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Senate Bill 0544

Senate Bill sb0544

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    Florida Senate - 2004                                   SB 544

    By Senator Bennett





    21-239C-04

  1                      A bill to be entitled

  2         An act relating to construction services;

  3         amending s. 218.70, F.S.; providing a short

  4         title; amending s. 218.72, F.S.; redefining

  5         terms used in part VII of ch. 218, F.S.;

  6         amending s. 218.735, F.S.; revising provisions

  7         relating to timely payment for purchases of

  8         construction services; revising deadlines for

  9         payment; providing procedures for project

10         closeout and payment of retainage; providing

11         requirements for local government construction

12         retainage; providing that ss. 218.72-218.76,

13         F.S., apply to the payment of any payment

14         request for retainage; creating s. 255.0705,

15         F.S.; providing a short title; amending s.

16         255.071, F.S.; revising deadlines for the

17         payment of subcontractors, sub-subcontractors,

18         materialmen, and suppliers on construction

19         contracts for public projects; creating ss.

20         255.072, 255.073, 255.074, 255.075, 255.076,

21         255.077, and 255.078, F.S.; providing

22         definitions; providing for timely payment for

23         purchases of construction services by a public

24         entity; providing procedures for calculating

25         payment due dates; providing procedures for

26         handling improper payment requests; providing

27         for the resolution of disputes; providing for

28         payment of court costs and attorney's fees;

29         providing for project closeout and payment of

30         retainage; providing for public-construction

31         retainage; providing that ss. 255.072-255.076,

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    Florida Senate - 2004                                   SB 544
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 1         F.S., apply to the payment of any payment

 2         request for retainage; amending s. 255.05,

 3         F.S.; providing requirements for certain

 4         notices of nonpayment served by a claimant who

 5         is not in privity with the contractor;

 6         providing limitations on a claimant's

 7         institution of certain actions against a

 8         contractor or surety; providing for certain

 9         notices to the claimant; creating s. 725.09,

10         F.S.; prohibiting the inclusion in a contract

11         for the purchase of construction materials or

12         services a provision that conditions payment

13         for such materials or services on the receipt

14         of payment from any other entity; providing an

15         effective date.

16  

17  Be It Enacted by the Legislature of the State of Florida:

18  

19         Section 1.  Section 218.70, Florida Statutes, is

20  amended to read:

21         218.70  Short title.--This part may be cited as the

22  "Local Government Florida Prompt Payment Act."

23         Section 2.  Subsections (2), (6), and (7) of section

24  218.72, Florida Statutes, are amended to read:

25         218.72  Definitions.--As used in this part:

26         (2)  "Local governmental entity" means a county or

27  municipal government, school board, school district,

28  authority, special taxing district, other political

29  subdivision, community college, or any office, board, bureau,

30  commission, department, branch, division, or institution

31  thereof or any project supported by county or municipal funds.

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 1         (6)  "Vendor" means any person who sells goods or

 2  services, sells or leases personal property, or leases real

 3  property directly to a local government entity. The term

 4  includes any person who provides waste-hauling services to

 5  residents or businesses located within the boundaries of a

 6  local government pursuant to a contract or local ordinance.

 7         (7)  "Construction services" means all labor, services,

 8  and materials provided in connection with the construction,

 9  alteration, repair, demolition, reconstruction, or any other

10  improvements to real property that require a license under

11  parts I and II of chapter 489.

