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House Co-Sponsorship Memoranda
House of Representatives
Session of 2013 - 2014
Regular Session
MEMORANDUM
| Posted: | May 23, 2014 12:14 PM |
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| From: | Representative Thomas H. Killion |
| To: | All House members |
| Subject: | Mechanics' Lien Law |
Please find attached a copy of legislation that I will be introducing in the near future to amend the Contractor and Subcontractor Payment Act (Act 7 of 1994) to address problems with the law that have been brought to my attention by contractors/subcontractors in my district. This law was originally passed to provide a means for contractors/subcontractors involved in construction work to resolve contract payment disputes. The problem with the law is that it is seen as ineffective and lacks "teeth." In fact, this law's perceived ineffectiveness has led to contractor/subcontractors leaning more on filing mechanic's liens to resolve payment disputes. In my opinion, we need to reduce reliance on our Mechanics' Lien Law when it comes to payment disputes, and encourage the use of this law by improving it. My legislation proposes several major reforms to the act to make it more of an effective legal tool that contractors/subcontractors will use. These reforms are as follows: -First, my legislation allows suspension of work if payment is not received by contactor/subcontractor in accordance with terms of contract. -Second, my legislation further limits the current exemption in the law (six or fewer residential units) to one residential unit. This change will apply the law to work involving multiple residential units. -Third, my legislation sets forth clear standards for when retainage can be withheld in good faith. It is important to note that these proposed reforms were brought to my attention by representatives of the Architectural Glass and Metal Association and the Interior Finish Contractor's Association. The legislation is also supported by the Sheet Metal Contractor's Association, International Cement Employers, Mechanical Contractor's Association of America, and the National Electrical Contractor's Association. It is my understanding that there are other proposals to reform the law and I expect to work with these other sponsors to arrive at a bill that has consensus. Thank you for your consideration. |
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| View Attachment | ||
Introduced as HB2331