Bill Text: MS SB2230 | 2013 | Regular Session | Introduced
Bill Title: Public construction contracts; increase threshold amount whereby no performance or payment bond is required.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2013-02-05 - Died In Committee [SB2230 Detail]
Download: Mississippi-2013-SB2230-Introduced.html
MISSISSIPPI LEGISLATURE
2013 Regular Session
To: Public Property; Accountability, Efficiency, Transparency
By: Senator(s) Blount
Senate Bill 2230
AN ACT TO AMEND SECTION 31-5-51, MISSISSIPPI CODE OF 1972, TO INCREASE THE THRESHOLD AMOUNT WHEREBY NO PERFORMANCE OR PAYMENT BOND WILL BE REQUIRED IN CONSTRUCTION CONTRACTS WITH THE STATE OR ANY COUNTY, CITY OR POLITICAL SUBDIVISION THEREOF; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 31-5-51, Mississippi Code of 1972, is amended as follows:
31-5-51. (1) Any person entering into a formal contract with the state or any county, city or political subdivision thereof, or other public authority for the construction, alteration, or repair of any public building or public work, before entering into such contract, shall furnish to such public body, except as provided in subsection (5) of this section, bonds with good and sufficient surety as follows:
(a) A performance bond payable to, in favor of or for the protection of such public body, as owner, for the work to be done in an amount not less than the amount of the contract, conditioned for the full and faithful performance of the contract;
(b) A payment bond
payable to such public body but conditioned for the prompt payment of all
persons supplying labor or material used in the prosecution of the work under * * * the contract, for the use of each
such person, in an amount not less than the amount of the contract; and
(c) The bonds * * * may be made by any surety
company which is authorized to do business in the State of Mississippi and
listed on the United States Treasury Department's list of acceptable sureties,
or * * * the
bonds may be guaranteed by a personal surety as provided for herein. The
personal surety shall deposit with the State Treasurer cash or certificates of
deposit in an amount not less than the amount of the contract, and the State
Treasurer shall hold same in trust and on deposit for the benefit of the public
body that is a party to the contract providing for the construction, alteration
or repair of the public building or for the public work.
(2) Every person who has
furnished labor or material used in the prosecution of the work provided for in * * * the contract, * * *
in which a payment bond is
furnished and who has not been paid in full * * * before the expiration of a period of
ninety (90) days after the date on which the last of the labor was performed by
him or the last of the materials was furnished by him and for which * * * the claim is made, provided the
same has been approved, where required, by the public authority or its
architect or engineers, or such approval is being withheld as a result of
unreasonable acts of the contractor, shall have the right to sue on * * * the payment bond for the amount, or
the balance * * *
that is due and payable, but unpaid at the time of institution of * * * the suit, and to prosecute * * * the action to final execution and
judgment. Notwithstanding anything to the contrary contained herein, if the
amount claimed in such action is subject to contractual provisions or
conditions * * *
between the parties involved in * * * the action, the action shall be
abated pending the performance of such provisions and the fulfillment of such
conditions.
(3) Any person having
direct contractual relationship with a subcontractor but no contractual
relationship express or implied with the contractor furnishing * * * the payment bond shall have a right
of action upon the * * *
payment bond upon giving written notice to * * * the contractor within ninety (90)
days from the date on which * * * the person * * * performed the last of the labor or
furnished or supplied the last of the material for which * * * the claim is made, stating with
substantial accuracy the amount claimed and the name of the party to whom the
material was furnished or supplied or for whom the labor was * * * performed. * * * The notice shall be given in
writing by the claimant to the contractor or surety at any place where the
contractor or surety maintains an office or conducts business. * * * The notice may be personally
delivered by the claimant to the contractor or surety, or it may be mailed by
certified mail, return receipt requested, postage prepaid, to the contractor or
surety. No such action may be maintained by any person not having a direct
contractual relationship with the contractor-principal, unless the notice
required by this section shall have been given.
(4) The only persons
protected by * * *
the payment bond, subject to the notice provisions of this section are:
(a) Subcontractors and material suppliers of the contractor;
(b) Sub-subcontractors and material suppliers of those subcontractors named in subsection (4)(a) of this section; and
(c) Laborers who have performed work on the project site.
(5) Whenever a contract is
less than * * * Fifty Thousand Dollars
($50,000.00), the owners may elect to make * * * two payments valued at fifty percent (50%) of the
contract amount.
The final payments will not be made until completion and acceptance by the
governing agency. In such a case, a performance bond or payment bond
will not be required.
(6) Except as otherwise provided in subsection (1)(c) for a personal surety, no surety or surety company shall be allowed to guarantee or write bonds for the benefit of the public body that is a party to a contract providing for the construction, alteration or repair of a public building or for public work, unless that surety is listed on the United States Treasury Department's list of acceptable sureties. If the surety is not listed on the United States Treasury Department's list of acceptable sureties, the public body for which the public work is being performed shall be liable to the extent that the surety would be liable.
(7) Any person entering into a formal contract with the state which exceeds Five Thousand Dollars ($5,000.00), or with a county, city or other public authority which exceeds Twenty-five Thousand Dollars ($25,000.00), for the construction, alteration, or repair of any public building or public work, before entering into such contract, shall furnish to the public body proof of general liability insurance coverage in an amount not less than One Million Dollars ($1,000,000.00) for bodily injury and property damage. Exempted from the provisions of this subsection are any persons who enter into a contract with the Mississippi Department of Rehabilitation Services for the construction, alteration or repair of the home of a disabled individual who has been determined eligible for services by the Mississippi Department of Rehabilitation Services.
SECTION 2. This act shall take effect and be in force from and after July 1, 2013.