Report Title:

Retainage

Description:

Amends current retainage law.

THE SENATE

S.B. NO.

2318

TWENTY-FIRST LEGISLATURE, 2002

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO RETAINAGE.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that current retainage law hinders the cash flow management of contractors that work with the state. Current law allows the state to retain a percentage of a contract award in order to create incentives to complete work. One option for contractors to recover this retainage before project completion and review is for the contractor to provide a bond to the state. The purpose of this Act is to encourage the use of this option, which will assist contractors in managing cash flow and encourage the purchase of state and county municipal bonds.

SECTION 2. Section 103-32.2, Hawaii Revised Statutes, is amended to read as follows:

"§103-32.2 Substitution of retainage. Any other law to the contrary notwithstanding, any public contract [may] shall provide that the procurement officer [may] shall enter into an agreement with the contractor which will allow the contractor to withdraw from time to time the whole or any portion of the sum retained under section 103-32.1 upon depositing with the procurement officer any general obligation bond of the State or its political subdivisions with a market value not less than the sum to be withdrawn; provided that the procurement officer may require that the total market value of such bond be greater than the sum to be withdrawn."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

 

INTRODUCED BY:

_____________________________