HB 0141A 2003
1	A bill to be entitled
2	An act relating to construction services; amending s.
3	725.06, F.S.; providing conditions, limitations, and
4	exceptions for construction contracts that limit
5	indemnification; amending s. 218.70, F.S.; providing a
6	popular name; amending s. 218.72, F.S.; redefining terms
7	used in pt. VII of ch. 218, F.S.; amending s. 218.735,
8	F.S.; revising provisions relating to timely payment for
9	purchases of construction services; revising deadlines for
10	payment; providing procedures for project closeout and
11	payment of retainage; providing requirements for local
12	government construction retainage; providing a definition;
13	providing for application of timeframes for payment of
14	payment requests for retainage; creating s. 255.0705,
15	F.S.; providing a popular name; amending s. 255.071, F.S.;
16	revising deadlines for the payment of subcontractors, sub-
17	subcontractors, materialmen, and suppliers on construction
18	contracts for public projects; creating ss. 255.072,
19	255.073, 255.074, 255.075, 255.076, 255.077, and 255.078,
20	F.S.; providing definitions; providing for timely payment
21	for purchases of construction services by a public entity;
22	providing procedures for calculating payment due dates;
23	providing for collection of mandatory interest; providing
24	procedures for handling improper payment requests;
25	providing for the resolution of disputes; providing for
26	project closeout and payment of retainage; providing for
27	public-construction retainage; providing that ss. 255.072-
28	255.076, F.S., apply to the payment of any payment request
29	for retainage; amending s. 255.05, F.S.; providing
30	requirements for certain notices of nonpayment served by a
31	claimant who is not in privity with the contractor;
32	providing limitations on a claimant's institution of
33	certain actions against a contractor or surety; providing
34	for certain notices to the claimant; providing for
35	construction of the act in pari materia with laws enacted
36	during the 2003 Regular Session of the Legislature;
37	providing an effective date.
38
39	Be It Enacted by the Legislature of the State of Florida:
40
41	Section 1. Section 725.06, Florida Statutes, is amended to
42	read:
43	725.06 Construction contracts; limitation on
44	indemnification; agreements to insure.--
45	(1) Except as otherwise provided in paragraphs (a), (b),
46	and (c),any portion of any agreement or contract for or in
47	connection with, or any guarantee of or in connection with, any
48	construction, alteration, repair, or demolition of a building,
49	structure, appurtenance, or appliance, including moving and
50	excavating associated therewith, between an owner of real
51	property and anarchitect, engineer, general contractor,
52	subcontractor, sub-subcontractor, or materialman or any
53	combination thereof wherein any party referred to herein
54	promises to have someone named an additional insured under the
55	party's insurance policy or to indemnify, defend,or hold
56	harmless another person or partythe other party to the
57	agreement, contract, or guarantee for liability orfor damages
58	to persons or property caused in whole or in part by any act,
59	omission, or default of the person or party being indemnified
60	indemnitee arising from the contract or its performance,shall
61	be void and unenforceable as against public policy. However,
62	this provision shall not be construed to place limits on
63	indemnity agreements that exist only between a general
64	contractor and the owner of real property as long asunlessthe
65	contract contains a monetary limitation on the extent of the
66	indemnification that bears a reasonable commercial relationship
67	to the contract and is part of the project specifications or bid
68	documents, if any. Notwithstanding the foregoing, the monetary
69	limitation on the extent of the indemnification provided to the
70	owner of real property by any party in privity of contract with
71	such owner shall not be less than $1 million per occurrence,
72	unless otherwise agreed by the parties. However, such
73	indemnification shall not include claims of, or damages
74	resulting from, gross negligence or willful, wanton, or
75	intentional misconduct of the indemnitee or its officers,
76	directors, agents, or employees, or for statutory violations or
77	punitive damages except if and to the extent that the statutory
78	violation or punitive damages are caused by or result from the
79	negligent acts, omissions, or default of the indemnitor or any
80	of the indemnitor's contractors, subcontractors, sub-
81	subcontractors, materialmen, or agents of any tier or their
82	respective employees.
