N.Y. State Finance Law § 139: Retained percentages

§ 139. Retained percentages. 1. A clause shall be inserted in all

specifications or contracts hereafter made or awarded by the state, or

by any public department or official thereof for work to be executed

except as provided in section thirty-eight of the highway law in which

the execution and delivery by the contractor of a performance bond shall

be required, providing that the state shall retain five per centum of

the amount of each progress payment in accordance with section one

hundred thirty-nine-f of the state finance law.

2. The clause specified in subdivision one of this section may be

inserted in the specifications of any uncompleted public contract, of

the kind referred to in such subdivision, heretofore made or awarded by

the state or by any public department, or official thereof, with the

written consent of the commissioner of general services and of the

official of the public department by whom such contract was awarded and

of the contractor, provided the surety or sureties upon the performance

and labor and material bonds given by the contractor upon any such

contract shall consent in writing thereto and the retained percentage of

moneys earned under such contract shall, after the insertion of such

clause, be payable in accordance with the provisions set forth in said

clause.

3. Under any contract heretofore or hereafter made or awarded by the

state, or by any public department or official thereof, the contractor

may, from time to time, withdraw the whole or any portion of the amount

retained from payments to the contractor pursuant to the terms of the

contract, upon depositing with the state comptroller or, if so directed

by the state comptroller, with a bank or trust company which has entered

into an agreement with the state comptroller to provide the services

which the state comptroller is required to perform pursuant to the

provisions of this subdivision (1) United States treasury bonds, United

States treasury notes, United States treasury certificates of

indebtedness or United States treasury bills, (2) bonds or notes of the

state of New York, (3) bonds of any political subdivision in the state

of New York, (4) bonds of the New York state housing finance agency, or

(5) bonds of the New York state medical care facilities finance agency,

of a market value not exceeding par, at the time of deposit, equal to

the amount so withdrawn. The state comptroller shall, from time to time,

collect all interest or income on the obligations so deposited, and

shall pay the same, when and as collected, to the contractor who

deposited the obligations. If the deposit be in the form of coupon

bonds, the coupons as they respectively become due shall be clipped,

presented for payment, and the proceeds remitted to the contractor. The

contractor shall not be entitled to interest or coupons or income on any

of the deposited obligations, the proceeds of which shall be or shall

have been used, or applied by the state, or by any public department or

official thereof, pursuant to the terms of the contract. The state

comptroller or any such bank or trust company when authorized by the

state comptroller, may impose upon each contractor a service charge for

receiving, handling and disbursing obligations, funds and coupons

pursuant to the provisions of this subdivision in an amount to be

determined by the state comptroller. The provisions of this section, as

amended, shall supersede the provisions of any act inconsistent

herewith.