Senate Bill sb0632c2
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By the Committees on Regulated Industries; Community Affairs;
and Senators Bennett and King
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1 A bill to be entitled
2 An act relating to prompt payment for
3 construction services; amending s. 218.70,
4 F.S.; providing a short title; amending s.
5 218.72, F.S.; redefining terms used in part VII
6 of ch. 218, F.S.; amending s. 218.735, F.S.;
7 revising provisions relating to timely payment
8 for purchases of construction services;
9 revising deadlines for payment; providing
10 procedures for project closeout and payment of
11 retainage; providing requirements for local
12 government construction retainage; providing
13 that ss. 218.72-218.76, F.S., apply to the
14 payment of any payment request for retainage;
15 providing exceptions; creating s. 255.0705,
16 F.S.; providing a short title; amending s.
17 255.071, F.S.; revising deadlines for the
18 payment of subcontractors, sub-subcontractors,
19 materialmen, and suppliers on construction
20 contracts for public projects; creating ss.
21 255.072, 255.073, 255.074, 255.075, 255.076,
22 255.077, and 255.078, F.S.; providing
23 definitions; providing for timely payment for
24 purchases of construction services by a public
25 entity; providing procedures for calculating
26 payment-due dates; providing procedures for
27 handling improper payment requests; providing
28 for an award of court costs and attorney's
29 fees; providing for the resolution of disputes;
30 providing for project closeout and payment of
31 retainage; providing that ss. 255.072-255.076,
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1 F.S., apply to the payment of any payment
2 request for retainage; providing exceptions;
3 amending s. 255.05, F.S.; providing
4 requirements for certain notices of nonpayment
5 served by a claimant who is not in privity with
6 the contractor; providing limitations on a
7 claimant's institution of certain actions
8 against a contractor or surety; amending s.
9 287.0585, F.S.; providing an exemption for
10 contractors making late payment to
11 subcontractors when the contract is subject to
12 the "Prompt Payment Act"; amending s. 95.11,
13 F.S., to conform a cross-reference; providing
14 that specified sections of the act do not apply
15 to certain pending contracts and projects;
16 providing an effective date.
17
18 Be It Enacted by the Legislature of the State of Florida:
19
20 Section 1. Section 218.70, Florida Statutes, is
21 amended to read:
22 218.70 Short title.--This part may be cited as the
23 "Local Government Florida Prompt Payment Act."
24 Section 2. Subsections (2), (6), and (7) of section
25 218.72, Florida Statutes, are amended, and subsection (10) is
26 added to that section, to read:
27 218.72 Definitions.--As used in this part:
28 (2) "Local governmental entity" means a county or
29 municipal government, school board, school district,
30 authority, special taxing district, other political
31 subdivision, or any office, board, bureau, commission,
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1 department, branch, division, or institution thereof or any
2 project supported by county or municipal funds.
3 (6) "Vendor" means any person who sells goods or
4 services, sells or leases personal property, or leases real
5 property directly to a local governmental entity. The term
6 includes any person who provides waste-hauling services to
7 residents or businesses located within the boundaries of a
8 local government pursuant to a contract or local ordinance.
9 (7) "Construction services" means all labor, services,
10 and materials provided in connection with the construction,
11 alteration, repair, demolition, reconstruction, or any other
12 improvements to real property that require a license under
13 parts I and II of chapter 489.
14 (10) "Contractor" or "provider of construction
15 services" means any person who contracts directly with a local
16 governmental entity to provide construction services.
17 Section 3. Subsection (6) of section 218.735, Florida
18 Statutes, is amended, present subsection (7) of that section
19 is redesignated as subsection (9), and new subsections (7) and
20 (8) are added to that section, to read:
21 218.735 Timely payment for purchases of construction
22 services.--
23 (6) When a contractor receives payment from a local
24 governmental entity for labor, services, or materials
25 furnished by subcontractors and suppliers hired by the
26 contractor, the contractor shall remit payment due to those
27 subcontractors and suppliers within 10 15 days after the
28 contractor's receipt of payment. When a subcontractor receives
29 payment from a contractor for labor, services, or materials
30 furnished by subcontractors and suppliers hired by the
31 subcontractor, the subcontractor shall remit payment due to
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1 those subcontractors and suppliers within 7 15 days after the
2 subcontractor's receipt of payment. Nothing herein shall
3 prohibit a contractor or subcontractor from disputing,
4 pursuant to the terms of the relevant contract, all or any
5 portion of a payment alleged to be due to another party. In
6 the event of such a dispute, the contractor or subcontractor
7 may withhold the disputed portion of any such payment if the
8 contractor or subcontractor notifies the party whose payment
9 is disputed, in writing, of the amount in dispute and the
10 actions required to cure the dispute. The contractor or
11 subcontractor must pay all undisputed amounts due within the
12 time limits imposed by this section.
