September 26, 2020
Print This PagePrint This Page

  *
Session:
Bill #:
Session:
Chamber: View Search Tips
Search Term:
Year: View Search Tips
Search Term:
Senate Bill 0544

Senate Bill sb0544c1

CODING: Words stricken are deletions; words underlined are additions.
    Florida Senate - 2004                            CS for SB 544

    By the Committee on Comprehensive Planning; and Senator
    Bennett




    316-2030-04

  1                      A bill to be entitled

  2         An act relating to prompt payment for

  3         construction services; amending s. 218.70,

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

  5         218.72, F.S.; redefining terms used in part VII

  6         of ch. 218, F.S.; amending s. 218.735, F.S.;

  7         revising provisions relating to timely payment

  8         for purchases of construction services;

  9         revising deadlines for payment; providing

10         procedures for project closeout and payment of

11         retainage; providing requirements for local

12         government construction retainage; providing

13         that ss. 218.72-218.76, F.S., apply to the

14         payment of any payment request for retainage;

15         creating s. 255.0705, F.S.; providing a short

16         title; amending s. 255.071, F.S.; revising

17         deadlines for the payment of subcontractors,

18         sub-subcontractors, materialmen, and suppliers

19         on construction contracts for public projects;

20         creating ss. 255.072, 255.073, 255.074,

21         255.075, 255.076, 255.077, and 255.078, F.S.;

22         providing definitions; providing for timely

23         payment for purchases of construction services

24         by a public entity; providing procedures for

25         calculating payment due dates; providing

26         procedures for handling improper payment

27         requests; providing for the resolution of

28         disputes; providing for project closeout and

29         payment of retainage; providing that ss.

30         255.072-255.076, F.S., apply to the payment of

31         any payment request for retainage; amending s.

                                  1

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






    Florida Senate - 2004                            CS for SB 544
    316-2030-04




 1         255.05, F.S.; providing requirements for

 2         certain notices of nonpayment served by a

 3         claimant who is not in privity with the

 4         contractor; providing limitations on a

 5         claimant's institution of certain actions

 6         against a contractor or surety; amending s.

 7         95.11, F.S., to conform a cross-reference;

 8         providing an effective date.

 9  

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

11  

12         Section 1.  Section 218.70, Florida Statutes, is

13  amended to read:

14         218.70  Popular name Short title.--This part may be

15  cited as the "Local Government Florida Prompt Payment Act."

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

17  218.72, Florida Statutes, are amended, and subsection (10) is

18  added to that section, to read:

19         218.72  Definitions.--As used in this part:

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

21  municipal government, district, authority, school board,

22  school district, authority, special taxing district, other

23  political subdivision or separate unit of local government

24  created or established pursuant to law, community college, or

25  any office, board, bureau, commission, department, branch,

26  division, or institution thereof or any project supported by

27  county or municipal funds.

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

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

30  property directly to a local governmental entity. The term

31  includes any person who provides waste-hauling services to

                                  2

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






    Florida Senate - 2004                            CS for SB 544
    316-2030-04




 1  residents or businesses located within the boundaries of a

 2  local government pursuant to a contract or local ordinance.

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

 4  and materials provided in connection with the construction,

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

 6  improvements to real property that require a license under

 7  parts I and II of chapter 489.

 8         (10)  "Contractor" or "provider of construction

 9  services" means any person who contracts directly with a local

10  governmental entity to provide construction services.

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

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

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

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

15         218.735  Timely payment for purchases of construction

16  services.--

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

18  governmental entity for labor, services, or materials

19  furnished by subcontractors and suppliers hired by the

20  contractor, the contractor shall remit payment due to those

21  subcontractors and suppliers within 10 15 days after the

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

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

24  furnished by subcontractors and suppliers hired by the

25  subcontractor, the subcontractor shall remit payment due to

26  those subcontractors and suppliers within 7 15 days after the

27  subcontractor's receipt of payment. Nothing herein shall

28  prohibit a contractor or subcontractor from disputing,

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

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

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

                                  3

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






    Florida Senate - 2004                            CS for SB 544
    316-2030-04




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

 2  contractor or subcontractor notifies the party whose payment

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

 4  actions required to cure the dispute. The contractor or

 5  subcontractor must pay all undisputed amounts due within the

 6  time limits imposed by this section.

