Senate Bill 2902

(As Passed the Senate)

AN ACT TO CREATE A RIGHT ON BEHALF OF CERTAIN SUBCONTRACTORS TO PAYMENTS MADE TO A SUBCONTRACTOR FOR MATERIALS OR EQUIPMENT FURNISHED OR LABOR PERFORMED BY THE SUBCONTRACTOR; TO CREATE THE MISDEMEANOR OF NEGOTIATING A DRAFT FOR A PAYMENT OWED TO A SUBCONTRACTOR WITHOUT AUTHORIZATION AND TO CREATE PENALTIES THEREFOR; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. (1) A contractor who undertakes to negotiate a draft made payable to the contractor and any other party must first obtain the authorization of every co-payee on the draft if the draft is tendered in payment for materials or equipment furnished or labor performed by the owner, laborer, supplier or equipment dealer.

(2) A contractor who negotiates a draft without first obtaining the authorization required under this section is guilty of a misdemeanor and shall be subject to a fine not to exceed Five Hundred Dollars ($500.00) per violation, and shall also be ordered by the court to make full restitution to the owner, laborer, supplier or equipment dealer who is entitled to payment from the proceeds of the draft, as well as reasonable attorney's fees incurred by any party to whom restitution is ordered.

SECTION 2. This act shall take effect and be in force from and after July 1, 2012.