ALABAMA

House:  334-242-7600                       
Senate:  334-242-7800
Legislative Reference Service: 334-242-7560
Legislative Website: http://www.legislature.state.al.us/

Contingent Payment

"PAY IF PAID" Enforced If Explicit - YES

"PAY WHEN PAID" And "PAY IF PAID" Treated Same – NO

“Pay When Paid” Suggest Time For Payment - YES

Statutory Provisions - Ala. Code 8-29-2:  All contracts between parties must specify a date of payment.

Case Law - Pay-when-paid clause in the subcontract did not create a condition precedent to payment, but that it was merely a timing mechanism for payment.  The parties did not "clearly indicat[e] that the subcontractor assumed the risk of nonpayment." Fed. Ins. Co. v. I. Kruger, Inc., 829 So. 2d 732, 741 (Ala. 2002) 

Prompt Payment for Commercial Construction

Private
CITE – Ala. Code §§8-29-1 to 8-29-4

Owner to Prime – 30 days after invoice unless otherwise agreed

Prime to Sub – 7 days after payment unless otherwise agreed

Sub to Lower Tiers – 7 days after payment unless otherwise agreed

Interest/Fees – 1% per month; attorneys’ fees to “party in whose favor a judgment is rendered”

Comments – Contractors must pay 1% per month interest on retainage exceeding amount held by owner.

Public
CITE – Ala. Code § 41-16-3

Owner to Prime – 30 days after invoice

Prime to Sub – 7 days after payment unless otherwise agreed

Sub to Lower Tiers – 7 days after payment unless otherwise agreed

Interest/Fees – interest at the rate “currently charged by the state”.  No fees provision

Public

Retainage may not exceed 5%.  After 50% of the contract is complete, no retainage may be withheld.  Upon completion and acceptance of each division of the contract, full payment of the amount retained is to be made, unless such division is an integral component of the project.  A contractor may elect to substitute securities in lieu of retainage.  Ala. Code  § 39-2-12.

Private
The percentage of retainage withheld between a contractor and subcontractor shall not exceed the retainage withheld by the owner. Any percent of retainage on payments made by a contractor to the subcontractor that exceed the percentage of retainage on payments made by the owner to the contractor shall be subject to interest, to be paid by the contractor to the subcontractor at the rate of 1% per month.  This provision is also applicable to subcontractor-subcontractor contracts. Ala. Code  § 8-29-3.

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ALASKA

House:  907-465-3725
Senate:  907-465-3701
Legislative Information Office: 907-465-4648
Legislative Website: http://w3.legis.state.ak.us/index.php

Contingent Pay

"PAY IF PAID" Enforced If Explicit - YES

"PAY WHEN PAID" And "PAY IF PAID" Treated Same – YES

“Pay When Paid” Suggest Time For Payment - NO

Statutory Provisions –

Case Law - The pay-when-paid clause is enforced as creating a valid condition precedent to payment for the subcontract.  Industrial Indem. Co. v. Wick Constr. Co., 680 P.2d 1100 (Alaska 1984).

Prompt Payment For Commercial Construction

Private
CITE – None

Owner to Prime – n/a

Prime to Sub – n/a

Sub to Lower Tiers – n/a

Interest/Fees – n/a

Comments –

Public
CITE – Alaska Stat. §§ 36.90.200-36.90.290, 45.45.010

Owner to Prime – 30 or 21 days (depending on source of public funds) from later of invoice or political subdivision’s actual receipt of grant money

Prime to Sub – 8 working days after payment

Sub to Lower Tiers – 8 working days after payment

Interest/Fees – Interest at the legal rate currently 10.5%.  No fees provision

Comments – Contractors arguably must pay interest on retainage exceeding amount held by owner.

Retainage

There are no statutes specifying the rate of retainage.  However, there are statutes regarding the timing of payment to contractors and subcontractors. On public construction contracts, the public body shall pay to the general contractor interest at a rate of 10%. The interest accrues from the date of approval of pay request until the day the contractor is paid. Alaska Stat. §§ 36.90.210, 36.90.250, 45.45.010.

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ARIZONA

House Information Desk: 602-926-4221 
Senate Information Desk: 602-926-3559
Legislative Website: http://www.azleg.gov/

Arizona Significantly Broadens Prompt Payment Protections
http://www.constructionweblinks.com/Resources/Industry_Reports__Newsletters/April_30_2001/arizona.htm

Arizona law and the enforceability of Pay if Paid/Pay When Paid Clauses
http://www.swlaw.com/files/Publication/5a3b626e-313d-401f-b245-1155f80f658d/Presentation/PublicationAttachment/e0f5b9a5-e908-4784-a24a-f1a783a5723b/UC_Mar07.pdf

Contingent Payment Clauses

"PAY IF PAID" Enforced If Explicit - YES

"PAY WHEN PAID" And "PAY IF PAID" Treated Same – NO

“Pay When Paid” Suggest Time For Payment - YES

Statutory Provisions –

Case Law - "In order to create a condition precedent [to the subcontractor's payment], there must be contractual language demonstrating the parties' unequivocal intent" that the subcontractor will only be paid if the contractor is paid.  L. Harvey Concrete v. Agro Constr. & Supply Co., 189 Ariz. 178, 181 (Ariz. Ct. App. 1997)

Prompt Payment for Commercial Construction

Private
CITE – Ariz. Rev. Stat. §§ 32-1129 to 32-1129.06

Owner to Prime – 7 days after approval of invoice (i.e., not less than 21 days after invoice) unless otherwise provided in bid plans and specs

Prime to Sub – 7 days after payment

Sub to Lower Tiers – 7 days after payment

Interest/Fees – 1.5% per month; attorneys’ fees to “successful party.”

Comments – right to suspend work controlled by statute

Public
CITE – Ariz. Rev. Stat. §§ 34-221,41-2576,41-2577,28-6924 (highway), schools exempt: § 15-213

Owner to Prime – 14 days after invoice approved (i.e., not less than 21 days after invoice). Final payment 60 days after acceptance

Prime to Sub – 7 days after payment “unless otherwise agreed… except that no contract for construction may materially alter the rights of any contractor, subcontractor or material supplier to receive prompt and timely payment as provided under this section.”

Sub to Lower Tiers – 7 days after payment “unless otherwise agreed. . . except that no contract for construction may materially alter the rights of any contractor, subcontractor or material supplier to receive prompt and timely payment as provided under this section.”

Interest/Fees – 1.0% per month.  No fees provision

Comments – 10% retainage required by statute; sub required to notify state if additional retainage withheld.

Retainage

Public
The rate of retainage is 10% of the amount of each pay estimate.  When 50% of the work is complete, one-half of the retainage is released.  Thereafter, if work is deemed satisfactory, no more than 5% may be withheld.  In lieu of retainage, a contractor may deposit securities.  Upon final payment, the contractor is entitled to all interest earned on the deposited securities.  When a contractor substitutes securities, a subcontractor is also entitled to substitute securities.  Upon completion and acceptance of each separate building, public work, or division of the contract, payment may be made in full.  Ariz. Rev. Stat. § 34-221(C).

