SB 441-1_ Filed 02/10/2011, 12:21

COMMITTEE REPORT

MADAM PRESIDENT:

    The Senate Committee on Local Government, to which was referred Senate Bill No. 441, has had the same under consideration and begs leave to report the same back to the Senate with the recommendation that said bill be AMENDED as follows:

SOURCE: Page 1, line 1; (11)CR044101.1. -->     Page 1, between the enacting clause and line 1, begin a new paragraph and insert:
SOURCE: IC 4-13.6-5-2; (11)CR044101.1. -->     "SECTION 1. IC 4-13.6-5-2 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 2. (a) Except as provided by this chapter and IC 16-33-4-10, if the estimated cost of a public works project is at least seventy-five thousand dollars ($75,000), one hundred fifty thousand dollars ($150,000), the division shall award a contract for the project based on competitive bids.
    (b) If the estimated cost of a public works project is at least seventy-five thousand dollars ($75,000), one hundred fifty thousand dollars ($150,000), the division shall develop contract documents for a public works contract and keep the contract documents on file in its offices so that they may be inspected by contractors and members of the public.
    (c) The division shall advertise for bids under section 8 of this chapter. The director shall award a contract under IC 4-13.6-6.
    (d) A contractor shall submit under oath a financial statement as a part of the bid. The director may waive filing of the financial statement.
    (e) After bids are opened but before a contract is awarded, the director may require a contractor to submit a statement of the

contractor's experience, a proposed plan of performing the work, and a listing of the equipment that is available to the contractor for performance of the work.
    (f) The statements required by this section shall be submitted on forms approved by the state board of accounts. The forms shall be based, so far as applicable, on standard questionnaires and financial statements for contractors used in investigating the qualifications of contractors on public construction work.
    (g) The division shall reject the bid of a contractor if:
        (1) the estimated cost of the public works project is one hundred fifty thousand dollars ($150,000) or more and the contractor is not qualified under chapter 4 of this article;
        (2) the estimated cost of the public works project is less than one hundred fifty thousand dollars ($150,000) and the director makes a written determination, based upon information provided under subsections (d) and (e), that the contractor is not qualified to perform the public works contract;
        (3) the contractor has failed to perform a previous contract with the state satisfactorily and has submitted the bid during a period of suspension imposed by the director (the failure of the contractor to perform a contract satisfactorily must be based upon a written determination by the director);
        (4) the contractor has not complied with a rule adopted under this article and the rule specifies that failure to comply with it is a ground for rejection of a bid; or
        (5) the contractor has not complied with any requirement under section 2.5 of this chapter.
    (h) The division shall keep a record of all bids. The state board of accounts shall approve the form of this record, and the record must include at least the following information:
        (1) The name of each contractor.
        (2) The amount bid by each contractor.
        (3) The name of the contractor making the lowest bid.
        (4) The name of the contractor to whom the contract was awarded.
        (5) The reason the contract was awarded to a contractor other than the lowest bidder, if applicable.
        (6) Purchase order numbers.


SOURCE: IC 4-13.6-5-3; (11)CR044101.2. -->     SECTION 2. IC 4-13.6-5-3 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 3. (a) If the estimated cost of a public works project is less than seventy-five thousand dollars ($75,000), one hundred fifty thousand dollars ($150,000), the division may award a public works contract either under section 2 of this chapter or under this section, at the discretion of the director.
    (b) If the director awards a contract under this section, the division shall invite quotations from at least three (3) contractors known to the division to deal in the work required to be done. However, if fewer than three (3) contractors are known to the division to be qualified to perform the work, the division shall invite quotations from as many contractors as are known to be qualified to perform the work. Failure to receive three (3) quotations shall not prevent an award from being made.
    (c) The division may authorize the governmental body for which the public work is to be performed to invite quotations, but award of a contract based upon those quotations is the responsibility of the division.
    (d) Quotations given by a contractor under this section must be in writing and sealed in an envelope, shall be considered firm, and may be the basis upon which the division awards a public works contract.
    (e) The division shall award a contract to the lowest responsible and responsive contractor and in accordance with any requirement imposed under section 2.5 of this chapter.".
SOURCE: Page 1, line 4; (11)CR044101.1. -->     Page 1, line 4, strike "seventy-five thousand dollars ($75,000)," and insert " one hundred fifty thousand dollars ($150,000),".
    Page 2, delete lines 21 through 42, begin a new paragraph and insert:
SOURCE: IC 4-13.6-7-2; (11)CR044101.4. -->     "SECTION 4. IC 4-13.6-7-2, AS AMENDED BY P.L.160-2006, SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 2. (a) If the estimated cost of a public works project is one hundred fifty thousand dollars ($150,000) one million dollars ($1,000,000) or more, the division shall include as part of the public works contract provisions for the retainage of portions of payments by the division to the contractor, by the contractor to subcontractors, and for the payment of subcontractors and suppliers by the contractor. The contract must provide that the division may withhold from the contractor sufficient funds from the contract price to

