H.B. 318

This document includes House Committee Amendments incorporated into the bill on Thu, Feb 19, 2009 at 4:35 PM by jeyring. --> 1

CONSTRUCTION TRADES LICENSING
2 AMENDMENTS
3 2009 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Brian S. King
6 Senate Sponsor: ____________
7
8 LONG TITLE
9 General Description:
10 This bill amends the Construction Trades Licensing payment provisions.
11 Highlighted Provisions:
12 This bill:
13 . requires a contractor to hold construction funds in trust;
14 . requires a subcontractor to hold construction funds in trust; and
15 . makes technical corrections.
16 Monies Appropriated in this Bill:
17 None
18 Other Special Clauses:
19 None
20 Utah Code Sections Affected:
21 AMENDS:
22 58-55-603, as renumbered and amended by Laws of Utah 1994, Chapter 181
23
24 Be it enacted by the Legislature of the state of Utah:
25 Section 1. Section 58-55-603 is amended to read:
26 58-55-603. Payment to subcontractors and suppliers.
27 (1) H. (a) .H When a contractor receives [any] construction funds from an owner,
27a lender, or

28 another contractor for work performed and billed, [he shall pay each of his subcontractors and
29 suppliers] the contractor shall H. , for each subcontractor or supplier with whom the
29a contractor is in privity of contract .H :
30 H. [ (a) ] (i) .H hold the construction funds in trust; and
31 H. [ (b) ] (ii) .H pay each subcontractor and supplier in proportion to the percentage of
31a the work
32 [they] the subcontractor performed or goods the supplier provided under that billing, unless
33 otherwise agreed by contract.
33a H. (b) A contractor under Subsection(1)(a)(i) may create a separate construction
33b fund trust account. .H
34 [(2) If, under this section and without reasonable cause, or unless otherwise agreed by
35 contract,]
36 (2) (a) Subject to Subsection (2)(b) and unless otherwise agreed by contract, a
37 contractor shall pay a subcontractor or supplier, in addition to a payment described in
38 Subsection (1):
39 (i) 1% interest per month of the outstanding amount due;
40 (ii) reasonable costs of any collection; and
41 (iii) reasonable attorney fees.
42 (b) Subsection (2)(a) does not apply unless the contractor fails to pay for work
43 performed by [his subcontractors or suppliers] a subcontractor or supplier by the later of the
44 following:
45 (i) within 30 consecutive days after receiving construction funds from [the] an owner,
46 lender, or another contractor for work performed and billed[,]; or
47 (ii) after the last day payment is due under the terms of the billing[, whichever is later,
48 he shall pay to the subcontractor or supplier, in addition to the payment, interest in the amount
49 of 1% per month of the amount due, beginning on the day after payment is due, and reasonable
50 costs of any collection and attorney's fees].
51 [(3) When a subcontractor receives any construction payment under this section,
52 Subsections (1) and (2) apply to that subcontractor.]
53 (3) When a subcontractor receives construction funds from an owner, lender, or
54 another subcontractor under this section, Subsections (1) and (2) shall apply to the
55 subcontractor.

Legislative Review Note
as of 2-4-09 8:31 AM

Office of Legislative Research and General Counsel