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H.B. 382 Enrolled
AN ACT RELATING TO COMMERCE AND TRADE; PROVIDING DEFINITIONS;
SPECIFYING LIMITS TO THE AMOUNT OF RETENTION PROCEEDS WITHHELD IN
CONSTRUCTION PROJECTS; REQUIRING ALLOWABLE RETENTION PROCEEDS TO BE
DEPOSITED IN AN INTEREST-BEARING ESCROW ACCOUNT; PROVIDING
STANDARDS FOR REQUIRING RELEASE OF ANY RETENTION PROCEEDS;
CLARIFYING APPLICABILITY OF PROVISIONS TO PUBLIC AGENCIES; PROVIDING
ATTORNEYS' FEES TO THE PREVAILING PARTY; ADDRESSING PERIODIC
PAYMENTS; AND MAKING TECHNICAL CHANGES.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
10-7-20, as last amended by Chapter 270, Laws of Utah 1998
10-8-14, as last amended by Chapter 60, Laws of Utah 1983
10-8-18, as last amended by Chapter 60, Laws of Utah 1983
10-8-20, as last amended by Chapter 60, Laws of Utah 1983
10-8-37, as last amended by Chapter 60, Laws of Utah 1983
10-8-38, as last amended by Chapter 60, Laws of Utah 1983
10-8-71, as last amended by Chapter 60, Laws of Utah 1983
17-5-232, as renumbered and amended by Chapter 147, Laws of Utah 1994
17-5-237, as renumbered and amended by Chapter 147, Laws of Utah 1994
17-5-239, as renumbered and amended by Chapter 147, Laws of Utah 1994
17-15-3, as last amended by Chapter 265, Laws of Utah 1995
17A-2-328, as last amended by Chapter 16, Laws of Utah 1998
17A-2-531, as renumbered and amended by Chapter 186, Laws of Utah 1990
17A-2-1016, as last amended by Chapter 120, Laws of Utah 1994
17A-3-209, as renumbered and amended by Chapter 186, Laws of Utah 1990
17A-3-309, as renumbered and amended by Chapter 186, Laws of Utah 1990
38-1-2, Utah Code Annotated 1953
58-55-602, as renumbered and amended by Chapter 181, Laws of Utah 1994
63-56-3, as last amended by Chapter 232, Laws of Utah 1993
63A-5-205, as last amended by Chapter 99, Laws of Utah 1998
72-6-107, as renumbered and amended by Chapter 270, Laws of Utah 1998
72-6-108, as renumbered and amended by Chapter 270, Laws of Utah 1998
73-10-8, as last amended by Chapter 264, Laws of Utah 1996
73-10-27, as last amended by Chapter 218, Laws of Utah 1987
ENACTS:
13-8-5, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 10-7-20 is amended to read:
10-7-20. Definition -- Necessity for contract -- Call for bids -- Acceptance or rejection
-- Retainage.
(1) As used in this section, the term "lowest responsible bidder" means any prime contractor
who:
(a) has bid in compliance with the invitation to bid and within the requirements of the plans
and specifications for a construction project;
(b) is the low bidder;
(c) has furnished a bid bond or equivalent in money as a condition to the award of a prime
contract; and
(d) furnishes a payment and performance bond as required by law.
(2) (a) Whenever the board of commissioners or city council of any city or the board of
trustees of any town contemplates making any new improvement to be paid for out of the general
funds of the city or town, the governing body shall cause plans and specifications for, and an
estimate of the cost of, the improvement to be made.
(b) If the estimated cost of the improvement is less than $25,000, the city or town may make
the improvement without calling for bids for making the same.
(c) (i) If the estimated cost of the proposed improvement exceeds $25,000, the city or town
shall, if it determines to make the improvement, do so by contract let to the lowest responsible bidder
after publication of notice at least twice in a newspaper published or of general circulation in that
city or town at least five days prior to the opening of bids.
(ii) If there is no newspaper published or of general circulation in the city or town, the notice
shall be posted at least five days prior to the opening of bids in at least five public places in the city
or town. The notice shall remain posted for at least three days.
(d) If the cost of a contemplated improvement exceeds the sum of $25,000, the same shall
not be so divided as to permit the making of such improvement in several parts, except by contract.
(e) (i) The governing body has the right to reject any or all bids presented, and all notices
calling for bids shall so state.
(ii) If all bids are rejected and the governing body decides to make the improvement, it shall
advertise anew in the same manner as before.
(iii) If after twice advertising as provided in this section, no bid is received that is
satisfactory, the governing body may proceed under its own direction to make the improvement.
(3) [
or withheld, it shall be [
retained or withheld and released as provided in Section 13-8-5 .
[
(4) (a) Cities and towns are not required to call for bids or let contracts for the conduct or
management of any of the departments, business, or property of the city or town, for lowering or
repairing water mains or sewers, making connections with water mains or sewers, or for grading,
repairing, or maintaining streets, sidewalks, bridges, culverts, or conduits in any city or town.
(b) Work excluded under this Subsection (4) shall comply with Section 72-6-108 as
applicable.
Section 2. Section 10-8-14 is amended to read:
10-8-14. Water, sewer, gas, electricity, telephone and public transportation -- Service
beyond city limits -- Retainage.
(1) They may construct, maintain and operate waterworks, sewer collection, sewer treatment
systems, gas works, electric light works, telephone lines or public transportation systems, or
authorize the construction, maintenance and operation of the same by others, or purchase or lease
such works or systems from any person or corporation, and they may sell and deliver the surplus
product or service capacity of any such works, not required by the city or its inhabitants, to others
beyond the limits of the city.
