CA AB1885

State agencies are prohibited from withholding retention proceeds when making progress payments to contractors for work performed on public works contracts.

Repeals existing provisions that allowed retention proceeds over $10,000 to be placed in escrow accounts with state- or federally chartered banks, along with the associated escrow agreement form.

Requires state agencies to promptly notify the appropriate legislative policy committees if their interests are compromised due to not withholding retention on a public works contract.

Applies to all public works contracts awarded by state agencies after January 1, 2027, but excludes the Department of Transportation (which remains governed by Section 7202).

Preserves existing rights, duties, and obligations between original contractors and subcontractors regarding retention on public works projects under Section 7200.