The proposed bill, General Assembly Committee Bill No. 5685, aims to prohibit "pay-if-paid" clauses in construction contracts and ensure timely payments to subcontractors and suppliers. It mandates that construction contracts include provisions requiring owners to pay all amounts due to contractors, subcontractors, and suppliers within specified timeframes—thirty days for owners and seven days or sixty days for contractors, depending on the circumstances. The bill also stipulates that contractors must include similar payment requirements in their subcontracts. Additionally, it establishes a process for claims and interest accrual if payments are not made, and it prohibits withholding payments due to disputes between contractors.

Key changes in the bill include the replacement of "any" with "all" in payment requirements, the adjustment of payment timelines, and the introduction of a new provision stating that any contract clause violating these requirements will be void. The bill also clarifies that payments cannot be withheld from subcontractors or suppliers due to disputes between contractors. It is set to take effect on October 1, 2025, and aims to enhance the financial security of those involved in construction projects by ensuring they receive timely compensation for their work.

Statutes affected:
Committee Bill: 42-158j