(2) If any payment on a contract with a private person, firm, or corporation to construct
waterworks, sewer collection, sewer treatment systems, gas works, electric light works, telephone
lines, or public transportation systems is retained or withheld, it shall be [
released as provided in Section 13-8-5 .
Section 3. Section 10-8-18 is amended to read:
10-8-18. Acquisition of water sources -- Retainage.
(1) They may construct, purchase or lease and maintain canals, ditches, artesian wells and
reservoirs, may appropriate, purchase or lease springs, streams or sources of water supply for the
purpose of providing water for irrigation, domestic or other useful purposes; may prevent all waste
of water flowing from artesian wells, and if necessary to secure sources of water supply, may
purchase or lease land; they may also purchase, acquire or lease stock in canal companies and water
companies for the purpose of providing water for the city and the inhabitants thereof.
(2) If any payment on a contract with a private person, firm, or corporation to construct
canals, ditches, artesian wells, or reservoirs is retained or withheld, it shall be [
released as provided in Section 13-8-5 .
Section 4. Section 10-8-20 is amended to read:
10-8-20. Lighting works -- Contracts -- Retainage.
(1) They may contract with and authorize any person, company or association to construct
gas works, electric or other lighting works within the city, and give such persons, company or
association the privilege of furnishing light for the public buildings, streets, sidewalks and alleys of
the city for any length of time not exceeding three years.
(2) If any payment on a contract with a private person, firm, or corporation to construct gas
works, electric or other lighting works within the city is retained or withheld, it shall be [
withheld and released as provided in Section 13-8-5 .
Section 5. Section 10-8-37 is amended to read:
10-8-37. Construction, repair, and maintenance of bridges, viaducts, and tunnels --
Retainage.
(1) They may construct and keep in repair bridges, viaducts and tunnels, and regulate the use
thereof.
(2) If any payment on a contract with a private person, firm, or corporation to construct
bridges, viaducts, or tunnels is retained or withheld, it shall be [
in Section 13-8-5 .
Section 6. Section 10-8-38 is amended to read:
10-8-38. Drainage and sewage systems -- Construction regulation and control --
Retainage -- Mandatory hookup -- Charges for use -- Collection of charges -- Service to tenants
-- Failure to pay for service -- Service outside municipality.
(1) (a) Boards of commissioners, city councils and boards of trustees of cities and towns may
construct, reconstruct, maintain and operate, sewer systems, sewage treatment plants, culverts,
drains, sewers, catch basins, manholes, cesspools and all systems, equipment and facilities necessary
to the proper drainage, sewage and sanitary sewage disposal requirements of the city or town and
regulate the construction and use thereof.
(b) If any payment on a contract with a private person, firm, or corporation to construct or
reconstruct sewer systems, sewage treatment plants, culverts, drains, sewers, catch basins, manholes,
cesspools, and other drainage and sewage systems is retained or withheld, it shall be [
(2) (a) Any city or town may, for the purpose of defraying the cost of construction,
reconstruction, maintenance or operation of any sewer system or sewage treatment plant, provide for
mandatory hookup where the sewer is available and within 300 feet of any property line with any
building used for human occupancy and make a reasonable charge for the use thereof. In order to
enforce the mandatory hookup to the sewer where available and the collection of any such charge,
any city or town operating a waterworks system may make one charge for the combined use of water
and the services of the sewer system, including the services of any sewage treatment plant operated
by the city or town and may provide by ordinance that application for service from such combined
system shall be made in writing, signed by the owner desiring such service or his authorized agent,
in which application such owner shall agree that he will pay for all service furnished such owner
according to the rules and regulations enacted in the ordinance of such city or town.
(b) In case an application for furnishing service from such combined systems shall be made
by a tenant of the owner, such city or town may require as a condition of granting the same that such
application contain an agreement signed by the owner or his duly authorized agent to the effect that
in consideration of granting such application the owner will pay for all service furnished such tenant
or any other occupant of the premises named in the application in case such tenant or occupant shall
fail to pay for the same according to the ordinance of such city or town.
(c) In case any person shall fail to hookup to the sewer where available and in case any
applicant shall fail to pay for the service furnished according to the rules and regulations prescribed
by the ordinances of such city or town, then the city or town may cause the water to be shut off from
such premises and shall not be required to turn the same on again until such person has hooked up
to the sewer at his own expense or all arrears for service furnished shall be paid in full.
(d) Cities and towns may sell and deliver from the surplus capacity thereof, services of any
such system or facility not required by the municipality or its inhabitants to others beyond the limits
of the municipality.
Section 7. Section 10-8-71 is amended to read:
10-8-71. Waterworks -- Police and fire signals -- Retainage.
(1) They may purchase, construct, lease, rent, manage and maintain any system or part of
any system of waterworks, hydrants and supplies of water, telegraphic or other police or fire signals,
and pass all ordinances, penal or otherwise, that shall be necessary for the full protection,
maintenance, management and control of the property so leased, purchased or constructed.
(2) If any payment on a contract with a private person, firm, or corporation to construct all
or part of any waterworks system is retained or withheld, it shall be [
retained or withheld and released as provided in Section 13-8-5 .
Section 8. Section 13-8-5 is enacted to read:
13-8-5. Definitions -- Limitation on retention proceeds withheld -- Deposit in
interest-bearing escrow account -- Release of proceeds -- Payment to subcontractors -- Penalty
-- No waiver.
