Senate Bill sb0870er

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  2         An act relating to construction; amending s.

  3         218.72, F.S.; redefining the terms "proper

  4         invoice," "local government entity,"

  5         "purchase," and "construction services" and

  6         defining the terms "payment request" and

  7         "agent" for the purpose of the Florida Prompt

  8         Payment Act; amending s. 218.73, F.S.;

  9         providing for timely payment for

10         nonconstruction services; amending s. 218.735,

11         F.S.; revising provisions with respect to

12         timely payment for purchases of construction

13         services; providing for disputed payment

14         requests; providing for payment of undisputed

15         amounts; amending s. 218.74, F.S.; revising

16         provisions with respect to procedures for

17         calculation of payment due dates; amending s.

18         218.75, F.S.; revising provisions with respect

19         to mandatory interest; amending s. 218.76,

20         F.S.; revising provisions with respect to

21         improper invoices and resolution of disputes;

22         providing for the recovery of court costs and

23         attorney's fees under certain circumstances;

24         providing an effective date.

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26  Be It Enacted by the Legislature of the State of Florida:

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28         Section 1.  Subsections (1), (2), (5), and (7) of

29  section 218.72, Florida Statutes, are amended, and subsections

30  (8) and (9) are added to that section, to read:

31         218.72  Definitions.--As used in this part:


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  1         (1)  "Proper invoice" means an invoice which conforms

  2  with all statutory requirements and with all requirements that

  3  have been specified by the local governmental entity to which

  4  the invoice is submitted. if:

  5         (a)  Such requirements have been adopted by formal

  6  action of the local governmental entity taken prior to the

  7  transaction to which the invoice applies.

  8         (b)  The local governmental entity made such

  9  requirements available to vendors.

10         (2)  "Local governmental entity" means a county or

11  municipal government, school board, school district,

12  authority, special taxing district, other political

13  subdivision, or any office, board, bureau, commission,

14  department, branch, division, or institution thereof or any

15  project supported by county or municipal funds.

16         (5)  "Purchase" means the purchase of goods, or

17  services, or construction services; the purchase or lease of

18  personal property;, or the lease of real property by a local

19  governmental entity.

20         (7)  "Construction services" means all labor, services,

21  and materials provided performed in connection with the

22  construction, alteration, repair, demolition, reconstruction,

23  or any other improvements to real property that require a

24  license under parts I and II of chapter 489.

25         (8)  "Payment request" means a request for payment for

26  construction services which conforms with all statutory

27  requirements and with all requirements specified by the local

28  governmental entity to which the payment request is submitted.

29         (9)  "Agent" means project architect, project engineer,

30  or any other agency or person acting on behalf of the local

31  governmental entity.


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  1         Section 2.  Section 218.73, Florida Statutes, is

  2  amended to read:

  3         218.73  Timely payment for nonconstruction

  4  services.--The time at which payment is due for a purchase

  5  other than construction services by a local governmental

  6  entity, except for the purchase of construction services, is

  7  due must be calculated from:

  8         (1)  The date on which a proper invoice is received by

  9  the chief disbursement officer of the local governmental

10  entity after approval by the governing body, if required; or

11         (2)  If a proper invoice is not received by the local

12  governmental entity, the date:

13         (a)  On which delivery of personal property is accepted

14  by the local governmental entity;

15         (b)  On which services are completed;

16         (c)  On which the rental period begins; or

17         (d)  On which the local governmental entity and vendor

18  agree in a contract that provides dates relative to payment

19  periods;

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21  whichever date is latest.

22         Section 3.  Section 218.735, Florida Statutes, is

23  amended to read:

24         218.735  Timely payment for purchases of construction

25  services.--

26         (1)  The due date for payment for the purchase of

27  construction services by a local governmental entity is

28  determined as follows:

29         (a)  If an agent the project architect or project

30  engineer must approve the payment request or invoice prior to

31  the payment request or invoice being submitted to the local


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  1  governmental entity, payment is due 25 20 business days after

  2  the date on which the payment request or architect or engineer

  3  approves the invoice and the invoice is stamped as received as

  4  provided in s. 218.74(1).

  5         (b)  If an agent the project architect or project

  6  engineer need not approve the payment request or invoice which

  7  is submitted by the contractor, payment is due 20 business

  8  days after the date on which the payment request or invoice is

  9  stamped as received as provided in s. 218.74(1).

10         (2)  The local governmental entity may reject the

11  payment request or invoice within 20 business days after the

12  date on which the payment request or invoice is stamped as

13  received as provided in s. 218.74(1).  The rejection must be

14  written and must specify the deficiency in the payment request

15  or invoice and the action necessary to make the payment

16  request or invoice proper.

17         (3)  If a payment request or an invoice is rejected

18  under subsection (2) or this subsection and the contractor

19  submits a corrected payment request or invoice which corrects

20  the deficiency specified in writing by the local governmental

21  entity, the corrected payment request or invoice must be paid

22  or rejected on the later of:

23         (a)  Ten business days after the date the corrected

24  payment request or invoice is stamped as received as provided

25  in s. 218.74(1); or

26         (b)  If the governing body is required by ordinance,

27  charter, or other law to approve or reject the corrected

28  payment request or invoice, the first business day after the

29  next regularly scheduled meeting of the governing body held

30  after the corrected payment request or invoice is stamped as

31  received as provided in s. 218.74(1).


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  1         (4)  If a dispute between the local governmental entity

  2  and the contractor cannot be resolved by the procedure in

  3  subsection (3), the dispute must be resolved in accordance

  4  with the dispute resolution procedure prescribed in the

  5  construction contract or in any applicable ordinance.  In the

  6  absence of a prescribed procedure, the dispute must be

  7  resolved by the procedure specified in s. 218.76(2).