12         Section 3.  Subsection (6) of section 218.735, Florida

13  Statutes, is amended, present subsection (7) of that section

14  is redesignated as subsection (9), and new subsections (7) and

15  (8) are added to that section, to read:

16         218.735  Timely payment for purchases of construction

17  services.--

18         (6)  When a contractor receives payment from a local

19  governmental entity for labor, services, or materials

20  furnished by subcontractors and suppliers hired by the

21  contractor, the contractor shall remit payment due to those

22  subcontractors and suppliers within 10 15 days after the

23  contractor's receipt of payment. When a subcontractor receives

24  payment from a contractor for labor, services, or materials

25  furnished by subcontractors and suppliers hired by the

26  subcontractor, the subcontractor shall remit payment due to

27  those subcontractors and suppliers within 10 15 days after the

28  subcontractor's receipt of payment. Nothing herein shall

29  prohibit a contractor or subcontractor from disputing,

30  pursuant to the terms of the relevant contract, all or any

31  portion of a payment alleged to be due to another party. In

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 1  the event of such a dispute, the contractor or subcontractor

 2  may withhold the disputed portion of any such payment if the

 3  contractor or subcontractor notifies the party whose payment

 4  is disputed, in writing, of the amount in dispute and the

 5  actions required to cure the dispute. The contractor or

 6  subcontractor must pay all undisputed amounts due within the

 7  time limits imposed by this section.

 8         (7)(a)  Each contract for construction services between

 9  a local government entity and vendor must provide for the

10  development of a list of items required to render complete,

11  satisfactory, and acceptable the construction services

12  purchased by the local government. The contract must specify

13  the process for the development of the list, including the

14  respective responsibilities of the local government and the

15  vendor in developing and reviewing the list and a reasonable

16  time for developing the list as follows:

17         1.  For construction projects with an estimated cost of

18  less than $10 million, within 30 days after reaching

19  substantial completion of the construction services purchased

20  as defined in the contract, or, if not defined in the

21  contract, upon reaching beneficial occupancy or use; or

22         2.  For construction projects with an estimated cost of

23  $10 million or more, within 30 days, unless otherwise extended

24  by contract not to exceed 90 days, after reaching substantial

25  completion of the construction services purchased as defined

26  in the contract, or, if not defined in the contract, upon

27  reaching beneficial occupancy or use.

28         (b)  If the contract between the local government

29  entity and vendor relates to the purchase of construction

30  services on more than one building or structure or involves a

31  multiphased project, the contract must provide for the

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 1  development of a list of items required to render complete,

 2  satisfactory, and acceptable the construction services

 3  purchased for each building, structure, or phase of the

 4  project in accordance with the timeframes specified in

 5  subparagraph (a)1. or subparagraph (a)2.

 6         (c)  The failure to include any corrective work or

 7  pending items not yet completed on the list developed pursuant

 8  to this subsection does not alter the responsibility of the

 9  vendor to complete all the purchased construction services as

10  defined in the contract.

11         (d)  Upon completion of all items on the list, or such

12  other time as defined in the contract, the vendor may submit a

13  payment request for the appropriate amount of retainage. The

14  local government may withhold an amount not to exceed 150

15  percent of the total costs to complete any incomplete items on

16  the list.

17         (e)  All items that require correction under the

18  contract and that are identified after the preparation and

19  delivery of the list remain the obligation of the vendor as

20  defined by the contract.

21         (f)  Warranty items may not affect the final payment of

22  retainage as provided in this section or as provided in the

23  contract between the vendor and its subcontractors and

24  suppliers.

25         (g)  Retainage may not be held by a local governmental

26  entity or a vendor to secure payment of insurance premiums

27  under a consolidated insurance program or series of insurance

28  policies issued to a public agency or a contractor for a

29  project or group of projects, and the final payment of

30  retainage as provided in this section may not be delayed

31  

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    Florida Senate - 2004                                   SB 544
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 1  pending a final audit by the local governmental entity's or

 2  vendor's insurance provider.

 3         (h)  If a local government entity fails to comply with

 4  its responsibilities to develop the list required under

 5  paragraph (a) or paragraph (b), as defined in the contract,

 6  and the timeframes provided in subparagraph (a)1. or

 7  subparagraph (a)2., the vendor may submit a payment request

 8  for the appropriate amount of retainage. The local government

 9  entity need not pay or process any request for payment of

10  retainage if the vendor has, in whole or in part, failed to

11  cooperate with the local government in the development of the

12  list or failed to perform its contractual responsibilities, if

13  any, with regard to the development of the list or if

14  paragraph (8)(d) applies.