(1) As used in this section:
(a) (i) "Construction contract" means a written agreement between the parties relative to the
design, construction, alteration, repair, or maintenance of a building, structure, highway,
appurtenance, appliance, or other improvements to real property, including moving, demolition, and
excavating for non-residential commercial or industrial construction projects.
(ii) If the construction contract is for construction of a project that is part residential and part
non-residential, this section applies only to that portion of the construction project that is
non-residential as determined pro-rata based on the percentage of the total square footage of the
project that is non-residential.
(b) "Contractor" means a person who, for compensation other than wages as an employee,
undertakes any work in a construction trade, as defined in Section 58-55-102 and includes:
(i) any person engaged as a maintenance person who regularly engages in activities set forth
in Section 58-55-102 as a construction trade; or
(ii) a construction manager who performs management and counseling services on a
construction project for a fee.
(c) "Original contractor" is as provided in Section 38-1-2 .
(d) "Owner" means the person who holds any legal or equitable title or interest in property.
(e) "Public agency" means any state agency or political subdivision of the state that enters
into a construction contract for an improvement of public property.
(f) "Retention payment" means release of retention proceeds as defined in Subsection (1)(g).
(g) "Retention proceeds" means monies earned by a contractor or subcontractor but retained
by the owner or public agency pursuant to the terms of a construction contract to guarantee payment
or performance by the contractor or subcontractor of the construction contract.
(h) "Subcontractor" is as defined in Section 38-1-2 .
(i) "Successful party" has the same meaning as it does under Section 38-1-18 .
(2) This section is applicable to all construction contracts relating to construction work or
improvements entered into on or after July 1, 1999, between:
(a) an owner or public agency and an original contractor;
(b) an original contractor and a subcontractor; and
(c) subcontractors under a contract described in Subsection (2)(a) or (b).
(3) (a) Notwithstanding Section 58-55-603 , the retention proceeds withheld and retained
from any payment due under the terms of the construction contract may not exceed 5% of the
payment:
(i) by the owner or public agency to the original contractor;
(ii) by the original contractor to any subcontractor; or
(iii) by a subcontractor.
(b) The total retention proceeds withheld may not exceed 5% of the total construction price.
(c) The percentage of the retention proceeds withheld and retained pursuant to a construction
contract between the original contractor and a subcontractor or between subcontractors shall be the
same retention percentage as between the owner and the original contractor if:
(i) the retention percentage in the original construction contract between an owner and the
original contractor is less than 5%; or
(ii) after the original construction contract is executed but before completion of the
construction contract the retention percentage is reduced to less than 5%.
(4) (a) If any payment on a contract with a private contractor, firm, or corporation to do work
for an owner or public agency is retained or withheld by the owner or the public agency, as retention
proceeds, it shall be placed in an interest-bearing account.
(b) The interest accrued under Subsection (4)(a) shall be:
(i) for the benefit of the contractor and subcontractors; and
(ii) paid after the project is completed and accepted by the owner or the public agency.
(c) The contractor shall ensure that any interest accrued on the retainage is distributed by the
contractor to subcontractors on a pro rata basis.
(5) Any retention proceeds retained or withheld pursuant to this section and any accrued
interest shall be released pursuant to a billing statement from the contractor within 45 days from the
later of:
(a) the date the owner or public agency receives the billing statement from the contractor;
(b) the date that a certificate of occupancy or final acceptance notice is issued to:
(i) the original contractor who obtained the building permit from the building inspector or
public agency;
(ii) the owner or architect; or
(iii) the public agency;
(c) the date that a public agency or building inspector having authority to issue its own
certificate of occupancy does not issue the certificate but permits partial or complete occupancy of
a newly constructed or remodeled building; or
(d) the date the contractor accepts the final pay quantities.
(6) If only partial occupancy of a building is permitted, any retention proceeds withheld and
retained pursuant to this section and any accrued interest shall be partially released within 45 days
under the same conditions as provided in Subsection (5) in direct proportion to the value of the part
of the building occupied.
(7) The billing statement from the contractor as provided in Subsection (5)(a) shall include
documentation of lien releases or waivers.
(8) (a) Notwithstanding Subsection (3):
(i) if a contractor or subcontractor is in default or breach of the terms and conditions of the
construction contract documents, plans, or specifications governing construction of the project, the
owner or public agency may withhold from payment for as long as reasonably necessary an amount
necessary to cure the breach or default of the contractor or subcontractor; or
(ii) if a project or a portion of the project has been substantially completed, the owner or
public agency may retain until completion up to twice the fair market value of the work of the
original contractor or of any subcontractor that has not been completed:
(A) in accordance with the construction contract documents, plans, and specifications; or
(B) in the absence of plans and specifications, to generally accepted craft standards.
(b) An owner or public agency that refuses payment under Subsection (8)(a) shall describe
in writing within 45 days of withholding such amounts what portion of the work was not completed
according to the standards specified in Subsection (8)(a).
(9) (a) Except as provided in Subsection (9)(b), an original contractor or subcontractor who
receives retention proceeds shall pay each of its subcontractors from whom retention has been
withheld each subcontractor's share of the retention received within ten days from the day that all
or any portion of the retention proceeds is received:
(i) by the original contractor from the owner or public agency; or
(ii) by the subcontractor from:
(A) the original contractor; or
(B) a subcontractor.
(b) Notwithstanding Subsection (9)(a), if a retention payment received by the original
contractor is specifically designated for a particular subcontractor, payment of the retention shall be
made to the designated subcontractor.
(10) (a) In any action for the collection of the retained proceeds withheld and retained in
violation of this section, the successful party is entitled to:
(i) attorney's fees; and
(ii) other allowable costs.
