CA AB2216

Reduces the payment deadline for prime contractors and subcontractors to pay subcontractors from 10 days to 7 days after receipt of each progress payment for private and public works of improvement.

Changes the notice requirement for enforcing claims on payment bonds for contracts entered into on or after January 1, 2011, requiring written notice to surety and bond principal prior to project completion or recordation of notice of completion, rather than within 15-75 days after completion.

Caps retention proceeds at 5% of each payment for public works contracts entered into on or after January 1, 2011, until January 1, 2015, with exceptions for substantially complex projects approved by the department or public entity governing body.

Modifies payment limits for state contracts by allowing progress payments up to 100% of actual work completed (instead of 95%) and limiting retention withholding to not more than 5% (instead of not less than 5%) until final completion and acceptance, effective through January 1, 2015.

Allows contractors to withhold no more than 150% of disputed amounts in good faith disputes over progress payments, with penalties of 2% per month for late payments and attorney's fees for prevailing parties in collection actions.