Bill Text: IA HF2233 | 2017-2018 | 87th General Assembly | Enrolled
Bill Title: A bill for an act relating to mechanics’ liens, public construction liens, and the early release of retained funds. (Formerly HSB 524.) Effective 7-1-18.
Spectrum: Committee Bill
Status: (Passed) 2018-04-10 - Signed by Governor. H.J. 768. [HF2233 Detail]
Download: Iowa-2017-HF2233-Enrolled.html
House File 2233 - Enrolled
HOUSE FILE
BY COMMITTEE ON JUDICIARY
(SUCCESSOR TO HSB 524)
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A BILL FOR
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House File 2233
AN ACT
RELATING TO MECHANICS' LIENS, PUBLIC CONSTRUCTION LIENS,
AND THE EARLY RELEASE OF RETAINED FUNDS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
Section 1. Section 26.3, subsection 3, Code 2018, is amended
to read as follows:
3. Sections 26.4 through 26.13 26.12 apply to all
competitive bidding pursuant to this section.
Sec. 2. Section 314.1, subsection 2, Code 2018, is amended
to read as follows:
2. Notwithstanding any other provision of law to the
contrary, a public improvement that involves the construction,
reconstruction, or improvement of a highway, bridge, or culvert
and that has a cost in excess of the applicable threshold
in section 73A.18, 262.34, 297.7, 309.40, 310.14, or 313.10,
as modified by the bid threshold subcommittee pursuant to
section 314.1B, shall be advertised and let for bid, except
such public improvements that involve emergency work pursuant
to section 309.40A, 313.10, or 384.103, subsection 2. For a
city having a population of fifty thousand or less, a public
improvement that involves the construction, reconstruction, or
improvement of a highway, bridge, or culvert that has a cost
in excess of twenty=five thousand dollars, as modified by the
bid threshold subcommittee pursuant to section 314.1B, shall be
advertised and let for bid, excluding emergency work. However,
a public improvement that has an estimated total cost to a
city in excess of a threshold of fifty thousand dollars, as
modified by the bid threshold subcommittee pursuant to section
314.1B, and that involves the construction, reconstruction, or
improvement of a highway, bridge, or culvert that is under the
jurisdiction of a city with a population of more than fifty
thousand, shall be advertised and let for bid. Cities required
to competitively bid highway, bridge, or culvert work shall
do so in compliance with the contract letting procedures of
sections 26.3 through 26.13 26.12.
Sec. 3. Section 572.26, Code 2018, is amended to read as
follows:
572.26 Kinds of action == amendment.
1. An action to enforce a mechanic's lien shall be by
equitable proceedings, and no other cause of action shall be
joined therewith.
2. a. Any lien statement may be amended by leave of court
in furtherance of justice, except as to the amount demanded
Except as provided in paragraph "b", a claimant may only amend a
lien statement by leave of court in furtherance of justice.
b. A claimant may amend a lien statement without leave of
court to decrease the amount demanded, and such amendment shall
be effected through the mechanics' notice and lien registry.
Amendment of a lien statement pursuant to this paragraph shall
not change or otherwise affect its priority.
c. A claimant shall not amend a lien statement to increase
the amount demanded.
Sec. 4. Section 573.15, Code 2018, is amended by striking
the section and inserting in lieu thereof the following:
573.15 Exception.
1. A person, firm, or corporation that has performed
labor for or furnished materials, service, or transportation
to a subcontractor shall not be entitled to a claim against
the retainage or bond under this chapter unless the person,
firm, or corporation that performed the labor or furnished
the materials, service, or transportation does all of the
following:
a. Notifies the principal contractor in writing with a
one=time notice containing the name, mailing address, and
telephone number of the person, firm, or corporation that
performed the labor or furnished the materials, service,
or transportation, and the name of the subcontractor for
whom the labor was performed or the materials, service, or
transportation were furnished, within thirty days of first
performing the labor or furnishing the materials, service, or
transportation for which a claim may be made. Additional labor
performed or materials, service, or transportation furnished by
the same person, firm, or corporation to the same subcontractor
for use in the same construction project shall be covered by
this notice.
b. Supports the claim with a certified statement that the
principal contractor received the notice described in paragraph
"a".
2. This section shall not apply to highway, bridge, or
culvert projects as referred to in section 573.28.
Sec. 5. NEW SECTION. 573.28 Early release of retained
funds.