13 (7)(a) Each contract for construction services between
14 a local governmental entity and a contractor must provide for
15 the development of a list of items required to render
16 complete, satisfactory, and acceptable the construction
17 services purchased by the local governmental entity. The
18 contract must specify the process for the development of the
19 list, including responsibilities of the local governmental
20 entity and the contractor in developing and reviewing the list
21 and a reasonable time for developing the list, as follows:
22 1. For construction projects having an estimated cost
23 of less than $10 million, within 30 calendar days after
24 reaching substantial completion of the construction services
25 purchased as defined in the contract, or, if not defined in
26 the contract, upon reaching beneficial occupancy or use; or
27 2. For construction projects having an estimated cost
28 of $10 million or more, within 30 calendar days, unless
29 otherwise extended by contract not to exceed 60 calendar days,
30 after reaching substantial completion of the construction
31 services purchased as defined in the contract, or, if not
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1 defined in the contract, upon reaching beneficial occupancy or
2 use.
3 (b) If the contract between the local governmental
4 entity and the contractor relates to the purchase of
5 construction services on more than one building or structure,
6 or involves a multiphased project, the contract must provide
7 for the development of a list of items required to render
8 complete, satisfactory, and acceptable all the construction
9 services purchased pursuant to the contract for each building,
10 structure, or phase of the project within the time limitations
11 provided in paragraph (a).
12 (c) The failure to include any corrective work or
13 pending items not yet completed on the list developed pursuant
14 to this subsection does not alter the responsibility of the
15 contractor to complete all the construction services purchased
16 pursuant to the contract.
17 (d) Upon completion of all items on the list, the
18 contractor may submit a payment request for all remaining
19 retainage withheld by the local governmental entity pursuant
20 to this section. If a good-faith dispute exists as to whether
21 one or more items identified on the list have been completed
22 pursuant to the contract, the local governmental entity may
23 continue to withhold an amount not to exceed 150 percent of
24 the total costs to complete such items.
25 (e) All items that require correction under the
26 contract and that are identified after the preparation and
27 delivery of the list remain the obligation of the contractor
28 as defined by the contract.
29 (f) Warranty items may not affect the final payment of
30 retainage as provided in this section or as provided in the
31
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1 contract between the contractor and its subcontractors and
2 suppliers.
3 (g) Retainage may not be held by a local governmental
4 entity or a contractor to secure payment of insurance premiums
5 under a consolidated insurance program or series of insurance
6 policies issued to a local governmental entity or a contractor
7 for a project or group of projects, and the final payment of
8 retainage as provided in this section may not be delayed
9 pending a final audit by the local governmental entity's or
10 contractor's insurance provider.
11 (h) If a local governmental entity fails to comply
12 with its responsibilities to develop the list required under
13 paragraph (a) or paragraph (b), as defined in the contract,
14 within the time limitations provided in paragraph (a), the
15 contractor may submit a payment request for all remaining
16 retainage withheld by the local governmental entity pursuant
17 to this section. The local governmental entity need not pay or
18 process any payment request for retainage if the contractor
19 has, in whole or in part, failed to cooperate with the local
20 governmental entity in the development of the list or failed
21 to perform its contractual responsibilities, if any, with
22 regard to the development of the list or if paragraph (8)(f)
23 applies.
24 (8)(a) With regard to any contract for construction
25 services, a local governmental entity may withhold from each
26 progress payment made to the contractor an amount not
27 exceeding 10 percent of the payment as retainage until
28 50-percent completion of such services.