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

 8  a local governmental entity and a contractor must provide for

 9  the development of a list of items required to render

10  complete, satisfactory, and acceptable all the construction

11  services purchased pursuant to the contract. The contract must

12  specify the process for the development of the list, including

13  the respective responsibilities of the local governmental

14  entity and the contractor in developing and reviewing the

15  list. The list must be completed within 30 days after the

16  earliest of the following:

17         1.  Issuance of a temporary or final certificate of

18  occupancy, if applicable;

19         2.  Substantial completion of the construction services

20  purchased, as defined in the contract; or

21         3.  Beneficial occupancy or use of the improvement that

22  is the subject of the construction services purchased, as

23  defined in the contract.

24  

25  For construction projects with an estimated cost of $10

26  million or more, the deadline for completion of the list may

27  be extended for up to 15 additional days if provided for in

28  the contract.

29         (b)  If the contract between the local governmental

30  entity and the contractor relates to the purchase of

31  construction services on more than one building or structure,

                                  4

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






    Florida Senate - 2004                            CS for SB 544
    316-2030-04




 1  or involves a multiphased project, the contract shall provide

 2  for the development of a list of items required to render

 3  complete, satisfactory, and acceptable all the construction

 4  services purchased pursuant to the contract for each building,

 5  structure, or phase of the project within the time limitations

 6  provided in paragraph (a).

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

 8  pending items not yet completed on the list developed pursuant

 9  to this subsection does not alter the responsibility of the

10  contractor to complete all the construction services purchased

11  pursuant to the contract.

12         (d)  Upon completion of all items on the list, the

13  contractor may submit a payment request for all remaining

14  retainage withheld by the local governmental entity pursuant

15  to this section. If a good-faith dispute exists as to whether

16  one or more items identified on the list have been completed

17  pursuant to the contract, the local governmental entity may

18  continue to withhold an amount not to exceed 150 percent of

19  the total costs to complete such items.

20         (e)  All items that require correction under the

21  contract and that are identified after the preparation and

22  delivery of the list remain the obligation of the contractor

23  as defined by the contract.

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

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

26  contract between the contractor and its subcontractors and

27  suppliers.

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

29  entity or a contractor to secure payment of insurance premiums

30  under a consolidated insurance program or series of insurance

31  policies issued to a local governmental entity or a contractor

                                  5

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






    Florida Senate - 2004                            CS for SB 544
    316-2030-04




 1  for a project or group of projects, and the final payment of

 2  retainage as provided in this section may not be delayed

 3  pending a final audit by the local governmental entity's or

 4  contractor's insurance provider.

 5         (h)  If a local governmental entity fails to comply

 6  with its responsibilities to develop the list required under

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

 8  within the time limitations provided in paragraph (a), the

 9  contractor may submit a payment request for all remaining

10  retainage withheld by the local governmental entity pursuant

11  to this section. The local governmental entity need not pay or

12  process any payment request for retainage if the contractor

13  has, in whole or in part, failed to cooperate with the local

14  governmental entity in the development of the list or failed

15  to perform its contractual responsibilities, if any, with

16  regard to the development of the list or if paragraph (8)(f)

17  applies.

18         (8)(a)  With regard to any contract for construction

19  services, a local governmental entity may withhold from each

20  progress payment made to the contractor an amount not

21  exceeding 10 percent of the payment as retainage to ensure the

22  satisfactory completion of the construction services purchased

23  pursuant to the contract until 50-percent completion of such

24  services.

25         (b)  After 50-percent completion of the construction

26  services purchased pursuant to the contract, the local

27  governmental entity must reduce to 5 percent the amount of

28  retainage withheld from each subsequent progress payment made

29  to the contractor. For purposes of this subsection, the term

30  "50-percent completion" has the meaning set forth in the

31  contract between the local governmental entity and the

                                  6

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






    Florida Senate - 2004                            CS for SB 544
    316-2030-04




 1  contractor, or, if not defined in the contract, the point at

 2  which the local governmental entity has expended 50 percent of

 3  the total project cost identified in the contract together

 4  with all costs associated with existing change orders and

 5  other additions or modifications to the construction services

 6  provided for in the contract. However, notwithstanding this

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

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

 9  withhold retainage in an amount not exceeding 10 percent of

10  each progress payment made to the contractor until final

11  completion and acceptance of the project by the local

12  governmental entity.

