All 50 US states have adopted ‘Little’ Miller Acts. These laws protect first-tier subcontractors and suppliers on state-funded projects, ensuring that they get paid. Since public projects are not subject to mechanics liens, these Little Miller Acts are vital to protecting payments on public projects.
What is the Little Miller Act?
Let’s start with the Miller Act. The Miller Act was passed in 1935 and applies to federally funded public works projects. It protects suppliers, first-tier subcontractors, and the federal government by requiring general contractors to purchase performance and payment bonds on each project.
These bonds protect the government from unfinished work and protect first-tier suppliers and subs from nonpayment. If a sub or supplier is not getting paid, they can file a claim against the payment bond on the project. The surety investigates the claim and pays them if the claim is legitimate.
The Little Miller Act is the name given to the collection of state laws that are based on the federal Miller Act. Like the Miller Act, the Little Miller Acts require general contractors on state-funded public works projects to purchase performance and payment bonds.
However, the terms of each state’s laws are different.
General terms of Little Miller Acts
Although each state has its own set of laws regarding performance and payment bonds on state-funded projects, there are some similarities.
Each state says that the general contractor must purchase performance and payment bonds on state-funded public works projects. Usually, there is a baseline contract amount that has to be exceeded before bonds need to be purchased. For example: In Texas, bonds are required on projects over $25,000; in Nevada, it’s $100,000.
The value of the bonds also varies, as some states, like Alabama, only require a bond for 50% of the contract value. Requirements like these can make collecting difficult if you delay filing a claim. That’s why it’s always good to file as soon as possible.
Some states require subcontractors and suppliers to submit a preliminary notice before beginning work on a project. This notice may need to be sent to the owner, the general contractor, and possibly recorded with the county clerk. Failing to submit a preliminary notice when required may invalidate your right to file a bond claim, so make sure you find out if one is required before you start work.
If a first-tier supplier or subcontractor hasn’t been paid, they have a certain number of days after the project is completed to file a payment bond claim. The amount of time they have to file varies by state and can be anywhere from 75 days to a year. If you miss the deadline for filing a bond claim, your claim will be denied.
Little Miller Acts – State-By-State
Since each state has different requirements, we’ve created guides for each one. Simply click on the state name to be taken to the page with everything you need to know about that state’s Little Miller Act.