83	(a)Indemnification provisions in any such agreements,
84	contracts, or guarantees may notrequire that the indemnitor
85	indemnify the indemnitee for damages to persons or property
86	caused in whole or in part by any act, omission, or default of a
87	party other than:
88	1.(a) The indemnitor; or
89	2.(b)Any of the indemnitor's contractors, subcontractors,
90	sub-subcontractors, materialmen, or agents of any tier or their
91	respective employees.; or
92	(c) The indemnitee or its officers, directors, agents, or
93	employees. However, such indemnification shall not include
94	claims of, or damages resulting from, gross negligence, or
95	willful, wanton or intentional misconduct of the indemnitee or
96	its officers, directors, agents or employees, or for statutory
97	violation or punitive damages except and to the extent the
98	statutory violation or punitive damages are caused by or result
99	from the acts or omissions of the indemnitor or any of the
100	indemnitor's contractors, subcontractors, sub-subcontractors,
101	materialmen, or agents of any tier or their respective
102	employees.
103	(b)(2)A construction contract for a public agency or in
104	connection with a public agency's project may require a party to
105	that contract to indemnify and hold harmless the other party to
106	the contract, andtheir officers and employees, from
107	liabilities, damages, losses and costs, including, but not
108	limited to, reasonable attorney's fees, to the extent caused by
109	the negligence, recklessness, or intentional wrongful misconduct
110	of the indemnifying party and persons employed or utilized by
111	the indemnifying party in the performance of the construction
112	contract.
113	(c) Any portion of any agreement or contract for or in
114	connection with, or any guarantee of or in connection with, any
115	construction, alteration, repair, or demolition of a building,
116	structure, appurtenance, or appliance, including moving and
117	excavating associated therewith, between an entity regulated by
118	the Florida Public Service Commission and an architect,
119	engineer, general contractor, subcontractor, sub-subcontractor,
120	or materialman or any combination thereof wherein any party
121	referred to herein promises to indemnify or hold harmless the
122	other party to the agreement, contract, or guarantee for
123	liability for damages to persons or property caused in whole or
124	in part by any negligent act, omission, or default of the
125	indemnitee arising from the contract or its performance shall be
126	void and unenforceable unless the contract contains a monetary
127	limitation on the extent of the indemnification which bears a
128	reasonable commercial relationship to the contract and is part
129	of the project specifications or bid documents, if any.
130	Notwithstanding the foregoing, the monetary limitation on the
131	extent of the indemnification provided to the owner of real
132	property by any party in privity of contract with such owner
133	shall not be less than $1 million per occurrence, unless
134	otherwise agreed by the parties. Indemnification provisions in
135	any such agreements, contracts, or guarantees may not require
136	that the indemnitor indemnify the indemnitee for damages to
137	persons or property caused in whole or in part by any act,
138	omission, or default of a party other than:
139	1. The indemnitor;
140	2. Any of the indemnitor's contractors, subcontractors,
141	sub-subcontractors, materialmen, or agents of any tier or their
142	respective employees; or
143	3. The indemnitee or its officers, directors, agents, or
144	employees. However, such indemnification shall not include
145	claims of, or damages resulting from, gross negligence or
146	willful, wanton, or intentional misconduct of the indemnitee or
147	its officers, directors, agents, or employees, or for statutory
148	violation or punitive damages except if, and to the extent that,
149	the statutory violation or punitive damages are caused by or
150	result from the acts or omissions of the indemnitor or any of
151	the indemnitor's contractors, subcontractors, sub-
152	subcontractors, materialmen, or agents of any tier or their
153	respective employees.
154	(2) If, as part of any agreement or contract for or in
155	connection with, or any guarantee of or in connection with, any
156	construction, alteration, repair, or demolition of a building,
157	structure, appurtenance, or appliance, including moving and
158	excavating associated with such activities, between or among an
159	architect, engineer, general contractor, subcontractor, sub-
160	subcontractor, or materialman or any combination of such
161	persons, a policy of insurance extends certain coverage rights
162	to an additional insured for liability arising out of the acts,
163	errors, or omissions of the named insured, such additional
164	insured coverage shall provide liability protection only to the
165	additional insured for the imputed or vicarious liability
166	imposed on the additional insured as a direct consequence of the
167	negligent acts or omissions of the named insured.