13         (c)  After 50-percent completion of the construction

14  services purchased pursuant to the contract, the contractor

15  may elect to withhold retainage from payments to its

16  subcontractors at a rate higher than 5 percent. The specific

17  amount to be withheld must be determined on a case-by-case

18  basis and must be based on the contractor's assessment of the

19  subcontractor's past performance, the likelihood that such

20  performance will continue, and the contractor's ability to

21  rely on other safeguards. The contractor shall notify the

22  subcontractor, in writing, of its determination to withhold

23  more than 5 percent of the progress payment and the reasons

24  for making that determination, and the contractor may not

25  request the release of such retained funds from the local

26  governmental entity.

27         (d)  After 50-percent completion of the construction

28  services purchased pursuant to the contract, the contractor

29  may present to the local governmental entity a payment request

30  for up to one-half of the retainage held by the local

31  governmental entity. The local governmental entity shall

                                  7

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






    Florida Senate - 2004                            CS for SB 544
    316-2030-04




 1  promptly make payment to the contractor, unless the local

 2  governmental entity has grounds, pursuant to paragraph (f),

 3  for withholding the payment of retainage. If the local

 4  governmental entity makes payment of retainage to the

 5  contractor under this paragraph which is attributable to the

 6  labor, services, or materials supplied by one or more

 7  subcontractors or suppliers, the contractor shall timely remit

 8  payment of such retainage to those subcontractors and

 9  suppliers.

10         (e)  This section does not prohibit a local

11  governmental entity from withholding retainage at a rate less

12  than 10 percent of each progress payment, from incrementally

13  reducing the rate of retainage pursuant to a schedule provided

14  for in the contract, or from releasing at any point all or a

15  portion of any retainage withheld by the local governmental

16  entity which is attributable to the labor, services, or

17  materials supplied by the contractor or by one or more

18  subcontractors or suppliers. If a local governmental entity

19  makes any payment of retainage to the contractor which is

20  attributable to the labor, services, or materials supplied by

21  one or more subcontractors or suppliers, the contractor shall

22  timely remit payment of such retainage to those subcontractors

23  and suppliers.

24         (f)  This section does not require the local

25  governmental entity to pay or release any amounts that are the

26  subject of a good-faith dispute, the subject of an action

27  brought pursuant to s. 255.05, or otherwise the subject of a

28  claim or demand by the local governmental entity or

29  contractor.

30  

31  

                                  8

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






    Florida Senate - 2004                            CS for SB 544
    316-2030-04




 1         (g)  The time limitations set forth in this section for

 2  payment of payment requests apply to any payment request for

 3  retainage made pursuant to this section.

 4         Section 4.  Section 255.0705, Florida Statutes, is

 5  created to read:

 6         255.0705  Popular name.--Sections 255.0705-255.078 may

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

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

 9  Florida Statutes, are amended to read:

10         255.071  Payment of subcontractors, sub-subcontractors,

11  materialmen, and suppliers on construction contracts for

12  public projects.--

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

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

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

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

17  within the time limitations set forth in s. 255.073(3) 30 days

18  after the date payment for such labor, services, or materials

19  is received, whichever last occurs, shall entitle any person

20  providing such labor, services, or materials to the procedures

21  specified in subsection (3) and the remedies provided in

22  subsection (4).

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

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

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

26  building or public work improvements to real property may file

27  a verified complaint alleging:

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

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

30  

31  

                                  9

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






    Florida Senate - 2004                            CS for SB 544
    316-2030-04




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

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

 3  were provided in accordance with the contract.

 4         (c)  The amount of the contract price.

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

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

 7  contract and the amount thereof that is undisputed.

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

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

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

11  were received.

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

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

14  or materials described in the complaint and, as of the date

15  the complaint was filed, has failed to make payment within the

16  time limitations set forth in s. 255.073(3) more than 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  

                                  10

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






    Florida Senate - 2004                            CS for SB 544
    316-2030-04




 1         (3)  "Contractor" means any person who contracts

 2  directly with a public entity to provide construction

 3  services.

 4         (4)  "Payment request" means a request for payment for

 5  construction services which conforms with all statutory

 6  requirements and with all requirements specified by the public

 7  entity to which the payment request is submitted.

