HOUSE BILL NO. 532

INTRODUCED BY S. ANDERSON

A BILL FOR AN ACT ENTITLED: "AN ACT REQUIRING GOVERNMENT ENTITIES TO MAKE FINAL PAYMENT OF THE PRICE OF CONSTRUCTION CONTRACTS WITHIN 60 DAYS OF SUBSTANTIAL COMPLETION OF THE CONTRACT; REQUIRING PAYMENT OF INTEREST; AND PROVIDING AN APPLICABILITY DATE."

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

NEW SECTION. Section 1. Time final payment on construction contracts -- interest. (1) A government entity that enters into a contract for the construction of a building shall, unless otherwise provided by law or the contract and within 60 days after the substantial completion of the building, make the final payment of the contract price specified in the contract to the other party to the contract.

(2) Except as provided by law or the contract, a government entity that fails to complete the payment of the contract price at the time required by subsection (1) shall pay to the other party to the contract interest at the rate specified in 18-1-404. Collection of interest pursuant to this section does not preclude any other legal remedy.

(3) The following definitions apply to this section:

(a) "Building" has the meaning provided in 18-2-101.

(b) "Construction" has the meaning provided in 18-2-101.

(c) "Government entity" means a department, agency, commission, board, authority, institution, or office of the state, including the board of regents and the Montana university system, a municipality, county, consolidated municipal-county government, school district, or other special district.

(d) "Substantial completion of the building" means the stage in the construction of the building or a designated portion of the building when the building or the portion is sufficiently complete, in accordance with the terms of the contract, that the government entity may occupy or use the building for its intended purpose.

NEW SECTION. Section 2. Contract let by commission -- time for final payment of contract price -- interest. The commission shall comply with the 60-day time period for payment of contracts as provided in [section 1] for all contracts let by the commission in accordance with this part.

NEW SECTION. Section 3. Codification instruction. (1) [Section 1] is intended to be codified as an integral part of Title 18, chapter 2, part 3, and the provisions of Title 18, chapter 2, part 3, apply to [section 1].

(2) [Section 2] is intended to be codified as an integral part of Title 60, chapter 2, part 1, and the provisions of Title 60, chapter 2, part 1, apply to [section 2].

NEW SECTION. Section 4. Applicability. [This act] applies to contracts entered into after October 1, 1999.

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