1Amending the act of December 20, 1967 (P.L.869, No.385), 
2entitled "An act establishing a uniform and mandatory system 
3governing the requirement of bonds to be furnished by 
4contractors in the prosecution of any public building, or 
5other public work or public improvement, including road work; 
6the rights and remedies of persons furnishing labor or 
7material in the prosecution of such public building, public 
8work or public improvement, including road work; procedure in 
9connection with suits on payment bonds; rights of persons 
10furnishing labor or materials to a copy of bond; prescribing 
11penalties; and repealing other prior acts or provisions 
12thereof inconsistent herewith," further providing for duty of 
13prime contractor to provide financial security in certain 
14contracts involving public works and public improvements.

15The General Assembly of the Commonwealth of Pennsylvania
16hereby enacts as follows:

17Section 1. Section 3.1(a) of the act of December 20, 1967
18(P.L.869, No.385), known as the Public Works Contractors' Bond
19Law of 1967, amended December 20, 2000 (P.L.965, No.131), is
20amended to read:

21Section 3.1. (a)--Before any contract exceeding ten thousand
22dollars ($10,000) for the construction, reconstruction,
23alteration or repair of any public building or other public work
24or public improvement, including highway work, of any

1contracting body is awarded to any prime contractor, such
2contractor shall furnish to the contracting body the following
3financial security, which shall become binding upon the awarding
4of said contract to such contractor:

5(1) [Any financial security, acceptable to and approved by
6the contracting body, including, but not limited to,] A 
7performance bond, Federal or Commonwealth chartered lending
8institution irrevocable [letters] letter of credit [and] or
9restrictive or escrow [accounts] account in such lending
10[institutions] institution, equal to one hundred percent of the
11contract amount, conditioned upon the faithful performance of
12the contract in accordance with the plans, specifications and
13conditions of the contract. Such financial security shall be
14solely for the protection of the contracting body which awarded
15the contract.

16(2) [Any financial security, acceptable to and approved by
17the contracting body, including, but not limited to,] A payment 
18bond, Federal or Commonwealth chartered lending institution
19irrevocable [letters] letter of credit [and] or restrictive or
20escrow [accounts] account in such lending [institutions]
21institution, equal to one hundred percent of the contract
22amount. Such financial security shall be solely for the
23protection of claimants supplying labor or materials to the
24prime contractor to whom the contract was awarded, or to any of
25his subcontractors, in the prosecution of the work provided for
26in such contract, and shall be conditioned for the prompt
27payment of all such material furnished or labor supplied or
28performed in the prosecution of the work. "Labor or materials"
29shall include public utility services and reasonable rentals of
30equipment, but only for periods when the equipment rented is

1actually used at the site.

2* * *

3Section 2. This act shall take effect in 60 days.