Senate Bill sb0870c1

    Florida Senate - 2001                            CS for SB 870

    By the Committee on Governmental Oversight and Productivity;
    and Senators Webster, Peaden, Posey, Lee and Sanderson




    302-1531-01

  1                      A bill to be entitled

  2         An act relating to construction; amending s.

  3         218.72, F.S.; redefining the terms "proper

  4         invoice," "local government entity,"

  5         "purchase," and "construction services" and

  6         defining the terms "payment request" and

  7         "agent" for the purpose of the Florida Prompt

  8         Payment Act; amending s. 218.73, F.S.;

  9         providing for timely payment for

10         nonconstruction services; amending s. 218.735,

11         F.S.; revising provisions with respect to

12         timely payment for purchases of construction

13         services; amending s. 218.74, F.S.; revising

14         provisions with respect to procedures for

15         calculation of payment due dates; amending s.

16         218.75, F.S.; revising provisions with respect

17         to mandatory interest; amending s. 218.76,

18         F.S.; revising provisions with respect to

19         improper invoices and resolution of disputes;

20         providing for the recovery of court costs and

21         attorney's fees under certain circumstances;

22         providing an effective date.

23  

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

25  

26         Section 1.  Subsections (1), (2), (5), and (7) of

27  section 218.72, Florida Statutes, are amended, and subsections

28  (8) and (9) are added to that section, to read:

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

30         (1)  "Proper invoice" means an invoice which conforms

31  with all statutory requirements and with all requirements that

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    Florida Senate - 2001                            CS for SB 870
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  1  have been specified by the local governmental entity to which

  2  the invoice is submitted. if:

  3         (a)  Such requirements have been adopted by formal

  4  action of the local governmental entity taken prior to the

  5  transaction to which the invoice applies.

  6         (b)  The local governmental entity made such

  7  requirements available to vendors.

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

  9  municipal government, school board, school district,

10  authority, special taxing district, other political

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

12  commission, department, branch, division, or institution

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

14         (5)  "Purchase" means the purchase of goods, or

15  services, or construction services; the purchase or lease of

16  personal property;, or the lease of real property by a local

17  governmental entity.

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

19  and materials provided performed in connection with the

20  construction, alteration, repair, demolition, reconstruction,

21  or any other improvements to real property that require a

22  license under parts I and II of chapter 489.

23         (8)  "Payment request" means a request for payment for

24  construction services which conforms with all statutory

25  requirements and with all requirements specified by the local

26  governmental entity to which the payment request is submitted.

27         (9)  "Agent" means project architect, project engineer,

28  or any other agency or person acting on behalf of the local

29  governmental entity.

30         Section 2.  Section 218.73, Florida Statutes, is

31  amended to read:

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    Florida Senate - 2001                            CS for SB 870
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  1         218.73  Timely payment for nonconstruction

  2  services.--The time at which payment is due for a purchase

  3  other than construction services by a local governmental

  4  entity, except for the purchase of construction services, is

  5  due must be calculated from:

  6         (1)  The date on which a proper invoice is received by

  7  the chief disbursement officer of the local governmental

  8  entity after approval by the governing body, if required; or

  9         (2)  If a proper invoice is not received by the local

10  governmental entity, the date:

11         (a)  On which delivery of personal property is accepted

12  by the local governmental entity;

13         (b)  On which services are completed;

14         (c)  On which the rental period begins; or

15         (d)  On which the local governmental entity and vendor

16  agree in a contract that provides dates relative to payment

17  periods;

18  

19  whichever date is latest.

20         Section 3.  Section 218.735, Florida Statutes, is

21  amended to read:

22         218.735  Timely payment for purchases of construction

23  services.--

24         (1)  The due date for payment for the purchase of

25  construction services by a local governmental entity is

26  determined as follows:

27         (a)  If an agent the project architect or project

28  engineer must approve the payment request or invoice prior to

29  the payment request or invoice being submitted to the local

30  governmental entity, payment is due 25 20 business days after

31  the date on which the payment request or architect or engineer

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    Florida Senate - 2001                            CS for SB 870
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  1  approves the invoice and the invoice is stamped as received as

  2  provided in s. 218.74(1).

