HB 0487CS

CHAMBER ACTION



2The Committee on Local Government & Veterans' Affairs recommends
3the following:
4
5     Committee Substitute
6     Remove the entire bill and insert:
7
A bill to be entitled
8An act relating to prompt payment for construction
9services; amending s. 218.70, F.S.; providing a popular
10name; amending s. 218.72, F.S.; redefining terms used in
11part VII of ch. 218, F.S.; amending s. 218.735, F.S.;
12revising provisions relating to timely payment for
13purchases of construction services; revising deadlines for
14payment; providing procedures for project closeout and
15payment of retainage; providing requirements for local
16government construction retainage; providing that ss.
17218.72-218.76, F.S., apply to the payment of any payment
18request for retainage; providing exceptions; creating s.
19255.0705, F.S.; providing a popular name; amending s.
20255.071, F.S.; revising deadlines for the payment of
21subcontractors, sub-subcontractors, materialmen, and
22suppliers on construction contracts for public projects;
23creating ss. 255.072, 255.073, 255.074, 255.075, 255.076,
24255.077, and 255.078, F.S.; providing definitions;
25providing for timely payment for purchases of construction
26services by a public entity; providing procedures for
27calculating payment due dates; authorizing the collection
28of interest under certain circumstances; providing
29procedures for handling improper payment requests;
30providing for the resolution of disputes; providing for
31project closeout and payment of retainage; providing that
32ss. 255.072-255.076, F.S., apply to the payment of any
33payment request for retainage; providing exceptions;
34amending s. 255.05, F.S.; providing requirements for
35certain notices of nonpayment served by a claimant who is
36not in privity with the contractor; providing limitations
37on a claimant's institution of certain actions against a
38contractor or surety; creating s. 725.09, F.S.;
39prohibiting a contract provision that makes payment
40contingent upon certain conditions; amending s. 95.11,
41F.S., to conform a cross reference; providing that this
42act does not apply to contracts pending approval on the
43effective date of the act or to projects advertised on or
44before that date; providing an effective date.
45
46Be It Enacted by the Legislature of the State of Florida:
47
48     Section 1.  Section 218.70, Florida Statutes, is amended to
49read:
50     218.70  Popular name Short title.--This part may be cited
51as the "Local Government Florida Prompt Payment Act."
52     Section 2.  Subsections (2), (6), and (7) of section
53218.72, Florida Statutes, are amended, and subsection (10) is
54added to said section, to read:
55     218.72  Definitions.--As used in this part:
56     (2)  "Local governmental entity" means a county or
57municipal government, district, authority, school board, school
58district, authority, special taxing district, other political
59subdivision or separate unit of local government created or
60established pursuant to law, or any office, board, bureau,
61commission, department, branch, division, or institution thereof
62or any project supported by county or municipal funds.
63     (6)  "Vendor" means any person who sells goods or services,
64sells or leases personal property, or leases real property
65directly to a local governmental entity. The term includes any
66person who provides waste-hauling services to residents or
67businesses located within the boundaries of a local government
68pursuant to a contract or local ordinance.
69     (7)  "Construction services" means all labor, services, and
70materials provided in connection with the construction,
71alteration, repair, demolition, reconstruction, or any other
72improvements to real property that require a license under parts
73I and II of chapter 489.
74     (10)  "Contractor" or "provider of construction services"
75means any person who contracts directly with a local
76governmental entity to provide construction services.
77     Section 3.  Subsection (6) of section 218.735, Florida
78Statutes, is amended, present subsection (7) of said section is
79redesignated as subsection (9), and new subsections (7) and (8)
80are added to said section, to read:
81     218.735  Timely payment for purchases of construction
82services.--
83     (6)  When a contractor receives payment from a local
84governmental entity for labor, services, or materials furnished
85by subcontractors and suppliers hired by the contractor, the
86contractor shall remit payment due to those subcontractors and
87suppliers within 10 15 days after the contractor's receipt of
88payment. When a subcontractor receives payment from a contractor
89for labor, services, or materials furnished by subcontractors
90and suppliers hired by the subcontractor, the subcontractor
91shall remit payment due to those subcontractors and suppliers
92within 7 15 days after the subcontractor's receipt of payment.
