Double payment legislation sent to state House for vote

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The Carolinas AGC reports a committee of  the state House on June 13 approved proposed legislation that would help solve  problems with contractors having to pay twice for the same work or materials as  well as bankruptcy issues that threaten subcontractors. House Bill 1052 was approved with  amendments in House Judiciary Subcommittee B and sent  to the full House for consideration this week.

The action came with amendments that were offered by  aggregates representatives. Under the original bill, lower-tiered  subcontractors and suppliers would only be able to recover against a payment  bond for labor and materials provided within to 60 days prior to having notified  the contractor in writing that they were providing labor materials on the job. The aggregates representatives offered an  amendment that would extend that look-back period to 75 days.  The original bill only would  apply to jobs of $10,000 or more. The aggregates representatives offered an  amendment raising that ceiling to $25,000.

Dave Simpson, NC government relations and building director  for Carolinas AGC, told committee members that the 60-day threshold was  adequate, noting that South Carolina has no such time period and that most  states with related laws only have 20-30 day look-back periods, with only two  having a 60-day look-back period. Simpson also urged the committee to reduce  the threshold from the proposed $25,000 to $20,000, noting that building  contractors have lost millions of dollars in having to pay twice for the same  materials. At the same time, Simpson said, Carolinas AGC, because of the  fragile nature of the compromise legislation, did not want to do anything that  would jeopardize the bill at a time when the NC General Assembly is winding  down its short session.

The Judiciary Subcommittee B voted to reduce the proposed  threshold from $25,000 to $20,000 but to keep the look-back period to 75  days. Concerning bankruptcy issues, the  proposal would clarify that lower-tiered subcontractors would have the same  ability as contractors to recover on lien claims once a higher-tiered party files  for bankruptcy.

Meantime, CAGC will continue to be heavily involved with  ongoing efforts concerning hidden-lien problems that title insurer and banking  interests are trying to resolve through proposed legislation that would set up a  lien agent notice requirement to perfect a claim of lien on real property. Under this process, contractors,  subcontractors and suppliers would all have to notify an independent lien agent  of their work on a project in order to make sure their lien claims took  priority over a subsequent buyer’s interest. The lien agent process would apply to any project larger than $30,000.   Please contact members of the state House and the Senate Judiciary I Committee to ask them  to support House Bill 1052.

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