SF 533

as introduced - 90th Legislature (2017 - 2018) Posted on 02/03/2017 08:43am

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 2016,
section 574.26, subdivision 2, by adding a subdivision.

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

Section 1.

Minnesota Statutes 2016, 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 2016, 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