15         (8)(a)  In any public construction project, a local

16  government entity may withhold an amount not exceeding 10

17  percent of each progress payment made to the vendor until the

18  local government project has reached 50-percent completion.

19  After the project has reached 50-percent completion, the local

20  government must reduce to 5 percent the amount of retainage

21  withheld from each subsequent progress payment made to the

22  vendor. However, notwithstanding the provisions of this

23  subsection, a municipality with a population of 25,000 or

24  fewer, or a county with a population of 100,000 or fewer, may

25  withhold retainage in an amount not exceeding 10 percent of

26  each progress payment made to the vendor until final

27  completion and acceptance of the project by the local

28  government. For purposes of this subsection, the term

29  "50-percent completion" means as defined in the contract

30  between the local government entity and the vendor, or, if not

31  defined in the contract, the point at which the local

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 1  government has expended 50 percent of the total project costs

 2  identified in the contract, plus all change orders and other

 3  additions issued subsequent to the approval of the contract by

 4  the governing body of the local government, and the level of

 5  actual project construction is equivalent to such expenditure

 6  of funds.

 7         (b)  After the project has reached 50-percent

 8  completion, the vendor may present to the local government

 9  entity a payment request for up to one-half of the retainage

10  amount held by the local government. The local government

11  entity shall promptly make payment to the vendor, unless the

12  local government has grounds, pursuant to the contract or as

13  provided in paragraph (d), for withholding the payment of

14  retainage. If the local government makes payment of retainage

15  to the vendor under this paragraph, the vendor shall timely

16  remit payment of such retainage to the appropriate

17  subcontractors and suppliers.

18         (c)  After the project has reached 50-percent

19  completion, the vendor may elect to withhold retainage from

20  payments to its subcontractors at a rate higher than 5

21  percent. The specific amount to be withheld must be determined

22  on a case-by-case basis and must be based on the vendor's

23  assessment of the subcontractor's past performance, the

24  likelihood that such performance will continue, and the

25  vendor's ability to rely on other safeguards. The vendor shall

26  notify the subcontractor, in writing, of its determination to

27  withhold more than 5 percent of the progress payment and the

28  reasons for making that determination, and the vendor may not

29  request the release of such retained funds from the local

30  government.

31  

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 1         (d)  This section does not require the local government

 2  to pay or release any amounts that are the subject of a

 3  good-faith dispute, the subject of an action brought under s.

 4  255.05, or otherwise the subject of a claim or demand by the

 5  local government or vendor.

 6         (e)  The timeframes set forth in this section for

 7  payment of payment requests apply to any payment request for

 8  retainage made pursuant to this subsection.

 9         Section 4.  Section 255.0705, Florida Statutes, is

10  created to read:

11         255.0705  Short title.--Sections 255.0705-255.078 may

12  be cited as the "Florida Prompt Payment Act."

13         Section 5.  Subsections (2) and (3) of section 255.071,

14  Florida Statutes, are amended to read:

15         255.071  Payment of subcontractors, sub-subcontractors,

16  materialmen, and suppliers on construction contracts for

17  public projects.--

18         (2)  The failure to pay any undisputed obligations for

19  such labor, services, or materials within 30 days after the

20  date the labor, services, or materials were furnished and

21  payment for such labor, services, or materials became due, or

22  within 10 30 days after the date payment for such labor,

23  services, or materials is received, whichever last occurs,

24  shall entitle any person providing such labor, services, or

25  materials to the procedures specified in subsection (3) and

26  the remedies provided in subsection (4).

27         (3)  Any person providing labor, services, or materials

28  for the construction of a public building, for the prosecution

29  and completion of a public work, or for repairs upon a public

30  building or public work improvements to real property may file

31  a verified complaint alleging:

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 1         (a)  The existence of a contract for providing such

 2  labor, services, or materials to improve real property.