For construction manager-at-risk services, design-build services, and job-order construction contracts, the maximum rate of retainage is 10% of the amount of each pay estimate. When the contract is 50% complete, one-half of the amount retained, including any securities substituted, shall be paid upon the contractor’s request, provided the contractor’s progress is satisfactory.  After the contract is 50% complete, no more than 5% may be retained, provided the contractor is proceeding acceptably. If, at any time, the owner determines satisfactory progress is not being made, 10% shall be retained. A contractor may substitute securities in lieu of retainage. Upon completion and acceptance of each separate building or division of the contract, payment may be made in full.  Ariz. Rev. Stat. § 34-607.

Private
Owners may withhold a "reasonable amount of retention." They are permitted to withhold only an amount sufficient to pay the direct expenses the owner reasonably expects to incur to correct any items set forth in the statute such as defective work, damage, or reasonable evidence that the contract cannot be completed.  For a full list of statutory items see  Ariz. Rev. Stat. § 32-1129.01(d).  At a subcontractor’s request, owners must notify subcontractors of progress payments and final payment within five days. Ariz. Rev. Stat. § 32-1129.01. 

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ARKANSAS

House:  501-682-7771; 501-682-6211
Senate:  501-682-2902
Legislative Website: http://www.arkleg.state.ar.us/

Contingent Pay

"PAY IF PAID" Enforced If Explicit - YES

"PAY WHEN PAID" And "PAY IF PAID" Treated Same – YES

“Pay When Paid” Suggest Time For Payment - NO

Statutory Provisions – Ark. Code Ann. § 22-9-205:  Recognizes the enforceability of a "pay-when-paid" provision in a public contract.  It does not address whether a "pay-when-paid" clause would create a condition precedent to the subcontractor's payment.

Case Law - A condition that sets out events to happen before payment may be construed to link the existence of the debt to fulfillment of the conditions.  Brown v. Maryland Casualty Co., 246 Ark. 1074, 1082 (Ark. 1969).

Clause that required payment "immediately on the completion of the work" established a valid condition precedent to payment.  Manuel v. Campbell, 3 Ark. 324 (1841).

Prompt Payment for Commercial Construction

Private
CITE – None

Owner to Prime – n/a

Prime to Sub – n/a

Sub to Lower Tiers – n/a

Interest/Fees – n/a

Comments –

Public
CITE – Ark. Code § 19-4-1411

Owner to Prime –  Maximum of 15 working days after invoice.

Prime to Sub – No provision

Sub to Lower Tiers – No provision

Interest/Fees – 8% per annum.  No fees provision

Comments –

Retainage

Generally, the rate of retainage is 10%.  Once 50% of the project is complete, no additional funds may be withheld. If completion is based upon partial occupancy, any retention proceeds withheld shall be partially released within thirty days, proportionate to the value of the project. Monies are to be paid to the contractor within thirty days of the contract being substantially complete.  Retainage is not deducted from the part of a progress payment that includes the cost of materials or equipment stored on the job site. Ark. Code Ann. § 22-9-604.  A contractor may substitute securities in lieu of retainage.  Ark. Code Ann. § 22-9-501.

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CALIFORNIA

Chief Clerk of the Assembly: 916-319-2856
Secretary of the Senate: 916-445-4251
Bill Status: 916-445-2323
Legislative Website: http://www.leginfo.ca.gov/

Contingent Pay

"PAY IF PAID" Enforced If Explicit - NO

"PAY WHEN PAID" And "PAY IF PAID" Treated Same – NO

“Pay When Paid” Suggest Time For Payment - YES

Statutory Provisions –  Cal Civ Code § 3262:  Statute preventing a waiver of lien rights has been interpreted to also prohibit "pay-if-paid" provisions for the indirect effect on lien rights.

Case Law - California courts will not enforce "pay-if-paid" clauses as they unlawfully inhibit subcontractor's mechanic's lien rights.  William R. Clark Corp. v. Safeco Ins. Co., 938 P.2d 372 (Cal. 1997).

Prompt Payment for Commercial Construction

Private
CITE – Cal. Bus. & Prof. Code § 7108.5, Cal. Civil Code §§ 3260-3260.1

Owner to Prime – 30 days after invoice (39 days for state universities).

Prime to Sub – 10 days after payment unless otherwise agreed.  Final payment 45 days after project completion.

Sub to Lower Tiers – 10 days after payment unless otherwise agreed.

Interest/Fees – 2% per month and attorneys’ fees to “prevailing party”.

Comments – Right to suspend work controlled by statute

Public
CITE – Cal. Bus. & Prof. Code § 3262.5, Pub. Cont. Code §§ 7107, 9202, 10261.5, 10262.5, 10853.

Owner to Prime – 30 days after invoice (39 days for state universities).

Prime to Sub – 10 days after payment (15 days for a prime to a public utility to pay subs).

Sub to Lower Tiers – 10 days after payment unless otherwise agreed.

Interest/Fees – For payments to subs, 2% interest per month and attorneys’ fees to “prevailing party.” For payments to prime, interest at legal rate, no fees

Until final completion and acceptance of the project, the rate of retainage shall not be less than 5%.  However, any time after 95% of the work is complete, the department may reduce the funds withheld to an amount not less than 125% of the estimated value of the unfinished work.  Cal. Pub. Cont. Code § 10261.  A contractor may substitute securities in lieu of retainage or request that payments be made into an escrow account. Cal. Pub. Cont. Code § 10263.

Retainage must be released within forty-five days of the “date of completion," as defined by statute. If a dispute arises, the owner may retain 150% of the disputed amount. Cal. Civ. Code §§ 3260, 3262.5.

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COLORADO

House:  303-866-2904
Senate:  303-866-2316
Bill Room (in session only): 303-866-3055
House Legislative Council (between sessions): 303-866-2904
Senate Legislative Council (between sessions): 303-866-2316
Legislative Website: http://www.leg.state.co.us/

Colorado Law Concerning Pay if Paid/Pay When Paid Analysis
http://www.swlaw.com/files/Publication/5a3b626e-313d-401f-b245-1155f80f658d/Presentation/PublicationAttachment/e0f5b9a5-e908-4784-a24a-f1a783a5723b/UC_Mar07.pdf

Prompt Payment, CDOT - notice to all subcontractors and suppliers 
The Colorado Department of Transportation (CDOT is committed to the principle that all members of the construction team are entitled to payment for work properly performed.  It is CDOT's intention to work in partnership with all Contractors, Subcontractors, and Suppliers to improve prompt payment of all parties involved in CDOT contracts.  Read More . . .