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

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

10  department, branch, division, or institution thereof, but does

11  not include a local governmental entity as defined in s.

12  218.72.

13         (6)  "Purchase" means the purchase of construction

14  services.

15         Section 7.  Section 255.073, Florida Statutes, is

16  created to read:

17         255.073  Timely payment for purchases of construction

18  services.--

19         (1)  Except as otherwise provided in ss.

20  255.072-255.078, s. 215.422 governs the timely payment for

21  construction services by a public entity.

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

23  request, the undisputed portion must be timely paid.

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

25  entity for labor, services, or materials furnished by

26  subcontractors and suppliers hired by the contractor, the

27  contractor shall remit payment due to those subcontractors and

28  suppliers within 10 days after the contractor's receipt of

29  payment. When a subcontractor receives payment from a

30  contractor for labor, services, or materials furnished by

31  subcontractors and suppliers hired by the subcontractor, the

                                  11

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






    Florida Senate - 2004                            CS for SB 544
    316-2030-04




 1  subcontractor shall remit payment due to those subcontractors

 2  and suppliers within 7 days after the subcontractor's receipt

 3  of payment. This subsection does not prohibit a contractor or

 4  subcontractor from disputing, pursuant to the terms of the

 5  relevant contract, all or any portion of a payment alleged to

 6  be due to another party if the contractor or subcontractor

 7  notifies the party whose payment is disputed, in writing, of

 8  the amount in dispute and the actions required to cure the

 9  dispute. The contractor or subcontractor must pay all

10  undisputed amounts due within the time limits imposed by this

11  subsection.

12         (4)  All payments due for the purchase of construction

13  services and not made within the applicable time limits shall

14  bear interest at the rate of 1 percent per month, or the rate

15  specified by contract, whichever is greater.

16         Section 8.  Section 255.074, Florida Statutes, is

17  created to read:

18         255.074  Procedures for calculation of payment due

19  dates.--

20         (1)  Each public entity shall establish procedures

21  whereby each payment request received by the public entity is

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

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

24  office of the public entity.

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

26  for partial deliveries and a payment request is submitted for

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

28  delivery must be calculated from the time of the partial

29  delivery and the submission of the payment request.

30  

31  

                                  12

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






    Florida Senate - 2004                            CS for SB 544
    316-2030-04




 1         (3)  A 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 contractor may not prohibit the collection

 8  of late payment interest charges authorized under s.

 9  255.073(4).

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 contractor submits an improper payment

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

16  receiving the improper payment request, notify the contractor

17  that the payment request is improper and indicate what

18  corrective action on the part of the contractor is needed to

19  make the payment request proper.

20         (2)  If a dispute occurs between a contractor and a

21  public entity concerning payment of a payment request, the

22  dispute must be submitted to a dispute resolution process

23  established by the public entity for this purpose. Under such

24  a process, proceedings to resolve the dispute must commence

25  not later than 45 days after the date on which the public

26  entity received the payment request and must conclude by final

27  decision of the public entity not later than 60 days after the

28  date on which the public entity received the payment request.

29  Such a dispute resolution process is not subject to chapter

30  120 and does not constitute an administrative proceeding that

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

                                  13

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






    Florida Senate - 2004                            CS for SB 544
    316-2030-04




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

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

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

 4  in favor of the contractor, interest begins to accrue as of

 5  the original date the payment became due.

 6         (3)  In an action to recover amounts due for

 7  construction services purchased by a public entity, the court

 8  shall award court costs and reasonable attorney's fees,

 9  including fees incurred through any appeal, to the prevailing

10  party, if the court finds that the nonprevailing party

11  withheld any portion of the payment that is the subject of the

12  action without any reasonable basis in law or fact to dispute

13  the prevailing party's claim to those amounts.

14         Section 11.  Section 255.077, Florida Statutes, is

15  created to read:

16         255.077  Project closeout and payment of retainage.--

17         (1)  Each contract for construction services between a

18  public entity and a contractor must provide for the

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

20  satisfactory, and acceptable all the construction services

21  purchased pursuant to the contract. The contract must specify

22  the process for the development of the list, including

23  responsibilities of the public entity and the contractor in

24  developing and reviewing the list. The list must be completed

25  within 30 days after the earliest of the following:

26         1.  Issuance of a temporary or final certificate of

27  occupancy, if applicable;

28         2.  Substantial completion of the construction services

29  purchased, as defined in the contract; or

30  

31  

                                  14

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






    Florida Senate - 2004                            CS for SB 544
    316-2030-04




 1         3.  Beneficial occupancy or use of the improvement that

 2  is the subject of the construction services purchased, as

 3  defined in the contract.