 3         (b)  A description of the labor, services, or materials

 4  provided and alleging that the labor, services, or materials

 5  were provided in accordance with the contract.

 6         (c)  The amount of the contract price.

 7         (d)  The amount, if any, paid pursuant to the contract.

 8         (e)  The amount that remains unpaid pursuant to the

 9  contract and the amount thereof that is undisputed.

10         (f)  That the undisputed amount has remained due and

11  payable pursuant to the contract for more than 30 days after

12  the date the labor or services were accepted or the materials

13  were received.

14         (g)  That the person against whom the complaint was

15  filed has received payment on account of the labor, services,

16  or materials described in the complaint more than 10 30 days

17  prior to the date the complaint was filed.

18         Section 6.  Section 255.072, Florida Statutes, is

19  created to read:

20         255.072  Definitions.--As used in ss. 255.073-255.078,

21  the term:

22         (1)  "Agent" means project architect, project engineer,

23  or any other agency or person acting on behalf of a public

24  entity.

25         (2)  "Construction services" means all labor, services,

26  and materials provided in connection with the construction,

27  alteration, repair, demolition, reconstruction, or any other

28  improvements to real property. The term "construction

29  services" does not include contracts or work performed for the

30  Department of Transportation.

31  

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 1         (3)  "Payment request" means an invoice or request for

 2  payment for construction services which conforms with all

 3  statutory requirements and with all requirements specified by

 4  the public entity to which the payment request is submitted.

 5         (4)  "Public entity" means the state, a state

 6  university, or any office, board, bureau, commission,

 7  department, branch, division, or institution thereof, or any

 8  project supported by state funds, but does not include a local

 9  government entity as defined in s. 218.72.

10         (5)  "Purchase" means the purchase of construction

11  services.

12         (6)  "Vendor" means any person providing construction

13  services directly to a public entity.

14         Section 7.  Section 255.073, Florida Statutes, is

15  created to read:

16         255.073  Timely payment for purchases of construction

17  services.--

18         (1)  Except as otherwise provided in ss.

19  255.072-255.078, s. 215.422 governs the timely payment for

20  construction services by a public entity under this act.

21         (2)  If a public entity disputes a portion of a payment

22  request, the undisputed portion must be timely paid, in

23  accordance with subsection (1).

24         (3)  When a vendor receives payment from a public

25  entity for labor, services, or materials furnished by

26  subcontractors and suppliers hired by the vendor, the vendor

27  shall remit payment due to those subcontractors and suppliers

28  within 10 days after the vendor's receipt of payment. When a

29  subcontractor receives payment from a vendor for labor,

30  services, or materials furnished by subcontractors and

31  suppliers hired by the subcontractor, the subcontractor shall

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 1  remit payment due to those subcontractors and suppliers within

 2  10 days after the subcontractor's receipt of payment. This

 3  subsection does not prohibit a vendor or subcontractor from

 4  disputing, pursuant to the terms of the relevant contract, all

 5  or any portion of a payment alleged to be due to another

 6  party. If such a dispute occurs, the vendor or subcontractor

 7  may withhold the disputed portion of any such payment if the

 8  vendor or subcontractor notifies the party whose payment is

 9  disputed, in writing, of the amount in dispute and the actions

10  required to cure the dispute. The vendor or subcontractor must

11  pay all undisputed amounts due within the time limits imposed

12  by this section.

13         (4)  All payments due under this section and not made

14  within the time periods specified by this section shall bear

15  interest at the rate of 1 percent per month, or the rate

16  specified by contract, whichever is greater.

17         Section 8.  Section 255.074, Florida Statutes, is

18  created to read:

19         255.074  Procedures for calculation of payment due

20  dates.--

21         (1)  Each public entity shall establish procedures

22  whereby each payment request received by the public entity is

23  marked as received on the date on which it is delivered to an

24  agent or employee of the public entity or of a facility or

25  office of the public entity.