How A Bill Becomes Law

Contingent Payment Clauses

"PAY IF PAID" Enforced If Explicit - YES

"PAY WHEN PAID" And "PAY IF PAID" Treated Same – NO

“Pay When Paid” Suggest Time For Payment - YES

Statutory Provisions – 

Case Law - Pay-if-paid provisions must unequivocally express the party's intent to establish a condition precedent to payment in order to be enforceable.  "[A] pay-when-paid clause . . . is an unconditional promise by the general contractor to pay its subcontractor even if the owner becomes insolvent."  Main Elec., Ltd. v. Printz Servs. Corp., 980 P.2d 522 (Colo. 1999).

Prompt Payment for Commercial Construction

Private
CITE – None

Owner to Prime – n/a

Prime to Sub – n/a

Sub to Lower Tiers – n/a

Interest/Fees – n/a

Comments –

Public
CITE – Colo. Rev. Stat. §§ 24-91-101 to 24-91.103

Owner to Prime – “at the end of each calendar month, or as soon thereafter as practible”.

Prime to Sub – 7 days after payment

Sub to Lower Tiers – 7 days after payment

Interest/Fees – For payments to subs, 15% per annum or amount specified in contract “whichever is higher,” no fees provision.

Retainage

For contracts exceeding $150,000, the maximum rate of retainage is 10%.  Once 50% of the work is complete and progress is deemed satisfactory, the public entity shall not withhold additional funds.  Upon written request by the contractor, the public entity may authorize final payment to the contractor or subcontractors who have completed their work, if the entity finds satisfactory progress is being made. Colo. Rev. Stat. § 24-91-103.  The contractor is permitted to substitute securities in lieu of retainage and is entitled to all interest that accrues. Colo. Rev. Stat. §§ 24-91-105, -108.

Subcontractors won an important victory in the Colorado Supreme Court regarding the interpretation of the payment provisions of a construction contract.  The Court limited the use of "pay if paid" clauses in Main Electric, Ltd. v. Printz Services Corporation, 980 P.2d 522 (Colo. 1999) to certain and specific contract terms.  This decision reversed a previous decision by the Colorado Court of Appeals that mistakenly relied on a very old (1897) case and had taken Colorado into the distinct minority of jurisdictions on the contingent payment issue.  Both subcontractors and general contractors now have guidelines and standards to rely on in their understanding and application of payment terms.  The Court wisely observed that typically, subcontractors look to the general contractor for payment, not the owner.  If the risk on owner nonpayment is to shift to the subcontractors, the shift must be clearly articulated in the subcontract.

In order to have a valid and enforceable "pay if paid" or condition precedent payment provision in a subcontract, the following terms must be stated unequivocally and with sufficient clarity:

1. The subcontractor will be paid only if the general contractor is first paid by the owner; and

2. The subcontractor bears the risk of owner's nonpayment.

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CONNECTICUT

General Assembly: 860-240-0100
Legislative Website: http://www.cga.ct.gov

Contingent Pay

"PAY IF PAID" Enforced If Explicit - YES

"PAY WHEN PAID" And "PAY IF PAID" Treated Same – YES

“Pay When Paid” Suggest Time For Payment - NO

Statutory Provisions –  Conn. Gen. Stat. 158 (j):  Contractor cannot withhold payment from a subcontractor because of a dispute with another contractor, subcontractor, or vendor.

Case Law - Contract language that specifies payment shall be made to the subcontractor at the time it is made to the contractor effectively establishes a valid condition precedent to payment.  Star Contracting Corp. v. Manway Constr. Co., 337 A.2d 669 (Conn. 1973).

Prompt Payment For Commercial Construction

Private
CITE – Conn. Gen. Stat. §§ 42-158i to 42-158j.

Owner to Prime – 30 days after invoice

Prime to Sub – 30 days after payment

Sub to Lower Tiers – 30 days after payment

Interest/Fees – 1% per month; attorneys’ fees only upon finding payment “unreasonably withheld”

Comments –  Notice of nonpayment must be given by certified mail.

Public
CITE – Conn. Gen. Stat. §§ 4a-71 to 4a-75, 49-41c.

Owner to Prime – 45 days after invoice unless otherwise agreed

Prime to Sub – 30 days after payment

Sub to Lower Tiers – see private

Interest/Fees – For payment to prime, interest at rate equal to “monthly effective yield for the [state’s] Short Term Investment Fund:; no fees provision

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DELAWARE

House Receptionist:  (D) 302-744-4351, (R) 302-744-4171
Senate Receptionist:  (D) 302-744-4286, (R) 302-744-4048
Legislative Research: 302-739-4114, 800-282-8545
Legislative Website: http://legis.delaware.gov/

Contingent Payment

"PAY IF PAID" Enforced If Explicit - NO

"PAY WHEN PAID" And "PAY IF PAID" Treated Same – NO

“Pay When Paid” Suggest Time For Payment - YES

Statutory Provisions –  Del. Code. Ann. tit. 6 § 3507 (e): Makes void any clause in a Subcontract that makes payment by the owner a condition precedent to the subcontractor's payment.  This statute does not apply to public contracts.

Case Law - No cases have yet to interpret the bounds of the statutory prohibition of "pay-if-paid" clauses.  The statute was passed in 2002.

Prompt Payment for Commercial Construction

Private
CITE – Del.Code, Title 6 §§ 3501-09

Owner to Prime – Within 30 days after invoice or “end of the billing period”.

Prime to Sub – 15 days after payment unless otherwise agreed

Sub to Lower Tiers – 15 days after payment unless otherwise agreed

Interest/Fees – Interest required but rate not specified; attorneys’ fees to “substantially prevailing party” unless agreed otherwise.

Comments –  Contingent payment expressly unenforceable § 3507 (e). Additional damage award for “amounts wrongfully withheld” is permitted.

Public
CITE – Del. Code, Title 29, § 6516 (f)

Owner to Prime – Unless otherwise specified on bid plans, then 28 or 31 days after invoice, depending on whether federal approval required; final payment 60 days after final completion and acceptance.

Prime to Sub – 21 days after payment unless otherwise specified on bid plans

Sub to Lower Tiers – 21 days after payment unless otherwise specified on bid plans

Interest/Fees – “prime interest rate as established by the Federal Reserve” plus 2%; no fees provision

Comments – Additional damage award for “amounts wrongfully withheld” is permitted.

Retainage

Retainage shall not exceed 5% of the value of the work completed by the contractor. At completion, the public entity may release 60% of the retainage.  The balance is released when the contractor submits all required reports, all subcontractors are paid by the contractor, and the agency authorizes release.  Del. Code Ann. tit. 29, § 6962(5)(a)(1).  With agency approval, the contractor may substitute securities for retention.  Del. Code Ann. tit. 29, § 6962(5)(c).

In the event of a dispute between a contractor and subcontractor over the amount owed, the agency may withhold 150% of the amount withheld by the contractor in the contractors dispute with the subcontractor. Del. Code Ann. tit. 29, § 6962(5)(a)(1)(B).

