The bill establishes a new requirement for general contractors and subcontractors in Iowa to obtain and maintain an annual performance bond or irrevocable letter of credit valued at fifty thousand dollars. This bond or letter of credit must be payable to the state of Iowa and executed by a qualified surety company or financial institution. The bill outlines that these financial instruments must be filed with the state, which can enforce compliance and take action on behalf of private individuals or political subdivisions harmed by a contractor's failure to meet contractual obligations.

Additionally, the bill specifies that a political subdivision cannot require additional bonds or financial securities for private construction work, except as mandated by this section or other laws, with the exception of work performed in public rights-of-way. It clarifies that the new requirements do not apply to contractors working for the state or its subdivisions. Definitions for "construction," "general contractor," and "subcontractor" are also provided, aligning with existing legal definitions.

Statutes affected:
Introduced: 91C.2, 91C.7, 91C.8, 105.18