168	(3) If a written contract requires a subcontractor, sub-
169	subcontractor, or materialman to provide a policy of insurance
170	or a certificate of insurance to a general contractor or
171	subcontractor, extending specific coverage rights to an
172	additional insured:
173	(a) The general contractor or subcontractor may, at any
174	point prior to the date the subcontractor, sub-subcontractor, or
175	materialman commences work or delivers material to the project,
176	accept or reject the policy as being nonconforming;
177	(b) If the policy is not rejected, the general contractor
178	or subcontractor shall be deemed to have accepted the policy;
179	and
180	(c) The general contractor or subcontractor may not use
181	the lack of conforming insurance as a reason to reject work
182	already completed by a subcontractor or sub-subcontractor, or
183	material already supplied by the materialman, or withhold
184	payment to the subcontractor, sub-subcontractor, or materialman
185	for work already completed or material already suppliedExcept
186	as specifically provided in subsection (2), a construction
187	contract for a public agency or in connection with a public
188	agency's project may not require one party to indemnify, defend,
189	or hold harmless the other party, its employees, officers,
190	directors, or agents from any liability, damage, loss, claim,
191	action, or proceeding, and any such contract provision is void
192	as against public policy of this state.
193	(4) This section does not affect any contracts,
194	agreements, or guarantees entered into before the effective date
195	of this section or any renewals thereof.
196	Section 2. Section 218.70, Florida Statutes, is amended to
197	read:
198	218.70 Popular nameShort title.--This part shall be known
199	by the popular namemay be cited as the "Local Government
200	FloridaPrompt Payment Act."
201	Section 3. Subsections (2), (6), and (7) of section
202	218.72, Florida Statutes, are amended to read:
203	218.72 Definitions.--As used in this part:
204	(2) "Local governmental entity" means a county or
205	municipal government, school board, school district, authority,
206	special taxing district, other political subdivision, community
207	college,or any office, board, bureau, commission, department,
208	branch, division, or institution thereof or any project
209	supported by county or municipal funds.
210	(6) "Vendor" means any person who sells goods or services,
211	sells or leases personal property, or leases real property
212	directly to a local governmental entity. The term includes any
213	person who provides waste-hauling services to residents or
214	businesses located within the boundaries of a local government
215	pursuant to a contract or local ordinance.
216	(7) "Construction services" means all labor, services, and
217	materials provided in connection with the construction,
218	alteration, repair, demolition, reconstruction, or any other
219	improvements to real property that require a license under parts
220	I and II of chapter 489.
221	Section 4. Subsection (6) of section 218.735, Florida
222	Statutes, is amended, present subsection (7) of said section is
223	renumbered as subsection (9), and new subsections (7) and (8)
224	are added to said section, to read:
225	218.735 Timely payment for purchases of construction
226	services.--
227	(6) When a contractor receives payment from a local
228	governmental entity for labor, services, or materials furnished
229	by subcontractors and suppliers hired by the contractor, the
230	contractor shall remit payment due to those subcontractors and
231	suppliers within 1015days after the contractor's receipt of
232	payment. When a subcontractor receives payment from a contractor
233	for labor, services, or materials furnished by subcontractors
234	and suppliers hired by the subcontractor, the subcontractor
235	shall remit payment due to those subcontractors and suppliers
236	within 1015days after the subcontractor's receipt of payment.
237	Nothing herein shall prohibit a contractor or subcontractor from
238	disputing, pursuant to the terms of the relevant contract, all
239	or any portion of a payment alleged to be due to another party.
240	In the event of such a dispute, the contractor or subcontractor
241	may withhold the disputed portion of any such payment if the
242	contractor or subcontractor notifies the party whose payment is
243	disputed, in writing, of the amount in dispute and the actions
244	required to cure the dispute. The contractor or subcontractor
245	must pay all undisputed amounts due within the time limits
246	imposed by this section.
247	(7)(a) Each contract for construction services between a
248	local governmental entity and vendor must provide for the
249	development of a list of items required to render complete,
250	satisfactory, and acceptable the construction services purchased
251	by the local government. The contract must specify the process
252	for the development of the list, including responsibilities of
253	the local government and vendor in developing and reviewing the
254	list and a reasonable time for developing such list as follows:
255	1. For construction projects with an estimated cost of
256	less than $10 million, within 30 days after reaching substantial
257	completion of the construction services purchased as defined in
258	the contract or, if not defined in the contract, upon reaching
259	beneficial occupancy or use; or
260	2. For construction projects with an estimated cost of $10
261	million or more, within 30 days, unless otherwise extended by a
262	contract not to exceed 90 days, after reaching substantial
263	completion of the construction services purchased as defined in
264	the contract or, if not defined in the contract, upon reaching
265	beneficial occupancy or use.
