CERTIFICATION OF ENROLLMENT

SENATE BILL 5186

Chapter 28, Laws of 2013

63rd Legislature
2013 Regular Session

PUBLIC CONTRACTS--BONDS

EFFECTIVE DATE: 07/28/13 - Except section 2, which becomes effective 06/30/16

Passed by the Senate February 26, 2013 YEAS 46 NAYS 0 BRAD OWEN ________________________________________ President of the Senate Passed by the House April 9, 2013 YEAS 89 NAYS 5 FRANK CHOPP ________________________________________ Speaker of the House of Representatives		CERTIFICATE I, Hunter G. Goodman, Secretary of the Senate of the State of Washington, do hereby certify that the attached is SENATE BILL 5186 as passed by the Senate and the House of Representatives on the dates hereon set forth. HUNTER G. GOODMAN ________________________________________ Secretary
Approved April 22, 2013, 3:24 p.m. JAY INSLEE ________________________________________ Governor of the State of Washington		FILED April 23, 2013 Secretary of State State of Washington

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SENATE BILL 5186
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Passed Legislature - 2013 Regular Session

State of Washington

63rd Legislature

2013 Regular Session

By Senators Roach, Conway, Benton, Chase, and Shin

Read first time 01/23/13. Referred to Committee on Governmental Operations.

AN ACT Relating to contractor's bond; amending RCW 39.08.030 and 39.08.030; providing an effective date; and providing an expiration date.

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

Sec. 1 RCW 39.08.030 and 2009 c 473 s 1 are each amended to read as follows:
(1) The bond mentioned in RCW 39.08.010 shall be in an amount equal to the full contract price agreed to be paid for such work or improvement, except under subsections (2) and (3) of this section, and shall be to the state of Washington, except as otherwise provided in RCW 39.08.100, and except in cases of cities ((~~and~~)), towns, and water-sewer districts, in which cases such municipalities may by general ordinance fix and determine the amount of such bond and to whom such bond shall run: PROVIDED, The same shall not be for a less amount than twenty-five percent of the contract price of any such improvement for cities and towns, and not less than the full contract price of any such improvement for water-sewer districts, and may designate that the same shall be payable to such city, town, or water-sewer district and not to the state of Washington, and all such persons mentioned in RCW 39.08.010 shall have a right of action in his, her, or their own name or names on such bond for work done by such laborers or mechanics, and for materials furnished or provisions and goods supplied and furnished in the prosecution of such work, or the making of such improvements: PROVIDED, That such persons shall not have any right of action on such bond for any sum whatever, unless within thirty days from and after the completion of the contract with an acceptance of the work by the affirmative action of the board, council, commission, trustees, officer, or body acting for the state, county or municipality, or other public body, city, town or district, the laborer, mechanic or subcontractor, or material supplier, or person claiming to have supplied materials, provisions or goods for the prosecution of such work, or the making of such improvement, shall present to and file with such board, council, commission, trustees or body acting for the state, county or municipality, or other public body, city, town or district, a notice in writing in substance as follows:

     Such notice shall be signed by the person or corporation making the claim or giving the notice, and said notice, after being presented and filed, shall be a public record open to inspection by any person, and in any suit or action brought against such surety or sureties by any such person or corporation to recover for any of the items hereinbefore specified, the claimant shall be entitled to recover in addition to all other costs, ((~~attorney's~~)) attorneys' fees in such sum as the court shall adjudge reasonable: PROVIDED, HOWEVER, That no ((~~attorney's~~)) attorneys' fees shall be allowed in any suit or action brought or instituted before the expiration of thirty days following the date of filing of the notice hereinbefore mentioned: PROVIDED FURTHER, That any city may avail itself of the provisions of RCW 39.08.010 through 39.08.030, notwithstanding any charter provisions in conflict herewith: AND PROVIDED FURTHER, That any city or town may impose any other or further conditions and obligations in such bond as may be deemed necessary for its proper protection in the fulfillment of the terms of the contract secured thereby, and not in conflict herewith.
     (2) Under the job order contracting procedure described in RCW 39.10.420, bonds will be in an amount not less than the dollar value of all open work orders.
     (3)(a) On highway construction contracts administered by the department of transportation with an estimated contract price of two hundred fifty million dollars or more, the department may authorize bonds in an amount less than the full contract price of the project. If a bond less than the full contract price is authorized by the department, the bond must be in the form of a performance bond and a separate payment bond. The department shall fix the amount of the performance bond on a contract-by-contract basis to adequately protect one hundred percent of the state's exposure to loss. The amount of the performance bond must not be less than two hundred fifty million dollars. The payment bond must be in an amount fixed by the department but must not be less than the amount of the performance bond. The secretary of transportation must approve each performance bond and payment bond authorized to be less than the full contract price of a project. Before the secretary may approve any bond authorized to be less than the full contract price of a project, the office of financial management shall review and approve the analysis supporting the amount of the bond set by the department to ensure that one hundred percent of the state's exposure to loss is adequately protected. All the requirements of this chapter apply respectively to the individual performance and payment bonds. The performance bond is solely for the protection of the department. The payment bond is solely for the protection of laborers, mechanics, subcontractors, and suppliers mentioned in RCW 39.08.010.
     (b) The department shall develop risk assessment guidelines and gain approval of these guidelines from the office of financial management before implementing (a) of this subsection. The guidelines must include a clear process for how the department measures the state's exposure to loss and how the performance bond amount, determined under (a) of this subsection, adequately protects one hundred percent of the state's exposure to loss.
     (((c) The department shall report to the house of representatives and senate transportation committees by December 1, 2012: Each project where the department authorized bonds that were less than the full contract price; the difference between the project amount and the bond requirements; the number of bidders on the project; and other information that documents the effects of the reduced bond amounts on the project.))

