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First Substitute S.B. 141

Senator Howard A. Stephenson proposes the following substitute bill:


             1     
LOCAL GOVERNMENT CAPITAL PROJECTS

             2     
2003 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: Howard A. Stephenson

             5      This act modifies provisions relating to certain capital projects of certain local
             6      government entities. The act requires that counties, municipalities, special districts, and
             7      local districts request bids for certain capital projects and establishes a bid process,
             8      including the amount of the project for which a bid is required. The act provides for the
             9      amount of the cost of a project required to be submitted to bids to be adjusted for
             10      inflation. The act provides for attorney's fees and costs to be awarded to a successful
             11      party against the local government entity in a civil action for a violation of the
             12      requirements. The act also makes technical changes.
             13      This act affects sections of Utah Code Annotated 1953 as follows:
             14      AMENDS:
             15          17A-2-1314, as last amended by Chapter 133, Laws of Utah 2000
             16          17A-3-208, as last amended by Chapters 86 and 133, Laws of Utah 2000
             17          72-6-109, as renumbered and amended by Chapter 270, Laws of Utah 1998
             18      ENACTS:
             19          11-39-101, Utah Code Annotated 1953
             20          11-39-102, Utah Code Annotated 1953
             21          11-39-103, Utah Code Annotated 1953
             22          11-39-104, Utah Code Annotated 1953
             23          11-39-105, Utah Code Annotated 1953
             24          11-39-106, Utah Code Annotated 1953
             25          11-39-107, Utah Code Annotated 1953


             26      REPEALS:
             27          10-7-20, as last amended by Chapter 365, Laws of Utah 1999
             28          17-53-308, as renumbered and amended by Chapter 133, Laws of Utah 2000
             29          17A-2-531, as last amended by Chapters 86 and 254, Laws of Utah 2000
             30          17A-2-723, as last amended by Chapter 285, Laws of Utah 2002
             31      Be it enacted by the Legislature of the state of Utah:
             32          Section 1. Section 11-39-101 is enacted to read:
             33     
CHAPTER 39. BUILDING IMPROVEMENTS AND PUBLIC WORKS PROJECTS

             34          11-39-101. Definitions.
             35          As used in this chapter:
             36          (1) "Bid limit" means:
             37          (a) for a building improvement:
             38          (i) for the year 2003, $40,000; and
             39          (ii) for each year after 2003, the amount of the bid limit for the previous year, plus an
             40      amount calculated by multiplying $40,000 by the lesser of 3% or the actual percent change in
             41      the Consumer Price Index during the previous calendar year; and
             42          (b) for a public works project:
             43          (i) for the year 2003, $125,000; and
             44          (ii) for each year after 2003, the amount of the bid limit for the previous year, plus an
             45      amount calculated by multiplying $125,000 by the lesser of 3% or the actual percent change in
             46      the Consumer Price Index during the previous calendar year.
             47          (2) "Building improvement":
             48          (a) means the construction or repair of a public building or structure; and
             49          (b) does not include construction or repair at an international airport.
             50          (3) "Consumer Price Index" means the Consumer Price Index for All Urban
             51      Consumers as published by the Bureau of Labor Statistics of the United States Department of
             52      Labor.
             53          (4) "Emergency repairs" means a building improvement or public works project
             54      undertaken on an expedited basis to:
             55          (a) eliminate an imminent risk of damage to or loss of public or private property;
             56          (b) remedy a condition that poses an immediate physical danger; or


