Report Title:

Public Contracts; Rules

Description:

Requires the comptroller to adopt rules to implement a public contractor's duty to make prompt payment to its subcontractors.

THE SENATE

S.B. NO.

3035

TWENTY-SECOND LEGISLATURE, 2004

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO PUBLIC CONTRACTS.

 

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

SECTION 1. Section 103-10.5, Hawaii Revised Statutes, is amended to read as follows:

"§103-10.5 Prompt payment. (a) Any money, other than retainage, paid to a contractor shall be dispersed to subcontractors within ten days after receipt of the money in accordance with the terms of the subcontract; provided that the subcontractor has met all the terms and conditions of the subcontract and there are no bona fide disputes on which the procurement agency has withheld payment.

(b) Upon final payment to the contractor, full payment to the subcontractor, including retainage, shall be made within ten days after receipt of the money; provided there are no bona fide disputes over the subcontractor's performance under the subcontract.

(c) Where a subcontractor has provided evidence to the contractor of:

(1) A valid union trust fund contribution bond acceptable to the contractor in an amount not less than three months of the subcontractor's trust fund contribution;

(2) A performance and payment bond for the project executed by a surety company authorized to do business in the State;

(3) Any other bond acceptable to the contractor; or

(4) Any other form of mutually-acceptable collateral;

and the contractor fails to pay in accordance with this section, a penalty of one and one-half per cent per month shall be imposed on the outstanding amounts due to the subcontractor. The penalty may be withheld from future payment due to the contractor. Where a contractor has violated subsection (b) three or more times within two years of the first violation, the contractor shall be referred to the contractor license board by the procurement agency for action under section 444-17(14).

(d) The comptroller shall adopt rules pursuant to chapter 91 as may be necessary to implement this section."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act shall take effect upon its approval.

INTRODUCED BY:

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