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HB 2341

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2025 Regular Session Introduced by Elizabeth Bennett-Parker and 12 co-sponsors

Requires Kansas-licensed sureties on lien-discharge bonds and a fast 30-day hearing to decide payment or escrow, with fees awarded to claimants who pre-demand and win.

House sustained Governor's veto
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Bill Summary · HB 2341

HB 2341 — Summary

Status: Introduced Feb. 3, 2025; referred to Committee on Insurance (as provided).
Bill amends K.S.A. 60-1110 (contractor/owner bonds used to discharge contractor liens).

Purpose

To strengthen protections for claimants (e.g., subcontractors, material suppliers, laborers) who bring claims against bonds posted to discharge contractor liens by (1) requiring sureties on those bonds to be licensed to do business in Kansas, (2) creating a fast preliminary court process to resolve whether the surety must pay or escrow the claimed amount, and (3) shifting attorney fees and costs to the principal and surety when a claimant meets certain pre-suit demand conditions and prevails.

Key provisions

  • Licensing of sureties: Any surety on a bond executed to replace or clear contractor liens must be licensed as required by law to do business in Kansas.
  • Bond requirements retained/clarified:
    • The contractor or owner may file a bond in lieu of liens; bond must be conditioned for payment of claims and have “good and sufficient sureties,” approved by a district court judge and filed with the clerk.
    • When such a bond is approved and filed, existing liens are discharged and future liens under the act do not attach.
    • Suits on the bond may be brought by any interested person, but defendants may only be the principal or the surety or those contractually liable.
  • Pre-suit written demand / 30‑day cure: If a claimant makes a written demand for payment to both the principal and the surety and does not receive payment within 30 days, and later prevails in a suit on the bond, the court must award the claimant attorney fees and court costs.
  • Mandatory preliminary hearing: In a suit on such a bond, the district court must hold a hearing within 30 days of the filing of the answer to make an initial determination whether:
    • the surety should immediately pay the amount claimed to the claimant; or
    • the surety should instead pay the claimed amount into an account held by the district court pending final resolution.
  • Technical: The bill amends and repeals the existing K.S.A. 60-1110 and provides that the act takes effect following publication in the statute book.

Who is affected

  • Claimants (subcontractors, suppliers, laborers) — faster access to remedies and potential recovery of attorney fees when pre-suit demand is ignored.
  • Principals (property owners or contractors) — exposure to fee awards and quicker provisional payments or escrow outcomes.
  • Surety companies — must be licensed in Kansas to be an eligible surety on these bonds; face earlier court-ordered payment or escrow and possible fee assessments.
  • District courts / Judicial Branch — required to schedule and hold initial hearings within 30 days of an answer; Office of Judicial Administration notes this could increase expenditures, but a fiscal impact cannot be estimated. The Department of Insurance reports no fiscal effect.

Procedural/timing notes

  • Preconditions for fee award: claimant must have made a written demand on both principal and surety, waited 30 days without payment, then prevailed in court.
  • Preliminary hearing deadline: within 30 days after the defendant(s) file an answer in the suit on the bond.
  • Fiscal note: potential unquantified judicial costs for expedited hearings; no state insurance department fiscal impact identified.

Compiled from official sources — confirm details with the bill’s official record.

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