SB 152-1_ Filed 02/20/2002, 15:21

Text Box

Adopted Rejected


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COMMITTEE REPORT


                                                        YES:

10

                                                        NO:
0

MR. SPEAKER:

    Your Committee on       Public Policy, Ethics and Veterans Affairs     , to which was referred       Senate Bill 152     , has had the same under consideration and begs leave to report the same back to the House with the recommendation that said bill be amended as follows:

SOURCE: Page 1, line 13; (02)CR015202.1. -->     Page 1, between lines 13 and 14, begin a new paragraph and insert:
SOURCE: IC 5-11-1-26; (02)CR015202.3. -->     "SECTION 3. IC 5-11-1-26 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 26. (a) If a state office, municipality, or other entity has authority to contract for the construction, reconstruction, alteration, repair, improvement, or maintenance of a public work, the state board of accounts shall include in each examination report concerning the state office, municipality, or entity:
        (1) an opinion concerning whether the state office, municipality, or entity has complied with IC 5-16-8 ; and
        (2) a brief description of each instance in which the state office, municipality, or entity has exercised its authority under IC 5-16-8-2 (b) or IC 5-16-8-4.
     (b) If a municipality or a county performs a public work by

means of its own workforce under IC 36-1-12-3 or IC 36-1-12-3.1 , the state board of accounts shall include the following in each examination report concerning the municipality or county:
        (1) An opinion concerning whether the municipality or county has complied with IC 36-1-12-3 or IC 36-1-12-3.1 for each public work performed by the entity's own workforce.
        (2) A brief description of each public work that the municipality or county has performed with its own workforce under IC 36-1-12-3 or IC 36-1-12-3.1 , including a calculation of the actual cost of each public work pursuant to IC 36-1-12-3.1 (d).
        (3) An opinion concerning whether the municipality or county has complied with IC 36-1-12-19 in calculating the actual costs of a public work project performed under IC 36-1-12-3 or IC 36-1-12-3.1.

    (b) (c) The state board of accounts may exercise any of its powers under this chapter concerning public accounts to carry out this section, including the power to require a uniform system of accounting or the use of forms prescribed by the state board of accounts.".

SOURCE: Page 2, line 30; (02)CR015202.2. -->     Page 2, line 30, strike "fifty thousand dollars ($50,000)," and insert " seventy-five thousand dollars ($75,000),".
    Page 3, line 8, delete "the workforce is" and insert " :
         (1) the workforce, through demonstrated skills, training, or expertise, is capable of performing the public work; and
        (2) for a public work project whose cost is estimated to be more than one hundred thousand dollars ($100,000), the board:
            (A) publishes a notice pursuant to IC 5-3-1 that:
                (i) describes the public work that the board intends to perform with its own workforce; and
                (ii) sets forth the projected cost of each component of the public work as described in subsection (d); and
            (B) determines at a public meeting that it is in the public interest to perform the public work with the board's own workforce.
".
    Page 3, delete line 9.
    Page 3, after line 17, begin a new paragraph and insert:
    " (e) A public work project performed by a board's own workforce shall be inspected and accepted as complete in the same

manner as a public work project performed pursuant to a contract awarded after receiving bids.