29 (b) After 50-percent completion of the construction
30 services purchased pursuant to the contract, the local
31 governmental entity must reduce to 5 percent the amount of
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1 retainage withheld from each subsequent progress payment made
2 to the contractor. For purposes of this subsection, the term
3 "50-percent completion" has the meaning set forth in the
4 contract between the local governmental entity and the
5 contractor or, if not defined in the contract, the point at
6 which the local governmental entity has expended 50 percent of
7 the total cost of the construction services purchased as
8 identified in the contract together with all costs associated
9 with existing change orders and other additions or
10 modifications to the construction services provided for in the
11 contract. However, notwithstanding this subsection, a
12 municipality having a population of 25,000 or fewer, or a
13 county having a population of 100,000 or fewer, may withhold
14 retainage in an amount not exceeding 10 percent of each
15 progress payment made to the contractor until final completion
16 and acceptance of the project by the local governmental
17 entity.
18 (c) After 50-percent completion of the construction
19 services purchased pursuant to the contract, the contractor
20 may elect to withhold retainage from payments to its
21 subcontractors at a rate higher than 5 percent. The specific
22 amount to be withheld must be determined on a case-by-case
23 basis and must be based on the contractor's assessment of the
24 subcontractor's past performance, the likelihood that such
25 performance will continue, and the contractor's ability to
26 rely on other safeguards. The contractor shall notify the
27 subcontractor, in writing, of its determination to withhold
28 more than 5 percent of the progress payment and the reasons
29 for making that determination, and the contractor may not
30 request the release of such retained funds from the local
31 governmental entity.
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1 (d) After 50-percent completion of the construction
2 services purchased pursuant to the contract, the contractor
3 may present to the local governmental entity a payment request
4 for up to one-half of the retainage held by the local
5 governmental entity. The local governmental entity shall
6 promptly make payment to the contractor, unless the local
7 governmental entity has grounds, pursuant to paragraph (f),
8 for withholding the payment of retainage. If the local
9 governmental entity makes payment of retainage to the
10 contractor under this paragraph which is attributable to the
11 labor, services, or materials supplied by one or more
12 subcontractors or suppliers, the contractor shall timely remit
13 payment of such retainage to those subcontractors and
14 suppliers.
15 (e) This section does not prohibit a local
16 governmental entity from withholding retainage at a rate less
17 than 10 percent of each progress payment, from incrementally
18 reducing the rate of retainage pursuant to a schedule provided
19 for in the contract, or from releasing at any point all or a
20 portion of any retainage withheld by the local governmental
21 entity which is attributable to the labor, services, or
22 materials supplied by the contractor or by one or more
23 subcontractors or suppliers. If a local governmental entity
24 makes any payment of retainage to the contractor which is
25 attributable to the labor, services, or materials supplied by
26 one or more subcontractors or suppliers, the contractor shall
27 timely remit payment of such retainage to those subcontractors
28 and suppliers.
29 (f) This section does not require the local
30 governmental entity to pay or release any amounts that are the
31 subject of a good-faith dispute, the subject of a claim
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1 brought pursuant to s. 255.05, or otherwise the subject of a
2 claim or demand by the local governmental entity or
3 contractor.
4 (g) The time limitations set forth in this section for
5 payment of payment requests apply to any payment request for
6 retainage made pursuant to this section.
7 (h) Paragraphs (a)-(d) do not apply to construction
8 services purchased by a local governmental entity which are
9 paid for, in whole or in part, with federal funds and are
10 subject to federal grantor laws and regulations or
11 requirements that are contrary to any provision of the Local
12 Government Prompt Payment Act.
13 (i) This subsection does not apply to any construction
14 services purchased by a local governmental entity if the total
15 cost of the construction services purchased as identified in
16 the contract is $200,000 or less.
17 Section 4. Section 255.0705, Florida Statutes, is
18 created to read:
19 255.0705 Short title.--Sections 255.0705-255.078 may
20 be cited as the "Florida Prompt Payment Act."