 4  

 5  For construction projects with an estimated cost of $10

 6  million or more, the deadline for completion of the list may

 7  be extended for up to 15 additional days if provided for in

 8  the contract.

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

10  contractor relates to the purchase of construction services on

11  more than one building or structure, or involves a multiphased

12  project, the contract shall provide for the development of a

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

14  acceptable all the construction services purchased pursuant to

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

16  project within the time limitations provided in subsection

17  (1).

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

19  pending items not yet completed on the list developed pursuant

20  to subsection (1) or subsection (2) does not alter the

21  responsibility of the contractor to complete all the

22  construction services purchased pursuant to the contract.

23         (4)  Upon completion of all items on the list, the

24  contractor may submit a payment request for all remaining

25  retainage withheld by the public entity pursuant to s.

26  255.078. If a good-faith dispute exists as to whether one or

27  more items identified on the list have been completed pursuant

28  to the contract, the public entity may continue to withhold an

29  amount not to exceed 150 percent of the total costs to

30  complete such items.

31  

                                  15

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






    Florida Senate - 2004                            CS for SB 544
    316-2030-04




 1         (5)  All items that require correction under the

 2  contract and that are identified after the preparation and

 3  delivery of the list remain the obligation of the contractor

 4  as defined by the contract.

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

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

 7  contract between the contractor and its subcontractors and

 8  suppliers.

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

10  contractor to secure payment of insurance premiums under a

11  consolidated insurance program or series of insurance policies

12  issued to a public entity or a contractor for a project or

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

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

15  audit by the public entity's or contractor's insurance

16  provider.

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

18  responsibilities to develop the list required under subsection

19  (1) or subsection (2), as defined in the contract, within the

20  time limitations provided in subsection (1), the contractor

21  may submit a payment request for all remaining retainage

22  withheld by the public entity pursuant to s. 255.078. The

23  public entity need not pay or process any payment request for

24  retainage if the contractor has, in whole or in part, failed

25  to cooperate with the public entity in the development of the

26  list or failed to perform its contractual responsibilities, if

27  any, with regard to the development of the list or if s.

28  255.078(6) applies.

29         Section 12.  Section 255.078, Florida Statutes, is

30  created to read:

31         255.078  Public construction retainage.--

                                  16

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






    Florida Senate - 2004                            CS for SB 544
    316-2030-04




 1         (1)  With regard to any contract for construction

 2  services, a public entity may withhold from each progress

 3  payment made to the contractor an amount not exceeding 10

 4  percent of the payment as retainage to ensure the satisfactory

 5  completion of the construction services purchased pursuant to

 6  the contract until 50-percent completion of such services.

 7         (2)  After 50-percent completion of the construction

 8  services purchased pursuant to the contract, the public entity

 9  must reduce to 5 percent the amount of retainage withheld from

10  each subsequent progress payment made to the contractor. For

11  purposes of this section, the term "50-percent completion" has

12  the meaning set forth in the contract between the public

13  entity and the contractor, or, if not defined in the contract,

14  the point at which the public entity has expended 50 percent

15  of the total project cost identified in the contract together

16  with all costs associated with existing change orders and

17  other additions or modifications to the construction services

18  provided for in the contract.

19         (3)  After 50-percent completion of the construction

20  services purchased pursuant to the contract, the contractor

21  may elect to withhold retainage from payments to its

22  subcontractors at a rate higher than 5 percent. The specific

23  amount to be withheld must be determined on a case-by-case

24  basis and must be based on the contractor's assessment of the

25  subcontractor's past performance, the likelihood that such

26  performance will continue, and the contractor's ability to

27  rely on other safeguards. The contractor shall notify the

28  subcontractor, in writing, of its determination to withhold

29  more than 5 percent of the progress payment and the reasons

30  for making that determination, and the contractor may not

31  

                                  17

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






    Florida Senate - 2004                            CS for SB 544
    316-2030-04




 1  request the release of such retained funds from the public

 2  entity.