26         (2)  If the terms under which a purchase is made allow

27  for partial deliveries and a payment request is submitted for

28  a partial delivery, the time for payment for the partial

29  delivery must be calculated from the time of the partial

30  delivery and the submission of the payment request in the same

31  manner as provided in s. 255.073.

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 1         (3)  The public entity must submit a payment request to

 2  the Chief Financial Officer for payment no more than 25 days

 3  after receipt of the payment request.

 4         Section 9.  Section 255.075, Florida Statutes, is

 5  created to read:

 6         255.075  Mandatory interest.--A contract between a

 7  public entity and a vendor or a provider of construction

 8  services may not prohibit the collection of late payment

 9  interest charges allowable under ss. 255.072-255.078.

10         Section 10.  Section 255.076, Florida Statutes, is

11  created to read:

12         255.076  Improper payment request; resolution of

13  disputes.--

14         (1)  If a vendor submits an improper payment request,

15  the public entity shall, within 10 days after receiving the

16  improper payment request, notify the vendor that the payment

17  request is improper and indicate what corrective action on the

18  part of the vendor is needed to make the payment request

19  proper.

20         (2)  If a dispute occurs between a vendor and a public

21  entity concerning payment of a payment request, the dispute

22  must be resolved as provided in this section. Each public

23  entity shall establish a dispute resolution procedure to be

24  followed by the public entity if such a dispute occurs. The

25  procedure must provide that proceedings to resolve the dispute

26  must commence not later than 45 days after the date on which

27  the public entity received the payment request and must

28  conclude by final decision of the public entity not later than

29  60 days after the date on which the public entity received the

30  payment request. Such procedures are not subject to chapter

31  120 and do not constitute an administrative proceeding that

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 1  prohibits a court from deciding de novo any action arising out

 2  of the dispute. If the dispute is resolved in favor of the

 3  public entity, interest charges begin to accrue 15 days after

 4  the public entity's final decision. If the dispute is resolved

 5  in favor of the vendor, interest begins to accrue as of the

 6  original date the payment became due.

 7         (3)  In an action to recover amounts due under ss.

 8  255.072-255.078, the court shall award court costs and

 9  reasonable attorney's fees, including fees incurred through

10  any appeal, to the prevailing party, if the court finds that

11  the nonprevailing party withheld any portion of the payment

12  that is the subject of the action without any reasonable basis

13  in law or fact to dispute the prevailing party's claim to

14  those amounts.

15         Section 11.  Section 255.077, Florida Statutes, is

16  created to read:

17         255.077  Project closeout and payment of retainage.--

18         (1)  Each contract for construction services between a

19  public entity and a vendor must provide for the development of

20  a list of items required to render complete, satisfactory, and

21  acceptable the construction services purchased by the public

22  entity. The contract must specify the process for the

23  development of the list, including the respective

24  responsibilities of the public entity and the vendor in

25  developing and reviewing the list. The list must be developed

26  within 30 days after substantial completion of the

27  construction services purchased, as defined in the contract,

28  or, if not defined in the contract, within 30 days after

29  beneficial occupancy or use of the project.

30         (2)  If the contract between the public entity and the

31  vendor relates to the purchase of construction services on

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 1  more than one building or structure or involves a multiphased

 2  project, the contract must provide for the development of a

 3  list of items required to render complete, satisfactory, and

 4  acceptable the construction services purchased for each

 5  building, structure, or phase of the project. Each list must

 6  be developed within 30 days after substantial completion of

 7  the construction services purchased, as defined in the

 8  contract, for each building, structure, or phase of the

 9  project, or, if not defined in the contract, within 30 days

10  after beneficial occupancy or use of each building, structure,

11  or phase of the project.