SOURCE: IC 36-1-12-14; (02)CR015202.6. -->     SECTION 6. IC 36-1-12-14 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 14. (a) This section applies to public work contracts in excess of one hundred thousand dollars ($100,000) for projects other than highways, roads, streets, alleys, bridges, and appurtenant structures situated on streets, alleys, and dedicated highway rights-of-way. This section also applies to a lessor corporation qualifying under IC 21-5-11 or IC 21-5-12 or any other lease-back arrangement containing an option to purchase, notwithstanding the statutory provisions governing those leases.
    (b) A board that enters into a contract for public work, and a contractor who subcontracts parts of that contract, shall include in their respective contracts provisions for the retainage of portions of payments by the board to contractors, by contractors to subcontractors, and for the payment of subcontractors. Either the board or At the discretion of the contractor, or both, shall place the retainage shall either be held by the board or be placed in an escrow account, with a bank, savings and loan institution, or the state as the escrow agent. The escrow agent shall be selected by mutual agreement between board and contractor or contractor and subcontractor under a written agreement among the bank or savings and loan institution and:
        (1) the board and the contractor; or
        (2) the subcontractor and the contractor.
The board shall not be required to pay interest on the amounts of retainage that it holds under this section.
    (c) To determine the amount of retainage to be withheld, the board shall:
        (1) withhold no more than ten percent (10%) of the dollar value of all work satisfactorily completed until the public work is fifty percent (50%) completed, and nothing further after that; or
        (2) withhold no more than five percent (5%) of the dollar value of all work satisfactorily completed until the public work is substantially completed.
If upon substantial completion of the public work minor items remain uncompleted, an amount computed under subsection (f) of this section shall be withheld until those items are completed.
    (d) The escrow agreement must contain the following provisions:
        (1) The escrow agent shall invest all escrowed principal in obligations selected by the escrow agent.
        (2) The escrow agent shall hold the escrowed principal and income until receipt of notice from the board and the contractor, or the contractor and the subcontractor, specifying the part of the escrowed principal to be released from the escrow and the person to whom that portion is to be released. After receipt of the notice, the escrow agent shall remit the designated part of escrowed principal and the same proportion of then escrowed income to the person specified in the notice.
        (3) The escrow agent shall be compensated for the agent's services. The parties may agree on a reasonable fee comparable with fees being charged for the handling of escrow accounts of similar size and duration. The fee shall be paid from the escrowed income.
The escrow agreement may include other terms and conditions consistent with this subsection, including provisions authorizing the escrow agent to commingle the escrowed funds with funds held in other escrow accounts and limiting the liability of the escrow agent.
    (e) The contractor shall furnish the board with a performance bond equal to the contract price. If acceptable to the board, the performance bond may provide for incremental bonding in the form of multiple or chronological bonds that, when taken as a whole, equal the contract price. The surety on the performance bond may not be released until one (1) year after the date of the board's final settlement with the contractor. The performance bond must specify that:
        (1) a modification, omission, or addition to the terms and conditions of the public work contract, plans, specifications, drawings, or profile;
        (2) a defect in the public work contract; or
        (3) a defect in the proceedings preliminary to the letting and awarding of the public work contract;
does not discharge the surety.
    (f) The board or escrow agent shall pay the contractor shall be paid in full, including all escrowed principal and escrowed income, by the board and escrow agent, within sixty-one (61) days after the date of substantial completion, subject to sections 11 and 12 of this chapter. Payment by the escrow agent shall include all escrowed principal

and escrowed income. If within sixty-one (61) days after the date of substantial completion there remain uncompleted minor items, an amount equal to two hundred percent (200%) of the value of each item as determined by the architect-engineer shall be withheld until the item is completed. Required warranties begin not later than the date of substantial completion.
    (g) Actions against a surety on a performance bond must be brought within one (1) year after the date of the board's final settlement with the contractor.
    (h) This subsection applies to public work contracts of less than two hundred fifty thousand dollars ($250,000). The board may waive the performance bond requirement of subsection (e) and accept from a contractor an irrevocable letter of credit for an equivalent amount from an Indiana financial institution approved by the department of financial institutions instead of a performance bond. Subsections (e) through (g) apply to a letter of credit submitted under this subsection.

SOURCE: IC 36-1-12-22; (02)CR015202.7. -->     SECTION 7. IC 36-1-12-22 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2002]: Sec. 22. (a) For purposes of this section, the "actual cost" of a public work project includes:
        (1) the actual cost of materials, labor equipment, and rental used in;
        (2) a reasonable rate for trucks and heavy equipment that are owned by the municipality or county and are used in; and
        (3) other expenses incidental to;
the performance of the project.

     (b) For purposes of this section, the "excess cost" of a public work project is the amount by which the actual cost of a public work project performed by a municipality or county with its own workforce under section 3 or 3.1 of this chapter exceeds one hundred five percent (105%) of the amount permitted under section 3.1(b) of this chapter.
    (c) The state board of accounts shall calculate the excess costs incurred by a municipality or a county pursuant to its examination under IC 5-11-1-26.
    (d) The auditor shall withhold from the distribution of motor vehicle highway account funds an amount equaling the sum of the excess costs incurred by a municipality or a county in the

preceding fiscal year.".
    Renumber all SECTIONS consecutively.
    (Reference is to SB 152 as printed January 18, 2002.)

and when so amended that said bill do pass.

__________________________________

Representative Kuzman


CR015202/DI 87    2002