January 19, 2020
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Amendment CaShTmL-481972.HTM
                                                  SENATE AMENDMENT
    Bill No. SB 2754
    Amendment No. ___   Barcode 481972
                            CHAMBER ACTION
              Senate                               House
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       04/26/2004 12:25 PM         .                    
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 4  ______________________________________________________________
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10  ______________________________________________________________
11  Senator Bennett moved the following amendment:
12  
13         Senate Amendment (with title amendment) 
14         On page 2, line 7, through
15            page 4, line 11, delete those lines
16  
17  and insert:  
18         Section 1.  Section 218.70, Florida Statutes, is
19  amended to read:
20         218.70  Popular name Short title.--This part may be
21  cited as the "Local Government Florida Prompt Payment Act."
22         Section 2.  Subsections (2), (6), and (7) of section
23  218.72, Florida Statutes, are amended, and subsection (10) is
24  added to that section, to read:
25         218.72  Definitions.--As used in this part:
26         (2)  "Local governmental entity" means a county or
27  municipal government, school board, school district,
28  authority, special taxing district, other political
29  subdivision, or any office, board, bureau, commission,
30  department, branch, division, or institution thereof or any
31  project supported by county or municipal funds.
                                  1
    8:18 AM   04/26/04                                s2754c-21t12

SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 (6) "Vendor" means any person who sells goods or 2 services, sells or leases personal property, or leases real 3 property directly to a local governmental entity. The term 4 includes any person who provides waste-hauling services to 5 residents or businesses located within the boundaries of a 6 local government pursuant to a contract or local ordinance. 7 (7) "Construction services" means all labor, services, 8 and materials provided in connection with the construction, 9 alteration, repair, demolition, reconstruction, or any other 10 improvements to real property that require a license under 11 parts I and II of chapter 489. 12 (10) "Contractor" or "provider of construction 13 services" means any person who contracts directly with a local 14 governmental entity to provide construction services. 15 Section 3. Subsection (6) of section 218.735, Florida 16 Statutes, is amended, present subsection (7) of that section 17 is redesignated as subsection (9), and new subsections (7) and 18 (8) are added to that section, to read: 19 218.735 Timely payment for purchases of construction 20 services.-- 21 (6) When a contractor receives payment from a local 22 governmental entity for labor, services, or materials 23 furnished by subcontractors and suppliers hired by the 24 contractor, the contractor shall remit payment due to those 25 subcontractors and suppliers within 10 15 days after the 26 contractor's receipt of payment. When a subcontractor receives 27 payment from a contractor for labor, services, or materials 28 furnished by subcontractors and suppliers hired by the 29 subcontractor, the subcontractor shall remit payment due to 30 those subcontractors and suppliers within 7 15 days after the 31 subcontractor's receipt of payment. Nothing herein shall 2 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 prohibit a contractor or subcontractor from disputing, 2 pursuant to the terms of the relevant contract, all or any 3 portion of a payment alleged to be due to another party. In 4 the event of such a dispute, the contractor or subcontractor 5 may withhold the disputed portion of any such payment if the 6 contractor or subcontractor notifies the party whose payment 7 is disputed, in writing, of the amount in dispute and the 8 actions required to cure the dispute. The contractor or 9 subcontractor must pay all undisputed amounts due within the 10 time limits imposed by this section. 11 (7)(a) Each contract for construction services between 12 a local governmental entity and a contractor must provide for 13 the development of a list of items required to render 14 complete, satisfactory, and acceptable the construction 15 services purchased by the local governmental entity. The 16 contract must specify the process for the development of the 17 list, including responsibilities of the local governmental 18 entity and the contractor in developing and reviewing the list 19 and a reasonable time for developing the list, as follows: 20 1. For construction projects with an estimated cost of 21 less than $10 million, within 30 calendar days after reaching 22 substantial completion of the construction services purchased 23 as defined in the contract, or, if not defined in the 24 contract, upon reaching beneficial occupancy or use; or 25 2. For construction projects with an estimated cost of 26 $10 million or more, within 30 calendar days, unless otherwise 27 extended by contract not to exceed 60 calendar days, after 28 reaching substantial completion of the construction services 29 purchased as defined in the contract, or, if not defined in 30 the contract, upon reaching beneficial occupancy or use. 31 (b) If the contract between the local governmental 3 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 entity and the contractor relates to the purchase of 2 construction services on more than one building or structure, 3 or involves a multiphased project, the contract shall provide 4 for the development of a list of items required to render 5 complete, satisfactory, and acceptable all the construction 6 services purchased pursuant to the contract for each building, 7 structure, or phase of the project within the time limitations 8 provided in paragraph (a). 9 (c) The failure to include any corrective work or 10 pending items not yet completed on the list developed pursuant 11 to this subsection does not alter the responsibility of the 12 contractor to complete all the construction services purchased 13 pursuant to the contract. 14 (d) Upon completion of all items on the list, the 15 contractor may submit a payment request for all remaining 16 retainage withheld by the local governmental entity pursuant 17 to this section. If a good-faith dispute exists as to whether 18 one or more items identified on the list have been completed 19 pursuant to the contract, the local governmental entity may 20 continue to withhold an amount not to exceed 150 percent of 21 the total costs to complete such items. 