NCS Blog

Recent Statute Changes: A Recap

Here’s a recap of recent statute changes impacting the construction industry throughout the U.S.

 
ALABAMA
SB24—PUBLIC WORKS CONTRACTS INCLUDING PROMPT PAY PROVISIONS Click here for legislation.
The Change: Effective 7-1-14, in part this act reduces the maximum time for payment of completed work. 
Amended legislation relates to pre-bid meeting; prohibiting modification of specifications within 24 hours of the opening of a bid; to remove the provision in the current law that provides that the prompt payment provisions will not apply until an awarding authority is in receipt of funds as provided in the contract; to provide for the review and approval of the progress of completed work; to provide procedures for the dispute of a submitted invoice; and to provide for the alteration of contract terms upon the discovery of certain material changes in the property where work is to be performed.  

COLORADO
HB14-1387—PAYMENT BOND THRESHOLD Click here for legislation.
The Change: The threshold for requiring a payment bond increased to $150,000 on state contracts.
Colorado HB14-1387, effective June 6, 2014, includes a provision that a payment bond must be obtained for state projects exceeding $150,000.00.  The Act also increases the contract threshold for which the awarding authority must publish a notice of final settlement.

LOUISIANA
HB567—FILING OF SECURITY UNDER PRIVATE WORKS ACT Click here for legislation.
The Change: Effective 8-1-14, a certificate of deposit will no longer qualify to guarantee payment under a lien.  
Act HB567 provides that a bond, cash or certified funds may be deposited with the recorder of mortgages to guarantee payment of an obligation secured by a privilege.  A federally insured certificate of deposit no longer qualifies to guarantee payment. 
 
MINNESOTA
HF1984 – RESPONSIBLE CONTRACTOR LEGISLATION Click here for legislation.
The Change: Minnesota legislation sets requirements for contractors on publicly owned or financed projects.  
Effective January 1, 2015, HF1984 provides for enhancement of accountability and transparency in public construction, establishing a requirement for and a definition of responsible contractor, verification of compliance, and subcontractor verification. 
 
MISSISSIPPI
SB2622 - LIEN LAW EFFECTIVE 4-11-14 Click here for legislation

The Change:  The governor has signed into law statute that will provide lien rights to those who contract with general contractors and first-tier subcontractors.  A preliminary notice will be required within 30 days from first furnishing, and the lien must be filed within 90 days from last furnishing.

MISSOURI
SB529 – PUBLIC PROMPT PAY LAW Click here for legislation.
The Change: Modifies the Prompt Payment Act and the threshold for requiring a payment bond on public projects.
Effective August 28, 2014, the Missouri Prompt Payment Act has been modified:  the amount to be held as retainage has changed; the public owner must provide a written explanation if the owner determines a project is not substantially complete or if the owner does not release full payment due to specific areas of work or materials the owner is rejecting; the threshold for requiring a payment bond has been increased; and increases the amount the public owner may retain if the project is not bonded because the contract is not estimated to exceed $50,000. 

NEBRASKA
LB961 – CONSTRUCTION PROMPT PAY ACT Click here for legislation.
The Change: Approved earlier this year, Nebraska LB961 becomes effective for any contracts entered into after July 17, 2014. 
The prompt payment statute was amended, significantly changing the definition of contractors and subcontractors, the time frame in which the owner or the contractor shall pay retainage, the amount of retainage that can be held, and allows for damages and attorney fees for an entity who pursues a violation of the Nebraska Construction Prompt Pay Act.  

OHIO
HB533 – PUBLIC PRIVATE PARTNERSHIPS Click here for legislation.
The Change: Effective 9-9-2014, Ohio statute provides bonding requirements on P3 projects. 
Ohio Revised Code 5501.73 provides that the Department of Transportation may enter into a public-private agreement with a private entity for a transportation facility, and requires that a payment bond be obtained. 

PENNSYLVANIA
SB145 - RESIDENTIAL LIENS TO BE LIMITED TO THE UNPAID BALANCE Click here for legislation.
The Change:
SB145 defines costs of construction and residential property, and limits residential liens to unpaid balance.
Pennsylvania legislation, SB145, becomes effective for any liens perfected on or after 9/7/14.  The main highlights of this bill include a definition for the costs of construction, a definition of residential property, and provisions that a subcontractor’s lien is limited to the amount unpaid by the owner or tenant.

SOUTH CAROLINA
S1026 – CONTRACTOR PAYMENT BONDS Click here for legislation.
The Change: Effective 6-6-14, South Carolina law, signed by Governor on June 6, 2014, relating to building contractor payment bonds.
In addition to outlining the methods for serving a notice of furnishing under 29-5-20(B), this legislation provides that the payment bond surety for the bonded contractor must have the same rights and defenses of the bonded contractor.  The statute applies to any payment bond, whether statutory, public, common law, or private in nature.

VIRGINIA
HB311—PUBLIC PRIVATE TRANSPORTATION ACT Click here for legislation.
The Change: Virginia statute, to become effective 10-1-14, provides for public private partnerships on transportation facilities. 
New legislation outlines the provisions for a Comprehensive Agreement to be entered into by a public entity and a private entity for the development and/or operation of transportation facilities.  As part of the Comprehensive Agreement, the private entity must obtain a performance and payment bond, in the form and amount satisfactory to the responsible public entity.