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DISTRICT OF COLUMBIA

D.C. City Council: 202-724-8080
Legislative Services: 202-724-8050
Legislative Website: http://www.dccouncil.washington.dc.us

Contingent Pay

"PAY IF PAID" Enforced If Explicit - YES

"PAY WHEN PAID" And "PAY IF PAID" Treated Same – YES

“Pay When Paid” Suggest Time For Payment - NO

Statutory Provisions – 

Case Law - "Pay-when-paid" provision established a valid condition precedent.   Subcontractor still prevailed in claim for damages as the court imposed a duty on contractor to attempt to recover payment, and contractor had settled with owner without accounting for the subcontractor's entitlement.  Urban Masonry Corp. v. N&N Contractors, Inc., 676 A.2d 26 (D.C. 1996).

Prompt Payment For Commercial Construction

Private
CITE – None

Owner to Prime – n/a

Prime to Sub – n/a

Sub to Lower Tiers – n/a

Interest/Fees – n/a

Public
CITE – D.C. Code §§ 2-221.01 to 2-221.06

Owner to Prime – 30 days after invoice unless otherwise agreed

Prime to Sub – 7 days after payment

Sub to Lower Tiers – 7 days after payment

Interest/Fees – Interest at rate determined by mayoral regulation; no fees provision

Retainage

Public

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FLORIDA

House:  850-488-1157
Legislative Information Services: 904-488-4871, 800-342-1827
Legislative Website: http://www.leg.state.fl.u

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GEORGIA

Clerk of the House:  404-656-5015
Secretary of the Senate:  404-656-5040, 800-282-5803
Legislative Website: http://www.legis.state.ga.us

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HAWAII

Senate:  808-586-6719
Bill Status: 808- 587-0478
Legislative Website: http://www.capitol.hawaii.gov

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IDAHO

General Legislature: 208-334-2475
Legislative Website: http://www.legislature.idaho.gov

Retainage

Public

If a public body requires a performance or payment bond in excess of 50% for the total contract amount, the rate of retainage may not exceed 5% of the money owed to the contractor. Retention must be released to the contractor thirty days after the acceptance of the portion of the project on which the funds were retained.  Contractors may not withhold more than 5% retainage from subcontractors and shall release retention to subcontractors within thirty days of the completion of the subcontract.  Idaho Code  § 54-1926.

For the construction of projects involving irrigation and drainage, 10% retainage is required until final completion. Idaho Code  § 42-2944. 

Retainage withheld from the contractor or subcontractor may not exceed 5% unless there is no performance bond.  Residential construction of one to four units is exempted from the statute.  Idaho Code  § 29-115. 

See also Idaho Code  § 67-2302 (interest for late payment on retainage).

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ILLINOIS

House:  217-782-8223
Senate:  217-782-4517
Bill Status: 217-782-3944
Legislative Website: http://www.ilga.gov

Prompt Pay

The new prompt payment law, as its title infers, requires prompt payment from owners for contractors, subcontractors, and materialmen, and imposes severe penalties on owners if there is not prompt payment, effective August 31, 2008
http://www.shefskylaw.com/?t=40&an=341&format=xml

Prompt Payment for Commercial Construction

Private
CITE – Illinois Compiled Statutes TBD [HB 743 (2007), Public Act 95-0567]

Owner to Prime – 40 days after invoice (25 days to approve + 15 to pay).

Prime to Sub –15 days after payment

Sub to Lower Tiers – 15 days after payment

Interest/Fees – Interest at 10% per annum; no fees provision

Comments – Right to suspend work controlled by statute (7 days written notice after nonpayment).

Retainage

In general, when subcontractors' retainage exceeds $20,000, upon mutual agreement by the contractor and subcontractor, the funds may be deposited under a trust agreement with an Illinois financial institution.  The subcontract is to receive any interest on the deposited amount.  605 Ill. Comp. Stat.  5/4-104

However, for any contracts for the construction of highways, retainage may be withheld as required by the Standard Specifications for Road and Bridge construction. At the request of the contractor or subcontractor and with agency approval, retention may be held under a trust agreement. 605 Ill. Comp. Stat. 5/4-103. 

The Standard Specifications for Road and Bridge construction provides that 2% of the cost of completed work shall be retained when the awarding authority is the State of Illinois.  Standard Specifications for Rd. and Bridge Constr. 109.07(a). When the awarding authority is a county or municipality, 10% shall be retained until the work is 50% complete. Upon 50% completion, at the discretion of the Engineer, retainage may be reduced to a minimum of 5% if work is progressing satisfactorily. Standard Specifications for Rd. and Bridge Constr. 109.07(b).

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INDIANA

House:  317-232-9600
Senate:  317-232-9400
Bill Status: 317-232-9856
Legislative Website: http://www.state.in.us/legislative

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IOWA

House:  515-281-3221
Senate:  515-281-3371
Bill Status: 515-281-5129
Legislative Website: http://www.legis.state.ia.us

Retainage

Public
The maximum rate of retainage is 5% of the estimated labor performed and material delivered.  A contractor may retain from a subcontractor either 5% or an amount specified in the contract, whichever is smaller. Iowa Code § 573.12.

KANSAS

Legislative Administrative Services: 785-296-2391
Legislative Website: http://www.kslegislature.org

New Kansas Law Defines Prompt Payment For Construction Industry
http://www.allbusiness.com/accounting/3487421-1.html

Prompt Payment for Commercial Construction
Case Study. On April 18, 2005, ASA-Greater Kansas celebrated as Kansas Gov. Kathleen Sebelius (D) signed into law the Fairness in Private Construction Contract Act, S.B. 33, a private construction law that provides specialty contractors some of the strongest prompt payment protections in America. The new law requires construction owners to pay prime contractors within 30 days for completed, undisputed work, and contractors to pay their subcontractors within seven days of receipt of payment for subcontractors' work. It also preserves contractors' and subcontractors' ability to assert mechanic's lien rights notwithstanding pay-if-paid clauses, provides for suspension of work after progress payments are 14 days late, limits retainage to 10 percent, establishes equal retainage levels at all tiers, bans out-of-state arbitration and litigation on disputes over Kansas construction, provides attorney fees for the prevailing party in disputes

Private
CITE:  Kan. Stat. 16-1801 to 16-1807

Owner to Prime:  30 days after invoice for progress payments; final payment per contract

Prime to Sub: 7 business days after payment.

Sub to Lower Tiers: 7 business days after payment.

Interest/Fees: Interest at 18% per year; fees for “prevailing party.”

Comments:  Right to suspend controlled by statute.

Public
CITE:  Kan. Stat. §§ 75-6401 to 75-6407, highway excluded.

Owner to Prime: 37 days after invoice for progress payments (7 for owner agent approval plus 30 to pay), extended to 52 days for “extenuating circumstances”’ final payment 30 days after substantial completion.

Prime to Sub:  7 business days after payment.

Sub to Lower Tiers:  7 business days after payment.

Interest/Fees:  Interest at 18% per year; fees for “prevailing party.”