             57          (c) reduce a substantial, imminent risk of interruption of an essential public service.
             58          (5) "Independent special district" means an independent special district under Title
             59      17A, Chapter 2, Independent Special Districts, excluding a special service district under Title
             60      17A, Chapter 2, Part 13, Utah Special Service District Act.
             61          (6) "Legislative body" means:
             62          (a) for a county, the county legislative body;
             63          (b) for a city or town, the municipal legislative body;
             64          (c) for an independent special district or for a local district, the board of trustees;
             65          (d) for a special service district under Title 17A, Chapter 2, Part 13, Utah Special
             66      Service District Act, the legislative body of the county or municipality that created the special
             67      service district; and
             68          (e) for a dependent special district under Title 17A, Chapter 3, Dependent Special
             69      Districts, the board or other body that exercises legislative authority with respect to the
             70      dependent special district.
             71          (7) "Local district" has the same meaning as defined in Section 17B-2-101 .
             72          (8) "Local entity" means a county, city, town, special district, or local district.
             73          (9) "Lowest responsive responsible bidder" means a prime contractor who:
             74          (a) has submitted a bid in compliance with the invitation to bid and within the
             75      requirements of the plans and specifications for the building improvement or public works
             76      project;
             77          (b) is the lowest bidder that satisfies the local entity's criteria relating to financial
             78      strength, past performance, integrity, reliability, and other factors that the local entity uses to
             79      assess the ability of a bidder to perform fully and in good faith the contract requirements;
             80          (c) has furnished a bid bond or equivalent in money as a condition to the award of a
             81      prime contract; and
             82          (d) furnishes a payment and performance bond as required by law.
             83          (10) "Procurement code" means the provisions of Title 63, Chapter 56, Utah
             84      Procurement Code.
             85          (11) "Public works project":
             86          (a) means the construction of:
             87          (i) a park or recreational facility; or


             88          (ii) a pipeline, culvert, dam, canal, or other system for water, sewage, storm water, or
             89      flood control; and
             90          (b) does not include:
             91          (i) the replacement or repair of existing infrastructure on private property;
             92          (ii) construction commenced before June 1, 2003; and
             93          (iii) construction or repair at an international airport.
             94          (11) "Special district" has the same meaning as defined in Section 17A-1-101 .
             95          Section 2. Section 11-39-102 is enacted to read:
             96          11-39-102. Requirement for plans and specifications and cost estimate.
             97          Each local entity intending to undertake a building improvement or public works
             98      project paid for by the local entity shall cause:
             99          (1) plans and specifications to be made for the building improvement or public works
             100      project; and
             101          (2) an estimate of the cost of the building improvement or public works project to be
             102      made.
             103          Section 3. Section 11-39-103 is enacted to read:
             104          11-39-103. Requirements for undertaking a building improvement or public
             105      works project -- Request for bids.
             106          (1) If the estimated cost of the building improvement or public works project exceeds
             107      the bid limit, the local entity shall, if it determines to proceed with the building improvement or
             108      public works project:
             109          (a) request bids for completion of the building improvement or public works project
             110      by:
             111          (i) publishing notice at least twice in a newspaper published or of general circulation in
             112      the local entity at least five days before opening the bids; or
             113          (ii) if there is no newspaper published or of general circulation in the local entity,
             114      posting notice at least five days before opening the bids in at least five public places in the
             115      local entity and leaving the notice posted for at least three days; and
             116          (b) except as provided in Subsection (3), enter into a contract for the completion of the
             117      building improvement or public works project with the lowest responsive responsible bidder.
             118          (2) (a) Each notice under Subsection (1)(a) shall indicate that the local entity may reject


             119      any or all bids submitted.
             120          (b) (i) The cost of a building improvement or public works project may not be divided
             121      to avoid:
             122          (A) exceeding the bid limit; and
             123          (B) subjecting the local entity to the requirements of this section.
             124          (ii) Notwithstanding Subsection (2)(b)(i), a local entity may divide the cost of a
             125      building improvement or public works project that would, without dividing, exceed the bid
             126      limit if the local entity complies with the requirements of this section with respect to each part
             127      of the building improvement or public works project that results from dividing the cost.
             128          (3) (a) The local entity may reject any or all bids submitted.
             129          (b) If the local entity rejects all bids submitted but still intends to undertake the
             130      building improvement or public works project, the local entity shall again request bids by
             131      following the procedure provided in Subsection (1)(a).
             132          (c) If, after twice requesting bids by following the procedure provided in Subsection
             133      (1)(a), the local entity determines that no satisfactory bid has been submitted, the legislative
             134      body may undertake the building improvement or public works project as it considers
             135      appropriate.
             136          Section 4. Section 11-39-104 is enacted to read:
             137          11-39-104. Exceptions.
             138          (1) The requirements of Section 11-39-103 do not apply to:
             139          (a) emergency repairs;
             140          (b) a building improvement or public works project if the estimated cost under Section
             141      11-39-102 is less than the bid limit; or
             142          (c) the conduct or management of any of the departments, business, or property of the
             143      local entity.
             144          (2) This section may not be construed to limit the application of Section 72-6-108 to an
             145      improvement project, as defined in Section 72-6-109 , that would otherwise be subject to
             146      Section 72-6-108 .
             147          Section 5. Section 11-39-105 is enacted to read:
             148          11-39-105. Retained payments.
             149          Each payment that the local entity retains on a contract with a private person, firm, or