  3         (b)  If an agent the project architect or project

  4  engineer need not approve the payment request or invoice which

  5  is submitted by the contractor, payment is due 20 business

  6  days after the date on which the payment request or invoice is

  7  stamped as received as provided in s. 218.74(1).

  8         (2)  The local governmental entity may reject the

  9  payment request or invoice within 20 business days after the

10  date on which the payment request or invoice is stamped as

11  received as provided in s. 218.74(1).  The rejection must be

12  written and must specify the deficiency in the payment request

13  or invoice and the action necessary to make the payment

14  request or invoice proper.

15         (3)  If a payment request or an invoice is rejected

16  under subsection (2) or this subsection and the contractor

17  submits a corrected payment request or invoice which corrects

18  the deficiency specified in writing by the local governmental

19  entity, the corrected payment request or invoice must be paid

20  or rejected on the later of:

21         (a)  Ten business days after the date the corrected

22  payment request or invoice is stamped as received as provided

23  in s. 218.74(1); or

24         (b)  If the governing body is required by ordinance,

25  charter, or other law to approve or reject the corrected

26  payment request or invoice, the first business day after the

27  next regularly scheduled meeting of the governing body held

28  after the corrected payment request or invoice is stamped as

29  received as provided in s. 218.74(1).

30         (4)  If a dispute between the local governmental entity

31  and the contractor cannot be resolved by the procedure in

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    Florida Senate - 2001                            CS for SB 870
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  1  subsection (3), the dispute must be resolved in accordance

  2  with the dispute resolution procedure prescribed in the

  3  construction contract or in any applicable ordinance.  In the

  4  absence of a prescribed procedure, the dispute must be

  5  resolved by the procedure specified in s. 218.76(2).

  6         (5)  If a local governmental entity disputes a portion

  7  of a payment request or an invoice, the undisputed portion

  8  shall be paid timely, in accordance with subsection (1). The

  9  payment time periods provided in this section for construction

10  services purchased by a local governmental entity shall not

11  affect contractual provisions or contractual covenants of a

12  local governmental entity in effect on September 30, 1995.

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

14  governmental entity for labor, services, or materials

15  furnished by subcontractors and suppliers hired by the

16  contractor, the contractor shall remit payment due to those

17  subcontractors and suppliers within 15 days after the

18  contractor's receipt of payment.  When a subcontractor

19  receives payment from a contractor for labor, services, or

20  materials furnished by subcontractors and suppliers hired by

21  the subcontractor, the subcontractor shall remit payment due

22  to those subcontractors and suppliers within 15 days after the

23  subcontractor's receipt of payment.  Nothing herein shall

24  prohibit a contractor or subcontractor from disputing,

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

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

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

28  may withhold the disputed portion of any such payment but the

29  undisputed portion must be remitted within the time limits

30  imposed by this subsection.

31  

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    Florida Senate - 2001                            CS for SB 870
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  1         (7)(6)  All payments due under this section from a

  2  local governmental entity and not made within the time periods

  3  period specified by this section shall bear interest at the

  4  rate of 1 percent per month, or the rate specified by

  5  contract, whichever is greater as specified in s. 218.74(4).

  6         Section 4.  Section 218.74, Florida Statutes, is

  7  amended to read:

  8         218.74  Procedures for calculation of payment due

  9  dates.--

10         (1)  Each local governmental entity shall establish

11  procedures whereby each payment request or invoice received by

12  the local governmental entity is marked as received on the

13  date on which it is delivered to an agent or employee of the

14  local governmental entity or of a facility or office of the

15  local governmental entity.

