Bill > HF1234

This bill enhances payment transparency and fairness for public improvement and building construction contracts in Minnesota by establishing new requirements for how public contracting agencies and owners handle payments to contractors and subcontractors. The bill amends existing statutes to mandate that public contracting agencies and owners must provide detailed notifications within three business days of making any payment, including the payment amount, date, recipient information, and specifics about the work completed or payment purpose. It maintains existing provisions about retainage (funds temporarily withheld during project completion), which cannot exceed 5% and must be released within 60 days after substantial completion, while adding a new requirement that contractors must reduce retainage for subcontractors at the same rate as the primary contract. The bill also explicitly prohibits any contract, management system, or procedure that restricts or delays invoice submissions, declaring such provisions void and unenforceable. Additionally, the legislation requires that if there are payment disputes, contractors must still pay subcontractors for undisputed work and provide clear written explanations for any withheld payments. These changes aim to promote more transparent, timely, and fair payment practices in public construction projects by ensuring all parties are promptly informed about payment details and preventing arbitrary payment restrictions.

Government Affairs

https://www.revisor.mn.gov/bills/bill.php?b=House&f=HF1234&ssn=0&y=2025