             150      corporation shall be retained and released as provided in Section 13-8-5 .
             151          Section 6. Section 11-39-106 is enacted to read:
             152          11-39-106. Attorney's fees and costs in civil action.
             153          In a civil action to enforce the provisions of this part against a local entity, the court
             154      may award attorney's fees and costs to the prevailing party.
             155          Section 7. Section 11-39-107 is enacted to read:
             156          11-39-107. Procurement code.
             157          (1) This chapter may not be construed to:
             158          (a) prohibit a county legislative body from adopting the procedures of the procurement
             159      code; or
             160          (b) limit the application of the procurement code to a special district or local district.
             161          (2) (a) In seeking bids and awarding a contract for a building improvement or public
             162      works project, a county legislative body may elect to follow the provisions of the procurement
             163      code, as the county legislative body considers appropriate under the circumstances, for
             164      specification preparation, source selection, or contract formation.
             165          (b) A county legislative body's election to adopt the procedures of the procurement
             166      code may not excuse the county from complying with the requirements to award a contract for
             167      work in excess of the bid limit and to publish notice of the intent to award.
             168          (c) An election under Subsection (2)(a) may be made on a case-by-case basis, unless
             169      the county has previously adopted the procurement code as permitted by Subsection
             170      63-56-2 (3)(e).
             171          (d) The county legislative body shall:
             172          (i) make each election under Subsection (2)(a) in an open meeting; and
             173          (ii) specify in its action the portions of the procurement code to be followed.
             174          (3) If the estimated cost of the building improvement or public works project proposed
             175      by a special district or local district exceeds the bid limit, the legislative body of the special
             176      district or local district may, if it determines to proceed with the building improvement or
             177      public works project, use the competitive procurement procedures of the procurement code in
             178      place of the comparable provisions of this chapter.
             179          Section 8. Section 17A-2-1314 is amended to read:
             180           17A-2-1314. Rights, powers, and authority of service district.


             181          (1) In addition to all other rights, powers, and authority granted by law or by other
             182      provisions of this part, a service district has the following rights, powers and authority:
             183          (a) The right to sue and be sued.
             184          (b) The power to exercise all powers of eminent domain possessed by the county or
             185      municipality which established the service district.
             186          (c) The power to enter into contracts considered desirable by the governing authority of
             187      the service district to carry out the functions of the service district, including, without
             188      limitation, the power to enter into contracts with the government of the United States or any of
             189      its agencies, the State of Utah, counties, municipalities, school districts, and other public
             190      corporations, districts, or political subdivisions including institutions of higher education.
             191      These contracts may include, without limitation, provisions concerning the use, operation, and
             192      maintenance of any facilities of the service district and the collection of fees or charges with
             193      respect to commodities, services, or facilities provided by the service district.
             194          (d) The power to acquire or construct facilities, to purchase, take, receive, lease, take
             195      by gift, devise or bequest, or otherwise acquire, own, hold, improve, use, finance, and
             196      otherwise deal in and with real and personal property, or any interest in them, wherever
             197      situated, either within or outside of the service district, including water and water rights, and
             198      including the power to acquire other than by condemnation property or interests in property
             199      owned or held by institutions of higher education.
             200          (e) The power to sell, convey, mortgage, pledge, lease, exchange, transfer, and
             201      otherwise dispose of or contract with respect to the use, operation, and maintenance of, all or
             202      any part of its property and assets, including water and water rights.
             203          (f) The power to accept governmental grants, loans, or funds and to comply with the
             204      conditions of them.
             205          (g) The right to utilize any officers, employees, property, equipment, offices, or
             206      facilities of the county or municipality which established the service district, and for which the
             207      governing authority of the service district shall reimburse the county or municipality from
             208      service district funds, a reasonable amount for the services so rendered or for the property,
             209      equipment, offices, or facilities so used.
             210          (h) The right to employ officers, employees, and agents for the service district,
             211      including engineers, accountants, attorneys, and financial consultants, and to fix their


