REPORT TITLE:
Public contracts; payment


DESCRIPTION:
Requires the comptroller to adopt administrative rules as may be
necessary to implement the law relating to the prompt payment of
public contracts.  Specifies that the administrative rules
include a system of graduated penalties for violations.
Establishes penalties for failure of a contractor to pay a
subcontractor promptly.  (HB122 HD2)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        122
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 2
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO PUBLIC CONTRACTS.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Section 103-10.5, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "[[]103-10.5[]]  Prompt payment.  (a)  Any money, other
 
 4 than retainage, paid to a contractor shall be dispersed to
 
 5 subcontractors within ten days after receipt of the money in
 
 6 accordance with the terms of the subcontract[,]; provided that
 
 7 the subcontractor has met all the terms and conditions of the
 
 8 subcontract and there are no bona fide disputes.
 
 9      Upon final payment to the contractor, full payment to the
 
10 subcontractor, including retainage, shall be made within ten days
 
11 after receipt of the money[,]; provided there are no bona fide
 
12 disputes over the subcontractor's performance under the
 
13 subcontract.
 
14      (b)  Failure of a contractor to pay a subcontractor in
 
15 accordance with this section shall result in a violation.  Each
 
16 nonpayment to a subcontractor shall constitute a separate
 
17 violation.
 
18      (c)  The comptroller shall adopt rules pursuant to chapter
 
19 91 as may be necessary to implement this section.  The rules
 
20 shall include a system of graduated penalties for succeeding
 

 
Page 2                                                     122
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 violations, including monetary fines, payment of interest to the
 
 2 subcontractor, and debarment for noncomplying contractors."
 
 3      SECTION 2.  Statutory material to be repealed is bracketed.
 
 4 New statutory material is underscored.
 
 5      SECTION 3.  This Act, upon its approval, shall apply to all
 
 6 contracts executed after July 1, 1999.