Bill > SF574

This bill modifies Iowa's public improvement contract laws by reducing the maximum percentage of contract payments that can be retained by public corporations and contractors from five percent to three percent. Specifically, the bill amends sections 573.12 and 573.13 of the Iowa Code to lower the retention rate for monthly payments on public improvement projects. Under the new provisions, public corporations would be limited to retaining no more than three percent of monthly payments from contractors, and contractors would similarly be restricted to retaining no more than three percent from payments to their subcontractors. The retention fund continues to serve its original purpose of providing a financial reserve for paying claims related to materials and labor performed on the improvement project. The bill is set to take effect on July 1, 2025, and appears designed to potentially reduce financial burdens on contractors by allowing them to keep a larger percentage of their contract payments during the course of a public improvement project.

Budget and Finance

Commerce (S)

https://www.legis.iowa.gov/legislation/BillBook?ga=91&ba=SF574