HOUSE DOCKET, NO. 1525        FILED ON: 1/15/2015

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 3523

The Commonwealth of Massachusetts

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PRESENTED BY:

Frank A. Moran

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To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act relative to the payment of subcontractors in the Commonwealth.

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PETITION OF:

HOUSE DOCKET, NO. 1525        FILED ON: 1/15/2015

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 3523

The Commonwealth of Massachusetts

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In the One Hundred and Eighty-Ninth General Court
(2015-2016)

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An Act relative to the payment of subcontractors in the Commonwealth.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

SECTION 1. Paragraph (a) of section 4A of chapter 7 of the General Laws, as appearing in the 2012 Official Edition, is hereby amended by adding the following 2 sentences:- The state purchasing agent shall oversee the payment of subcontractors by general contractors pursuant to the time-frame in section 39F of chapter 30 for work performed on public jobs in the commonwealth.  The state purchasing agent shall create and maintain a statewide toll free telephone number staffed by assigned investigators that enables subcontractors to contact the state purchasing agent to ensure such subcontractors are paid pursuant to the general laws.

SECTION 2. Section 61 of chapter 7 of the General Laws, as so appearing, is hereby amended by inserting after subsection (o) the following subsection:-

(o½) General contractors using SDO minority certified subcontractor prices in a letter of intent, or any other writing, shall use the subcontractor acknowledged in such writing at the stated price.  SDO shall, in conjunction with the state purchasing agent, ensure general contractors are in compliance with the provisions of this subsection.  SDO or the state purchasing agent may impose administrative penalties on a general contractor found noncompliant with this subsection.

SECTION 3. Paragraph (1) of section 39F of chapter 30 of the General Laws, as appearing in the 2012 Official Edition, is hereby amended by striking out subparagraph (b) and inserting in place thereof the following 2 subparagraphs:-

(b) (i) Notwithstanding any other provision of this chapter or chapter 29, whenever a general contractor receives payment from a department, public entity, or any agency of the executive, judicial or legislative branch of the government for labor, services, or materials furnished by subcontractors hired by the general contractor, the general contractor shall remit payment due to the subcontractor within 7 days after the contractor's receipt of payment. All such payments due to a subcontractor and not made within 7 days shall bear interest at the prime rate, as such rate is reported by the “Wall Street Journal”, plus 3 percentage points compounded daily on the outstanding non-paid balance and the commonwealth may impose additional administrative penalties;

(ii) a contract between any entity in subparagraph (b) and any contractor may not prohibit the collection of late payment interest charges authorized under this subparagraph;

(iii) the failure to pay any undisputed obligations for such labor, services, or materials within 30 days after the date the labor, services, or materials were furnished and payment for such labor, services, or materials became due shall entitle any person providing such labor, services, or materials to the procedures and the remedies provided in clauses (iv), (v) and (vi);

(iv) a subcontractor providing labor, services, or materials pursuant to this section may file a verified complaint alleging:

(1)the existence of a contract for providing such labor, services, or materials to improve real property;

(2)a description of the labor, services, or materials provided and alleging that the labor, services, or materials were provided in accordance with the contract;

(3)the amount of the contract price;

(4)the amount, if any, paid pursuant to the contract;

(5)the amount that remains unpaid pursuant to the contract and the amount thereof that is undisputed;

(6)that the undisputed amount has remained due and payable pursuant to the contract for more than 30 days after the date the labor or services were accepted or the materials were received;

(7)that the general contractor against whom the complaint was filed has received payment on account of the labor, services, or materials described in the complaint and, as of the date the complaint was filed, has failed to make payment within the time limitations set forth in this subparagraph;

(v) after service of the complaint, the court shall conduct an evidentiary hearing on the complaint, upon not less than 15 days' written notice. The subcontractor providing labor, services, or materials shall be entitled to the following remedies to the extent of the undisputed amount due for labor or services performed or materials supplied, and upon proof of each allegation in the complaint:

(1) an accounting of the use of any such payment from the general contractor who received such payment;

(2) a temporary injunction against the general contractor who received the payment;

(3) prejudgment attachment against the person who received the payment, in accordance with the requirements in the general laws, if any;

(4) such other legal or equitable remedies as may be appropriate in accordance with the requirements of the law; and

(vi) the remedies specified in this subparagraph shall be granted without regard to any other remedy at law and without regard to whether or not irreparable damage has occurred or will occur; provided, however, that the remedies specified in this subparagraph do not apply to the extent of a bona fide dispute regarding any portion of the contract price or in the event the plaintiff has committed a material breach of the contract which would relieve the defendant from the obligations under the contract; provided, further, that in an action by a subcontractor to recover amounts due from general contractors for a contract awarded pursuant to this section, the court shall award court costs and reasonable attorney's fees, including fees incurred through any appeal, to the prevailing party. 

(b½)  A subcontractor with a written subcontract agreement with the general contractor shall be entitled to apply for direct payment from the department, public entity, or any agency of the executive, judicial or legislative branch of the government for labor, services, or materials furnished by the subcontractor.