Nebraska Legislation Adopts Provisions of Nebraska Construction Prompt Pay Act (LB 961)
The Nebraska Legislature passed a bill to amend certain provisions of the Nebraska Construction Prompt Pay Act. Senator Heath Mello originally introduced revisions to the Prompt Pay Act as Legislative Bill 373, but the Nebraska Legislature later incorporated the provisions of LB 373 into Legislative Bill 961. The Nebraska Governor approved LB 961 on April 16, 2014.
As approved, LB 961 amends the Prompt Pay Act by: (i) excluding work done by a contractor or subcontractor for the State of Nebraska or for any federal or state-aid project of a state political subdivision; (ii) defining when a project is “substantially complete” to mean when the work is sufficiently complete in accordance with the contract to allow the owner to occupy or utilize the project for its intended use; (iii) requiring release of payment and retainage fee(s) within forty-five (45) days after substantial completion of the project and payment to a subcontractor within ten (10) days of receipt of the retainage; (iv) capping retainage amounts to ten percent (10%) and then five percent (5%) when fifty percent (50%) or more of the project is complete, both percentages subject to certain conditions; and (v) allowing courts to award equitable relief, attorney’s fees and costs in an action under the Prompt Pay Act.
For information regarding LB 961 and a copy of the final slip law visit the Nebraska Legislature’s website.