HB 1157

1	A bill to be entitled
2	An act relating to the Local Government Prompt Payment
3	Act; amending s. 218.72, F.S.; revising definitions;
4	amending s. 218.735, F.S.; revising provisions relating to
5	the timely payment for purchases of construction services;
6	requiring that a dispute be resolved according to
7	procedures in the invitation to bid or request for
8	proposal; prohibiting the assessment of damages against a
9	contractor if the list of items remaining to complete is
10	not timely provided to the contractor; amending s. 218.76,
11	F.S.; revising provisions relating to the resolution of
12	disputes concerning an improper payment request or
13	invoice; providing that a local governmental entity waives
14	its objection in a payment dispute if it fails to commence
15	the dispute resolution procedure within the time required;
16	providing an effective date.
17
18	Be It Enacted by the Legislature of the State of Florida:
19
20	Section 1.  Section 218.72, Florida Statutes, is reordered
21	and amended to read:
22	218.72  Definitions.-As used in this part, the term:
23	(8)(1)  "Proper invoice" means an invoice that which
24	conforms with all statutory requirements and with all
25	requirements that have been specified by the local governmental
26	entity to which the invoice is submitted. Such requirements must
27	be included in the invitation to bid or request for proposal for
28	the project for which the invoice is submitted.
29	(5)(2)  "Local governmental entity" means a county or
30	municipal government, school board, school district, authority,
31	special taxing district, other political subdivision, or any
32	office, board, bureau, commission, department, branch, division,
33	or institution thereof.
34	(4)(3)  "County" means a political subdivision of the state
35	established pursuant to s. 1, Art. VIII of the State
36	Constitution.
37	(6)(4)  "Municipality" means a municipality created
38	pursuant to general or special law and metropolitan and
39	consolidated governments as provided in s. 6(e) and (f), Art.
40	VIII of the State Constitution.
41	(9)(5)  "Purchase" means the purchase of goods, services,
42	or construction services; the purchase or lease of personal
43	property; or the lease of real property by a local governmental
44	entity.
45	(10)(6)  "Vendor" means any person who sells goods or
46	services, sells or leases personal property, or leases real
47	property directly to a local governmental entity. The term
48	includes any person who provides waste hauling services to
49	residents or businesses located within the boundaries of a local
50	government pursuant to a contract or local ordinance.
51	(2)(7)  "Construction services" means all labor, services,
52	and materials provided in connection with the construction,
53	alteration, repair, demolition, reconstruction, or any other
54	improvements to real property.
55	(7)(8)  "Payment request" means a request for payment for
56	construction services which conforms with all statutory
57	requirements and with all requirements specified by the local
58	governmental entity to which the payment request is submitted.
59	Such requirements must be included in the invitation to bid or
60	request for proposal for the project for which payment is
61	requested.
62	(1)(9)  "Agent" means the project architect, project
63	engineer, or any other agency or person acting on behalf of the
64	local governmental entity. The agent who is required to review
65	invoices or payment requests must be identified in the
66	invitation to bid or request for proposal for the project for
67	which payment requests or invoices are submitted.
68	(3)(10)  "Contractor" or "provider of construction
69	services" means the any person who contracts directly with a
70	local governmental entity to provide construction services.
71	Section 2.  Subsections (1) through (7) of section 218.735,
72	Florida Statutes, are amended to read:
73	218.735  Timely payment for purchases of construction
74	services.-
75	(1)  The due date for payment for the purchase of
76	construction services by a local governmental entity is
77	determined as follows:
78	(a)  If an agent must approve the payment request or
79	invoice before prior to the payment request or invoice is being
80	submitted to the local governmental entity, payment is due 25
81	business days after the date on which the payment request or
82	invoice is stamped as received as provided in s. 218.74(1). If
83	the payment request or invoice is not rejected before the due
84	date, it shall be deemed accepted.
85	(b)  If an agent need not approve the payment request or
86	invoice which is submitted by the contractor, payment is due 20
87	business days after the date on which the payment request or
88	invoice is stamped as received as provided in s. 218.74(1).
89	(2)  If a payment request or invoice does not meet the
90	contract requirements, the local governmental entity must may
91	reject the payment request or invoice within 20 business days
92	after the date on which the payment request or invoice is
93	stamped as received as provided in s. 218.74(1). The rejection
94	must be written and must specify the deficiency in the payment
95	request or invoice and the action necessary to make the payment
96	request or invoice proper.