(b) (i) Any owner, public agency, original contractor, or subcontractor who knowingly and
wrongfully withholds a retention shall be subject to a charge of 2% per month on the improperly
withheld amount, in addition to any interest otherwise due.
(ii) The charge described in Subsection (10)(b)(i) shall be paid to the contractor or
subcontractor from whom the retention proceeds have been wrongfully withheld.
(11) It is against public policy for any party to require any other party to waive any provision
of this section.
Section 9. Section 17-5-232 is amended to read:
17-5-232. County roads and airports -- Acquisition and control -- Retainage.
(1) They may contract for, purchase or otherwise acquire when necessary rights of way for
county roads over private property, and may institute proceedings for acquiring such rights of way
as provided by law, and lay out, construct, maintain, control and manage county roads, sidewalks,
ferries and bridges within the county, outside of incorporated cities, may designate the county roads
to be maintained by the county within or extending through any incorporated city or town, which in
no case shall be more than three in the same direction, and may abolish or abandon such county
roads as are unnecessary for the use of the public in the manner provided by law. They may also lay
out, construct, maintain, control and manage landing fields and hangars for the use of airplanes or
other vehicles for aerial travel anywhere within the county.
(2) If any payment on a contract with a private contractor to construct county roads,
sidewalks, ferries, and bridges under this section is retained or withheld, it shall be [
in Section 13-8-5 .
Section 10. Section 17-5-237 is amended to read:
17-5-237. Water and water rights -- Acquisition and control -- Retainage.
(1) They may purchase, receive by donation, or lease any real or personal property or water
rights necessary for the use of the county; may purchase or otherwise acquire the necessary real
estate upon which to sink wells to obtain water for sprinkling roads and for other county purposes
and may erect thereon pumping apparatus, tanks, and reservoirs for the obtaining and storage of
water for such purposes; may preserve, take care of, manage, and control the same; may purchase,
receive by donation, or lease any water rights or stock or rights in reservoirs or storage companies
or associations for the use of citizens of the county; may construct dams and canals for the storage
and distribution of such waters; and may fix the price for and sell such water, water rights, stock, or
rights in reservoir or storage companies or associations, with the dams and canals, as are not required
for public use to citizens of the county.
(2) If any payment on a contract with a private contractor to construct dams and canals under
this section is retained or withheld, it shall be [
Section 11. Section 17-5-239 is amended to read:
17-5-239. Courthouse, jail, hospital, and other public buildings -- Acquisition and
control -- Retainage.
(1) They may erect, repair or rebuild, and furnish a courthouse, jail, hospital, and such other
public buildings as may be necessary, and join with cities and towns in the construction, ownership,
and operation of hospitals.
(2) If any payment on a contract with a private contractor to erect, repair, or rebuild public
buildings under this section is retained or withheld, it shall be [
Section 12. Section 17-15-3 is amended to read:
17-15-3. Repair, alteration, or construction of public buildings -- Contracts -- Bids --
Payment and performance bonds -- Retainage.
(1) (a) Whenever the county legislative body considers the repair, alteration, or construction
of any courthouse, jail, hospital, or other public building to be paid for out of the general funds of
the county, the county executive shall require plans and specifications to be drawn up and an
estimate of the cost to be made. If the estimated cost exceeds $25,000, the county may not repair,
alter, or construct any building except through contract let to the low responsive and responsible
bidder.
(b) All buildings for which the estimated cost exceeds $25,000 shall be repaired, altered, or
constructed by contract let to the low responsive and responsible bidder after publication of notice
at least once a week for three consecutive weeks in a newspaper of general circulation published in
the county, or, if there is no such newspaper, then after posting such notice for at least 20 days in at
least five public places in the county.
(c) The county executive may reject any or all bids.
(d) In seeking bids and awarding a contract for the repair, alteration, or construction work,
the county legislative body may elect to follow the provisions of Title 63, Chapter 56, Utah
Procurement Code, as the county legislative body considers appropriate under the circumstances for
specification preparation, source selection, or contract formation. The election may be made on a
case-by-case basis, unless the county has previously adopted the Utah Procurement Code as
permitted by Subsection 63-56-2 (3)(e). If an election is made, it shall be done in an open meeting
of the county legislative body and the portions of the Utah Procurement Code to be followed for the
work under consideration shall be specified in the legislative body's action.
(e) This chapter may not be construed to prohibit the county legislative body from adopting
the procedures of the Utah Procurement Code; however, an election to adopt the procedures of the
code may not excuse the county from complying with the requirements to award a contract for work
in excess of $25,000 and to publish notice of the intent to award.
(f) The person to whom any contract to erect or repair buildings is awarded shall execute
bonds under Sections 14-1-18 and 63-56-38 .
(2) [
under this section that is retained or withheld shall be [
or withheld and released as provided in Section 13-8-5 .
[
[
Section 13. Section 17A-2-328 is amended to read:
17A-2-328. Powers of municipalities -- Collection -- System for collection, retention,
and disposition of storm and flood waters -- Power of district to make contracts -- Retainage.
(1) (a) If an improvement district under this part contracts with a municipality to supply
sewage treatment or disposal service, the municipality's legislative body may:
(i) impose an appropriate service charge to each party connected with the municipality's
sewer system for the services provided by the improvement district, as the municipality's legislative
body considers reasonable and proper; and
(ii) require industrial and commercial establishments to pre-treat certain wastes and sewage
when the wastes and sewage would otherwise impose an unreasonable burden upon the collection
system or the treatment facility of the improvement district.
