September 18, 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 sb0544e1

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




    CS for CS for SB 544                           First Engrossed



  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         providing exceptions; creating s. 255.0705,

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

17         255.071, F.S.; revising deadlines for the

18         payment of subcontractors, sub-subcontractors,

19         materialmen, and suppliers on construction

20         contracts for public projects; creating ss.

21         255.072, 255.073, 255.074, 255.075, 255.076,

22         255.077, and 255.078, F.S.; providing

23         definitions; providing for timely payment for

24         purchases of construction services by a public

25         entity; providing procedures for calculating

26         payment due dates; providing procedures for

27         handling improper payment requests; providing

28         for the resolution of disputes; providing for

29         project closeout and payment of retainage;

30         providing that ss. 255.072-255.076, F.S., apply

31         to the payment of any payment request for


                                  1

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






    CS for CS for SB 544                           First Engrossed



 1         retainage; providing exceptions; amending s.

 2         255.05, F.S.; providing requirements for

 3         certain notices of nonpayment served by a

 4         claimant who is not in privity with the

 5         contractor; revising the form for a public

 6         construction bond; requiring the payment

 7         provisions of all public construction bonds to

 8         be construed as statutory bonds; prohibiting

 9         conversion to common law bonds; deleting a

10         requirement that bond forms used by public

11         owners reference certain notice and time

12         limitation provisions; providing limitations on

13         a claimant's institution of certain actions

14         against a contractor or surety; amending s.

15         95.11, F.S., to conform a cross-reference;

16         providing for application of specified sections

17         of the act to certain contracts and projects;

18         providing an effective date.

19  

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

21  

22         Section 1.  Section 218.70, Florida Statutes, is

23  amended to read:

24         218.70  Popular name Short title.--This part may be

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

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

27  218.72, Florida Statutes, are amended, and subsection (10) is

28  added to that section, to read:

29         218.72  Definitions.--As used in this part:

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

31  municipal government, school board, school district,


                                  2

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






    CS for CS for SB 544                           First Engrossed



 1  authority, special taxing district, other political

 2  subdivision, or any office, board, bureau, commission,

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

 4  project supported by county or municipal funds.

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

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

 7  property directly to a local governmental entity. The term

 8  includes any person who provides waste-hauling services to

 9  residents or businesses located within the boundaries of a

10  local government pursuant to a contract or local ordinance.

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

12  and materials provided in connection with the construction,

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

14  improvements to real property that require a license under

15  parts I and II of chapter 489.

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

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

18  governmental entity to provide construction services.

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

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

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

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

23         218.735  Timely payment for purchases of construction

24  services.--

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

26  governmental entity for labor, services, or materials

27  furnished by subcontractors and suppliers hired by the

28  contractor, the contractor shall remit payment due to those

29  subcontractors and suppliers within 10 15 days after the

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

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


                                  3

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






    CS for CS for SB 544                           First Engrossed



 1  furnished by subcontractors and suppliers hired by the

 2  subcontractor, the subcontractor shall remit payment due to

 3  those subcontractors and suppliers within 7 15 days after the

 4  subcontractor's receipt of payment. Nothing herein shall

 5  prohibit a contractor or subcontractor from disputing,

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

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

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

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

10  contractor or subcontractor notifies the party whose payment

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

12  actions required to cure the dispute. The contractor or

13  subcontractor must pay all undisputed amounts due within the

14  time limits imposed by this section.

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

16  a local governmental entity and a contractor must provide for

17  the development of a list of items required to render

18  complete, satisfactory, and acceptable the construction

19  services purchased by the local governmental entity. The

20  contract must specify the process for the development of the

21  list, including responsibilities of the local governmental

22  entity and the contractor in developing and reviewing the list

23  and a reasonable time for developing the list, as follows:

24         1.  For construction projects with an estimated cost of

25  less than $10 million, within 30 calendar days after reaching

26  substantial completion of the construction services purchased

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

28  contract, upon reaching beneficial occupancy or use; or

29         2.  For construction projects with an estimated cost of

30  $10 million or more, within 30 calendar days, unless otherwise

31  extended by contract not to exceed 60 calendar days, after


                                  4

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






    CS for CS for SB 544                           First Engrossed



 1  reaching substantial completion of the construction services

 2  purchased as defined in the contract, or, if not defined in

 3  the contract, upon reaching beneficial occupancy or use.

