January 20, 2021
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       Florida Senate - 2010                                    SB 1056
       
       
       
       By Senator Baker
       
       
       
       
       20-00916-10                                           20101056__
    1                        A bill to be entitled                      
    2         An act relating to the Local Government Prompt Payment
    3         Act; amending s. 218.72, F.S.; revising definitions;
    4         amending s. 218.735, F.S.; revising provisions
    5         relating to the timely payment for purchases of
    6         construction services; requiring that a dispute be
    7         resolved according to procedures in the invitation to
    8         bid or request for proposal; prohibiting the
    9         assessment of damages against a contractor if the list
   10         of items remaining to complete is not timely provided
   11         to the contractor; amending s. 218.76, F.S.; revising
   12         provisions relating to the resolution of disputes
   13         concerning an improper payment request or invoice;
   14         providing that a local governmental entity waives its
   15         objection in a payment dispute if it fails to commence
   16         the dispute resolution procedure within the time
   17         required; providing an effective date.
   18  
   19  Be It Enacted by the Legislature of the State of Florida:
   20  
   21         Section 1. Section 218.72, Florida Statutes, is reordered
   22  and amended to read:
   23         218.72 Definitions.—As used in this part, the term:
   24         (8)(1) “Proper invoice” means an invoice that which
   25  conforms with all statutory requirements and with all
   26  requirements that have been specified by the local governmental
   27  entity to which the invoice is submitted. Such requirements must
   28  be included in the invitation to bid or request for proposal for
   29  the project for which the invoice is submitted.
   30         (5)(2) “Local governmental entity” means a county or
   31  municipal government, school board, school district, authority,
   32  special taxing district, other political subdivision, or any
   33  office, board, bureau, commission, department, branch, division,
   34  or institution thereof.
   35         (4)(3) “County” means a political subdivision of the state
   36  established pursuant to s. 1, Art. VIII of the State
   37  Constitution.
   38         (6)(4) “Municipality” means a municipality created pursuant
   39  to general or special law and metropolitan and consolidated
   40  governments as provided in s. 6(e) and (f), Art. VIII of the
   41  State Constitution.
   42         (9)(5) “Purchase” means the purchase of goods, services, or
   43  construction services; the purchase or lease of personal
   44  property; or the lease of real property by a local governmental
   45  entity.
   46         (10)(6) “Vendor” means any person who sells goods or
   47  services, sells or leases personal property, or leases real
   48  property directly to a local governmental entity. The term
   49  includes any person who provides waste hauling services to
   50  residents or businesses located within the boundaries of a local
   51  government pursuant to a contract or local ordinance.
   52         (2)(7) “Construction services” means all labor, services,
   53  and materials provided in connection with the construction,
   54  alteration, repair, demolition, reconstruction, or any other
   55  improvements to real property.
   56         (7)(8) “Payment request” means a request for payment for
   57  construction services which conforms with all statutory
   58  requirements and with all requirements specified by the local
   59  governmental entity to which the payment request is submitted.
   60  Such requirements must be included in the invitation to bid or
   61  request for proposal for the project for which payment is
   62  requested.
   63         (1)(9) “Agent” means the project architect, project
   64  engineer, or any other agency or person acting on behalf of the
   65  local governmental entity. The agent who is required to review
   66  invoices or payment requests must be identified in the
   67  invitation to bid or request for proposal for the project for
   68  which payment requests or invoices are submitted.
   69         (3)(10) “Contractor” or “provider of construction services”
   70  means the any person who contracts directly with a local
   71  governmental entity to provide construction services.
   72         Section 2. Subsections (1) through (7) of section 218.735,
   73  Florida Statutes, are amended to read:
   74         218.735 Timely payment for purchases of construction
   75  services.—
   76         (1) The due date for payment for the purchase of
   77  construction services by a local governmental entity is
   78  determined as follows:
   79         (a) If an agent must approve the payment request or invoice
   80  before prior to the payment request or invoice is being
   81  submitted to the local governmental entity, payment is due 25
   82  business days after the date on which the payment request or
   83  invoice is stamped as received as provided in s. 218.74(1). If
   84  the payment request or invoice is not rejected before the due
   85  date, it shall be deemed accepted.
   86         (b) If an agent need not approve the payment request or
   87  invoice which is submitted by the contractor, payment is due 20
   88  business days after the date on which the payment request or
   89  invoice is stamped as received as provided in s. 218.74(1).
   90         (2) If a payment request or invoice does not meet the
   91  contract requirements, the local governmental entity must may
   92  reject the payment request or invoice within 20 business days
   93  after the date on which the payment request or invoice is