(b) If the municipality operates a waterworks system, the charge under Subsection (1)(a)(i)
may be combined with the charge made for water furnished by the water system and may be
collected and the collection thereof secured in the same manner as that specified in Section 10-8-38 .
(2) (a) An improvement district acquiring a system for the collection, retention, and
disposition of storm and flood waters may contract with a municipality or other political subdivision
or a person, firm, or corporation for the collection of storm and flood waters by any of the
contracting parties.
(b) Some or all of the parties to a contract under Subsection (2)(a) may agree to joint
acquisition, ownership, construction, operation, or maintenance of all or part of the system for the
collection of storm and flood waters.
(c) (i) In exercising the power to acquire and operate a system for the collection of storm and
flood waters, an improvement district may contract for the construction of storm sewers, drainage
channels, dams, dikes, levees, reservoirs, and other pertinent improvements.
(ii) As a local public procurement unit as defined in Subsection 63-56-5 (14), each
improvement district contracting as provided in Subsection (2)(c)(i) shall comply with the provisions
applicable to local public procurement units under Title 63, Chapter 56, Utah Procurement Code.
(3) [
storm sewers, drainage canals, dams, dikes, levees, reservoirs, and other pertinent improvements is
retained or withheld, it shall be [
[
Section 14. Section 17A-2-531 is amended to read:
17A-2-531. Bids for construction -- Contracts -- Payment and performance bonds --
Retainage.
(1) After adopting a plan and making an estimate of the cost of any drainage canal or canals,
drains, drain ditches, and works, the board of supervisors shall give notice by publication for at least
20 days in at least one newspaper published or having a general circulation in each of the counties
comprising the district, and in any other publication they deem advisable, calling for bids for the
construction of such work or of any portion of it. If less than the whole work is advertised, then the
portion so advertised shall be particularly described in such notice. Such notice shall state:
(a) that plans and specifications can be seen at the office of the board of supervisors;
(b) that the board of supervisors will receive sealed proposals for the work;
(c) that the contract will be let to the lowest responsible bidder; and
(d) the time and place appointed for opening bids. The bids shall be opened in public, and
as soon as convenient thereafter the supervisors shall let the work, either in portions or as a whole,
to the lowest responsible bidder, or they may reject any or all bids. Contracts for the purchase of
material shall be awarded to the lowest responsible bidder. Any person or persons to whom a
contract is awarded shall provide the board with bonds under Sections 14-1-18 and 63-56-38 . The
work shall be done under the direction and to the satisfaction of the engineer, and subject to the
approval of the board of supervisors. This section does not apply in the case of any contract with
the United States.
(2) If any payment on a contract with a private contractor for the construction of works under
this section is retained or withheld, it shall be [
Section 15. Section 17A-2-1016 is amended to read:
17A-2-1016. Powers of incorporated district -- Bidding -- Eminent domain.
(1) As used in this section, "operator" means any city, public agency, person, firm, or private
corporation engaged in the transportation of passengers for hire.
(2) Any district incorporated under this part may:
(a) have perpetual succession;
(b) sue and be sued in all actions and proceedings and in all courts and tribunals of
competent jurisdiction;
(c) adopt a corporate seal and alter it at pleasure;
(d) levy and collect taxes only for paying:
(i) the principal and interest of bonded indebtedness of the district; or
(ii) any final judgment obtained against the district beyond the amount of any collectable
insurance or indemnity policy if the district is required by final order of any court of competent
jurisdiction to levy a tax to pay the judgment;
(e) take by grant, purchase, bequest, devise, or lease, and to hold, enjoy, lease, sell,
encumber, alien, or otherwise dispose of real or personal property of every kind within the district;
(f) make contracts and enter into stipulations of any nature, including contracts and
stipulations:
(i) to indemnify and save harmless; [
(ii) to do all acts to exercise the powers granted in this part; and
(iii) with any department or agency of the United States of America, of the state, or with any
public agency or private person, firm, or corporation upon terms and conditions the board of
directors finds are in the best interests of the district;
(g) (i) insure against:
(A) loss of revenues from accident or destruction of the system or any part of the system,
from any cause whatsoever; or
(B) public liability or property damage, or against all other types of events, acts, or
omissions; and
(ii) provide in the proceedings authorizing the issuance of any bonds for the carrying of any
other insurance, in an amount and of such character as may be specified, and for the payment of the
premiums on the insurance;
(h) provide a public transit system for the transportation of passengers and their incidental
baggage;
(i) purchase all supplies, equipment, and materials;
(j) construct facilities and works, but when the expenditure required exceeds $25,000
construction shall be let by contract to the lowest responsible bidder or proposer;
(k) acquire, contract for, lease, construct, own, operate, control, or use rights-of-way, rail
lines, monorails, bus lines, stations, platforms, switches, yards, terminals, parking lots, any facilities
necessary or convenient for public transit service, and all structures necessary for access by persons
and vehicles;
(l) hire, lease, or contract for the supplying of, or management of, any facilities, operations,
equipment, services, employees, or management staff of any operator and provide for subleases or
subcontracts by the operator upon terms that are in the public interest; and
(m) operate feeder bus lines and other feeder services as necessary.
(3) (a) Bids or proposals shall be advertised through public notice as determined by the
board.
(b) The notice may include publication in a newspaper of general circulation in the district,
trade journal, or other method determined by the board at least once and not less than ten days prior
to the expiration of the period within which bids or proposals are received.
(c) The board may reject any and all bids or proposals and readvertise or give renotice at its
discretion.
(d) If, after rejecting bids or proposals, the board determines and declares by vote of
two-thirds of all its members present that in its opinion the supplies, equipment, and materials may
be purchased at a lower price in the open market, the board may proceed to purchase the same in the
open market without further observance of the provisions requiring contracts, bids or proposals,
advertisement, or notice.
