1.1                          A bill for an act 
  1.2             relating to commerce; regulating building and 
  1.3             construction contracts; regulating payments and 
  1.4             retainages; prohibiting certain contract provisions; 
  1.5             proposing coding for new law in Minnesota Statutes, 
  1.6             chapter 337. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  [337.10] [BUILDING AND CONSTRUCTION CONTRACTS; 
  1.9   PROHIBITED PROVISIONS.] 
  1.10     Subdivision 1.  [APPLICATION OF LAWS OF ANOTHER STATE.] 
  1.11  Provisions contained in, or executed in connection with, a 
  1.12  building and construction contract to be performed in Minnesota 
  1.13  making the contract subject to the laws of another state or 
  1.14  requiring that any litigation, arbitration, or other dispute 
  1.15  resolution process on the contract occur in another state are 
  1.16  void and unenforceable.  
  1.17     Subd. 2.  [WAIVER OF LIEN OR CLAIM.] Provisions contained 
  1.18  in, or executed in connection with, a building and construction 
  1.19  contract requiring a contractor, subcontractor, or material 
  1.20  supplier to waive the right to a mechanics lien or to a claim 
  1.21  against a payment bond before the person has been paid for the 
  1.22  labor or materials or both that the person furnished are void 
  1.23  and unenforceable.  
  1.24     Subd. 3.  [PROMPT PAYMENT TO SUBCONTRACTORS.] A building 
  1.25  and construction contract must require the prime contractor and 
  1.26  all subcontractors to promptly pay any subcontractor or material 
  2.1   supplier according to section 16A.1245. 
  2.2      Subd. 4.  [PROGRESS PAYMENTS AND RETAINAGES.] Unless the 
  2.3   building and construction contract provides otherwise, the owner 
  2.4   or other persons making payment under the contract must make 
  2.5   progress payments and reserve retainages according to section 
  2.6   15.72.  This subdivision does not apply to improvements to 
  2.7   residential real estate, as defined in section 326.83, 
  2.8   subdivision 17. 
  2.9      Subd. 5.  [DEFINITION.] For purposes of this section, 
  2.10  "building and construction contract" has the meaning given the 
  2.11  term in section 337.01. 
  2.12     Sec. 2.  [EFFECTIVE DATE.] 
  2.13     Section 1 is effective August 1, 1997, and applies to 
  2.14  contracts or agreements entered into on or after that date.