12         (3)  The failure to include any corrective work or

13  pending items not yet completed on the list developed under

14  this section does not alter the responsibility of the vendor

15  to complete all the purchased construction services as defined

16  in the contract.

17         (4)  Upon completion of all items on the list, or at

18  such other time as defined in the contract, the vendor may

19  submit a payment request for the appropriate amount of

20  retainage. The public entity may withhold an amount not to

21  exceed 150 percent of the total costs to complete any

22  incomplete items on the list.

23         (5)  All items that require correction under the

24  contract and that are identified after the preparation and

25  delivery of the list remain the obligation of the vendor as

26  defined by the contract.

27         (6)  Warranty items may not affect the final payment of

28  retainage as provided in this section or as provided in the

29  contract between the vendor and its subcontractors and

30  suppliers.

31  

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 1         (7)  Retainage may not be held by a public entity or a

 2  vendor to secure payment of insurance premiums under a

 3  consolidated insurance program or series of insurance policies

 4  issued to a public agency or a contractor for a project or

 5  group of projects, and the final payment of retainage as

 6  provided in this section may not be delayed pending a final

 7  audit by the public entity's or vendor's insurance provider.

 8         (8)  If a public entity fails to comply with its

 9  responsibilities to develop the list required under subsection

10  (1) or subsection (2), the vendor may submit a payment request

11  for the appropriate amount of retainage. The public entity

12  need not pay or process any request for payment of retainage

13  if the vendor has, in whole or in part, failed to cooperate

14  with the public entity in the development of the list or

15  failed to perform its contractual responsibilities, if any,

16  with regard to the development of the list.

17         Section 12.  Section 255.078, Florida Statutes, is

18  created to read:

19         255.078  Public construction retainage.--

20         (1)  In any public construction project that is subject

21  to ss. 255.072-255.078, a public entity may withhold an amount

22  not exceeding 10 percent of each progress payment made to the

23  vendor until the project has reached 50-percent completion.

24  After the project has reached 50-percent completion, the

25  public entity must reduce to 5 percent the amount of retainage

26  withheld from each subsequent progress payment made to the

27  vendor. As used in this section, the term "50-percent

28  completion" means as defined in the contract between the

29  public entity and the vendor, or, if not defined in the

30  contract, the point at which the public entity has expended 50

31  percent of the amount of the total project costs identified in

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 1  the contract, plus all change orders and other additions

 2  issued after the approval of the contract by the public

 3  entity, and the level of actual project construction is

 4  equivalent to such expenditure of funds.

 5         (2)  After the project has reached 50-percent

 6  completion, the vendor may present to the public entity a

 7  payment request for up to one-half of the retainage amount

 8  held by the public entity. The public entity shall promptly

 9  make payment to the vendor unless the public entity has

10  grounds, under the contract or as provided in subsection (4),

11  for withholding the payment of retainage. If the public entity

12  makes payment of retainage to the vendor under this

13  subsection, the vendor shall timely remit payment of such

14  retainage to the appropriate subcontractors and suppliers.

15         (3)  After the project has reached 50-percent

16  completion, the vendor may elect to withhold retainage from

17  payments to its subcontractors at a rate higher than 5

18  percent. The specific amount to be withheld must be determined

19  on a case-by-case basis and must be based on the vendor's

20  assessment of the subcontractor's past performance, the

21  likelihood that such performance will continue, and the

22  vendor's ability to rely on other safeguards. The vendor shall

23  notify the subcontractor, in writing, of its determination to

24  withhold more than 5 percent of the progress payment and the

25  reasons for making that determination, and the vendor may not

26  request the release of such withheld funds from the public

27  entity.

28         (4)  This section does not require the public entity to

29  pay or release any amounts that are the subject of a

30  good-faith dispute, the subject of an action brought under s.

31  

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 1  255.05, or otherwise the subject of a claim or demand by the

 2  public entity or vendor.

