SB 1602 Summary

• Amends the Fair Pay for Construction Act to allow contractors to use a release of retainage bond as an alternative to withholding retainage payments on construction contracts.

• Permits prime contractors, subcontractors, and sub-subcontractors to post a bond equal to 10% of the contract price instead of withholding retainage from payments.

• Requires the retainage bond to include provisions ensuring faithful performance of contract obligations, prompt payment to workers and material suppliers, and timely payment of state and federal withholdings.

• Maintains existing retainage limits: up to 10% until invoices reach 50% of contract value, then reduced to 5% thereafter (unless bond option is used).

• Effective date: November 1, 2010.