Bill Text: FL S1056 | 2010 | Regular Session | Comm Sub
Bill Title: Local Government Prompt Payment Act [CPSC]
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2010-04-27 - Placed on Special Order Calendar; Read 2nd time -SJ 00919; Amendment(s) adopted (495022, 482460) -SJ 00919; Substituted CS/HB 1157 -SJ 00919; Laid on Table, companion bill(s) passed, see CS/HB 1157 (Ch. 2010-111) -SJ 00919 [S1056 Detail]
Download: Florida-2010-S1056-Comm_Sub.html
Florida Senate - 2010 CS for CS for SB 1056
By the Committees on Judiciary; and Community Affairs; and
Senator Baker
590-05219A-10 20101056c2
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
5 relating to the timely payment for purchases of
6 construction services; providing that a payment
7 request or invoice that is not rejected within a
8 certain time after an overdue notice is sent is deemed
9 accepted; requiring a local governmental entity to
10 identify in a construction contract the agent or
11 employee or facility or office to which a contractor
12 may submit its payment request or invoice; requiring
13 that an ordinance providing dispute resolution
14 procedures applicable to a construction contract be
15 referenced in the contract; requiring construction
16 contracts to specify a date for the delivery of a list
17 of items required to render complete, satisfactory,
18 and acceptable the construction services purchased by
19 a local governmental entity; providing for the
20 extension of the contract if the list of items
21 remaining to complete is not timely provided to the
22 contractor; specifying the time for paying any
23 remaining undisputed contract amount; amending s.
24 218.76, F.S.; revising provisions relating to the
25 resolution of disputes concerning an improper payment
26 request or invoice; providing that a local
27 governmental entity waives its objection in a payment
28 dispute if it fails to commence the dispute resolution
29 procedure within a certain time and after receiving
30 notice from the contractor; providing an effective
31 date.
32
33 Be It Enacted by the Legislature of the State of Florida:
34
35 Section 1. Section 218.72, Florida Statutes, is reordered
36 and amended to read:
37 218.72 Definitions.—As used in this part, the term:
38 (8)(1) “Proper invoice” means an invoice that which
39 conforms with all statutory requirements and with all
40 requirements that have been specified by the local governmental
41 entity to which the invoice is submitted. Such requirements must
42 be included in the contract for the project for which the
43 invoice is submitted.
44 (5)(2) “Local governmental entity” means a county or
45 municipal government, school board, school district, authority,
46 special taxing district, other political subdivision, or any
47 office, board, bureau, commission, department, branch, division,
48 or institution thereof.
49 (4)(3) “County” means a political subdivision of the state
50 established pursuant to s. 1, Art. VIII of the State
51 Constitution.
52 (6)(4) “Municipality” means a municipality created pursuant
53 to general or special law and metropolitan and consolidated
54 governments as provided in s. 6(e) and (f), Art. VIII of the
55 State Constitution.
56 (9)(5) “Purchase” means the purchase of goods, services, or
57 construction services; the purchase or lease of personal
58 property; or the lease of real property by a local governmental
59 entity.
60 (10)(6) “Vendor” means any person who sells goods or
61 services, sells or leases personal property, or leases real
62 property directly to a local governmental entity. The term
63 includes any person who provides waste hauling services to
64 residents or businesses located within the boundaries of a local
65 government pursuant to a contract or local ordinance.
66 (2)(7) “Construction services” means all labor, services,
67 and materials provided in connection with the construction,
68 alteration, repair, demolition, reconstruction, or any other
69 improvements to real property.
70 (7)(8) “Payment request” means a request for payment for
71 construction services which conforms with all statutory
72 requirements and with all requirements specified by the local
73 governmental entity to which the payment request is submitted.
74 Such requirements must be included in the contract for the
75 project for which payment is requested.
76 (1)(9) “Agent” means the project architect, project
77 engineer, or any other agency or person acting on behalf of the
78 local governmental entity. The agent who is required to review
79 invoices or payment requests must be identified in accordance
80 with s. 218.735(2).
