November 15, 2019
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_h1157__
HB 1157

1
A bill to be entitled
2An act relating to the Local Government Prompt Payment
3Act; amending s. 218.72, F.S.; revising definitions;
4amending s. 218.735, F.S.; revising provisions relating to
5the timely payment for purchases of construction services;
6requiring that a dispute be resolved according to
7procedures in the invitation to bid or request for
8proposal; prohibiting the assessment of damages against a
9contractor if the list of items remaining to complete is
10not timely provided to the contractor; amending s. 218.76,
11F.S.; revising provisions relating to the resolution of
12disputes concerning an improper payment request or
13invoice; providing that a local governmental entity waives
14its objection in a payment dispute if it fails to commence
15the dispute resolution procedure within the time required;
16providing an effective date.
17
18Be It Enacted by the Legislature of the State of Florida:
19
20     Section 1.  Section 218.72, Florida Statutes, is reordered
21and amended to read:
22     218.72  Definitions.-As used in this part, the term:
23     (8)(1)  "Proper invoice" means an invoice that which
24conforms with all statutory requirements and with all
25requirements that have been specified by the local governmental
26entity to which the invoice is submitted. Such requirements must
27be included in the invitation to bid or request for proposal for
28the project for which the invoice is submitted.
29     (5)(2)  "Local governmental entity" means a county or
30municipal government, school board, school district, authority,
31special taxing district, other political subdivision, or any
32office, board, bureau, commission, department, branch, division,
33or institution thereof.
34     (4)(3)  "County" means a political subdivision of the state
35established pursuant to s. 1, Art. VIII of the State
36Constitution.
37     (6)(4)  "Municipality" means a municipality created
38pursuant to general or special law and metropolitan and
39consolidated governments as provided in s. 6(e) and (f), Art.
40VIII of the State Constitution.
41     (9)(5)  "Purchase" means the purchase of goods, services,
42or construction services; the purchase or lease of personal
43property; or the lease of real property by a local governmental
44entity.
45     (10)(6)  "Vendor" means any person who sells goods or
46services, sells or leases personal property, or leases real
47property directly to a local governmental entity. The term
48includes any person who provides waste hauling services to
49residents or businesses located within the boundaries of a local
50government pursuant to a contract or local ordinance.
51     (2)(7)  "Construction services" means all labor, services,
52and materials provided in connection with the construction,
53alteration, repair, demolition, reconstruction, or any other
54improvements to real property.
55     (7)(8)  "Payment request" means a request for payment for
56construction services which conforms with all statutory
57requirements and with all requirements specified by the local
58governmental entity to which the payment request is submitted.
59Such requirements must be included in the invitation to bid or
60request for proposal for the project for which payment is
61requested.
62     (1)(9)  "Agent" means the project architect, project
63engineer, or any other agency or person acting on behalf of the
64local governmental entity. The agent who is required to review
65invoices or payment requests must be identified in the
66invitation to bid or request for proposal for the project for
67which payment requests or invoices are submitted.
68     (3)(10)  "Contractor" or "provider of construction
69services" means the any person who contracts directly with a
70local governmental entity to provide construction services.
71     Section 2.  Subsections (1) through (7) of section 218.735,
72Florida Statutes, are amended to read:
73     218.735  Timely payment for purchases of construction
74services.-
75     (1)  The due date for payment for the purchase of
76construction services by a local governmental entity is
77determined as follows:
78     (a)  If an agent must approve the payment request or
79invoice before prior to the payment request or invoice is being
80submitted to the local governmental entity, payment is due 25
81business days after the date on which the payment request or
82invoice is stamped as received as provided in s. 218.74(1). If
83the payment request or invoice is not rejected before the due
84date, it shall be deemed accepted.
85     (b)  If an agent need not approve the payment request or
86invoice which is submitted by the contractor, payment is due 20
87business days after the date on which the payment request or
88invoice is stamped as received as provided in s. 218.74(1).
89     (2)  If a payment request or invoice does not meet the
90contract requirements, the local governmental entity must may
91reject the payment request or invoice within 20 business days
92after the date on which the payment request or invoice is
93stamped as received as provided in s. 218.74(1). The rejection
94must be written and must specify the deficiency in the payment
95request or invoice and the action necessary to make the payment
96request or invoice proper.
