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Pennsylvania House of Representatives
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House of Representatives
Session of 2015 - 2016 Regular Session


Posted: January 20, 2015 02:42 PM
From: Representative Mike Tobash
To: All House members
Subject: Contractor and Subcontractor Payment

I am preparing to introduce legislation that will amend the Contractor and Subcontractor Payment Act (Act 7 of 1994). As many of you have heard from your constituents, it can be very problematic for a small construction-related business when payment is not received for work that has been satisfactorily completed. My legislation is intended to strengthen the law and provide additional incentives to pay contractors and subcontractors on time, as agreed.

Specifically, my bill will:
  • Provide that the provisions of the Contractor and Subcontractor Payment Act cannot be waived in a contract.
  • Increase the monthly interest rate for an outstanding payment from 1% to 1.5%.
  • When payment or retainage is withheld for a deficiency item, require that a written explanation of the good-faith reason be provided.
  • Allow a contractor or subcontractor to post a maintenance bond to facilitate the release of retainage.
  • Increase the penalty in cases where arbitration or litigation determines that payment was wrongly withheld (from 1%/month to 1.5%/month).
I believe that adding these provisions to the current law will provide additional protections for contractors and subcontractors. I hope that you will join me by cosponsoring this legislation.

Introduced as HB726