SENATE BILL NO. 145


   January 27, 1999, Introduced by Senators STEIL, GOUGEON, 
        GOSCHKA, SIKKEMA, MC MANUS, JAYE, SHUGARS and 
        HAMMERSTROM and referred to the Committee on Local, 
        Urban and State Affairs.



        A bill to amend 1963 PA 213, entitled

   "An act to provide a procedure for bonding contractors for public
   buildings and public works of governmental units; and to repeal
   certain acts and parts of acts,"

   by amending section 1 (MCL 129.201), as amended by 1982 PA 11.

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1         Sec. 1.  (1) Before any contract  ,  exceeding
             $50,000.00

 2    for the construction, alteration, or repair of any public build-

 3    ing or public work or improvement of  the state or a county,

 4     city, village, township, school district, public educational

 5     institution, other political subdivision, public authority,
                       or

 6     public agency hereinafter referred to as the "governmental

 7     unit",  A GOVERNMENTAL UNIT is awarded, the
                        proposed contractor,

 8     hereinafter referred to as the "principal contractor",
                        PRINCIPAL

 9    CONTRACTOR shall furnish at his or her own cost to the

10    governmental unit a performance bond and a payment bond which


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 1    shall become binding upon the award of the contract to the

 2    principal contractor.  However, if the principal contractor is a

 3    common carrier as defined in section 3 of  Act No. 300 of
             the

 4     Public Acts of 1909, as amended, being section 462.3 of the

 5     Michigan Compiled Laws  1909 PA 300, MCL 462.3,
                        or  IS the des-

 6    ignated operator of a state subsidized railroad, OR IS AUTHORIZED

 7    BY THE GOVERNMENTAL UNIT IN WRITING, the principal contractor may

 8    provide an irrevocable letter of credit from a state or national

 9    bank or a state or federally chartered savings and loan associa-

10    tion instead of the bonds.  Neither the invitation for bids, nor

11    any person acting, or purporting to act, on behalf of the govern-

12    mental unit shall require that the bonds be furnished by a par-

13    ticular bank or surety company, or through a particular agent or

14    broker, or through a bank, company, agent, or broker in any par-

15    ticular locality.

16         (2) AS USED IN THIS ACT, "GOVERNMENTAL UNIT" MEANS THIS

17    STATE, A COUNTY, CITY, VILLAGE, TOWNSHIP, SCHOOL DISTRICT, OR

18    PUBLIC EDUCATION INSTITUTION, OR ANY OTHER POLITICAL SUBDIVISION,

19    PUBLIC AUTHORITY, OR PUBLIC AGENCY.



















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