22 (e) All items that require correction under the 23 contract and that are identified after the preparation and 24 delivery of the list remain the obligation of the contractor 25 as defined by the contract. 26 (f) Warranty items may not affect the final payment of 27 retainage as provided in this section or as provided in the 28 contract between the contractor and its subcontractors and 29 suppliers. 30 (g) Retainage may not be held by a local governmental 31 entity or a contractor to secure payment of insurance premiums 4 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 under a consolidated insurance program or series of insurance 2 policies issued to a local governmental entity or a contractor 3 for a project or group of projects, and the final payment of 4 retainage as provided in this section may not be delayed 5 pending a final audit by the local governmental entity's or 6 contractor's insurance provider. 7 (h) If a local governmental entity fails to comply 8 with its responsibilities to develop the list required under 9 paragraph (a) or paragraph (b), as defined in the contract, 10 within the time limitations provided in paragraph (a), the 11 contractor may submit a payment request for all remaining 12 retainage withheld by the local governmental entity pursuant 13 to this section. The local governmental entity need not pay or 14 process any payment request for retainage if the contractor 15 has, in whole or in part, failed to cooperate with the local 16 governmental entity in the development of the list or failed 17 to perform its contractual responsibilities, if any, with 18 regard to the development of the list or if paragraph (8)(f) 19 applies. 20 (8)(a) With regard to any contract for construction 21 services, a local governmental entity may withhold from each 22 progress payment made to the contractor an amount not 23 exceeding 10 percent of the payment as retainage to ensure the 24 satisfactory completion of the construction services purchased 25 pursuant to the contract until 50-percent completion of such 26 services. 27 (b) After 50-percent completion of the construction 28 services purchased pursuant to the contract, the local 29 governmental entity must reduce to 5 percent the amount of 30 retainage withheld from each subsequent progress payment made 31 to the contractor. For purposes of this subsection, the term 5 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 "50-percent completion" has the meaning set forth in the 2 contract between the local governmental entity and the 3 contractor, or, if not defined in the contract, the point at 4 which the local governmental entity has expended 50 percent of 5 the total cost of the construction services purchased as 6 identified in the contract together with all costs associated 7 with existing change orders and other additions or 8 modifications to the construction services provided for in the 9 contract. However, notwithstanding this subsection, a 10 municipality with a population of 25,000 or fewer, or a county 11 with a population of 100,000 or fewer, may withhold retainage 12 in an amount not exceeding 10 percent of each progress payment 13 made to the contractor until final completion and acceptance 14 of the project by the local governmental entity. 15 (c) After 50-percent completion of the construction 16 services purchased pursuant to the contract, the contractor 17 may elect to withhold retainage from payments to its 18 subcontractors at a rate higher than 5 percent. The specific 19 amount to be withheld must be determined on a case-by-case 20 basis and must be based on the contractor's assessment of the 21 subcontractor's past performance, the likelihood that such 22 performance will continue, and the contractor's ability to 23 rely on other safeguards. The contractor shall notify the 24 subcontractor, in writing, of its determination to withhold 25 more than 5 percent of the progress payment and the reasons 26 for making that determination, and the contractor may not 27 request the release of such retained funds from the local 28 governmental entity. 29 (d) After 50-percent completion of the construction 30 services purchased pursuant to the contract, the contractor 31 may present to the local governmental entity a payment request 6 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 for up to one-half of the retainage held by the local 2 governmental entity. The local governmental entity shall 3 promptly make payment to the contractor, unless the local 4 governmental entity has grounds, pursuant to paragraph (f), 5 for withholding the payment of retainage. If the local 6 governmental entity makes payment of retainage to the 7 contractor under this paragraph which is attributable to the 8 labor, services, or materials supplied by one or more 9 subcontractors or suppliers, the contractor shall timely remit 10 payment of such retainage to those subcontractors and 11 suppliers. 12 (e) This section does not prohibit a local 13 governmental entity from withholding retainage at a rate less 14 than 10 percent of each progress payment, from incrementally 15 reducing the rate of retainage pursuant to a schedule provided 16 for in the contract, or from releasing at any point all or a 17 portion of any retainage withheld by the local governmental 18 entity which is attributable to the labor, services, or 19 materials supplied by the contractor or by one or more 20 subcontractors or suppliers. If a local governmental entity 21 makes any payment of retainage to the contractor which is 22 attributable to the labor, services, or materials supplied by 23 one or more subcontractors or suppliers, the contractor shall 24 timely remit payment of such retainage to those subcontractors 25 and suppliers. 26 (f) This section does not require the local 27 governmental entity to pay or release any amounts that are the 28 subject of a good-faith dispute, the subject of an action 29 brought pursuant to s. 255.05, or otherwise the subject of a 30 claim or demand by the local governmental entity or 31 contractor. 7 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 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 (h) Paragraphs (a)-(d) do not apply to construction 5 services purchased by a local governmental entity which are 6 paid for, in whole or in part, with federal funds and are 7 subject to federal grantor laws and regulations or 8 requirements that are contrary to any provision of the Local 9 Government Prompt Payment Act. 10 (i) This subsection does not apply to any construction 11 services purchased by a local governmental entity if the total 12 cost of the construction services purchased as identified in 13 the contract is $200,000 or less. 14 Section 4. Section 255.0705, Florida Statutes, is 15 created to read: 16 255.0705 Popular name.