21 Section 5. Subsections (2) and (3) of section 255.071,
22 Florida Statutes, are amended to read:
23 255.071 Payment of subcontractors, sub-subcontractors,
24 materialmen, and suppliers on construction contracts for
25 public projects.--
26 (2) The failure to pay any undisputed obligations for
27 such labor, services, or materials within 30 days after the
28 date the labor, services, or materials were furnished and
29 payment for such labor, services, or materials became due, or
30 within the time limitations set forth in s. 255.073(3) 30 days
31 after the date payment for such labor, services, or materials
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1 is received, whichever last occurs, shall entitle any person
2 providing such labor, services, or materials to the procedures
3 specified in subsection (3) and the remedies provided in
4 subsection (4).
5 (3) Any person providing labor, services, or materials
6 for the construction of a public building, for the prosecution
7 and completion of a public work, or for repairs upon a public
8 building or public work improvements to real property may file
9 a verified complaint alleging:
10 (a) The existence of a contract for providing such
11 labor, services, or materials to improve real property.
12 (b) A description of the labor, services, or materials
13 provided and alleging that the labor, services, or materials
14 were provided in accordance with the contract.
15 (c) The amount of the contract price.
16 (d) The amount, if any, paid pursuant to the contract.
17 (e) The amount that remains unpaid pursuant to the
18 contract and the amount thereof that is undisputed.
19 (f) That the undisputed amount has remained due and
20 payable pursuant to the contract for more than 30 days after
21 the date the labor or services were accepted or the materials
22 were received.
23 (g) That the person against whom the complaint was
24 filed has received payment on account of the labor, services,
25 or materials described in the complaint and, as of the date
26 the complaint was filed, has failed to make payment within the
27 time limitations set forth in s. 255.073(3) more than 30 days
28 prior to the date the complaint was filed.
29 Section 6. Section 255.072, Florida Statutes, is
30 created to read:
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1 255.072 Definitions.--As used in ss. 255.073-255.078,
2 the term:
3 (1) "Agent" means project architect, project engineer,
4 or any other agency or person acting on behalf of a public
5 entity.
6 (2) "Construction services" means all labor, services,
7 and materials provided in connection with the construction,
8 alteration, repair, demolition, reconstruction, or any other
9 improvements to real property. The term "construction
10 services" does not include contracts or work performed for the
11 Department of Transportation.
12 (3) "Contractor" means any person who contracts
13 directly with a public entity to provide construction
14 services.
15 (4) "Payment request" means a request for payment for
16 construction services which conforms with all statutory
17 requirements and with all requirements specified by the public
18 entity to which the payment request is submitted.
19 (5) "Public entity" means the state, or any office,
20 board, bureau, commission, department, branch, division, or
21 institution thereof, but does not include a local governmental
22 entity as defined in s. 218.72.
23 (6) "Purchase" means the purchase of construction
24 services.
25 Section 7. Section 255.073, Florida Statutes, is
26 created to read:
27 255.073 Timely payment for purchases of construction
28 services.--
29 (1) Except as otherwise provided in ss.
30 255.072-255.078, s. 215.422 governs the timely payment for
31 construction services by a public entity.
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1 (2) If a public entity disputes a portion of a payment
2 request, the undisputed portion must be timely paid.
3 (3) When a contractor receives payment from a public
4 entity for labor, services, or materials furnished by
5 subcontractors and suppliers hired by the contractor, the
6 contractor shall remit payment due to those subcontractors and
7 suppliers within 10 days after the contractor's receipt of
8 payment. When a subcontractor receives payment from a
9 contractor for labor, services, or materials furnished by
10 subcontractors and suppliers hired by the subcontractor, the
11 subcontractor shall remit payment due to those subcontractors
12 and suppliers within 7 days after the subcontractor's receipt
13 of payment. This subsection does not prohibit a contractor or
14 subcontractor from disputing, pursuant to the terms of the
15 relevant contract, all or any portion of a payment alleged to
16 be due to another party if the contractor or subcontractor
17 notifies the party whose payment is disputed, in writing, of
18 the amount in dispute and the actions required to cure the
19 dispute. The contractor or subcontractor must pay all
20 undisputed amounts due within the time limits imposed by this
21 subsection.
