§ 573.14 — Retention of unpaid funds

Iowa § 573.14

• Jurisdiction: Iowa
• Title XIV: PROPERTY
• Ch. 573: LABOR AND MATERIAL ON PUBLIC IMPROVEMENTS

Text

1. The fund provided for in section 573.13 shall be retained by the public corporation for
a period of thirty days after the completion and final acceptance of the improvement. If at
the end of the thirty-day period claims are on file, the public corporation shall continue to
retain from the unpaid funds a sum equal to double the total amount of all claims on file. The
remaining balance of the unpaid fund, or if no claims are on file, the entire unpaid fund, shall
be released and paid to the contractor.
2. The public corporation shall order payment of any amount due the contractor to be
made in accordance with the terms of the contract. Except as provided in section 573.12 for
progress payments, failure to make payment pursuant to this section, of any amount due the
contractor, within forty days, unless a greater time period not to exceed fifty days is specified
in the contract documents, after the work under the contract has been completed and if the
work has been accepted and all required materials, certifications, and other documentations
required to be submitted by the contractor and specified by the contract have been furnished
the awarding public corporation by the contractor, shall cause interest to accrue on the
amount unpaid to the benefit of the unpaid party. Interest shall accrue during the period
commencing the thirty-first day following the completion of work and satisfaction of the
other requirements of this subsection and ending on the date of payment. The rate of
interest shall be determined by the period of time during which interest accrues, and shall
be the same as the rate of interest that is in effect under section 12C.6, as of the day interest
begins to accrue, for a deposit of public funds for a comparable period of time. However,
for institutions governed pursuant to chapter 262, the rate of interest shall be determined by
the period of time during which interest accrues, and shall be calculated as the prime rate
plus one percent per year as of the day interest begins to accrue. This subsection does not
abridge any of the rights set forth in section 573.16. Except as provided in sections 573.12
and 573.16, interest shall not accrue on funds retained by the public corporation to satisfy
the provisions of this section regarding claims on file. This chapter does not apply if the
public corporation has entered into a contract with the federal government or accepted a
federal grant which is governed by federal law or rules that are contrary to the provisions of
this chapter. For purposes of this subsection, “prime rate” means the prime rate charged by
banks on short-term business loans, as determined by the board of governors of the federal
reserve system and published in the federal reserve bulletin.

Legislative History

[C97, §3104; S13, §1989-a59; C24, 27, 31, 35, 39, §10312; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §573.14; 81 Acts, ch 127, §4]