GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1999

H	1 

HOUSE BILL 1400

Short Title:  Payment Bond Revisions.	(Public)

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Sponsors: Representatives McMahan; Baddour and Cox (Primary Sponsors).

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Referred to:  Finance.

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April 29, 1999

A BILL TO BE ENTITLED
AN ACT TO AMEND THE LAW GOVERNING CLAIMS AGAINST PAYMENT BONDS ON PUBLIC PROJECTS.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 44A-27 reads as rewritten:
"§ 44A-27. Actions on payment bonds; service of notice.
(a)	Subject to the provision of subsection (b) hereof, any claimant who has performed labor or furnished materials in the prosecution of the work required by any contract for which a payment bond has been given pursuant to the provisions of this Article, and who has not been paid in full therefor before the expiration of 90 days after the day on which the claimant performed the last such labor or furnished the last such materials for which he claims payment, may bring an action on such payment bond in his own name, to recover any amount due him for such labor or materials and may prosecute such action to final judgment and have execution on the judgment.
(b)	Any claimant who has a direct contractual relationship, valued at more than ten thousand dollars ($10,000), with any subcontractor but has no contractual relationship, express or implied, with the contractor, may bring an action on the payment bond only if:
(1)	The contractor, within 30 days of the date established in the notice to proceed issued by the owner, has filed with the Office of State Construction a Notice of Contract as provided in subsection (g) of this section.
(2)	The claimant, within 90 days after (i) the contractor's filing of the Notice of Contract pursuant to subdivision (1) of this subsection or (ii) beginning work on or furnishing materials to the project, whichever is later, provided written notice to the contractor that the claimant is working on or furnishing materials to the project and written notice of the name of the person with whom the claimant has a contractual relationship.
(3)	The claimant, within 120 days of the date of last providing the labor or materials for which a claim is made, notifies the contractor of the claim, stating with substantial accuracy the amount claimed and the name of the person for whom work was performed or to whom materials were furnished. For retained payments, the 120 day period begins to run on the date the owner releases the retainage covering the work performed or materials furnished by the claimant.
(c)	The notices required by subdivisions (2) and (3) of subsection (b) of this section shall be served by first class mail, postage prepaid, in an envelope addressed to the contractor at a place where his office is regularly maintained for the transaction of business or served by facsimile or e-mail.
(d)	A claimant's service of notice pursuant to subdivision (2) of subsection (b) of this section is prima facie evidence that the claimant has in good faith sold and delivered the materials or provided the labor under the reasonable belief that the labor or materials are for the improvement of the contract on which the payment bond claim is made.
(e)	Failure by the contractor to file a Notice of Contract relieves the claimant of the duty to file the notice in subdivision (2) of subsection (b) of this section and does not bar the claimant from pursuing a claim pursuant to this section.
(f)	A claimant who has a direct contractual relationship, valued at ten thousand dollars ($10,000) or less, with a subcontractor but who has no contractual relationship, express or implied, with the contractor, may bring an action on the payment bond only if the subcontractor provides the notice required by subdivision (3) of subsection (b) of this section.
(g)	The form of the Notice of Contract shall be substantially as follows.  The contractor shall pay a filing fee to the Office of State Construction of fifteen dollars ($15.00):
‘NOTICE OF CONTRACT-BONDED PUBLIC PROJECT
(1)	Name and address of the contractor
(2)	Name and address of the public owner as shown in the contract
(3)	Project number, project location and description of the project, as shown in the contract
(4)	Name and address of the company furnishing the payment bond
(5)	Name and address of the person, firm, or corporation filing this NOTICE OF CONTRACT
Dated                                          
	Contractor
Filed this                  day of                                        ,                .

(Person filing the document)'."
Section 2.  This act becomes effective October 1, 1999, and applies to actions commenced on payment bonds for contracts awarded on or after that date.