97	(3)  If a payment request or an invoice is rejected under
98	subsection (2) and the contractor submits a corrected payment
99	request or invoice that which corrects the deficiency specified
100	in writing by the local governmental entity, the corrected
101	payment request or invoice must be paid or rejected on the later
102	of:
103	(a)  Ten business days after the date the corrected payment
104	request or invoice is stamped as received as provided in s.
105	218.74(1); or
106	(b)  If the local governmental entity governing body is
107	required by ordinance, charter, or other law to approve or
108	reject the corrected payment request or invoice, the first
109	business day after the next regularly scheduled meeting of the
110	local governmental entity governing body held after the
111	corrected payment request or invoice is stamped as received as
112	provided in s. 218.74(1).
113	(4)  If a dispute between the local governmental entity and
114	the contractor cannot be resolved by the procedure in subsection
115	(3), the dispute must be resolved in accordance with the dispute
116	resolution procedure prescribed in the invitation to bid or
117	request for proposal for the project for which the payment
118	request or invoice is submitted construction contract or in any
119	applicable ordinance. In the absence of a prescribed procedure,
120	the dispute must be resolved by the procedure specified in s.
121	218.76(2).
122	(5)  If a local governmental entity disputes a portion of a
123	payment request or an invoice, the undisputed portion shall be
124	paid timely, in accordance with subsection (1).
125	(6)  If When a contractor receives payment from a local
126	governmental entity for labor, services, or materials furnished
127	by subcontractors and suppliers hired by the contractor, the
128	contractor must shall remit payment due to those subcontractors
129	and suppliers within 10 days after the contractor's receipt of
130	payment. If When a subcontractor receives payment from a
131	contractor for labor, services, or materials furnished by
132	subcontractors and suppliers hired by the subcontractor, the
133	subcontractor must shall remit payment due to those
134	subcontractors and suppliers within 7 days after the
135	subcontractor's receipt of payment. This subsection does not
136	Nothing herein shall prohibit a contractor or subcontractor from
137	disputing, pursuant to the terms of the relevant contract, all
138	or any portion of a payment alleged to be due to another party
139	if the contractor or subcontractor notifies the party whose
140	payment is disputed, in writing, of the amount in dispute and
141	the actions required to cure the dispute. The contractor or
142	subcontractor must pay all undisputed amounts due within the
143	time limits imposed by this section.
144	(7)(a)  Each contract for construction services between a
145	local governmental entity and a contractor must provide for the
146	development of a single list of items required to render
147	complete, satisfactory, and acceptable the construction services
148	purchased by the local governmental entity.
149	(a)  The contract must specify the process for developing
150	the development of the list, including the responsibilities of
151	the local governmental entity and the contractor in developing
152	and reviewing the list and a reasonable time for developing the
153	list, as follows:
154	1.  For construction projects having an estimated cost of
155	Less than $10 million, within 30 calendar days after reaching
156	substantial completion of the construction services purchased as
157	defined in the contract, or, if not defined in the contract,
158	upon reaching beneficial occupancy or use; or
159	2.  For construction projects having an estimated cost of
160	$10 million or more, within 30 calendar days, or, if unless
161	otherwise extended by contract, up to not to exceed 60 calendar
162	days, after reaching substantial completion of the construction
163	services purchased as defined in the contract, or, if not
164	defined in the contract, upon reaching beneficial occupancy or
165	use.
166	(b)  If the contract between the local governmental entity
167	and the contractor relates to the purchase of construction
168	services on more than one building or structure, or involves a
169	multiphased project, the contract must provide for the
170	development of a list of items required to render complete,
171	satisfactory, and acceptable all the construction services
172	purchased pursuant to the contract for each building, structure,
173	or phase of the project within the time limitations provided in
174	paragraph (a).
175	(c)  The final contract completion date must be at least 30
176	days after the delivery of the list of items. If the list is not
177	timely provided to the contractor, the contract time for
178	completion must be extended by at least 30 days after the
179	contractor receives the list. Damages may not be assessed
180	against a contractor for failing to complete a project within
181	the time required by the contract if the list of items has not
182	been timely provided to the contractor.
183	(d)(c)  The failure to include any corrective work or
184	pending items not yet completed on the list developed pursuant
185	to this subsection does not alter the responsibility of the
186	contractor to complete all the construction services purchased
187	pursuant to the contract.
