CS/HB 1157

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 contract; prohibiting the assessment of
8damages against a contractor if the list of items
9remaining to complete is not timely provided to the
10contractor; amending s. 218.76, F.S.; revising provisions
11relating to the resolution of disputes concerning an
12improper payment request or invoice; providing that a
13local governmental entity waives its objection in a
14payment dispute if it fails to commence the dispute
15resolution procedure within the time required; providing
16an effective date.
18Be It Enacted by the Legislature of the State of Florida:
20     Section 1.  Section 218.72, Florida Statutes, is amended to
22     218.72  Definitions.-As used in this part, the term:
23     (1)(9)  "Agent" means the project architect, project
24engineer, or any other agency or person acting on behalf of the
25local governmental entity. The agent who is required to review
26invoices or payment requests must be identified in accordance
27with s. 218.735(1).
28     (2)(7)  "Construction services" means all labor, services,
29and materials provided in connection with the construction,
30alteration, repair, demolition, reconstruction, or any other
31improvements to real property.
32     (3)(10)  "Contractor" or "provider of construction
33services" means the any person who contracts directly with a
34local governmental entity to provide construction services.
35     (4)(3)  "County" means a political subdivision of the state
36established pursuant to s. 1, Art. VIII of the State
38     (5)(2)  "Local governmental entity" means a county or
39municipal government, school board, school district, authority,
40special taxing district, other political subdivision, or any
41office, board, bureau, commission, department, branch, division,
42or institution thereof.
43     (6)(4)  "Municipality" means a municipality created
44pursuant to general or special law and metropolitan and
45consolidated governments as provided in s. 6(e) and (f), Art.
46VIII of the State Constitution.
47     (7)(8)  "Payment request" means a request for payment for
48construction services which conforms with all statutory
49requirements and with all requirements specified by the local
50governmental entity to which the payment request is submitted.
51Such requirements must be included in the contract for the
52project for which payment is requested.
53     (8)(1)  "Proper invoice" means an invoice that which
54conforms with all statutory requirements and with all
55requirements that have been specified by the local governmental
56entity to which the invoice is submitted. Such requirements must
57be included in the contract for the project for which the
58invoice is submitted.
59     (9)(5)  "Purchase" means the purchase of goods, services,
60or construction services; the purchase or lease of personal
61property; or the lease of real property by a local governmental
63     (10)(6)  "Vendor" means any person who sells goods or
64services, sells or leases personal property, or leases real
65property directly to a local governmental entity. The term
66includes any person who provides waste hauling services to
67residents or businesses located within the boundaries of a local
68government pursuant to a contract or local ordinance.
69     Section 2.  Subsections (1) through (7) of section 218.735,
70Florida Statutes, are amended to read:
71     218.735  Timely payment for purchases of construction
73     (1)  The due date for payment for the purchase of
74construction services by a local governmental entity is
75determined as follows:
76     (a)  If an agent must approve the payment request or
77invoice before prior to the payment request or invoice is being
78submitted to the local governmental entity, payment is due 25
79business days after the date on which the payment request or
80invoice is stamped as received as provided in s. 218.74(1). The
81contractor may send the local government an overdue notice. If
82the payment request or invoice is not rejected within 4 business
83days after delivery of the overdue notice, the payment request
84or invoice shall be deemed accepted, except for any portion of
85the payment request or invoice that is fraudulent or misleading.
86     (b)  If an agent need not approve the payment request or
87invoice which is submitted by the contractor, payment is due 20
88business days after the date on which the payment request or
89invoice is stamped as received as provided in s. 218.74(1).
91A local governmental entity shall identify the agent or employee
92of the local governmental entity, or the facility or office, to
93which the contractor may submit its payment request or invoice.
94This requirement shall be included in the contract between the
95local governmental entity and contractor, or shall be provided
96by the local governmental entity through a separate written
97notice, as required under the contract, no later than 10 days
98after the contract award or notice to proceed. A contractor's
99submission of a payment request or invoice to the identified
100agent, employee, facility, or office of the local governmental
101entity shall be stamped as received as provided in s. 218.74(1)
102and shall commence the time periods for payment or rejection of
103a payment request or invoice as provided in this subsection and
104subsection (2).
105     (2)  If a payment request or invoice does not meet the
106contract requirements, the local governmental entity must may
107reject the payment request or invoice within 20 business days
108after the date on which the payment request or invoice is
109stamped as received as provided in s. 218.74(1). The rejection
110must be written and must specify the deficiency in the payment
111request or invoice and the action necessary to make the payment
112request or invoice proper.
