House File 2005 - Introduced HOUSE FILE 2005 BY BALTIMORE A BILL FOR An Act relating to the retention of funds due to contractors on 1 public improvements. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 5391YH (1) 84 je/sc

H.F. 2005 Section 1. Section 573.1, Code 2011, is amended by adding 1 the following new subsections: 2 NEW SUBSECTION . 2A. “Principal contractor” means those 3 persons, firms, or corporations having contracts directly with 4 the public corporation. 5 NEW SUBSECTION . 6. “Subcontractor” shall include every 6 person, firm, or corporation performing labor for or furnishing 7 materials to a public improvement, except those persons, firms, 8 or corporations having contracts directly with the public 9 corporation. 10 Sec. 2. Section 573.15, Code 2011, is amended by striking 11 the section and inserting in lieu thereof the following: 12 573.15 Exception. 13 1. A person, firm, or corporation performing labor for or 14 furnishing materials to a subcontractor shall not be entitled 15 to a claim against the retainage or bond under this chapter 16 unless the person, firm, or corporation performing the labor or 17 furnishing the materials does all of the following: 18 a. Notifies the principal contractor in writing with a 19 one-time notice containing the name, mailing address, and 20 telephone number of the person, firm, or corporation performing 21 the labor or furnishing the materials and the name of the 22 subcontractor for whom the labor was performed or to whom the 23 materials were furnished, within forty-five calendar days after 24 first performing the labor or furnishing the materials for the 25 public improvement. Additional labor performed, or materials 26 furnished by the same person, firm, or corporation to the same 27 subcontractor for the public improvement shall be covered by 28 this notice. 29 b. Supports the claim with a certified statement that the 30 principal contractor was notified in writing with a notice 31 containing the name, mailing address, and telephone number 32 of the person, firm, or corporation performing the labor or 33 furnishing the materials and the name of the subcontractor for 34 whom the labor was performed or to whom the materials were 35 -1- LSB 5391YH (1) 84 je/sc 1/ 3

H.F. 2005 furnished, within forty-five calendar days after the labor 1 was performed or the materials were furnished, pursuant to 2 paragraph “a” . 3 2. Notwithstanding any other provision of this chapter, a 4 principal contractor shall not be prohibited from requesting 5 information from a subcontractor or from a person, firm, or 6 corporation performing labor for or furnishing materials to a 7 subcontractor regarding payments made or payments to be made 8 to a person, firm, or corporation performing labor for or 9 furnishing materials to a subcontractor. 10 3. This section does not apply to claims for labor 11 filed by employees of principal contractors or employees of 12 subcontractors. 13 4. A public corporation shall not retain any part of the 14 unpaid fund due to the contractor as provided in this chapter 15 because of the commencement of any action by the contractor 16 against the state department of transportation under authority 17 granted in section 613.11. 18 EXPLANATION 19 Current law provides an exception to the requirement that a 20 public corporation retain a portion of funds due a contractor 21 on a public improvement project in a fund for the payment 22 of claims for materials furnished and labor performed. The 23 exception provides that a public corporation need only retain 24 funds due a supplier of material to a general contractor if 25 the supplier provides the general contractor with one of two 26 permitted types of notice after the materials are supplied. 27 This bill provides that the exception shall apply to both 28 claims for labor and claims for material. The bill also amends 29 the notice requirement to provide that a supplier of labor 30 or material to a general contractor must give only one type 31 of notice, along with a certified statement that such notice 32 was given. The bill provides that a principal contractor, as 33 defined in the bill, shall not be prohibited from requesting 34 information from a subcontractor or from an entity performing 35 -2- LSB 5391YH (1) 84 je/sc 2/ 3

H.F. 2005 labor for or furnishing materials to a subcontractor regarding 1 payments made to the entity from the subcontractor for labor or 2 materials. The bill provides that the bill does not apply to 3 claims for labor filed by employees of principal contractors 4 or employees of subcontractors. 5 -3- LSB 5391YH (1) 84 je/sc 3/ 3