NY Gen Mun L § 106-B (2021)
2021 New York Laws GMU - General Municipal Article 5-A - Public Contracts 106-B - 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) Not later than forty-five business days after the  date  when  the project  has  reached substantial completion, as such term is defined in the contract or as it is contemplated by the terms of the contract,  the  public  owner  shall  submit to the contractor a written list describing all remaining items to be completed by the contractor.  Not  later  than five  business  days  after  receiving  a  written  list  describing all remaining  items to be completed by the contractor, the contractor shall submit to each subcontractor from whom  the  contractor  is  withholding retainage a written list of all remaining items required to be completed by  the  subcontractor. Such list may include items in addition to those items on the public owner's list.  (c) 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.  (d) 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 (c) 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  seven  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.  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 seven 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 seven  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  established  in paragraph (b) of subdivision one of section seven hundred fifty-six-b of the general business 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 seven 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.