2016 -- S 2229 SUBSTITUTE A

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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A N   A C T

RELATING TO PUBLIC PROPERTY AND WORKS - CONTRACTORS' BONDS

     Introduced By: Senators McCaffrey, Doyle, Miller, Jabour, and Lynch Prata

     Date Introduced: January 27, 2016

     Referred To: Senate Judiciary

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 37-12-1 and 37-12-3 of the General Laws in Chapter 37-12

entitled "Contractors' Bonds" are hereby amended to read as follows:

     37-12-1. Contractors required to give bond -- Terms and conditions. -- Every person

(which word for the purposes of this chapter shall include a copartnership, a number of persons

engaged in a joint enterprise, or a corporation), before being awarded a contract by the

department of transportation or by the department of administration, as the case may be, and

every person awarded such a contract as a general contractor or construction or project manager

for the construction, improvement, completion, or repair of any public road or portion thereof or

of any bridge in which the contract price shall be in excess of fifty thousand dollars ($50,000), or

for a contract for the construction, improvement, completion, or repair of any public building, or

portion thereof, shall be required to furnish to the respective department a bond of that person to

the state, with good and sufficient surety or sureties (hereafter in this chapter referred to as

surety), acceptable to the respective department, in a sum not less than fifty percent (50%) and

not more than one hundred percent (100%) of the contract price, conditioned that the contractor,

principal in the bond, the person's executors, administrators, or successors, shall in all things, well

and truly keep and perform the covenants, conditions, and agreements in the contract, and in any

alterations thereof made as therein provided, on the person's part to be kept and performed, at the

time and in the manner therein specified, and in all respects according to their true intent and

meaning, and shall indemnify and save harmless the state, the respective department, and all of its

officers, agents, and employees, as therein stipulated, and shall also promptly pay for all such

labor performed or furnished, together with penalties assessed pursuant to §37-13-14.1(b), and for

all such materials and equipment furnished, (which as to equipment shall mean payment of the

reasonable rental value, as determined by the respective department, of its use during the period

of its use), as shall be used in the carrying on of the work covered by the contract, or shall see that

they are promptly paid for, whether or not the labor is directly performed for or furnished to the

contractor or is even directly performed upon the work covered by the contract, and whether or

not the materials are furnished to the contractor or become component parts of the work, and

whether or not the equipment is furnished to the contractor or even directly used upon the work.

The bond shall contain the provisions that it is subject to all such rights and powers of the

respective department and such other provisions as are set forth in the contract and the plans,

specifications, and proposal incorporated by reference in the contract, and that no extension of the

time of performance of the contract or delay in the completion of the work thereunder or any

alterations thereof, made as therein provided, shall invalidate the bond or release the liability of

the surety thereunder. Waiver of the bonding requirements of this section is expressly prohibited.

     37-12-3. Remedies of creditors and state -- Priority of claims. -- The remedy on the

bond shall be by a civil action brought in the superior court for the counties of Providence and

Bristol and in any suit brought on the bond the rights of the state shall be prior to those of all

creditors. These rights shall include penalties, assessed under §37-13-14.1(b) for nonpayment or

late payment of wages due. The rights of persons who shall have performed labor as aforesaid

shall be prior to the rights of all other creditors, and there shall be no priorities among laborers or

among other creditors under the bond. The state, either after having recovered a judgment against

the contractor on the contract or without having recovered a judgment, may bring a suit on the

bond against the contractor and surety on the bond, and may join as parties defendant in the suit

any persons claiming to have rights under the bond as creditors; and, if it has not brought such a

suit, it may at any time before a final and conclusive decree, intervene and become a party in any

suit brought, as hereafter provided in this chapter, by any person claiming to be a creditor under

the bond.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC PROPERTY AND WORKS - CONTRACTORS' BONDS

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     This act would expand the penalties which public works contractors can be assessed for

failing to properly pay persons for the services they provide to them.

     This act would take effect upon passage.

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