House Business Affairs & Labor [Mar 18, 2026 - Upon Adjournment]

Ms. Jawara, please call the roll. Representatives Brooks. Excuse. English. Excuse.

Mabry. Here. Marshall. Here.

Richardson. Here.

Camacho. Here.

Madam Majority Leader. Thank you, Mr. Chair and members of the committee. I'm here today to present House Bill 1311, a bill grounded in a simple but important principle. Contractors and subcontractors should be able to access the payments they have earned without unnecessary delays. This is not new work for me. In 2021, I brought forward House Bill 1168, legislation focused on improving fairness and transparency in construction payment practices here in Colorado. That bill was about making sure contractors and subcontractors were paid more reliably and on time. And it laid important groundwork for how we think about accountability and cash flow in the industry. House Bill 1311 builds directly upon that work. Right now in Colorado, up to 5% of a construction contract can be withheld as retainage until the project is fully complete. While that may sound reasonable, in practice it creates real challenges, especially for subcontractors who finish their work early but then have to wait months and sometimes years to receive full payment. For small and mid-sized contractors, that delay can mean struggling to cover payroll, delaying materials, or losing the ability to take on new work. This bill offers a modern and balanced solution. House Bill 1311 creates an option, not a mandate, that allows contractors and subcontractors to post a security bond in place of retainage. If a complaint bond is provided, the retainage must be released while the project owner remains fully protected through that bond. This bill is intentionally focused on private construction projects. Expanding it to public projects would carry a fiscal impact, and in this moment, we are being mindful of our state budget. Because good policy is not just about what we can do, it's about what we can responsibly afford to do. And I want to be clear. This bill does not eliminate retainage. It does not reduce protections. It simply creates flexibility. This is a model that is already working in states like Oregon and Washington, and it is time for Colorado to take the next step. At its core, the bill is about building on the progress we have already made, supporting small businesses, and making sure that the contractors doing this work are not the ones carrying unnecessary financial burdens I respectfully ask for a yes vote on House Bill 1311 Thank you Representative Carter Thank you Mr Chair To echo my co this is about allowing smaller contractors

thank you representative carter and let the record reflect that we joined our representative leader and madam chair committee members do we have any questions for our spill sponsors

As I indicated, thank you, Representative Gonzalez. It's a great question. As I indicated, what we'll do is the large-scale projects are already going. And remember, these are private projects. We're not working on the public ones. The large-scale projects will continue. This will have no impact on them because I don't believe the surety will be of use for those large-scale projects. But for the smaller-scale projects, for the contractors who, perchance, cannot have $100,000 in a retainage fee that they cannot use for their next project, It'll allow not only them to access those projects, but after they've accessed and completed them, they can still keep moving forward. One of the things that retainers does, it takes that corpus, that money out of the contractor's pocket. So he can't then bid on the next project until he receives it back in that retainers fee. So it actually allows them, one, bid on larger projects, two, also continue working as opposed to waiting for that retained fee to be given back. We've had contractors indicate that there are some retainers fees that take three to five years for them to get back. Those are the larger ones. but if you are a $500,000 contractor or $100,000 contractor and you have to wait for a retainage fee to get back that is $100,000 or whatever the number is, you're not going to be in business until you get it back. For a larger corporation they just move on because they know that they can go from project to project and they have the ability to do that.

A couple of very quick ones. Both sponsors said that this was optional, but it's only optional for the contractor if they want to use it. It does require the property owner or GM to accept it, does it not?

As I indicated, it's an all-volunteer army. If you as the project do not want the contractor to use a surety, then you don't have to. You can pick another contractor. So it does not force anyone to be in that contract. This is all consent. So it's a surety, the general contractor, and the actual project. If any of those do not agree, then they don't have to use a surety bond.

And I know you said briefly about large projects, but truly, why not private entities? Because those large projects would even have much larger retainage.

And this is for private. The larger projects are going to be bidded on by the larger corporations who will probably have the ability to assign that 5% retainage. but it's still if a larger corporation wanted to do that there's nothing in the bill that says they can't and I may have just phrased I meant representative Richardson thank you Mr. Chair public entities

if we were to put public entities in it it would give it a physical no

Thank you, Mr. Chair. So I have a couple of questions. I keep hearing, yeah, it's voluntary, it's voluntary, but on page four, line six to nine, 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. doesn't sound very voluntary for the property owner if there are certain subcontractors he would prefer to see a retainage from to ensure compliance.

Or Madam Majority Leader?

Mr. Chair, can you tell me that page again, Representative?

Go ahead. Representative Carter.

Representative Marshall.

too then. Madam Majority Leader. Mr. Chair, I would beg to disagree with you on that point. We have experts here. I think we kind of went through some questions last night that you sent to us, but we have experts here that I would refer this to because I think you want to dig in a little bit deeper on that. So I would refer to them. Thank you. Committee, any other questions for our bill sponsors? All right. We'll move into our

Sorry about that. My name is Terry Olson. I am the CFO and Vice President of a company called OE Construction. We're a civil contractor, which means we move dirt, we install underground utilities, and do a variety of site work, right, in a horizontal manner. We are predominantly operating as a subcontractor. About 10% of our work, we are a general contractor, and we work directly for the owners. So we've seen both aspects, if you will, of contracting. I'm also a private developer in the past, done some ground up and commercial development in North Dakota and in Weld County. So a variety of experience there. My company that I own with my son, we've been in business 20 years. This is our 20th anniversary. And boy, has it been an experience. So we're still standing. We employ about 52 employees on average. We do about $20 million a year in revenue. So we would be considered mid to small size when you look across the scope of different subs and types of work. The reason I'm here today is to talk about cash flow and what it's going to mean to not only our company but many others, particularly smaller ones. I do a lot of coaching to help small businesses expand and learn how to operate in this industry. Right now we have about a million dollars sitting out there in retention that we have not collected. But most importantly, I brought numbers from 2025. We were able to collect $785,274.58. Since I'm a numbers person, I thought that was important. In order to collect that money, if we count from when we finished our scope of work, we were actually done-done, whether it was dirt moving or pipe, It took approximately seven months from when we were done to collect that. That's the average for that $785,000. From the bottom, when we actually submitted the bill, it was approximately five months. So I submit those numbers as a perspective. Thank you.