   94  stamped as received as provided in s. 218.74(1). The rejection
   95  must be written and must specify the deficiency in the payment
   96  request or invoice and the action necessary to make the payment
   97  request or invoice proper.
   98         (3) If a payment request or an invoice is rejected under
   99  subsection (2) and the contractor submits a corrected payment
  100  request or invoice that which corrects the deficiency specified
  101  in writing by the local governmental entity, the corrected
  102  payment request or invoice must be paid or rejected on the later
  103  of:
  104         (a) Ten business days after the date the corrected payment
  105  request or invoice is stamped as received as provided in s.
  106  218.74(1); or
  107         (b) If the local governmental entity governing body is
  108  required by ordinance, charter, or other law to approve or
  109  reject the corrected payment request or invoice, the first
  110  business day after the next regularly scheduled meeting of the
  111  local governmental entity governing body held after the
  112  corrected payment request or invoice is stamped as received as
  113  provided in s. 218.74(1).
  114         (4) If a dispute between the local governmental entity and
  115  the contractor cannot be resolved by the procedure in subsection
  116  (3), the dispute must be resolved in accordance with the dispute
  117  resolution procedure prescribed in the invitation to bid or
  118  request for proposal for the project for which the payment
  119  request or invoice is submitted construction contract or in any
  120  applicable ordinance. In the absence of a prescribed procedure,
  121  the dispute must be resolved by the procedure specified in s.
  122  218.76(2).
  123         (5) If a local governmental entity disputes a portion of a
  124  payment request or an invoice, the undisputed portion shall be
  125  paid timely, in accordance with subsection (1).
  126         (6) If When a contractor receives payment from a local
  127  governmental entity for labor, services, or materials furnished
  128  by subcontractors and suppliers hired by the contractor, the
  129  contractor must shall remit payment due to those subcontractors
  130  and suppliers within 10 days after the contractor’s receipt of
  131  payment. If When a subcontractor receives payment from a
  132  contractor for labor, services, or materials furnished by
  133  subcontractors and suppliers hired by the subcontractor, the
  134  subcontractor must shall remit payment due to those
  135  subcontractors and suppliers within 7 days after the
  136  subcontractor’s receipt of payment. This subsection does not
  137  Nothing herein shall prohibit a contractor or subcontractor from
  138  disputing, pursuant to the terms of the relevant contract, all
  139  or any portion of a payment alleged to be due to another party
  140  if the contractor or subcontractor notifies the party whose
  141  payment is disputed, in writing, of the amount in dispute and
  142  the actions required to cure the dispute. The contractor or
  143  subcontractor must pay all undisputed amounts due within the
  144  time limits imposed by this section.
  145         (7)(a) Each contract for construction services between a
  146  local governmental entity and a contractor must provide for the
  147  development of a single list of items required to render
  148  complete, satisfactory, and acceptable the construction services
  149  purchased by the local governmental entity.
  150         (a) The contract must specify the process for developing
  151  the development of the list, including the responsibilities of
  152  the local governmental entity and the contractor in developing
  153  and reviewing the list and a reasonable time for developing the
  154  list, as follows:
  155         1. For construction projects having an estimated cost of
  156  Less than $10 million, within 30 calendar days after reaching
  157  substantial completion of the construction services purchased as
  158  defined in the contract, or, if not defined in the contract,
  159  upon reaching beneficial occupancy or use; or
  160         2. For construction projects having an estimated cost of
  161  $10 million or more, within 30 calendar days, or, if unless
  162  otherwise extended by contract, up to not to exceed 60 calendar
  163  days, after reaching substantial completion of the construction
  164  services purchased as defined in the contract, or, if not
  165  defined in the contract, upon reaching beneficial occupancy or
  166  use.
  167         (b) If the contract between the local governmental entity
  168  and the contractor relates to the purchase of construction
  169  services on more than one building or structure, or involves a
  170  multiphased project, the contract must provide for the
  171  development of a list of items required to render complete,
  172  satisfactory, and acceptable all the construction services
  173  purchased pursuant to the contract for each building, structure,
  174  or phase of the project within the time limitations provided in
  175  paragraph (a).
  176         (c) The final contract completion date must be at least 30
  177  days after the delivery of the list of items. If the list is not
  178  timely provided to the contractor, the contract time for
  179  completion must be extended by at least 30 days after the
  180  contractor receives the list. Damages may not be assessed
  181  against a contractor for failing to complete a project within
  182  the time required by the contract if the list of items has not
  183  been timely provided to the contractor.
  184         (d)(c) The failure to include any corrective work or
  185  pending items not yet completed on the list developed pursuant
  186  to this subsection does not alter the responsibility of the