Comments:  Right to suspend controlled statute.

Retainage

For projects involving state roads, however, the maximum rate of retainage is 10%. Kan. Stat. Ann. § 68-411.

Private
The maximum rate of retainage is 10%. Kan. Stat. Ann. §16-1803, -1804.

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KENTUCKY

Senate:  502-564-3120
Legislative Website: http://www.lrc.state.ky.us

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LOUISIANA

House:  225-342-6945
Senate:  225-342-2040
Legislative Website: http://www.legis.state.la.us

Retainage

With the consent of the surety, the contractor may substitute securities in lieu of retention. La. Rev. Stat. Ann. § 38: 2249.

For contracts with the Department of Transportation, for projects less than $500,000, the maximum rate of retainage is 10%. For projects exceeding $500,000, the maximum rate of retainage is 5%. Retainage is held until forty-five days after formal acceptance of the work.  The department shall not withhold retainage if the contractor furnishes a retainage bond equal to 10% of the contract amount for projects less than $500,000 or 5% of the contracts exceeding $500,000. La. Rev. Stat. Ann. § 48:256.

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MAINE

House:  207-287-1400
Senate:  207-287-1540
Bill Status: 207-287-1692
Legislative Website: http://janus.state.me.us

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MARYLAND

State General Assembly Operator: 410-841-3000
Legislative Information Desk: 410-946-5400
Legislative Website: http://mlis.state.md.us

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MASSACHUSETTS

House: 617-722-2000
Senate: 617-722-1455
Legislative Website: http://www.mass.gov/legis

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MICHIGAN

House:  517-373-0135
Senate:  517-373-2400
Legislative Website: http://www.legislature.mi.gov

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MINNESOTA

House:  651-296-2146
Senate:  651-296-0504
Legislative Website: http://www.leg.state.mn.us

Retainage

Public
Retainage may not exceed 5%. If the work is satisfactory, the public agency may release or eliminate retainage. Contractors may substitute securities for retention. Minn. Stat. § 15.72-3.

Private
Unless the contract provides otherwise, the owner may reserve retainage, not to exceed 5%, and may reduce or eliminate retainage if progress is satisfactory. This provision does not apply to construction or improvements for residential real estate or contracts for professional services such as architecture, geoscience, land surveying, or interior design. Minn. Stat. § 337.10.

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MISSISSIPPI

House:  601-359-3360
Bill Status Center (sessions only): 601-359-3719
Legislative Website: http://billstatus.ls.state.ms.us

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MISSOURI

House:  573-751-3659
Senate:  573-751-3824
Legislative Website: http://www.moga.state.mo.us

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MONTANA

Legislative Information Office: 406-444-4800
Legislative Service Division: 406-444-3064
Legislative Website: http://www.leg.mt.gov

Prompt Payment For Commercial Construction

Private and Localities
CITE:  Mont. Code §§ 28-2-2101 to 28-2-2117 (includes localities but not state agencies, cf. § 28-2-2103(2) (receipt of payment from “owner or a state agency”).

Owner to Prime: “monthly” unless alternate disclosed in the bid documents; invoices deemed approved after 21 days unless alternate disclosed in bid docs; payment due 7 days after approval unless alternate disclosed in bid docs.

Prime to Sub:  7 days after payment.

Sub to Lower Tiers:  7 days after payment.

Interest/Fees:  Interest only if late payments are refused at 1.5% per month; attorneys fees’ for “prevailing part” in court and “may” be awarded in arbitration.”

Public (for Localities, see Private)
CITE:  Mont. Code §§ 17-8-241 to 17-8-244 (for localities see Private): §§ 28-2-2103 (2) & (3) (payment of subcontractors).

Owner to Prime:  30 days after invoice or receipt of services, whichever is later, unless otherwise agreed.

Prime to Sub:  7 days after payment

Sub to Lower Tiers:  7 days after payment

Interest/Fees:  Interest for prime at 9.95% per day in absence of good faith dispute, 10% per year in other cases; no fees for prime, for subs see Private.

Retainage
Case Study. On April 25, 2005, ASA of Montana celebrated when Montana Gov. Brian Schweitzer (D) signed into law a reduction in the maximum retainage rate from 10 to 5 percent on public works. The law also establishes equal retainage levels for all tiers, and provides for interest on late progress payments and line-item release of retainage.

Public
The maximum rate of retainage is 5% if the contractor is performing by the terms of the contract. The contractor can withhold no more retainage from subcontractors than is withheld by the owner. Mont. Code Ann. § 18-1-301.

Private
Retainage may not exceed 5%.  A contractor may not withhold a higher percentage from its subcontractors then is being withheld from the contractor. Retainage must be released upon the final acceptance of each portion of work for which a separate price is stated in the contract.  Mont. Code Ann. § 28-2-2110.

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NEBRASKA

Bicameral Legislative Switchboard: 402-471-2311
Clerk of the Legislature: 402-471-2271
Legislative Website: http://www.unicam.state.ne.us

Contingent Payment Clauses

"PAY IF PAID" Enforced If Explicit - YES

"PAY WHEN PAID" And "PAY IF PAID" Treated Same – NO

“Pay When Paid” Suggest Time For Payment - YES

Statutory Provisions – 

Case Law - Clause that does not unambiguously create a condition precedent for payment merely establishes a reasonable time for the contractor to pay the subcontractor.  D. K. Meyer Corp. v. Bevco, Inc., 292 N.W.2d 773 (Neb. 1980).

Prompt Payment for Commercial Construction

Private
CITE – None

Owner to Prime – n/a

Prime to Sub – n/a

Sub to Lower Tiers – n/a

Interest/Fees – n/a

Public
CITE – Neb. Statute. §§ 624.606 to 624.630

Owner to Prime – 45 days after invoice or receipt of services whichever is later

Prime to Sub – No provision

Sub to Lower Tiers – No provision

Interest/Fees – Interest at statutory rate for prime; no fees provision

Retainage

For state highway contracts, if the contractor has provided all required reports and has not been paid by the owner for more than sixty days after final completion, the retained funds are subject to an interest rate 3% above the Federal Reserve composite prime lending rate from the previous year. Neb. Rev. Stat. § 39-1349.

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NEVADA

Senate: 775-684-1400
Legislative Hotline (sessions only): 702-687-5545
Legislative Counsel Bureau (between sessions): 702-687-6800
Legislative Website: http://leg.state.nv.us

Nevada Supreme Court Rules

Nevada May Enforce Pay if Paid Clauses if Carefully Drafted
http://www.swlaw.com/files/Publication/5a3b626e-313d-401f-b245-1155f80f658d/Presentation/PublicationAttachment/e0f5b9a5-e908-4784-a24a-f1a783a5723b/UC_Mar07.pdf

Prompt Payment for Commercial Construction

Private
CITE:  Nev. Rev. Stat. §§ 624.606 to 624.630

Owner to Prime:  21 days after invoice or as otherwise agreed for progress payments; 30 days after availability of improvement for intended use for final payment.

