16-1903.   Public construction contracts; paymentprovisions; provisions against public policy, void, unenforceable; failure topay.(a) Subject to the provisions of subsections (b), (c),(d), (e), (f), (g), (h) and K.S.A. 16-1904 and 16-1905, and amendmentsthereto, all owners, contractors and subcontractors, who enter into a contractfor publicconstruction after the effective date of this act, shall make allpayments pursuant to the terms of the contract.

      (b)   The following provisions in a contract for publicconstruction shall be against public policy and shall be void andunenforceable:

      (1)   A provision that purports to waive, release orextinguish the right to resolve disputes through litigation incourt or substantive or procedural rights in connection with suchlitigation except that a contract may requirenonbinding alternativedispute resolution as a prerequisite to litigation;

      (2)   a provision that purports to waive, release orextinguish rights to file a claim against a payment orperformance bond, except that a contract may require a contractoror subcontractor to provide a waiver or release of such rights as a conditionfor payment, but only to the extent of the amount ofpayment received; and

      (3)   a provision that purports to waive, release orextinguish rights of subrogation for losses or claims covered orpaid by liability or workers compensation insurance except that acontract may require waiver of subrogation for losses or claimspaid by a consolidated or wrap-up insurance program, owners andcontractors protective liability insurance, or project managementprotective liability insurance or a builder's risk policy.

      (c)   All contracts for public construction shall provide that payment ofamounts due a contractor from an owner, except retainage, shall be made within30 days after the owner receives a timely, properly completed, undisputedrequest for paymentaccording to terms of the contract, unless extenuating circumstances existwhich wouldpreclude approval of payment within 30 days. If such extenuating circumstancesexist, then payment shall be made within 45 days after the owner receives suchpayment request.

      (d)   The architect or engineer of record or agent of the owner shall review,approve and forwardundisputed requests for payment to the owner within seven business days ofreceipt from the contractor.

      (e)   If the owner fails to pay a contractor within the time period set forthin subsection (c), the owner shall pay interest computed at the rate of 18% perannum on the undisputed amount to the contractor beginning on the day followingthe end of the time period set forth in subsection (d).

      (f)   A contractor shall pay its subcontractors any amounts due within sevenbusiness days of receipt of payment from the owner, including payment ofretainage, if retainage is released by the owner, if the subcontractor hasprovided a timely, properly completed and undisputed request for payment to thecontractor.

      (g)   If the contractor fails to pay a subcontractor within seven businessdays, the contractor shall pay interest to the subcontractor beginning on theeighth business day after receipt of payment by the contractor, computed at therate of 18% per annum on the undisputed amount.

      (h)   The provisions of subsection (g) shall also apply to all payments fromsubcontractors to their subcontractors.

      History:   L. 2007, ch. 163, § 3; July 1.