HB1724--CONTRACTSWITHPUBLICENTITIES
SPONSOR: Falkner
COMMITTEEACTION:Voted"DoPass"bytheStandingCommitteeon
FinancialInstitutionsbyavoteof13to0.
Thisbilladdsthedefinitionofa"publicofficial"toSection
107.170,RSMo,regardingbondsandpublicworkscontractorsand
modifiesthedefinitionof"publicentity"toincludeany
municipality.
Thisbillmakesitthedutyofallpublicentitiesinmaking
contractsover$50,000forpublicworksexemptfromattachmentand
executiontorequirethecontractortofurnishabond.
Currently,aschoolboardmemberisnotrequiredtoindependently
confirmthatabondcompanyexistsandissolventifacontractor
representsthatitis,buttheschoolboardmemberisnotexempt
fromliabilityifheorshehasactualknowledgeoftheinsolvency
ordoesnotingoodfaithcomplywiththelawinrequiringthe
contractortohaveasufficientlawfulbond.Thebillexpandsboth
thelackofdutytoverifythestatusofthebondcompanyandthe
lackofexemptionfromliabilityforactualknowledgeregardinga
bondcompanyfromaschoolboardmembertoallpublicofficials.
Nopublicofficialwhowouldbepersonallyliableunderlaworat
equitytoacontractor,subcontractor, orsupplieratanytier,
becauseofapublicentity'sfailuretorequireacontractorto
furnishapaymentbondwillbeliableunlessthecontractor
providestothepresidingofficialandsecretaryofthepublic
entityawrittennoticeidentifyingthepersonswhowillhave
personalliabilityforpaymentifnopaymentbondmeetingthe
statutoryrequirementsisfurnished. Compliancewiththiswritten
noticerequirementisaconditionprecedenttothepersonal
liabilityofanypublicofficialforaclaimofpayment. Any
originalcontractorwhofailstoprovidethewrittennotice
describedinthebill,withintenttodefraud,willbeguiltyofa
classBmisdemeanor. Ifconsentthatmeetstherequirementsof
Section513.455,asspecifiedbelow,isacknowledgedandrecorded
asrequired,nobondisrequired.Alesseeofapublicentity
contractingforapublicworksprojecttobeusedfor
nongovernmental purposesisnotrequiredtofurnishabondwhenthe
contractorfurnishesabond.
Currently,courthouses,jails,clerks'offices,andotherbuildings
andthelotsonwhichtheystandownedbyacountyormunicipality,
aswellasallburialgrounds,areexemptfromattachmentand
execution. Thisbillexpandstheexemptiontootherlandsownedby thestate;anypublicbodycorporateandpolitic;anycounty,city,
town,municipality;anyroad,water,sewer,fire,library,
hospital,orschooldistrict;andanyotherpoliticalsubdivision
ofthisstate.
Thebillalsoprovidesthatthestateoranypoliticalsubdivision,
asspecified,mayconsenttohavecertainprojectsandthelands
thereonbecomesubjecttotheattachmentofmechanics'liensfiled
underChapter429iftheconsentisinwriting,containsalegal
descriptionofthepropertysubjecttotheattachment,andis
acknowledgedbyanauthorizedofficialinaformthatcanbeandis
recordedintheofficeoftherecorderofdeedsforthecounty
wherethepropertyislocated.
ThisbillisthesameasHB926(2023).
PROPONENTS: Allowingtheuseofmechanics'lienslowersthecost
tothepublicwhenaconstructionprojectonpublicpropertyhasa
nongovernmental purpose,bygivingtheoptiontorequireapayment
bondortoconsenttomechanic'sliensbeingfiledagainstan
industrialrevenuebondproject.
TestifyinginpersonforthebillwereRepresentative Falkner;Brad
Lau,St.JosephChamberofCommerce&St.JosephEconomic
DevelopmentPartnership;MissouriEconomicDevelopmentCouncil;
MissouriChamberofCommerce&Industry;MissouriMunicipalLeague;
MissouriEconomicDevelopmentFinancingAssociation.
OPPONENTS: Thosewhoopposethebillsaythatthelawcurrently
makestheindividualswhohadthedutytoobtainthebondand
failedtodosopersonallyliableforfailingtoperformtheirduty
asgovernmentalofficials,sothechangeinthisbillweakensthis
remedy.Someschooldistrictsdonotneedbondsforconstruction
projects.
TestifyinginpersonagainstthebillwereAmericanSubcontractors
AssociationMidwestCouncil;andArnieC.Dienoff.
Writtentestimonyhasbeensubmittedforthisbill.Thefull
writtentestimonyandwitnessestestifyingonlinecanbefound
underTestimonyonthebillpageontheHousewebsite.