New York Laws
Article 9 - Contracts
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the amount so withdrawn.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.

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