 3         (4)  After 50-percent completion of the construction

 4  services purchased pursuant to the contract, the contractor

 5  may present to the public entity a payment request for up to

 6  one-half of the retainage held by the public entity. The

 7  public entity shall promptly make payment to the contractor,

 8  unless the public entity has grounds, pursuant to subsection

 9  (6), for withholding the payment of retainage. If the public

10  entity makes payment of retainage to the contractor under this

11  subsection which is attributable to the labor, services, or

12  materials supplied by one or more subcontractors or suppliers,

13  the contractor shall timely remit payment of such retainage to

14  those subcontractors and suppliers.

15         (5)  Neither this section nor s. 255.077 prohibits a

16  public entity from withholding retainage at a rate less than

17  10 percent of each progress payment, from incrementally

18  reducing the rate of retainage pursuant to a schedule provided

19  for in the contract, or from releasing at any point all or a

20  portion of any retainage withheld by the public entity which

21  is attributable to the labor, services, or materials supplied

22  by the contractor or by one or more subcontractors or

23  suppliers.  If a public entity makes any payment of retainage

24  to the contractor which is attributable to the labor,

25  services, or materials supplied by one or more subcontractors

26  or suppliers, the contractor shall timely remit payment of

27  such retainage to those subcontractors and suppliers.

28         (6)  Neither this section nor s. 255.077 requires the

29  public entity to pay or release any amounts that are the

30  subject of a good-faith dispute, the subject of an action

31  

                                  18

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






    Florida Senate - 2004                            CS for SB 544
    316-2030-04




 1  brought pursuant to s. 255.05, or otherwise the subject of a

 2  claim or demand by the public entity or contractor.

 3         (7)  The same time limits for payment of a payment

 4  request apply regardless of whether the payment request is

 5  for, or includes, retainage.

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

 7  subsection (4) of section 255.05, Florida Statutes, are

 8  amended, and subsection (10) is added to that section, to

 9  read:

10         255.05  Bond of contractor constructing public

11  buildings; form; action by materialmen.--

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

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

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

15  prescribed time in this paragraph within which an action to

16  enforce any claim against a payment bond provided pursuant to

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

18  office a notice in substantially the following form:

19  

20                    NOTICE OF CONTEST OF CLAIM

21                       AGAINST PAYMENT BOND

22  

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

24  

25         You are notified that the undersigned contests your

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

27  on the undersigned on ............, ........, and that the

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

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

30  

31         DATED on ............, .........

                                  19

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






    Florida Senate - 2004                            CS for SB 544
    316-2030-04




 1  

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

 3  

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

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

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

 7  notice shall be extinguished automatically. The clerk shall

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

 9  address shown in the notice of nonpayment or most recent

10  amendment thereto and shall certify to such service on the

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

12  upon mailing.

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

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

15  45 days after commencing to furnish labor, materials, or

16  supplies for the prosecution of the work, furnish the

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

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

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

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

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

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

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

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

25  45 days after the first furnishing of labor, services, or

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

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

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

29  90 days after the date that the rental equipment was last on

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

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

                                  20

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






    Florida Senate - 2004                            CS for SB 544
    316-2030-04




 1  which includes sums for retainage must specify the portion of

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

 3  materials, or supplies may be instituted against the

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

 5  Notices required or permitted under this section may be served

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

 7  exclusively for recovery of retainage, must be instituted

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

 9  the payment provisions of a combined payment and performance

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

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

12  exclusively for recovery of retainage must be instituted

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

14  performance of the labor or completion of delivery of the

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

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

17  final reconciliation of quantities if no further payment is

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

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

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

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

22  claim against a payment bond under this section, the

23  prevailing party is entitled to recover a reasonable fee for

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

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

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

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

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

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

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

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

                                  21

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






    Florida Senate - 2004                            CS for SB 544
    316-2030-04




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

 2  a certificate of substantial completion.

 3         (4)  The payment provisions of all bonds furnished for

 4  public work contracts described in subsection (1) shall,

 5  regardless of form, be construed and deemed statutory bond

 6  provisions, subject to all requirements of subsections

 7  subsection (2) and (10).