Prime to Sub:  10 days after payment.

Sub to Lower Tiers:  10 days after payment

Interest/Fees:  Interest at statutory prime rate or agreed rate, whichever is higher; attorneys’ fees “may” be awarded to prevailing party if statutory right to suspend and to terminate is exercised.

Comments:  right to suspend controlled by statute.

Public
CITE:  Nev. Rev. Stat. §§ 338.400-338.645

Owner to Prime:  30 days after invoice for progress payments; 30 days after occupancy, use, or notice of completion, whichever is earlier, for final payment.

Prime to Sub: 10 days after payment

Sub to Lower Tiers:  10 days after payment.

Interest/Fees:  Interest at one statutory rate for primes and another for subs; attorneys’ fees unpaid party who prevails

Retainage

The maximum rate of retainage is 10%. If the performance is satisfactory, retainage may be eliminated when 50% of the work is complete.  The public body must pay the contractor, at the end of each quarter, interest for the quarter on the amount withheld at a rate equal to the rate quoted by at least three financial institutions.  Nev. Rev. Stat. § 338.515.

When a public agency occupies one or more buildings of a public work, the agency shall pay the contractor the proportional value of the occupied portion including retainage and interest. Nev. Rev. Stat. § 338.520.

A contractor or subcontractor may retain up to 10% of any partial payment due under a subcontract until half of the work is complete. Subsequent payments must equal that paid by the public body for the work performed by the subcontractor. If the contractor or subcontractor receives interest earned on the retainage, he or she shall, within ten days, pay each subcontractor the interest which has accrued from the retainage.  Nev. Rev. Stat. §§ 338.555, .595.

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NEW HAMPSHIRE

House: 603-271-2548
Senate: 603-271-2111
Legislative Website: http://www.gencourt.state.nh.us

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NEW JERSEY

Assembly: 609-292-5339
Senate: 609-292-5199
Legislative Information: 609-292-4840
Legislative Website: http://www.njleg.state.nj.us

Retainage

For highway work, 2% retainage shall be withheld. Upon substantial completion, 1% shall be withheld. If work is not progressing, as defined by the New Jersey Department of Transportation Standard Specifications for Road and Bridge Construction, 4% may be withheld. The contractor may substitute securities in lieu of retainage. N.J. Stat. Ann. § 27:7-34.

For municipalities and counties, the rate of retainage is also 2%; upon substantial competition, 1% shall be withheld. N.J. Stat. Ann. § 40A:11-16.3.

See also N.J. Stat. Ann. § 2-A:30A-2.

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NEW MEXICO

House: 505-986-4751
Senate: 505-986-4714
Legislative Council Service: 505-986-4600
Legislative Website: http://legis.state.nm.us/lcs

Contingent Payment Clauses

"PAY IF PAID" Enforced If Explicit - NO

"PAY WHEN PAID" And "PAY IF PAID" Treated Same – NO

“Pay When Paid” Suggest Time For Payment - NO

Statutory Provisions – 

Case Law - No court in New Mexico has yet to address the issue of contingent payment clauses.

Prompt Payment for Commercial Construction

Private and Public
CITE – N.M. Stat., §§ 57-28-1 to 57-28-11

Owner to Prime – Progress payments: 21 days after invoice, or 45 days for local public bodies who print notice on each page of the bid plans.  Final payment: 10 days after certification of completion upon presentment of required documents.

Prime to Sub – 7 days after payment

Sub to Lower Tiers – 7 days after payment

Interest/Fees – Interest at 1.5% per month; court “may” award attorneys’ fees.

Retainage

Governor Bill Richardson (D) signed into law, S.B. 604 on April 6, 2007. The law prohibited the use of retainage on both private and public construction as of June 15, 2007, except for residential construction projects containing four or fewer dwellings and for state Department of Transportation projects.

Retainage is prohibited for the majority of private and public construction contracts.  N.M. Stat. Ann. § 57-28-5.  The following retainage statutes have been repealed: §§ 13-4-27 to -30; 57-28-4, -6, -9, -10.

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NEW YORK

Assembly: 518-455-4100
Senate: 518-455-2800
Bill Status: 518-455-7545
Legislative Website: http://public.leginfo.state.ny.us

New York Enacts Prompt Pay Act For Private Projects, effective January 13 2003
Strong lobbying efforts by the carpenter and the drywall contractors resulted in passage and signing of legislation to require prompt payment for construction work on private projects in New York
http://www.constructionweblinks.com/Resources/Industry_Reports__Newsletters/Aug_12_2002/ny_private_projectshtm.htm

Contingent Pay

"PAY IF PAID" Enforced If Explicit - NO

"PAY WHEN PAID" And "PAY IF PAID" Treated Same – NO

“Pay When Paid” Suggest Time For Payment - YES

Statutory Provisions – NY Lien Law § 34:  Any contractual provision waiving a subcontractor's right to a lien against a property is void.  The Court of Appeals has interpreted these provisions to void all "pay if paid" clauses in subcontracts.

Case Law - Two sophisticated commercial entities can overcome New York's public policy against "pay if paid" clauses by including a choice of law clause that favors the law of a jurisdiction that permits such contingent payment clauses.  (If the contract was entered into before the Prompt Payment Act's prohibition of choice of law clauses went into effect in 2003).  Welsbach Elec. Corp. v. MasTec N. Am., Inc., 2006 NY Slip Op 8632, 1 (N.Y. 2006).

Prompt Payment for Commercial Construction

Private
CITE – N.Y. Gen Bus. Law §§ 756 et seq.

Owner to Prime – Progress payments: monthly billing cycle unless otherwise agreed; 42 days to pay (12 days to approve invoice plus 30 days to pay) unless otherwise agreed; owner gets time extension if lender fails to disburse loan and lender is legally required to do so.  Final payment: 30 days after “final approval” for final payment.

Prime to Sub – 7 days after payment

Sub to Lower Tiers – 7 days after payment

Interest/Fees – 1.5% per month; no fees provision.

Comments – right to suspend controlled by statute.

Public
CITE – State Fin. Law §§ 139-f, 179-f (pt. of art. 11-A); Pub. Auth. Law § 2880, Gen Mun. Law § 106-b; Hwy. Law § 38; NYC Procurement Policy Board Rules § 4-06.

Owner to Prime –  30 days after invoice for public agencies, authorities and corporations; 75 days after invoice for highway; NYC rules: 30 days after invoice for progress payments, 60 days after invoice for changes, 60 days after invoice for final payment.

Prime to Sub – 15 days after payment

Sub to Lower Tiers – 15 days after payment

Interest/Fees – Interest at one of two statutory rates, depending on type of public agency for primes; another statutory rate for subs; no fees provision

Retainage

The maximum rate of retainage is 5%.  However, the public entity may withhold more than 5%, however, not more than 10%, if no performance bond was required.  A contractor may retain no more than 5% from a bonded subcontractor, or up to 10% from an unbonded subcontractor. The contractor may substitute securities in lieu of retainage. N.Y. State Fin. Law §§ 139, 139f.

