SB 506

Abstract

Creates the Building and Construction Contract Payment Act. Provides that, upon receipt of any payment, a contractor shall pay his or her subcontractors and material suppliers their application less any retention. Provides that, when the contractor receives less than the full price, he or she shall divide those funds between himself or herself, the subcontractors and material suppliers, pro rata. Provides that, when the owner does not pay the full amount under the contract due to the contractor's rejection of certain aspects of the work performed or materials provided, the specific subcontractors and material suppliers involved shall not be paid for the work or materials rejected, and all the others shall be paid in full. Provides that, if the contractor fails to make the payments within 15 days after receipt of payment under the contract, the amounts due shall be remitted with interest in the amount of 2% per month. Effective immediately.