Relates to claims and actions against the New York city school construction authority arising out of contracts

BILL NUMBER:S6577

Title of bill

An act to amend the public authorities law, in relation to claims and actions against the New York city school construction authority arising out of contracts

Purpose or general idea of bill

To bring section 1744 of the Public Authorities Law into conformance with all other school districts in the state with regard to claims for contracts.

Summary of specific provisions

Section 1 - amends subdivision two of section 1744 of the Public Authorities Law to add an additional sentence that provides that in the case of an action or special proceeding for monies due arising out of contract, accrual of such claim shall be deemed to have occurred as of the date payment for the amount claimed was denied.

Section 2 - provides that this act shall take effect immediately and shall apply to contracts executed on or after such date.

Justification

This bill will bring the time of accrual for contractual work done for the New York City School Construction Authority into conformance with the Education Law provisions applicable to all other school districts statewide, will prevent the unintentional and unfair waiver of claims, and will reduce paperwork for both the Authority and its contractors.

Because of the volume of work being done by the New York City School Construction Authority, and the numerous change orders that have occurred and continue to occur, review of completed projects and changes is often delayed beyond the ninety days within which a claim must be presented.

Under present School Construction Authority Law, a notice of claim to preserve contractors' rights to pursue an action (if the claim is eventually denied) must often be served before a contractor even knows that there is a dispute to preserve the contractors rights to be paid for work that has been properly completed. The routine filing of a notice of claim for work completed and under review by the School Construction Authority is a costly and burdensome expense to the Authority. The limited, technical amendment implemented by this bill will avoid the cost of handling of what would often be the unnecessary filing of a notice of claim, and will allow for a much clearer, understandable trigger as to when the ninety days to file a notice of claim, or the one year to commence an action on the claim, begins to run. The denial-of-a-claim starting point, utilized in the Education Law § 3813, has been a success for over twenty years for all other school districts across the state and is much clearer than the vague, accrual-of-claim starting point currently in the Public Authorities Law.

Prior legislative history

New bill. Reference can be made to Chapter 387 of the Laws of 1992 amending the Education Law.

Fiscal implications

None.

Effective date

This act shall take effect immediately and shall apply to contracts executed on or after such date.