North Carolina HB 383: NAIC Models/ORSA & Credit for Reinsurance-AB

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 1
HOUSE BILL 383

Short Title: Augment Subcontractor Protections. (Public)
Sponsors: Representative Lowery.
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
Referred to: Housing and Development, if favorable, Commerce and Economic Development,
if favorable, Rules, Calendar, and Operations of the House
March 13, 2025
*H383-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO MODIFY THE CHAPTER REGARDING PAYMENTS TO 2
SUBCONTRACTORS TO AUGMENT THE PROTECTIONS AFFORDED BY THAT 3
CHAPTER. 4
The General Assembly of North Carolina enacts: 5
SECTION 1. Chapter 22C of the General Statutes reads as rewritten: 6
"Chapter 22C. 7
"Payments to Subcontractors. 8
"§ 22C-1. Definitions.Purpose; definitions. 9
(a) Purpose. – The purpose of this Chapter is to increase protections applicable to 10
payments to subcontractors, including declaring clauses of contracts attempting to shift the risk 11
of failure to pay to another by making payment to the other contingent on receipt of payment, 12
such as a pay if paid clause or a pay when paid clause, against the public policy of the State and 13
unenforceable. 14
(b) Definitions. – Unless the context otherwise requires in this Chapter: 15
(1) "Contractor" means a person who contracts with an owner to improve real 16
property. 17
(2) "Improve" means to build, effect, alter, repair, or demolish any improvement 18
upon, connected with, or on or beneath the surface of any real property, or to 19
excavate, clear, grade, fill or landscape any real property, or to construct 20
driveways and private roadways, or to furnish materials, including trees and 21
shrubbery, for any of such purposes, or to perform any labor upon such 22
improvements, and shall also mean and include any design or other 23
professional or skilled services furnished by architects, engineers, land 24
surveyors and landscape architects registered under Chapters 83A, 89C or 25
89A of the General Statutes. 26
(3) "Improvement" means all or any part of any building, structure, erection, 27
alteration, demolition, excavation, clearing, grading, filling, or landscaping, 28
including trees and shrubbery, driveways, and private roadways, on real 29
property. 30
(4) An "owner" is a person who has an interest in the real property improved and 31
for whom an improvement is made and who ordered the improvement to be 32
made. "Owner" includes successors in interest of the owner and agents of the 33
owner acting within their authority. 34

General Assembly Of North Carolina Session 2025
Page 2 House Bill 383-First Edition
(5) "Real property" means the real estate that is improved, including lands, 1
leaseholds, tenements and hereditaments, and improvements placed thereon. 2
(6) "Subcontractor" means any person who has contracted to furnish labor or 3
materials to, or has performed labor for, a contractor or another subcontractor 4
in connection with a contract to improve real property. 5
"§ 22C-2. Performance by subcontractor. 6
Performance by a subcontractor in accordance with the provisions of its contract shall entitle 7
it to payment from the party with whom it contracts. Payment by the owner to a contractor is not 8
a condition precedent for payment to a subcontractor and payment by a contractor to a 9
subcontractor is not a condition precedent for payment to any other subcontractor, and an 10
agreement to the contrary is unenforceable. 11
"§ 22C-3. Time of payment to subcontractors after contractor or other subcontractor has 12
been paid.payment. 13
(a) When a subcontractor has performed in accordance with the provisions of his 14
contract, the contractor shall pay to his subcontractor and each subcontractor shall pay to his 15
subcontractor, within seven days of receipt by the contractor or subcontractor of each periodic or 16
final payment, the full amount received for such subcontractor's work and materials based on 17
work completed or service provided under the subcontract. 18
(b) When a subcontractor has performed in accordance with the provisions of his 19
contract, unless earlier required by subsection (a) of this section, the contractor shall pay to his 20
subcontractor and each subcontractor shall pay to his subcontractor, within 30 days of receipt of 21
billing from the payee to the payor, the full amount billed for such subcontractor's work and 22
materials based on work completed or service provided. A contractual provision postponing 23
payment for more than 30 days after performance in accordance with the provisions of the 24
contract and billing is void. 25
"§ 22C-4. Conditions of payment. 26
Nothing in this Chapter shall prevent the contractor, at the time of application and 27
certification to the owner, from withholding such application and certification to the owner for 28
payment to the subcontractor for: unsatisfactory job progress; defective construction not 29
remedied; disputed work; third party claims filed or reasonable evi