§ 573.28

573.28 Early release of retained funds. 1. For purposes of this section:a. 'Authorized contract representative' means the person chosen by the governmental entity or the department to represent its interests or the person designated in the contractas the party representing the governmental entity’s or the department’s interest regardingadministration and oversight of the project. b. 'Department' means the state department of transportation.c. 'Governmental entity' means the state, political subdivisions of the state, public school corporations, and all officers, boards, or commissions empowered by law to enter intocontracts for the construction of public improvements, excluding the state board of regentsand the department. d. 'Public improvement' means a building or construction work which is constructed under the control of a governmental entity and is paid for in whole or in part with fundsof the governmental entity, including a building or improvement constructed or operatedjointly with any other public or private agency, but excluding urban renewal demolition andlow-rent housing projects, industrial aid projects authorized under chapter 419, emergencywork or repair or

djointly with any other public or private agency, but excluding urban renewal demolition andlow-rent housing projects, industrial aid projects authorized under chapter 419, emergencywork or repair or maintenance work performed by employees of a governmental entity,and excluding a highway, bridge, or culvert project, and excluding construction or repairor maintenance work performed for a city utility under chapter 388 by its employees orperformed for a rural water district under chapter 357A by its employees. e. 'Repair or maintenance work' means the preservation of a building, storm sewer, sanitary sewer, or other public facility or structure so that it remains in sound or propercondition, including minor replacements and additions as necessary to restore the publicfacility or structure to its original condition with the same design. f. 'Substantially completed' means the first date on which any of the following occurs: (1) Completion of the public improvement project or the highway, bridge, or culvert project or when the work on the public improvement or the highway, bridge, or culvertproject has been substantially completed in general accordance with the terms andprovisions of

bridge, or culvert project or when the work on the public improvement or the highway, bridge, or culvertproject has been substantially completed in general accordance with the terms andprovisions of the contract. (2) The work on the public improvement or on the designated portion is substantially completed in general accordance with the terms of the contract so that the governmentalentity or the department can occupy or utilize the public improvement or designated portionof the public improvement for its intended purpose. This subparagraph shall not apply tohighway, bridge, or culvert projects. (3) The public improvement project or the highway, bridge, or culvert project is certified as having been substantially completed by either of the following: (a) The architect or engineer authorized to make such certification.(b) The authorized contract representative.(4) The governmental entity or the department is occupying or utilizing the public improvement for its intended purpose. This subparagraph shall not apply to highway, bridge, or culvert projects. 2. Payments made by a governmental entity or the department for the construction of public improvements and highway, bridge, or

s subparagraph shall not apply to highway, bridge, or culvert projects. 2. Payments made by a governmental entity or the department for the construction of public improvements and highway, bridge, or culvert projects shall be made in accordancewith the provisions of this chapter, except as provided in this section: a. At any time after all or any part of the work on the public improvement or highway, bridge, or culvert project is substantially completed, the contractor may request the releaseof all or part of the retained funds owed. The request shall be accompanied by a swornstatement of the contractor that, ten calendar days prior to filing the request, notice was givenas required by paragraphs 'f' and 'g' to all known subcontractors, sub-subcontractors, andsuppliers. b. Except as provided under paragraph 'c', upon receipt of the request, the governmental entity or the department shall release all or part of the retained funds. Retained funds thatare approved as payable shall be paid at the time of the next monthly payment or within thirtydays, whichever is sooner. If partial retained funds are released pursuant to a contractor’srequest, no retained funds shall be subsequently

id at the time of the next monthly payment or within thirtydays, whichever is sooner. If partial retained funds are released pursuant to a contractor’srequest, no retained funds shall be subsequently held based on that portion of the work. If Sat Dec 23 11:08:13 2023 Iowa Code 2024, Section 573.28 (6, 0) §573.28, LABOR AND MATERIAL ON PUBLIC IMPROVEMENTS 2 within thirty days of when payment becomes due the governmental entity or the departmentdoes not release the retained funds due, interest shall accrue on the amount of retained fundsat the rate of interest that is calculated as the prime rate plus one percent per year as of theday interest begins to accrue until the amount is paid. c. If labor and materials are yet to be provided at the time the request for the release of the retained funds is made, an amount equal to two hundred percent of the value ofthe labor or materials yet to be provided, as determined by the governmental entity’s orthe department’s authorized contract representative, may be withheld until such labor ormaterials are provided. d. An itemization of the labor or materials yet to be provided, or the reason that the request for release of retained funds is

resentative, may be withheld until such labor ormaterials are provided. d. An itemization of the labor or materials yet to be provided, or the reason that the request for release of retained funds is denied, shall be provided to the contractor in writing withinthirty calendar days of the receipt of the request for release of retained funds. e. The contractor shall release retained funds to the subcontractor or subcontractors in the same manner as retained funds are released to the contractor by the governmental entityor the department. Each subcontractor shall pass through to each lower-tier subcontractorall retained fund payments from the contractor. f. Prior to applying for release of retained funds, the contractor shall send a notice to all known subcontractors, sub-subcontractors, and suppliers that provided labor or materials forthe public improvement project or the highway, bridge, or culvert project. g. The notice shall be substantially similar to the following: NOTICE OF CONTRACTOR’S REQUEST FOR EARLY RELEASE OF RETAINED FUNDS You are hereby notified that [name of contractor] will be requesting an early release of funds on a public improvementproject or a highway, bridge,

ACTOR’S REQUEST FOR EARLY RELEASE OF RETAINED FUNDS You are hereby notified that [name of contractor] will be requesting an early release of funds on a public improvementproject or a highway, bridge, or culvert project designated as [nameof project] for which you have or may have provided labor ormaterials. The request will be made pursuant to Iowa Code section573.28. The request may be filed with the [name of governmentalentity or department] after ten calendar days from the date of thisnotice. The purpose of the request is to have [name of governmentalentity or department] release and pay funds for all work that hasbeen performed and charged to [name of governmental entity ordepartment] as of the date of this notice. This notice is provided inaccordance with Iowa Code section 573.28. 2018 Acts, ch 1097, §5Referred to in §573.15 Sat Dec 23 11:08:13 2023 Iowa Code 2024, Section 573.28 (6, 0)