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 after work completion, whichever is sooner) for contractors. Additionally, it requires contractors to include similar payment timelines in their subcontracts. The bill also stipulates that no payments can be withheld from subcontractors or suppliers due to disputes between contractors.

Furthermore, the bill introduces a mechanism for claims and interest on unpaid amounts, requiring parties to notify each other via registered or certified mail if payments are not made. It establishes that any construction contract provisions that violate these requirements will be deemed void. The bill is set to take effect on October 1, 2025, and aims to enhance the financial security of subcontractors and suppliers in the construction industry by ensuring they receive timely payments for their work.

Statutes affected:
Committee Bill: 42-158j