 3         (5)  The timeframes set forth in ss. 255.072-255.076

 4  for payment of payment requests apply to any payment request

 5  for retainage made pursuant to this section.

 6         Section 13.  Paragraph (a) of subsection (2) of section

 7  255.05, Florida Statutes, is amended, and subsections (10) and

 8  (11) are added to that section, to read:

 9         255.05  Bond of contractor constructing public

10  buildings; form; action by materialmen.--

11         (2)(a)1.  If a claimant is no longer furnishing labor,

12  services, or materials on a project, a contractor or the

13  contractor's agent or attorney may elect to shorten the

14  prescribed time in this paragraph within which an action to

15  enforce any claim against a payment bond provided pursuant to

16  this section may be commenced by recording in the clerk's

17  office a notice in substantially the following form:

18  

19                    NOTICE OF CONTEST OF CLAIM

20                       AGAINST PAYMENT BOND

21  

22  To: ...(Name and address of claimant)...

23  

24         You are notified that the undersigned contests your

25  notice of nonpayment, dated ............, ........, and served

26  on the undersigned on ............, ........, and that the

27  time within which you may file suit to enforce your claim is

28  limited to 60 days after the date of service of this notice.

29  

30         DATED on ............, .........

31  

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    Florida Senate - 2004                                   SB 544
    21-239C-04




 1  Signed:...(Contractor or Attorney)...

 2  

 3  The claim of any claimant upon whom such notice is served and

 4  who fails to institute a suit to enforce his or her claim

 5  against the payment bond within 60 days after service of such

 6  notice shall be extinguished automatically. The clerk shall

 7  mail a copy of the notice of contest to the claimant at the

 8  address shown in the notice of nonpayment or most recent

 9  amendment thereto and shall certify to such service on the

10  face of such notice and record the notice. Service is complete

11  upon mailing.

12         2.  A claimant, except a laborer, who is not in privity

13  with the contractor shall, before commencing or not later than

14  45 days after commencing to furnish labor, materials, or

15  supplies for the prosecution of the work, furnish the

16  contractor with a notice that he or she intends to look to the

17  bond for protection. A claimant who is not in privity with the

18  contractor and who has not received payment for his or her

19  labor, materials, or supplies shall deliver to the contractor

20  and to the surety written notice of the performance of the

21  labor or delivery of the materials or supplies and of the

22  nonpayment. The notice of nonpayment may be served at any time

23  during the progress of the work or thereafter but not before

24  45 days after the first furnishing of labor, services, or

25  materials, and not later than 90 days after the final

26  furnishing of the labor, services, or materials by the

27  claimant or, with respect to rental equipment, not later than

28  90 days after the date that the rental equipment was last on

29  the job site available for use. Any notice of nonpayment

30  served by a claimant who is not in privity with the contractor

31  which includes sums for retainage must specify the portion of

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    Florida Senate - 2004                                   SB 544
    21-239C-04




 1  the amount claimed for retainage. No action for the labor,

 2  materials, or supplies may be instituted against the

 3  contractor or the surety unless both notices have been given.

 4  Notices required or permitted under this section may be served

 5  in accordance with s. 713.18. An action, except for an action

 6  exclusively for recovery of retainage, must be instituted

 7  against the contractor or the surety on the payment bond or

 8  the payment provisions of a combined payment and performance

 9  bond within 1 year after the performance of the labor or

10  completion of delivery of the materials or supplies. An action

11  exclusively for recovery of retainage must be instituted

12  against the contractor or the surety within 1 year after the

13  performance of the labor or completion of delivery of the

14  materials or supplies, or within 90 days after receipt of

15  final payment (or the payment estimate containing the owner's

16  final reconciliation of quantities if no further payment is

17  earned and due as a result of deductive adjustments) by the

18  contractor or surety, whichever comes last. A claimant may not

19  waive in advance his or her right to bring an action under the

20  bond against the surety. In any action brought to enforce a

21  claim against a payment bond under this section, the

22  prevailing party is entitled to recover a reasonable fee for

23  the services of his or her attorney for trial and appeal or

24  for arbitration, in an amount to be determined by the court,

25  which fee must be taxed as part of the prevailing party's

26  costs, as allowed in equitable actions. The time periods for

27  service of a notice of nonpayment or for bringing an action

28  against a contractor or a surety shall be measured from the

29  last day of furnishing labor, services, or materials by the

30  claimant and shall not be measured by other standards, such as

31  

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    Florida Senate - 2004                                   SB 544
    21-239C-04




