2016 -- S 2550 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: Senator James E. Doyle

     Date Introduced: February 25, 2016

     Referred To: Senate Labor

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 37-12-10 of the General Laws in Chapter 37-12 entitled

"Contractors' Bonds" is hereby amended to read as follows:

     37-12-10. Retainers relating to contracts for public works, sewer, or water main

construction. -- Retainers relating to contracts for public works. -- (a) Upon substantial

completion of the work required by a contract aggregating in amount less than five hundred

thousand dollars ($500,000) with any municipality, or any agency or political subdivision thereof,

for the construction, reconstruction, alteration, remodeling, repair, or improvement of sewers and

water mains, or any public works project defined in § 37-13-1, the awarding authority may deduct

from its payment a retention to secure satisfactory performance of the contractual work not

exceeding five percent (5%) of the contract price unless otherwise agreed to by the parties. Upon

substantial completion of the work required by a contract aggregating in an amount of five

hundred thousand dollars ($500,000) or greater with any municipality, or any agency or political

subdivision thereof, for the construction, reconstruction, alteration, remodeling, repair, or

improvement of sewers and water mains, or any public works project defined in § 37-13-1, the

awarding authority may deduct from its payment a retention to secure satisfactory performance of

the contractual work not exceeding five percent (5%) of the contract price. In the case of periodic

payments with respect to contracts less than the aggregate amount of five hundred thousand

dollars ($500,000), the awarding authority may deduct from its payment a retention to secure

satisfactory performance of the contractual work not exceeding five percent (5%) of the approved

amount of any periodic payment unless otherwise agreed to by the parties. In the case of periodic

payments with respect to contracts in the aggregate amount of five hundred thousand dollars

($500,000) or greater, the awarding authority may deduct from its payment a retention to secure

satisfactory performance of the contractual work not exceeding five percent (5%) of the approved

amount of any periodic payment.

      (b) The retainage shall be paid to any contractor or subcontractor within ninety (90) days

of the date the work is accepted by the awarding authority unless a dispute exists with respect to

the work. If payment is not made within ninety (90) days for any reason other than a dispute,

which, if resolved and it is not the fault of the contractor, interest shall be assessed at the rate of

ten percent (10%) per annum on all money which is to be paid to the contractor or subcontractor.

      (c) The retainage shall be paid to any contractor or subcontractor within ninety (90) days

of the date his or her work is completed and accepted by the awarding authority. If payment is not

made, interest shall be assessed at the rate of ten percent (10%) per annum.

      (d) There shall also be deducted and retained from the contract price an additional sum

sufficient to pay the estimated cost of municipal police traffic control on any public works

project. Municipalities shall directly pay the officers working traffic details and shall bill and be

reimbursed by the withholding authority for which the contract is being performed every thirty

(30) days until the project is complete.

      (e) Notwithstanding the foregoing, with respect to projects located within the town of

Warren, the withholding authority shall hold an amount from the contract price which shall be

reasonably sufficient to pay the estimated cost of municipal police traffic control. The

withholding authority shall pay to the town of Warren within seventy-two (72) hours of written

demand the actual costs of police traffic control associated with said project on an ongoing basis.

     The state of Rhode Island, or any municipality or any agency or political subdivision

thereof, for the construction, reconstruction, alteration, remodeling, repair, or improvement of any

public works and/or sewers, water mains, or any public works project defined in §37-13-1, shall

not withhold more than five percent (5%) as a retainer in relation to any construction contract.

     (b) No general contractor or construction manager who has been awarded a contract by

the state of Rhode Island, any municipality or any agency or political subdivision thereof, for the

construction, reconstruction, alteration, remodeling, repair, or improvement of sewers and water

mains, or any public works project defined in §37-13-1 shall withhold more than five percent

(5%) from any subcontractors who perform work on any public works project as noted above.

     (c) Upon substantial completion of any public works project as noted above, or the

issuance of a permanent certificate of occupancy, whichever occurs first, any and all retainage as

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noted above shall be paid to the contractor or construction manager within fifty-five (55) days,

except as to an amount sufficient to equal one hundred fifty percent (150%) times the value of

any punch list as determined by the owner with respect to each project. The general contractor or

the construction manager shall make final payment to each subcontractor within ten (10) days of

receiving payment from the owner, less the withheld retainage of one hundred fifty percent

(150%) of the value of the punch list not completed by the subcontractor. Upon satisfactory

completion of the punch list, any and all monies withheld shall be paid to the general contractor

or to the construction manager within fifty-five (55) days and the general contractor or

construction manager shall pay the subcontractor within ten (10) days of receiving payment from

the owner.

     (d) Section 37-12-10 shall not apply to highway or heavy construction projects that are

procured by either the Rhode Island Department of Transportation, a public corporation, a public

agency or any city or town in Rhode Island.

     (e) There shall also be deducted and retained from the contract price an additional sum

sufficient to pay the estimated cost of municipal police traffic control on any public works

project. Municipalities shall directly pay the officers working traffic details and shall bill and be

reimbursed by the withholding authority for which the contract is being performed every thirty

(30) days until the project is complete.

     (f) Notwithstanding the foregoing, with respect to projects located within the town of

Warren, the withholding authority shall hold an amount from the contract price which shall be

reasonably sufficient to pay the estimated cost of municipal police traffic control. The

withholding authority shall pay to the town of Warren within seventy-two (72) hours of written

demand the actual costs of police traffic control associated with said project on an ongoing basis.

     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

***

     This act would prohibit the state, general contractors, and construction managers from

withholding more than five percent (5%) as a retainer with respect to any sewer, water main, or

other public works construction contract.

     This act would take effect upon passage.

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