--Sections 255.0705-255.078 may 17 be cited as the "Florida Prompt Payment Act." 18 Section 5. Subsections (2) and (3) of section 255.071, 19 Florida Statutes, are amended to read: 20 255.071 Payment of subcontractors, sub-subcontractors, 21 materialmen, and suppliers on construction contracts for 22 public projects.-- 23 (2) The failure to pay any undisputed obligations for 24 such labor, services, or materials within 30 days after the 25 date the labor, services, or materials were furnished and 26 payment for such labor, services, or materials became due, or 27 within the time limitations set forth in s. 255.073(3) 30 days 28 after the date payment for such labor, services, or materials 29 is received, whichever last occurs, shall entitle any person 30 providing such labor, services, or materials to the procedures 31 specified in subsection (3) and the remedies provided in 8 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 subsection (4). 2 (3) Any person providing labor, services, or materials 3 for the construction of a public building, for the prosecution 4 and completion of a public work, or for repairs upon a public 5 building or public work improvements to real property may file 6 a verified complaint alleging: 7 (a) The existence of a contract for providing such 8 labor, services, or materials to improve real property. 9 (b) A description of the labor, services, or materials 10 provided and alleging that the labor, services, or materials 11 were provided in accordance with the contract. 12 (c) The amount of the contract price. 13 (d) The amount, if any, paid pursuant to the contract. 14 (e) The amount that remains unpaid pursuant to the 15 contract and the amount thereof that is undisputed. 16 (f) That the undisputed amount has remained due and 17 payable pursuant to the contract for more than 30 days after 18 the date the labor or services were accepted or the materials 19 were received. 20 (g) That the person against whom the complaint was 21 filed has received payment on account of the labor, services, 22 or materials described in the complaint and, as of the date 23 the complaint was filed, has failed to make payment within the 24 time limitations set forth in s. 255.073(3) more than 30 days 25 prior to the date the complaint was filed. 26 Section 6. Section 255.072, Florida Statutes, is 27 created to read: 28 255.072 Definitions.--As used in ss. 255.073-255.078, 29 the term: 30 (1) "Agent" means project architect, project engineer, 31 or any other agency or person acting on behalf of a public 9 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 entity. 2 (2) "Construction services" means all labor, services, 3 and materials provided in connection with the construction, 4 alteration, repair, demolition, reconstruction, or any other 5 improvements to real property. The term "construction 6 services" does not include contracts or work performed for the 7 Department of Transportation. 8 (3) "Contractor" means any person who contracts 9 directly with a public entity to provide construction 10 services. 11 (4) "Payment request" means a request for payment for 12 construction services which conforms with all statutory 13 requirements and with all requirements specified by the public 14 entity to which the payment request is submitted. 15 (5) "Public entity" means the state, or any office, 16 board, bureau, commission, department, branch, division, or 17 institution thereof, but does not include a local governmental 18 entity as defined in s. 218.72. 19 (6) "Purchase" means the purchase of construction 20 services. 21 Section 7. Section 255.073, Florida Statutes, is 22 created to read: 23 255.073 Timely payment for purchases of construction 24 services.-- 25 (1) Except as otherwise provided in ss. 26 255.072-255.078, s. 215.422 governs the timely payment for 27 construction services by a public entity. 28 (2) If a public entity disputes a portion of a payment 29 request, the undisputed portion must be timely paid. 30 (3) When a contractor receives payment from a public 31 entity for labor, services, or materials furnished by 10 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 subcontractors and suppliers hired by the contractor, the 2 contractor shall remit payment due to those subcontractors and 3 suppliers within 10 days after the contractor's receipt of 4 payment. When a subcontractor receives payment from a 5 contractor for labor, services, or materials furnished by 6 subcontractors and suppliers hired by the subcontractor, the 7 subcontractor shall remit payment due to those subcontractors 8 and suppliers within 7 days after the subcontractor's receipt 9 of payment. This subsection does not prohibit a contractor or 10 subcontractor from disputing, pursuant to the terms of the 11 relevant contract, all or any portion of a payment alleged to 12 be due to another party if the contractor or subcontractor 13 notifies the party whose payment is disputed, in writing, of 14 the amount in dispute and the actions required to cure the 15 dispute. The contractor or subcontractor must pay all 16 undisputed amounts due within the time limits imposed by this 17 subsection. 18 (4) All payments due for the purchase of construction 19 services and not made within the applicable time limits shall 20 bear interest at the rate specified in s. 215.422. After July 21 1, 2005, such payments shall bear interest at the rate of 1 22 percent per month, to the extent that the Chief Financial 23 Officer's replacement project for the state's accounting and 24 cash management systems (Project ASPIRE) is operational for 25 the particular affected public entities. After January 1, 26 2006, all such payments due from public entities shall bear 27 interest at the rate of 1 percent per month. 28 Section 8. Section 255.074, Florida Statutes, is 29 created to read: 30 255.074 Procedures for calculation of payment due 31 dates.-- 11 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 (1) Each public entity shall establish procedures 2 whereby each payment request received by the public entity is 3 marked as received on the date on which it is delivered to an 4 agent or employee of the public entity or of a facility or 5 office of the public entity. 6 (2) If the terms under which a purchase is made allow 7 for partial deliveries and a payment request is submitted for 8 a partial delivery, the time for payment for the partial 9 delivery must be calculated from the time of the partial 10 delivery and the submission of the payment request. 