Bill Text: MS SB2517 | 2021 | Regular Session | Introduced
Bill Title: Public works construction; performance bond not required if contract is less than $50,000.00 and paid in two equal installments.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2021-02-02 - Died In Committee [SB2517 Detail]
Download: Mississippi-2021-SB2517-Introduced.html
MISSISSIPPI LEGISLATURE
2021 Regular Session
To: Accountability, Efficiency, Transparency
By: Senator(s) Horhn
Senate Bill 2517
AN ACT TO AMEND SECTION 31-5-51, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT A PERFORMANCE BOND IS NOT REQUIRED WHEN A CONTRACT FOR THE CONSTRUCTION, ALTERATION OR REPAIR OF ANY PUBLIC BUILDING OR PUBLIC WORK IS LESS THAN $50,000.00 AND THE PUBLIC BODY ELECTS TO MAKE TWO PAYMENTS VALUED AT 50% OF THE CONTRACT AMOUNT; 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 * * * the 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 * * * the 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 * * *
the 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 * * * provided for in this section 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 * * *such the bonds may be guaranteed by a personal surety
as provided for * * *
in this section. 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 * * * the cash or certificates of deposit
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 respect of which a
payment bond is furnished and who has not been paid in full * * * for the labor or material
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 * * * labor or material has been
approved, where required, by the public authority or its architect or
engineers, or * * *
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 thereof 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 * * *
in this section, if the amount claimed in * * * the action is subject to contractual
provisions or conditions, between the parties involved in * * * the action, the action shall be
abated pending the performance of * * * the provisions and the fulfillment
of * * * the
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 did or 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 done or 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 has 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 (2) 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, 2021.
