David McLain | Colorado Construction Litigation
On Tuesday, February 18th, the Colorado House Business Affairs & Labor Committee voted 10-0 to postpone indefinitely House Bill 1046. If it had been enacted, HB 1046 would have required, for all construction contracts of at least $150,000:
- A property owner to make partial payments to the contractor of any amount due under the contract at the end of each calendar month or as soon as practicable after the end of the month;
- A property owner to pay the contractor at least 95% of the value of satisfactorily completed work;
- A property owner to pay the withheld percentage within 60 days after the contract is completed satisfactorily;
- A contractor to pay a subcontractor for work performed under a subcontract within 30 calendar days after receiving payment for the work, not including a withheld percentage not to exceed 5%;
- A subcontractor to pay any supplier, subcontractor, or laborer who provided goods, materials, labor, or equipment to the subcontractor within 30 calendar days after receiving payment under the subcontract; and
- A subcontractor to submit to the contractor a list of the suppliers, sub-subcontractors, and laborers who provided goods, materials, labor, or equipment to the subcontractor for the work.
The bill did not apply to contracts with public entities or to a contract concerning one multi-family dwelling of no more than 4 units or one single-family dwelling. A person who failed to make a required payment would have been required to pay 1.5% interest per month until the debt is fully paid. In a lawsuit to enforce the bill, the prevailing party iswould have been awarded attorney fees and costs.
In response to the indefinite postponement of the Bill, the Colorado Contractors Coalition put out a announcement reading:
The Colorado Contractors Coalition | CCC announce that they will table efforts to pass HB20 1046, Private Retainage Reform stating that most of the 2020 objectives have been achieved and a path forward post the current Colorado legislative session is underway.
Tuesday, February 18, 2020, the House Business Affairs Committee heard a motion from Representative Valdez, primary sponsor, to postpone indefinitely the bill. Representative Kraft-Tharp, Chair thanked him for his work and that she spoke to all parties involved who have agreed to work together in the interim for a solution to this very real problem.
CCC and their lobby team Valdez Public Affairs are pleased with the response to HB20 1046 with much of the Colorado construction industry in support of the legislation. The work prior to the 2021 Colorado General Assembly will focus on the banking and construction development community.
Scott Deering, ASAC Legislative Chair and CCC Vice Chair | Absolute Caulking & Waterproofing, Inc., commented “Though we hoped to celebrate the passage of HB20-1046 this year, we know that rarely is a bill passed the first year it is introduced. We accomplished a great deal this session including unprecedented industry support for this effort. Members of the CO legislature and stakeholders have committed to continue to work with us on this very important issue. Our goal remains to allow subcontractors to be able to invest their earned capital into their businesses.”
CCC is fully engaged in partnership with Valdez Public Affairs as we advocate for the membership of the Coalition on several issues before the 2020 Colorado General Assembly. Rob Willis, CCC Chair | BT Construction stated, “We have a full agenda that will take us through adjournment May 6. We will be working on private retainage reform in the interim and focus on candidates and campaigns leading up to the 2020 General Election November 3.”
CCC established in 2017 to influence state and local policy makers to support public policy that provides for the improvement and betterment of the subcontractor business community. Members are American Subcontractors Association Colorado, Associated Wall and Ceiling Industries, Colorado Roofing Association, National Utility Contractors Association Colorado and Rocky Mountain Steel Construction Association.