General Assembly |
|||
January Session, 2015 |
LCO No. 4801 | ||
*04801SB00830LAB* | |||
Referred to Committee on LABOR AND PUBLIC EMPLOYEES |
|||
Introduced by: |
|||
(LAB) |
|||
AN ACT CONCERNING A SURETY BOND GUARANTEE PROGRAM FOR MINORITY-OWNED BUSINESSES.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. (NEW) (Effective from passage) (a) As used in this section:
(1) "Contract" means an agreement for work for the state or a municipality that is estimated to cost more than five hundred thousand dollars and is funded, in whole or in part, by state funds;
(2) "Emerging contractor" means a contractor that (A) is owned by a minority, (B) has not been prequalified pursuant to section 4a-100 of the general statutes, and (C) is unable to (i) obtain bonding required under section 49-41 of the general statutes, as amended by this act, to bid on a contract or perform work pursuant to a contract for the construction, reconstruction, alteration, remodeling, repair or demolition of any public building or any other public work by the state or a municipality, except a public highway or bridge project or any other construction project administered by the Department of Transportation, or (ii) perform work under such a contract as a substantial subcontractor;
(3) "Minority" means "minority" as defined in section 32-9n of the general statutes; and
(4) "Substantial subcontractor" means a person who performs work with a value in excess of five hundred thousand dollars for a contractor pursuant to a contract for work for the state or a municipality which is estimated to cost more than five hundred thousand dollars.
(b) Not later than October 1, 2015, the Commissioner of Administrative Services shall establish a surety bond guarantee program for emerging contractors. Participation in the program shall satisfy the bond requirements pursuant to subsection (a) of section 49-41 of the general statutes. An emerging contractor shall only be eligible for the surety bond guarantee program for a period not exceeding five years from the date of the emerging contractor's initial application for the program.
Sec. 2. Section 49-41 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):
(a) Each contract exceeding one hundred thousand dollars in amount for the construction, alteration or repair of any public building or public work of the state or a municipality shall include a provision that the person to perform the contract shall furnish to the state or municipality on or before the award date, a bond in the amount of the contract which shall be binding upon the award of the contract to that person, with a surety or sureties satisfactory to the officer awarding the contract, for the protection of persons supplying labor or materials in the prosecution of the work provided for in the contract for the use of each such person, provided no such bond shall be required to be furnished (1) in relation to any general bid in which the total estimated cost of labor and materials under the contract with respect to which such general bid is submitted is less than one hundred thousand dollars, (2) in relation to any sub-bid in which the total estimated cost of labor and materials under the contract with respect to which such sub-bid is submitted is less than one hundred thousand dollars, or (3) in relation to any general bid or sub-bid submitted by a consultant, as defined in section 4b-55. Any such bond furnished shall have as principal the name of the person awarded the contract.
(b) Nothing in this section or sections 49-41a to 49-43, inclusive, shall be construed to limit the authority of any contracting officer to require a performance bond or other security in addition to the bond referred to in subsection (a) of this section, except that no such officer shall require a performance bond in relation to any general bid in which the total estimated cost of labor and materials under the contract with respect to which such general bid is submitted is less than twenty-five thousand dollars or in relation to any sub-bid in which the total estimated cost of labor and materials under the contract with respect to which such sub-bid is submitted is less than fifty thousand dollars.
(c) No contract for the construction, alteration or repair of any public building or public work of the state or a municipality that requires a person to supply the state or municipality with a bond may include a provision that requires the person to obtain the bond from a specific surety, agent, broker or producer. No contracting officer may require that a bond be obtained from a specific surety, agent, broker or producer.
(d) In the event that any political subdivision of the state enters into a contract described in subsection (a) of this section and fails to obtain delivery from the contractor of the bond required by this section, any person who has not been paid by the contractor for labor or materials supplied in the performance of work under the contract shall have the same legal right of action against such political subdivision of the state as such person would have had against a surety under the provisions of section 49-42. Nothing in this section shall be construed to extend liability to the state for any person's right to payment or constitute a waiver of the state's sovereign immunity.
(e) (1) As used in this subsection, "owner-controlled insurance program" means an insurance procurement program under which a principal provides and consolidates insurance coverage for one or more contractors on one or more construction projects.
(2) No contract for the construction, alteration or repair of any public building or public work of the state or a municipality may include a provision that allows or requires the state or municipality to maintain an owner-controlled insurance program, except for (A) a project approved pursuant to section 10a-109e, or (B) one or more municipal projects totaling one hundred million dollars or more (i) under the supervision of one construction manager, or (ii) located within the boundaries of a municipality if under the supervision of more than one construction manager.
(3) Each contract or policy of insurance issued under an owner-controlled insurance program pursuant to this subsection shall provide that:
(A) Coverage for work performed and materials furnished shall continue from the completion of the work until the date all causes of action are barred under any applicable statute of limitations.
(B) Any notice of a change in coverage under the contract or policy or of a cancellation or refusal to renew the coverage under the contract or policy shall be provided to the principal and all contractors covered under the program.
(C) The effective date of a (i) change in coverage under the contract or policy shall be at least thirty days after the date the principal and contractors receive the notice of change in coverage as required under subparagraph (B) of this subdivision, and (ii) cancellation or refusal to renew shall be at least sixty days after the principal and contractors receive the notice of change in coverage as required under subparagraph (B) of this subdivision.
(4) Each principal or contractor shall disclose in the project plans or specifications at the time the principal or contractor is soliciting bids for the construction project that the project will be covered by an owner-controlled insurance program.
(f) Whenever a surety bond is required in connection with a contract for the construction, reconstruction, alteration, remodeling, repair or demolition of any public building for work by the state or a municipality, that is estimated to cost more than five hundred thousand dollars and is paid for, in whole or in part, with state funds, the surety contract between the contractor named as principal in the bond and the surety that issues such bond shall contain the following provision: "In the event that the surety assumes the contract or obtains a bid or bids for completion of the contract, the surety shall ensure that the contractor chosen to complete the contract is prequalified pursuant to section 4a-100 of the Connecticut general statutes in the requisite classification and has the aggregate work capacity rating and single project limit necessary to complete the contract".
(g) An emerging contractor participating in the surety bond guarantee program established pursuant to section 1 of this act shall not be required to comply with the provisions of this section.
Sec. 3. (Effective July 1, 2015) The sum of one hundred thousand dollars is appropriated to the Department of Administrative Services, for the fiscal year ending June 30, 2016, for the purpose of a grant to establish a surety bond guarantee program for emerging contractors.
This act shall take effect as follows and shall amend the following sections: | ||
Section 1 |
from passage |
New section |
Sec. 2 |
October 1, 2015 |
49-41 |
Sec. 3 |
July 1, 2015 |
New section |
Statement of Purpose:
To eliminate the inability to obtain performance bonds as one of the barriers to the full participation of minority-owned businesses in construction contracting opportunities in the state of Connecticut.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]