97     (3)  If a payment request or an invoice is rejected under
98subsection (2) and the contractor submits a corrected payment
99request or invoice that which corrects the deficiency specified
100in writing by the local governmental entity, the corrected
101payment request or invoice must be paid or rejected on the later
102of:
103     (a)  Ten business days after the date the corrected payment
104request or invoice is stamped as received as provided in s.
105218.74(1); or
106     (b)  If the local governmental entity governing body is
107required by ordinance, charter, or other law to approve or
108reject the corrected payment request or invoice, the first
109business day after the next regularly scheduled meeting of the
110local governmental entity governing body held after the
111corrected payment request or invoice is stamped as received as
112provided in s. 218.74(1).
113     (4)  If a dispute between the local governmental entity and
114the contractor cannot be resolved by the procedure in subsection
115(3), the dispute must be resolved in accordance with the dispute
116resolution procedure prescribed in the invitation to bid or
117request for proposal for the project for which the payment
118request or invoice is submitted construction contract or in any
119applicable ordinance. In the absence of a prescribed procedure,
120the dispute must be resolved by the procedure specified in s.
121218.76(2).
122     (5)  If a local governmental entity disputes a portion of a
123payment request or an invoice, the undisputed portion shall be
124paid timely, in accordance with subsection (1).
125     (6)  If When a contractor receives payment from a local
126governmental entity for labor, services, or materials furnished
127by subcontractors and suppliers hired by the contractor, the
128contractor must shall remit payment due to those subcontractors
129and suppliers within 10 days after the contractor's receipt of
130payment. If When a subcontractor receives payment from a
131contractor for labor, services, or materials furnished by
132subcontractors and suppliers hired by the subcontractor, the
133subcontractor must shall remit payment due to those
134subcontractors and suppliers within 7 days after the
135subcontractor's receipt of payment. This subsection does not
136Nothing herein shall prohibit a contractor or subcontractor from
137disputing, pursuant to the terms of the relevant contract, all
138or any portion of a payment alleged to be due to another party
139if the contractor or subcontractor notifies the party whose
140payment is disputed, in writing, of the amount in dispute and
141the actions required to cure the dispute. The contractor or
142subcontractor must pay all undisputed amounts due within the
143time limits imposed by this section.
144     (7)(a)  Each contract for construction services between a
145local governmental entity and a contractor must provide for the
146development of a single list of items required to render
147complete, satisfactory, and acceptable the construction services
148purchased by the local governmental entity.
149     (a)  The contract must specify the process for developing
150the development of the list, including the responsibilities of
151the local governmental entity and the contractor in developing
152and reviewing the list and a reasonable time for developing the
153list, as follows:
154     1.  For construction projects having an estimated cost of
155Less than $10 million, within 30 calendar days after reaching
156substantial completion of the construction services purchased as
157defined in the contract, or, if not defined in the contract,
158upon reaching beneficial occupancy or use; or
159     2.  For construction projects having an estimated cost of
160$10 million or more, within 30 calendar days, or, if unless
161otherwise extended by contract, up to not to exceed 60 calendar
162days, after reaching substantial completion of the construction
163services purchased as defined in the contract, or, if not
164defined in the contract, upon reaching beneficial occupancy or
165use.
166     (b)  If the contract between the local governmental entity
167and the contractor relates to the purchase of construction
168services on more than one building or structure, or involves a
169multiphased project, the contract must provide for the
170development of a list of items required to render complete,
171satisfactory, and acceptable all the construction services
172purchased pursuant to the contract for each building, structure,
173or phase of the project within the time limitations provided in
174paragraph (a).
175     (c)  The final contract completion date must be at least 30
176days after the delivery of the list of items. If the list is not
177timely provided to the contractor, the contract time for
178completion must be extended by at least 30 days after the
179contractor receives the list. Damages may not be assessed
180against a contractor for failing to complete a project within
181the time required by the contract if the list of items has not
182been timely provided to the contractor.
183     (d)(c)  The failure to include any corrective work or
184pending items not yet completed on the list developed pursuant
185to this subsection does not alter the responsibility of the
186contractor to complete all the construction services purchased
187pursuant to the contract.