93Nothing herein shall prohibit a contractor or subcontractor from
94disputing, pursuant to the terms of the relevant contract, all
95or any portion of a payment alleged to be due to another party.
96In the event of such a dispute, the contractor or subcontractor
97may withhold the disputed portion of any such payment if the
98contractor or subcontractor notifies the party whose payment is
99disputed, in writing, of the amount in dispute and the actions
100required to cure the dispute. The contractor or subcontractor
101must pay all undisputed amounts due within the time limits
102imposed by this section.
103     (7)(a)  Each contract for construction services between a
104local governmental entity and a contractor must provide for the
105development of a list of items required to render complete,
106satisfactory, and acceptable the construction services purchased
107by the local governmental entity. The contract must specify the
108process for the development of the list, including
109responsibilities of the local governmental entity and the
110contractor in developing and reviewing the list and a reasonable
111time for developing the list, as follows:
112     1.  For construction projects with an estimated cost of
113less than $10 million, within 30 calendar days after reaching
114substantial completion of the construction services purchased as
115defined in the contract, or, if not defined in the contract,
116upon reaching beneficial occupancy or use; or
117     2.  For construction projects with an estimated cost of $10
118million or more, within 30 calendar days, unless otherwise
119extended by contract not to exceed 60 calendar days, after
120reaching substantial completion of the construction services
121purchased as defined in the contract, or, if not defined in the
122contract, upon reaching beneficial occupancy or use.
123     (b)  If the contract between the local governmental entity
124and the contractor relates to the purchase of construction
125services on more than one building or structure, or involves a
126multiphased project, the contract shall provide for the
127development of a list of items required to render complete,
128satisfactory, and acceptable all the construction services
129purchased pursuant to the contract for each building, structure,
130or phase of the project within the time limitations provided in
131paragraph (a).
132     (c)  The failure to include any corrective work or pending
133items not yet completed on the list developed pursuant to this
134subsection does not alter the responsibility of the contractor
135to complete all the construction services purchased pursuant to
136the contract.
137     (d)  Upon completion of all items on the list, the
138contractor may submit a payment request for all remaining
139retainage withheld by the local governmental entity pursuant to
140this section. If a good-faith dispute exists as to whether one
141or more items identified on the list have been completed
142pursuant to the contract, the local governmental entity may
143continue to withhold an amount not to exceed 150 percent of the
144total costs to complete such items.
145     (e)  All items that require correction under the contract
146and that are identified after the preparation and delivery of
147the list remain the obligation of the contractor as defined by
148the contract.
149     (f)  Warranty items may not affect the final payment of
150retainage as provided in this section or as provided in the
151contract between the contractor and its subcontractors and
152suppliers.
153     (g)  Retainage may not be held by a local governmental
154entity or a contractor to secure payment of insurance premiums
155under a consolidated insurance program or series of insurance
156policies issued to a local governmental entity or a contractor
157for a project or group of projects, and the final payment of
158retainage as provided in this section may not be delayed pending
159a final audit by the local governmental entity's or contractor's
160insurance provider.
161     (h)  If a local governmental entity fails to comply with
162its responsibilities to develop the list required under
163paragraph (a) or paragraph (b), as defined in the contract,
164within the time limitations provided in paragraph (a), the
165contractor may submit a payment request for all remaining
166retainage withheld by the local governmental entity pursuant to
167this section. The local governmental entity need not pay or
168process any payment request for retainage if the contractor has,
169in whole or in part, failed to cooperate with the local
170governmental entity in the development of the list or failed to
171perform its contractual responsibilities, if any, with regard to
172the development of the list or if paragraph (8)(f) applies.
173     (8)(a)  With regard to any contract for construction
174services, a local governmental entity may withhold from each
175progress payment made to the contractor an amount not exceeding
17610 percent of the payment as retainage to ensure the
177satisfactory completion of the construction services purchased
178pursuant to the contract until 50-percent completion of such
179services.