I am Steve Hathaway from Native Sun Construction, and I have been in the construction industry 42 years, and I also teach construction finance at a regional and national level through various organizations. I would say I would be for this proposal primarily because, let's just use an example. Take a million dollar project. A contractor goes out there, gets a million dollar project. And the average net profit for a contractor is typically about 3%. So you have a million dollar project, you're going to make 3% on the end of that job, you're going to make 30 grand. Okay, but retainage is in there and they take 5%. So you, from a cash flow perspective, are actually going negative every week throughout the life of that project. You have to figure out how you're going to make payroll next week because you don't get paid enough from the owner on that project to actually make your payroll. You have to come up with money in other directions. You have to use your bank, your credit line. You have to pay interest on your credit line to finance the project that you are building, which seems a little backwards to me. I would also say because of that, it makes it really difficult for new contractors to get into the business because where are they going to come up with that? Here, I just used a million-dollar project, but let's say you have 10 of those. Well, $10 million, retainage on that, okay, now I'm up to $500,000, but I'm only going to make $300,000. So where am I coming up with that $200,000 difference? I'm mortgaging my house. I'm doing second mortgages on properties I own, things like that to build the construction within Colorado and to make Colorado better. So it would be nice to get rid of the retainage. Thank you.

Luke Miller. Sorry. OK, Mr. Miller, you have two minutes to give us your testimony. Thank you, Madam Chair. I'm Luke Miller. I own a small asphalt paving contractor business here in Denver. and we predominantly take care of repairs in the roads and we build brand new parking lots for like Chipotles and small commercial businesses. I've got about 25 employees. We're very small. And cash flow, as everyone on this panel has mentioned, is very challenging. It is very hard to run a small business. The work I did this week, I have to pay my labor next Friday. The asphalt that I bought is going to be due for the entire month of March. I'm going to have to pay my asphalt bill by the 10th of April, or I can't buy more asphalt. My truckers want to be paid at the end of the month. But I'm not going to get paid for what I did last week for 55 days on average. So I'll collect that money in May. So I have to bridge the gap. I have to keep my employees busy next week. I have to pay their payroll the following week, and so on and so forth. As he mentioned, most of our actual profits are like 3% to 5%. So this retainage is actually in some cases 100 of our net profit And I need that profit in order to cash flow my business I have a couple examples My current business has in retention and it can stretch as far back as 1 days Here's a retention check I collected on a private apartment building that I built in Denver. I completed the work in March of 2022. I issued my invoice on April 14, 2022, and they finally paid me my $2,719 of retention on January 9, 2026. That was held for 1,372 days, and so on and so forth. So this bill would allow me to go issue a bond to collect some of this older retention. I have another building that I built. I can go buy coffee here and they still owe me $8,000. I built it in November of 2024. They still have $8,000. Thank you.

Thank you, Madam Chair. I'm Tony Milo, president of the Colorado Contractors Association. We represent everything from large multinational corporations to small local mom and pop shops. Our members do mainly civil construction. That's roads, bridges, underground utilities, grading work. Our industry is a bit unique in that on any given day, any one of my members could be a prime or they could be a sub. So they understand the issue from both perspectives. And overwhelmingly, our membership supports this bill and supports the ability to use a bond in lieu of retainage. All of the facts that you've heard so far, I agree with them 100%. I'll try not to reiterate, but many times, especially the civil contractors, are the first ones on the project and get their work done completely. But the project may still have two or three years to go to be completed. And those small contractors, many times DBEs, women-owned, smaller local contractors, could be waiting two to three years for what amounts to the profit on the project. So it's a hardship for smaller contractors for sure. This bill, this legislation is pro-business, it's pro-construction, and it's pro-small business. Again, it allows the contractor to get paid fully for the work that they've completed and allows them to move on to other projects, invest in equipment, hire people, and it's going to be beneficial to the state of Colorado as a whole. Thank you.

Please go ahead. Thank you, Madam Chair. And I guess this question is for this panel. I think the testimony I heard of their various costs, carrying costs for financing some of these, some of your loan costs or whatever up front, doesn't that make it into your bid? Like how do you deal with that? I mean it can't just be that you're pushing those costs off later. I mean does it actually go into your bid on some of these projects? Who wants to take that? Go ahead.

Did you want to add? Yes.

Sir, I didn't catch your name. Steve Hathaway. Okay, for Mr. Hathaway. As you were walking through the million dollar example on that retainage, what would be the cost for a retainage bond? Mr. Hathaway.

I would agree with that. We're budgeting that option. I think a lot of it is 1% of the average earnings amount. That's very reasonable and it's a possibility that it's acceptable.

