  the  tax law. A pro rata share of such interest shall be
  paid by the  contractor  or  subcontractor,  as  the  case  may  be,  to
  subcontractors  and  materialmen in a proportion equal to the percentage
  of their pro rata share of the contract payment. Such pro rata share  of
  interest  shall  be  due to such subcontractors and materialmen only for
  those payments which are not paid to such subcontractors and materialmen
  prior to the date upon which  interest  begins  to  accrue  between  the
  public  owner and the contractor. Such pro rata shares of interest shall
  be computed daily until such payments are made to the subcontractors and
  materialmen.
    (c) For projects of a public owner other than the city of New York, if
  state funds directly related to and which have  been  budgeted  for  the
  construction  of  the project for which the payment is due have not been
  received prior to the  expiration  of  the  thirty  or  forty-five  days
  specified  in  paragraph  (a) of this subdivision, the interest provided
  for in paragraph (b) of this subdivision shall not begin to  accrue  and
  payment  shall  not  be  due,  until ten days after receipt of the state
  funds. Nothing in this paragraph shall prevent  the  public  owner  from
  approving  the requisition, subject to receipt of the state funds. State
  funds shall mean monies provided to the public owner by the  state,  its
  officers,  boards,  departments,  commissions, or a public authority and
  public benefit corporation, a majority of the members of which have been
  appointed by the governor or who serve as members by virtue of holding a
  civil office of the state, or a combination thereof.
    2. Payment by contractors to subcontractors. Within  fifteen  calendar
  days of the receipt of any payment from the public owner, the contractor
  shall  pay  each of his 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
  reflecting 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 less any retained amount  as  hereafter  described.  With
  respect  to  contracts entered into by public owners other than the city
  of New York, 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 fifteen 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 fifteen calendar day period
  and ending on the date on which payment is made  by  the  contractor  to
  such  subcontractor  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 equal to the overpayment rate set  by  the
  commissioner  of  taxation  and  finance  pursuant  to subsection (e) of
  section one thousand ninety-six of the tax  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 subcontractor 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. However, 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
  fifteen calendar days of the receipt of payment from the contractor, the
  subcontractor and/or materialman shall pay each  of  his  subcontractors
  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.  In  the event that the terms of payment on a public works project,
  as provided in this section, are pre-empted or superseded as a result of
  the provisions of any federal statute, regulation or rule applicable  to
  the project, the terms of this section shall not apply.