MS HB1304

Prohibits contractors, subcontractors, and their agents from knowingly failing to apply construction contract payments toward settling material and labor claims.

Establishes penalties for misapplication of $1,000 or less as fines of $100-$500 and/or imprisonment of 90 days to 6 months.

Establishes penalties for misapplication exceeding $1,000 as $100-$500 fines and/or 90 days to 6 months imprisonment per $1,000 misapplied, with aggregate prison time capped at 5 years.

Requires violators to pay the court restitution equal to misapplied funds plus legal costs and clerk fees, which the court transfers to the affected party.

Makes the act effective July 1, 2012, and reaffirms existing payment requirements for public construction contracts and subcontractor payment obligations.