SB 152-1_ Filed 02/20/2002, 15:21
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
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. -->
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,
(1) an opinion concerning whether the state office, municipality,
or entity has complied with
(2) a brief description of each instance in which the state office,
municipality, or entity has exercised its authority under
(b) If a municipality or a county performs a public work by
means of its own workforce under
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
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
, including a calculation
of the actual cost of each public work pursuant to
(3) An opinion concerning whether the municipality or
county has complied with
in calculating the
actual costs of a public work project performed under
(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
(A) publishes a notice pursuant to
(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
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. -->
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
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
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
(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
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
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
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
(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
(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. -->
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
(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
3.1 of this chapter
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
(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.
CR015202/DI 87 2002