 4         (b)  If the contract between the local governmental

 5  entity and the contractor relates to the purchase of

 6  construction services on more than one building or structure,

 7  or involves a multiphased project, the contract shall provide

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

 9  complete, satisfactory, and acceptable all the construction

10  services purchased pursuant to the contract for each building,

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

12  provided in paragraph (a).

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

14  pending items not yet completed on the list developed pursuant

15  to this subsection does not alter the responsibility of the

16  contractor to complete all the construction services purchased

17  pursuant to the contract.

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

19  contractor may submit a payment request for all remaining

20  retainage withheld by the local governmental entity pursuant

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

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

23  pursuant to the contract, the local governmental entity may

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

25  the total costs to complete such items.

26         (e)  All items that require correction under the

27  contract and that are identified after the preparation and

28  delivery of the list remain the obligation of the contractor

29  as defined by the contract.

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

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


                                  5

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






    CS for CS for SB 544                           First Engrossed



 1  contract between the contractor and its subcontractors and

 2  suppliers.

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

 4  entity or a contractor to secure payment of insurance premiums

 5  under a consolidated insurance program or series of insurance

 6  policies issued to a local governmental entity or a contractor

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

 8  retainage as provided in this section may not be delayed

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

10  contractor's insurance provider.

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

12  with its responsibilities to develop the list required under

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

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

15  contractor may submit a payment request for all remaining

16  retainage withheld by the local governmental entity pursuant

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

18  process any payment request for retainage if the contractor

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

20  governmental entity in the development of the list or failed

21  to perform its contractual responsibilities, if any, with

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

23  applies.

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

25  services, a local governmental entity may withhold from each

26  progress payment made to the contractor an amount not

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

28  satisfactory completion of the construction services purchased

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

30  services.

31  


                                  6

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






    CS for CS for SB 544                           First Engrossed



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

 2  services purchased pursuant to the contract, the local

 3  governmental entity must reduce to 5 percent the amount of

 4  retainage withheld from each subsequent progress payment made

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

 6  "50-percent completion" has the meaning set forth in the

 7  contract between the local governmental entity and the

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

 9  which the local governmental entity has expended 50 percent of

10  the total cost of the construction services purchased as

11  identified in the contract together with all costs associated

12  with existing change orders and other additions or

13  modifications to the construction services provided for in the

14  contract. However, notwithstanding this subsection, a

15  municipality with a population of 25,000 or fewer, or a county

16  with a population of 100,000 or fewer, may withhold retainage

17  in an amount not exceeding 10 percent of each progress payment

18  made to the contractor until final completion and acceptance

19  of the project by the local governmental entity.

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

21  services purchased pursuant to the contract, the contractor

22  may elect to withhold retainage from payments to its

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

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

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

26  subcontractor's past performance, the likelihood that such

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

28  rely on other safeguards. The contractor shall notify the

29  subcontractor, in writing, of its determination to withhold

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

31  for making that determination, and the contractor may not


                                  7

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






    CS for CS for SB 544                           First Engrossed



 1  request the release of such retained funds from the local

 2  governmental entity.

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

 4  services purchased pursuant to the contract, the contractor

 5  may present to the local governmental entity a payment request

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

 7  governmental entity. The local governmental entity shall

 8  promptly make payment to the contractor, unless the local

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

10  for withholding the payment of retainage. If the local

11  governmental entity makes payment of retainage to the

12  contractor under this paragraph which is attributable to the

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

14  subcontractors or suppliers, the contractor shall timely remit

15  payment of such retainage to those subcontractors and

16  suppliers.

17         (e)  This section does not prohibit a local

18  governmental entity from withholding retainage at a rate less

19  than 10 percent of each progress payment, from incrementally

20  reducing the rate of retainage pursuant to a schedule provided

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

22  portion of any retainage withheld by the local governmental

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

24  materials supplied by the contractor or by one or more

25  subcontractors or suppliers. If a local governmental entity

26  makes any payment of retainage to the contractor which is

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

28  one or more subcontractors or suppliers, the contractor shall

29  timely remit payment of such retainage to those subcontractors

30  and suppliers.

31  


                                  8

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






    CS for CS for SB 544                           First Engrossed



 1         (f)  This section does not require the local

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

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

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

 5  claim or demand by the local governmental entity or

 6  contractor.