11 (3) A public entity must submit a payment request to 12 the Chief Financial Officer for payment no more than 20 days 13 after receipt of the payment request. 14 Section 9. Section 255.075, Florida Statutes, is 15 created to read: 16 255.075 Mandatory interest.--A contract between a 17 public entity and a contractor may not prohibit the collection 18 of late payment interest charges authorized under s. 19 255.073(4). 20 Section 10. Section 255.076, Florida Statutes, is 21 created to read: 22 255.076 Improper payment request; resolution of 23 disputes.-- In an action to recover amounts due for 24 construction services purchased by a public entity, the court 25 shall award court costs and reasonable attorney's fees, 26 including fees incurred through any appeal, to the prevailing 27 party, if the court finds that the nonprevailing party 28 withheld any portion of the payment that is the subject of the 29 action without any reasonable basis in law or fact to dispute 30 the prevailing party's claim to those amounts. 31 Section 11. Section 255.077, Florida Statutes, is 12 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 created to read: 2 255.077 Project closeout and payment of retainage.-- 3 (1) Each contract for construction services between a 4 public entity and a contractor must provide for the 5 development of a list of items required to render complete, 6 satisfactory, and acceptable the construction services 7 purchased by the public entity. The contract must specify the 8 process for the development of the list, including 9 responsibilities of the public entity and the contractor in 10 developing and reviewing the list and a reasonable time for 11 developing the list, as follows: 12 1. For construction projects with an estimated cost of 13 less than $10 million, within 30 calendar days after reaching 14 substantial completion of the construction services purchased 15 as defined in the contract, or, if not defined in the 16 contract, upon reaching beneficial occupancy or use; or 17 2. For construction projects with an estimated cost of 18 $10 million or more, within 30 calendar days, unless otherwise 19 extended by contract not to exceed 60 calendar days, after 20 reaching substantial completion of the construction services 21 purchased as defined in the contract, or, if not defined in 22 the contract, upon reaching beneficial occupancy or use. 23 (2) If the contract between the public entity and the 24 contractor relates to the purchase of construction services on 25 more than one building or structure, or involves a multiphased 26 project, the contract shall provide for the development of a 27 list of items required to render complete, satisfactory, and 28 acceptable all the construction services purchased pursuant to 29 the contract for each building, structure, or phase of the 30 project within the time limitations provided in subsection 31 (1). 13 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 (3) The failure to include any corrective work or 2 pending items not yet completed on the list developed pursuant 3 to subsection (1) or subsection (2) does not alter the 4 responsibility of the contractor to complete all the 5 construction services purchased pursuant to the contract. 6 (4) Upon completion of all items on the list, the 7 contractor may submit a payment request for all remaining 8 retainage withheld by the public entity pursuant to s. 9 255.078. If a good-faith dispute exists as to whether one or 10 more items identified on the list have been completed pursuant 11 to the contract, the public entity may continue to withhold an 12 amount not to exceed 150 percent of the total costs to 13 complete such items. 14 (5) All items that require correction under the 15 contract and that are identified after the preparation and 16 delivery of the list remain the obligation of the contractor 17 as defined by the contract. 18 (6) Warranty items may not affect the final payment of 19 retainage as provided in this section or as provided in the 20 contract between the contractor and its subcontractors and 21 suppliers. 22 (7) Retainage may not be held by a public entity or a 23 contractor to secure payment of insurance premiums under a 24 consolidated insurance program or series of insurance policies 25 issued to a public entity or a contractor for a project or 26 group of projects, and the final payment of retainage as 27 provided in this section may not be delayed pending a final 28 audit by the public entity's or contractor's insurance 29 provider. 30 (8) If a public entity fails to comply with its 31 responsibilities to develop the list required under subsection 14 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 (1) or subsection (2), as defined in the contract, within the 2 time limitations provided in subsection (1), the contractor 3 may submit a payment request for all remaining retainage 4 withheld by the public entity pursuant to s. 255.078. The 5 public entity need not pay or process any payment request for 6 retainage if the contractor has, in whole or in part, failed 7 to cooperate with the public entity in the development of the 8 list or failed to perform its contractual responsibilities, if 9 any, with regard to the development of the list or if s. 10 255.078(6) applies. 11 Section 12. Section 255.078, Florida Statutes, is 12 created to read: 13 255.078 Public construction retainage.-- 14 (1) With regard to any contract for construction 15 services, a public entity may withhold from each progress 16 payment made to the contractor an amount not exceeding 10 17 percent of the payment as retainage to ensure the satisfactory 18 completion of the construction services purchased pursuant to 19 the contract until 50-percent completion of such services. 20 (2) After 50-percent completion of the construction 21 services purchased pursuant to the contract, the public entity 22 must reduce to 5 percent the amount of retainage withheld from 23 each subsequent progress payment made to the contractor. For 24 purposes of this section, the term "50-percent completion" has 25 the meaning set forth in the contract between the public 26 entity and the contractor, or, if not defined in the contract, 27 the point at which the public entity has expended 50 percent 28 of the total cost of the construction services purchased as 29 identified in the contract together with all costs associated 30 with existing change orders and other additions or 31 modifications to the construction services provided for in the 15 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 contract. 