A bill for an act relating to bonds for general contractors.(Formerly SSB 1151; See SF 2376.)
Summary
Senate File 576 would require most general contractors in Iowa to obtain a $50,000 performance bond before beginning work in the state. The bond would be payable to the person for whom the contractor is performing the work and must be issued by a surety company authorized to do business in Iowa. The bill defines the requirement broadly by tying it to general contractors as defined in existing law, and it applies to private work unless an exception applies.
The bill excludes work performed for the state or a political subdivision of the state, including projects already subject to chapter 8A, subchapter III procurement requirements. It also bars counties, cities, townships, and school districts from imposing additional bond requirements on general contractors for private work beyond what the bill itself requires. In effect, the measure creates a uniform statewide bonding rule for private general contracting and limits local governments’ ability to add their own bonding conditions.
Impact
SF 576 would add a new section to Iowa Code chapter 572A and establish a statewide performance-bond requirement for general contractors on private projects. It would affect contractors, project owners, and surety companies by creating a mandatory $50,000 bond obligation before work begins, while leaving public projects and certain state procurement work outside the new rule. The bill would also preempt local governments from requiring separate bonds for private work, reducing local variation in contractor bonding requirements.
Sentiment
The available voting history suggests the bill was received favorably in committee, with the Senate Local Government report passing 13-0. No committee transcript is available, but the unanimous vote indicates broad support at the committee stage and little visible opposition in the recorded action. The later committee report approving the bill and renumbering it as SF 2376 also suggests the proposal advanced without major procedural resistance.
Contention
The main policy issue appears to be the balance between contractor accountability and regulatory burden. Supporters likely view the bond as a consumer-protection and project-security measure that helps ensure performance and provides a financial backstop for private owners. Potential concerns would come from general contractors and local governments: contractors may see the bond as an added cost or barrier to entry, while counties, cities, townships, and school districts lose the ability to set their own bonding rules for private work. The bill’s express preemption of local bonding requirements is the clearest point of contention, even though the recorded vote shows no formal opposition in committee.
State management: purchasing; awarding contracts to entities that donate or contribute to certain political candidates or committees; prohibit. Amends 1984 PA 431 (MCL 18.1101 - 18.1594) by adding sec. 264b.