PRINTER'S NO. 1621
No. 1391 Session of 2001
INTRODUCED BY TULLI, BUXTON, HARHAI, READSHAW, SEMMEL,
WOJNAROSKI, ARGALL, BELFANTI, BROWNE, BUNT, COLAFELLA,
CORRIGAN, CREIGHTON, FAIRCHILD, GEORGE, GODSHALL, JAMES,
KIRKLAND, LEDERER, LEWIS, MANN, MARSICO, McNAUGHTON, PRESTON,
SCRIMENTI, SHANER, SOLOBAY, E. Z. TAYLOR, THOMAS, WATSON,
WILT AND YOUNGBLOOD, APRIL 23, 2001
REFERRED TO COMMITTEE ON COMMERCE AND ECONOMIC DEVELOPMENT,
APRIL 23, 2001
AN ACT
1 Amending the act of February 17, 1994 (P.L.73, No.7), entitled
2 "An act requiring timely payment to certain contractors and
3 subcontractors; and providing remedies to contractors and
4 subcontractors," further providing for performance by
5 contractor or subcontractor and for penalties.
6 The General Assembly of the Commonwealth of Pennsylvania
7 hereby enacts as follows:
8 Section 1. Section 4 of the act of February 17, 1994
9 (P.L.73, No.7), known as the Contractor and Subcontractor
10 Payment Act, is amended to read:
11 Section 4. Performance by contractor or subcontractor.
12 (a) General rule.--Performance by a contractor or a
13 subcontractor, architect, engineer or supplier of materials and
14 services in accordance with the provisions of a contract shall
15 entitle the contractor or subcontractor, architect, engineer or
16 supplier of materials and services to payment from the party
17 with whom the contractor or subcontractor, architect, engineer
1 or supplier of materials and services has contracted.
2 (b) Status as a trust.--Any amount paid in connection with a
3 construction contract by any person to an owner, developer,
4 contractor or subcontractor shall be held by such recipient in
5 trust, for the benefit of those to whom the recipient owes funds
6 on that construction project to the extent that the amount paid
7 consists of funds due on account of labor, material or
8 professional services supplied to or for the project
9 contemplated by the construction contract.
10 Section 2. Section 12 of the act is amended by adding a
11 subsection to read:
12 Section 12. Penalty and attorney fee.
13 * * *
14 (a.1) Fraudulent detention by use by owner, developer,
15 contractor or subcontractor.--
16 (1) Notwithstanding any agreement to the contrary, any
17 owner, developer, contractor or subcontractor engaged in
18 construction who, with intent to defraud:
19 (i) retains or uses the proceeds or any part
20 thereof, of any payment made to him, for any purpose
21 other than to first pay amounts due or to become due to
22 those engaged by him to furnish labor, material or
23 professional services for the specific improvement; or
24 (ii) who appropriates the funds to his own use while
25 any amount for which he may be liable or become liable
26 under the terms of his contract for the labor, material
27 or professional services for the specific improvement
28 remains unpaid,
29 commits a felony of the third degree and shall, upon conviction,
30 be sentenced to pay a fine of not less than $100 nor more than
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1 $5,000 or to imprisonment for not less than six months nor more
2 than three years, or both.
3 (2) Any person so defrauded may file a complaint for a
4 prosecution to be commenced under this subsection.
5 (3) The appropriation by an owner, developer, contractor
6 or subcontractor of any moneys paid to him in connection with
7 construction before the payment by him of all moneys due or
8 to become due to those who furnished labor, material or
9 professional services and entitled to payment shall be deemed
10 evidence of intent to defraud.
11 Section 3. This act shall take effect in 60 days.
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