2 (3) After 50-percent completion of the construction 3 services purchased pursuant to the contract, the contractor 4 may elect to withhold retainage from payments to its 5 subcontractors at a rate higher than 5 percent. The specific 6 amount to be withheld must be determined on a case-by-case 7 basis and must be based on the contractor's assessment of the 8 subcontractor's past performance, the likelihood that such 9 performance will continue, and the contractor's ability to 10 rely on other safeguards. The contractor shall notify the 11 subcontractor, in writing, of its determination to withhold 12 more than 5 percent of the progress payment and the reasons 13 for making that determination, and the contractor may not 14 request the release of such retained funds from the public 15 entity. 16 (4) After 50-percent completion of the construction 17 services purchased pursuant to the contract, the contractor 18 may present to the public entity a payment request for up to 19 one-half of the retainage held by the public entity. The 20 public entity shall promptly make payment to the contractor, 21 unless the public entity has grounds, pursuant to subsection 22 (6), for withholding the payment of retainage. If the public 23 entity makes payment of retainage to the contractor under this 24 subsection which is attributable to the labor, services, or 25 materials supplied by one or more subcontractors or suppliers, 26 the contractor shall timely remit payment of such retainage to 27 those subcontractors and suppliers. 28 (5) Neither this section nor s. 255.077 prohibits a 29 public entity from withholding retainage at a rate less than 30 10 percent of each progress payment, from incrementally 31 reducing the rate of retainage pursuant to a schedule provided 16 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 for in the contract, or from releasing at any point all or a 2 portion of any retainage withheld by the public entity which 3 is attributable to the labor, services, or materials supplied 4 by the contractor or by one or more subcontractors or 5 suppliers. If a public entity makes any payment of retainage 6 to the contractor which is attributable to the labor, 7 services, or materials supplied by one or more subcontractors 8 or suppliers, the contractor shall timely remit payment of 9 such retainage to those subcontractors and suppliers. 10 (6) Neither this section nor s. 255.077 requires the 11 public entity to pay or release any amounts that are the 12 subject of a good-faith dispute, the subject of an action 13 brought pursuant to s. 255.05, or otherwise the subject of a 14 claim or demand by the public entity or contractor. 15 (7) The same time limits for payment of a payment 16 request apply regardless of whether the payment request is 17 for, or includes, retainage. 18 (8) Subsections (1)-(4) do not apply to construction 19 services purchased by a public entity which are paid for, in 20 whole or in part, with federal funds and are subject to 21 federal grantor laws and regulations or requirements that are 22 contrary to any provision of the Florida Prompt Payment Act. 23 (9) This section does not apply to any construction 24 services purchased by a public entity if the total cost of the 25 construction services purchased as identified in the contract 26 is $200,000 or less. 27 Section 13. Section 255.05, Florida Statutes, is 28 amended to read: 29 255.05 Bond of contractor constructing public 30 buildings; form; action by materialmen.-- 31 (1)(a) Any person entering into a formal contract with 17 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 the state or any county, city, or political subdivision 2 thereof, or other public authority, for the construction of a 3 public building, for the prosecution and completion of a 4 public work, or for repairs upon a public building or public 5 work shall be required, before commencing the work or before 6 recommencing the work after a default or abandonment, to 7 execute, deliver to the public owner, and record in the public 8 records of the county where the improvement is located, a 9 payment and performance bond with a surety insurer authorized 10 to do business in this state as surety. A public entity may 11 not require a contractor to secure a surety bond under this 12 section from a specific agent or bonding company. The bond 13 must state on its front page: the name, principal business 14 address, and phone number of the contractor, the surety, the 15 owner of the property being improved, and, if different from 16 the owner, the contracting public entity; the contract number 17 assigned by the contracting public entity; and a description 18 of the project sufficient to identify it, such as a legal 19 description or the street address of the property being 20 improved, and a general description of the improvement. Such 21 bond shall be conditioned upon the contractor's performance of 22 the construction work in the time and manner prescribed in the 23 contract and promptly making payments to all persons defined 24 in s. 713.01 who furnish labor, services, or materials for the 25 prosecution of the work provided for in the contract. Any 26 claimant may apply to the governmental entity having charge of 27 the work for copies of the contract and bond and shall 28 thereupon be furnished with a certified copy of the contract 29 and bond. The claimant shall have a right of action against 30 the contractor and surety for the amount due him or her, 31 including unpaid finance charges due under the claimant's 18 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 contract. Such action shall not involve the public authority 2 in any expense. When such work is done for the state and the 3 contract is for $100,000 or less, no payment and performance 4 bond shall be required. At the discretion of the official or 5 board awarding such contract when such work is done for any 6 county, city, political subdivision, or public authority, any 7 person entering into such a contract which is for $200,000 or 8 less may be exempted from executing the payment and 9 performance bond. When such work is done for the state, the 10 Secretary of the Department of Management Services may 11 delegate to state agencies the authority to exempt any person 12 entering into such a contract amounting to more than $100,000 13 but less than $200,000 from executing the payment and 14 performance bond. In the event such exemption is granted, the 15 officer or officials shall not be personally liable to persons 16 suffering loss because of granting such exemption. The 17 Department of Management Services shall maintain information 18 on the number of requests by state agencies for delegation of 19 authority to waive the bond requirements by agency and project 20 number and whether any request for delegation was denied and 21 the justification for the denial. Any provision in a bond 22 furnished for public work contracts as provided by this 23 subsection restricting the classes or persons protected by the 24 bond or the venue of any proceeding relating to the bond is 25 unenforceable. 