PRINTER'S NO. 1317
No. 1164 Session of 1999
INTRODUCED BY ROSS, BARD, HERMAN, LESCOVITZ AND COY,
APRIL 7, 1999
REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, APRIL 7, 1999
AN ACT
1 Amending the act of December 20, 1967 (P.L.869, No.385),
2 entitled "An act establishing a uniform and mandatory system
3 governing the requirement of bonds to be furnished by
4 contractors in the prosecution of any public building, or
5 other public work or public improvement, including road work;
6 the rights and remedies of persons furnishing labor or
7 material in the prosecution of such public building, public
8 work or public improvement, including road work; procedure in
9 connection with suits on payment bonds; rights of persons
10 furnishing labor or materials to a copy of bond; prescribing
11 penalties; and repealing other prior acts or provisions
12 thereof inconsistent herewith," further providing for
13 financial security of contractors.
14 The General Assembly of the Commonwealth of Pennsylvania
15 hereby enacts as follows:
16 Section 1. Section 3.1 of the act of December 20, 1967
17 (P.L.869, No.385), known as the Public Works Contractors' Bond
18 Law of 1967, added December 17, 1990 (P.L.694, No.171), is
19 amended to read:
20 Section 3.1. (a)--Before any contract exceeding [five
21 thousand dollars ($5,000)] ten thousand dollars ($10,000) for
22 the construction, reconstruction, alteration or repair of any
23 public building or other public work or public improvement,
1 including highway work, of any contracting body is awarded to
2 any prime contractor, such contractor shall furnish to the
3 contracting body the following financial security, which shall
4 become binding upon the awarding of said contract to such
5 contractor:
6 (1) Any financial security, acceptable to and approved by
7 the contracting body, including, but not limited to, Federal or
8 Commonwealth chartered lending institution irrevocable letters
9 of credit and restrictive or escrow accounts in such lending
10 institutions, equal to one hundred percent of the contract
11 amount, conditioned upon the faithful performance of the
12 contract in accordance with the plans, specifications and
13 conditions of the contract. Such financial security shall be
14 solely for the protection of the contracting body which awarded
15 the contract.
16 (2) Any financial security, acceptable to and approved by
17 the contracting body, including, but not limited to, Federal or
18 Commonwealth chartered lending institution irrevocable letters
19 of credit and restrictive or escrow accounts in such lending
20 institutions, equal to one hundred percent of the contract
21 amount. Such financial security shall be solely for the
22 protection of claimants supplying labor or materials to the
23 prime contractor to whom the contract was awarded, or to any of
24 his subcontractors, in the prosecution of the work provided for
25 in such contract, and shall be conditioned for the prompt
26 payment of all such material furnished or labor supplied or
27 performed in the prosecution of the work. "Labor or materials"
28 shall include public utility services and reasonable rentals of
29 equipment, but only for periods when the equipment rented is
30 actually used at the site.
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1 (b) Any bond or other financial security under the
2 provisions of this act shall be executed by one or more surety
3 companies or Federal or Commonwealth chartered lending
4 institutions, chosen by the party posting the financial security
5 and acceptable to the contracting body, legally authorized to do
6 business in the Commonwealth of Pennsylvania.
7 (c) A duplicate copy of each financial security, including
8 bonds, shall be filed in the office of the contracting body
9 which awarded the contract for which such bonds or financial
10 security were given.
11 (d) For purposes of this section, the phrase "contracting
12 body" shall mean any county, school district, intermediate unit,
13 area vocational-technical school, city, borough, incorporated
14 town, township, home-rule municipality and any authority formed
15 under the act of May 2, 1945 (P.L.382, No.164), known as the
16 "Municipality Authorities Act of 1945."
17 (e) For the contracting body as defined in subsection (d),
18 the provisions of this section supersede the provisions of
19 section 3 of this act.
20 (f) In the case of contracts of ten thousand dollars
21 ($10,000) or less, nothing in this section shall be construed as
22 preventing a contracting body, prior to awarding a contract for
23 the construction, reconstruction, alteration or repair of any
24 public building or other public work or public improvement,
25 including highway work, from requiring a prime contractor to
26 furnish financial security in accordance with subsection (a).
27 Section 2. This act shall take effect in 60 days.
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