Ditchmen • NUCA of Florida March 2019 | Page 5

Legislative Notes Bad Construction Bonds Bill Continues to Move Our friends at Associated General Contractors (AGC) filed legislation relating to construction bonds and their political contributions and grassroots efforts are paying dividends. HB 1247 by Rep. Daniel Perez (R-Miami) passed its last committee this week and is ready for floor action in the House. The Senate bill, SB 1200 by Sen. Kelli Stargel (R-Lakeland) will be heard in its last committee stop on April 10 in Senate Rules. On bonded construction projects, both public and private, current law requires a subcontractor/supplier to serve a “notice of nonpayment” on the General Contractor (GC) and surety if they have performed work or delivered materials and have not been paid in accordance with their contracts. HB 1247 and SB 1200, although improved from the initial version, still contain the following problematic provisions: • C  reate a new process for notifying the GC of payments owed by requiring the notice of nonpayment to be under oath (similar to a sworn statement of accounts). • C  reate a new harsh penalty--fraudulent notice of nonpayment--against subcontractors and suppliers when providing a claim for monetary damages if the subcontractor or supplier has miscalculated amount owed. • A  llow a GC to recover attorney’s fees if a surety refuses to perform under a subcontractor’s performance bond. NUCA of Florida believes elevating an inaccurate notice of nonpayment to “fraud status” by statutorily creating a fraudulent notice of nonpayment is much too severe a penalty in a process by which the GC isn’t at risk of losing his property like the potential situation under the current lien law. We also are concerned that an incorrect number of days billed for heavy equipment rental or miscalculated overhead costs and change orders could trigger a fraudulent notice of nonpayment under this bill. Through our lobbying efforts, we have been able to get the bill amended by the House sponsor to address some of our concerns. The bill has now been amended to provide that the negligent inclusion or omission of any information in the notice of nonpayment that has not prejudiced the contractor or surety does not defeat an otherwise valid bond claim. Also, the bill was changed to provide that contractors are entitled to attorney’s fees for obtaining a judgment against an insurer for failing to make a payment under a bond. While we are grateful to the sponsor for these changes, we remain opposed because this new process creates a higher likelihood that legitimate claims will be challenged therefore creating more costs to our members. Unfortunately, thanks to the sponsors ability to ameliorate other group’s concerns, there is little opposition elsewhere and the bill is expected to pass. THANK YOU TO ALL WHO RESPONDED TO OUR CALL TO ACTION ON THIS BILL. We will continue to fight this bill. “Through our lobbying efforts, we have been able to get the bill amended by the House sponsor to address some of our concerns. The bill has now been amended to provide that the negligent inclusion or omission of any information in the notice of nonpayment that has not prejudiced the contractor or surety does not defeat an otherwise valid bond claim.” Your Government Affairs Team, Kari & Scott • • • MARCH 2019 • DITCHMEN 3