summary
Introduced
01/09/2025
01/09/2025
In Committee
05/28/2025
05/28/2025
Crossed Over
04/09/2025
04/09/2025
Passed
08/15/2025
08/15/2025
Dead
Signed/Enacted/Adopted
08/15/2025
08/15/2025
Introduced Session
104th General Assembly
Bill Summary
Amends the Public Construction Bond Act. Provides that, before the completion of 50% of the contract for public works, the State or a local governmental unit, except for the Department of Transportation, may not withhold retainage from any payment to a contractor who furnishes the bond or bond substitute required by the Act in an amount in excess of 10% of any payment made before the date of completion of 50% of the contract for public works. Provides that, when a contract for public works is 50% complete, the State or the local governmental unit, except for the Department of Transportation, shall reduce the retainage so that no more than 5% is held. Allows a State agency, subject to these limitations, to withhold as retainage a portion of the moneys from the payment of a contract that is entered into on or after the effective date of the amendatory Act if and only if the State agency determines that satisfactory progress has not been achieved by a contractor or subcontractor during any period for which a payment is to be made. Requires satisfactory progress to be clearly provided for in the contract between the State agency and the contractor or subcontractor. Provides that retainage may not be used as a substitute for good contract management, and the State agency may not withhold funds without cause. Provides that determinations to retain and the specific amount to be withheld must be made by the State agency on a case-by-case basis based on the performance of milestones under the current contract as provided for in the contract between the State agency and the contractor. Prohibits a contractor from withholding retainage from a subcontractor except to the extent a State agency has withheld retainage from the contractor which is attributable to that subcontractor's subcontract. Defines "retainage". Provides that nothing in the amendatory Act may be construed to modify any provision of the State Prompt Payment Act or the Local Government Prompt Payment Act. Effective June 1, 2027.
AI Summary
This bill amends the Public Construction Bond Act to modify how retainage (a portion of money withheld from payments to contractors to ensure contract completion) is handled in public works contracts. Before a contract reaches 50% completion, state agencies and local governmental units (except the Department of Transportation) cannot withhold more than 10% of any payment from a contractor who has provided the required bond. Once the contract reaches 50% completion, the retainage must be reduced to no more than 5%. The bill allows state agencies to withhold additional retainage only if they determine that satisfactory progress has not been achieved, and such criteria must be clearly specified in the contract. The bill emphasizes that retainage cannot be used as a substitute for good contract management, and agencies cannot withhold funds without a valid cause. Determinations about retainage must be made on a case-by-case basis based on contract milestones. Additionally, contractors are prohibited from withholding retainage from subcontractors beyond the amount withheld from them by the state agency. The bill defines "retainage" and explicitly states that it does not modify existing prompt payment regulations. The changes will take effect on June 1, 2027.
Committee Categories
Government Affairs
Sponsors (13)
William Davis (D)*,
Willie Preston (D)*,
Dee Avelar (D),
Harry Benton (D),
Diane Blair-Sherlock (D),
Lakesia Collins (D),
La Shawn Ford (D),
Matt Hanson (D),
Napoleon Harris (D),
Mattie Hunter (D),
Rita Mayfield (D),
Laura Murphy (D),
Nick Smith (D),
Last Action
Public Act . . . . . . . . . 104-0168 (on 08/15/2025)
bill text
bill summary
Loading...
bill summary
Loading...
bill summary
Loading...