Bill Text: IN HB1163 | 2012 | Regular Session | Amended
Bill Title: Bonding and retainage in public works projects.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Enrolled - Dead) 2012-03-15 - Signed by the Governor [HB1163 Detail]
Download: Indiana-2012-HB1163-Amended.html
Citations Affected: IC 4-13.6; IC 5-16; IC 36-1.
Synopsis: Bonding and retainage in public works projects. Provides
that a person who has a claim against the retainage or the payment
bond of a contractor on a public works project must make the claim and
deliver a copy of the claim to the contractor not later than stated times
after that person performed the service or labor or supplied the
materials for the public works project. Decreases the amount that may
be withheld on state public works projects upon substantial completion
to cover remaining uncompleted minor items. Makes stylistic and
technical changes.
Effective: July 1, 2012.
January 9, 2012, read first time and referred to Committee on Government and Regulatory
Reform.
January 25, 2012, amended, reported _ Do Pass.
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A BILL FOR AN ACT to amend the Indiana Code concerning state
and local administration.
(1) To withhold no more than six percent (6%) of the dollar value of all work satisfactorily completed until the public work is fifty percent (50%) complete, and nothing further after that.
(2) To withhold no more than three percent (3%) of the dollar value of all work satisfactorily completed until the public work is substantially complete.
(b)
(1) If there are any remaining uncompleted minor items,
(2) Any amounts required to be withheld under section 8(b) of
this chapter.
(1) from the contractor under section 3 of this chapter for uncompleted minor items; and
(2) under subsection (b);
the division may make a full, final, and complete settlement with a contractor, including providing for full payment of all escrowed principal and escrowed income,
(b) If the division receives a claim from a subcontractor or a supplier under section 9 of this chapter, the division shall withhold the amount of the claim until the claim is resolved under section 9(c) of this chapter.
(b) In order to proceed against the bond of the contractor required under section 6 of this chapter, the claimant must notify the surety of
the contractor by sending a copy of the claim required by subsection (a)
to the surety company. The claimant shall also inform the division and
the contractor that the surety has been notified. The division shall
supply the claimant with any information the claimant requires to
notify the surety and the contractor.
(c) The claimant may not file suit against the contractor's surety on
the contractor's bond until the expiration of before thirty (30) days after
filing of the claim with the division and delivering a copy of the
claim to the contractor. If the claim is not paid in full at the expiration
of the thirty (30) day period, the claimant may bring an action in a court
of competent jurisdiction in the claimant's own name upon the bond.
(1) all subcontractors;
(2) all suppliers of materials for material furnished;
(3) all labor employed in
(4) all those furnishing any service in relation to or in connection with
all bills due and owing
(b) If there is not a sufficient sum owing to
(c) A person claiming payment under this section must file with
(d) If there is no dispute
(e) If there is a dispute
(f) Except for amounts required to be withheld under subsection (e) or as otherwise provided in this chapter, this chapter
payment in full of all subcontractors, materialmen, laborers, or those
furnishing services in the performance of said contract. Provided,
further, That
(g) The surety of said a contractor or contractors shall may not be
released until the expiration of one (1) year after the final settlement
with said contractor or all contractors. The terms "public building,"
"public work" and "public improvement," or combinations thereof, as
used in this chapter, shall be construed to include all buildings, work
or improvements the cost of which is paid for by funds derived from
taxation.
(b) The bond required under subsection (a) shall be deposited with the
state or commission public body for the benefit of a person firm,
limited liability company, or corporation interested in and entitled to
the bond. The bond shall be conditioned that:
(1) a change, modification, omission, or addition in and to the
terms or conditions of the contract, plans, specifications,
drawings, or profile; or
(2) any irregularity or defect in the contract or in the proceedings
preliminary to the letting and awarding of the contract;
shall does not affect or operate to release or discharge the surety.
(c) The provisions of this chapter shall become a part of the terms
of a contract awarded under this chapter. A bond for a public work or
improvement is subject to the provisions of this chapter.
(d) A person firm, limited liability company, or corporation to whom
money is due on account of for having performed labor or having
furnished material or service in the construction, erection, alteration,
or repair of a building, for a public work or improvement under this
chapter shall, within must, not later than sixty (60) days after the
completion of that person completed the labor or service or within
sixty (60) days after that person furnished the last item of material:
has been furnished,
(1) file with the board, commission, trustee, officer, clerk, or
agent of the state or commission that entered into contract with
the principal contractor for the public work or improvement
public body duplicate verified statements of the amount due to
the subcontractor. person; and
(2) deliver a copy of the statement to the contractor.