 8         (10)  An action, except for an action for recovery of

 9  retainage, must be instituted against the contractor or the

10  surety on the payment bond or the payment provisions of a

11  combined payment and performance bond within 1 year after the

12  performance of the labor or completion of delivery of the

13  materials or supplies. An action for recovery of retainage

14  must be instituted against the contractor or the surety within

15  1 year after the performance of the labor or completion of

16  delivery of the materials or supplies, provided that such an

17  action may not be instituted until one of the following

18  conditions is satisfied:

19         (a)  The public entity has paid out the claimant's

20  retainage to the contractor, and the time provided under s.

21  255.073(3) for payment of that retainage to the claimant has

22  expired;

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

24  its contract and 70 days have passed since the contractor sent

25  its final payment request to the public entity; or

26         (c)  The claimant has asked the contractor, in writing,

27  when the contractor received payment of the claimant's

28  retainage or when the contractor sent its final payment

29  request to the public entity, and the contractor has failed to

30  respond to this request, in writing, within 10 days after

31  receipt.

                                  22

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






    Florida Senate - 2004                            CS for SB 544
    316-2030-04




 1  

 2  If none of the conditions described in paragraph (a),

 3  paragraph (b), or paragraph (c) is satisfied and an action for

 4  recovery of retainage therefore cannot be instituted within

 5  the 1-year limitation period set forth in this subsection,

 6  this limitation period shall be extended until 120 days after

 7  one of these conditions is satisfied.

 8         Section 14.  Section 725.09, Florida Statutes, is

 9  created to read:

10         725.09  Construction contracts; contingent payment

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

12  purchase of construction materials or services which

13  conditions payment for such materials or services on the

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

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

16  of this state.

17         Section 15.  Paragraph (b) of subsection (2) of section

18  95.11, Florida Statutes, is amended to read:

19         95.11  Limitations other than for the recovery of real

20  property.--Actions other than for recovery of real property

21  shall be commenced as follows:

22         (2)  WITHIN FIVE YEARS.--

23         (b)  A legal or equitable action on a contract,

24  obligation, or liability founded on a written instrument,

25  except for an action to enforce a claim against a payment

26  bond, which shall be governed by the applicable provisions of

27  ss. 255.05(10) 255.05(2)(a)2. and 713.23(1)(e).

28         Section 16.  This act shall take effect October 1,

29  2004.

30  

31  

                                  23

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






    Florida Senate - 2004                            CS for SB 544
    316-2030-04




 1          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
 2                         Senate Bill 544

 3                                 

 4  The CS differs from the bill as filed in that it:

 5         * Replaces the term "vender" throughout the
           bill with the term "contractor" or "provider of
 6         construction services;"
           * Reduces from 10 to 7 the days subcontractors
 7         have to remit payment to their suppliers and
           sub-subcontractors;
 8         * For projects costing more than $10 million,
           restricts the contractual extension for the
 9         completion of the punch-list from 60 days to 15
           days; in addition, it includes a third
10         threshold (issuance of a temporary or final
           certificate of occupancy) from which the
11         punch-list deadline commences;
           * Clarifies that there must be a "good faith
12         dispute" between the local government and the
           contractor before the local government may
13         withhold from the retainage;
           * Authorizes the local government to withhold
14         retainage at a rate lower than 10% and to
           release the retainage to the contractor; the
15         contractor is subsequently responsible for
           remitting such retainage to the subcontractors
16         and suppliers; and
           * Reorganizes section 13, which prohibits a
17         claimant from initiating an action to recover
           retainage against the contractor or against the
18         surety providing a payment or the performance
           bond until certain conditions are met.
19         Substantive changes include
                - requiring the claimant to request
20         retainage payment information from the
           contractor, rather than the building owner;
21              - reducing a commencement deadline, from
           90 to 70 days, for filing an action against the
22         contractor; and
                - providing for a 120 day extension, under
23         certain conditions,  to the 1 year time-frame
           for filing an action against the contractor.
24                                                                                                                                          

25  

26  

27  

28  

29  

30  

31  

                                  24

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

Site Map
Session:   Bills ·   Calendars ·   Bound Journals ·   Citator ·   Search ·   Appropriations ·   Redistricting ·   Bill Information Reports
Committee Publications
Historical Information
Statutes:   Introduction ·   View Statutes ·   Search Statutes
Flsenate.gov
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.     Privacy Statement     Contact Us     Get Acrobat Reader