81 (3)(10) “Contractor” or “provider of construction services”
82 means the any person who contracts directly with a local
83 governmental entity to provide construction services.
84 Section 2. Present subsections (8) and (9) of section
85 218.735, Florida Statutes, are redesignated as subsections (9)
86 and (10), respectively, and present subsections (1) through (7)
87 of that section are amended, to read:
88 218.735 Timely payment for purchases of construction
89 services.—
90 (1) The due date for payment for the purchase of
91 construction services by a local governmental entity is
92 determined as follows:
93 (a) If an agent must approve the payment request or invoice
94 before prior to the payment request or invoice is being
95 submitted to the local governmental entity, payment is due 25
96 business days after the date on which the payment request or
97 invoice is stamped as received as provided in s. 218.74(1). The
98 contractor may send the local government an overdue notice. If
99 the payment request or invoice is not rejected within 2 business
100 days after delivery of the overdue notice, the payment request
101 or invoice is deemed accepted, except for any portion that is
102 fraudulent or misleading.
103 (b) If an agent need not approve the payment request or
104 invoice which is submitted by the contractor, payment is due 20
105 business days after the date on which the payment request or
106 invoice is stamped as received as provided in s. 218.74(1).
107 (2) A local governmental entity shall identify the agent or
108 employee of the local governmental entity, or the facility or
109 office, to which the contractor may submit its payment request
110 or invoice.
111 (a) This requirement must be included in the contract
112 between the local governmental entity and contractor, or, as
113 required by the contract, must be provided by the local
114 governmental entity through a separate written notice within 10
115 days after the contract award.
116 (b) A contractor’s submission of a payment request or
117 invoice to the identified agent, employee, facility, or office
118 of the local governmental entity must be stamped as received as
119 provided in s. 218.74(1), and commences the time periods for
120 payment or rejection of a payment request or invoice as provided
121 in this subsection and subsection (3).
122 (3)(2) If a payment request or invoice does not meet the
123 contract requirements, the local governmental entity must may
124 reject the payment request or invoice within 20 business days
125 after the date on which the payment request or invoice is
126 stamped as received as provided in s. 218.74(1). The rejection
127 must be written and must specify the deficiency in the payment
128 request or invoice and the action necessary to make the payment
129 request or invoice proper.
130 (4)(3) If a payment request or an invoice is rejected under
131 subsection (3) (2) and the contractor submits a corrected
132 payment request or invoice that which corrects the deficiency
133 specified in writing by the local governmental entity, the
134 corrected payment request or invoice must be paid or rejected on
135 the later of:
136 (a) Ten business days after the date the corrected payment
137 request or invoice is stamped as received as provided in s.
138 218.74(1); or
139 (b) If the local governmental entity governing body is
140 required by ordinance, charter, or other law to approve or
141 reject the corrected payment request or invoice, the first
142 business day after the next regularly scheduled meeting of the
143 local governmental entity governing body held after the
144 corrected payment request or invoice is stamped as received as
145 provided in s. 218.74(1).
146 (5)(4) If a dispute between the local governmental entity
147 and the contractor cannot be resolved by the procedure in
148 subsection (4) (3), the dispute must be resolved in accordance
149 with the dispute resolution procedure prescribed in the
150 construction contract or in any applicable ordinance, which must
151 be referenced in the contract. In the absence of a prescribed
152 procedure, the dispute must be resolved by the procedure
153 specified in s. 218.76(2).
154 (6)(5) If a local governmental entity disputes a portion of
155 a payment request or an invoice, the undisputed portion shall be
156 paid timely, in accordance with subsection (1).