1. For purposes of this section:
a. "Authorized contract representative" means the person
chosen by the governmental entity or the department to
represent its interests or the person designated in the
contract as the party representing the governmental entity's
or the department's interest regarding administration and
oversight of the project.
b. "Department" means the state department of
transportation.
c. "Governmental entity" means the state, political
subdivisions of the state, public school corporations, and all
officers, boards, or commissions empowered by law to enter
into contracts for the construction of public improvements,
excluding the state board of regents and the department.
d. "Public improvement" means a building or construction
work which is constructed under the control of a governmental
entity and is paid for in whole or in part with funds of the
governmental entity, including a building or improvement
constructed or operated jointly with any other public or
private agency, but excluding urban renewal demolition and
low=rent housing projects, industrial aid projects authorized
under chapter 419, emergency work or repair or maintenance
work performed by employees of a governmental entity, and
excluding a highway, bridge, or culvert project, and excluding
construction or repair or maintenance work performed for a city
utility under chapter 388 by its employees or performed for a
rural water district under chapter 357A by its employees.
e. "Repair or maintenance work" means the preservation of a
building, storm sewer, sanitary sewer, or other public facility
or structure so that it remains in sound or proper condition,
including minor replacements and additions as necessary to
restore the public facility or structure to its original
condition with the same design.
f. "Substantially completed" means the first date on which
any of the following occurs:
(1) Completion of the public improvement project or the
highway, bridge, or culvert project or when the work on the
public improvement or the highway, bridge, or culvert project
has been substantially completed in general accordance with the
terms and provisions of the contract.
(2) The work on the public improvement or on the designated
portion is substantially completed in general accordance with
the terms of the contract so that the governmental entity or
the department can occupy or utilize the public improvement or
designated portion of the public improvement for its intended
purpose. This subparagraph shall not apply to highway, bridge,
or culvert projects.
(3) The public improvement project or the highway, bridge,
or culvert project is certified as having been substantially
completed by either of the following:
(a) The architect or engineer authorized to make such
certification.
(b) The authorized contract representative.
(4) The governmental entity or the department is occupying
or utilizing the public improvement for its intended purpose.
This subparagraph shall not apply to highway, bridge, or
culvert projects.
2. Payments made by a governmental entity or the department
for the construction of public improvements and highway,
bridge, or culvert projects shall be made in accordance with
the provisions of this chapter, except as provided in this
section:
a. At any time after all or any part of the work on the
public improvement or highway, bridge, or culvert project is
substantially completed, the contractor may request the release
of all or part of the retained funds owed. The request shall be
accompanied by a sworn statement of the contractor that, ten
calendar days prior to filing the request, notice was given as
required by paragraphs "f" and "g" to all known subcontractors,
sub=subcontractors, and suppliers.
b. Except as provided under paragraph "c", upon receipt of
the request, the governmental entity or the department shall
release all or part of the retained funds. Retained funds that
are approved as payable shall be paid at the time of the next
monthly payment or within thirty days, whichever is sooner. If
partial retained funds are released pursuant to a contractor's
request, no retained funds shall be subsequently held based
on that portion of the work. If within thirty days of when
payment becomes due the governmental entity or the department
does not release the retained funds due, interest shall accrue
on the amount of retained funds at the rate of interest that is
calculated as the prime rate plus one percent per year as of
the day interest begins to accrue until the amount is paid.
c. If labor and materials are yet to be provided at the
time the request for the release of the retained funds is made,
an amount equal to two hundred percent of the value of the
labor or materials yet to be provided, as determined by the
governmental entity's or the department's authorized contract
representative, may be withheld until such labor or materials
are provided.
d. An itemization of the labor or materials yet to be
provided, or the reason that the request for release of
retained funds is denied, shall be provided to the contractor
in writing within thirty calendar days of the receipt of the
request for release of retained funds.
e. The contractor shall release retained funds to the
subcontractor or subcontractors in the same manner as retained
funds are released to the contractor by the governmental entity
or the department. Each subcontractor shall pass through to
each lower=tier subcontractor all retained fund payments from
the contractor.
f. Prior to applying for release of retained funds, the
contractor shall send a notice to all known subcontractors,
sub=subcontractors, and suppliers that provided labor or
materials for the public improvement project or the highway,
bridge, or culvert project.
g. The notice shall be substantially similar to the
following:
NOTICE OF CONTRACTOR'S REQUEST
FOR EARLY RELEASE OF RETAINED FUNDS
You are hereby notified that [name of contractor] will be
requesting an early release of funds on a public improvement
project or a highway, bridge, or culvert project designated as
[name of project] for which you have or may have provided labor
or materials. The request will be made pursuant to Iowa Code
section 573.28. The request may be filed with the [name of
governmental entity or department] after ten calendar days from
the date of this notice. The purpose of the request is to have
[name of governmental entity or department] release and pay
funds for all work that has been performed and charged to [name
of governmental entity or department] as of the date of this
notice. This notice is provided in accordance with Iowa Code
section 573.28.
Sec. 6. REPEAL. Section 26.13, Code 2018, is repealed.
LINDA UPMEYER
Speaker of the House
CHARLES SCHNEIDER
President of the Senate
I hereby certify that this bill originated in the House and
is known as House File 2233, Eighty=seventh General Assembly.
CARMINE BOAL
Chief Clerk of the House
Approved , 2018
KIM REYNOLDS
Governor
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