188     (e)(d)  Upon completion of all items on the list, the
189contractor may submit a payment request for all remaining
190retainage withheld by the local governmental entity pursuant to
191this section. If a good faith dispute exists as to whether one
192or more items identified on the list have been completed
193pursuant to the contract, the local governmental entity may
194continue to withhold up to an amount not to exceed 150 percent
195of the total costs to complete such items.
196     (f)(e)  All items that require correction under the
197contract and that are identified after the preparation and
198delivery of the list remain the obligation of the contractor as
199defined by the contract.
200     (g)(f)  Warranty items or items not included in the list of
201items required under paragraph (a) may not affect the final
202payment of retainage as provided in this section or as provided
203in the contract between the contractor and its subcontractors
204and suppliers.
205     (h)(g)  Retainage may not be held by a local governmental
206entity or a contractor to secure payment of insurance premiums
207under a consolidated insurance program or series of insurance
208policies issued to a local governmental entity or a contractor
209for a project or group of projects, and the final payment of
210retainage as provided in this section may not be delayed pending
211a final audit by the local governmental entity's or contractor's
212insurance provider.
213     (i)(h)  If a local governmental entity fails to comply with
214its responsibilities to develop the list required under
215paragraph (a) or paragraph (b), as defined in the contract,
216within the time limitations provided in paragraph (a), the
217contractor may submit a payment request for all remaining
218retainage withheld by the local governmental entity pursuant to
219this section and payment of any remaining contract amount must
220be paid within 20 business days. If the local governmental
221entity has provided written notice to the contractor specifying
222the failure of the contractor to meet contract requirements in
223the development of the list of items to be completed, the local
224governmental entity need not pay or process any payment request
225for retainage if the contractor has, in whole or in part, failed
226to cooperate with the local governmental entity in the
227development of the list, or failed to perform its contractual
228responsibilities, if any, with regard to the development of the
229list, or if paragraph (8)(f) applies.
230     Section 3.  Section 218.76, Florida Statutes, is amended to
231read:
232     218.76  Improper payment request or invoice; resolution of
233disputes.-
234     (1)  If In any case in which an improper payment request or
235invoice is submitted by a vendor, the local governmental entity
236shall, within 10 days after the improper payment request or
237invoice is received by it, notify the vendor, in writing, that
238the payment request or invoice is improper and indicate what
239corrective action on the part of the vendor is needed to make
240the payment request or invoice proper.
241     (2)  If In the event a dispute arises occurs between a
242vendor and a local governmental entity concerning payment of a
243payment request or an invoice, the dispute such disagreement
244shall be finally determined by the local governmental entity
245pursuant to as provided in this section. Each local governmental
246entity shall establish a dispute resolution procedure
247established to be followed by the local governmental entity in
248cases of such disputes. Such procedure must shall provide that
249proceedings to resolve the dispute are shall be commenced within
250not later than 45 days after the date on which the payment
251request or proper invoice was received by the local governmental
252entity and shall be concluded by final decision of the local
253governmental entity within not later than 60 days after the date
254on which the payment request or proper invoice was received by
255the local governmental entity. Such procedures are shall not be
256subject to chapter 120, and do such procedures shall not
257constitute an administrative proceeding that which prohibits a
258court from deciding de novo any action arising out of the
259dispute. If the dispute is resolved in favor of the local
260governmental entity, then interest charges shall begin to accrue
26115 days after the local governmental entity's final decision. If
262the dispute is resolved in favor of the vendor, then interest
263begins shall begin to accrue as of the original date the payment
264became due. If the local governmental entity does not commence
265the dispute resolution procedure within the time required, the
266objection to payment shall be deemed to have been waived. The
267time for dispute resolution may be extended upon the written
268agreement of the affected parties.
269     (3)  In an action to recover amounts due under this part
270ss. 218.70-218.80, the court shall award court costs and
271reasonable attorney's fees, including fees incurred through any
272appeal, to the prevailing party, if the court finds that the
273nonprevailing party withheld any portion of the payment that is
274the subject of the action without any reasonable basis in law or
275fact to dispute the prevailing party's claim to those amounts.
276     Section 4.  This act shall take effect July 1, 2010.


CODING: Words stricken are deletions; words underlined are additions.
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