22 (4) All payments due for the purchase of construction
23 services and not made within the applicable time limits shall
24 bear interest at the rate specified in s. 215.422. After July
25 1, 2006, such payments shall bear interest at the rate of 1
26 percent per month, to the extent that the Chief Financial
27 Officer's replacement project for the state's accounting and
28 cash management systems is operational for the particular
29 affected public entity. After January 1, 2007, all such
30 payments due from public entity shall bear interest at the
31 rate of 1 percent per month.
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1 Section 8. Section 255.074, Florida Statutes, is
2 created to read:
3 255.074 Procedures for calculation of payment-due
4 dates.--
5 (1) Each public entity shall establish procedures
6 whereby each payment request received by the public entity is
7 marked as received on the date on which it is delivered to an
8 agent or employee of the public entity or of a facility or
9 office of the public entity.
10 (2) If the terms under which a purchase is made allow
11 for partial deliveries and a payment request is submitted for
12 a partial delivery, the time for payment for the partial
13 delivery must be calculated from the time of the partial
14 delivery and the submission of the payment request.
15 (3) A public entity must submit a payment request to
16 the Chief Financial Officer for payment no more than 20 days
17 after receipt of the payment request.
18 Section 9. Section 255.075, Florida Statutes, is
19 created to read:
20 255.075 Mandatory interest.--A contract between a
21 public entity and a contractor may not prohibit the collection
22 of late payment interest charges authorized under s.
23 255.073(4).
24 Section 10. Section 255.076, Florida Statutes, is
25 created to read:
26 255.076 Award of court costs and attorney's fees.--In
27 an action to recover amounts due for construction services
28 purchased by a public entity, the court shall award court
29 costs and reasonable attorney's fees, including fees incurred
30 through any appeal, to the prevailing party, if the court
31 finds that the nonprevailing party withheld any portion of the
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1 payment that is the subject of the action without any
2 reasonable basis in law or fact to dispute the prevailing
3 party's claim to those amounts.
4 Section 11. Section 255.077, Florida Statutes, is
5 created to read:
6 255.077 Project closeout and payment of retainage.--
7 (1) Each contract for construction services between a
8 public entity and a contractor must provide for the
9 development of a list of items required to render complete,
10 satisfactory, and acceptable the construction services
11 purchased by the public entity. The contract must specify the
12 process for the development of the list, including
13 responsibilities of the public entity and the contractor in
14 developing and reviewing the list and a reasonable time for
15 developing the list, as follows:
16 (a) For construction projects having an estimated cost
17 of less than $10 million, within 30 calendar days after
18 reaching substantial completion of the construction services
19 purchased as defined in the contract, or, if not defined in
20 the contract, upon reaching beneficial occupancy or use; or
21 (b) For construction projects having an estimated cost
22 of $10 million or more, within 30 calendar days, unless
23 otherwise extended by contract not to exceed 60 calendar days,
24 after reaching substantial completion of the construction
25 services purchased as defined in the contract, or, if not
26 defined in the contract, upon reaching beneficial occupancy or
27 use.
28 (2) If the contract between the public entity and the
29 contractor relates to the purchase of construction services on
30 more than one building or structure, or involves a multiphased
31 project, the contract must provide for the development of a
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1 list of items required to render complete, satisfactory, and
2 acceptable all the construction services purchased pursuant to
3 the contract for each building, structure, or phase of the
4 project within the time limitations provided in subsection
5 (1).
6 (3) The failure to include any corrective work or
7 pending items not yet completed on the list developed pursuant
8 to subsection (1) or subsection (2) does not alter the
9 responsibility of the contractor to complete all the
10 construction services purchased pursuant to the contract.
11 (4) Upon completion of all items on the list, the
12 contractor may submit a payment request for all remaining
13 retainage withheld by the public entity pursuant to s.
14 255.078. If a good-faith dispute exists as to whether one or
15 more items identified on the list have been completed pursuant
16 to the contract, the public entity may continue to withhold an
17 amount not to exceed 150 percent of the total costs to
18 complete such items.
19 (5) All items that require correction under the
20 contract and that are identified after the preparation and
21 delivery of the list remain the obligation of the contractor
22 as defined by the contract.
23 (6) Warranty items may not affect the final payment of
24 retainage as provided in this section or as provided in the
25 contract between the contractor and its subcontractors and
26 suppliers.