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

 8  payment of payment requests apply to any payment request for

 9  retainage made pursuant to this section.

10         (h)  Paragraphs (a)-(d) do not apply to construction

11  services purchased by a local governmental entity which are

12  paid for, in whole or in part, with federal funds and are

13  subject to federal grantor laws and regulations or

14  requirements that are contrary to any provision of the Local

15  Government Prompt Payment Act.

16         (i)  This subsection does not apply to any construction

17  services purchased by a local governmental entity if the total

18  cost of the construction services purchased as identified in

19  the contract is $200,000 or less.

20         Section 4.  Section 255.0705, Florida Statutes, is

21  created to read:

22         255.0705  Popular name.--Sections 255.0705-255.078 may

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

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

25  Florida Statutes, are amended to read:

26         255.071  Payment of subcontractors, sub-subcontractors,

27  materialmen, and suppliers on construction contracts for

28  public projects.--

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

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

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


                                  9

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






    CS for CS for SB 544                           First Engrossed



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

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

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

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

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

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

 7  subsection (4).

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

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

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

11  building or public work improvements to real property may file

12  a verified complaint alleging:

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

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

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

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

17  were provided in accordance with the contract.

18         (c)  The amount of the contract price.

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

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

21  contract and the amount thereof that is undisputed.

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

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

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

25  were received.

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

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

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

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

30  time limitations set forth in s. 255.073(3) more than 30 days

31  prior to the date the complaint was filed.


                                  10

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






    CS for CS for SB 544                           First Engrossed



 1         Section 6.  Section 255.072, Florida Statutes, is

 2  created to read:

 3         255.072  Definitions.--As used in ss. 255.073-255.078,

 4  the term:

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

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

 7  entity.

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

 9  and materials provided in connection with the construction,

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

11  improvements to real property. The term "construction

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

13  Department of Transportation.

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

15  directly with a public entity to provide construction

16  services.

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

18  construction services which conforms with all statutory

19  requirements and with all requirements specified by the public

20  entity to which the payment request is submitted.

21         (5)  "Public entity" means the state, or any office,

22  board, bureau, commission, department, branch, division, or

23  institution thereof, but does not include a local governmental

24  entity as defined in s. 218.72.

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

26  services.

27         Section 7.  Section 255.073, Florida Statutes, is

28  created to read:

29         255.073  Timely payment for purchases of construction

30  services.--

31  


                                  11

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






    CS for CS for SB 544                           First Engrossed



 1         (1)  Except as otherwise provided in ss.

 2  255.072-255.078, s. 215.422 governs the timely payment for

 3  construction services by a public entity.

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

 5  request, the undisputed portion must be timely paid.

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

 7  entity for labor, services, or materials furnished by

 8  subcontractors and suppliers hired by the contractor, the

 9  contractor shall remit payment due to those subcontractors and

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

11  payment. When a subcontractor receives payment from a

12  contractor for labor, services, or materials furnished by

13  subcontractors and suppliers hired by the subcontractor, the

14  subcontractor shall remit payment due to those subcontractors

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

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

17  subcontractor from disputing, pursuant to the terms of the

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

19  be due to another party if the contractor or subcontractor

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

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

22  dispute. The contractor or subcontractor must pay all

23  undisputed amounts due within the time limits imposed by this

24  subsection.

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

26  services and not made within the applicable time limits shall

27  bear interest at the rate specified in s. 215.422. After July

28  1, 2005, such payments shall bear interest at the rate of 1

29  percent per month, to the extent that the Chief Financial

30  Officer's replacement project for the state's accounting and

31  cash management systems (Project ASPIRE) is operational for


                                  12

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






    CS for CS for SB 544                           First Engrossed



 1  the particular affected public entities. After January 1,

 2  2006, all such payments due from public entities shall bear

 3  interest at the rate of 1 percent per month.

 4         Section 8.  Section 255.074, Florida Statutes, is

 5  created to read:

 6         255.074  Procedures for calculation of payment due

 7  dates.--

 8         (1)  Each public entity shall establish procedures

 9  whereby each payment request received by the public entity is

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

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

12  office of the public entity.

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

14  for partial deliveries and a payment request is submitted for

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

16  delivery must be calculated from the time of the partial

17  delivery and the submission of the payment request.

18         (3)  A public entity must submit a payment request to

19  the Chief Financial Officer for payment no more than 20 days

20  after receipt of the payment request.