180     (b)  After 50-percent completion of the construction
181services purchased pursuant to the contract, the local
182governmental entity must reduce to 5 percent the amount of
183retainage withheld from each subsequent progress payment made to
184the contractor. For purposes of this subsection, the term "50-
185percent completion" has the meaning set forth in the contract
186between the local governmental entity and the contractor, or, if
187not defined in the contract, the point at which the local
188governmental entity has expended 50 percent of the total cost of
189the construction services purchased as identified in the
190contract together with all costs associated with existing change
191orders and other additions or modifications to the construction
192services provided for in the contract. However, notwithstanding
193this subsection, a municipality with a population of 25,000 or
194fewer, or a county with a population of 100,000 or fewer, may
195withhold retainage in an amount not exceeding 10 percent of each
196progress payment made to the contractor until final completion
197and acceptance of the project by the local governmental entity.
198     (c)  After 50-percent completion of the construction
199services purchased pursuant to the contract, the contractor may
200elect to withhold retainage from payments to its subcontractors
201at a rate higher than 5 percent. The specific amount to be
202withheld must be determined on a case-by-case basis and must be
203based on the contractor's assessment of the subcontractor's past
204performance, the likelihood that such performance will continue,
205and the contractor's ability to rely on other safeguards. The
206contractor shall notify the subcontractor, in writing, of its
207determination to withhold more than 5 percent of the progress
208payment and the reasons for making that determination, and the
209contractor may not request the release of such retained funds
210from the local governmental entity.
211     (d)  After 50-percent completion of the construction
212services purchased pursuant to the contract, the contractor may
213present to the local governmental entity a payment request for
214up to one-half of the retainage held by the local governmental
215entity. The local governmental entity shall promptly make
216payment to the contractor, unless the local governmental entity
217has grounds, pursuant to paragraph (f), for withholding the
218payment of retainage. If the local governmental entity makes
219payment of retainage to the contractor under this paragraph
220which is attributable to the labor, services, or materials
221supplied by one or more subcontractors or suppliers, the
222contractor shall timely remit payment of such retainage to those
223subcontractors and suppliers.
224     (e)  This section does not prohibit a local governmental
225entity from withholding retainage at a rate less than 10 percent
226of each progress payment, from incrementally reducing the rate
227of retainage pursuant to a schedule provided for in the
228contract, or from releasing at any point all or a portion of any
229retainage withheld by the local governmental entity which is
230attributable to the labor, services, or materials supplied by
231the contractor or by one or more subcontractors or suppliers. If
232a local governmental entity makes any payment of retainage to
233the contractor which is attributable to the labor, services, or
234materials supplied by one or more subcontractors or suppliers,
235the contractor shall timely remit payment of such retainage to
236those subcontractors and suppliers.
237     (f)  This section does not require the local governmental
238entity to pay or release any amounts that are the subject of a
239good-faith dispute, the subject of an action brought pursuant to
240s. 255.05, or otherwise the subject of a claim or demand by the
241local governmental entity or contractor.
242     (g)  The time limitations set forth in this section for
243payment of payment requests apply to any payment request for
244retainage made pursuant to this section.
245     (h)  Paragraphs (a)-(d) do not apply to construction
246services purchased by a local governmental entity which are paid
247for, in whole or in part, with federal funds and are subject to
248federal grantor laws and regulations or requirements that are
249contrary to any provision of the Local Government Prompt Payment
250Act.
251     (i)  This subsection does not apply to any construction
252services purchased by a local governmental entity if the total
253cost of the construction services purchased as identified in the
254contract is $200,000 or less.
255     Section 4.  Section 255.0705, Florida Statutes, is created
256to read:
257     255.0705  Popular name.--Sections 255.0705-255.078 may be
258cited as the "Florida Prompt Payment Act."
