MN SF1898

Requires prime contractors and all subcontractors to pay undisputed subcontractor and material supplier invoices within 10 days of receipt.

Imposes interest penalty of 1-1/2 percent per month on undisputed amounts not paid on time, with a minimum penalty of $10 for unpaid balances of $100 or more.

Awards costs, disbursements, and attorney fees to any party that prevails in civil action to collect interest penalties.

Allows prime contractors or subcontractors to suspend work if undisputed payment is not received within 10 days.

Caps retainage (money withheld from progress payments) at 5 percent of each payment unless contract specifies otherwise, and permits owners to reduce or eliminate retainage if work progresses satisfactorily.

Effective August 1, 2016, applying to building and construction contracts executed on or after that date.