21         Section 9.  Section 255.075, Florida Statutes, is

22  created to read:

23         255.075  Mandatory interest.--A contract between a

24  public entity and a contractor may not prohibit the collection

25  of late payment interest charges authorized under s.

26  255.073(4).

27         Section 10.  Section 255.076, Florida Statutes, is

28  created to read:

29         255.076  Improper payment request; resolution of

30  disputes.-- In an action to recover amounts due for

31  construction services purchased by a public entity, the court


                                  13

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






    CS for CS for SB 544                           First Engrossed



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

 2  including fees incurred through any appeal, to the prevailing

 3  party, if the court finds that the nonprevailing party

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

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

 6  the prevailing party's claim to those amounts.

 7         Section 11.  Section 255.077, Florida Statutes, is

 8  created to read:

 9         255.077  Project closeout and payment of retainage.--

10         (1)  Each contract for construction services between a

11  public entity and a contractor must provide for the

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

13  satisfactory, and acceptable the construction services

14  purchased by the public entity. The contract must specify the

15  process for the development of the list, including

16  responsibilities of the public entity and the contractor in

17  developing and reviewing the list and a reasonable time for

18  developing the list, as follows:

19         1.  For construction projects with an estimated cost of

20  less than $10 million, within 30 calendar days after reaching

21  substantial completion of the construction services purchased

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

23  contract, upon reaching beneficial occupancy or use; or

24         2.  For construction projects with an estimated cost of

25  $10 million or more, within 30 calendar days, unless otherwise

26  extended by contract not to exceed 60 calendar days, after

27  reaching substantial completion of the construction services

28  purchased as defined in the contract, or, if not defined in

29  the contract, upon reaching beneficial occupancy or use.

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

31  contractor relates to the purchase of construction services on


                                  14

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






    CS for CS for SB 544                           First Engrossed



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

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

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

 4  acceptable all the construction services purchased pursuant to

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

 6  project within the time limitations provided in subsection

 7  (1).

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

 9  pending items not yet completed on the list developed pursuant

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

11  responsibility of the contractor to complete all the

12  construction services purchased pursuant to the contract.

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

14  contractor may submit a payment request for all remaining

15  retainage withheld by the public entity pursuant to s.

16  255.078. If a good-faith dispute exists as to whether one or

17  more items identified on the list have been completed pursuant

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

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

20  complete such items.

21         (5)  All items that require correction under the

22  contract and that are identified after the preparation and

23  delivery of the list remain the obligation of the contractor

24  as defined by the contract.

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

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

27  contract between the contractor and its subcontractors and

28  suppliers.

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

30  contractor to secure payment of insurance premiums under a

31  consolidated insurance program or series of insurance policies


                                  15

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






    CS for CS for SB 544                           First Engrossed



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

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

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

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

 5  provider.

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

 7  responsibilities to develop the list required under subsection

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

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

10  may submit a payment request for all remaining retainage

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

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

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

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

15  list or failed to perform its contractual responsibilities, if

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

17  255.078(6) applies.

18         Section 12.  Section 255.078, Florida Statutes, is

19  created to read:

20         255.078  Public construction retainage.--

21         (1)  With regard to any contract for construction

22  services, a public entity may withhold from each progress

23  payment made to the contractor an amount not exceeding 10

24  percent of the payment as retainage to ensure the satisfactory

25  completion of the construction services purchased pursuant to

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

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

28  services purchased pursuant to the contract, the public entity

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

30  each subsequent progress payment made to the contractor. For

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


                                  16

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






    CS for CS for SB 544                           First Engrossed



 1  the meaning set forth in the contract between the public

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

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

 4  of the total cost of the construction services purchased as

 5  identified in the contract together with all costs associated

 6  with existing change orders and other additions or

 7  modifications to the construction services provided for in the

 8  contract.

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

10  services purchased pursuant to the contract, the contractor

11  may elect to withhold retainage from payments to its

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

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

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

15  subcontractor's past performance, the likelihood that such

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

17  rely on other safeguards. The contractor shall notify the

18  subcontractor, in writing, of its determination to withhold

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

20  for making that determination, and the contractor may not

21  request the release of such retained funds from the public

22  entity.