  8         (5)  If a local governmental entity disputes a portion

  9  of a payment request or an invoice, the undisputed portion

10  shall be paid timely, in accordance with subsection (1). The

11  payment time periods provided in this section for construction

12  services purchased by a local governmental entity shall not

13  affect contractual provisions or contractual covenants of a

14  local governmental entity in effect on September 30, 1995.

15         (6)  When a contractor receives payment from a local

16  governmental entity for labor, services, or materials

17  furnished by subcontractors and suppliers hired by the

18  contractor, the contractor shall remit payment due to those

19  subcontractors and suppliers within 15 days after the

20  contractor's receipt of payment. When a subcontractor receives

21  payment from a contractor for labor, services, or materials

22  furnished by subcontractors and suppliers hired by the

23  subcontractor, the subcontractor shall remit payment due to

24  those subcontractors and suppliers within 15 days after the

25  subcontractor's receipt of payment. Nothing herein shall

26  prohibit a contractor or subcontractor from disputing,

27  pursuant to the terms of the relevant contract, all or any

28  portion of a payment alleged to be due to another party. In

29  the event of such a dispute, the contractor or subcontractor

30  may withhold the disputed portion of any such payment if the

31  contractor or subcontractor notifies the party whose payment


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  1  is disputed, in writing, of the amount in dispute and the

  2  actions required to cure the dispute. The contractor or

  3  subcontractor must pay all undisputed amounts due within the

  4  time limits imposed by this section.

  5         (7)(6)  All payments due under this section from a

  6  local governmental entity and not made within the time periods

  7  period specified by this section shall bear interest at the

  8  rate of 1 percent per month, or the rate specified by

  9  contract, whichever is greater as specified in s. 218.74(4).

10         Section 4.  Section 218.74, Florida Statutes, is

11  amended to read:

12         218.74  Procedures for calculation of payment due

13  dates.--

14         (1)  Each local governmental entity shall establish

15  procedures whereby each payment request or invoice received by

16  the local governmental entity is marked as received on the

17  date on which it is delivered to an agent or employee of the

18  local governmental entity or of a facility or office of the

19  local governmental entity.

20         (2)  The payment due date for a local governmental

21  entity for the purchase of goods or services other than

22  construction services is 45 days after the date specified in

23  s. 218.73.  The payment due date for the purchase of

24  construction services is specified in s. 218.735.

25         (3)  If the terms under which a purchase is made allow

26  for partial deliveries and a payment request or proper invoice

27  is submitted for a partial delivery, the time for payment for

28  the partial delivery must be calculated from the time of the

29  partial delivery and the submission of the payment request or

30  invoice in the same manner as provided in s. 218.73 or s.

31  218.735.


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  1         (4)  All payments, other than payments for construction

  2  services, due from a local governmental entity and not made

  3  within the time specified by this section bear interest from

  4  30 days after the due date at the rate of 1 percent per month

  5  on the unpaid balance. The vendor must invoice the local

  6  governmental entity for any interest accrued in order to

  7  receive the interest payment.  Any overdue period of less than

  8  1 month is considered as 1 month in computing interest.

  9  Unpaid interest is compounded monthly.  With respect to each

10  past due payment, interest ceases to accrue after interest on

11  that payment has accrued for 12 months. For the purposes of

12  this section, the term "1 month" means a period beginning on

13  any day of one month and ending on the same day of the

14  following month.

15         Section 5.  Section 218.75, Florida Statutes, is

16  amended to read:

17         218.75  Mandatory interest.--No contract between a

18  local governmental entity and a vendor or a provider of

19  construction services shall prohibit the collection of vendor

20  from invoicing the local governmental entity for late payment

21  interest charges allowable under this part.

22         Section 6.  Section 218.76, Florida Statutes, is

23  amended to read:

24         218.76  Improper payment request or invoice; resolution

25  of disputes.--

26         (1)  In any case in which an improper payment request

27  or invoice is submitted by a vendor, the local governmental

28  entity shall, within 10 days after the improper payment

29  request or invoice is received by it, notify the vendor that

30  the payment request or invoice is improper and indicate what

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  1  corrective action on the part of the vendor is needed to make

  2  the payment request or invoice proper.

  3         (2)  In the event a dispute occurs between a vendor and

  4  a local governmental entity concerning payment of a payment

  5  request or an invoice, such disagreement shall be finally

  6  determined by the local governmental entity as provided in

  7  this section.  Each local governmental entity shall establish

  8  a dispute resolution procedure to be followed by the local

  9  governmental entity in cases of such disputes.  Such procedure

10  shall provide that proceedings to resolve the dispute shall be

11  commenced not later than 45 days after the date on which the

12  payment request proper invoice was received by the local

13  governmental entity and shall be concluded by final decision

14  of the local governmental entity not later than 60 days after

15  the date on which the payment request or proper invoice was

16  received by the local governmental entity.  Such procedures

17  shall not be subject to chapter 120, and such procedures shall

18  not constitute an administrative proceeding which prohibits a

19  court from deciding de novo any action arising out of the

20  dispute.  If the dispute is resolved in favor of the local

21  governmental entity, then interest charges shall begin to

22  accrue 15 days after the local governmental entity's final

23  decision.  If the dispute is resolved in favor of the vendor,

24  then interest shall begin to accrue as of the original date

25  the payment became due.

26         (3)  In an action to recover amounts due under ss.

27  218.70-218.80 the court shall award court costs and reasonable

28  attorney's fees, including fees incurred through any appeal,

29  to the prevailing party, if the court finds that the

30  nonprevailing party withheld any portion of the payment that

31  is the subject of the action without any reasonable basis in


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  1  law or fact to dispute the prevailing party's claim to those

  2  amounts.

  3         Section 7.  This act shall take effect July 1, 2001.

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