Notice of Intended Action
Interest on retained funds, ch 27
ARC 8591C
TRANSPORTATION DEPARTMENT[761]
Notice of Intended Action
Proposing rulemaking related to interest on retained funds
and providing an opportunity for public comment
The Transportation Department hereby proposes to rescind Chapter 27, “Interest on Retained Funds,” Iowa Administrative Code, and to adopt a new chapter with the same title.
Legal Authority for Rulemaking
This rulemaking is proposed under the authority provided in Iowa Code sections 307.12(1)“j” and 573.12.
State or Federal Law Implemented
This rulemaking implements, in whole or in part, Iowa Code section 573.12.
Purpose and Summary
This rulemaking proposes to repromulgate Chapter 27 in compliance with Executive Order 10. Proposed Chapter 27 implements Iowa Code section 573.12 regarding interest payments on retained funds.
Regulatory Analysis
A Regulatory Analysis for this rulemaking was published in the Iowa Administrative Bulletin on October 2, 2024. A public hearing was held on the following date(s):
●October 28, 2024
The Department received no comments.
Fiscal Impact
This rulemaking has no fiscal impact to the State of Iowa.
Jobs Impact
After analysis and review of this rulemaking, no impact on jobs has been found.
Waivers
Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to 761—Chapter 11.
Public Comment
Any interested person may submit written comments concerning this proposed rulemaking, which must be received by the Department no later than 4:30 p.m. on January 15, 2025. Comments should be directed to:
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Tracy George |
Public Hearing
Public hearings at which persons may present their views orally will be held as follows:
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January 14, 2025 |
Microsoft Teams link |
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January 15, 2025 |
Microsoft Teams link |
Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking.
Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing impairments, should contact Tracy George and advise of specific needs.
Review by Administrative Rules Review Committee
The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).
The following rulemaking action is proposed:
ITEM 1.Rescind 761—Chapter 27 and adopt the following new chapter in lieu thereof:
CHAPTER 27
INTEREST ON RETAINED FUNDS
761—27.1(573) Interest on retained funds.
27.1(1) Scope. This rule implements Iowa Code section 573.12 regarding payment to a contractor of interest earned on retained funds. This rule does not address payment of interest under Iowa Code section 573.14.
27.1(2) General requirements.
a.Interest is paid on retained funds of a contract only if the accrued interest on those funds is at least $25. This dollar threshold reflects the cost to the department of processing an interest payment on retained funds.
b.Interest is not to be paid on retained funds of a contract declared in default.
27.1(3) Procedures.
a.Interest begins to accrue on retained funds on the date the first progress payment is issued. An interest rate is established on this date in accordance with Iowa Code section 12C.6. This interest rate applies for the duration of the contract.
b.In general, interest continues to accrue on retained funds until the date the final payment is issued.
(1)Final payment is payment of retained funds less assessed liquidated damages, if applicable.
(2)The final payment and the interest payment are paid by separate warrants. The interest payment is issued within two weeks after issuance of final payment.
c.Notwithstanding paragraph 27.1(3)“b,” interest is to cease to accrue on retained funds:
(1)Upon the expiration of 90 days following field acceptance of a project if the contractor has failed to submit to the department the documentation necessary for final payment as specified in the contract provisions.
(2)Upon payment of retained funds via a retention release voucher. A retention release voucher releases the retained funds and the interest accrued on those funds less assessed liquidated damages, twice the amount of claims on file, and the amount of possible overpayments or adjustments to contract items and change orders. A retention release voucher may be paid at any time after 30 days have expired following completion and final acceptance of the project if the contractor has submitted the necessary documentation.
(3)Upon the court’s obtaining jurisdiction of the retained funds pursuant to Iowa Code section 573.16. Retained funds turned over to the court will include the interest accrued on those funds to the date the action was filed if the interest has not been paid to the contractor.
This rule is intended to implement Iowa Code sections 307.12(1)“j” and 573.12.
Transportation Department
- 800 Lincoln Way
- Ames, IA 50010
- (515) 239-1358
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Open For Comments
This notice is open for comments for 13 more day(s). If you'd like to comment, select or click the text you wish to comment on in the document, or click the button below to make a general comment about the document. Comments will be collected through 1/15/2025
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Public Hearing
Official Document
- Interest on retained funds, ch 27
- Published on 12/25/2024
- 21 Views , 0 Comments
- Notice of Intended Action
The official published PDF of this document is available from the Iowa General Assembly’s Administrative Rules page.
View the Iowa Administrative Bulletin for 12/25/2024.
Administrative Rule References
The following administrative rule references were added to this document. You may click a reference to view related notices.
Rule -27.1(3) Rule 761-27.1Iowa Code References
The following Iowa code references were added to this document. You may click a reference to view related notices.
Iowa Code 12C.6 Iowa Code 307.12(1) Iowa Code 573.12 Iowa Code 573.14 Iowa Code 573.16Keywords
The following keywords and tags were added to this document. You may click a keyword to view related notices.
General requirements Interest on retained funds Procedures ScopeAbout
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