259     Section 5.  Subsections (2) and (3) of section 255.071,
260Florida Statutes, are amended to read:
261     255.071  Payment of subcontractors, sub-subcontractors,
262materialmen, and suppliers on construction contracts for public
263projects.--
264     (2)  The failure to pay any undisputed obligations for such
265labor, services, or materials within 30 days after the date the
266labor, services, or materials were furnished and payment for
267such labor, services, or materials became due, or within the
268time limitations set forth in s. 255.073(3) 30 days after the
269date payment for such labor, services, or materials is received,
270whichever last occurs, shall entitle any person providing such
271labor, services, or materials to the procedures specified in
272subsection (3) and the remedies provided in subsection (4).
273     (3)  Any person providing labor, services, or materials for
274the construction of a public building, for the prosecution and
275completion of a public work, or for repairs upon a public
276building or public work improvements to real property may file a
277verified complaint alleging:
278     (a)  The existence of a contract for providing such labor,
279services, or materials to improve real property.
280     (b)  A description of the labor, services, or materials
281provided and alleging that the labor, services, or materials
282were provided in accordance with the contract.
283     (c)  The amount of the contract price.
284     (d)  The amount, if any, paid pursuant to the contract.
285     (e)  The amount that remains unpaid pursuant to the
286contract and the amount thereof that is undisputed.
287     (f)  That the undisputed amount has remained due and
288payable pursuant to the contract for more than 30 days after the
289date the labor or services were accepted or the materials were
290received.
291     (g)  That the person against whom the complaint was filed
292has received payment on account of the labor, services, or
293materials described in the complaint and, as of the date the
294complaint was filed, has failed to make payment within the time
295limitations set forth in s. 255.073(3) more than 30 days prior
296to the date the complaint was filed.
297     Section 6.  Section 255.072, Florida Statutes, is created
298to read:
299     255.072  Definitions.--As used in ss. 255.073-255.078, the
300term:
301     (1)  "Agent" means project architect, project engineer, or
302any other agency or person acting on behalf of a public entity.
303     (2)  "Construction services" means all labor, services, and
304materials provided in connection with the construction,
305alteration, repair, demolition, reconstruction, or any other
306improvements to real property. The term "construction services"
307does not include contracts or work performed for the Department
308of Transportation.
309     (3)  "Contractor" means any person who contracts directly
310with a public entity to provide construction services.
311     (4)  "Payment request" means a request for payment for
312construction services which conforms with all statutory
313requirements and with all requirements specified by the public
314entity to which the payment request is submitted.
315     (5)  "Public entity" means the state, a state university,
316or any office, board, bureau, commission, department, branch,
317division, or institution thereof, but does not include a local
318governmental entity as defined in s. 218.72.
319     (6)  "Purchase" means the purchase of construction
320services.
321     Section 7.  Section 255.073, Florida Statutes, is created
322to read:
323     255.073  Timely payment for purchases of construction
324services.--
325     (1)  Except as otherwise provided in ss. 255.072-255.078,
326s. 215.422 governs the timely payment for construction services
327by a public entity.
328     (2)  If a public entity disputes a portion of a payment
329request, the undisputed portion must be timely paid.
330     (3)  When a contractor receives payment from a public
331entity for labor, services, or materials furnished by
332subcontractors and suppliers hired by the contractor, the
333contractor shall remit payment due to those subcontractors and
334suppliers within 10 days after the contractor's receipt of
335payment. When a subcontractor receives payment from a contractor
336for labor, services, or materials furnished by subcontractors
337and suppliers hired by the subcontractor, the subcontractor
338shall remit payment due to those subcontractors and suppliers
339within 7 days after the subcontractor's receipt of payment. This
340subsection does not prohibit a contractor or subcontractor from
341disputing, pursuant to the terms of the relevant contract, all
342or any portion of a payment alleged to be due to another party
343if the contractor or subcontractor notifies the party whose
344payment is disputed, in writing, of the amount in dispute and
345the actions required to cure the dispute. The contractor or
346subcontractor must pay all undisputed amounts due within the
347time limits imposed by this subsection.
348     (4)  All payments due for the purchase of construction
349services and not made within the applicable time limits shall
350bear interest at the rate of 1 percent per month, or the rate
351specified by contract, whichever is greater.