 1  the issuance of a certificate of occupancy or the issuance of

 2  a certificate of substantial completion.

 3         (10)  Notwithstanding any other provision of law to the

 4  contrary, a claimant may not institute an action for the sole

 5  purpose of recovery of retainage against the contractor or

 6  against the surety issuing a payment or performance bond

 7  pursuant to this section until:

 8         (a)  The public entity has paid out that retainage to

 9  the contractor and the time provided under ss. 218.70-218.76

10  or ss. 255.072-255.078 for payment of that retainage to the

11  claimant has expired;

12         (b)  The claimant has completed all work required under

13  its contract and 90 days have passed since the owner's receipt

14  of the contractor's last payment request; or

15         (c)  The claimant has made the written request to the

16  owner provided in subsection (11) and has not timely received

17  the requested information from the owner.

18         (11)  An owner shall furnish in writing to a claimant

19  who has provided labor, services, or materials to a project,

20  within 5 business days after receipt of a written request from

21  that claimant, the following information:

22         (a)  The dates of all payment requests received by the

23  owner from the contractor.

24         (b)  The dates of all payments made by the owner to the

25  contractor.

26         (c)  Whether the owner has received the contractor's

27  final payment request and, if so, the date the final payment

28  request was submitted by the contractor to the owner.

29         Section 14.  Section 725.09, Florida Statutes, is

30  created to read:

31  

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    Florida Senate - 2004                                   SB 544
    21-239C-04




 1         725.09  Construction contracts; contingent payment

 2  provisions.--An entity may not enter into a contract for the

 3  purchase of construction materials or services which

 4  conditions payment for such materials or services on the

 5  receipt of payment from any other entity. Any such conditional

 6  payment provision is void as a violation of the public policy

 7  of this state.

 8         Section 15.  This act shall take effect July 1, 2004.

 9  

10            *****************************************

11                          SENATE SUMMARY

12    Creates the "Local Government Prompt Payment Act."
      Redefines terms used in part VII of ch. 218, F.S. Revises
13    provisions relating to timely payment for purchases of
      construction services. Revises deadlines for payment.
14    Provides procedures for project closeout and payment of
      retainage. Provides requirements for local government
15    construction retainage. Provides that ss. 218.72-218.76,
      F.S., apply to the payment of any payment request for
16    retainage. Creates the "Florida Prompt Payment Act."
      Revises deadlines for the payment of subcontractors,
17    sub-subcontractors, materialmen, and suppliers on
      construction contracts for public projects. Provides
18    definitions. Provides for timely payment for purchases of
      construction services by a public entity. Provides
19    procedures for calculating payment due dates. Provides
      procedures for handling improper payment requests.
20    Provides for the resolution of disputes. Provides for
      project closeout and payment of retainage. Provides for
21    public-construction retainage. Provides that ss.
      255.072-255.076, F.S., apply to the payment of any
22    payment request for retainage. Provides requirements for
      certain notices of nonpayment served by a claimant who is
23    not in privity with the contractor. Provides limitations
      on a claimant's institution of certain actions against a
24    contractor or surety. Provides for certain notices to the
      claimant. Prohibits the inclusion in a contract for the
25    purchase of construction materials or services a
      provision that conditions payment for such materials or
26    services on the receipt of payment from any other entity.

27  

28  

29  

30  

31  

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