26 (b) The Department of Management Services shall adopt 27 rules with respect to all contracts for $200,000 or less, to 28 provide: 29 1. Procedures for retaining up to 10 percent of each 30 request for payment submitted by a contractor and procedures 31 for determining disbursements from the amount retained on a 19 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 pro rata basis to laborers, materialmen, and subcontractors, 2 as defined in s. 713.01. 3 2. Procedures for requiring certification from 4 laborers, materialmen, and subcontractors, as defined in s. 5 713.01, prior to final payment to the contractor that such 6 laborers, materialmen, and subcontractors have no claims 7 against the contractor resulting from the completion of the 8 work provided for in the contract. 9 10 The state shall not be held liable to any laborer, 11 materialman, or subcontractor for any amounts greater than the 12 pro rata share as determined under this section. 13 (2)(a)1. If a claimant is no longer furnishing labor, 14 services, or materials on a project, a contractor or the 15 contractor's agent or attorney may elect to shorten the 16 prescribed time in this paragraph within which an action to 17 enforce any claim against a payment bond provided pursuant to 18 this section may be commenced by recording in the clerk's 19 office a notice in substantially the following form: 20 21 NOTICE OF CONTEST OF CLAIM 22 AGAINST PAYMENT BOND 23 24 To: ...(Name and address of claimant)... 25 26 You are notified that the undersigned contests your 27 notice of nonpayment, dated ............, ........, and served 28 on the undersigned on ............, ........, and that the 29 time within which you may file suit to enforce your claim is 30 limited to 60 days after the date of service of this notice. 31 20 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 DATED on ............, ......... 2 3 Signed:...(Contractor or Attorney)... 4 5 The claim of any claimant upon whom such notice is served and 6 who fails to institute a suit to enforce his or her claim 7 against the payment bond within 60 days after service of such 8 notice shall be extinguished automatically. The clerk shall 9 mail a copy of the notice of contest to the claimant at the 10 address shown in the notice of nonpayment or most recent 11 amendment thereto and shall certify to such service on the 12 face of such notice and record the notice. Service is complete 13 upon mailing. 14 2. A claimant, except a laborer, who is not in privity 15 with the contractor shall, before commencing or not later than 16 45 days after commencing to furnish labor, materials, or 17 supplies for the prosecution of the work, furnish the 18 contractor with a notice that he or she intends to look to the 19 bond for protection. A claimant who is not in privity with the 20 contractor and who has not received payment for his or her 21 labor, materials, or supplies shall deliver to the contractor 22 and to the surety written notice of the performance of the 23 labor or delivery of the materials or supplies and of the 24 nonpayment. The notice of nonpayment may be served at any time 25 during the progress of the work or thereafter but not before 26 45 days after the first furnishing of labor, services, or 27 materials, and not later than 90 days after the final 28 furnishing of the labor, services, or materials by the 29 claimant or, with respect to rental equipment, not later than 30 90 days after the date that the rental equipment was last on 31 the job site available for use. Any notice of nonpayment 21 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 served by a claimant who is not in privity with the contractor 2 which includes sums for retainage must specify the portion of 3 the amount claimed for retainage. No action for the labor, 4 materials, or supplies may be instituted against the 5 contractor or the surety unless both notices have been given. 6 Notices required or permitted under this section may be served 7 in accordance with s. 713.18. An action, except for an action 8 exclusively for recovery of retainage, must be instituted 9 against the contractor or the surety on the payment bond or 10 the payment provisions of a combined payment and performance 11 bond within 1 year after the performance of the labor or 12 completion of delivery of the materials or supplies. An action 13 exclusively for recovery of retainage must be instituted 14 against the contractor or the surety within 1 year after the 15 performance of the labor or completion of delivery of the 16 materials or supplies, or within 90 days after receipt of 17 final payment (or the payment estimate containing the owner's 18 final reconciliation of quantities if no further payment is 19 earned and due as a result of deductive adjustments) by the 20 contractor or surety, whichever comes last. A claimant may not 21 waive in advance his or her right to bring an action under the 22 bond against the surety. In any action brought to enforce a 23 claim against a payment bond under this section, the 24 prevailing party is entitled to recover a reasonable fee for 25 the services of his or her attorney for trial and appeal or 26 for arbitration, in an amount to be determined by the court, 27 which fee must be taxed as part of the prevailing party's 28 costs, as allowed in equitable actions. The time periods for 29 service of a notice of nonpayment or for bringing an action 30 against a contractor or a surety shall be measured from the 31 last day of furnishing labor, services, or materials by the 22 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 claimant and shall not be measured by other standards, such as 2 the issuance of a certificate of occupancy or the issuance of 3 a certificate of substantial completion. 4 (b) When a person is required to execute a waiver of 5 his or her right to make a claim against the payment bond in 6 exchange for, or to induce payment of, a progress payment, the 7 waiver may be in substantially the following form: 8 9 WAIVER OF RIGHT TO CLAIM 10 AGAINST THE PAYMENT BOND 11 (PROGRESS PAYMENT) 12 13 The undersigned, in consideration of the sum of $...., 14 hereby waives its right to claim against the payment bond for 15 labor, services, or materials furnished through ...(insert 16 date)... to ...(insert the name of your customer)... on the 17 job of ...