March 10, 2001

Mr. President:

Your JUDICIARY COMMITTEE, to whom has been referred

has had it under consideration and reports same with recommendation that it DO PASS, amended as follows:

1. Strike House Business and Industry Committee Amendments 1, 4, 5, 6 and 7.

2. On page 3, line 4, strike "for" and insert in lieu thereof "through a contract with".

3. On page 3, lines 5 and 6, strike Subsection C and insert in lieu thereof:

"C. "owner" means a person, local public body or state agency other than the state highway and transportation department;".

4. On page 3, between lines 6 and 7, insert the following new subsection:

"D. "person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture or similar legal entity;".

5. Reletter the succeeding subsections accordingly.

6. On page 3, line 10, after the semicolon insert "and".

7. On page 3, line 13, strike "; and" and insert in lieu thereof a period.

8. On page 3, strike lines 14 through 23.

9. On page 3, line 25, strike "Retainage" and insert in lieu thereof:

"A. Except as otherwise provided in this section, retainage".

10. On page 4, line 1, after the period insert:

"Securities may be offered by a contractor or subcontractor in lieu of retention.

B. A local public body may provide in its bidding documents the manner in which retainage is to be held. Retainage by a local public body shall be in an interest-bearing account. A local public body may combine retainage from more than one project into a single account, and the interest shall be allocated to the contractors and subcontractors pro rata to each project's retainage.

C. A manufacturing plant engaged in at least ten construction projects at the same time may serve as its own escrow agent; provided that all other conditions pertaining to escrow accounts shall apply.".

11. On page 4, line 3, strike "All" and insert in lieu thereof "Except as provided in Subsection B of this section, all".

12. On page 4, line 7, after "mailing" insert ", electronic funds transfer".

13. On page 4, between lines 20 and 21, insert the following new subsection:

"B. A local public body may make payment within forty-five days after submission of an undisputed request for payment when grant money is a source of funding, if:

(1) the construction contract specifically provides in a clear and conspicuous manner for a payment later than twenty-one days after submission of an undisputed request for payment; and

(2) the following legend or substantially similar language setting forth the specified number of days appears in clear and conspicuous type on each page of the plans, including bid plans and construction plans:

This contract allows the owner to make payment within _____________ days after submission of an undisputed request for payment."".

14. Reletter the succeeding subsections accordingly.

15. On page 5, strike lines 10 through 19 and insert in lieu thereof:

"C. A creditor shall not collect, enforce a security interest against, garnish or levy execution on those retainage, progress payments or other payments that are owed by an owner, contractor or subcontractor to a person, or his surety, who has furnished labor or material pursuant to a construction contract.".

16. On page 5, line 23, strike "fifty percent" and insert in lieu thereof "substantially".

17. On page 5, line 24, after the period insert "A contractor shall retain no more than five percent retainage, regardless of whether retainage is withheld by the owner.".

18. On page 6, line 25, after "contractor" strike the remainder of the line, strike page 7, line 1, up to the semicolon and insert in lieu thereof a period and "The contractor and his subcontractors shall pay interest as it is received pro rata to their subcontractors".

19. On page 9, line 2, strike "substantial".

20. On page 9, line 13, strike "substantial".

21. On page 10, between lines 6 and 7, insert the following new section:

"Section 11. ATTORNEY FEES.--In an action to enforce the provisions of the Retainage Act, the court may award court costs and reasonable attorney fees.".

22. Renumber the succeeding section accordingly.

Respectfully submitted,

__________________________________

Michael S. Sanchez, Chairman

Adopted_______________________ Not Adopted_______________________

(Chief Clerk) (Chief Clerk)

Date ________________________

The roll call vote was 6 For 0 Against

Yes: 6

No: 0

Excused: Gorham, Ingle, Komadina, Lopez

Absent: None

H0320JU1 .138157.2