113     (3)  If a payment request or an invoice is rejected under
114subsection (2) and the contractor submits a corrected payment
115request or invoice that which corrects the deficiency specified
116in writing by the local governmental entity, the corrected
117payment request or invoice must be paid or rejected on the later
119     (a)  Ten business days after the date the corrected payment
120request or invoice is stamped as received as provided in s.
121218.74(1); or
122     (b)  If the local governmental entity governing body is
123required by ordinance, charter, or other law to approve or
124reject the corrected payment request or invoice, the first
125business day after the next regularly scheduled meeting of the
126local governmental entity governing body held after the
127corrected payment request or invoice is stamped as received as
128provided in s. 218.74(1).
129     (4)  If a dispute between the local governmental entity and
130the contractor cannot be resolved by the procedure in subsection
131(3), the dispute must be resolved in accordance with the dispute
132resolution procedure prescribed in the construction contract or
133in any applicable ordinance, which shall be referenced in the
134contract. In the absence of a prescribed procedure, the dispute
135must be resolved by the procedure specified in s. 218.76(2).
136     (5)  If a local governmental entity disputes a portion of a
137payment request or an invoice, the undisputed portion shall be
138paid timely, in accordance with subsection (1).
139     (6)  If When a contractor receives payment from a local
140governmental entity for labor, services, or materials furnished
141by subcontractors and suppliers hired by the contractor, the
142contractor must shall remit payment due to those subcontractors
143and suppliers within 10 days after the contractor's receipt of
144payment. If When a subcontractor receives payment from a
145contractor for labor, services, or materials furnished by
146subcontractors and suppliers hired by the subcontractor, the
147subcontractor must shall remit payment due to those
148subcontractors and suppliers within 7 days after the
149subcontractor's receipt of payment. This subsection does not
150Nothing herein shall prohibit a contractor or subcontractor from
151disputing, pursuant to the terms of the relevant contract, all
152or any portion of a payment alleged to be due to another party
153if the contractor or subcontractor notifies the party whose
154payment is disputed, in writing, of the amount in dispute and
155the actions required to cure the dispute. The contractor or
156subcontractor must pay all undisputed amounts due within the
157time limits imposed by this section.
158     (7)(a)  Each contract for construction services between a
159local governmental entity and a contractor must provide for the
160development of a single list of items required to render
161complete, satisfactory, and acceptable the construction services
162purchased by the local governmental entity.
163     (a)  The contract must specify the process for developing
164the development of the list, including the responsibilities of
165the local governmental entity and the contractor in developing
166and reviewing the list and a reasonable time for developing the
167list, as follows:
168     1.  For construction projects having an estimated cost of
169Less than $10 million, within 30 calendar days after reaching
170substantial completion of the construction services purchased as
171defined in the contract, or, if not defined in the contract,
172upon reaching beneficial occupancy or use; or
173     2.  For construction projects having an estimated cost of
174$10 million or more, within 30 calendar days, or, if unless
175otherwise extended by contract, up to not to exceed 60 calendar
176days, after reaching substantial completion of the construction
177services purchased as defined in the contract, or, if not
178defined in the contract, upon reaching beneficial occupancy or
181The contract must also specify a date for the delivery of the
182list of items, not to exceed 5 days after the list of items has
183been developed and reviewed in accordance with the time periods
184set forth in subparagraphs 1. and 2.
185     (b)  If the contract between the local governmental entity
186and the contractor relates to the purchase of construction
187services on more than one building or structure, or involves a
188multiphased project, the contract must provide for the
189development of a list of items required to render complete,
190satisfactory, and acceptable all the construction services
191purchased pursuant to the contract for each building, structure,
192or phase of the project within the time limitations provided in
193paragraph (a).
194     (c)  The final contract completion date must be at least 30
195days after the delivery of the list of items. If the list is not
196provided to the contractor by the agreed upon date for delivery
197of the list, the contract time for completion must be extended
198by the number of days the local governmental entity exceeded the
199delivery date. Damages may not be assessed against a contractor
200for failing to complete a project within the time required by
201the contract, unless the contractor failed to complete the
202project within the contract period as extended under this
204     (d)(c)  The failure to include any corrective work or
205pending items not yet completed on the list developed pursuant
206to this subsection does not alter the responsibility of the
207contractor to complete all the construction services purchased
208pursuant to the contract.
209     (e)(d)  Upon completion of all items on the list, the
210contractor may submit a payment request for all remaining
211retainage withheld by the local governmental entity pursuant to
212this section. If a good faith dispute exists as to whether one
213or more items identified on the list have been completed
214pursuant to the contract, the local governmental entity may
215continue to withhold up to an amount not to exceed 150 percent
216of the total costs to complete such items.