16         (2)  The payment due date for a local governmental

17  entity for the purchase of goods or services other than

18  construction services is 45 days after the date specified in

19  s. 218.73.  The payment due date for the purchase of

20  construction services is specified in s. 218.735.

21         (3)  If the terms under which a purchase is made allow

22  for partial deliveries and a payment request or proper invoice

23  is submitted for a partial delivery, the time for payment for

24  the partial delivery must be calculated from the time of the

25  partial delivery and the submission of the payment request or

26  invoice in the same manner as provided in s. 218.73 or s.

27  218.735.

28         (4)  All payments, other than payments for construction

29  services, due from a local governmental entity and not made

30  within the time specified by this section bear interest from

31  30 days after the due date at the rate of 1 percent per month

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    Florida Senate - 2001                            CS for SB 870
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  1  on the unpaid balance. The vendor must invoice the local

  2  governmental entity for any interest accrued in order to

  3  receive the interest payment.  Any overdue period of less than

  4  1 month is considered as 1 month in computing interest.

  5  Unpaid interest is compounded monthly.  With respect to each

  6  past due payment, interest ceases to accrue after interest on

  7  that payment has accrued for 12 months. For the purposes of

  8  this section, the term "1 month" means a period beginning on

  9  any day of one month and ending on the same day of the

10  following month.

11         Section 5.  Section 218.75, Florida Statutes, is

12  amended to read:

13         218.75  Mandatory interest.--No contract between a

14  local governmental entity and a vendor or a provider of

15  construction services shall prohibit the collection of vendor

16  from invoicing the local governmental entity for late payment

17  interest charges allowable under this part.

18         Section 6.  Section 218.76, Florida Statutes, is

19  amended to read:

20         218.76  Improper payment request or invoice; resolution

21  of disputes.--

22         (1)  In any case in which an improper payment request

23  or invoice is submitted by a vendor, the local governmental

24  entity shall, within 10 days after the improper payment

25  request or invoice is received by it, notify the vendor that

26  the payment request or invoice is improper and indicate what

27  corrective action on the part of the vendor is needed to make

28  the payment request or invoice proper.

29         (2)  In the event a dispute occurs between a vendor and

30  a local governmental entity concerning payment of a payment

31  request or an invoice, such disagreement shall be finally

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    Florida Senate - 2001                            CS for SB 870
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  1  determined by the local governmental entity as provided in

  2  this section.  Each local governmental entity shall establish

  3  a dispute resolution procedure to be followed by the local

  4  governmental entity in cases of such disputes.  Such procedure

  5  shall provide that proceedings to resolve the dispute shall be

  6  commenced not later than 45 days after the date on which the

  7  payment request proper invoice was received by the local

  8  governmental entity and shall be concluded by final decision

  9  of the local governmental entity not later than 60 days after

10  the date on which the payment request or proper invoice was

11  received by the local governmental entity.  Such procedures

12  shall not be subject to chapter 120, and such procedures shall

13  not constitute an administrative proceeding which prohibits a

14  court from deciding de novo any action arising out of the

15  dispute.  If the dispute is resolved in favor of the local

16  governmental entity, then interest charges shall begin to

17  accrue 15 days after the local governmental entity's final

18  decision.  If the dispute is resolved in favor of the vendor,

19  then interest shall begin to accrue as of the original date

20  the payment became due.

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

22  218.70-218.80, the prevailing party is entitled to recover

23  court costs and reasonable attorney's fees at trial and on

24  appeal.

25         Section 7.  This act shall take effect July 1, 2001.

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    Florida Senate - 2001                            CS for SB 870
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  1          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
  2                              SB 870

  3                                 

  4  Amends the definitions of "proper invoice" and "payment
    request" to provide that the local governmental entity need
  5  not take formal action to approve requirements for invoices or
    payment requests.
  6  
    Adds that attorney's fees awarded to prevailing plantiff's
  7  must be reasonable.

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