Skip to main content Skip to office menu Skip to footer
Capital IconMinnesota Legislature

Office of the Revisor of Statutes

    Subdivision 1. Citation. (a) Sections 574.26 to 574.32 are the "public contractors'
performance and payment bond act," within those sections referred to as "the act."
(b) For the purposes of the act:
(1) "public body" means the state, municipal corporation, school district, or other public
board or body; and
(2) "labor and materials" means work, skill, tools, machinery, materials, insurance premiums,
equipment or supplies, or taxes incurred under section 290.92, chapter 268, or 297A; and
(3) "contract" means a contract with a public body for the doing of public work.
    Subd. 1a. Exemptions: certain manufacturers; commissioner of transportation. (a)
Sections 574.26 to 574.32 do not apply to a manufacturer of public transit buses that manufactures
at least 100 public transit buses in a calendar year. For purposes of this section, "public transit
bus" means a motor vehicle designed to transport people, with a design capacity for carrying more
than 40 passengers, including the driver. The term "public transit bus" does not include a school
bus, as defined in section 169.01, subdivision 6.
(b) At the discretion of the commissioner of transportation, sections 574.26 to 574.32 do
not apply to any projects of the Department of Transportation (1) costing less than $75,000, or
(2) involving the permanent or semipermanent installation of heavy machinery, fixtures, or other
capital equipment to be used primarily for maintenance or repair.
    Subd. 2. Terms. Except as provided in sections 574.263 and 574.264 or if the amount of
the contract is $75,000 or less, 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.
    Subd. 3. Penalty. The penalty of each bond must not be less than the contract price, and
if after the giving of the bond the contract price is increased, for any reason, the public body
may require additional bonds, the penalties of which shall be not less than the amount of
the increase, and if the additional bonds are not furnished within ten days after demand, the
work on the contract shall cease until the additional bonds are furnished. In contracts made
by the commissioner of administration or the Department of Transportation of the state, the
commissioner of administration or the commissioner of transportation, respectively, may fix the
amount of the bond penalty, but at not less than three-quarters of the contract price.
History: (9700) RL s 4535; 1909 c 429 s 1; 1923 c 373 s 1; 1929 c 369 s 1; 1931 c 229 s 1;
1975 c 377 s 39; 1976 c 166 s 7; 1985 c 112 s 2; 1986 c 327 s 5; 1986 c 444; 1994 c 419 s 1; 1995
c 54 s 28; 1995 c 200 s 1; 1998 c 403 s 25; 1Sp2001 c 10 art 2 s 83