157 (7)(6) If When a contractor receives payment from a local
158 governmental entity for labor, services, or materials furnished
159 by subcontractors and suppliers hired by the contractor, the
160 contractor must shall remit payment due to those subcontractors
161 and suppliers within 10 days after the contractor’s receipt of
162 payment. If When a subcontractor receives payment from a
163 contractor for labor, services, or materials furnished by
164 subcontractors and suppliers hired by the subcontractor, the
165 subcontractor must shall remit payment due to those
166 subcontractors and suppliers within 7 days after the
167 subcontractor’s receipt of payment. This subsection does not
168 Nothing herein shall prohibit a contractor or subcontractor from
169 disputing, pursuant to the terms of the relevant contract, all
170 or any portion of a payment alleged to be due to another party
171 if the contractor or subcontractor notifies the party whose
172 payment is disputed, in writing, of the amount in dispute and
173 the actions required to cure the dispute. The contractor or
174 subcontractor must pay all undisputed amounts due within the
175 time limits imposed by this section.
176 (8)(7)(a) Each contract for construction services between a
177 local governmental entity and a contractor must provide for the
178 development of a single list of items required to render
179 complete, satisfactory, and acceptable the construction services
180 purchased by the local governmental entity.
181 (a) The contract must specify the process for developing
182 the development of the list, including the responsibilities of
183 the local governmental entity and the contractor in developing
184 and reviewing the list and a reasonable time for developing the
185 list, as follows:
186 1. For construction projects having an estimated cost of
187 Less than $10 million, within 30 calendar days after reaching
188 substantial completion of the construction services purchased as
189 defined in the contract, or, if not defined in the contract,
190 upon reaching beneficial occupancy or use; or
191 2. For construction projects having an estimated cost of
192 $10 million or more, within 30 calendar days, or, if unless
193 otherwise extended by contract, up to not to exceed 60 calendar
194 days, after reaching substantial completion of the construction
195 services purchased as defined in the contract, or, if not
196 defined in the contract, upon reaching beneficial occupancy or
197 use.
198 (b) The contract must also specify a date for the delivery
199 of the list of items, not to exceed 5 days after the list of
200 items has been developed and reviewed in accordance with the
201 time periods set forth in paragraph (a).
202 (c)(b) If the contract between the local governmental
203 entity and the contractor relates to the purchase of
204 construction services on more than one building or structure, or
205 involves a multiphased project, the contract must provide for
206 the development of a list of items required to render complete,
207 satisfactory, and acceptable all the construction services
208 purchased pursuant to the contract for each building, structure,
209 or phase of the project within the time limitations provided in
210 paragraph (a).
211 (d) The final contract completion date must be at least 30
212 days after the delivery of the list of items. If the list is not
213 provided to the contractor by the agreed date, the contract time
214 for completion must be extended by the number of days the local
215 governmental entity exceeded the delivery date. Damages may not
216 be assessed against a contractor for failing to complete a
217 project within the time required by the contract, unless the
218 contractor failed to complete the project within the contract
219 period as extended pursuant to this paragraph.
220 (e)(c) The failure to include any corrective work or
221 pending items not yet completed on the list developed pursuant
222 to this subsection does not alter the responsibility of the
223 contractor to complete all the construction services purchased
224 pursuant to the contract.
225 (f)(d) Upon completion of all items on the list, the
226 contractor may submit a payment request for all remaining
227 retainage withheld by the local governmental entity pursuant to
228 this section. If a good faith dispute exists as to whether one
229 or more items identified on the list have been completed
230 pursuant to the contract, the local governmental entity may
231 continue to withhold up to an amount not to exceed 150 percent
232 of the total costs to complete such items.
233 (g)(e) All items that require correction under the contract
234 and that are identified after the preparation and delivery of
235 the list remain the obligation of the contractor as defined by
236 the contract.
237 (h)(f) Warranty items or items not included in the list of
238 items may not affect the final payment of retainage as provided
239 in this section or as provided in the contract between the
240 contractor and its subcontractors and suppliers.
241 (i)(g) Retainage may not be held by a local governmental
242 entity or a contractor to secure payment of insurance premiums
243 under a consolidated insurance program or series of insurance
244 policies issued to a local governmental entity or a contractor
245 for a project or group of projects, and the final payment of
246 retainage as provided in this section may not be delayed pending
247 a final audit by the local governmental entity’s or contractor’s
248 insurance provider.
