HB547 Alabama 2014 Session

Summary

Primary Sponsor

John W. Rogers

Democrat

Co-Sponsors

Mary MooreOliver RobinsonLesley VanceAlan BakerDarrio MeltonJoe FaustRichard BaughnJim CarnsJames E. BuskeyMac ButtramElaine BeechSteve HurstMerika ColemanRandall SheddMike HubbardChris EnglandRod ScottWes LongMike JonesMicky HammonPaul W. LeeDonnie ChesteenDavid StandridgeMargie WilcoxBecky NordgrenPebblin W. WarrenBarbara Bigsby BoydDexter GrimsleyMarcel BlackJohn RobinsonK.L. BrownThad McClammyArtis McCampbellJohnny Mack MorrowJuandalynn GivanDimitri PolizosWilliam RobertsRichard LindseyJamie IsonMike HolmesRon JohnsonTerri CollinsJohn F. Knight JrSteve ClouseCharles O. NewtonDickie DrakeKurt WallaceHarry ShiverNapoleon BracyGreg WrenTodd GreesonDavid SessionsVictor Gaston

Session

Regular Session 2014

Title

Contractors, public works contracts, timely payments, contractor required to timely pay a subcontractor for work completed, Sec. 8-29-3 am'd.

Summary

HB547 would require contractors on Alabama public works projects to timely pay subcontractors and set rules for retainage, interest, and payment timing.

What This Bill Does

It amends Section 8-29-3 to require contractors to timely pay subcontractors and sub-subcontractors for work on public works contracts. It adds specific timelines: owners must pay contractors per contract terms (or within 30 days if terms are not set); contractors must pay subcontractors within 7 days of receiving owner funds, and subcontractors must pay their sub-subcontractors within 7 days. It imposes 1% per month interest on late payments and on excess retainage, sets a 10% cap on retainage, and requires retainage to be released within 60 days after project completion or substantial completion with occupancy certificates. It also requires pass-through payments to subcontractors from owner funds, including any interest for stored materials, and adds a special rule that all subcontractors on public works be paid within 10 business days after funds are received for that portion.

Who It Affects

• Contractors on public works projects who must timely pay subcontractors, sub-subcontractors, and material suppliers and manage retainage under the new rules
• Subcontractors, sub-subcontractors, and material suppliers on public works projects who will receive payments sooner, have retention limits, and be protected by interest penalties for late payments

Key Provisions

• Amends Section 8-29-3 to require timely payment to subcontractors and sub-subcontractors on public works.
• Establishes payment timelines: owner to contractor per contract terms (or within 30 days if no terms); contractor to subcontractor within 7 days of owner payment; subcontractor to sub-subcontractor within 7 days.
• Imposes interest of 1% per month on late payments and on excess retainage.
• Sets retainage maximum at 10% and requires retainage to be released within 60 days after project completion or substantial completion with occupancy certificates; no further retainage after 50% completion.
• Requires pass-through payments from owner funds to subcontractors proportional to their share and includes interest for amounts related to stored materials.
• Gives rules for retainage across tiers so that excess retainage can incur interest and clarifies that retainage is subject to contract law and not a blanket prohibition on withholding payments.
• Public works special rule: subcontractors must be paid within 10 business days after the contractor receives funds for the completed portion.
• Effective date: the act becomes law on the first day of the third month after passage and gubernatorial approval.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Contractors