Private
By mutual agreement of the parties, an owner may retain a reasonable amount of the contract sum as retainage. A contractor or subcontractor may also withhold retainage so long as that amount does not exceed the amount withheld by the owner. Retainage shall be released no later than 30 days after the final approval of the work under the contract. Late payments accrue interest at a rate of 1% per month.  N.Y. General Business Law § 756-C.

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NORTH CAROLINA

General Assembly: 919-733-7928
Legislative Services: 919-733-7044
Legislative Website: http://www.ncga.state.nc.us

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NORTH DAKOTA

Legislative Assembly: 701-328-3373
Legislative Council: 701-328-2916
Legislative Website: http://www.legis.nd.gov

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OHIO

Clerk of the Legislature: 614-466-3357
Legislative Information: 614-466-8842
Legislative Website: http://www.legislature.state.oh.us

Retainage

Public and Private
The maximum rate of retainage is 8% of the labor estimates prepared by the contractor and approved by the architect/engineer. When 50% of the project is complete, no retainage may be withheld. Ohio Rev. Code Ann. § 153.12.

Retained funds are to be placed in an escrow account with interest accruing to the contractor.  Retainage and interest are paid to the contractor upon final completion and acceptance of the work. Ohio Rev. Code Ann. § 153.13. See also Ohio Rev. Code Ann. § 4113.61.

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OKLAHOMA

House: 1-800- 522-8506
Senate: 405-524-0126
Bill Status – Senate: 405-521-5642
Legislative Website: http://www.okhouse.gov

Contingent Payment Clauses

"PAY IF PAID" Enforced If Explicit - YES

"PAY WHEN PAID" And "PAY IF PAID" Treated Same – NO

“Pay When Paid” Suggest Time For Payment - YES

Statutory Provisions –  Okla. Stat. tit. 61 § 224:  "If a subcontractor … has performed … the prime contractor shall make payment to the subcontractor … no later than ten (10) calendar days after the prime contractor receives its corresponding payment for the work performed."

Case Law - Clause setting the time for payment of a subcontractor after the contractor has received payment does not create a condition precedent to payment.  It merely establishes a reasonable time for payment from the contractor to the subcontractor.  Byler v. Great American Ins. Co. 395 F.2d 273 (10th Cir. 1968) (applying Oklahoma law).

Prompt Payment For Commercial Construction

Prompt Payment for Commercial Construction

Private
CITE – None

Owner to Prime – n/a

Prime to Sub – n/a

Sub to Lower Tiers – n/a

Interest/Fees – n/a

Public
CITE – Okla. Stat., Title 61, §§ 221-227 (highway excluded); Title 61, §§ 113.1-113.3 (retainage generally; 62, §§ 41.4a – 41.4d (prompt payment by government generally.

Owner to Prime – 30 days after invoice for progress payments; 21 days after substantial completion for final payment.

Prime to Sub – 10 days after payment

Sub to Lower Tiers – 7 days after payment

Interest/Fees – Interest for prime at statutory rate, and for sub at 1.5% per month.

Comment - right to suspend controlled by statute.

Retainage

Public
The rate of retainage may not exceed 10% of all partial payments.  When 50% of the project is complete and if progress is satisfactory, the amount retained may be reduced to 5% of the amount earned to date. Okla. Stat. tit. 61, § 113.1. In a subcontract, the maximum rate of retainage is 10%; once the subcontract is 50% complete, the value of retainage shall not exceed the retainage withheld by the awarding authority. Okla. Stat. tit. 61, § 226.

A contractor may substitute securities in lieu of retainage.  Okla. Stat. tit. 61, § 113.2.

Neither the Department of Transportation nor the Turnpike Authority may withhold retainage on public contracts.  Okla. Stat. tit. 61, § 113.1.

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OREGON

Assembly: 503-986-1187
Secretary of the Senate: 503-986-1851
Chief Clerk of the House: (503) 986-1870
Bill Status: 503-986-1180
Legislative Website: http://www.leg.state.or.us

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PENNSYLVANIA

House: 717-787-2372
Secretary of the Senate: 717-787-5920
Bill Status: 717-787-2342  
Code Search: 717-783-1530
Legislative Website: http://www.legis.state.pa.us

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RHODE ISLAND

House: 401-222-2466
Senate: 401-222-6655
Bill Status: 401-222-3580, 401-751-8833
Legislative Website: http://www.rilin.state.ri.us

Retainage

Public
Retainage may not exceed 5% of any periodic payment or an amount otherwise agreed on by the contracting parties. The same holds for a payment being made in one installment. The retained funds are to be paid to the contractor within ninety days after final acceptance.  Subsequently, such funds will be charged interest at 10%. R.I. Gen. Laws § 37-12-10.

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SOUTH CAROLINA

House: 803-734-2010
Senate: 803-212-6200
Legislative Website: http://www.scstatehouse.net

Retainage

Public
The maximum rate of retainage that may be withheld in a contract or subcontract is 3.5%. The state releases these funds upon completion of each division of the work. The contractor is required to release retention to its subcontractors within ten days after receiving payment from the state.  S.C. Code Ann. § 11-35-3030(4).

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SOUTH DAKOTA

House: 605-773-3851
Senate: 605-773-3821
Legislative Research Council: 605-773-3251
Legislative Website: http://legis.state.sd.us

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TENNESSEE

House: 615-741-2901
Senate: 615-741-2730
Legislative Information System: 615-741-1552
Legislative Website: http://www.legislature.state.tn.us

Amendment to Tennessee Statutes Regarding Retainage for Construction Contracts Becomes Effective July 1, 2008 ~On April 10, 2008, The Tennessee General Assembly enacted legislation amending the existing Tennessee statutes governing retainage funds withheld pursuant to construction contracts in Tennessee. The changes become effective on July 1, 2008 and represent an effort to clarify some questions that had arisen in the wake of the significant revisions to the Tennessee Mechanic’s and Materialman’s Lien statute and the Prompt Pay Act that were adopted in 2007.
http://www.constructionlawnews.com/BlogEntry.aspx?_entry=b76683c2-b47f-4c6d-9b8e-009741f672fb&RSS=true

Prompt Pay Acts Set Payment Guidelines for Construction Work, Baker Donelson’s Newsletter  http://www.bakerdonelson.com/Marketing/ConstructionNewsWinter2004.pdf

Prompt Payment for Commercial Construction

Private
Cite:  Tenn. Code §§ 66-34-101 to 66-34-703 HB 3068

Owner to Prime:  Progress payments: 30 days aafter invoice submitted in accordance with contract schedule.  Final payment: after substantial completion per contract.

Prime to Sub:  30 days after invoice submitted in accordance with contract schedule, subject to any pay if paid clause.

