Text: HSB00602                          Text: HSB00604
Text: HSB00600 - HSB00699               Text: HSB Index
Bills and Amendments: General Index     Bill History: General Index

House Study Bill 603

Bill Text

PAG LIN
  1  1    Section 1.  NEW SECTION.  10A.303  TARGETED SMALL
  1  2 BUSINESSES – WAIVER OF BOND REQUIREMENT – IOWA SATISFACTION
  1  3 AND PERFORMANCE BOND PROGRAM.
  1  4    1.  Agencies of state government shall be required to waive
  1  5 the requirement of satisfaction, performance, surety, or bid
  1  6 bonds for targeted small businesses which are able to
  1  7 demonstrate the inability of securing such a bond because of a
  1  8 lack of experience, lack of net worth, or lack of capital.
  1  9 This waiver shall not apply to businesses with a record of
  1 10 repeated failure of substantial performance or material breach
  1 11 of contract in prior circumstances.
  1 12    2.  The waiver shall be applied only to a project or
  1 13 individual transaction amounting to one hundred fifty thousand
  1 14 dollars or less, notwithstanding section 573.2.
  1 15    3.  In order to qualify, the targeted small business shall
  1 16 provide written evidence to the department that the business
  1 17 would otherwise be denied the bond.
  1 18    4.  The granting of the waiver shall not in any way relieve
  1 19 the business from its contractual obligations and shall not
  1 20 preclude the state agency from pursuing any remedies under law
  1 21 upon default or breach of contract.
  1 22    5.  The department shall certify targeted small businesses
  1 23 for eligibility and participation in this program and shall
  1 24 make this information available to other state agencies.
  1 25    6.  Subdivisions of state government may also grant such a
  1 26 waiver under similar circumstances.
  1 27    Sec. 2.  Section 573.2, Code 1999, is amended to read as
  1 28 follows:
  1 29    573.2  PUBLIC IMPROVEMENTS – BOND – WAIVER AND REMEDIES.
  1 30    1.  a.  Contracts for the construction of a public
  1 31 improvement shall, when the contract price equals or exceeds
  1 32 twenty-five thousand dollars, be accompanied by a bond, with
  1 33 surety, conditioned for the faithful performance of the
  1 34 contract, and for the fulfillment of other requirements as
  1 35 provided by law.
  2  1    b.  The bond may also be required when the contract price
  2  2 does not equal that amount.  However, if a contractor provides
  2  3 a performance or maintenance bond as required by a public
  2  4 improvement contract governed by this chapter and subsequently
  2  5 the surety company becomes insolvent and the contractor is
  2  6 required to purchase a new bond, the contractor may apply for
  2  7 reimbursement from the governmental agency that required a
  2  8 second bond and the claims shall be reimbursed from funds
  2  9 allocated for road construction purposes.
  2 10    2.  a.  If the requirement for a bond is waived pursuant to
  2 11 section 12.44 10A.303, a person, firm, or corporation, having
  2 12 a contract with the targeted small business or with
  2 13 subcontractors of the targeted small business, for labor
  2 14 performed or materials furnished, in the performance of the
  2 15 contract on account of which the bond was waived, is entitled
  2 16 to any remedy provided under this chapter.
  2 17    b.  When a bond has been waived pursuant to section 12.44
  2 18 10A.303, the remedies provided for under this paragraph
  2 19 subsection are available in an action against the public
  2 20 corporation.
  2 21    Sec. 3.  Section 12.44, Code 1999, is amended repealed.  
  2 22                           EXPLANATION
  2 23    This bill transfers the Iowa satisfaction and performance
  2 24 bond program from the state treasurer's office to the
  2 25 department of inspections and appeals' audits division.  The
  2 26 bill also increases the cap on the waiver eligibility program
  2 27 from the current amount of $50,000 to $150,000.  
  2 28 LSB 5366DP 78
  2 29 jj/gg/8

Text: HSB00602                          Text: HSB00604
Text: HSB00600 - HSB00699               Text: HSB Index
Bills and Amendments: General Index     Bill History: General Index

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