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-HOUSE BILL 26-1311
-BY REPRESENTATIVE(S) Duran and Carter, Gonzalez R., Titone;
-also SENATOR(S) Bright and Snyder, Amabile, Benavidez, Cutter, Exum,
-Frizell, Gonzales J., Jodeh, Kipp, Kolker, Rodriguez, Wallace, Coleman.
-CONCERNING THE USE OF A BOND IN LIEU OF RET AINA GE IN CONSTRUCTION
-CONTRACTS.
-Be it enacted by the General Assembly of the State of Colorado:
-SECTION 1. In Colorado Revised Statutes, 38-46-101, add (2.5)
-and (4.5) as follows:
-38-46-101. Definitions.
-As used in this article 46, unless the context otherwise requires:
-(2.5) "LIKE BOND" MEANS A RETAINAGE BOND SUBMITTED BY A
-SUBCONTRACTOR TO A CONTRACTOR OR SUBCONTRACTOR THAT IS
-SUBSTANTIALLY EQUIVALENT TO THE RETAINAGE BOND SUBMITTED BY THE
-CONTRACTOR OR SUBCONTRACTOR TO THE PROPERTY OWNER OR
-CONTRACTOR.
-Capital letters or bold & italic numbers indicate new material added to existing law; dashes
-through words or numbers indicate deletions from existing law and such material is not part of
-the act.
-( 4.5) "RETAINAGE BOND" MEANS A SURETY BOND THAT IS ISSUED BY
-AN INSURER LICENSED TO ISSUE THE BOND IN COLORADO AS ASSURANCE FOR
-THE PERSON ACCEPTING THE BOND THAT:
-(a) A CONTRACT OR SUBCONTRACT WILL BE SATISFACTORILY
-COMPLETED; OR
-(b) THE GOODS, MATERIALS, OR EQUIPMENT MEETS THE
-SPECIFICATIONS NECESSARY FOR SATISFACTORY PERFORMANCE OF A
-CONTRACT OR SUBCONTRACT.
-SECTION 2. In Colorado Revised Statutes, 38-46-103, amend (1)
-as follows:
-38-46-103. Private construction contracts - retainage -
-conditions precedent.
-(1) (a) A property owner, contractor, or subcontractor shall not
-withhold as retainage more than five percent of the price of the work
-completed under the contract or subcontract. Making a partial payment
-under this subsection (1) is not acceptance or approval of some of the work
-or of a waiver of defects in the work.
-(b) (I) IN LIEU OF RETAINAGE, A SUBCONTRACTOR OR CONTRACTOR
-MAY TENDER A RETAINAGE BOND IN AN AMOUNT NOT TO EXCEED FIVE
-PERCENT OF THE MONEY EARNED BY THE SUBCONTRACTOR OR CONTRACTOR.
-IF THE CONTRACTOR OR SUBCONTRACTOR TENDERS A RETAINAGE BOND
-MEETING THE REQUIREMENTS OF SUBSECTIONS ( 1 )(b )(II) AND ( 1 )(b )(Ill) OF
-THIS SECTION, THE PROPERTY OWNER, CONTRACTOR, OR SUBCONTRACTOR
-SHALL ACCEPT THE RET AINA GE BOND AND RELEASE THE RET AINA GE
-COVERED BY THE RETAINAGE BOND.
-(11) TO COMPLY WITH SUBSECTION (1 )(b )(1) OF THIS SECTION, THE
-CONTRACTOR OR SUBCONTRACTOR MUST PROVIDE A RETAINAGE BOND
-MEETING THE REQUIREMENTS OF SUBSECTION (l)(b)(l11) OF THIS SECTION
-AND MUST:
-(A) FAITHFULLY PERFORM ALL THE PROVISIONS OF THE CONTRACT
-ORSUBCONTRACT;AND
-PAGE 2-HOUSE BILL 26-1311
-(B) PAY ALL LABORERS, SUPPLIERS, AND SUBCONTRACTORS
-AMOUNTS OWED UNDER THE CONTRACT OR SUBCONTRACT.
-(Ill) THE PROPERTY OWNER OR CONTRACTOR MAY REQUIRE THAT
-THE AUTHORIZED SURETY HAVE A MINIMUM A.M. BEST, OR A SUCCESSOR
-INSTITUTION, FINANCIAL STRENGTH RA TING, SO LONG AS THE REQUIRED
-MINIMUM RATING DOES NOT EXCEED "A-". THE CONTRACTOR MAY
-WITHHOLD THE SUBCONTRACTOR'S PORTION OF THE BOND PREMIUM, TO THE
-EXTENT THE CONTRACTOR PROVIDES A RET AINAGE BOND TO OBTAIN A
-RELEASE OF THE SUBCONTRACTOR'S RETAINAGE.
-(IV) THE CONTRACTOR OR PROPERTY OWNER MUST ACCEPT A BOND
-MEETING THE REQUIREMENTS OF SUBSECTION (l)(b)(III) OF THIS SECTION.
-THE SUBCONTRACTOR'S OR CONTRACTOR'S BOND AND THE PROCEEDS FROM
-THE BOND ARE SUBJECT TO A CLAIM AND LIEN IN THE SAME MANNER AND
-PRIORITY AS SET FORTH IN ARTICLE 22 OF THIS TITLE 38.
-(V) WHEN A PROPERTY OWNER ACCEPTS A BOND IN LIEU OF
-RETAINAGE FROM A CONTRACTOR, THE CONTRACTOR MUST ACCEPT A LIKE
-BOND FROM ANY SUBCONTRACTOR THAT SUBMITS A BOND IN LIEU OF
-RETAINAGE UNDER THIS SUBSECTION (l)(b).
-(VI) THIS SUBSECTION (l)(b) DOES NOT APPLY TO A CONTRACT OR
-SUBCONTRACTTHA T CONCERNS PROPERTY OWNED BY A PUBLIC ENTITY. THE
-EXEMPTION DESCRIBED IN THIS SUBSECTION ( 1 )(b )(VI) INCLUDES A
-CONTRACT OR SUBCONTRACT THAT RESULTS FROM A PUBLIC-PRIVATE
-PARTNERSHIP.
-SECTION 3. Act subject to petition - effective date -
-applicability. (1) This act takes effect at 12:01 a.m. on the day following
-the expiration of the ninety-day period after final adjournment of the
-general assembly (August 12, 2026, if adjournment sine die is on May 13,
-2026); except that, if a referendum petition is filed pursuant to section 1 (3)
-of article V of the state constitution against this act or an item, section, or
-part of this act within such period, then the act, item, section, or part will
-not take effect unless approved by the people at the general election to be
-held in November 2026 and, in such case, will take effect on the date of the
-official declaration of the vote thereon by the governor.
-PAGE 3-HOUSE BILL 26-1311
-(2) This act applies to contracts created on or after the applicable
-effective date of this act.
-Ju~ ~
-SPEAKER OF THE HOUSE
-OF REPRESENTATIVES
-v~ 4
-Vanessa Reilly ~
-CHIEF CLERK OF THE HOUSE
-OF REPRESENTATIVES
-PAGE 4-HOUSE BILL 26-1311
-James Rashad Coleman, Sr.
-PRESIDENT OF
-THE SENATE
-Esther van Mourik
-SECRETARY OF
-THE SENATE
-I 4th 1@6 0., f \ : 1{)fY't
-e)
+Senate Committee of Reference Report: Not Amended
+
+Committee on Finance
+
+March 31, 2026
+
+After consideration on the merits, the Committee recommends the following:
+
+HB26-1311   be referred to the Committee of the Whole with favorable recommendation.