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Legislative Memo

Frank Kerbein
Director, Center for Human Resources
T 518.465.7517 x210
www.bcnys.org

BILL:

S.3551 (Ranzenhofer) / A.5443 (Brennan)

Support

SUBJECT:

New York City Construction Authority Contractor Claims

 

DATE:

May 6, 2013

 

This bill would amend the Public Authorities Law and bring clarity to the process of filing construction claims. It addresses a technical inconsistency in the law concerning the beginning of the ninety day claim period. The Business Council supports this bill.

The Public Authorities Law which applies to schools in New York City through its School Construction Authority creates a different standard for the filing of subcontractor claims performing work in New York City than the state's Education Law governing those contractors performing work in school districts elsewhere throughout the state.

The New York State Legislature amended Education Law section 3813 in 1992 to adjust the time period in which a contractor's claim could be made against schools districts across the state. The change required claims to be filed with school districts after the date payment for the amount claimed was denied.

The Public Authorities Law, however, was not changed at that time.

The Public Authorities Law claim process requires claims to be filed within three months after the claim has accrued, rather than when payment of the claim is denied, creating a situation requiring a contractor to file a claim before the contractor may even know that it has a claim.
Even the Court of Appeals has indicated that a change to the Public Authorities Law would end this disparity.

This legislation would provide a standard claims process throughout New York State benefiting taxpayers, contractors and the city construction authority by reducing disputes and litigation.

For these reasons, The Business Council supports this bill and urges that it be enacted by the New York State Legislature.