(insert the name of the owner)..., for improvements 18 to the following described project: 19 20 (description of project) 21 22 This waiver does not cover any retention or any labor, 23 services, or materials furnished after the date specified. 24 25 DATED ON ........, ..... 26 ...(Claimant)... 27 By:............ 28 29 (c) When a person is required to execute a waiver of 30 his or her right to make a claim against the payment bond, in 31 exchange for, or to induce payment of, the final payment, the 23 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 waiver may be in substantially the following form: 2 3 WAIVER OF RIGHT TO CLAIM 4 AGAINST THE PAYMENT BOND (FINAL PAYMENT) 5 6 The undersigned, in consideration of the final payment 7 in the amount of $...., hereby waives its right to claim 8 against the payment bond for labor, services, or materials 9 furnished to ...(insert the name of your customer)... on the 10 job of ...(insert the name of the owner)..., for improvements 11 to the following described project: 12 13 (description of project) 14 15 DATED ON ........, ..... 16 ...(Claimant)... 17 By:............ 18 19 (d) A person may not require a claimant to furnish a 20 waiver that is different from the forms in paragraphs (b) and 21 (c). 22 (e) A claimant who executes a waiver in exchange for a 23 check may condition the waiver on payment of the check. 24 (f) A waiver that is not substantially similar to the 25 forms in this subsection is enforceable in accordance with its 26 terms. 27 (3) The bond required in subsection (1) may be in 28 substantially the following form: 29 30 PUBLIC CONSTRUCTION BOND 31 24 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 Bond No. (enter bond number) 2 3 BY THIS BOND, We _____, as Principal and _____, a 4 corporation, as Surety, are bound to _____, herein called 5 Owner, in the sum of $_____, for payment of which we bind 6 ourselves, our heirs, personal representatives, successors, 7 and assigns, jointly and severally. 8 THE CONDITION OF THIS BOND is that if Principal: 9 1. Performs the contract dated _____, _____, between 10 Principal and Owner for construction of _____, the contract 11 being made a part of this bond by reference, at the times and 12 in the manner prescribed in the contract; and 13 2. Promptly makes payments to all claimants, as 14 defined in Section 255.05(1), Florida Statutes, supplying 15 Principal with labor, materials, or supplies, used directly or 16 indirectly by Principal in the prosecution of the work 17 provided for in the contract; and 18 3. Pays Owner all losses, damages, expenses, costs, 19 and attorney's fees, including appellate proceedings, that 20 Owner sustains because of a default by Principal under the 21 contract; and 22 4. Performs the guarantee of all work and materials 23 furnished under the contract for the time specified in the 24 contract, then this bond is void; otherwise it remains in full 25 force. 26 Any action instituted by a claimant under this bond for 27 payment must be in accordance with the notice and time 28 limitation provisions in Section 255.05, Florida Statutes. 29 Any changes in or under the contract documents and 30 compliance or noncompliance with any formalities connected 31 with the contract or the changes does not affect Surety's 25 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 obligation under this bond. 2 3 DATED ON _____, _____. 4 5 ... (Name of Principal) ... 6 By ... (As Attorney in Fact) ... 7 ... (Name of Surety) ... 8 9 (4) The payment provisions of all bonds required by 10 furnished for public work contracts described in subsection 11 (1) shall, regardless of form, be construed and deemed 12 statutory bonds furnished pursuant to this section and such 13 bonds shall not under any circumstances be converted into 14 common law bonds bond provisions, subject to all requirements 15 of subsection (2). 16 (5) In addition to the provisions of chapter 47, any 17 action authorized under this section may be brought in the 18 county in which the public building or public work is being 19 constructed or repaired. This subsection shall not apply to an 20 action instituted prior to May 17, 1977. 21 (6) All bonds executed pursuant to this section shall 22 make reference to this section by number and shall contain 23 reference to the notice and time limitation provisions of this 24 section. 25 (6)(7) In lieu of the bond required by this section, a 26 contractor may file with the state, county, city, or other 27 political authority an alternative form of security in the 28 form of cash, a money order, a certified check, a cashier's 29 check, an irrevocable letter of credit, or a security of a 30 type listed in part II of chapter 625. Any such alternative 31 form of security shall be for the same purpose and be subject 26 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 to the same conditions as those applicable to the bond 2 required by this section. The determination of the value of 3 an alternative form of security shall be made by the 4 appropriate state, county, city, or other political 5 subdivision. 6 (7)(8) When a contractor has furnished a payment bond 7 pursuant to this section, he or she may, when the state, 8 county, municipality, political subdivision, or other public 9 authority makes any payment to the contractor or directly to a 10 claimant, serve a written demand on any claimant who is not in 11 privity with the contractor for a written statement under oath 12 of his or her account showing the nature of the labor or 13 services performed and to be performed, if any; the materials 14 furnished; the materials to be furnished, if known; the amount 15 paid on account to date; the amount due; and the amount to 16 become due, if known, as of the date of the statement by the 17 claimant. Any such demand to a claimant who is not in privity 18 with the contractor must be served on the claimant at the 19 address and to the attention of any person who is designated 20 to receive the demand in the notice to contractor served by 21 the claimant. The failure or refusal to furnish the statement 22 does not deprive the claimant of his or her rights under the 23 bond if the demand is not served at the address of the 24 claimant or directed to the attention of the person designated 25 to receive the demand in the notice to contractor. The failure 26 to furnish the statement within 30 days after the demand, or 27 the furnishing of a false or fraudulent statement, deprives 28 the claimant who fails to furnish the statement, or who 29 furnishes the false or fraudulent statement, of his or her 30 rights under the bond. If the contractor serves more than one 31 demand for statement of account on a claimant and none of the 27 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 information regarding the account has changed since the 2 claimant's last response to a demand, the failure or refusal 3 to furnish such statement does not deprive the claimant of his 4 or her rights under the bond. The negligent inclusion or 5 omission of any information deprives the claimant of his or 6 her rights under the bond to the extent that the contractor 7 can demonstrate prejudice from such act or omission by the 8 claimant. The failure to furnish a response to a demand for 9 statement of account does not affect the validity of any claim 10 on the bond being enforced in a lawsuit filed before the date 11 the demand for statement of account is received by the 12 claimant. 