27 (7) Retainage may not be held by a public entity or a
28 contractor to secure payment of insurance premiums under a
29 consolidated insurance program or series of insurance policies
30 issued to a public entity or a contractor for a project or
31 group of projects, and the final payment of retainage as
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1 provided in this section may not be delayed pending a final
2 audit by the public entity's or contractor's insurance
3 provider.
4 (8) If a public entity fails to comply with its
5 responsibilities to develop the list required under subsection
6 (1) or subsection (2), as defined in the contract, within the
7 time limitations provided in subsection (1), the contractor
8 may submit a payment request for all remaining retainage
9 withheld by the public entity pursuant to s. 255.078. The
10 public entity need not pay or process any payment request for
11 retainage if the contractor has, in whole or in part, failed
12 to cooperate with the public entity in the development of the
13 list or failed to perform its contractual responsibilities, if
14 any, with regard to the development of the list or if s.
15 255.078(6) applies.
16 Section 12. Section 255.078, Florida Statutes, is
17 created to read:
18 255.078 Public construction retainage.--
19 (1) With regard to any contract for construction
20 services, a public entity may withhold from each progress
21 payment made to the contractor an amount not exceeding 10
22 percent of the payment as retainage until 50-percent
23 completion of such services.
24 (2) After 50-percent completion of the construction
25 services purchased pursuant to the contract, the public entity
26 must reduce to 5 percent the amount of retainage withheld from
27 each subsequent progress payment made to the contractor. For
28 purposes of this section, the term "50-percent completion" has
29 the meaning set forth in the contract between the public
30 entity and the contractor or, if not defined in the contract,
31 the point at which the public entity has expended 50 percent
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1 of the total cost of the construction services purchased as
2 identified in the contract together with all costs associated
3 with existing change orders and other additions or
4 modifications to the construction services provided for in the
5 contract.
6 (3) After 50-percent completion of the construction
7 services purchased pursuant to the contract, the contractor
8 may elect to withhold retainage from payments to its
9 subcontractors at a rate higher than 5 percent. The specific
10 amount to be withheld must be determined on a case-by-case
11 basis and must be based on the contractor's assessment of the
12 subcontractor's past performance, the likelihood that such
13 performance will continue, and the contractor's ability to
14 rely on other safeguards. The contractor shall notify the
15 subcontractor, in writing, of its determination to withhold
16 more than 5 percent of the progress payment and the reasons
17 for making that determination, and the contractor may not
18 request the release of such retained funds from the public
19 entity.
20 (4) After 50-percent completion of the construction
21 services purchased pursuant to the contract, the contractor
22 may present to the public entity a payment request for up to
23 one-half of the retainage held by the public entity. The
24 public entity shall promptly make payment to the contractor,
25 unless the public entity has grounds, pursuant to subsection
26 (6), for withholding the payment of retainage. If the public
27 entity makes payment of retainage to the contractor under this
28 subsection which is attributable to the labor, services, or
29 materials supplied by one or more subcontractors or suppliers,
30 the contractor shall timely remit payment of such retainage to
31 those subcontractors and suppliers.
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1 (5) Neither this section nor s. 255.077 prohibits a
2 public entity from withholding retainage at a rate less than
3 10 percent of each progress payment, from incrementally
4 reducing the rate of retainage pursuant to a schedule provided
5 for in the contract, or from releasing at any point all or a
6 portion of any retainage withheld by the public entity which
7 is attributable to the labor, services, or materials supplied
8 by the contractor or by one or more subcontractors or
9 suppliers. If a public entity makes any payment of retainage
10 to the contractor which is attributable to the labor,
11 services, or materials supplied by one or more subcontractors
12 or suppliers, the contractor shall timely remit payment of
13 such retainage to those subcontractors and suppliers.
14 (6) Neither this section nor s. 255.077 requires the
15 public entity to pay or release any amounts that are the
16 subject of a good-faith dispute, the subject of a claim
17 brought pursuant to s. 255.05, or otherwise the subject of a
18 claim or demand by the public entity or contractor.
19 (7) The same time limits for payment of a payment
20 request apply regardless of whether the payment request is
21 for, or includes, retainage.