The board, commission, trustee, officer, authorized clerk, or agent of
the state public body shall deliver to the surety or sureties on the bond
one (1) of the duplicate statements. The failure to deliver a duplicate
statement by a board, commission, trustee, officer, authorized clerk, or
agent of the state the public body does not affect or invalidate the
rights of the person firm, limited liability company, or corporation to
whom money is due, on account of having performed labor or service
or having furnished material, nor does the failure to deliver a duplicate
statement operate as a defense for the surety.
(e) No A suit shall may not be brought against a surety or sureties
on a bond under this section until the expiration of before thirty (30)
days after both of the following have occurred:
(1) The filing of the verified duplicate statement.
(2) A copy of the notice has been delivered to the contractor.
If the indebtedness is not paid in full at the expiration of after thirty
(30) days, the person, firm, limited liability company, or corporation
may bring an action in a court of competent jurisdiction upon the bond.
The action must be commenced within brought not later than sixty
(60) days from after the date of the final completion and acceptance of
the public building or public work. and unless commenced within sixty
(60) days, An action on the bond against the a surety or sureties is
barred if not brought within this time.
(f) IC 8-23-9, and not this chapter, applies to bonds and claims
on state highway road and bridge contracts. the provisions of the
Indiana department of transportation law (IC 8-23-9) with respect to the
bond shall govern.
(b) To receive payment
(c) If there is no dispute
(d) If there is a dispute
(e) If the board receives a claim from a subcontractor or a material supplier under this section, the board shall withhold the
amount of the claim until the claim is resolved under this section.
(e) (f) A claim form must be signed by an individual from the
political subdivision or agency who is directly responsible for the
project and who can verify:
(1) the quantity of a purchased item; or
(2) the weight or volume of the material applied, in the case of a
road, street, or bridge project.
(1) shall require the contractor to execute a payment bond to the appropriate political subdivision or agency, approved by and for the benefit of the political subdivision or agency, in an amount equal to the contract price if the cost of the public work is estimated to be more than two hundred thousand dollars ($200,000); and
(2) may require the contractor to execute a payment bond to the appropriate political subdivision or agency, approved by and for the benefit of the political subdivision or agency, in an amount equal to the contract price if the cost of the public work is estimated to be not more than two hundred thousand dollars ($200,000).
The payment bond is binding on the contractor, the subcontractor, and their successors and assigns for the payment of all indebtedness to a person for labor and service performed, material furnished, or services rendered. The payment bond must state that it is for the benefit of the subcontractors, laborers, material suppliers, and those performing services.
(b) The payment bond shall be deposited with the board. The payment bond must specify that:
(1) a modification, omission, or addition to the terms and conditions of the public work contract, plans, specifications, drawings, or profile;
(2) a defect in the public work contract; or
(3) a defect in the proceedings preliminary to the letting and awarding of the public work contract;
does not discharge the surety. The surety of the payment bond may not be released until one (1) year after the board's final settlement with the contractor.
(c) A person to whom money is due for labor performed, material furnished, or services provided
(60) days after the completion of that person completed the labor or
service or within sixty (60) days after the that person furnished the
last item of material: has been furnished:
(1) file with the board signed duplicate statements of the amount
due; and
(2) deliver a copy of the statement to the contractor.
The board shall forward to the surety of the payment bond one (1) of
the signed duplicate statements. However, failure of the board to
forward a signed duplicate statement does not affect the rights of a
person to whom money is due. In addition, a failure of the board to
forward the statement does not operate as a defense for the surety.
(d) An action may not be brought against the surety until before
thirty (30) days after:
(1) the filing of the signed duplicate statements with the board;
and
(2) delivery of a copy of the statement to the contractor.
If the indebtedness is not paid in full at the end of that thirty (30) day
period the person may bring an action in court. The court action must
be brought within not later than sixty (60) days after the date of the
final completion and acceptance of the public work.
(e) This subsection applies to contracts for a capital improvement
entered into by, for, or on behalf of the Indiana stadium and convention
building authority created by IC 5-1-17-6. The board awarding the
contract for the capital improvement project may waive any payment
bond requirement if the board, after public notice and hearing,
determines:
(1) that:
(A) an otherwise responsive and responsible bidder is unable
to provide the payment bond; or
(B) the cost or coverage of the payment bond is not in the best
interest of the project; and
(2) that an adequate alternative is provided through a letter of
credit, additional retainage of at least ten percent (10%) of the
contract amount, a joint payable check system, or other sufficient
protective mechanism.