Thank you. I think this might be for Mr. Milo but any of the contractors.

And I've represented CCA for 20 years and I can tell you for 20 years, this has been one of the biggest issues for our contractors. The holdup in getting retainage has been an issue for the last 20 years plus and this bill will help that in a great way The owners have no real incentive to release retainage They will hold on to it as long as they possibly can because they getting to hold on to all that cash And that's the reason why if it were a public project, it would have a fiscal note because the owner is able to hold on to that cash and use it as they wish. And, you know, projects can be open for business. for years before a retainage is actually released.

Is there, and this is for Mr. Milo, is there a standard retainage or does it differ depending on the type of job you're doing?

Rev Kelti.

Mr. Miller. Thank you, Representative Kelty. Yes. So from my experience, most of my jobs are a day. So my labor is on a job for a day. It's already done. And then if there's any punch list things, they're usually resolved before I'm paid the first 95% of what I'm owed. On average, I'm already waiting 55 days to be paid by these general contractors for the work I did. So they're already holding 100% of the pay for 55 days, and I'm usually already done with my work. And it's been approved by the general contractor, and we're good. So to me, it almost seems disingenuous to even hold the 5% because I'm completed and I've satisfied my contract with my particular scope. So I'm shedding light on something with these GCs. Where's my money? Why is it out for 1,300 days after I've completed an apartment complex?

Rip Delty, follow up. Yes, ma'am. Thank you. So, okay, with that being said, I know you're unusual because you're there and gone, but, like, I had a pergola put up. The pergola is falling apart. And, for example, and, you know, two months later or 30 days later, it starts falling apart. What is the recourse then for the individual, for the customer to that contractor spent, you know, two weeks or whatever, putting the pergola up and to be able to make sure that that's, you know, to go back and say, hey, it's falling apart. You need to come back and finish it. What is the, what's the recourse for the customer in that scenario?

I see a couple of hints. Everybody wants to jump in. Okay. Let's go with Mr. Hathaway.

Okay. Also, Ms. Olson in the room, and then I'll go to Mr. Milo.

Mr. Milo. Thank you Madam Chair. The points I wanted to make have been made so thank you I appreciate it. Thank you. This is all the time that oh okay one last

three parts? That was not a deal. That was not a deal. So just so I understand, I mean, would required interest payment on retainage held not help the issue? And can you not sell your invoices or have a bond that goes for yourself rather than, and I see you laughing, but again, I'm just asking the question. and have bonding to protect yourself rather than require it to be accepted by the GC?

Oh, Ms. Olson. Okay, I'm going to be brave here. Great question. So typically, if you want to sell your invoice, right, which, you know, that's in many industries. A lot of truckers use it, right? They call it factoring. There's a very high cost to do that. it's a pretty significant percentage of that invoice and you're still on the line so if we were to go out and assign a contract to some other entity which is we have to notify both the owner and the gc in most contracts there's a cost associated with that we might give up my god 20 30 percent of that number to factor or to sell that invoice so most folks in this industry particularly in private, that's a signal that you can't, there could be trouble ahead. So most trade partners will not be out selling their invoices, I promise you, because it's a high cost and you're representing something that we have to go back to the owner and the GC to even get permission to do that.

Thank you very much. This ends this panel. We thank you all for coming, and we'll take the next panel now. All right. For this panel, we're calling up Michael Gifford, Kathy Bartzner, and she's going to be online. I thought I saw Mr. Gifford. Yeah, he is here. Okay. Mr. Gifford, you have two minutes to give us your testimony. Tell us who you're representing. Good morning.

Thank you, Mr. Gifford. We're going to go online to Ms. Barsner.

It does Thank you Ms Bosner Okay committee members questions for this panel I see Vice Chair Camacho Thank you Madam Chair Witnesses what I heard from the sponsors with this is voluntary

Michael, why don't you go ahead as a general contractor

Mr. Gifford.

Jeff Camacho. Thank you, Madam Chair. I guess maybe this is more for your legal team, but if you're setting up a contract with one of these specialty subs and you say at the front end, you shall not present me with a retained bond, why wouldn't that be sufficient? Because that would essentially address that scenario that you identified, I think, but I don't know. Mr. Gifford.

Okay. Ms. Bosner, did you want to add anything?

Okay, perfect. Any other questions?

Ms. Bartzner.

I wanted to talk about the impact of this bill on underwriting because there will be, and I understand that the bankers are also in opposition, and I don't know if perhaps they'll have someone here to testify, but reducing built-in cash reserves and substituting them with surety credit. Lenders are going to be forced to underwrite specific surety forms and increase their reliance on performance and payment bonds. And this bill strips away the owner's bargaining power and could easily conflict with existing lender covenants and conservative financing structures. So institutional owners and lenders will likely have to respond by tightening risk controls, and that is by its very nature going to increase the costs. So, you know, at a time when we're concerned about, in particular, affordable housing and our association, our largest product type is multifamily housing, the last thing I think any of us want to do is add additional cost. And I would respectfully disagree that if this can't be applied to publics because it would create a fiscal note to assume that it then would not create fiscal problems for the private sector, I think is respectfully short-sighted. And in regards to the letter, I believe it's there. Yeah, it what we talk about in the letter is some other options. I know Mr. Gifford mentioned that prompt pay would be a way to address this issue without disrupt disrupting the existing ability to do retainage. retainage, and we did present an option to the sponsors about doing more prompt pay, particularly for those early in subs. We understand for those early in ones who are doing all that early work, to have their retainage held until the project is fully complete is a challenge and we would like to see them get paid early. I know what we suggested is already in place in practice in Arizona and unfortunately we were not able to continue those discussions.