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

24  services purchased pursuant to the contract, the contractor

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

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

27  public entity shall promptly make payment to the contractor,

28  unless the public entity has grounds, pursuant to subsection

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

30  entity makes payment of retainage to the contractor under this

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


                                  17

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






    CS for CS for SB 544                           First Engrossed



 1  materials supplied by one or more subcontractors or suppliers,

 2  the contractor shall timely remit payment of such retainage to

 3  those subcontractors and suppliers.

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

 5  public entity from withholding retainage at a rate less than

 6  10 percent of each progress payment, from incrementally

 7  reducing the rate of retainage pursuant to a schedule provided

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

 9  portion of any retainage withheld by the public entity which

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

11  by the contractor or by one or more subcontractors or

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

13  to the contractor which is attributable to the labor,

14  services, or materials supplied by one or more subcontractors

15  or suppliers, the contractor shall timely remit payment of

16  such retainage to those subcontractors and suppliers.

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

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

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

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

21  claim or demand by the public entity or contractor.

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

23  request apply regardless of whether the payment request is

24  for, or includes, retainage.

25         (8)  Subsections (1)-(4) do not apply to construction

26  services purchased by a public entity which are paid for, in

27  whole or in part, with federal funds and are subject to

28  federal grantor laws and regulations or requirements that are

29  contrary to any provision of the Florida Prompt Payment Act.

30         (9)  This section does not apply to any construction

31  services purchased by a public entity if the total cost of the


                                  18

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






    CS for CS for SB 544                           First Engrossed



 1  construction services purchased as identified in the contract

 2  is $200,000 or less.

 3         Section 13.  Section 255.05, Florida Statutes, is

 4  amended to read:

 5         255.05  Bond of contractor constructing public

 6  buildings; form; action by materialmen.--

 7         (1)(a)  Any person entering into a formal contract with

 8  the state or any county, city, or political subdivision

 9  thereof, or other public authority, for the construction of a

10  public building, for the prosecution and completion of a

11  public work, or for repairs upon a public building or public

12  work shall be required, before commencing the work or before

13  recommencing the work after a default or abandonment, to

14  execute, deliver to the public owner, and record in the public

15  records of the county where the improvement is located, a

16  payment and performance bond with a surety insurer authorized

17  to do business in this state as surety. A public entity may

18  not require a contractor to secure a surety bond under this

19  section from a specific agent or bonding company. The bond

20  must state on its front page: the name, principal business

21  address, and phone number of the contractor, the surety, the

22  owner of the property being improved, and, if different from

23  the owner, the contracting public entity; the contract number

24  assigned by the contracting public entity; and a description

25  of the project sufficient to identify it, such as a legal

26  description or the street address of the property being

27  improved, and a general description of the improvement. Such

28  bond shall be conditioned upon the contractor's performance of

29  the construction work in the time and manner prescribed in the

30  contract and promptly making payments to all persons defined

31  in s. 713.01 who furnish labor, services, or materials for the


                                  19

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






    CS for CS for SB 544                           First Engrossed



 1  prosecution of the work provided for in the contract. Any

 2  claimant may apply to the governmental entity having charge of

 3  the work for copies of the contract and bond and shall

 4  thereupon be furnished with a certified copy of the contract

 5  and bond. The claimant shall have a right of action against

 6  the contractor and surety for the amount due him or her,

 7  including unpaid finance charges due under the claimant's

 8  contract. Such action shall not involve the public authority

 9  in any expense. When such work is done for the state and the

10  contract is for $100,000 or less, no payment and performance

11  bond shall be required. At the discretion of the official or

12  board awarding such contract when such work is done for any

13  county, city, political subdivision, or public authority, any

14  person entering into such a contract which is for $200,000 or

15  less may be exempted from executing the payment and

16  performance bond. When such work is done for the state, the

17  Secretary of the Department of Management Services may

18  delegate to state agencies the authority to exempt any person

19  entering into such a contract amounting to more than $100,000

20  but less than $200,000 from executing the payment and

21  performance bond. In the event such exemption is granted, the

22  officer or officials shall not be personally liable to persons

23  suffering loss because of granting such exemption. The

24  Department of Management Services shall maintain information

25  on the number of requests by state agencies for delegation of

26  authority to waive the bond requirements by agency and project

27  number and whether any request for delegation was denied and

28  the justification for the denial.

