Bill Text For HB1114 - Senate Floor Version

 1|                        SENATE FLOOR VERSION                           |
  |                           April 11, 2019                              |
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 3|COMMITTEE SUBSTITUTE                                                   |
  |FOR ENGROSSED                                                          |
 4|HOUSE BILL NO. 1114                  By: West (Kevin) of the House     |
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 5|                                         and                           |
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 6|                                         Pederson of the Senate        |
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 9|                        COMMITTEE SUBSTITUTE                           |
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10|       [ public buildings and public works -  modifying                |
  |       retainage on certain public contracts - effective               |
11|       date ]                                                          |
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14|BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:                  |
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15|    SECTION 1.     AMENDATORY     61 O.S. 2011, Section 1, as last     |
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16|amended by Section 302, Chapter 304, O.S.L. 2012 (61 O.S. Supp.        |
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17|2018, Section 1), is amended to read as follows:                       |
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18|    Section 1.  A.  Prior to an award of a contract or subcontract     |
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19|exceeding Fifty Thousand Dollars ($50,000.00) One Hundred Thousand     |
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20|Dollars ($100,000.00) for construction or repair of a public or        |
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21|private building, structure, or improvement on public real property,   |
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22|and prior to an award of a contract or subcontract procured for        |
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23|at-risk construction management or agency construction management      |
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24|exceeding Fifty Thousand Dollars ($50,000.00) for construction or      |
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arsid14569844 SENATE FLOOR VERSION - HB1114 SFLR                   Page 1
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 1|repair of a public or private building, structure, or improvement on   |
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 2|public real property, the person that receives the award shall:        |
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 3|    1.  Furnish a bond with good and sufficient sureties payable to    |
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 4|the state in a sum not less than the total sum of the contract; or     |
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 5|    2.  Cause an irrevocable letter of credit, containing terms the    |
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 6|Office of Management and Enterprise Services or as the political       |
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 7|subdivision prescribes, to be issued for the benefit of the state by   |
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 8|a financial institution insured by the Federal Deposit Insurance       |
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 9|Corporation in a sum not less than the total sum of the contract.      |
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10|    B.  The bond or irrevocable letter of credit shall ensure the      |
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11|proper and prompt completion of the work in accordance with the        |
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12|contract and shall ensure that the contractor or subcontractor shall   |
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13|pay all indebtedness the contractor or subcontractor incurs for the    |
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14|contractor's or subcontractor's subcontractors and all suppliers of    |
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15|labor, material, rental of machinery or equipment, and repair of and   |
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16|parts for equipment the contract requires the contractor or            |
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17|subcontractor, that is directly contracted with the contractor or      |
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18|subcontractor to furnish.                                              |
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19|    C.  For a contract not exceeding Fifty Thousand Dollars            |
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20|($50,000.00) One Hundred Thousand Dollars ($100,000.00), excluding     |
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21|at-risk construction management or agency construction management,     |
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22|in lieu of a bond or irrevocable letter of credit, the contractor      |
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23|shall submit an affidavit of the payment of all indebtedness           |
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24|incurred by the contractor, the contractor's subcontractors, and all   |
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arsid14569844 SENATE FLOOR VERSION - HB1114 SFLR                   Page 2
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 1|suppliers of labor, material, rented machinery or equipment, and       |
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 2|repair of and parts for equipment used or consumed in the              |
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 3|performance of the contract.  The execution of the affidavit with      |
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 4|knowledge that any of the contents of the affidavit are false, upon    |
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 5|conviction, shall constitute perjury, punishable as provided for by    |
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 6|law.                                                                   |
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 7|    SECTION 2.     AMENDATORY     61 O.S. 2011, Section 113.1, is      |
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 8|amended to read as follows:                                            |
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 9|    Section 113.1  A.  A public construction contract or subcontract   |
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10|shall provide for partial payment based upon work completed.  The      |
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11|contract or subcontract shall provide that up to five percent (5%)     |
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12|of all partial payments made shall be withheld as retainage as         |
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13|described in Section 226 of this act.                                  |
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14|    B.  The Department of Transportation or the Oklahoma Turnpike      |
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15|Authority shall not withhold retainage on public construction          |
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16|contracts awarded by the Department or the Authority.                  |
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17|    C.  The Department of Transportation shall not withhold            |
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18|retainage or require any bond on projects awarded to railroads on      |
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19|the railroad's privately owned or operated rail property.              |
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20|    SECTION 3.     AMENDATORY     61 O.S. 2011, Section 226, is        |
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21|amended to read as follows:                                            |
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22|    Section 226.  A.  A construction contract may include a            |
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23|provision for the retainage of a portion of payment due.  Such         |
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24|retainage is not to exceed five percent (5%) of the amount of the      |
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arsid14569844 SENATE FLOOR VERSION - HB1114 SFLR                   Page 3
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 1|payment due until the work of the contractor has been determined by    |
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 2|the holder to be at least fifty percent (50%) complete, and with       |
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 3|respect to the balance of the work to be performed by the              |
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 4|contractor, the retainage amount shall be two and one-half percent     |
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 5|(2.5%).  The holder of the retainage shall be responsible for          |
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 6|payment on all interest accrued.                                       |
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 7|    B.  A subcontract may shall include a provision for the            |
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 8|retainage of a portion of payment due.  Such retainage is not to       |
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 9|shall not exceed five percent (5%) of the amount of the payment due    |
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10|until the work of the subcontractor has been determined by the         |
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11|holder to be at least fifty percent (50%) complete, and with respect   |
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12|to the balance of the work to be performed by the subcontractor, the   |
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13|retainage amount shall be two and one-half percent (2.5%).  The        |
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14|holder of the retainage shall be responsible for payment on all        |
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15|interest accrued.                                                      |
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16|    C.  No later than twenty-one (21) calendar days after a            |
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17|certificate of substantial completion is issued for the project or     |
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18|separate usable phase of the project and upon adequate performance     |
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19|of the prime contractor and with approval of any applicable surety,    |
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20|retainage shall be released by the owner to the prime contractor       |
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21|less an amount no greater than one hundred fifty percent (150%) of     |
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22|the estimated costs to correct any incomplete or defective work as     |
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23|identified, itemized, and attached to the certificate of substantial   |
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24|completion.  All remaining funds shall be released as each             |
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arsid14569844 SENATE FLOOR VERSION - HB1114 SFLR                   Page 4
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 1|deficiency is satisfactorily completed.  The prime contractor shall    |
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 2|release within ten (10) calendar days of receipt, the share of those   |
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 3|funds that have been withheld from other entities.  All other          |
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 4|entities shall release within seven (7) calendar days of receipt,      |
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 5|the share of those funds that have been withheld from other            |
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 6|entities.                                                              |
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 7|    SECTION 4.  This act shall become effective November 1, 2019.      |
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 8|COMMITTEE REPORT BY: COMMITTEE ON BUSINESS, COMMERCE AND TOURISM       |
  |April 11, 2019 - DO PASS AS AMENDED                                    |
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