Rev Kelty, did you have a question? And if you didn't, it's okay. Okay, well, okay, any other questions? Rev Leader.

Why would they want it withheld? Madam Chair and Representative Leader, if I understand your question correctly, you're asking why would a general contractor want to hold? Yeah, they would want the 5% of their earned amount withheld for retainage. the general contractor is in a position between the owner and the end of the job and all the specialty contractors. So, yes, they have, they're of two minds. They have 5% held on the entire job, and it's a true 5% on the work that they're doing. Let's say they're doing concrete. But also, all of the downstream specialty contractors, they have to ensure performance of those different scopes to deliver the project to the owner. So if they relieve themselves of their own 5 but they not holding 5 downstream they feel that makes it harder for them to deliver the whole project to the owner because they have less leverage without that cash to go get something done if the contractor doesn't get it done. Like we heard earlier with Representative Kelty and the gazebo or the awning, looking for ways to make sure that it gets done in a timely manner. So they're willing to hold some on themselves to be able to get the whole job complete, especially highway construction is a lot more, the general does a lot more of the scope and subs out less, but in our building side of the business, we do very little of the work ourselves, maybe only one piece, the concrete, and everything else is subbed out. So we have a bigger amount of subcontracts to manage.

If I might just add.

Madam Chair and Rep. Leader, in 2011, we tried, when we reduced retention from 10% to 5% on public entities, We tried to also put in there, release the retention to all of the specialty contractors 30 days after the completion of the job. But it was the public entities, the cities and the universities and the state itself that opposed that. They wanted to hold on to the retention even longer. So it was not the general contractors. We were okay releasing it as soon as the job was done. And it was the owners who advocated against that. And we had to give that part of our bill up to get the retention reduced from 10% to 5%.

Is this a question or is it a comment?

That was not a question. But thank you so much for coming. We're going to call the next panel. Okay, support panel. We're going to call Rob Slauson, Jessica Richards, Chris Lau, Lauren Grosch, Brandon Singbil, I may be mispronouncing that, Nick William-O. Williams. Williams, okay. It looks like William-O. Sorry. Sorry about the... Nick Williams. Thank you. Okay. We have some people in front of us. Who wants to start? I'll start on this side. Please, you have two minutes to introduce yourself and tell us who you're representing in that button. But a plug should be green.

Thank you, Mr. Sangba. We're going to go on to Nick Williams. Thank you, Mr. Williams.

Thank you. Rob Slauson?

Thank you, Mrs. Lawson. Stand by for questions. We're going to go online to Chris Lau. I don't see Chris yet, but Lauren Grosh. Why don't you unmute? You have two minutes to give us your testimony. Tell us who you're representing.

Thank you, Ms. Grafsch. We're going to go on to Ms. Jessica Richards.

Thank you so much, Ms. Richards. Committee members, questions for this panel?

Yeah, the interest that I was speaking to is like I'm the kind of boots on the ground, buck stops here, lower tier car contractor, and I need to pay my employees or my vendors or people don't show up to work or there's no materials. And a lot of times, liquidated damages will be built into my contract. So hook or cook, I have to get the job done on time. And if I need to take out a loan or pay interest on materials in order to finance my payroll, I'm put in that position. And that's the part that I'm being essentially forced to kick up a ladder, an itch's free loan to a developer or a general contractor that's withholding retainage to me.

So by you doing this on your own getting this loan I guess you should say on your own it has no impact on the general contractor that you working under Is that correct It a sink ball Yeah I talking about financing my part of the project It's done well before the final completion, and that's why every change is being held on my portion of it is because the entire project hasn't been completed.

So I got you. All right. So when we're at the end of the project, right, and we have to make a measured business decision about whether we want to pay a fee to purchase a surety bond and allow ourselves to bill for that retainage that we're owed for that project. That's work usually that's already done, right?

Does that answer the question? Thank you. It does. Yes, it does. And then if you, let's say you're a bad guy, not that you are, and you skip out and don't finish the job after getting your 5%, who then compensates for that to the owner or the customer that's having the job done? Are they just SOL or are they? Really clearly, when a retainage bond is in place,

Thank you, Madam Chair. And this question is for Mr. Williams. I believe you had answered this, but just my own knowledge, what's the market value of one of these surety bonds? because when you said that you have to make the business decision to pay for one of these based off the 5% retainer, is it 5% of the 5% or is it, I guess I'm not asking for a quote. I'm just wondering what in the universe are we talking about here? How much is one of these things? Mr. Williams.

