AR HB1008

Contractors on public construction projects receiving performance and payment bonds are entitled to 95% of earned progress payments, with the public agency retaining 5% to ensure faithful performance.

Public agencies may stop withholding retainage once the construction contract reaches 50% completion if the contractor has provided satisfactory work and both the design professional and public agency approve.

Subcontractors required to furnish performance and payment bonds are entitled to 95% of earned progress payments with the contractor retaining 5%, and contractors must stop retaining funds once the subcontract reaches 50% completion upon contractor approval.

All retainage withheld by public agencies must be paid to contractors within 30 days after the construction contract is completed.

For phased construction projects with partial occupancy, retained funds must be partially released within 30 days in direct proportion to the value of completed work, and no retainage is withheld on stored materials or equipment costs.