             212      compensation.
             213          (i) The right to adopt an official seal for the service district.
             214          (2) The county legislative body shall by ordinance establish those classes of contracts
             215      of a service district which shall be subject to the requirements of [Section 17-53-308 ] Title 11,
             216      Chapter 39, Building Improvements and Public Works Projects, or of any law hereafter enacted
             217      for the same purpose.
             218          (3) The governing authority of a municipality shall by ordinance establish those classes
             219      of contracts of a service district which shall be subject to the requirements of [Section 10-7-20 ]
             220      Title 11, Chapter 39, Building Improvements and Public Works Projects, or of any law
             221      hereafter enacted for the same purpose.
             222          Section 9. Section 17A-3-208 is amended to read:
             223           17A-3-208. Contract required for improvement -- Bidding requirements --
             224      Exceptions.
             225          (1) As used in this section, the word "sealed" does not preclude acceptance of
             226      electronically sealed and submitted bids or proposals in addition to bids or proposals manually
             227      sealed and submitted.
             228          (2) (a) Except as otherwise provided in this section, improvements in a special
             229      improvement district shall be made only under contract duly let to the lowest responsible
             230      bidder for the kind of service or material or form of construction which may be desired. The
             231      improvements may be divided into parts, and separate contracts let for each part, or several
             232      parts may be combined in the same contract. A contract may be let on a unit basis. A contract
             233      shall not be let until a notice to contractors that sealed bids for the construction of the
             234      improvements will be received by the governing body at a specified time and place, and this
             235      notice has been published at least one time in a newspaper having general circulation in the
             236      county at least 15 days before the date specified for the receipt of bids.
             237          (b) If by inadvertence or oversight, the notice is not published or is not published for a
             238      sufficient period of time prior to the receipt of bids, the governing body, however, may still
             239      proceed to let a contract for the improvements if at the time specified for the receipt of bids it
             240      has received not less than three sealed and bona fide bids from contractors.
             241          (c) If, under the construction contract, periodic payments for work performed are to be
             242      made by the issuance of interim warrants, this fact shall be disclosed in the notice to


             243      contractors. The notice to contractors may be published simultaneously with the notice of
             244      intention.
             245          (3) The governing body, or its designated agent, shall at the time specified in the
             246      notice, open, examine, and publicly declare the bids. From these bids, the governing body may
             247      award a contract to the lowest, responsible bidder if that party's bid is responsive to the request
             248      for proposal or invitation to bid; but the governing body shall not be obligated or required to
             249      award a contract to any bidder and may reject any or all bids. In the event no bids are received
             250      or no responsive or acceptable bids are received after one public invitation to bid, the
             251      governing body may take any of the following actions:
             252          (a) publicly rebid the project using the original plans, specifications, cost estimates,
             253      and contract documents;
             254          (b) negotiate a contract privately using the original project plans, specifications, cost
             255      estimates, and contract documents;
             256          (c) publicly rebid the project after revising the original plans, specifications, cost
             257      estimates, or contract documents;
             258          (d) cancel the project;
             259          (e) abandon or dissolve the improvement district; or
             260          (f) perform the project work with the governing entity's work forces and be reimbursed
             261      for this work out of the special assessments levied.
             262          (4) A contract need not be let for any improvement or part of any improvement the cost
             263      of which or the making of which is donated or contributed by any individual, corporation, the
             264      county, a municipality, the state, the United States, or any political subdivision of the state or of
             265      the United States. These donations or contributions may be accepted by the governing entity,
             266      but no assessments shall be levied against the property in the district for the amount of the
             267      donations or contributions.
             268          (5) A contract need not be let as provided in this section where the improvements
             269      consist of the furnishing of utility services or maintenance of improvements. This work may be
             270      done by the governing entity itself. Assessments may be levied for the actual cost incurred by
             271      the governing entity for the furnishing of these services or maintenance, or in case the work is
             272      done by the governing entity, to reimburse the governing entity for the reasonable cost of
             273      supplying the services or maintenance.