352     Section 8.  Section 255.074, Florida Statutes, is created
353to read:
354     255.074  Procedures for calculation of payment due dates.--
355     (1)  Each public entity shall establish procedures whereby
356each payment request received by the public entity is marked as
357received on the date on which it is delivered to an agent or
358employee of the public entity or of a facility or office of the
359public entity.
360     (2)  If the terms under which a purchase is made allow for
361partial deliveries and a payment request is submitted for a
362partial delivery, the time for payment for the partial delivery
363must be calculated from the time of the partial delivery and the
364submission of the payment request.
365     (3)  A public entity must submit a payment request to the
366Chief Financial Officer for payment no more than 25 days after
367receipt of the payment request.
368     Section 9.  Section 255.075, Florida Statutes, is created
369to read:
370     255.075  Mandatory interest.--A contract between a public
371entity and a contractor may not prohibit the collection of late
372payment interest charges authorized under s. 255.073(4).
373     Section 10.  Section 255.076, Florida Statutes, is created
374to read:
375     255.076  Improper payment request; resolution of
376disputes.--
377     (1)  If a contractor submits an improper payment request,
378the public entity shall, within 10 days after receiving the
379improper payment request, notify the contractor that the payment
380request is improper and indicate what corrective action on the
381part of the contractor is needed to make the payment request
382proper.
383     (2)  If a dispute occurs between a contractor and a public
384entity concerning payment of a payment request, the dispute must
385be submitted to a dispute resolution process established by the
386public entity for this purpose. Under such a process,
387proceedings to resolve the dispute must commence not later than
38845 days after the date on which the public entity received the
389payment request and must conclude by final decision of the
390public entity not later than 60 days after the date on which the
391public entity received the payment request. Such a dispute
392resolution process is not subject to chapter 120 and does not
393constitute an administrative proceeding that prohibits a court
394from deciding de novo any action arising out of the dispute. If
395the dispute is resolved in favor of the public entity, interest
396charges begin to accrue 15 days after the public entity's final
397decision. If the dispute is resolved in favor of the contractor,
398interest begins to accrue as of the original date the payment
399became due.
400     (3)  In an action to recover amounts due for construction
401services purchased by a public entity, the court shall award
402court costs and reasonable attorney's fees, including fees
403incurred through any appeal, to the prevailing party, if the
404court finds that the nonprevailing party withheld any portion of
405the payment that is the subject of the action without any
406reasonable basis in law or fact to dispute the prevailing
407party's claim to those amounts.
408     Section 11.  Section 255.077, Florida Statutes, is created
409to read:
410     255.077  Project closeout and payment of retainage.--
411     (1)  Each contract for construction services between a
412public entity and a contractor must provide for the development
413of a list of items required to render complete, satisfactory,
414and acceptable the construction services purchased by the public
415entity. The contract must specify the process for the
416development of the list, including responsibilities of the
417public entity and the contractor in developing and reviewing the
418list and a reasonable time for developing the list, as follows:
419     (a)  For construction projects with an estimated cost of
420less than $10 million, within 30 calendar days after reaching
421substantial completion of the construction services purchased as
422defined in the contract, or, if not defined in the contract,
423upon reaching beneficial occupancy or use; or
424     (b)  For construction projects with an estimated cost of
425$10 million or more, within 30 calendar days, unless otherwise
426extended by contract not to exceed 60 calendar days, after
427reaching substantial completion of the construction services
428purchased as defined in the contract, or, if not defined in the
429contract, upon reaching beneficial occupancy or use.
430     (2)  If the contract between the public entity and the
431contractor relates to the purchase of construction services on
432more than one building or structure, or involves a multiphased
433project, the contract shall provide for the development of a
434list of items required to render complete, satisfactory, and
435acceptable all the construction services purchased pursuant to
436the contract for each building, structure, or phase of the
437project within the time limitations provided in subsection (1).
438     (3)  The failure to include any corrective work or pending
439items not yet completed on the list developed pursuant to
440subsection (1) or subsection (2) does not alter the
441responsibility of the contractor to complete all the
442construction services purchased pursuant to the contract.