217     (f)(e)  All items that require correction under the
218contract and that are identified after the preparation and
219delivery of the list remain the obligation of the contractor as
220defined by the contract.
221     (g)(f)  Warranty items or items not included in the list of
222items required under paragraph (a) may not affect the final
223payment of retainage as provided in this section or as provided
224in the contract between the contractor and its subcontractors
225and suppliers.
226     (h)(g)  Retainage may not be held by a local governmental
227entity or a contractor to secure payment of insurance premiums
228under a consolidated insurance program or series of insurance
229policies issued to a local governmental entity or a contractor
230for a project or group of projects, and the final payment of
231retainage as provided in this section may not be delayed pending
232a final audit by the local governmental entity's or contractor's
233insurance provider.
234     (i)(h)  If a local governmental entity fails to comply with
235its responsibilities to develop the list required under
236paragraph (a) or paragraph (b), as defined in the contract,
237within the time limitations provided in paragraph (a), the
238contractor may submit a payment request for all remaining
239retainage withheld by the local governmental entity pursuant to
240this section and payment of any remaining undisputed contract
241amount, less any amount withheld pursuant to the contract for
242incomplete or uncorrected work, must be paid within 20 business
243days after receipt of a proper invoice or payment request. If
244the local governmental entity has provided written notice to the
245contractor specifying the failure of the contractor to meet
246contract requirements in the development of the list of items to
247be completed, the local governmental entity need not pay or
248process any payment request for retainage if the contractor has,
249in whole or in part, failed to cooperate with the local
250governmental entity in the development of the list or failed to
251perform its contractual responsibilities, if any, with regard to
252the development of the list or if paragraph (8)(f) applies.
253     Section 3.  Section 218.76, Florida Statutes, is amended to
255     218.76  Improper payment request or invoice; resolution of
257     (1)  If In any case in which an improper payment request or
258invoice is submitted by a vendor, the local governmental entity
259shall, within 10 days after the improper payment request or
260invoice is received by it, notify the vendor, in writing, that
261the payment request or invoice is improper and indicate what
262corrective action on the part of the vendor is needed to make
263the payment request or invoice proper.
264     (2)(a)  If In the event a dispute arises occurs between a
265vendor and a local governmental entity concerning payment of a
266payment request or an invoice, the dispute such disagreement
267shall be finally determined by the local governmental entity
268pursuant to as provided in this section. Each local governmental
269entity shall establish a dispute resolution procedure
270established to be followed by the local governmental entity in
271cases of such disputes. Such procedure must shall provide that
272proceedings to resolve the dispute are shall be commenced within
273not later than 45 days after the date on which the payment
274request or proper invoice was received by the local governmental
275entity and shall be concluded by final decision of the local
276governmental entity within not later than 60 days after the date
277on which the payment request or proper invoice was received by
278the local governmental entity. Such procedures are shall not be
279subject to chapter 120, and do such procedures shall not
280constitute an administrative proceeding that which prohibits a
281court from deciding de novo any action arising out of the
282dispute. If the dispute is resolved in favor of the local
283governmental entity, then interest charges shall begin to accrue
28415 days after the local governmental entity's final decision. If
285the dispute is resolved in favor of the vendor, then interest
286begins shall begin to accrue as of the original date the payment
287became due.
288     (b)  If the local governmental entity does not commence the
289dispute resolution procedure within the time required, a
290contractor may give written notice to the local governmental
291entity of the failure to timely commence its dispute resolution
292procedure. If the local governmental entity fails to commence
293the dispute resolution procedure within 4 business days after
294such notice, any amounts resolved in the contractor's favor
295shall bear mandatory interest, as set forth in s. 218.735(9),
296from the date the payment request or invoice containing the
297disputed amounts was submitted to the local governmental entity.
298If the dispute resolution procedure is not commenced within 4
299business days after the notice, the objection to the payment
300request or invoice shall be deemed waived. The waiver of an
301objection pursuant to this paragraph does not relieve a
302contractor of its contractual obligations.
303     (3)  In an action to recover amounts due under this part
304ss. 218.70-218.80, the court shall award court costs and
305reasonable attorney's fees, including fees incurred through any
306appeal, to the prevailing party, if the court finds that the
307nonprevailing party withheld any portion of the payment that is
308the subject of the action without any reasonable basis in law or
309fact to dispute the prevailing party's claim to those amounts.
310     Section 4.  This act shall take effect October 1, 2010.

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

Disclaimer: The information on this system is unverified. The journals or printed bills of the respective chambers should be consulted for official purposes. Copyright © 2000-2020 State of Florida.