29         (b)  The Department of Management Services shall adopt

30  rules with respect to all contracts for $200,000 or less, to

31  provide:


                                  20

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






    CS for CS for SB 544                           First Engrossed



 1         1.  Procedures for retaining up to 10 percent of each

 2  request for payment submitted by a contractor and procedures

 3  for determining disbursements from the amount retained on a

 4  pro rata basis to laborers, materialmen, and subcontractors,

 5  as defined in s. 713.01.

 6         2.  Procedures for requiring certification from

 7  laborers, materialmen, and subcontractors, as defined in s.

 8  713.01, prior to final payment to the contractor that such

 9  laborers, materialmen, and subcontractors have no claims

10  against the contractor resulting from the completion of the

11  work provided for in the contract.

12  

13  The state shall not be held liable to any laborer,

14  materialman, or subcontractor for any amounts greater than the

15  pro rata share as determined under this section.

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

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

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

19  prescribed time in this paragraph within which an action to

20  enforce any claim against a payment bond provided pursuant to

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

22  office a notice in substantially the following form:

23  

24                    NOTICE OF CONTEST OF CLAIM

25                       AGAINST PAYMENT BOND

26  

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

28  

29         You are notified that the undersigned contests your

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

31  on the undersigned on ............, ........, and that the


                                  21

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






    CS for CS for SB 544                           First Engrossed



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

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

 3  

 4         DATED on ............, .........

 5  

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

 7  

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

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

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

11  notice shall be extinguished automatically. The clerk shall

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

13  address shown in the notice of nonpayment or most recent

14  amendment thereto and shall certify to such service on the

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

16  upon mailing.

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

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

19  45 days after commencing to furnish labor, materials, or

20  supplies for the prosecution of the work, furnish the

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

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

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

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

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

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

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

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

29  45 days after the first furnishing of labor, services, or

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

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


                                  22

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






    CS for CS for SB 544                           First Engrossed



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

 2  90 days after the date that the rental equipment was last on

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

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

 5  which includes sums for retainage must specify the portion of

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

 7  materials, or supplies may be instituted against the

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

 9  Notices required or permitted under this section may be served

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

11  exclusively for recovery of retainage, must be instituted

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

13  the payment provisions of a combined payment and performance

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

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

16  exclusively for recovery of retainage must be instituted

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

18  performance of the labor or completion of delivery of the

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

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

21  final reconciliation of quantities if no further payment is

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

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

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

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

26  claim against a payment bond under this section, the

27  prevailing party is entitled to recover a reasonable fee for

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

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

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

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


                                  23

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






    CS for CS for SB 544                           First Engrossed



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

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

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

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

 5  the issuance of a certificate of occupancy or the issuance of

 6  a certificate of substantial completion.

 7         (b)  When a person is required to execute a waiver of

 8  his or her right to make a claim against the payment bond in

 9  exchange for, or to induce payment of, a progress payment, the

10  waiver may be in substantially the following form:

11  

12                     WAIVER OF RIGHT TO CLAIM

13                     AGAINST THE PAYMENT BOND

14                        (PROGRESS PAYMENT)

15  

16         The undersigned, in consideration of the sum of $....,

17  hereby waives its right to claim against the payment bond for

18  labor, services, or materials furnished through ...(insert

19  date)... to ...(insert the name of your customer)... on the

20  job of ...(insert the name of the owner)..., for improvements

21  to the following described project:

22  

23                     (description of project)

24  

25  This waiver does not cover any retention or any labor,

26  services, or materials furnished after the date specified.

27  

28         DATED ON ........, .....

29                                                ...(Claimant)...

30                                                 By:............

31  


                                  24

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






    CS for CS for SB 544                           First Engrossed



 1         (c)  When a person is required to execute a waiver of

 2  his or her right to make a claim against the payment bond, in

 3  exchange for, or to induce payment of, the final payment, the

 4  waiver may be in substantially the following form:

 5  

 6                     WAIVER OF RIGHT TO CLAIM

 7             AGAINST THE PAYMENT BOND (FINAL PAYMENT)

 8  

 9         The undersigned, in consideration of the final payment

10  in the amount of $...., hereby waives its right to claim

11  against the payment bond for labor, services, or materials

12  furnished to ...(insert the name of your customer)... on the

13  job of ...(insert the name of the owner)..., for improvements

14  to the following described project:

15  

16                     (description of project)

17  

18         DATED ON ........, .....

19                                                ...(Claimant)...