188	(e)(d)  Upon completion of all items on the list, the
189	contractor may submit a payment request for all remaining
190	retainage withheld by the local governmental entity pursuant to
191	this section. If a good faith dispute exists as to whether one
192	or more items identified on the list have been completed
193	pursuant to the contract, the local governmental entity may
194	continue to withhold up to an amount not to exceed 150 percent
195	of the total costs to complete such items.
196	(f)(e)  All items that require correction under the
197	contract and that are identified after the preparation and
198	delivery of the list remain the obligation of the contractor as
199	defined by the contract.
200	(g)(f)  Warranty items or items not included in the list of
201	items required under paragraph (a) may not affect the final
202	payment of retainage as provided in this section or as provided
203	in the contract between the contractor and its subcontractors
204	and suppliers.
205	(h)(g)  Retainage may not be held by a local governmental
206	entity or a contractor to secure payment of insurance premiums
207	under a consolidated insurance program or series of insurance
208	policies issued to a local governmental entity or a contractor
209	for a project or group of projects, and the final payment of
210	retainage as provided in this section may not be delayed pending
211	a final audit by the local governmental entity's or contractor's
212	insurance provider.
213	(i)(h)  If a local governmental entity fails to comply with
214	its responsibilities to develop the list required under
215	paragraph (a) or paragraph (b), as defined in the contract,
216	within the time limitations provided in paragraph (a), the
217	contractor may submit a payment request for all remaining
218	retainage withheld by the local governmental entity pursuant to
219	this section and payment of any remaining contract amount must
220	be paid within 20 business days. If the local governmental
221	entity has provided written notice to the contractor specifying
222	the failure of the contractor to meet contract requirements in
223	the development of the list of items to be completed, the local
224	governmental entity need not pay or process any payment request
225	for retainage if the contractor has, in whole or in part, failed
226	to cooperate with the local governmental entity in the
227	development of the list, or failed to perform its contractual
228	responsibilities, if any, with regard to the development of the
229	list, or if paragraph (8)(f) applies.
230	Section 3.  Section 218.76, Florida Statutes, is amended to
231	read:
232	218.76  Improper payment request or invoice; resolution of
233	disputes.-
234	(1)  If In any case in which an improper payment request or
235	invoice is submitted by a vendor, the local governmental entity
236	shall, within 10 days after the improper payment request or
237	invoice is received by it, notify the vendor, in writing, that
238	the payment request or invoice is improper and indicate what
239	corrective action on the part of the vendor is needed to make
240	the payment request or invoice proper.
241	(2)  If In the event a dispute arises occurs between a
242	vendor and a local governmental entity concerning payment of a
243	payment request or an invoice, the dispute such disagreement
244	shall be finally determined by the local governmental entity
245	pursuant to as provided in this section. Each local governmental
246	entity shall establish a dispute resolution procedure
247	established to be followed by the local governmental entity in
248	cases of such disputes. Such procedure must shall provide that
249	proceedings to resolve the dispute are shall be commenced within
250	not later than 45 days after the date on which the payment
251	request or proper invoice was received by the local governmental
252	entity and shall be concluded by final decision of the local
253	governmental entity within not later than 60 days after the date
254	on which the payment request or proper invoice was received by
255	the local governmental entity. Such procedures are shall not be
256	subject to chapter 120, and do such procedures shall not
257	constitute an administrative proceeding that which prohibits a
258	court from deciding de novo any action arising out of the
259	dispute. If the dispute is resolved in favor of the local
260	governmental entity, then interest charges shall begin to accrue
261	15 days after the local governmental entity's final decision. If
262	the dispute is resolved in favor of the vendor, then interest
263	begins shall begin to accrue as of the original date the payment
264	became due. If the local governmental entity does not commence
265	the dispute resolution procedure within the time required, the
266	objection to payment shall be deemed to have been waived. The
267	time for dispute resolution may be extended upon the written
268	agreement of the affected parties.
269	(3)  In an action to recover amounts due under this part
270	ss. 218.70-218.80, the court shall award court costs and
271	reasonable attorney's fees, including fees incurred through any
272	appeal, to the prevailing party, if the court finds that the
273	nonprevailing party withheld any portion of the payment that is
274	the subject of the action without any reasonable basis in law or
275	fact to dispute the prevailing party's claim to those amounts.
276	Section 4.  This act shall take effect July 1, 2010.

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