266	(b) If the contract between the local governmental entity
267	and the vendor relates to the purchase of construction services
268	on more than one building or structure, or involves a
269	multiphased project, the contract shall provide for the
270	development of a list of items required to render complete,
271	satisfactory, and acceptable the construction services purchased
272	for each building, structure, or phase of the project in
273	accordance with the timeframes specified in subparagraph (a)1.
274	or subparagraph (a)2.
275	(c) The failure to include any corrective work or pending
276	items not yet completed on the list developed pursuant to this
277	subsection shall not alter the responsibility of the vendor to
278	complete all the purchased construction services as defined in
279	the contract.
280	(d) Upon completion of all items on the list, or such
281	other time defined in the contract, the vendor may submit a
282	payment request for the appropriate amount of retainage. The
283	local government may withhold an amount not to exceed 150
284	percent of the total costs to complete any incomplete items on
285	the list.
286	(e) All items that require correction under the contract
287	and that are identified after the preparation and delivery of
288	the list shall remain the obligation of the vendor as defined by
289	the contract.
290	(f) Warranty items may not affect the final payment of
291	retainage as provided in this section or as may be provided in
292	the contract between the vendor and its subcontractors and
293	suppliers.
294	(g) If a local governmental entity fails to comply with
295	its responsibilities to develop the list required under
296	paragraph (a) or paragraph (b), as defined in the contract, and
297	the timeframes provided in subparagraph (a)1. or subparagraph
298	(a)2., the vendor may submit a payment request for the
299	appropriate amount of retainage. The local governmental entity
300	shall not be required to pay or process any request for payment
301	of retainage if the vendor has, in whole or in part, failed to
302	cooperate with the local government in the development of the
303	list, failed to perform its contractual responsibilities, if
304	any, with regard to the development of the list, or if paragraph
305	(8)(d) applies.
306	(8)(a) In any public construction project, a local
307	governmental entity may withhold an amount not exceeding 10
308	percent of each progress payment made to the vendor until the
309	local government project has reached 50-percent completion.
310	After reaching 50-percent completion, the local government must
311	reduce to 5 percent the amount of retainage withheld from each
312	subsequent progress payment made to the vendor. However,
313	notwithstanding the provisions of this subsection, a
314	municipality with a population of 25,000 or fewer, or a county
315	with a population of 100,000 or fewer, may withhold retainage in
316	an amount not exceeding 10 percent of each progress payment made
317	to the vendor until final completion and acceptance of the
318	project by the local government. For purposes of this
319	subsection, the term "50-percent completion" means as defined in
320	the contract between the local governmental entity and the
321	vendor, or, if not defined in the contract, the point at which
322	the local government has expended 50 percent of the total
323	project costs identified in the contract, plus all change orders
324	and other additions issued subsequent to the approval of the
325	contract by the governing body of the local government, and the
326	level of actual project construction is equivalent to such
327	expenditure of funds.
328	(b) After 50-percent completion, the vendor may present to
329	the local governmental entity a payment request for up to one-
330	half of the retainage amount held by the local government. The
331	local governmental entity shall promptly make payment to the
332	vendor, unless the local government has grounds, pursuant to the
333	contract or as provided in paragraph (d), for withholding the
334	payment of retainage. If the local government makes payment of
335	retainage to the vendor under this paragraph, the vendor shall
336	timely remit payment of such retainage to the appropriate
337	subcontractors and suppliers.
338	(c) After 50-percent completion, the vendor may elect to
339	withhold retainage from payments to its subcontractors at a rate
340	higher than 5 percent. The specific amount to be withheld must
341	be determined on a case-by-case basis and must be based on the
342	vendor's assessment of the subcontractor's past performance, the
343	likelihood that such performance will continue, and the vendor's
344	ability to rely on other safeguards. The vendor shall notify the
345	subcontractor, in writing, of its determination to withhold more
346	than 5 percent of the progress payment and the reasons for
347	making that determination, and the vendor may not request the
348	release of such retained funds from the local government.