(e) Contracts, in writing or otherwise, may be let without advertising for or inviting bids
when any repairs, alterations, or other work or the purchase of materials, supplies, equipment, or
other property is found by the board upon a two-thirds vote of its members present to be of urgent
necessity, or where the general manager certifies by affidavit that there is only one source for the
required supplies, equipment, and materials, or construction items.
(f) If any payment on a contract with a private contractor to construct facilities under this
section is retained or withheld, it shall be [
[
(4) (a) Installations in state highways or freeways are subject to the approval of the
Department of Transportation.
(b) It is presumed that the use of the streets, roads, highways, and other public places by the
district for any of the purposes permitted in this section constitutes no greater burden on adjoining
properties than the uses existing on July 9, 1969.
(c) If facilities, other than state highways or freeways referred to in Subsection (2), including
streets, roads, highways, pipelines, sewers, water mains, storm drains, poles, and communications
wires of another public agency of the state, or of a private owner must be relocated, replaced, or
altered in order for the district to construct or operate its system, or to preserve and maintain already
constructed district facilities, the facilities shall be relocated, replaced, or altered with reasonable
promptness by the respective public corporation, state, or private owner and the district shall by prior
agreement reimburse the public corporation, state, or private owner for the reasonable cost incurred
in relocation, replacement, or alteration.
(d) The district may enter into an agreement with any city or county having jurisdiction over
the street, road, or highway involved and, as may be provided by agreement, close any city street or
county road at or near the point of its interception with any district facility or provide for carrying
the city street or county road over or under or to a connection with the district facility and may do
any and all work on the city street or county road as is necessary. A city street or county road may
not be closed directly or indirectly by the construction of district facilities except:
(i) pursuant to agreement; or
(ii) while temporarily necessary during the construction of district facilities.
(5) The state, a municipality, or a county may acquire private property interests by eminent
domain pursuant to Title 78, Chapter 34, Eminent Domain, including fee simple, easements, air
rights, rights-of-way, and other private property interests necessary to the establishment and
operation of a public transit district.
Section 16. Section 17A-3-209 is amended to read:
17A-3-209. Payment of contracts -- Progress payments -- Retainage.
(1) (a) Any contract for work in any special improvement district and any contract for the
purchase or exchange of property necessary to be acquired in order to make improvements in any
special improvement district may provide that the contract price or property price shall be paid, or,
at the option of the governing entity, may be paid, in whole or in part, by the issuance of special
improvement bonds issued against the funds created by assessments levied to pay the costs and
expenses of improvements in the special improvement district or by interim warrants issued as
authorized by this part at the time the special improvement bonds or interim warrants, as the case
may be, may be legally issued and delivered. If any contract is not paid from these sources in whole
or in part, or if paid in part, to the extent not so paid from these sources, the governing entity shall
be responsible for advancing funds for payment of the contract price or property price from the
general funds of the governing entity or from other funds legally available for this purpose as
provided in the contract.
(b) From the proceeds of the sale of interim warrants or special improvement bonds, or from
funds paid on assessments not pledged for the payment of the bonds or warrants, the governing entity
may reimburse itself for the amount paid from its general funds or other funds, except that the
governing entity may not reimburse itself for any of the costs of making the improvements properly
chargeable to the governing entity for which assessments may not be levied.
(2) Any contract for work in a special improvement district may provide for payments to the
contractor as the work progresses. If the contract so provides, payments may be made from time to
time to the extent of not to exceed [
as determined by estimates of the project engineer, with final payment to be made only after
completion of the work by the contractor and acceptance of the work by the governing entity. If
moneys payable to the contractor as the work progresses are retained [
they shall be [
retained or withheld and released as provided in Section 13-8-5 .
Section 17. Section 17A-3-309 is amended to read:
17A-3-309. Payment of contracts.
(1) (a) Any contract for work in any special improvement district, and any contract for the
purchase of property that must be acquired in order to make improvements in any special
improvement district, may provide that the contract price or property price shall be paid, or, at the
option of the municipality, may be paid, in whole or in part, from:
(i) proceeds of the sale of special improvement bonds issued as provided in this part; or
(ii) proceeds of the sale of interim warrants issued as authorized by this part.
(b) If any contract is not paid from those sources in whole or in part or, if paid in part, to the
extent that it is not paid from those sources, the municipality shall advance funds for payment of the
contract price or property price from the general fund of the municipality or from other funds legally
available, according to the requirements of the contract.
(c) The municipality may reimburse itself for the amount paid from its general fund or other
funds from:
(i) the proceeds of the sale of interim warrants;
(ii) the proceeds of the sale of special improvement bonds;
(iii) funds paid on assessments that are not pledged for the payment of the bonds or warrants;
or
(iv) improvement revenues not pledged for the payment of the bonds or warrants.
(d) The municipality may not reimburse itself for any of the costs of making the
improvements that are properly chargeable to the municipality or for which assessments may not be
levied.
(2) (a) Any contract for work in a special improvement district may provide for payments
to the contractor as the work progresses.
(b) When the contract provides for periodic payments, payments may be made as follows:
(i) periodic payments not to exceed [
payment as determined by estimates of the engineer for the municipality; and
(ii) a final payment to be made only after completion of the work by the contractor and
acceptance of the work by the municipality.
(c) [
[
[
Section 18. Section 38-1-2 is amended to read:
38-1-2. "Contractors" and "subcontractors" defined.
