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Sponsors
No co-sponsors yet.
History
- Referred to consumer protection
- Referred to consumer protection
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Provides for a reasonable amount of construction contract sum to be deposited in a separate interest bearing escrow account with a third party escrow agent
In Assembly Committee · Economic Development · Sponsor Edward Braunstein
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
Title of bill
An act to amend the general business law, in relation to retention of construction contracts
Purpose or general idea of bill
This bill would require retainage held on private construction projects to be placed in an interest-bearing escrow account for the benefit of the parties from whom the retainage is being held.
Summary of specific provisions
This bill accomplishes a much needed construction industry reform. Owners would continue to have added security of holding retain age on progress payments. However, the interest on the held money would be earned for the benefit of the parties, from whom retainage is being held, thus taking some of the sting out of having significant amounts of earned money held for substantial periods of time.
Justification
Retainage is the practice of withholding a portion of the earned progress payment of a construction contractor, subcontractor or supplier (hereinafter the "contractor") for work performed, for release at a later time. Retainage is a long-standing tradition in the building industry, and unique to the construction process, as it withholds funds already earned by the contractor.
Retainage represents money which has been previously earned by contractors. That is, retainage is already the subcontractor's money. As such, it is the contractors from whom retainage is held who should benefit from investment earnings on that money. Furthermore, by having retainage placed in an escrow account, contractors will have far more assurance that they will actually receive the money which they have earned in the event an owner's financial status becomes questionable later on.
Prior legislative history
2001-02: A.9711 Judiciary 2003-04: A.4620 Codes 2005-06: A.2721 Passed Assembly; 2007.08: A.9538 3rd Rdg. Cal. 817 2009-10: A.2279 Passed Assembly 2011-12: S.3180/A.5023 2013-14: S.1717/A.529
Fiscal implications
None.
Effective date
Immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.