pay subcontractors and suppliers as provided in section 4 of this chapter.
    (b) A public works contract and contracts between contractors and subcontractors, if portions of the public works contract are subcontracted, may include a provision that at the time any retainage is withheld, the division or the contractor, as the case may be, may place the retainage in an escrow account, as mutually agreed, with:
        (1) a bank;
        (2) a savings and loan institution;
        (3) the state of Indiana; or
        (4) an instrumentality of the state of Indiana;
as escrow agent. The parties to the contract shall select the escrow agent by mutual agreement. The parties to the agreement shall enter into a written agreement with the escrow agent.
    (c) The escrow agreement must provide the following:
        (1) The escrow agent shall promptly invest all escrowed principal in the obligations that the escrow agent selects, in its discretion.
        (2) The escrow agent shall hold the escrowed principal and income until it receives notice from both of the other parties to the escrow agreement specifying the percentage of the escrowed principal to be released from the escrow and the persons to whom this percentage is to be released. When it receives this notice, the escrow agent shall promptly pay the designated percentage of escrowed principal and the same percentage of the accumulated escrowed income to the persons designated in the notice.
        (3) The escrow agent shall be compensated for its services as the parties may agree. The compensation shall be a commercially reasonable fee commensurate with fees being charged at the time the escrow fund is established for the handling of escrow accounts of like size and duration. The fee must be paid from the escrowed income of the escrow account.
    (d) The escrow agreement may include other terms and conditions that are not inconsistent with subsection (c). Additional provisions may include provisions authorizing the escrow agent to commingle the escrowed funds held under other escrow agreements and provisions limiting the liability of the escrow agent.

SOURCE: IC 5-11-1-26; (11)CR044101.5. -->     SECTION 5. IC 5-11-1-26 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: 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, 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 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, including a calculation of the actual cost of each public work pursuant to IC 36-1-12-3.
        (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.

    (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: IC 5-16-1-1.5; (11)CR044101.6. -->     SECTION 6. IC 5-16-1-1.5 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 1.5. The governing board of any state educational institution, acting on behalf of said institution, may purchase materials in the manner provided by law and perform any work by means of its own employees and owned or leased equipment in the construction, rehabilitation, extension, maintenance, or repair of any building, structure, improvement, or facility of said institutions, without awarding a contract therefor, whenever the cost of such work shall be estimated to be less than fifty thousand dollars ($50,000). two hundred thousand dollars ($200,000).
SOURCE: IC 36-1-12-3; (11)CR044101.7. -->     SECTION 7. IC 36-1-12-3 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 3. (a) The board may purchase or lease materials in the manner provided in IC 5-22 and perform any public work, by means of its own workforce, without awarding a contract whenever the cost of that public work project is estimated to be less than one hundred fifty thousand dollars ($100,000). ($150,000). Before a board may perform any work under this section by means of its own workforce, the political subdivision or agency must have a group of employees on its staff who are capable of performing the construction, maintenance, and repair applicable to that work. For purposes of this subsection, the cost of a public work project includes:
         (1) the actual cost of materials, labor, equipment, and rental;
         (2) a reasonable rate for use of trucks and heavy equipment owned; and
         (3) all other expenses incidental to the performance of the project.
     (b) This subsection applies only to a municipality or a county. The workforce of a municipality or county may perform a public work described in subsection (a) only if:
        (1) the workforce, through demonstrated skills, training, or expertise, is capable of performing the public work; and
        (2) for a public work project under subsection (a) whose cost is estimated to be more than one hundred thousand dollars ($100,000), the board shall:
            (A) publish 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 (a); and
            (B) determine at a public meeting that it is in the public interest to perform the public work with the board's own workforce.

A public work project performed by a board's own workforce must be inspected and accepted as complete in the same manner as a public work project performed pursuant to a contract awarded after receiving bids.
    (b) (c) When the project involves the rental of equipment with an operator furnished by the owner, or the installation or application of

materials by the supplier of the materials, the project is considered to be a public work project and subject to this chapter. However, an annual contract may be awarded for equipment rental and materials to be installed or applied during a calendar or fiscal year if the proposed project or projects are described in the bid specifications.
    (c) (d) A board of aviation commissioners or an airport authority board may purchase or lease materials in the manner provided in IC 5-22 and perform any public work by means of its own workforce and owned or leased equipment, in the construction, maintenance, and repair of any airport roadway, runway, taxiway, or aircraft parking apron whenever the cost of that public work project is estimated to be less than fifty thousand dollars ($50,000).
    (d) (e) Municipal and county hospitals must comply with this chapter for all contracts for public work that are financed in whole or in part with cumulative building fund revenue, as provided in section 1(c) of this chapter. However, if the cost of the public work is estimated to be less than fifty thousand dollars ($50,000), as reflected in the board minutes, the hospital board may have the public work done without receiving bids, by purchasing the materials and performing the work by means of its own workforce and owned or leased equipment.
    (e) (f) If a public works project involves a structure, an improvement, or a facility under the control of a department (as defined in IC 4-3-19-2(2)), the department may not artificially divide the project to bring any part of the project under this section.".
    Delete page 3.
    Renumber all SECTIONS consecutively.
    (Reference is to SB 441 as introduced.)

and when so amended that said bill do pass.

Committee Vote: Yeas 9, Nays 0.

____________________________________

    Lawson C
Chairperson


CR044101/DI 87    2011