Thank you so much for coming, witnesses. Last panel will be Kristen Barnes, Taylor Renzink, Tom Peterson, Jamie Williams, Andrew Bach. Okay. We're going to start on this end. You have two minutes to tell us who you are and who you're representing in your testimony. Yeah, there should be a green. Yeah, press the button right in front of the plug. Yep. No, right there, that little red button. Yeah, there you go. Thank you, Madam Chair, members of the committee. My name is Tom Peterson. I'm the director of the Colorado Asphalt Pavement Association. We're the statewide trade association representing the 9 million ton asphalt industry of Colorado. We are in full support of this bill, and our member companies act often as prime contractors, specialty subs. We're often the first, one of the first construction elements of a project, sometimes the last, but we fully agree that in a tight market like we're in right now that 5% is so very, very important. Secondly, this bill presents a balanced solution to provide security for the owner with this surety bond. A couple of comments I'll make in response to questions that have been asked. Would Would a contractor bill this cost into their bid? Absolutely. Contractors know who they're working with, whether it's on the private or public side, prompt pay, release of retention. And so absolutely it is factored into the bill. Often the retention is held even when there's nothing wrong with what you've done. So if you pave it, it's tested, it's accepted, it's fine. The punch list that the general contractor may have may be something that has nothing to do with what you did but the funds are retained until completion. When is completion? I talked to a contractor yesterday and they paved a new subdivision. Acceptance wasn't until two years after they did the work when the city accepted the top lift of paving when they accepted the full project. And so it wasn't weeks or months. It's 1,000 days since they haven't seen their retention. So finally, the impact of that 5%, that is the amount where a contractor can say, boy, we're going to hire new employees, add to our equipment, grow our business. And so it comes down to cash flow. And from a business risk standpoint, you're building it into your bid. It's very important, and we support the bill. Thank you. Thank you so much. we're going to move on to what's the next my name is Taylor Rensink and good morning representatives and committee I appreciate you letting us allow to speak on this bill I work for a small civil subcontractor company called Easy Excavating I'm a project manager with them been there for six months and I also live in Greeley, Colorado with Representative Ryan Gonzalez in that map area over there With this bill it will help EZ as well as other small civil contractors that up front start the project first And normally typically their duration even lasts for six months or three weeks Depending on what the size of the project is, as well as different types of phases, we won't receive retention until we get substantial completion done, which could last four years, as some of the people in this room have stated today. By receiving this retention early, it helps cash flow with civil contractors like ourselves, as well as benefits to maintaining equipment, safety training programs, as well as raises and bonuses to keep employees on payroll and crew members in the field wise. Other than that, we just really want this bill to pass. So appreciate it. Thank you. Thank you so much. We're going to go on to Mr. Andrew Bach. Good morning. Thank you, Madam Chair. My name is Andrew Bach. I'm with Kilduff Underground Engineering. I'm also a founding member and board member of the National Utility Contractors Association. I've been in the construction industry, owner's rep, engineering side for 25 years, all sides of the contract. I think we've heard some really good testimony here in support of the bill and some of the nuances. I think the reason I'm here and what I would like to speak to is that we've given a lot of opportunities for many things in this industry to get businesses to go, to get them in the door, minority programs, other things that we can work with. Our business is a minority program as well. We have seen opposition to this for no reason that we can understand other than we're just trying to access our own operating capital. If there's questions about that and the actual root of it, we would be happy to understand or help you guys understand what that is. But in essence, we've been playing a chess match with this issue in industry. I think when NAOP said for 186 years, there's laws. There's a lot of laws that we don't need for 186 years. There's a reason that we need capital in this industry to run our own businesses. We need to have the choice to use that money the way that we want to. This is earned money that we have actually performed work and closed out on. We're not asking for the removal of a check and balance in the industry. That check and balance is in place. This is just an option and a tool for hardworking contractors to access their own operating capital to run the business and make a decision the way that they want to. We ask for your support. I'll yield my time. Thank you, Mr. Brock. We're going to go online to Christine Barnes. Ms. Barnes, you have two minutes. Please tell us who you're representing and give us your testimony. Good morning, Madam Chair and members of the committee. Thank you for the opportunity to testify today. My name is Christine Barnes. I'm the Executive Director of the National Utility Contractors Association of Colorado. I'm here today representing our 115 member companies and their thousands of diverse employee constituents across the state who build and maintain Colorado's critical underground infrastructure, water, sewer, gas, electric, and telecommunications systems. The majority of our companies are small and medium-sized businesses. We do have contractors that act as both subs and general contractors. NUCO of Colorado is proud to support and help bring forward HB 26, 13, 11. I'm also a part owner in a small to medium size construction and remodel business. So I have a stake in this as well. Retainage directly impacts cash flow. Contractors often have 5% of their contract value tied up for months or even years after work is completed, as you've heard here today. That is money that could be used to pay employees and provide wage increases when available, invest in equipment, take on additional projects, take on additional needed employees, provide benefits, or improve benefits to keep and attract employees in our workforce. And most importantly for the National Utility Contractors Association, provide additional safety and education training. This approach has already been successfully implemented in Washington State, where ANUCCA Chapter is also active. We have consulted directly with our counterparts there, and their experience has been overwhelmingly positive. This is not a mandate, and it does not relieve contractors of their responsibility to complete punch list items or meet project requirements. The bond ensures full accountability. This bill simply provides an additional option to improve cash flow within the industry. It allows contractors to reinvest in their businesses, their employees, and their communities. We respectfully ask for