STS Roundup: Missouri, Colorado and Ohio

June 30, 2014

Missouri will have a new retainage statute starting in August after Governor Jay Nixon signed SCS SB 529 into law last week. Under current law contractors in Missouri must pay subcontractors and suppliers when they receive payment on a public project less any retention not exceeding 10% of the value. SB 529 lowers that retention threshold to 5%. It also provides that a public owner may retain up to 10% if the contractor is not required to obtain a surety bond on the project, which is to say if the value of the project is $50,000 or less. The new statute also provides that if a public owner determines that certain aspects of a public project are not substantially or satisfactorily completed, the owner must provide a written explanation within 14 calendar days to the contractor, which must then inform any subcontractor or supplier that might be held responsible. Failing to provide this notice means the public body must pay at least 98% of the retainage within 30 calendar days.

Elsewhere, in Colorado, on June 6, upon its signature by Governor John Hickenlooper, HB 14-1387 entered into force, instituting a number of different construction law reforms particularly focused on updating the state's laws on purchasing and maintaining public real property. The bill cleans up a number of inconsistencies in the existing statute and establishes procedures for a number of different bookkeeping, budgeting and certifying purposes, but additionally also raises the threshold at which prime contractors on public construction must provide payment and performance bonds from $100,000 to $150,000.

Finally in Ohio, new amendments to the state's public-private partnership (P3) authority approved by Governor John Kasich earlier this month have left subcontractor and materials supplier advocates disappointed. The changes, which enter into effect on September 14, require that prime contractors provide both performance and payment bonds on P3 projects, but also allow the state's P3 director to specify the amount of the bonds, meaning that entities further down the ladder of supply might not be covered, depending on the specified size of the bond. The amendments also stipulate that building and construction materials used in P3s are exempt from Ohio's sales and use tax.

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