443     (4)  Upon completion of all items on the list, the
444contractor may submit a payment request for all remaining
445retainage withheld by the public entity pursuant to s. 255.078.
446If a good-faith dispute exists as to whether one or more items
447identified on the list have been completed pursuant to the
448contract, the public entity may continue to withhold an amount
449not to exceed 150 percent of the total costs to complete such
450items.
451     (5)  All items that require correction under the contract
452and that are identified after the preparation and delivery of
453the list remain the obligation of the contractor as defined by
454the contract.
455     (6)  Warranty items may not affect the final payment of
456retainage as provided in this section or as provided in the
457contract between the contractor and its subcontractors and
458suppliers.
459     (7)  Retainage may not be held by a public entity or a
460contractor to secure payment of insurance premiums under a
461consolidated insurance program or series of insurance policies
462issued to a public entity or a contractor for a project or group
463of projects, and the final payment of retainage as provided in
464this section may not be delayed pending a final audit by the
465public entity's or contractor's insurance provider.
466     (8)  If a public entity fails to comply with its
467responsibilities to develop the list required under subsection
468(1) or subsection (2), as defined in the contract, within the
469time limitations provided in subsection (1), the contractor may
470submit a payment request for all remaining retainage withheld by
471the public entity pursuant to s. 255.078. The public entity need
472not pay or process any payment request for retainage if the
473contractor has, in whole or in part, failed to cooperate with
474the public entity in the development of the list or failed to
475perform its contractual responsibilities, if any, with regard to
476the development of the list or if s. 255.078(6) applies.
477     Section 12.  Section 255.078, Florida Statutes, is created
478to read:
479     255.078  Public construction retainage.--
480     (1)  With regard to any contract for construction services,
481a public entity may withhold from each progress payment made to
482the contractor an amount not exceeding 10 percent of the payment
483as retainage to ensure the satisfactory completion of the
484construction services purchased pursuant to the contract until
48550-percent completion of such services.
486     (2)  After 50-percent completion of the construction
487services purchased pursuant to the contract, the public entity
488must reduce to 5 percent the amount of retainage withheld from
489each subsequent progress payment made to the contractor. For
490purposes of this section, the term "50-percent completion" has
491the meaning set forth in the contract between the public entity
492and the contractor, or, if not defined in the contract, the
493point at which the public entity has expended 50 percent of the
494total cost of the construction services purchased as identified
495in the contract together with all costs associated with existing
496change orders and other additions or modifications to the
497construction services provided for in the contract.
498     (3)  After 50-percent completion of the construction
499services purchased pursuant to the contract, the contractor may
500elect to withhold retainage from payments to its subcontractors
501at a rate higher than 5 percent. The specific amount to be
502withheld must be determined on a case-by-case basis and must be
503based on the contractor's assessment of the subcontractor's past
504performance, the likelihood that such performance will continue,
505and the contractor's ability to rely on other safeguards. The
506contractor shall notify the subcontractor, in writing, of its
507determination to withhold more than 5 percent of the progress
508payment and the reasons for making that determination, and the
509contractor may not request the release of such retained funds
510from the public entity.
511     (4)  After 50-percent completion of the construction
512services purchased pursuant to the contract, the contractor may
513present to the public entity a payment request for up to one-
514half of the retainage held by the public entity. The public
515entity shall promptly make payment to the contractor, unless the
516public entity has grounds, pursuant to subsection (6), for
517withholding the payment of retainage. If the public entity makes
518payment of retainage to the contractor under this subsection
519which is attributable to the labor, services, or materials
520supplied by one or more subcontractors or suppliers, the
521contractor shall timely remit payment of such retainage to those
522subcontractors and suppliers.