your support. Thank you for your time, and I'm happy to answer any questions. Thank you, Ms. Barnes. We're going to go on to Jamie Williams. Ms. Williams, you have two minutes to give us your testimony. Good morning, Madam Chair, members of the committee. My name is Jamie Williams, and I am here today wearing two hats. First, as the chair of the Colorado Subcontractors Coalition, which is a coalition representing thousands of trade partners that we're really speaking about today, those people that are directly affected. The bottom of the list, essentially, who have boots on the ground and do the work to build this state every day. Second, I'm also the owner and operator of a commercial construction business. So when I talk, I testify about this bill. It's not just about the policy. I'm also talking about my own balance sheet. So I really directly feel the impact of bills like this. So you've heard many folks testifying today in support and in opposition of this bill. For a subcontractor, you'll hear over and over again, cash is the lifeblood of the job site. And not just that, I would reiterate that this is, you know, the person, the worker who comes every day, puts in the hard work. You know, they put in quality construction. They do a job every single day. And in the end, this often affects that person. It affects affordability. It affects, you know, their ability to thrive in this state. So you'll hear that repeated over and over again through the testimony today. myself as a leader in the coalition of several high quality subcontractors in the state specialty contractors i can't go to an event and not have a conversation about the payment life cycle within construction projects so i would say beyond this specific bill i would leave the committee with a broader perspective really and that's the construction payment cycle is is currently broken and so this is really one of the only industries where a small business can perform perfect quality work and wait 60, 90, 120 days and beyond. And so the bill is a vital first step in a larger necessary conversation about payment reform in Colorado. Every day we shorten that cycle. Every day we get cash back into the hands of the people doing the actual labor. We make Colorado's economy more resilient. And I think that's a very important piece to reiterate for this bill. And so I appreciate your time. And on behalf of the coalition and my own employees, I urge a yes vote on this bill. Thank you. Thank you, Mr. Williams. Committee members, questions for this panel? Oh, Rep. Sukla. Thank you, Madam Chair. This question be for the Executive Director of the Colorado Paving Association. How does retention work for public contracts? Is that for Ms. Barnes? Is that the one Whoever can answer that question Okay Okay Oh in the room Okay Yeah Thank you Madam Chair Thank you sir for the question On public contracts it works as per specification and when the work is complete the contractor is paid it streamlined and it varies from public entity but that's all I have to say. Is there a follow-up? Okay, Brett Richardson. Yeah, I would like to follow up on that, Mr. Peterson. Is this an issue of releasing retainage on the public side as well as private projects? Is it an equivalent problem or seen less with public or more with public? Mr. Peterson. I'm sure the bill is really fairly treating the issue of retainage writ large, not just on the private side if it's also a public issue. Mr. Peterson? Yeah, thank you. Mr. Richardson, thank you for the question. On the public side, it's more straightforward. It's handled in a way that's per contract. As you've heard testimony, it varies on the private side from contract to contract. And I think this bill goes a long ways to address it on the private side where right now it's – if you want to pave the parking lot, you have to submit to the requirements of the contract, and this would go a long ways to improve that process. Mr. Brock. If I may, the enforcement mechanism is significant in the public realm. Obviously, there's an issue that goes into actually enforcing that that be paid. Let's say out at Denver International Airport if one of the subcontractors of the major GCs, it's brought to them that subcontractors are not being paid, they will withhold payment to the GC. In the private market, we don't have that oversight that's given in the public market, which is some of the beauty of working in public work. We want this in the private because the delineation of that schedule for the project is not defined. It's carried by the GC. And then that money and the opportunity and risk is delivered down to the subcontractor. Does that answer the question? Okay. I'm seeing no other questions. Thank you for sharing that. That kind of popped something in my head when you said that. Is it ever seen or possible that, I'm going to the dark side here, that a GC or whoever it is could withhold payment from a subcontractor is any type of retaliation or any type of, like, bias of getting someone out of the market or anything like that where maybe the surety bond could give you, give that subcontractor that could be retaliated against the ability to subvert anything like that? Who wants to think? Mr. Bach. I certainly wouldn't think in good faith of any of the constituents in the room or our that there would be any nefarious intent there, but obviously you can see there will be a gray area and what the reason was for that schedule to continue to elongate to where we weren't being able to be paid. If we can't say exactly where for a certificate of occupancy on the building, as you guys know, just like a building or a house, it starts from the ground up. There's the earthwork we put in the framing. There's the concrete and then ultimately the roof. Well, the utilities go in the beginning. When is the end of the project And in the private market if they still waiting for the grass or whatever it is for that project to end they can continue that We not going to say it because they don like the contractor but there is inherently less oversight there yes in the private market Okay. Well, thank you all for coming. We appreciate all the witnesses today. I'm going to make a last call for anyone who was here to testify on this bill who has not gotten to testify. Seeing none, testimony is closed. I'm going to call the bill sponsors back up. Bill sponsors, are there any amendments on your bill? No, Madam Chair, there aren't. Committee members, any amendments from the committee? Seeing none, amendments are closed. Wrap up. Who would like to begin? Representative Carter. Briefly. I just want to thank the members of the committee for your thoughtful questions. I just want to reiterate a couple of things that I wanted to touch on. One, I have to keep repeating it. It's an all-volunteer army. If you do not want to be a part of the bond, if you do not want to be a surety, If you do not want to be a contract, if you do not want to be a project, you do not have to. There's nothing in this bill that forces anyone to participate. One of the things that I was – my trade is a criminal defense attorney. Bonds are not confusing to me, and so perchance in explaining them to you, I may have left some stuff out. The reality is this allows smaller contractors, those who have to deal with cash flow, those who have to move from point A to point B. It allows