[
express or implied, with the owner, as provided in this chapter [
considered an original contractor, and all other persons doing work or furnishing materials shall be
[
Section 19. Section 58-55-602 is amended to read:
58-55-602. Payment of construction funds -- Interest.
(1) [
construction funds are payable to the contractor [
[
[
[
[
individually in determining the amount to be paid the contractor.
[
of the part of the building occupied.
(4) If any payment is retained or withheld, it shall be retained or withheld and released as
provided in Section 13-8-5 .
[
Section 20. Section 63-56-3 is amended to read:
63-56-3. Exemptions from chapter -- Compliance with federal law.
(1) This chapter is not applicable to funds administered under the Percent-for-Art Program
of the Utah Percent-for-Art Act.
(2) This chapter is not applicable to grants awarded by the state or contracts between the
state and local public procurement units except as provided in Part I of this chapter.
(3) This chapter shall not prevent the state or a local public procurement unit from
complying with the terms and conditions of any grant, gift, or bequest that is otherwise consistent
with law.
(4) When a procurement involves the expenditure of federal assistance or contract funds, the
chief procurement officer or head of a purchasing agency shall comply with mandatory applicable
federal law and regulations not reflected in this chapter.
(5) This chapter may not supersede the requirements for retention or withholding of
construction proceeds and release of construction proceeds as provided in Section 13-8-5 .
Section 21. Section 63A-5-205 is amended to read:
63A-5-205. Contracting powers of director -- Retainage.
(1) In accordance with Title 63, Chapter 56, Utah Procurement Code, the director may:
(a) enter into contracts for any work or professional services which the division or the State
Building Board may do or have done; and
(b) as a condition of any contract for architectural or engineering services, prohibit the
architect or engineer from retaining a sales or agent engineer for the necessary design work.
(2) The judgment of the director as to the responsibility and qualifications of a bidder is
conclusive, except in case of fraud or bad faith.
(3) [
or the State Building Board is retained or withheld, it shall be [
Section 13-8-5 .
[
Section 22. Section 72-6-107 is amended to read:
72-6-107. Construction or improvement of highway -- Contracts -- Retainage.
(1) (a) The department shall make plans, specifications, and estimates prior to the
construction or improvement of any state highway.
(b) Except as provided in Section 63-56-36.1 and except for construction or improvements
performed with state prison labor, a construction or improvement project with an estimated cost
exceeding $40,000 for labor and materials shall be performed under contract awarded to the lowest
responsible bidder.
(c) The advertisement for bids shall be published in a newspaper of general circulation in
the county in which the work is to be performed, at least once a week for two consecutive weeks,
with the last publication at least ten days before bids are opened.
(d) The department shall receive sealed bids and open the bids at the time and place
designated in the advertisement. The department may then award the contract but may reject any
and all bids.
(e) If the department's estimates are substantially lower than any responsible bid received,
the department may perform any work by force account.
(2) [
improvement of a state highway is retained or withheld, the payment shall be [
and released as provided in Section 13-8-5 .
[
Section 23. Section 72-6-108 is amended to read:
72-6-108. Class B and C roads -- Improvement projects -- Contracts -- Retainage.
(1) A county executive for class B roads and the municipal executive for class C roads shall
cause plans, specifications, and estimates to be made prior to the construction of any improvement
project, as defined in Section 72-6-109 , on a class B or C road if the estimated cost for any one
project exceeds the bid limit as defined in Section 72-6-109 for labor, equipment, and materials.
(2) (a) All projects in excess of the bid limit shall be performed under contract to be let to
the lowest responsible bidder.
(b) If the estimated cost of the improvement project exceeds the bid limit for labor,
equipment, and materials, the project may not be divided to permit the construction in parts, unless
each part is done by contract.
(3) The advertisement on bids shall be published in a newspaper of general circulation in the
county in which the work is to be performed at least once a week for three consecutive weeks. If
there is no newspaper of general circulation, the notice shall be posted for at least 20 days in at least
five public places in the county.
(4) The county or municipal executive or their designee shall receive sealed bids and open
the bids at the time and place designated in the advertisement. The county or municipal executive
or their designee may then award the contract but may reject any and all bids.
(5) The person, firm, or corporation that is awarded a contract under this section is subject
to the provisions of Title 63, Chapter 56, Utah Procurement Code.
(6) [
improvement of a class B or C road is retained or withheld, the payment shall be [
retained or withheld and released as provided in Section 13-8-5 .
[
Section 24. Section 73-10-8 is amended to read:
73-10-8. Water Resources Construction Fund -- Creation and contents of fund -- Use
-- Investigation Account created -- Interest -- Retainage -- Loans and grants for dam safety
work.
(1) There is created the Water Resources Construction Fund, which consists of:
(a) money appropriated or otherwise made available to it by the Legislature;
(b) money from the sale or management of the 500,000 acres of land selected for the
establishment of reservoirs under Section 12 of the Utah Enabling Act;
(c) charges assessed against water and power users pursuant to Section 73-10-6 ; and
(d) interest accrued pursuant to Subsection (5).
(2) The board may authorize the use of money in the fund for the following purposes:
(a) to develop water conservation projects, including paying the costs of construction,
engineering, investigation, inspection, and other related expenses;
(b) to provide loans and grants to dam owners to conduct dam safety studies;
(c) to provide loans and grants to dam owners:
(i) to upgrade dams in conformance with the minimum standards established by the state
engineer in rules; or
(ii) for nonstructural solutions developed to meet minimum standards or lower hazard ratings
that are approved by the state engineer, including the purchase of habitable structures, purchase of
flood easements, and installation of early warning systems; or
(d) as otherwise provided by law.
