2016 -- H 8193 SUBSTITUTE A

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LC005734/SUB A/3

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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: Representatives Carnevale, Slater, McKiernan, and O'Brien

     Date Introduced: May 11, 2016

     Referred To: House Labor

     It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 37-12-1 and 37-12-3 of the General Laws in Chapter 37-12

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entitled "Contractors' Bonds" are hereby amended to read as follows:

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     37-12-1. Contractors required to give bond -- Terms and conditions. -- Every person

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(which word for the purposes of this chapter shall include a copartnership, a number of persons

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engaged in a joint enterprise, or a corporation), before being awarded a contract by the

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department of transportation or by the department of administration, as the case may be, and

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every person awarded such a contract as a general contractor or construction or project manager

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for the construction, improvement, completion, or repair of any public road or portion thereof or

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of any bridge in which the contract price shall be in excess of fifty thousand dollars ($50,000), or

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for a contract for the construction, improvement, completion, or repair of any public building, or

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portion thereof, shall be required to furnish to the respective department a bond of that person to

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the state, with good and sufficient surety or sureties (hereafter in this chapter referred to as

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surety), acceptable to the respective department, in a sum not less than fifty percent (50%) and

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not more than one hundred percent (100%) of the contract price, conditioned that the contractor,

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principal in the bond, the person's executors, administrators, or successors, shall in all things, well

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and truly keep and perform the covenants, conditions, and agreements in the contract, and in any

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alterations thereof made as therein provided, on the person's part to be kept and performed, at the

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time and in the manner therein specified, and in all respects according to their true intent and

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meaning, and shall indemnify and save harmless the state, the respective department, and all of its

 

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officers, agents, and employees, as therein stipulated, and shall also promptly pay for all such

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labor performed or furnished, together with penalties assessed pursuant to §37-13-14.1(b), and for

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all such materials and equipment furnished, (which as to equipment shall mean payment of the

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reasonable rental value, as determined by the respective department, of its use during the period

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of its use), as shall be used in the carrying on of the work covered by the contract, or shall see that

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they are promptly paid for, whether or not the labor is directly performed for or furnished to the

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contractor or is even directly performed upon the work covered by the contract, and whether or

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not the materials are furnished to the contractor or become component parts of the work, and

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whether or not the equipment is furnished to the contractor or even directly used upon the work.

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The bond shall contain the provisions that it is subject to all such rights and powers of the

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respective department and such other provisions as are set forth in the contract and the plans,

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specifications, and proposal incorporated by reference in the contract, and that no extension of the

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time of performance of the contract or delay in the completion of the work thereunder or any

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alterations thereof, made as therein provided, shall invalidate the bond or release the liability of

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the surety thereunder. Waiver of the bonding requirements of this section is expressly prohibited.

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     37-12-3. Remedies of creditors and state -- Priority of claims. -- The remedy on the

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bond shall be by a civil action brought in the superior court for the counties of Providence and

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Bristol and in any suit brought on the bond the rights of the state shall be prior to those of all

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creditors. These rights shall include penalties, assessed under §37-13-14.1(b) for nonpayment or

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late payment of wages due. The rights of persons who shall have performed labor as aforesaid

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shall be prior to the rights of all other creditors, and there shall be no priorities among laborers or

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among other creditors under the bond. The state, either after having recovered a judgment against

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the contractor on the contract or without having recovered a judgment, may bring a suit on the

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bond against the contractor and surety on the bond, and may join as parties defendant in the suit

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any persons claiming to have rights under the bond as creditors; and, if it has not brought such a

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suit, it may at any time before a final and conclusive decree, intervene and become a party in any

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suit brought, as hereafter provided in this chapter, by any person claiming to be a creditor under

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the bond.

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     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

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     This act would expand the penalties which public works contractors can be assessed for

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failing to properly pay persons for the services they provide to them.

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     This act would take effect upon passage.

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