13 (8)(9) On any public works project for which the 14 public authority requires a performance and payment bond, 15 suits at law and in equity may be brought and maintained by 16 and against the public authority on any contract claim arising 17 from breach of an express provision or an implied covenant of 18 a written agreement or a written directive issued by the 19 public authority pursuant to the written agreement. In any 20 such suit, the public authority and the contractor shall have 21 all of the same rights and obligations as a private person 22 under a like contract except that no liability may be based on 23 an oral modification of either the written contract or written 24 directive. Nothing herein shall be construed to waive the 25 sovereign immunity of the state and its political subdivisions 26 from equitable claims and equitable remedies. The provisions 27 of this subsection shall apply only to contracts entered into 28 on or after July 1, 1999. 29 (9) An action, except an action for recovery of 30 retainage, must be instituted against the contractor or the 31 surety on the payment bond or the payment provisions of a 28 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 combined payment and performance bond within 1 year after the 2 performance of the labor or completion of delivery of the 3 materials or supplies. An action for recovery of retainage 4 must be instituted against the contractor or the surety within 5 1 year after the performance of the labor or completion of 6 delivery of the materials or supplies, provided that such an 7 action may not be instituted until one of the following 8 conditions is satisfied: 9 (a) The public entity has paid out the claimant's 10 retainage to the contractor, and the time provided under s. 11 255.073(3) for payment of that retainage to the claimant has 12 expired; 13 (b) The claimant has completed all work required under 14 its contract and 70 days have passed since the contractor sent 15 its final payment request to the public entity; or 16 (c) The claimant has asked the contractor, in writing, 17 when the contractor received payment of the claimant's 18 retainage or when the contractor sent its final payment 19 request to the public entity, and the contractor has failed to 20 respond to this request, in writing, within 10 days after 21 receipt. 22 23 If none of the conditions described in paragraph (a), 24 paragraph (b), or paragraph (c) is satisfied and an action for 25 recovery of retainage therefore cannot be instituted within 26 the 1-year limitation period set forth in this subsection, 27 this limitation period shall be extended until 120 days after 28 one of these conditions is satisfied. 29 Section 14. Paragraph (b) of subsection (2) of section 30 95.11, Florida Statutes, is amended to read: 31 95.11 Limitations other than for the recovery of real 29 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 property.--Actions other than for recovery of real property 2 shall be commenced as follows: 3 (2) WITHIN FIVE YEARS.-- 4 (b) A legal or equitable action on a contract, 5 obligation, or liability founded on a written instrument, 6 except for an action to enforce a claim against a payment 7 bond, which shall be governed by the applicable provisions of 8 ss. 255.05(9) 255.05(2)(a)2. and 713.23(1)(e). 9 10 (Redesignate subsequent sections.) 11 12 13 ================ T I T L E A M E N D M E N T =============== 14 And the title is amended as follows: 15 On page 1, lines 3 through 6, delete those lines 16 17 and insert: 18 amending s. 218.70, F.S.; providing a short 19 title; amending s. 218.72, F.S.; redefining 20 terms used in part VII of ch. 218, F.S.; 21 amending s. 218.735, F.S.; revising provisions 22 relating to timely payment for purchases of 23 construction services; revising deadlines for 24 payment; providing procedures for project 25 closeout and payment of retainage; providing 26 requirements for local government construction 27 retainage; providing that ss. 218.72-218.76, 28 F.S., apply to the payment of any payment 29 request for retainage; providing exceptions; 30 creating s. 255.0705, F.S.; providing a short 31 title; amending s. 255.071, F.S.; revising 30 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 deadlines for the payment of subcontractors, 2 sub-subcontractors, materialmen, and suppliers 3 on construction contracts for public projects; 4 creating ss. 255.072, 255.073, 255.074, 5 255.075, 255.076, 255.077, and 255.078, F.S.; 6 providing definitions; providing for timely 7 payment for purchases of construction services 8 by a public entity; providing procedures for 9 calculating payment due dates; providing 10 procedures for handling improper payment 11 requests; providing for the resolution of 12 disputes; providing for project closeout and 13 payment of retainage; providing that ss. 14 255.072-255.076, F.S., apply to the payment of 15 any payment request for retainage; providing 16 exceptions; amending s. 255.05, F.S.; providing 17 that certain restrictions in bonds issued for 18 public works projects are unenforceable; 19 providing requirements for certain notices of 20 nonpayment served by a claimant who is not in 21 privity with the contractor; revising the form 22 for a public construction bond; requiring the 23 payment provisions of all public construction 24 bonds to be construed as statutory bonds; 25 prohibiting conversion to common law bonds; 26 deleting obsolete language; deleting a 27 requirement that bond forms used by public 28 owners reference certain notice and time 29 limitation provisions; providing limitations on 30 a claimant's institution of certain actions 31 against a contractor or surety; amending s. 31 8:18 AM 04/26/04 s2754c-21t12
SENATE AMENDMENT Bill No. SB 2754 Amendment No. ___ Barcode 481972 1 95.11, F.S., to conform a cross-reference; 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 8:18 AM 04/26/04 s2754c-21t12
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