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Senate
File
2376
-
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SENATE
FILE
2376
BY
COMMITTEE
ON
LOCAL
GOVERNMENT
(SUCCESSOR
TO
SF
576)
(SUCCESSOR
TO
SSB
1151)
(As
Amended
and
Passed
by
the
Senate
March
2,
2026
)
A
BILL
FOR
An
Act
relating
to
bonds
and
letters
of
credit
for
general
1
contractors
and
subcontractors.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
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2376
Section
1.
NEW
SECTION
.
572A.1
Contractor
performance
bond
1
——
registration
requirement.
2
1.
A
general
contractor
or
subcontractor
that
engages
in
3
the
business
of
construction
in
this
state
shall
obtain
and
4
maintain
an
annual
performance
bond
or
irrevocable
letter
of
5
credit
in
the
amount
of
fifty
thousand
dollars.
The
bond
6
or
letter
of
credit
shall
be
payable
to
the
state
of
Iowa
7
and
executed
by
a
surety
company
or
financial
institution
8
authorized
to
do
business
in
this
state.
9
2.
A
bond
or
letter
of
credit
required
pursuant
to
10
this
section
shall
be
filed
with
the
state.
The
state
or
a
11
political
subdivision
of
the
state
may
enforce
the
requirements
12
of
this
section
in
connection
with
private
construction
work
13
within
its
jurisdiction
and
may
bring
an
action
on
the
bond
or
14
letter
of
credit
in
the
name
of
the
state
of
Iowa
for
the
use
15
and
benefit
of
a
private
person
or
political
subdivision
harmed
16
by
the
contractor’s
or
subcontractor’s
failure
to
perform
17
contractual
obligations
or
for
violation
of
this
section
or
18
other
applicable
law.
19
3.
The
aggregate
liability
of
a
surety
company
or
financial
20
institution
under
a
bond
or
letter
of
credit
issued
pursuant
to
21
this
section
shall
not
exceed
the
penal
sum
of
the
bond
or
the
22
face
amount
of
the
letter
of
credit,
regardless
of
the
number
23
of
claims
made
or
actions
brought.
24
4.
A
general
contractor
or
subcontractor
shall
not
25
register,
renew
a
registration,
or
conduct
business
as
a
26
general
contractor
or
subcontractor
in
this
state
unless
the
27
general
contractor
or
subcontractor
has
a
bond
or
letter
of
28
credit
as
required
by
this
section.
29
5.
a.
Except
as
provided
in
paragraph
“b”
,
a
political
30
subdivision
of
the
state
shall
not,
in
connection
with
31
private
construction
work,
require
a
general
contractor
or
32
subcontractor
to
obtain
or
file
a
bond,
letter
of
credit,
or
33
other
financial
security,
or
require
the
issuance
of
a
license
34
or
impose
a
license
fee
or
charge,
except
as
expressly
required
35
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S.F.
2376
by
this
section
or
by
other
state
or
federal
law.
1
b.
A
political
subdivision
of
the
state
may
require
a
2
contractor
or
subcontractor
to
obtain
or
file
a
bond,
letter
of
3
credit,
or
other
financial
security
for
private
construction
4
work
that
is
performed
in
a
public
right-of-way.
5
6.
This
section
does
not
apply
to
a
general
contractor
or
6
subcontractor
performing
work
for
the
state
or
a
political
7
subdivision
of
the
state,
including
work
subject
to
the
8
requirements
of
chapter
8A,
subchapter
III.
9
7.
For
purposes
of
this
section:
10
a.
“Construction”
means
the
improvement
of
real
property,
11
including
the
performance
of
labor
or
furnishing
of
materials
12
for
the
alteration,
repair,
or
erection
of
a
building
or
13
structure.
14
b.
“General
contractor”
means
the
same
as
defined
in
section
15
572.1.
16
c.
“Subcontractor”
means
the
same
as
defined
in
section
17
572.l.
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