Representative Jon Riki Karamatsu
Floor Remarks
House Bill 3036, H.D. 1, S.D. 2, C.D. 1
May 4, 2006
I rise in support.
This bill is a result of the hard work and compromise between the contractors and subcontractors to better the process in payment to a subcontractor or materialman once they complete their work under a contract for government projects.
The measure requires the Procurement Officer, within 30 days, to pay the contractor all sums retained or withheld from the subcontractor and otherwise due to the subcontractor for satisfactory performance under the subcontract. It also requires the contractor to pay the subcontractor within ten days of receipt of payment by the Procurement Officer, provided that the subcontractor provides evidence of completion in the form of a “properly documented payment request” and an acceptable performance and payment bond; a period of 90 days after the day on which the last of the labor was completed has elapsed without written notice of a claim; and the subcontractor has provided to the contractor an acceptable release of retainage bond, executed by a surety company in an amount not more than two times the amount being retained or withheld by the contractor.
The bill allows the contractor or subcontractor to retain a percentage of not more than ten percent of each progress payment without incurring late payment interest penalties.
This is a huge change in the way subcontractors and materialmen will be paid upon completion of their work in government projects.
Thank you.
JON RIKI KARAMATSU 