HF 1686

as introduced - 89th Legislature (2015 - 2016) Posted on 03/10/2015 03:20pm

A bill for an act
relating to public contracts; making the public body liable for unpaid costs when
there is no performance or payment bond; amending Minnesota Statutes 2014,
section 574.26, subdivision 2, by adding a subdivision.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2014, section 574.26, subdivision 2, is amended to read:

Subd. 2.

Terms.

Except as provided in new text begin subdivision 4 or new text end sections 574.263 and
574.264 deleted text begin or if the amount of the contract is less than the amount in section 471.345,
subdivision 3 deleted text end , a contract with a public body for the doing of any public work is not valid
unless the contractor gives (1) a performance bond to the public body with whom the
contractor entered into the contract, for the use and benefit of the public body to complete
the contract according to its terms, and conditioned on saving the public body harmless
from all costs and charges that may accrue on account of completing the specified work,
and (2) a payment bond for the use and benefit of all persons furnishing labor and materials
engaged under, or to perform the contract, conditioned for the payment, as they become
due, of all just claims for the labor and materials. Reasonable attorneys' fees, costs, and
disbursements may be awarded in an action to enforce claims under the act if the action is
successfully maintained or successfully appealed.

Sec. 2.

Minnesota Statutes 2014, section 574.26, is amended by adding a subdivision
to read:

new text begin Subd. 4. new text end

new text begin Small contracts; bonds optional. new text end

new text begin If the amount of the contract is less than
the amount in section 471.345, subdivision 3, a public body may require the contractor
to provide to the public body a performance bond and a payment bond as described in
subdivision 2. If a public body does not require a payment bond, the public body is liable
for all unpaid costs and charges that may accrue on account of completing the specified
work, and for all just claims by persons furnishing the labor and materials.
new text end