523     (5)  Neither this section nor s. 255.077 prohibits a public
524entity from withholding retainage at a rate less than 10 percent
525of each progress payment, from incrementally reducing the rate
526of retainage pursuant to a schedule provided for in the
527contract, or from releasing at any point all or a portion of any
528retainage withheld by the public entity which is attributable to
529the labor, services, or materials supplied by the contractor or
530by one or more subcontractors or suppliers.  If a public entity
531makes any payment of retainage to the contractor which is
532attributable to the labor, services, or materials supplied by
533one or more subcontractors or suppliers, the contractor shall
534timely remit payment of such retainage to those subcontractors
535and suppliers.
536     (6)  Neither this section nor s. 255.077 requires the
537public entity to pay or release any amounts that are the subject
538of a good-faith dispute, the subject of an action brought
539pursuant to s. 255.05, or otherwise the subject of a claim or
540demand by the public entity or contractor.
541     (7)  The same time limits for payment of a payment request
542apply regardless of whether the payment request is for, or
543includes, retainage.
544     (8)  Subsections (1)-(4) do not apply to construction
545services purchased by a public entity which are paid for, in
546whole or in part, with federal funds and are subject to federal
547grantor laws and regulations or requirements that are contrary
548to any provision of the Florida Prompt Payment Act.
549     (9)  This section does not apply to any construction
550services purchased by a public entity if the total cost of the
551construction services purchased as identified in the contract is
552$200,000 or less.
553     Section 13.  Paragraph (a) of subsection (2) and subsection
554(4) of section 255.05, Florida Statutes, are amended, and
555subsection (10) is added to said section, to read:
556     255.05  Bond of contractor constructing public buildings;
557form; action by materialmen.--
558     (2)(a)1.  If a claimant is no longer furnishing labor,
559services, or materials on a project, a contractor or the
560contractor's agent or attorney may elect to shorten the
561prescribed time in this paragraph within which an action to
562enforce any claim against a payment bond provided pursuant to
563this section may be commenced by recording in the clerk's office
564a notice in substantially the following form:
565
566
NOTICE OF CONTEST OF CLAIM
567
AGAINST PAYMENT BOND
568
569To:  . . . (Name and address of claimant) . . .  
570
571     You are notified that the undersigned contests your notice
572of nonpayment, dated ____________, ________, and served on the
573undersigned on ____________, ________, and that the time within
574which you may file suit to enforce your claim is limited to 60
575days after the date of service of this notice.
576
577     DATED on ____________, ________.
578
579Signed: . . . (Contractor or Attorney) . . .  
580
581The claim of any claimant upon whom such notice is served and
582who fails to institute a suit to enforce his or her claim
583against the payment bond within 60 days after service of such
584notice shall be extinguished automatically. The clerk shall mail
585a copy of the notice of contest to the claimant at the address
586shown in the notice of nonpayment or most recent amendment
587thereto and shall certify to such service on the face of such
588notice and record the notice. Service is complete upon mailing.
589     2.  A claimant, except a laborer, who is not in privity
590with the contractor shall, before commencing or not later than
59145 days after commencing to furnish labor, materials, or
592supplies for the prosecution of the work, furnish the contractor
593with a notice that he or she intends to look to the bond for
594protection. A claimant who is not in privity with the contractor
595and who has not received payment for his or her labor,
596materials, or supplies shall deliver to the contractor and to
597the surety written notice of the performance of the labor or
598delivery of the materials or supplies and of the nonpayment. The
599notice of nonpayment may be served at any time during the
600progress of the work or thereafter but not before 45 days after
601the first furnishing of labor, services, or materials, and not
602later than 90 days after the final furnishing of the labor,
603services, or materials by the claimant or, with respect to
604rental equipment, not later than 90 days after the date that the
605rental equipment was last on the job site available for use. Any
606notice of nonpayment served by a claimant who is not in privity
607with the contractor which includes sums for retainage must
608specify the portion of the amount claimed for retainage. No
609action for the labor, materials, or supplies may be instituted
610against the contractor or the surety unless both notices have
611been given. Notices required or permitted under this section may
612be served in accordance with s. 713.18. An action, except for an
613action exclusively for recovery of retainage, must be instituted
614against the contractor or the surety on the payment bond or the
615payment provisions of a combined payment and performance bond
616within 1 year after the performance of the labor or completion
617of delivery of the materials or supplies. An action exclusively
618for recovery of retainage must be instituted against the
619contractor or the surety within 1 year after the performance of
620the labor or completion of delivery of the materials or
621supplies, or within 90 days after receipt of final payment (or
622the payment estimate containing the owner's final reconciliation
623of quantities if no further payment is earned and due as a
624result of deductive adjustments) by the contractor or surety,
625whichever comes last. A claimant may not waive in advance his or
626her right to bring an action under the bond against the surety.
