Minnesota Legislature
SF 2876
as introduced - 88th Legislature (2013 - 2014) Posted on 03/24/2014 08:22am
Current Version - as introduced
1.7 1.8 1.9 1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21 1.22 1.23 1.24 1.25 2.1 2.2 2.3 2.4
2.5 2.6
2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 2.22 2.23 2.24 2.25 2.26 2.27 2.28 2.29 2.30 2.31 2.32 2.33 2.34 2.35 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 3.18 3.19 3.20 3.21 3.22 3.23 3.24 3.25 3.26 3.27 3.28 3.29 3.30 3.31 3.32 3.33 3.34 3.35 3.36 3.37 3.38 3.39 3.40 3.41 3.42 3.43 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 4.18 4.19 4.20 4.21 4.22 4.23 4.24 4.25 4.26
4.27 4.28
A bill for an act
relating to transportation; surety bonds; amending provisions governing
Department of Transportation contracting and payment bonds; amending
Minnesota Statutes 2012, sections 161.32, by adding a subdivision; 574.31,
subdivision 2.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2012, section 161.32, is amended by adding a
subdivision to read:
new text begin Subd. 8. new text end
new text begin Payments; uncompensated work. new text end
new text begin
(a) For purposes of this subdivision,
the following terms have the meaning given:
new text end
new text begin
(1) "agreement for trunk highway work" means an enforceable agreement, or
combination or series of agreements, by which a private contractor agrees with the
commissioner of transportation to provide work related to the trunk highway system
that requires surety under section 574.26, including but not limited to (i) construction,
maintenance, or improvement of a trunk highway, or (ii) professional or technical
services; and
new text end
new text begin
(2) "labor and materials" has the meaning given under section 574.26, subdivision 1.
new text end
new text begin
(b) The commissioner may make payments to the employee of a contractor operating
under an agreement for trunk highway work if:
new text end
new text begin
(1) based on a review, the commissioner determines that the employee has been
insufficiently compensated for labor and materials provided under the agreement;
new text end
new text begin
(2) the commissioner has initiated sanctions, including but not limited to withholding
or suspending payment of contract funds, arranging to reject future bids under subdivision
1d, or terminating the contract, against the contractor;
new text end
new text begin
(3) a claim under chapter 574 is filed and coverage is denied; and
new text end
new text begin
(4) the agreement has not been finalized and closed out.
new text end
new text begin
(c) The commissioner may not make a payment under this subdivision that exceeds
the amount specified under the agreement, including any supplemental agreements or
adjustments, less the total payments previously made.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment and
applies to contracts that are active on that date, or that are executed on or after that date.
new text end
Sec. 2.
Minnesota Statutes 2012, section 574.31, subdivision 2, is amended to read:
Subd. 2.
Claims on payment bonds.
(a) In the event of a claim on a payment bond
by a person furnishing labor and materials, no action shall be maintained on the payment
bond unlessdeleted text begin , within 120 days after completion, delivery, or provision by the person of its
last item of labor and materials, for the public work,deleted text end the personnew text begin :
new text end
new text begin (1)new text end serves written notice of claim under the payment bond personally or by certified
mail upon the surety that issued the bond and the contractor on whose behalf the bond
was issuednew text begin ,new text end at their addresses as stated in the bondnew text begin ,new text end specifying the nature and amount of
the claim and the date the claimant furnished its last item of labor and materials for the
public workdeleted text begin .deleted text end new text begin ; and
new text end
new text begin
(2) serves the notice:
new text end
new text begin
(i) within 120 days after completion, delivery, or provision by the person of its last
item of labor and materials for the public work; or
new text end
new text begin
(ii) with respect to a payment bond on a project of the Department of Transportation,
prior to finalization and closeout of the contract under which the person furnished labor
and materials.
new text end
The addresses of the contractor and the surety listed on the bond must be addresses
at which the companies are authorized to accept service of the notice of the claim. If an
agent or attorney-in-fact is authorized to accept service of notice of the claim for the
contractor or surety, that fact must be expressly stated in the bond along with the address
of the agent or attorney-in-fact at which service of the notice of the claim can be made.
