Prompt Payment Legislation - Electrical Contractors Association of ...

JURISDICTIONAL OVERVIEWA JurisdictionalOverviewof Prompt PaymentBy David ZurawelLegislation in the United StatesPrepared for the National Trade Contractors Coalition of Canada (NTCCC) bythe Council of Ontario Construction Associations (COCA), August, 2011.Executive Summary• Despite ongoing fundamental differences, the American general,sub and specialty contractor community have collectively recognizedthe importance and benefits of a prompt payment culture forconstruction.• The broader construction industry in the United States recognizesthree fundamental principles for prompt payment:1. prompt payment for all sums due is the correct and only posturefor the industry to maintain;2. contractors should take steps, including legislative action whenappropriate, to protect their interests and the interests of theirsubcontractors and suppliers; and3. owners should be willing to demonstrate their ability to pay.• As of July 2011, every state in the union, save for New Hampshire,has enacted prompt payment legislation for public constructionprojects.• Approximately one-third of U.S. states have enacted prompt paymentfor private contracts, with the trend forecasting more statesto pass similar legislation in the coming years.• The U.S. Federal Prompt Payment Actserves as a template for each state’sown legislation.• All states’ prompt payment legislation reflects the same fundamentalthemes and intent as the federal law.Basis for contractor support for prompt paymentlegislation in the United StatesThe American general contracting community has come to recognizethe importance and benefit of prompt payment to the broader constructionindustry. There is a firm commitment to prompt paymentby the general contracting community and the federal and statelevels, primarily conducting its advocacy efforts through the AssociatedGeneral Contractors of America (AGC of America).Working with the American Subcontractors Association, Inc. (ASA)and the Associated Specialty Contractors (ASC), the three groupshave at least two common goals:Ontario Electrical Contractor10