Relates to payment on construction contracts

Title of bill

An act to amend the general obligations law, in relation to payment on construction contracts

Purpose

The bill would require contractors to submit timely requisitions for payment of invoices for all work performed and materials provided on private construction contracts by subcontractors and/or materialmen, and document in writing the reasons for rejection of such payment, in whole or part.

Summary of provisions

Section 1 would require contractors to requisition for subcontractor work and materials provided on private construction projects that is not rejected by the contractor, in whole or part. Contractors shall have not less than 30 days or more than 45 days following the contractor's receipt of invoices from the subcontractor and materialmen to accept or reject the subcontractor's or materialman's request for payment, in whole or part.

In the event that the contractor rejects such subcontractor's or materialman's request for payment, the rejection must be in writing and accompanied by: (a) reasoned elaboration for the rejection, in whole or part; and (b) a description of the work, materials and/or supporting documentation required to approve payment. The private owner shall approve and pay requisitions in accordance with the terms of its contract.

Section 2 of the bill would make it effective immediately.

Justification

This bill is tailored to mitigate the issues created by contractors electing not to requisition for subcontractor and/or materialmen work that has been accepted by the contractor. It would thereby mitigate subcontractor payment issues on private construction projects.

Prior legislative history

None

Fiscal implications

None.

Effective date

This Bill shall take effect on the ninetieth day after it shall have become a law.