For the purpose of this section, notice is sufficient if served personally or via certified mail
to the addresses of the contractor and surety listed on the bond. The form of notice is
sufficient if it is substantially as follows:
NOTICE OF CLAIM ON PAYMENT BOND FOR PUBLIC WORK
|
TO:
. |
||
| (Surety that issued payment bond) |
||
|
and
. |
||
| (The contractor on whose behalf the bond was issued) |
||
|
NOTICE IS HEREBY GIVEN that the undersigned claimant has
|
||
| (Description of the public work) |
||
|
The labor and materials were furnished under a contract or agreement |
||
|
.
|
||
| (Name and address of contractor or supplier requesting labor and materials from the claimant) |
||
|
The nature of the labor and materials furnished is as follows:
|
||
|
.
|
||
|
The amount of the claim is:
|
||
| The date the claimant last furnished labor and materials to this public work is the ...... day of ......................., ............ |
||
|
Claimant seeks payment of the claim according to the law. |
|
.
Claimant |
|||
|
.
Address |
|||
|
.
|
|||
|
STATE OF
. |
|||
| ss. |
|||
|
COUNTY OF
. |
|||
|
......................... being duly sworn on oath says that ...... |
|||
|
.
|
|||
|
Signed and sworn to before me
on . , by . |
(Notary Seal) |
||
|
.
|
|||
| Notary Public |
|||
(b) If the contractor providing the payment bond fails to comply with the filing
requirements of section 574.28 by failing to state both its address and the address of the
surety providing the bond, then a claimant under the bond need not provide either the
surety or the contractor written notice of its claim under paragraph (a).
(c) An action to enforce a claim against the surety under the bond must be
commencednew text begin :
new text end
new text begin (1)new text end within one year from the date of completion, delivery, or provision by the claimant
of its last item of labor and materials for the public work stated in its notice of claimdeleted text begin .deleted text end new text begin ;
new text end
new text begin
(2) with respect to a bond on a project of the Department of Transportation, prior
finalization and closeout of the contract under which the person furnished labor and
materials; or
new text end
new text begin (3)new text end ifnew text begin clause (2) does not apply andnew text end no notice of claim was required because the
contractor providing the bond failed to comply with the requirements of section 574.28,
deleted text begin then any action under the bond must be commenceddeleted text end within one year from the actual date
of completion, delivery, or provision by the claimant of its last item of labor and materials
for the public work.
new text begin (d) new text end Any other person having a cause of action on a payment bond may be admitted,
on motion, as a party to the action, and the court shall determine the rights of all parties.
If the amount realized on the bond is insufficient to discharge all the claims in full, the
amount must be prorated among the parties.
deleted text begin (d)deleted text end new text begin (e)new text end The claimant can extend the time within which to bring an action to enforce a
claim under the bond to beyond that specified in paragraph (c) either by: (1) written
stipulation between the claimant and surety stating the extended deadline and executed by
both parties before the expiration of deleted text begin one year from the actual date of completion, delivery,
or provision by the claimant of its last item of labor and materials for the public workdeleted text end new text begin the
deadline that otherwise applies under paragraph (c)new text end ; or (2) written notice extending by one
year the deadline specified in paragraph (c) sent by the claimant to the surety via certified
mail 90 days before the expiration of the deadline specified in paragraph (c), which notice
is not objected to in a return written notice sent by the surety to the claimant via certified
mail within 30 days after the surety's receipt of claimant's notice.
new text begin (f)new text end If a claimant's payment is not yet contractually due deleted text begin within one year from the
actual date of completion, delivery, or provision by the claimant of its last item of labor
and materialsdeleted text end new text begin at the time an action is commencednew text end , the court shall continue and not dismiss
the action until the payment is due.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective August 1, 2014, and applies to
contracts executed on or after that date.
new text end