22 (8) Subsections (1)-(4) do not apply to construction
23 services purchased by a public entity which are paid for, in
24 whole or in part, with federal funds and are subject to
25 federal grantor laws and regulations or requirements that are
26 contrary to any provision of the Florida Prompt Payment Act.
27 (9) This section does not apply to any construction
28 services purchased by a public entity if the total cost of the
29 construction services purchased as identified in the contract
30 is $200,000 or less.
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1 Section 13. Paragraph (a) of subsection (2) of section
2 255.05, Florida Statutes, is amended and subsection (10) is
3 added to that section, to read:
4 255.05 Bond of contractor constructing public
5 buildings; form; action by materialmen.--
6 (2)(a)1. If a claimant is no longer furnishing labor,
7 services, or materials on a project, a contractor or the
8 contractor's agent or attorney may elect to shorten the
9 prescribed time in this paragraph within which an action to
10 enforce any claim against a payment bond provided pursuant to
11 this section may be commenced by recording in the clerk's
12 office a notice in substantially the following form:
13
14 NOTICE OF CONTEST OF CLAIM
15 AGAINST PAYMENT BOND
16
17 To: ...(Name and address of claimant)...
18
19 You are notified that the undersigned contests your
20 notice of nonpayment, dated ............, ........, and served
21 on the undersigned on ............, ........, and that the
22 time within which you may file suit to enforce your claim is
23 limited to 60 days after the date of service of this notice.
24
25 DATED on ............, .........
26
27 Signed:...(Contractor or Attorney)...
28
29 The claim of any claimant upon whom such notice is served and
30 who fails to institute a suit to enforce his or her claim
31 against the payment bond within 60 days after service of such
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1 notice shall be extinguished automatically. The clerk shall
2 mail a copy of the notice of contest to the claimant at the
3 address shown in the notice of nonpayment or most recent
4 amendment thereto and shall certify to such service on the
5 face of such notice and record the notice. Service is complete
6 upon mailing.
7 2. A claimant, except a laborer, who is not in privity
8 with the contractor shall, before commencing or not later than
9 45 days after commencing to furnish labor, materials, or
10 supplies for the prosecution of the work, furnish the
11 contractor with a notice that he or she intends to look to the
12 bond for protection. A claimant who is not in privity with the
13 contractor and who has not received payment for his or her
14 labor, materials, or supplies shall deliver to the contractor
15 and to the surety written notice of the performance of the
16 labor or delivery of the materials or supplies and of the
17 nonpayment. The notice of nonpayment may be served at any time
18 during the progress of the work or thereafter but not before
19 45 days after the first furnishing of labor, services, or
20 materials, and not later than 90 days after the final
21 furnishing of the labor, services, or materials by the
22 claimant or, with respect to rental equipment, not later than
23 90 days after the date that the rental equipment was last on
24 the job site available for use. Any notice of nonpayment
25 served by a claimant who is not in privity with the contractor
26 which includes sums for retainage must specify the portion of
27 the amount claimed for retainage. No action for the labor,
28 materials, or supplies may be instituted against the
29 contractor or the surety unless both notices have been given.
30 Notices required or permitted under this section may be served
31 in accordance with s. 713.18. An action, except for an action
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1 exclusively for recovery of retainage, must be instituted
2 against the contractor or the surety on the payment bond or
3 the payment provisions of a combined payment and performance
4 bond within 1 year after the performance of the labor or
5 completion of delivery of the materials or supplies. An action
6 exclusively for recovery of retainage must be instituted
7 against the contractor or the surety within 1 year after the
8 performance of the labor or completion of delivery of the
9 materials or supplies, or within 90 days after receipt of
10 final payment (or the payment estimate containing the owner's
11 final reconciliation of quantities if no further payment is
12 earned and due as a result of deductive adjustments) by the
13 contractor or surety, whichever comes last. A claimant may not
14 waive in advance his or her right to bring an action under the
15 bond against the surety. In any action brought to enforce a
16 claim against a payment bond under this section, the
17 prevailing party is entitled to recover a reasonable fee for
18 the services of his or her attorney for trial and appeal or
19 for arbitration, in an amount to be determined by the court,
20 which fee must be taxed as part of the prevailing party's
21 costs, as allowed in equitable actions. The time periods for
22 service of a notice of nonpayment or for bringing an action
23 against a contractor or a surety shall be measured from the
24 last day of furnishing labor, services, or materials by the
25 claimant and shall not be measured by other standards, such as
26 the issuance of a certificate of occupancy or the issuance of
27 a certificate of substantial completion.
