New Jersey Gov. Jon Corzine enacted legislation that requires all construction owners to pay interest to contractors when payments are not received by the contractors within 30 days of billing for work. The new law, known as Chapter 96 Laws of 2006, applies to public and private construction and is effective with all contracts entered into after Sept. 1, 2006.
Representatives of the Utility and Transportation Contractors Association (UTCA) worked with the bill sponsors, officials of the New Jersey Department of Transportation (NJDOT), the New Jersey Department of Environmental Protection (NJDEP), and representatives of other associations over the past several months in the movement of the legislation.
The new law was sponsored in the Senate by Senators Steve Sweeney and Fred Madden and in the Assembly by Assemblymen Wilfredo Caraballo, Joseph Egan, Neil Cohen, Thomas Giblin and Assemblywoman Bonnie Watson Coleman.
Where payments are not made within the 30-day time frame, interest must be paid at a rate equal to the prime rate plus one percent.
A copy of Chapter 96 Laws of 2006 is available from UTCA.
For more information, visit www.utcanj.org.