Sub to Lower Tiers: 30 days after invoice submitted in accordance with contract schedule, subject to any pay if paid clause.

Interest/Fees:  Interest at statutory rate unless otherwise agreed; fees “may” be awarded only if “nonprevailing party has acted in bad faith.”

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TEXAS

Speaker of the House: 512-463-1000
Secretary of the Senate: 512-463-0100
Legislative Reference Library: 512-463-1252
Legislative Website: http://www.capitol.state.tx.us

Contingent Payment Clauses

"PAY IF PAID" Enforced If Explicit - YES

"PAY WHEN PAID" And "PAY IF PAID" Treated Same – NO

“Pay When Paid” Suggest Time For Payment - YES

Statutory Provisions – 

Case Law - Clause reading "contractor will pay [for work for which] payment has been made by the owner] does not establish a condition precedent to payment.  Sheldon L. Pollack Corp. v. Falcon Industries, Inc., 794 S.W.2d 380, 383 (Tex. App. Corpus Christi 1990).

Prompt Payment for Commercial Construction

Private
CITE – Tex. Prop. Code §§ 28.001 to 28.010

Owner to Prime – 35 days after invoice

Prime to Sub – 7 days after payment

Sub to Lower Tiers – 7 days after payment

Interest/Fees – interest at 1.5% per month; court “may” award attorneys’ fees

Comments – right to suspend work controlled by statute

Public
CITE – Tx. Govt. Code §§ 2251.001 – 2251.43

Owner to Prime – 31 days after invoice or receipt of services whichever is later.

Prime to Sub – 10 days after payment

Sub to Lower Tiers –  10 days after payment

Interest/Fees – Interest at prime plus 1% for “prevailing party”

Retainage

Public
The Texas Government Code does not specify a maximum rate of retainage. It does provide, however, that all contracts, except those under $400,000, shall have the retainage deposited in an interest-bearing account, of which the interest earned is paid to the contractor upon completion. Tex. Gov't Code Ann. § 2252.032. Additionally, a claim for retainage is never valid for an amount greater than 10% or the amount specified on the contract, whichever is less. Tex. Gov't Code Ann. § 2253.076.

Under the Texas Transportation Code, the public entity may retain a maximum of 5% of the contract price. The retained amount may be deposited under a trust agreement with a bank and the interest earned shall be paid to the contractor. Tex. Trans. Code Ann. § 223.010.

Under the Texas Water Code, retainage shall be 10% until final completion of the project. However, if satisfactory progress is being made, the board may eliminate retention when the project is 50% complete.  At substantial completion, the board may release all or a portion of these monies.  The contractor receives no interest on retainage held on the first 50% of the work, but does receive interest on any retainage held on the remaining 50% of the work. Tex. Water Code Ann. § 49.276.

Private
For work for which a mechanic's lien may be claimed, the owner must retain 10% of either the contract price or the value of the work to be complete. Tex. Prop. Code Ann. § 53.101

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UTAH

House: 801-538-1029
Senate: 801-538-1035
Bills Status: 801-538-1588
Legislative Website: http://www.le.state.ut.us

Utah courts will Likely enforce Pay if paid/Pay when paid clauses
http://www.swlaw.com/files/Publication/5a3b626e-313d-401f-b245-1155f80f658d/Presentation/PublicationAttachment/e0f5b9a5-e908-4784-a24a-f1a783a5723b/UC_Mar07.pdf

Contingent Payment Clauses

"PAY IF PAID" Enforced If Explicit - YES

"PAY WHEN PAID" And "PAY IF PAID" Treated Same – NO

“Pay When Paid” Suggest Time For Payment - YES

Statutory Provisions –  Utah Code Ann. § 13-8-4 (3)(a):  The existence of a contingent payment contract is not a defense to a claim to enforce a mechanics' lien filed under Title 38, Chapter 1, Mechanics' Liens.

Case Law - "Pay when paid" provisions do not create conditions precedent to the payment of subcontractors.  Zions First Nat'l Bank v. Christiansen Bros., Inc., 66 F.3d 1560 (10th Cir. 1995).

Prompt Payment for Commercial Construction

Private
CITE:  Utah Code §§ 13-8-5, 58-55-603

Owner to Prime: No provision for progress payments; final payment 45 days after later of invoice or certificate of occupancy.

Prime to Sub:  Progress payments 30 days after payment; final payment 10 days after payment.

Sub to Lower Tiers:  30 days after payment; final payment 10 days after payment.

Interest/Fees:  Interest at 1% per month; fees for prevailing party in suit for retainage.

Public
CITE: Utah Code §§ 13-8-5, 15-6-1 to 15-6-6.

Owner to Prime:  60 days unless otherwise agreed for progress payments; final payment 45 days after later of invoice or certificate of occupancy.

Prime to Sub: Progress payments 30 days after payment; final payment 10 days after payment.

Sub to Lower Tiers:  Progress payments see private; final payment 10 days after payment       

Interest/Fees:  Interest at IRS refund rate plus 2% for prime; interest at 15.5% for sub; fees for prevailing party in suit for retainage.

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VERMONT

General Assembly: 802-828-2228
Legislative Council: 802-828-2231
Legislative Website: http://www.leg.state.vt.us

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VIRGINIA

House: 804-698-1619
Senate: (804) 698-7400
Legislative Information: (804) 698-7410
Legislative Website: http://legis.state.va.us

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WASHINGTON

House: 360-786-7750
Senate: 360-786-7550
Legislative Website: http://www.leg.wa.gov/legislature

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WEST VIRGINIA

House: 304-340-3200
Senate Clerk: 304-357-7800
Legislative Website: http://www.legis.state.wv.us

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WISCONSIN

Assembly Chief Clerk: 608-266-1501
Senate Chief Clerk: 608-266-2517
Legislative Website: http://www.legis.state.wi.us

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WYOMING

House (in Session only): 307-777-7852
Senate (in Session only): 307-777-7711
Legislative Services Office: (307) 777-7881
Legislative Website: http://legisweb.state.wy.us

Contingent Payment Clauses

"PAY IF PAID" Enforced If Explicit - NO

"PAY WHEN PAID" And "PAY IF PAID" Treated Same – NO

“Pay When Paid” Suggest Time For Payment - NO

Statutory Provisions –  Wyo. Stat. § 16-6-602:  For a public contract, contractors must be paid within 45 days of the receipt of the invoice.

Case Law - Wyoming courts have not addressed whether contingent payment clauses are enforceable.

Prompt Payment for Commercial Construction

Private
CITE – None

Owner to Prime – n/a

Prime to Sub – n/a

Sub to Lower Tiers – n/a

Interest/Fees – n/a

Public
CITE – Wyo. Stat. §§ 16-6-601 to 16-6-602

Owner to Prime –45 days after invoice

Prime to Sub – No provision.

Sub to Lower Tiers – No provision

Interest/Fees – Interest at 1.5% per month for primes; no fees provision.

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