28 (10) An action, except an action for recovery of
29 retainage, must be instituted against the contractor or the
30 surety on the payment bond or the payment provisions of a
31 combined payment and performance bond within 1 year after the
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1 performance of the labor or completion of delivery of the
2 materials or supplies. An action for recovery of retainage
3 must be instituted against the contractor or the surety within
4 1 year after the performance of the labor or completion of
5 delivery of the materials or supplies; however, such an action
6 may not be instituted until one of the following conditions is
7 satisfied:
8 (a) The public entity has paid out the claimant's
9 retainage to the contractor, and the time provided under s.
10 255.073(3) or s. 218.735(6) for payment of that retainage to
11 the claimant has expired;
12 (b) The claimant has completed all work required under
13 its contract and 70 days have passed since the contractor sent
14 its final payment request to the public entity;
15 (c) One hundred and sixty days have passed since
16 reaching substantial completion of the construction services
17 purchased, as defined in the contract, or if not defined in
18 the contract, since reaching beneficial occupancy or use of
19 the project; or
20 (d) The claimant has asked the contractor, in writing,
21 for any of the following information and the contractor has
22 failed to respond to the claimant's request, in writing,
23 within 10 days after receipt of the request:
24 1. Whether the project has reached substantial
25 completion, as that term is defined in the contract, or if not
26 defined in the contract, if beneficial occupancy or use of the
27 project has occurred.
28 2. Whether the contractor has received payment of the
29 claimant's retainage, and if so, the date the retainage was
30 received by the contractor.
31
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1 3. Whether the contractor has sent its final payment
2 request to the public entity, and if so, the date on which the
3 final payment request was sent.
4
5 If none of the conditions described in paragraphs (a) through
6 (d) is satisfied and an action for recovery of retainage
7 therefore cannot be instituted within the 1-year limitation
8 period set forth in this subsection, this limitation period
9 shall be extended until 120 days after one of these conditions
10 is satisfied.
11 Section 14. Subsection (2) of section 287.0585,
12 Florida Statutes, is amended to read:
13 287.0585 Late payments by contractors to
14 subcontractors and suppliers; penalty.--
15 (2) This section does shall not apply when the
16 contract between the contractor and subcontractors or
17 subvendors provides otherwise or when payments under the
18 contract are otherwise governed by ss. 255.0705-255.078.
19 Section 15. Paragraph (b) of subsection (2) of section
20 95.11, Florida Statutes, is amended to read:
21 95.11 Limitations other than for the recovery of real
22 property.--Actions other than for recovery of real property
23 shall be commenced as follows:
24 (2) WITHIN FIVE YEARS.--
25 (b) A legal or equitable action on a contract,
26 obligation, or liability founded on a written instrument,
27 except for an action to enforce a claim against a payment
28 bond, which shall be governed by the applicable provisions of
29 ss. 255.05(10) 255.05(2)(a)2. and 713.23(1)(e).
30 Section 16. Neither the amendments to sections 95.11,
31 218.70, 218.72, 218.735, and 255.071, Florida Statutes, and
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1 subsection (2) of section 255.05, Florida Statutes, as
2 provided in this act, nor subsection (10) of section 255.05,
3 Florida Statutes, and section 255.078, Florida Statutes, as
4 created by this act, applies to any existing construction
5 contract pending approval by a local governmental entity or
6 public entity, or to any project advertised for bid by the
7 local government entity or public entity, on or before October
8 1, 2005.
9 Section 17. This act shall take effect October 1,
10 2005.
11
12 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
13 CS for Senate Bill 632
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15 The CS for CS amends s. 287.0585, F.S., (which governs late
payments by contractors to subcontractors and penalties in
16 contracts between a contractor and a state agency), to provide
that the section is not applicable when payments under a
17 contract are governed by the newly created "Florida Prompt
Payment Act" in ss. 255.0705-255.078, F.S.
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