Bill > HB1311

This bill allows subcontractors and contractors on private construction projects to provide a "retainage bond" in lieu of holding a portion of the payment, known as retainage, which is typically up to five percent of the work completed. A retainage bond is a surety bond issued by an insurer licensed in Colorado that guarantees the satisfactory completion of a contract or subcontract, or that goods, materials, or equipment meet necessary specifications. A "like bond" refers to a retainage bond submitted by a subcontractor that is substantially equivalent to the one submitted by the contractor to the owner. If a contractor or subcontractor offers a valid retainage bond that meets specific requirements, including the surety having a minimum financial strength rating (not exceeding "A-"), the property owner, contractor, or subcontractor must accept it and release the retainage. The bill also clarifies that contractors can withhold the subcontractor's portion of the bond premium if they provide a retainage bond to release the subcontractor's retainage, and that the bond and its proceeds are subject to claims and liens similarly to existing laws. This provision does not apply to contracts or subcontracts involving property owned by a public entity, including those resulting from public-private partnerships.