  187  contractor to complete all the construction services purchased
  188  pursuant to the contract.
  189         (e)(d) Upon completion of all items on the list, the
  190  contractor may submit a payment request for all remaining
  191  retainage withheld by the local governmental entity pursuant to
  192  this section. If a good faith dispute exists as to whether one
  193  or more items identified on the list have been completed
  194  pursuant to the contract, the local governmental entity may
  195  continue to withhold up to an amount not to exceed 150 percent
  196  of the total costs to complete such items.
  197         (f)(e) All items that require correction under the contract
  198  and that are identified after the preparation and delivery of
  199  the list remain the obligation of the contractor as defined by
  200  the contract.
  201         (g)(f) Warranty items or items not included in the list of
  202  items required under paragraph (a) may not affect the final
  203  payment of retainage as provided in this section or as provided
  204  in the contract between the contractor and its subcontractors
  205  and suppliers.
  206         (h)(g) Retainage may not be held by a local governmental
  207  entity or a contractor to secure payment of insurance premiums
  208  under a consolidated insurance program or series of insurance
  209  policies issued to a local governmental entity or a contractor
  210  for a project or group of projects, and the final payment of
  211  retainage as provided in this section may not be delayed pending
  212  a final audit by the local governmental entity’s or contractor’s
  213  insurance provider.
  214         (i)(h) If a local governmental entity fails to comply with
  215  its responsibilities to develop the list required under
  216  paragraph (a) or paragraph (b), as defined in the contract,
  217  within the time limitations provided in paragraph (a), the
  218  contractor may submit a payment request for all remaining
  219  retainage withheld by the local governmental entity pursuant to
  220  this section and payment of any remaining contract amount must
  221  be paid within 20 business days. If the local governmental
  222  entity has provided written notice to the contractor specifying
  223  the failure of the contractor to meet contract requirements in
  224  the development of the list of items to be completed, the local
  225  governmental entity need not pay or process any payment request
  226  for retainage if the contractor has, in whole or in part, failed
  227  to cooperate with the local governmental entity in the
  228  development of the list, or failed to perform its contractual
  229  responsibilities, if any, with regard to the development of the
  230  list, or if paragraph (8)(f) applies.
  231         Section 3. Section 218.76, Florida Statutes, is amended to
  232  read:
  233         218.76 Improper payment request or invoice; resolution of
  234  disputes.—
  235         (1) If In any case in which an improper payment request or
  236  invoice is submitted by a vendor, the local governmental entity
  237  shall, within 10 days after the improper payment request or
  238  invoice is received by it, notify the vendor, in writing, that
  239  the payment request or invoice is improper and indicate what
  240  corrective action on the part of the vendor is needed to make
  241  the payment request or invoice proper.
  242         (2) If In the event a dispute arises occurs between a
  243  vendor and a local governmental entity concerning payment of a
  244  payment request or an invoice, the dispute such disagreement
  245  shall be finally determined by the local governmental entity
  246  pursuant to as provided in this section. Each local governmental
  247  entity shall establish a dispute resolution procedure
  248  established to be followed by the local governmental entity in
  249  cases of such disputes. Such procedure must shall provide that
  250  proceedings to resolve the dispute are shall be commenced within
  251  not later than 45 days after the date on which the payment
  252  request or proper invoice was received by the local governmental
  253  entity and shall be concluded by final decision of the local
  254  governmental entity within not later than 60 days after the date
  255  on which the payment request or proper invoice was received by
  256  the local governmental entity. Such procedures are shall not be
  257  subject to chapter 120, and do such procedures shall not
  258  constitute an administrative proceeding that which prohibits a
  259  court from deciding de novo any action arising out of the
  260  dispute. If the dispute is resolved in favor of the local
  261  governmental entity, then interest charges shall begin to accrue
  262  15 days after the local governmental entity’s final decision. If
  263  the dispute is resolved in favor of the vendor, then interest
  264  begins shall begin to accrue as of the original date the payment
  265  became due. If the local governmental entity does not commence
  266  the dispute resolution procedure within the time required, the
  267  objection to payment shall be deemed to have been waived. The
  268  time for dispute resolution may be extended upon the written
  269  agreement of the affected parties.
  270         (3) In an action to recover amounts due under this part ss.
  271  218.70-218.80, the court shall award court costs and reasonable
  272  attorney’s fees, including fees incurred through any appeal, to
  273  the prevailing party, if the court finds that the nonprevailing
  274  party withheld any portion of the payment that is the subject of
  275  the action without any reasonable basis in law or fact to
  276  dispute the prevailing party’s claim to those amounts.
  277         Section 4. This act shall take effect July 1, 2010.

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