             274          (6) A contract need not be let as provided in this section where any labor, materials, or
             275      equipment to make any of the improvements are supplied by the governing entity. Assessments
             276      may be levied to reimburse the governing entity for the reasonable cost of supplying such labor,
             277      materials or equipment. The provisions of [Sections 17-53-308 ] Title 11, Chapter 39, Building
             278      Improvements and Public Works Projects, and Section 72-6-108 shall not apply to the
             279      improvements to be placed in a special improvement district created under this part.
             280          Section 10. Section 72-6-109 is amended to read:
             281           72-6-109. Class B and C roads -- Construction and maintenance -- Definitions --
             282      Estimates lower than bids -- Accountability.
             283          (1) As used in this section and Section 72-6-108 :
             284          (a) "Bid limit" means [$100,000.]:
             285          (i) for the year 2003, $125,000; and
             286          (ii) for each year after 2003, the amount of the bid limit for the previous year, plus an
             287      amount calculated by multiplying $125,000 by the lesser of 3% or the actual percent change in
             288      the Consumer Price Index during the previous calendar year.
             289          (b) "Consumer Price Index" means the Consumer Price Index for All Urban
             290      Consumers as published by the Bureau of Labor Statistics of the United States Department of
             291      Labor.
             292          [(b)] (c) (i) "Construction" means the work that would apply to:
             293          (A) any new roadbed either by addition to existing systems or relocation;
             294          (B) resurfacing of existing roadways with more than two inches of bituminous
             295      pavement; or
             296          (C) new structures or replacement of existing structures, except the replacement of
             297      drainage culverts.
             298          (ii) "Construction" does not include maintenance, emergency repairs, or the installation
             299      of traffic control devices as described in Section 41-6-20 .
             300          [(c)] (d) "Improvement project" means construction and maintenance as defined in this
             301      section except for that maintenance excluded under Subsection (2).
             302          [(d)] (e) "Maintenance" means the keeping of a road facility in a safe and usable
             303      condition to which it was constructed or improved, and includes:
             304          (i) the reworking of an existing surface by the application of up to and including two


             305      inches of bituminous pavement;
             306          (ii) the installation or replacement of guardrails, seal coats, and culverts;
             307          (iii) the grading or widening of an existing unpaved road or flattening of shoulders or
             308      side slopes to meet current width and safety standards; and
             309          (iv) horizontal or vertical alignment changes necessary to bring an existing road in
             310      compliance with current safety standards.
             311          [(e)] (f) "Project" means the performance of a clearly identifiable group of associated
             312      road construction activities or the same type of maintenance process, where the construction or
             313      maintenance is performed on any one class B or C road, within a half-mile proximity and
             314      occurs within the same calendar year.
             315          (2) The following types of maintenance work are not subject to the contract or bid limit
             316      requirements of this section:
             317          (a) the repair of less than the entire surface by crack sealing or patching; and
             318          (b) road repairs incidental to the installation, replacement, or repair of water mains,
             319      sewers, drainage pipes, culverts, or curbs and gutters.
             320          (3) (a) (i) If the estimates of a qualified engineer referred to in Section 72-6-108 are
             321      substantially lower than any responsible bid received or in the event no bids are received, the
             322      county or municipality may perform the work by force account.
             323          (ii) In no event shall "substantially lower" mean estimates that are less than 10% below
             324      the lowest responsible bid.
             325          (b) If a county or municipality performs an improvement project by force account, it
             326      shall:
             327          (i) provide an accounting of the costs and expenditures of the improvement including
             328      material, labor, and direct equipment costs to be calculated using the Cost Reference Guide for
             329      Construction Equipment by Dataquest Inc.;
             330          (ii) disclose the costs and expenditures to any person upon request and allow the
             331      person to make a copy and pay for the actual cost of the copy; and
             332          (iii) perform the work using the same specifications and standards that would apply to
             333      a private contractor.
             334          Section 11. Repealer.
             335          This act repeals:


             336          Section 10-7-20, Definition -- Necessity for contract -- Call for bids -- Acceptance
             337      or rejection -- Retainage.
             338          Section 17-53-308, Repair, alteration, or construction of public buildings --
             339      Contracts -- Bids -- Payment and performance bonds -- Retainage.
             340          Section 17A-2-531, Bids for construction -- Contracts -- Payment and performance
             341      bonds -- Retainage.
             342          Section 17A-2-723, Construction -- Notice -- Awarding contracts -- Contractor's
             343      bonds.


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