349	(d) Nothing in this section requires the local government
350	to pay or release any amounts that are the subject of a good-
351	faith dispute, the subject of an action brought pursuant to s.
352	255.05, or otherwise the subject of a claim or demand by the
353	local government or vendor.
354	(e) The timeframes set forth in this section for payment
355	of payment requests apply to any payment request for retainage
356	made pursuant to this subsection.
357	Section 5. Section 255.0705, Florida Statutes, is created
358	to read:
359	255.0705 Popular name.--Sections 255.0705-255.078 shall be
360	known by the popular name the "Florida Prompt Payment Act."
361	Section 6. Subsections (2) and (3) of section 255.071,
362	Florida Statutes, are amended to read:
363	255.071 Payment of subcontractors, sub-subcontractors,
364	materialmen, and suppliers on construction contracts for public
365	projects.--
366	(2) The failure to pay any undisputed obligations for such
367	labor, services, or materials within 30 days after the date the
368	labor, services, or materials were furnished and payment for
369	such labor, services, or materials became due, or within 1030
370	days after the date payment for such labor, services, or
371	materials is received, whichever last occurs, shall entitle any
372	person providing such labor, services, or materials to the
373	procedures specified in subsection (3) and the remedies provided
374	in subsection (4).
375	(3) Any person providing labor, services, or materials for
376	the construction of a public building, for the prosecution and
377	completion of a public work, or for repairs upon a public
378	building or public work improvements to real property may file a
379	verified complaint alleging:
380	(a) The existence of a contract for providing such labor,
381	services, or materials to improve real property.
382	(b) A description of the labor, services, or materials
383	provided and alleging that the labor, services, or materials
384	were provided in accordance with the contract.
385	(c) The amount of the contract price.
386	(d) The amount, if any, paid pursuant to the contract.
387	(e) The amount that remains unpaid pursuant to the
388	contract and the amount thereof that is undisputed.
389	(f) That the undisputed amount has remained due and
390	payable pursuant to the contract for more than 30 days after the
391	date the labor or services were accepted or the materials were
392	received.
393	(g) That the person against whom the complaint was filed
394	has received payment on account of the labor, services, or
395	materials described in the complaint more than 1030days prior
396	to the date the complaint was filed.
397	Section 7. Section 255.072, Florida Statutes, is created
398	to read:
399	255.072 Definitions.--As used in ss. 255.073-255.078, the
400	term:
401	(1) "Agent" means a project architect, a project engineer,
402	or any other agency or person acting on behalf of a public
403	entity.
404	(2) "Construction services" means all labor, services, and
405	materials provided in connection with the construction,
406	alteration, repair, demolition, reconstruction, or any other
407	improvements to real property. The term "construction services"
408	does not include contracts or work performed for the Department
409	of Transportation.
410	(3) "Payment request" means an invoice or request for
411	payment for construction services which conforms with all
412	statutory requirements and with all requirements specified by
413	the public entity to which the payment request is submitted.
414	(4) "Public entity" means the state, a state university,
415	or any office, board, bureau, commission, department, branch,
416	division, or institution thereof, or any project supported by
417	state funds, but does not include a local governmental entity as
418	defined in s. 218.72.
419	(5) "Purchase" means the purchase of construction
420	services.
421	(6) "Vendor" means any person providing construction
422	services directly to a public entity.
423	Section 8. Section 255.073, Florida Statutes, is created
424	to read:
425	255.073 Timely payment for purchases of construction
426	services.--
427	(1) Except as otherwise provided in ss. 255.072-255.078,
428	s. 215.422 governs the timely payment for construction services
429	by a public entity under this act.
430	(2) If a public entity disputes a portion of a payment
431	request, the undisputed portion must be timely paid, in
432	accordance with subsection (1).