these smaller contractors to actually bid on larger projects. Those smaller contractors are going to be your contractors of color. You saw both the Iron Woman contractors. You saw the Hispanic Contractors Association. These are the smaller contractors who cannot afford to have 5% of their retainage being held while a project is being determined whether or not it is finished. It allows these smaller contractors into the market. All it's doing, and if a – geez, if you do not want to use a bond, if you do not, then don't. One of the things that I also wanted to point out And I think one of the last panels Kind of explained it to you Bonds are not free That surety will be compensated So this is an agreement Where in which that GC says to that surety I'm willing to forego a portion of my actual profit So that we can make sure I get taken care of I get paid And when that surety When that surety takes on the project, when that surety decides to issue that bond, there is now a third party who has a very, very vested interest in making sure the project is done, period. I'm asking for an aye vote. Thank you, Representative Carter. Majority Leader Duran. Thank you, Madam Chair. Thank you to my co-prime sponsor, and thank you to everyone who came and testified today. We heard clearly from witnesses today about the real challenges facing contractors and subcontractors in our state. Challenges from cash flow, access to working capital, and the barriers that continue to impact small businesses, especially minority and women businesses This bill is pro In this building we often talk about supporting small businesses Today is your opportunity to actually do that This bill simply gives contractors a choice, a tool to access the money that is already owed to them and that they have earned so that they can meet payroll, pay their bills, and keep their doors open. And let me be clear about what this bill does not do. It does not eliminate retainage. It does not force anyone into a new system. It does not take away protections from project owners. Participation is clearly voluntary. If a contractor prefers a traditional retainer structure, they can choose to do that work. This bill simply creates another pathway for those who want it. And members, I asked for a yes vote today. Thank you. Thank you, Emile Duran. Comments from the committee? Okay. Representative Marshall. Thank you, Madam Chair. So, again, I keep getting told it's voluntary, it's voluntary, but we still have this provision here that if the property owner accepts from the GC a bond, now the GC is absolutely required to accept any from any subs where they may want to pick and choose. Some subs that they've worked with for years, they wouldn't have a problem with the bond. Some they don't, wouldn't have a retainer. So it's not voluntary. And then the second issue is I asked at the start, too, that we took out public entities because there would be a fiscal note. And I was like, well, doesn't that absolutely necessarily imply that there's fiscal cost to the private sector? And I was told it would be explained by experts, but I heard nothing. I made sure I stayed here and did not leave so I could hear if that was brought up. So for those reasons, I'm going to have to be a no on this today. Thank you. Thank you, Rep. Marshall. Rep. Kelty. Thank you, Madam Chair, and thank you for bringing this. I've learned a lot about bonds and shorty bonds today. For me, I'm all about business and business choice. If the risk is totally on the person getting the bond and not anyone else, it doesn't affect anyone else, it just affects them, I don't see a problem with that. I did hear some testimony about the timelines and stuff like that, And I want to thank the bill sponsor for saying she talked to me about an amendment, about the deadline for payment, because that was quite alarming. I couldn't imagine going four years without getting a payment. For gosh sake, that would have put my business out of business. But, yeah, I learned a lot. I appreciate this bill. and to work forward and especially on the amendment, I'll probably be yes today. Any other comments from the committee? Deb Leader. Thank you, Madam Chair, and thank you for bringing the bill. This is a great bill. I talk with a lot of other contractors, you know, throughout, and this happens to them all the time. And it just slaps me in the face and goes back to the games that Trump plays, and sorry to flag that, but that's how he hires people. When he does a lot of his bidding and his projects, he'll hire the smaller contractors purposely, so then when he stiffs them and doesn't pay them, then they don't have any more money left to sue him because it's all tied up within his project. That's not the exact same thing, but that's just what it makes me think of. I'm all about small businesses, and these people need their money. They did the work. Pay them. It's that simple. Thank you for bringing it. Thank you, Rep Leader. I'm going to go online to Rep Gonzalez. Thank you, Madam Chair. Sponsors, I want to commend you for your work on this bill. I know it was a lot of hard work to get to where you guys are at now. I also want to commend my boss man for showing up to testify. I really do appreciate when my constituents come and are part of the process. I understand the issues that general contractors are facing as well as like the retaining and the pay from capital. So I will be a strong yes today. I will co-sponsor this bill and I appreciate sponsors your work. It really does mean a lot to the people of me and my district as my constituents said today. So thank you and I commend you for your work on this bill. Any other comments from the committee? Rep. Richardson. I appreciate you bringing the bill. I truly do. I think what we heard from testimony today unpacked a lot of issues that are out there. This addresses one of them. I appreciate your willingness to talk about timeliness of payments as well, because retainage really shouldn't be used as ransom. But I understand. I mean, this is a complicated area of industry where there's a lot of, honestly, fingers that get pointed in many different directions as to where the fault lies when there are delays or there are disagreements on whether standards have been better or not. Again, this is a piece of it. I think it's an important piece. I am a yes today. Thank you, Representative Richardson. And seeing the other comments, I'm just going to say thank you to the bill sponsors for bringing the bill. As an advocate of small businesses, making sure there's participation with minority-owned DBEs and ensuring that people have the capital that they need to run their businesses. I think this is a smart way of helping these small businesses have the working capital to keep going and to expand their businesses. So thank you for bringing this bill. I will be a yes. With that, we're going to move the bill. Mr. Vice Chair. Madam Chair, I move House Bill 1311 to the Committee of the Whole. Second. Yeah, Committee of the Whole. Thank you. With a favorable recommendation and seconded by someone. Seconded by, was that Brooks? Oh, Sukla. Someone. Okay, I'm just going to give it to, I'm going to give it to Brooks. Okay, seconded by Brooks. It was Gonzalez. Oh, sorry, Rep. Gonzalez, next time. I'll forgive you. Thank you so much. So with that, we're going to take the