Iowa Admin. Code r. 561-8.7 - Interest on retained funds
(1)
Scope. This rule
implements Iowa Code subsection
573.12(3)
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.
(2)
General requirements.
a. Interest shall be paid pursuant to Iowa
Code section
573.12
only on state contracts awarded on or after June 19, 1991.
b. Interest shall be 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 in contracts for the construction of public
improvements.
c. Interest shall not
be paid on retained funds of a contract declared in default.
(3)
Procedures.
a. Interest shall begin to accrue on retained
funds on the date the first progress payment is issued. An interest rate shall
be established on this date in accordance with Iowa Code section
12C.6.
This interest rate shall apply for the duration of the contract.
b. In general, interest shall continue to
accrue on retained funds until the date final payment is approved by the chief
engineer Final payment is payment of retained funds less assessed liquidated
damages, if applicable.
c.
Notwithstanding paragraph"b, " interest shall cease to accrue
on retained funds:
(1) Upon the expiration of
60 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 provision.
(2) Upon the court 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.
Notes
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
No prior version found.