20                                                 By:............

21  

22         (d)  A person may not require a claimant to furnish a

23  waiver that is different from the forms in paragraphs (b) and

24  (c).

25         (e)  A claimant who executes a waiver in exchange for a

26  check may condition the waiver on payment of the check.

27         (f)  A waiver that is not substantially similar to the

28  forms in this subsection is enforceable in accordance with its

29  terms.

30         (3)  The bond required in subsection (1) may be in

31  substantially the following form:


                                  25

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






    CS for CS for SB 544                           First Engrossed



 1  

 2                     PUBLIC CONSTRUCTION BOND

 3  

 4         Bond No.  (enter bond number)

 5  

 6         BY THIS BOND, We _____, as Principal and _____, a

 7  corporation, as Surety, are bound to _____, herein called

 8  Owner, in the sum of $_____, for payment of which we bind

 9  ourselves, our heirs, personal representatives, successors,

10  and assigns, jointly and severally.

11         THE CONDITION OF THIS BOND is that if Principal:

12         1.  Performs the contract dated _____, _____, between

13  Principal and Owner for construction of _____, the contract

14  being made a part of this bond by reference, at the times and

15  in the manner prescribed in the contract; and

16         2.  Promptly makes payments to all claimants, as

17  defined in Section 255.05(1), Florida Statutes, supplying

18  Principal with labor, materials, or supplies, used directly or

19  indirectly by Principal in the prosecution of the work

20  provided for in the contract; and

21         3.  Pays Owner all losses, damages, expenses, costs,

22  and attorney's fees, including appellate proceedings, that

23  Owner sustains because of a default by Principal under the

24  contract; and

25         4.  Performs the guarantee of all work and materials

26  furnished under the contract for the time specified in the

27  contract, then this bond is void; otherwise it remains in full

28  force.

29         Any action instituted by a claimant under this bond for

30  payment must be in accordance with the notice and time

31  limitation provisions in Section 255.05, Florida Statutes.


                                  26

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






    CS for CS for SB 544                           First Engrossed



 1         Any changes in or under the contract documents and

 2  compliance or noncompliance with any formalities connected

 3  with the contract or the changes does not affect Surety's

 4  obligation under this bond.

 5  

 6         DATED ON _____, _____.

 7  

 8  ...  (Name of Principal)  ...

 9  By ...  (As Attorney in Fact)  ...

10  ...  (Name of Surety)  ...

11  

12         (4)  The payment provisions of all bonds required by

13  furnished for public work contracts described in subsection

14  (1) shall, regardless of form, be construed and deemed

15  statutory bonds furnished pursuant to this section and such

16  bonds shall not under any circumstances be converted into

17  common law bonds bond provisions, subject to all requirements

18  of subsection (2).

19         (5)  In addition to the provisions of chapter 47, any

20  action authorized under this section may be brought in the

21  county in which the public building or public work is being

22  constructed or repaired.  This subsection shall not apply to

23  an action instituted prior to May 17, 1977.

24         (6)  All bonds executed pursuant to this section shall

25  make reference to this section by number and shall contain

26  reference to the notice and time limitation provisions of this

27  section.

28         (6)(7)  In lieu of the bond required by this section, a

29  contractor may file with the state, county, city, or other

30  political authority an alternative form of security in the

31  form of cash, a money order, a certified check, a cashier's


                                  27

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






    CS for CS for SB 544                           First Engrossed



 1  check, an irrevocable letter of credit, or a security of a

 2  type listed in part II of chapter 625. Any such alternative

 3  form of security shall be for the same purpose and be subject

 4  to the same conditions as those applicable to the bond

 5  required by this section.  The determination of the value of

 6  an alternative form of security shall be made by the

 7  appropriate state, county, city, or other political

 8  subdivision.

