SEC. 87-7-5. Proportional payment of subcontractors; penalty for late payment.
When a prime contractor receives any payment from the owner under a construction contract, other than a public construction contract, the prime contractor shall, upon receipt of that payment, pay each subcontractor and material supplier in proportion to the percentage of work completed by each such subcontractor and material supplier. If for any reason the prime contractor receives less than the full payment due from the owner, the prime contractor shall be obligated to disburse on a pro rata basis those funds received, with the prime contractor, subcontractors and material suppliers each receiving a prorated portion based on the amount due on the payment. If the prime contractor without reasonable cause fails to make any payment to his subcontractors and material suppliers within fifteen (15) days after the receipt of payment from the owner under the construction contract, the prime contractor shall pay to his subcontractors and material suppliers, in addition to the payment due them, a penalty in the amount of one-half of one percent ( 1 /2 of 1%) per day of the delinquency, calculated from the expiration of the 15-day period until fully paid. The total penalty shall not exceed fifteen percent (15%) of the outstanding balance due. The provisions of this section shall not be applicable to contracts for the construction of single-family dwellings.
SOURCES: Laws, 1985, ch. 505, Sec. 4, eff from and after January 1, 1986.