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COMMITTEE REPORT
March 23, 2000
S. 767
S. Printed 3/23/00--S.
Read the first time April 28, 1999.
To whom was referred a Bill (S. 767), to amend Chapter 6, Title 29, Code of Laws, South Carolina, 1976, relating to payments to contractors, subcontractors, and suppliers, etc., respectfully
That they have duly and carefully considered the same, and recommend that the same do pass with amendment:
Amend the bill, as and if amended, Section 29-6-250(1), page 2, by striking lines 2 and 3 and inserting:
/ a contract to improve real property, and the contract is for a sum in excess of fifty /
Renumber sections to conform.
Amend title to conform.
EDWARD E. SALEEBY, for Committee.
TO AMEND CHAPTER 6, TITLE 29, CODE OF LAWS, SOUTH CAROLINA, 1976, RELATING TO PAYMENTS TO CONTRACTORS, SUBCONTRACTORS, AND SUPPLIERS, BY ADDING ARTICLE 3 SO AS TO PROVIDE THE SUBCONTRACTORS' AND SUPPLIERS' PAYMENT PROTECTION ACT, AND TO AMEND CHAPTER 6, TITLE 29, BY DESIGNATING SECTIONS 29-6-10 THROUGH 29-6-60 AS ARTICLE 1.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Chapter 6, Title 29 of the 1976 Code is amended by adding:
Section 29-6-210. This article may be cited as the Subcontractors' and Suppliers' Payment Protection Act.
Section 29-6-230. Notwithstanding any other provision of law, performance by a construction subcontractor in accordance with the provisions of its contract entitles the subcontractor to payment from the party with whom it contracts. The payment by the owner to the contractor or the payment by the contractor to another subcontractor or supplier is not, in either case, a condition precedent for payment to the construction subcontractor. Any agreement to the contrary is not enforceable.
Section 29-6-250. (1) When a governmental body is a party to a contract to improve real property, or is the owner of the property to be improved, and the contract is for a sum in excess of fifty thousand dollars, the owner of the property shall require the contractor to provide a labor and material payment bond in the full amount of the contract. The bond must be secured by cash or must be issued by a surety company licensed in the State with an 'A' minimum rating of performance as stated in the most current publication of 'Best Key Rating Guide, Property Liability'.
(2) If the contract is for less than one hundred thousand dollars, the governmental body may permit the use of a 'B+' rated bond if it justifies that use in writing.
(3) For the purposes of any contract covered by the provisions of this section, it is the duty of the entity contracting for the improvement to take reasonable steps to assure that the appropriate payment bond is issued and is in proper form.
(4) For purposes of this section, 'governmental body' means a state government department, commission, council, board, bureau, committee, institution, college, university, technical school, agency, government corporation, or other establishment or official of the executive or judicial branch. 'Governmental body' excludes the General Assembly or its respective branches or its committees, Legislative Council, the Office of Legislative Printing and Information Technology Resources, and all local political subdivisions such as counties, municipalities, school districts, or public service or special purpose districts, or any entity created by act of the General Assembly for the purpose of erecting monuments or memorials or commissioning art that is procured exclusively by private funds.
Section 29-6-270. For any contract for the improvement of real property not covered by the provisions of Section 29-6-250, where a payment bond is required by the contract or otherwise, the bond may only be issued by a surety company licensed in the State with a 'B+' minimum rating as stated in the most current publication of 'Best Key Rating Guide, Property Liability'.
Section 29-6-290. A provision in a contract for the improvement of real property in the State must not operate to derogate the rights of a construction contractor, subcontractor, supplier, or other proper claimant against a payment bond or other form of payment security or protection established by law."
SECTION 2. Sections 29-6-10 through 29-6-60 of Chapter 6, Title 29 of the 1976 Code, entitled "Payments to Contractors, Subcontractors, and Suppliers" is designated "Article 1, Payments to Contractors, Subcontractors, and Suppliers".
SECTION 3. If a provision of this article or the application of a provision to a person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application. To this end, the provisions of this article are severable.
SECTION 4. This act takes effect July 1, 1999, and applies to contracts for the improvement of real property entered into on or after July 1, 1999.
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