NY State Fin L § 137 (2021)
2021 New York Laws STF - State Finance Article 9 - Contracts 137 - Bond to Secure Payment of Certain Claims Arising From a Public Improvement; Enforcement.

§  137. Bond to secure payment of certain claims arising from a public improvement; enforcement. 1. In addition to other bond or bonds, if any, required by law for the completion of a work specified in a contract for the prosecution of a public improvement for the  state  of  New  York  a municipal  corporation,  a  public  benefit  corporation or a commission appointed pursuant to law, or in the absence of  any  such  requirement, the  comptroller  may  or  the other appropriate official, respectively, shall nevertheless require prior to the approval of any such contract  a bond guaranteeing prompt payment of moneys due to all persons furnishing labor  or  materials  to  the  contractor  or  any subcontractors in the prosecution of the work  provided  for  in  such  contract.  Whenever  a municipal corporation issues a permit subject to compliance with section two hundred twenty of the labor law, such permittee or its contractor or subcontractors  furnishing  workers shall post a payment bond subject to this section. Provided, however, that all performance bonds and  payment bonds  may,  at  the  discretion of the head of the state agency, public benefit corporation or commission, or his or her designee, be  dispensed with  for  the  completion  of  a  work  specified in a contract for the prosecution of a public improvement for the state of New York for  which bids  are  solicited where the aggregate amount of the contract is under one hundred thousand dollars and provided further, that in a case  where the  contract is not subject to the multiple contract award requirements of section one hundred thirty-five of this  article,  such  requirements may be dispensed with where the head of the state agency, public benefit corporation  or  commission  finds  it  to be in the public interest and where the aggregate amount of the contract awarded or to be  awarded  is less than two hundred thousand dollars. Provided further, that in a case where a performance or payment bond is dispensed with, twenty per centum may  be retained from each progress payment or estimate until the entire contract work has been completed and accepted, at which time the head of the state  agency,  public  benefit  corporation  or  commission  shall, pending   the   payment  of  the  final  estimate,  pay  not  to  exceed seventy-five per centum of the amount of the retained percentage.   2. A copy of such payment bond shall be kept in the office of the head of the department or bureau having charge of the public  improvement  in connection  with  which the bond was given and a copy shall also be kept in the office of the comptroller or  other  appropriate  official;  such copies shall be open to public inspection.   3. Every person who has furnished labor or material, to the contractor or  to a subcontractor of the contractor, in the prosecution of the work provided for in the contract and who has not been paid in full  therefor before  the expiration of a period of ninety days after the day on which the last of the labor was performed or material was furnished by him for which the claim is made, shall have the right to  sue  on  such  payment bond  in  his own name for the amount, or the balance thereof, unpaid at the time of commencement of the action; provided, however, that a person having a direct contractual relationship with  a  subcontractor  of  the contractor  furnishing  the payment bond but no contractual relationship express or implied with such contractor shall not have a right of action upon the bond  unless  he  shall  have  given  written  notice  to  such contractor  within  one  hundred  twenty days from the date on which the last of the labor  was  performed  or  the  last  of  the  material  was furnished,  for  which  his  claim  is  made,  stating  with substantial accuracy the amount claimed and the  name  of  the  party  to  whom  the material  was  furnished or for whom the labor was performed. The notice shall be served by delivering the same personally to the  contractor  or by  mailing the same by registered mail, postage prepaid, in an envelope addressed to the contractor at any place where he maintains an office or  conducts his business or at his residence; provided, however, that where such notice is actually received by the contractor by other means,  such notice shall be deemed sufficient.   4.  (a)  A  payment bond required pursuant to this section may provide that the place of trial of an action on the bond shall be in the  county in which the contract of the contractor who furnished the bond was to be performed  or  if  such  contract  was  to be performed in more than one county, then in any such county, and not elsewhere.  (b) Except as provided in section two hundred twenty-g  of  the  labor law,  no  action  on  a  payment bond furnished pursuant to this section shall be commenced after the expiration of one year  from  the  date  on which  the  public  improvement  has  been completed and accepted by the public owner.  (c) In any action  on  a  payment  bond  furnished  pursuant  to  this section,  any  judgment in favor of a subcontractor or material supplier may include provision for  the  payment  of  interest  upon  the  amount recovered from the date when demand for payment was made pursuant to the labor  and material payment bond and provided further that the court may determine and award reasonable attorney's fee to either  party  to  such action  when,  upon  reviewing the entire record, it appears that either the original claim or the defense interposed to such  claim  is  without substantial basis in fact or law.   5. (a) The expression "furnishes material" or other similar expression wherever  used in this section shall be deemed to include the reasonable rental value for the  period  of  actual  use  of  machinery,  tools  or equipment,  and  the  value of compressed gases furnished for welding or cutting, and the value of fuel  and  lubricants  consumed  by  machinery operating  on  the  improvement, or by motor vehicles owned, operated or controlled  by  the  contractor  or  his  subcontractors  while  engaged exclusively   in   the  transportation  of  materials  to  or  from  the improvement for the purposes thereof.  (b) The expression "moneys due to  persons  furnishing  labor  to  the contractor  or  his  subcontractors"  includes all sums payable to or on behalf  of  persons  furnishing  labor  to   the   contractor   or   his subcontractors, for wages, health, welfare, non-occupational disability, retirement,  vacation  benefits,  holiday  pay,  life insurance or other benefits, payment of which is required pursuant to the labor law  or  by the  contract  in  connection  with  which the bond is furnished or by a collective  bargaining  agreement  between  organized  labor   and   the contractor or subcontractor, and which are computed upon labor performed in the prosecution of the contract. A trustee or other person authorized to collect such payments shall have the right to sue on the payment bond in  his  own  name  and subject to the same conditions as if he were the person performing the labor upon which such sums are computed.