433	(3) When a vendor receives payment from a public entity
434	for labor, services, or materials furnished by subcontractors
435	and suppliers hired by the vendor, the vendor shall remit
436	payment due to those subcontractors and suppliers within 10 days
437	after the vendor's receipt of payment. When a subcontractor
438	receives payment from a vendor for labor, services, or materials
439	furnished by subcontractors and suppliers hired by the
440	subcontractor, the subcontractor shall remit payment due to
441	those subcontractors and suppliers within 10 days after the
442	subcontractor's receipt of payment. This subsection does not
443	prohibit a vendor or subcontractor from disputing, pursuant to
444	the terms of the relevant contract, all or any portion of a
445	payment alleged to be due to another party. If such a dispute
446	occurs, the vendor or subcontractor may withhold the disputed
447	portion of any such payment if the vendor or subcontractor
448	notifies the party whose payment is disputed, in writing, of the
449	amount in dispute and the actions required to cure the dispute.
450	The vendor or subcontractor must pay all undisputed amounts due
451	within the time limits imposed by this section.
452	(4) All payments due under this section and not made
453	within the time periods specified by this section shall bear
454	interest at the rate of 1 percent per month, or the rate
455	specified by contract, whichever is greater.
456	Section 9. Section 255.074, Florida Statutes, is created
457	to read:
458	255.074 Procedures for calculation of payment due dates.--
459	(1) Each public entity shall establish procedures whereby
460	each payment request received by the public entity is marked as
461	received on the date on which it is delivered to an agent or
462	employee of the public entity or of a facility or office of the
463	public entity.
464	(2) If the terms under which a purchase is made allow for
465	partial deliveries and a payment request is submitted for a
466	partial delivery, the time for payment for the partial delivery
467	must be calculated from the time of the partial delivery and the
468	submission of the payment request in the same manner as provided
469	in s. 255.073.
470	(3) The public entity must submit a payment request to the
471	Chief Financial Officer for payment no more than 25 days after
472	receipt of the payment request.
473	Section 10. Section 255.075, Florida Statutes, is created
474	to read:
475	255.075 Mandatory interest.--A contract between a public
476	entity and a vendor or a provider of construction services may
477	not prohibit the collection of late payment interest charges
478	allowable under ss. 255.072-255.078.
479	Section 11. Section 255.076, Florida Statutes, is created
480	to read:
481	255.076 Improper payment request; resolution of
482	disputes.--
483	(1) If a vendor submits an improper payment request, the
484	public entity shall notify the vendor within 10 days after
485	receiving the improper payment request that the payment request
486	is improper and indicate what corrective action on the part of
487	the vendor is needed to make the payment request proper.
488	(2) If a dispute occurs between a vendor and a public
489	entity concerning payment of a payment request, the dispute must
490	be resolved as provided in this section. Each public entity
491	shall establish a dispute resolution procedure to be followed by
492	the public entity if such a dispute occurs. The procedure must
493	provide that proceedings to resolve the dispute must commence
494	not later than 45 days after the date on which the public entity
495	received the payment request and must conclude by final decision
496	of the public entity not later than 60 days after the date on
497	which the public entity received the payment request. Such
498	procedures are not subject to chapter 120 and do not constitute
499	an administrative proceeding that prohibits a court from
500	deciding de novo any action arising out of the dispute. If the
501	dispute is resolved in favor of the public entity, interest
502	charges begin to accrue 15 days after the public entity's final
503	decision. If the dispute is resolved in favor of the vendor,
504	interest begins to accrue as of the original date the payment
505	became due.
506	(3) In an action to recover amounts due under ss. 255.072-
507	255.078, the court shall award court costs and reasonable
508	attorney's fees, including fees incurred through any appeal, to
509	the prevailing party if the court finds that the nonprevailing
510	party withheld any portion of the payment that is the subject of
511	the action without any reasonable basis in law or fact to
512	dispute the prevailing party's claim to those amounts.
513	Section 12. Section 255.077, Florida Statutes, is created
514	to read:
515	255.077 Project closeout and payment of retainage.--
516	(1) A public entity must present to the vendor a final
517	punch list of all items required to render complete,
518	satisfactory, and acceptable the construction services
519	purchased, within 30 days after the earliest of the following:
520	(a) Issuance of a temporary or final certificate of
521	occupancy, if applicable;
522	(b) Substantial completion of the construction services
523	purchased, as defined in the contract; or
524	(c) Beneficial occupancy or use of the structure,
525	building, facility, or improvement that is the subject of the
526	construction services purchased, as defined in the contract.
