(1) When a governmental body is a party to a contract to improve real property, and the contract is for a sum in excess of fifty thousand dollars, the owner of the property shall require the contractor to provide a labor and material payment bond in the full amount of the contract. The bond must be secured by cash or must be issued by a surety company licensed in the State with an "A" minimum rating of performance as stated in the most current publication of "Best Key Rating Guide, Property Liability". The governmental body may not exact that the labor and material payment bond be furnished by a particular surety company or through a particular agent or broker.

(2) If the contract is for less than one hundred thousand dollars, the governmental body may permit the use of a "B+" rated bond if it justifies that use in writing.

(3) For the purposes of any contract covered by the provisions of this section, it is the duty of the entity contracting for the improvement to take reasonable steps to assure that the appropriate payment bond is issued and is in proper form.

(4) For purposes of this section, "governmental body" means a state government department, commission, council, board, bureau, committee, institution, college, university, technical school, agency, government corporation, or other establishment or official of the executive or judicial branch, and all local political subdivisions. Governmental body excludes the General Assembly or its respective branches or its committees, Legislative Council, the Legislative Services Agency, or any entity created by act of the General Assembly for the purpose of erecting monuments or memorials or commissioning art that is procured exclusively by private funds.