627In any action brought to enforce a claim against a payment bond
628under this section, the prevailing party is entitled to recover
629a reasonable fee for the services of his or her attorney for
630trial and appeal or for arbitration, in an amount to be
631determined by the court, which fee must be taxed as part of the
632prevailing party's costs, as allowed in equitable actions. The
633time periods for service of a notice of nonpayment or for
634bringing an action against a contractor or a surety shall be
635measured from the last day of furnishing labor, services, or
636materials by the claimant and shall not be measured by other
637standards, such as the issuance of a certificate of occupancy or
638the issuance of a certificate of substantial completion.
639     (4)  The payment provisions of all bonds furnished for
640public work contracts described in subsection (1) shall,
641regardless of form, be construed and deemed statutory bond
642provisions, subject to all requirements of subsections
643subsection (2) and (10).
644     (10)  An action, except for an action for recovery of
645retainage, must be instituted against the contractor or the
646surety on the payment bond or the payment provisions of a
647combined payment and performance bond within 1 year after the
648performance of the labor or completion of delivery of the
649materials or supplies. An action for recovery of retainage must
650be instituted against the contractor or the surety within 1 year
651after the performance of the labor or completion of delivery of
652the materials or supplies, provided that such an action may not
653be instituted until one of the following conditions is
654satisfied:
655     (a)  The public entity has paid out the claimant's
656retainage to the contractor, and the time provided under s.
657255.073(3) for payment of that retainage to the claimant has
658expired;
659     (b)  The claimant has completed all work required under its
660contract and 70 days have passed since the contractor sent its
661final payment request to the public entity; or
662     (c)  The claimant has asked the contractor, in writing,
663when the contractor received payment of the claimant's retainage
664or when the contractor sent its final payment request to the
665public entity, and the contractor has failed to respond to this
666request, in writing, within 10 days after receipt.
667
668If none of the conditions described in paragraph (a), paragraph
669(b), or paragraph (c) is satisfied and an action for recovery of
670retainage therefore cannot be instituted within the 1-year
671limitation period set forth in this subsection, this limitation
672period shall be extended until 120 days after one of these
673conditions is satisfied.
674     Section 14.  Section 725.09, Florida Statutes, is created
675to read:
676     725.09  Construction contracts; contingent payment
677provisions.--An entity may not enter into a contract for the
678purchase of construction materials or services which conditions
679payment for such materials or services on the receipt of payment
680from any other entity. Any such conditional payment provision is
681void as a violation of the public policy of this state.
682     Section 15.  Paragraph (b) of subsection (2) of section
68395.11, Florida Statutes, is amended to read:
684     95.11  Limitations other than for the recovery of real
685property.--Actions other than for recovery of real property
686shall be commenced as follows:
687     (2)  WITHIN FIVE YEARS.--
688     (b)  A legal or equitable action on a contract, obligation,
689or liability founded on a written instrument, except for an
690action to enforce a claim against a payment bond, which shall be
691governed by the applicable provisions of ss. 255.05(10)
692255.05(2)(a)2. and 713.23(1)(e).
693     Section 16.  Neither the amendments to sections 95.11,
694218.70, 218.72, 218.735, 255.05, and 255.071, Florida Statutes,
695as provided in this act, nor section 255.078, Florida Statutes,
696as created by this act, applies to any existing construction
697contract pending approval by a local governmental entity or
698public entity, or to any project advertised for bid by the local
699governmental entity or public entity, on or before the effective
700date of this act.
701     Section 17.  This act shall take effect October 1, 2004.


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