527	(2) If the purchase relates to construction services on
528	more than one building or structure, the public entity shall
529	prepare a final punch list for each building or structure. The
530	public entity must present to the vendor a final punch list with
531	regard to each building or structure within 30 days after the
532	earliest of the following:
533	(a) Issuance of a temporary or final certificate of
534	occupancy on the particular building or structure, if
535	applicable;
536	(b) Substantial completion of the particular building or
537	structure, as defined in the contract; or
538	(c) Beneficial occupancy or use of the particular
539	structure, building, facility, or improvement, as defined in the
540	contract.
541
542	Unless the contract provides otherwise, the public entity shall
543	pay out retainage to the vendor based upon the value of the
544	construction services rendered with regard to that structure,
545	building, facility, or improvement as compared to the total
546	value of the purchase.
547	(3) Upon completion of all items on the final punch list
548	or within 30 days after issuance of the punch list, whichever
549	occurs sooner, the vendor shall submit a payment request for the
550	appropriate amount of retainage. The owner may withhold up to
551	150 percent of the cost to complete any incomplete final punch
552	list items. Thereafter, ss. 255.072-255.076 apply to the payment
553	of any payment request for retainage.
554	(4) If the public entity fails to present to the vendor a
555	final punch list within the time periods provided in subsection
556	(1) or subsection (2), the project is considered to be complete
557	and the vendor shall submit a payment request for the
558	appropriate amount of retainage. Thereafter, ss. 255.072-255.076
559	apply to the payment of any payment request for retainage.
560	(5) All items that require correction under the contract
561	which are identified subsequent to preparation and delivery of
562	the final punch list must be considered warranty items or make-
563	good items, and such items have no effect on the final payment
564	of retainage provided in this section.
565	Section 13. Section 255.078, Florida Statutes, is created
566	to read:
567	255.078 Public construction retainage.--
568	(1) From the commencement of a public construction project
569	that is subject to ss. 255.072-255.078 until 50-percent of the
570	contract value has been earned, a public entity may not withhold
571	as retainage more than 10 percent of each progress payment to
572	the vendor. When 50-percent of the contract value has been
573	earned, the vendor may submit a payment request to the public
574	entity for up to one-half of the retainage withheld up to that
575	time.
576	(2) After 50-percent of the contract value has been
577	earned, the public entity may not withhold as retainage more
578	than 5 percent of each progress payment to the vendor. However,
579	the vendor may withhold retainage from payments to its
580	subcontractors at a rate higher than 5 percent. The specific
581	amount to be withheld must be determined on a case-by-case basis
582	and must be based on the vendor's assessment of the
583	subcontractor's past performance, the likelihood that such
584	performance will continue, and the vendor's ability to rely on
585	other safeguards. The vendor shall notify the subcontractor, in
586	writing, of its determination to withhold more than 5 percent of
587	the progress payment and the reasons for making that
588	determination.
589	(3) This section does not require the payment or release
590	of amounts that are the subject of a good-faith dispute.
591	(4) Sections 255.072-255.076 apply to the payment of any
592	payment request for retainage.
593	Section 14. Paragraph (a) of subsection (2) of section
594	255.05, Florida Statutes, is amended, and subsections (10) and
595	(11) are added to said section, to read:
596	255.05 Bond of contractor constructing public buildings;
597	form; action by materialmen.--
598	(2)(a)1. If a claimant is no longer furnishing labor,
599	services, or materials on a project, a contractor or the
600	contractor's agent or attorney may elect to shorten the
601	prescribed time in this paragraph within which an action to
602	enforce any claim against a payment bond provided pursuant to
603	this section may be commenced by recording in the clerk's office
604	a notice in substantially the following form:
605
606	NOTICE OF CONTEST OF CLAIM
607	AGAINST PAYMENT BOND
608
609	To: . . . (Name and address of claimant) . . .
610
611	You are notified that the undersigned contests your notice
612	of nonpayment, dated ____________, ________, and served on the
613	undersigned on ____________, ________, and that the time within
614	which you may file suit to enforce your claim is limited to 60
615	days after the date of service of this notice.
616
617	DATED on ____________, ________.
618
619	Signed: . . . (Contractor or Attorney) . . .
620
621	The claim of any claimant upon whom such notice is served and
622	who fails to institute a suit to enforce his or her claim
623	against the payment bond within 60 days after service of such
624	notice shall be extinguished automatically. The clerk shall mail
625	a copy of the notice of contest to the claimant at the address
626	shown in the notice of nonpayment or most recent amendment
627	thereto and shall certify to such service on the face of such
628	notice and record the notice. Service is complete upon mailing.