Sec. 2 RCW 39.08.030 and 2007 c 218 s 89 are each amended to read as follows:
(1) The bond mentioned in RCW 39.08.010 shall be in an amount equal to the full contract price agreed to be paid for such work or improvement, except under subsection (2) of this section, and shall be to the state of Washington, except as otherwise provided in RCW 39.08.100, and except in cases of cities ((~~and~~)), towns, and water-sewer districts, in which cases such municipalities may by general ordinance fix and determine the amount of such bond and to whom such bond shall run: PROVIDED, The same shall not be for a less amount than twenty-five percent of the contract price of any such improvement for cities and towns, and not less than the full contract price of any such improvement for water-sewer districts, and may designate that the same shall be payable to such city, town, or water-sewer district and not to the state of Washington, and all such persons mentioned in RCW 39.08.010 shall have a right of action in his, her, or their own name or names on such bond for work done by such laborers or mechanics, and for materials furnished or provisions and goods supplied and furnished in the prosecution of such work, or the making of such improvements: PROVIDED, That such persons shall not have any right of action on such bond for any sum whatever, unless within thirty days from and after the completion of the contract with an acceptance of the work by the affirmative action of the board, council, commission, trustees, officer, or body acting for the state, county or municipality, or other public body, city, town or district, the laborer, mechanic or subcontractor, or material supplier, or person claiming to have supplied materials, provisions or goods for the prosecution of such work, or the making of such improvement, shall present to and file with such board, council, commission, trustees or body acting for the state, county or municipality, or other public body, city, town or district, a notice in writing in substance as follows:

NEW SECTION. Sec. 3 Section 1 of this act expires June 30, 2016.

NEW SECTION. Sec. 4 Section 2 of this act takes effect June 30, 2016.

         Passed by the Senate February 26, 2013.
         Passed by the House April 9, 2013.
         Approved by the Governor April 22, 2013.
         Filed in Office of Secretary of State April 23, 2013.

To (here insert the name of the state, county or municipality or other public body, city, town or district):
Notice is hereby given that the undersigned (here insert the name of the laborer, mechanic or subcontractor, or material supplier, or person claiming to have furnished labor, materials or provisions for or upon such contract or work) has a claim in the sum of . . . . . . dollars (here insert the amount) against the bond taken from . . . . . . (here insert the name of the principal and surety or sureties upon such bond) for the work of . . . . . . (here insert a brief mention or description of the work concerning which said bond was taken).
	(here to be signed)	. . . . . . . . . . . .

To (here insert the name of the state, county or municipality or other public body, city, town or district):
Notice is hereby given that the undersigned (here insert the name of the laborer, mechanic or subcontractor, or material supplier, or person claiming to have furnished labor, materials or provisions for or upon such contract or work) has a claim in the sum of . . . . . . dollars (here insert the amount) against the bond taken from . . . . . . (here insert the name of the principal and surety or sureties upon such bond) for the work of . . . . . . (here insert a brief mention or description of the work concerning which said bond was taken).
	(here to be signed)	. . . . . . . . . . . .