249 (j)(h) If a local governmental entity fails to comply with
250 its responsibilities to develop the list of items, including the
251 list required under paragraph (c), if applicable, (a) or
252 paragraph (b), as defined in the contract, within the time
253 limitations provided in paragraph (a), the contractor may submit
254 a payment request for all remaining retainage withheld by the
255 local governmental entity pursuant to this section. The payment
256 of any remaining undisputed contract amount, less any amount
257 withheld pursuant to the contract for incomplete or uncorrected
258 work, must be paid within 20 business days after receipt of a
259 proper invoice or payment request. If the local governmental
260 entity has provided written notice to the contractor specifying
261 the failure of the contractor to meet contract requirements in
262 developing the list of items to be completed, the local
263 governmental entity need not pay or process any payment request
264 for retainage if the contractor has, in whole or in part, failed
265 to cooperate with the local governmental entity in the
266 development of the list, or failed to perform its contractual
267 responsibilities, if any, with regard to the development of the
268 list, or if paragraph (9)(f) (8)(f) applies.
269 Section 3. Section 218.76, Florida Statutes, is amended to
270 read:
271 218.76 Improper payment request or invoice; resolution of
272 disputes.—
273 (1) If In any case in which an improper payment request or
274 invoice is submitted by a vendor, the local governmental entity
275 shall, within 10 days after the improper payment request or
276 invoice is received by it, notify the vendor, in writing, that
277 the payment request or invoice is improper and indicate what
278 corrective action on the part of the vendor is needed to make
279 the payment request or invoice proper.
280 (2) If In the event a dispute arises occurs between a
281 vendor and a local governmental entity concerning payment of a
282 payment request or an invoice, the dispute such disagreement
283 shall be finally determined by the local governmental entity
284 pursuant to as provided in this section. Each local governmental
285 entity shall establish a dispute resolution procedure
286 established to be followed by the local governmental entity in
287 cases of such disputes.
288 (a) The Such procedure must shall provide that proceedings
289 to resolve the dispute are shall be commenced within not later
290 than 45 days after the date on which the payment request or
291 proper invoice was received by the local governmental entity and
292 shall be concluded by final decision of the local governmental
293 entity within not later than 60 days after the date on which the
294 payment request or proper invoice was received by the local
295 governmental entity. Such procedures are shall not be subject to
296 chapter 120, and do such procedures shall not constitute an
297 administrative proceeding that which prohibits a court from
298 deciding de novo any action arising out of the dispute. If the
299 dispute is resolved in favor of the local governmental entity,
300 then interest charges shall begin to accrue 15 days after the
301 local governmental entity’s final decision. If the dispute is
302 resolved in favor of the vendor, then interest begins shall
303 begin to accrue as of the original date the payment became due.
304 (b) If the local governmental entity does not commence the
305 dispute resolution procedure within the time required, the
306 contractor may give written notice to the local governmental
307 entity of the failure to timely commence the dispute resolution
308 procedure. If the local governmental entity fails to commence
309 the dispute resolution procedure within 2 business days after
310 such notice:
311 1. Any amounts resolved in the contractor’s favor bear
312 mandatory interest, as set forth in s. 218.735(10), from the
313 date the payment request or invoice containing the disputed
314 amounts was submitted to the local governmental entity.
315 2. The objection to the payment request or invoice is
316 deemed waived. The waiver of such objection does not relieve a
317 contractor of its contractual obligations.
318 (3) In an action to recover amounts due under this part ss.
319 218.70-218.80, the court shall award court costs and reasonable
320 attorney’s fees, including fees incurred through any appeal, to
321 the prevailing party, if the court finds that the nonprevailing
322 party withheld any portion of the payment that is the subject of
323 the action without any reasonable basis in law or fact to
324 dispute the prevailing party’s claim to those amounts. This
325 subsection does not apply to any litigation commenced before
326 October 1, 2010.
327 Section 4. This act shall take effect October 1, 2010.