629	2. A claimant, except a laborer, who is not in privity
630	with the contractor shall, before commencing or not later than
631	45 days after commencing to furnish labor, materials, or
632	supplies for the prosecution of the work, furnish the contractor
633	with a notice that he or she intends to look to the bond for
634	protection. A claimant who is not in privity with the contractor
635	and who has not received payment for his or her labor,
636	materials, or supplies shall deliver to the contractor and to
637	the surety written notice of the performance of the labor or
638	delivery of the materials or supplies and of the nonpayment. The
639	notice of nonpayment may be served at any time during the
640	progress of the work or thereafter but not before 45 days after
641	the first furnishing of labor, services, or materials, and not
642	later than 90 days after the final furnishing of the labor,
643	services, or materials by the claimant or, with respect to
644	rental equipment, not later than 90 days after the date that the
645	rental equipment was last on the job site available for use. Any
646	notice of nonpayment served by a claimant who is not in privity
647	with the contractor which includes sums for retainage must
648	specify the portion of the amount claimed for retainage.No
649	action for the labor, materials, or supplies may be instituted
650	against the contractor or the surety unless both notices have
651	been given. Notices required or permitted under this section may
652	be served in accordance with s. 713.18. An action, except for an
653	action exclusively for recovery of retainage, must be instituted
654	against the contractor or the surety on the payment bond or the
655	payment provisions of a combined payment and performance bond
656	within 1 year after the performance of the labor or completion
657	of delivery of the materials or supplies. An action exclusively
658	for recovery of retainage must be instituted against the
659	contractor or the surety within 1 year after the performance of
660	the labor or completion of delivery of the materials or
661	supplies, or within 90 days after receipt of final payment (or
662	the payment estimate containing the owner's final reconciliation
663	of quantities if no further payment is earned and due as a
664	result of deductive adjustments) by the contractor or surety,
665	whichever comes last. A claimant may not waive in advance his or
666	her right to bring an action under the bond against the surety.
667	In any action brought to enforce a claim against a payment bond
668	under this section, the prevailing party is entitled to recover
669	a reasonable fee for the services of his or her attorney for
670	trial and appeal or for arbitration, in an amount to be
671	determined by the court, which fee must be taxed as part of the
672	prevailing party's costs, as allowed in equitable actions. The
673	time periods for service of a notice of nonpayment or for
674	bringing an action against a contractor or a surety shall be
675	measured from the last day of furnishing labor, services, or
676	materials by the claimant and shall not be measured by other
677	standards, such as the issuance of a certificate of occupancy or
678	the issuance of a certificate of substantial completion.
679	(10) Notwithstanding any other provision of law to the
680	contrary, a claimant may not institute an action for the sole
681	purpose of recovery of retainage against the contractor or
682	against the surety issuing a payment or performance bond
683	pursuant to this section until:
684	(a) The public entity has paid out that retainage to the
685	contractor and the time provided under ss. 218.70-218.76 or ss.
686	255.072-255.078 for payment of that retainage to the claimant
687	has expired;
688	(b) The claimant has completed all work required under its
689	contract and 90 days have passed since the owner's receipt of
690	the contractor's last payment request; or
691	(c) The claimant has made the written request to the owner
692	provided in subsection (11) and has not timely received the
693	requested information from the owner.
694	(11) An owner shall furnish in writing to a claimant who
695	has provided labor, services, or materials to a project, within
696	5 business days after receipt of a written request from that
697	claimant, the following information:
698	(a) The dates of all payment requests received by the
699	owner from the contractor.
700	(b) The dates of all payments made by the owner to the
701	contractor.
702	(c) Whether the owner has received the contractor's final
703	payment request and, if so, the date the final payment request
704	was submitted by the contractor to the owner.
705	Section 15. If any law amended by this act was also
706	amended by a law enacted at the 2003 Regular Session of the
707	Legislature, such laws shall be construed as if they had been
708	enacted at the same session of the Legislature, and full effect
709	shall be given to each if possible.
710	Section 16. This act shall take effect July 1, 2003.