Date: 02/27/2014

Final
BILL SUMMARY for HB14-1165

HOUSE COMMITTEE ON BUSINESS, LABOR, ECONOMIC, & WORKFORCE DEVELOPMENT

Votes: View--> Action Taken:
Adopt amendment L.001. The motion passed without o
Postpone House Bill 14-1165 indefinitely. The moti
Refer House Bill 14-1165, as amended, to the Commi		Pass Without Objection
PASS
FAIL



02:55 PM -- HB 14-1165

Representative Fischer presented House Bill 14-1165, concerning a limit on the retainage allowed under a private construction contract. The bill requires 95 percent of all costs under a construction contract to be paid at the time they are invoiced and due according to the contractual payment schedule. Any party that withholds funds (retainage) in excess of five percent of the amount due is liable in a civil action for release of the excess withheld plus interest and legal expenses. The bill does not apply to projects with a total contract value less than $150,000, contracts concerning residential buildings with four or fewer dwelling units, or construction contracts with a public entity.

Representative Fischer distributed Amendment L.001 (Attachment D). Representative Fischer responded to questions from the committee.

140227 AttachD.pdf140227 AttachD.pdf

The following individuals testified:

03:08 PM -- Rick Woodruff, representing NAIOP and Urban Land Conservancy, testified in opposition to the bill. Mr. Woodruff stated that he was also authorized to speak for Building Owners and Managers Association (BOMA) and Independent Bankers in opposition to the bill. Mr. Woodruff discussed the retainage process and responded to questions from the committee.

03:13 PM -- Dave Davia, representing CAMPC and Building Jobs 4 Colorado, testified in opposition to the bill. Mr. Davia characterized the issue as a fracture in the industry. He responded to questions from the committee.

03:24 PM -- Ted Gorab, representing the Colorado Association of Homebuilders, testified in opposition to the bill. Mr. Gorab discussed lender constraints and the different risk profile and conditions of each construction project. He responded to questions from the committee.

03:27 PM -- Jesse Witt and David Ford, representing the Community Associations Institute (CAI), testified in opposition to the bill. Mr. Witt stated his concerns that the bill would create complications for multi-family housing developments. Mr. Ford stated his concern that this bill would set a retainage precedent where retainage has not previously been used. Mr. Witt and Mr. Ford responded to questions from the committee.

03:32 PM -- Karen Harris, representing American Institute of Architects (AIA), testified in opposition to the bill. She stated that there is no one-size-fits-all in contracting.

03:35 PM -- Nikolaus Remus, representing AIA, testified in opposition to the bill. He stated his concern with the bill in instances where the construction project is part of a greater endeavor, like the opening of a restaurant, and discussed the purpose of retainage as a tool in successful project completion.

03:37 PM -- Chris Green, representing AIA, testified in opposition to the bill.

03:40 PM -- Kevin Eronimous, representing AIA, testified in opposition to the bill.

03:42 PM -- Jenifer Waller, representing Colorado Bankers Association, testified in opposition to the bill. She stated her organization's concern that the bill would impact commercial development if enacted. She discussed the purposes of retainage, and stated the variable involved in setting the percentage. Ms. Waller responded to questions from the committee.

03:46 PM -- Bart McTaggart, representing Excel Environmental, testified in support of the bill. Mr. McTaggart discussed the burden of retainage on subcontractors and responded to questions from the committee.

03:49 PM -- Ed King and Ralph Baldwin, representing themselves as general contractors in Tennessee and New Mexico, testified in support of the bill. Mr. King and Mr. Baldwin discussed their experience in states where similar legislation has been enacted and responded to questions from the committee.

04:02 PM -- Travis Vap, representing South Valley Gravel, testified in support of the bill. Mr. Vap discussed the role of general contractors in project completion.

04:04 PM -- Rusty Ploughman, representing Delta Drywall, testified in support of the bill. Mr. Ploughman discussed examples of how slow pay and retainage lead to subcontractors going out of business.

04:07 PM -- Tara Olson, representing OE Construction Company, testified in support of the bill. She discussed the impact of retainage on cash flow.

04:09 PM -- Jim Donaldson, representing AIA Industries, testified in support of the bill. Mr. Donaldson discussed the difficulties of being in the subcontracting business because of retainage.

04:12 PM -- Dan Beaver, representing himself, testified in support of the bill. He discussed the alternatives to retainage.

04:15 PM -- Scott Deering, representing American Subcontractor Association of Colorado, testified in support of the bill. Mr. Deering stated that the bill was a good compromise.

04:17 PM

Representative Fischer discussed the amendment.

BILL:HB14-1165
TIME: 04:17:37 PM
MOVED:Ryden
MOTION:Adopt amendment L.001. The motion passed without objection.
SECONDED:Holbert
VOTE
Exum
Hamner
Holbert
Navarro
Nordberg
Rosenthal
Ryden
Szabo
Wright
Kraft-Tharp
Williams
YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


04:18 PM

Representative Fischer made closing remarks.
BILL:HB14-1165
TIME: 04:18:40 PM
MOVED:Rosenthal
MOTION:Refer House Bill 14-1165, as amended, to the Committee of the Whole. The motion failed on a vote of 3-7.
SECONDED:Ryden
VOTE
Exum
Yes
Hamner
No
Holbert
No
Navarro
No
Nordberg
No
Rosenthal
Yes
Ryden
Yes
Szabo
No
Wright
Excused
Kraft-Tharp
No
Williams
No
YES: 3 NO: 7 EXC: 1 ABS: 0 FINAL ACTION: FAIL
BILL:HB14-1165
TIME: 04:20:49 PM
MOVED:Kraft-Tharp
MOTION:Postpone House Bill 14-1165 indefinitely. The motion passed on a vote of 9-1.
SECONDED:Rosenthal
VOTE
Exum
No
Hamner
Yes
Holbert
Yes
Navarro
Yes
Nordberg
Yes
Rosenthal
Yes
Ryden
Yes
Szabo
Yes
Wright
Excused
Kraft-Tharp
Yes
Williams
Yes
Final YES: 9 NO: 1 EXC: 1 ABS: 0 FINAL ACTION: PASS