Florida Senate - 2019 COMMITTEE AMENDMENT Bill No. SB 246 Ì214284-Î214284 LEGISLATIVE ACTION Senate . House . . . . . ————————————————————————————————————————————————————————————————— ————————————————————————————————————————————————————————————————— The Committee on Governmental Oversight and Accountability (Hooper) recommended the following: 1 Senate Amendment (with title amendment) 2 3 Delete lines 95 - 100 4 and insert: 5 Section 3. Subsection (8) of section 218.735, Florida 6 Statutes, is amended to read: 7 218.735 Timely payment for purchases of construction 8 services.— 9 (8)(a) With regard to any contract for construction 10 services, a local governmental entity may withhold from each 11 progress payment made to the contractor an amount not exceeding 12 5
10percent of the payment as retainage until 50-percent 13 completion of such services. 14 (b) After 50-percent completion of the construction 15 services purchased pursuant to the contract, the local 16 governmental entity must reduce to 2.5 5percent the amount of 17 retainage withheld from each subsequent progress payment made to 18 the contractor. For purposes of this subsection, the term “50 19 percent completion” has the meaning set forth in the contract 20 between the local governmental entity and the contractor or, if 21 not defined in the contract, the point at which the local 22 governmental entity has expended 50 percent of the total cost of 23 the construction services purchased as identified in the 24 contract together with all costs associated with existing change 25 orders and other additions or modifications to the construction 26 services provided for in the contract. However, notwithstanding 27 this subsection, a municipality having a population of 25,000 or 28 fewer, or a county having a population of 100,000 or fewer, may 29 withhold retainage in an amount not exceeding 5 10percent of 30 each progress payment made to the contractor until final 31 completion and acceptance of the project by the local 32 governmental entity. 33 (c) After 50-percent completion of the construction 34 services purchased pursuant to the contract, the contractor may 35 elect to withhold retainage from payments to its subcontractors 36 at a rate higher than 2.5 5percent. The specific amount to be 37 withheld must be determined on a case-by-case basis and must be 38 based on the contractor’s assessment of the subcontractor’s past 39 performance, the likelihood that such performance will continue, 40 and the contractor’s ability to rely on other safeguards. The 41 contractor shall notify the subcontractor, in writing, of its 42 determination to withhold more than 2.5 5percent of the 43 progress payment and the reasons for making that determination, 44 and the contractor may not request the release of such retained 45 funds from the local governmental entity. 46 (d) After 50-percent completion of the construction 47 services purchased pursuant to the contract, the contractor may 48 present to the local governmental entity a payment request for 49 up to one-half of the retainage held by the local governmental 50 entity. The local governmental entity shall promptly make 51 payment to the contractor, unless the local governmental entity 52 has grounds, pursuant to paragraph (f), for withholding the 53 payment of retainage. If the local governmental entity makes 54 payment of retainage to the contractor under this paragraph 55 which is attributable to the labor, services, or materials 56 supplied by one or more subcontractors or suppliers, the 57 contractor shall timely remit payment of such retainage to those 58 subcontractors and suppliers. 59 (e) This section does not prohibit a local governmental 60 entity from withholding retainage at a rate less than 5 1061 percent of each progress payment, from incrementally reducing 62 the rate of retainage pursuant to a schedule provided for in the 63 contract, or from releasing at any point all or a portion of any 64 retainage withheld by the local governmental entity which is 65 attributable to the labor, services, or materials supplied by 66 the contractor or by one or more subcontractors or suppliers. If 67 a local governmental entity makes any payment of retainage to 68 the contractor which is attributable to the labor, services, or 69 materials supplied by one or more subcontractors or suppliers, 70 the contractor shall timely remit payment of such retainage to 71 those subcontractors and suppliers. 72 (f) This section does not require the local governmental 73 entity to pay or release any amounts that are the subject of a 74 good faith dispute, the subject of a claim brought pursuant to 75 s. 255.05, or otherwise the subject of a claim or demand by the 76 local governmental entity or contractor. 77 (g) The time limitations set forth in this section for 78 payment of payment requests apply to any payment request for 79 retainage made pursuant to this section. 80 (h) Paragraphs (a)-(d) do not apply to construction 81 services purchased by a local governmental entity which are paid 82 for, in whole or in part, with federal funds and are subject to 83 federal grantor laws and regulations or requirements that are 84 contrary to any provision of the Local Government Prompt Payment 85 Act. 86 (i) This subsection does not apply to any construction 87 services purchased by a local governmental entity if the total 88 cost of the construction services purchased as identified in the 89 contract is $200,000 or less. 90 Section 4. (1) This act does not apply to any contract for 91 construction services which is entered into or is pending 92 approval by a public entity, as defined in s. 255.072, Florida 93 Statutes, or to any construction services project advertised for 94 bid by the public entity, on or before July 1, 2019. 95 (2) The amendments made to ss. 255.05 and 255.078, Florida 96 Statutes, by this act do not apply to contracts executed under 97 Chapter 337, Florida Statutes. 98 Section 5. This act shall take effect July 1, 2019. 99 100 101 ================= T I T L E A M E N D M E N T ================ 102 And the title is amended as follows: 103 Delete lines 2 - 10 104 and insert: 105 An act relating to public construction; amending 106 255.05, F.S.; revising requirements for Department of 107 Management Services rules governing certain contracts; 108 amending s. 255.078, F.S.; revising the amounts of 109 retainage that certain public entities and contractors 110 may withhold from progress payments for any 111 construction services contract; amending s. 218.735; 112 revising the amounts of retainage that certain public 113 entities and contractors may withhold from progress 114 payments for any construction services contract; 115 specifying nonapplicability of the act; providing an 116 effective date.