 9         (7)(8)  When a contractor has furnished a payment bond

10  pursuant to this section, he or she may, when the state,

11  county, municipality, political subdivision, or other public

12  authority makes any payment to the contractor or directly to a

13  claimant, serve a written demand on any claimant who is not in

14  privity with the contractor for a written statement under oath

15  of his or her account showing the nature of the labor or

16  services performed and to be performed, if any; the materials

17  furnished; the materials to be furnished, if known; the amount

18  paid on account to date; the amount due; and the amount to

19  become due, if known, as of the date of the statement by the

20  claimant. Any such demand to a claimant who is not in privity

21  with the contractor must be served on the claimant at the

22  address and to the attention of any person who is designated

23  to receive the demand in the notice to contractor served by

24  the claimant. The failure or refusal to furnish the statement

25  does not deprive the claimant of his or her rights under the

26  bond if the demand is not served at the address of the

27  claimant or directed to the attention of the person designated

28  to receive the demand in the notice to contractor. The failure

29  to furnish the statement within 30 days after the demand, or

30  the furnishing of a false or fraudulent statement, deprives

31  the claimant who fails to furnish the statement, or who


                                  28

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






    CS for CS for SB 544                           First Engrossed



 1  furnishes the false or fraudulent statement, of his or her

 2  rights under the bond. If the contractor serves more than one

 3  demand for statement of account on a claimant and none of the

 4  information regarding the account has changed since the

 5  claimant's last response to a demand, the failure or refusal

 6  to furnish such statement does not deprive the claimant of his

 7  or her rights under the bond. The negligent inclusion or

 8  omission of any information deprives the claimant of his or

 9  her rights under the bond to the extent that the contractor

10  can demonstrate prejudice from such act or omission by the

11  claimant. The failure to furnish a response to a demand for

12  statement of account does not affect the validity of any claim

13  on the bond being enforced in a lawsuit filed before the date

14  the demand for statement of account is received by the

15  claimant.

16         (8)(9)  On any public works project for which the

17  public authority requires a performance and payment bond,

18  suits at law and in equity may be brought and maintained by

19  and against the public authority on any contract claim arising

20  from breach of an express provision or an implied covenant of

21  a written agreement or a written directive issued by the

22  public authority pursuant to the written agreement.  In any

23  such suit, the public authority and the contractor shall have

24  all of the same rights and obligations as a private person

25  under a like contract except that no liability may be based on

26  an oral modification of either the written contract or written

27  directive.  Nothing herein shall be construed to waive the

28  sovereign immunity of the state and its political subdivisions

29  from equitable claims and equitable remedies. The provisions

30  of this subsection shall apply only to contracts entered into

31  on or after July 1, 1999.


                                  29

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






    CS for CS for SB 544                           First Engrossed



 1         (9)  An action, except an action for recovery of

 2  retainage, must be instituted against the contractor or the

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

 4  combined payment and performance bond within 1 year after the

 5  performance of the labor or completion of delivery of the

 6  materials or supplies. An action for recovery of retainage

 7  must be instituted against the contractor or the surety within

 8  1 year after the performance of the labor or completion of

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

10  action may not be instituted until one of the following

11  conditions is satisfied:

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

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

14  255.073(3) for payment of that retainage to the claimant has

15  expired;

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

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

18  its final payment request to the public entity; or

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

20  when the contractor received payment of the claimant's

21  retainage or when the contractor sent its final payment

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

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

24  receipt.

25  

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

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

28  recovery of retainage therefore cannot be instituted within

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

30  this limitation period shall be extended until 120 days after

31  one of these conditions is satisfied.


                                  30

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






    CS for CS for SB 544                           First Engrossed



 1         Section 14.  Paragraph (b) of subsection (2) of section

 2  95.11, Florida Statutes, is amended to read:

 3         95.11  Limitations other than for the recovery of real

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

 5  shall be commenced as follows:

 6         (2)  WITHIN FIVE YEARS.--

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

 8  obligation, or liability founded on a written instrument,

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

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

11  ss. 255.05(9) 255.05(2)(a)2. and 713.23(1)(e).

12         Section 15.  Neither the amendments to sections 95.11,

13  218.70, 218.72, 218.735, and 255.071, Florida Statutes, and

14  subsection (2) of section 255.05, Florida Statutes, as

15  provided in this act, nor subsection (9) of section 255.05,

16  Florida Statutes, and section 255.078, Florida Statutes, as

17  created by this act, applies to any existing construction

18  contract pending approval by a local governmental entity or

19  public entity, or to any project advertised for bid by the

20  local government entity or public entity, on or before the

21  effective date of this act. The amendments to subsections (3),

22  (4), and (6) of section 255.05, Florida Statutes, as provided

23  in this act, apply to public construction bonds issued for

24  contracts entered into on or after the effective date of this

25  act.

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

27  2004.

28  

29  

30  

31  


                                  31

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