1.1                          A bill for an act 
  1.2             relating to education; providing for performance bonds 
  1.3             for certain school district contracts; amending 
  1.4             Minnesota Statutes 2002, section 574.26, subdivision 2.
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6      Section 1.  Minnesota Statutes 2002, section 574.26, 
  1.7   subdivision 2, is amended to read: 
  1.8      Subd. 2.  [TERMS.] (a) Except as provided in sections 
  1.9   574.263 and 574.264 or if the amount of the contract is $75,000 
  1.10  or less, a contract with a public body for the doing of any 
  1.11  public work is not valid unless the contractor gives (1) a 
  1.12  performance bond to the public body with whom the contractor 
  1.13  entered into the contract, for the use and benefit of the public 
  1.14  body to complete the contract according to its terms, and 
  1.15  conditioned on saving the public body harmless from all costs 
  1.16  and charges that may accrue on account of completing the 
  1.17  specified work, and (2) a payment bond for the use and benefit 
  1.18  of all persons furnishing labor and materials engaged under, or 
  1.19  to perform the contract, conditioned for the payment, as they 
  1.20  become due, of all just claims for the labor and materials.  
  1.21     (b) In the case of contracts to create, develop, provide, 
  1.22  or maintain student information systems, finance systems, Web 
  1.23  pages, ISP systems, human resources and payroll systems, other 
  1.24  software, network services, and Internet services, for $25,000 
  1.25  or more, a contract with a school board is not valid unless (1) 
  2.1   the contractor demonstrates in its quotation, proposal, or bid 
  2.2   its financial ability to complete the contract by providing 
  2.3   financial statements to that effect, and (2) if so required by 
  2.4   the school board in its specifications or request for proposals, 
  2.5   the contractor provides a performance bond for the use and 
  2.6   benefit of the school board to complete the contract according 
  2.7   to its terms, and conditioned on saving the school board 
  2.8   harmless from all costs and charges that may accrue on account 
  2.9   of completing the specified work.  
  2.10     (c) Reasonable attorneys' fees, costs, and disbursements 
  2.11  may be awarded in an action to enforce claims under the act if 
  2.12  the action is successfully maintained or successfully appealed.