(3) The board may provide for the repayment of the costs of investigation, engineering, and
inspection out of the first monies to be paid under a contract for the construction of a water project.
Those monies repaid shall be deposited into a subaccount within the Water Resources Construction
Fund known as the Investigation Account, to be used by the board for the purpose of making
investigations for the development and use of the water resources of the state.
(4) Contributions of money, property, or equipment may be received from any political
subdivision of the state, federal agency, water users' association, person, or corporation for use in
making investigations, constructing projects, or otherwise carrying out the purposes of this section.
(5) All monies deposited into the Water Resources Construction Fund shall be invested by
the state treasurer with interest accruing to the Water Resources Construction Fund.
(6) [
by the Water Resources Construction Fund is retained or withheld, it shall be [
retained or withheld and released as provided in Section 13-8-5 .
[
(7) Loans to dam owners for dam safety studies and to upgrade dams in conformance with
minimum standards shall be secured by taking water rights associated with the dam.
(8) The following restrictions apply to any grant made to a dam owner for a dam safety
study:
(a) only a nonprofit mutual irrigation company or a water users association is eligible to
receive a grant;
(b) the dam safety study shall be required by the state engineer pursuant to Section
73-5a-503 ; and
(c) the amount of any grant shall be limited to up to 50% of the costs of the dam safety study.
(9) (a) The board may provide grants to mutual irrigation companies and water users
associations to upgrade dams in conformance with minimum standards of the state engineer. Each
grant authorized by the board for the upgrade of a dam of a mutual irrigation company or water users
association in conformance with the minimum standards shall be sufficient to pay for 80% of the
costs to upgrade the dam.
(b) (i) Pursuant to guidelines specified in Subsection (9)(b)(ii), the board may provide loans
or grants, or both, to entities other than mutual irrigation companies and water users associations to
upgrade dams in conformance with minimum standards of the state engineer.
(ii) In determining the type of financial assistance to be provided to an entity other than a
mutual irrigation company or water users association, the board shall consider the dam owner's
ability to pay and may consider other factors including:
(A) the degree of hazard;
(B) the threat to public safety;
(C) the state engineer's priority list of dams;
(D) the cost effectiveness of the restoration;
(E) the number of potential and actual applications for financial assistance; and
(F) the funds available.
(10) The amount of money in the fund that may be used for grants for dam safety studies
shall be limited to the amount of money appropriated to the fund for that purpose.
(11) The board shall consult with the state engineer in establishing a priority list of dams to
be upgraded with money in the fund.
(12) A dam owner who has initiated or completed construction approved by the state
engineer to upgrade the dam in conformance with minimum standards may apply for a grant or loan
from the board as reimbursement for those construction expenditures.
Section 25. Section 73-10-27 is amended to read:
73-10-27. Project priorities -- Considerations -- Determinations of feasibility -- Bids
and contracts -- Definitions -- Retainage.
(1) In considering the priorities for projects to be built with funds made available under
Section 73-10-24 , the board shall give preference to those projects which:
(a) are sponsored by the state or a political subdivision of the state;
(b) meet a critical local need;
(c) have greater economic feasibility;
(d) will yield revenue to the state within a reasonable time or will return a reasonable rate
of interest, based on financial feasibility; and
(e) meet other considerations deemed necessary by the board, including, but not limited to,
wildlife management and recreational needs.
(2) In determining the economic feasibility the board shall establish a benefit-to-cost ratio
for each project, using a uniform standard of procedure for all projects. In considering whether a
project should be built, the benefit-to-cost ratio for each project shall be weighted based on the
relative cost of the project. A project, when considered in total with all other projects constructed
under this chapter and still the subject of a repayment contract, may not cause the accumulative
benefit-to-cost ratio of the projects to be less than one to one.
(3) Under no circumstances may a project be built that is not in the public interest as
determined by the Board of Water Resources, and no project may be built which is not adequately
designed based on sound engineering and geologic considerations.
(4) The board in the preparation of a project for construction shall comply with the
following:
(a) All flood control projects involving cities and counties costing in excess of $35,000, and
all contracts for the construction of a storage reservoir in excess of 100 acre-feet or for the
construction of a hydroelectric generating facility, shall be awarded on the basis of competitive bid.
Advertisement for competitive bids shall be published by the board at least once a week for three
consecutive weeks in a newspaper with general circulation in the state. The advertisement shall
indicate that the board will award the contract to the lowest responsible bidder but that it reserves
to itself the right to reject any and all bids. The date of last publication shall appear at least five days
before the scheduled bid opening.
(b) If all initial bids on the project are rejected, the board shall readvertise the project in the
manner specified in Subsection (4)(a). If no satisfactory bid is received by the board upon the
readvertisement of the project, it may proceed to construct the project but only in accordance with
the plans and specifications used to calculate the estimated cost of the project.
(c) The board shall keep an accurate record of all facts and representations relied upon in
preparing its estimated cost for any project which is subject to the competitive bidding requirements
of this section.
(d) For the purposes of this Subsection (4):
(i) "Estimated cost" means the cost of all labor, material, and equipment necessary for
construction of the contemplated project.
(ii) "Lowest responsible bidder" means any licensed contractor who submits the lowest bid,
whose bid is in compliance with the invitation for bids, whose bid meets the plans and specifications,
and who furnishes bonds under Sections 14-1-18 and 63-56-38 .
(5) If any payment on a contract with a private contractor for construction of projects under
this section is retained or withheld, it shall be [
retained or withheld and released as provided in Section 13-8-5 .
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