roll. Representative Brooks. I'm going to know for today. English. Yes. Gonzalez. Yes. Kelty. Yes. Leader. Yes. Mabry. Yes. Marshall. No. Morrow. Yes. Richardson. Yes. Bryden. Yes. Sucla. Yeah. Camacho. Yes. And Madam Chair. Yes. It passes 11 to 2. You're on the way to the cows. Thank you. Okay. Thank you. St Mary I a Christian that God is building across the street I not going to mark it Yeah I not going to mark it Yeah it him All resistance for that Yeah He asking He asking He asking He asking Okay Everybody's left. Let's do this in less than 30 minutes, because there's a lunch in this room, and I'm on my lunch. I do, too. I'm on the... Do we have enough people? No, we don't. Okay. The committee will come back to order. I'm not sure where everybody disappeared to, so... I don't know. Sure. Okay. We have our bill sponsors here for SB 26050 and Representative Joseph. Thank you, Madam Chair. Thank you, members of the committee. I'm going to just speed through this. It's a pleasure to present House Bill 261050 before your committee today. This bill strengthened the trust between child care centers and families. It will make sure that parents are informed about safety-related topics and policies. The bill does not create new mandates for reporting or surveillance. It simply requires disclosure of existing obligations and practices. Child care workers are already mandated reporters under Colorado law. Many families and guardians, however, do not know that child care workers are required to report suspected neglect or child abuse. This bill will ensure that child care centers clearly state that staffs are mandatory reporters and that they have a legal responsibility to report suspected abuse and neglect. With this bill, ensuring that it happens, it would promote accountability, child safety, and parental awareness. In child care centers that use video recording devices or equipment, the bill will require clear written disclosure when they are used. used. Additionally, it will require written disclosure of how footage is used, privacy protections and limitations, as well as parental and legal access to footage. Additionally, any other policies or procedures the child care center develops in relation to the use of video recording equipments and the generated video footage. This is important because parents must parents trust child care centers with their children and expect the safety of expect the safety of their child as well transparency would build trust with the parents clear policies would reduce misunderstanding and legal dispute this bill aligns with best practices and child protections and data privacy this bill does not require child centers to install cameras expand mandatory reporting laws or create new policies. The bill simply requires disclosures and written policies and procedures. This is a practical common sense transparency bill. It ensures that families are informed about their child safety and how video monitoring is handled when it exists. By promoting clarity and openness, this bill reinforces trust between families and child care providers across the state and I ask for a yes vote and I'm delighted to be working on the bill with Senator Marchman and Representative Soper Thank you Rep Soper Thank you Madam Chair Thank you Representative Joseph That was an excellent description of the bill This is one about transparency and ensuring that parents or guardians know that childcare workers are mandatory reporters and that if they do have video cameras within the childcare center that the policies on retention and use of the video footage and deletion of the footage be made known to the parents or the guardians and that also within the policies how access may be granted to the video whether for law enforcement purposes or if there's a way that parents would have access. And we'd ask for a yes vote. Thank you, Rep. Slipper. Are there any questions from the committee? Rep. Kulti. Thank you, Madam Chair. And thank you for bringing this bill in front of us today. And I'm just curious, what brought about this bill? Why was this something that you brought up? Thank you, Madam Chair. Thank you for this question, Representative Kelty. I'm not sure if you remember the case from a few years ago where a child was abused in a child care center and the footage was not released to the parent and there were a lot of conversation and discussion around that particular case, but also from my community as well. I have an early childhood advisory committee. That's one of the issues that we've discussed, child safety within the child care space as well. So this bill Senator Marchman had been working on for, I believe, over two years. It's from Red Brooks. Thank you, Chair. Curious, do we have any sort of ballpark about what sort of compliance costs the child care centers are going to end up facing with this proposal? Rep. Soper. Thank you, Madam Chair. Thank you, Representative Brooks. I mean the fact that they have to disclose this within their policies and procedures I mean it's possible that there's going to be some time whether it's the attorney who drafts the policy and procedure or the executive director of the child care center actually sitting down and writing it into their policy if it's not already there so I mean that could be pretty de minimis because once you write it, I mean, you're not going to be going back and re-disclosing. Rep. Brooks. Would you please read a follow-up that if these are commonly practiced already, then what are we driving at as far as the need goes? Ms. Rep. Sopar. Thank you, Madam Chair, and thank you, Representative Brooks. It's not necessarily common practice to have this all written down in your policies and procedures. The key is what Representative Joseph just said. There was a case in which the family was not able to gain access to video footage that showed that their child had been abused in a child care center. And what the bill says is that that must be in their policies and procedures how a parent can gain access. And so how this looks like is going to be up to the board of the child care center, but they have to have a policy under this bill for how a parent or a guardian could gain access to that type of information. Representative Sisson. Thank you, Madam Chair. I just not that I asking for it but I didn see any enforcement or penalties If this was not followed is it a risk of licensure or how is this more than a good idea Thank you. I can respond to that. I appreciate this question, Representative Brooks. So every bill that we pass, even if we don't put an enforcement mechanism into the law, the AG can enforce them as the attorney for the state. And also, I just wanted to note that the Early Care and Education Consortium, which is a group of private child cares in Colorado, they support this bill, and they've been working really hard with Senator Marchman to get this policy drafted as is. Thank you. Rep. English. Thank you, Madam Chair. How does this bill improve child safety and family trust, not just compliance? That's super. Thank you, Madam Chair, and thank you, Representative English. That's a great question. So to improve family safety, child safety, the fact that families know that a child care worker is a mandatory reporter, I mean, they should know that already, but once again, it's being restated in the policies and procedures. but also knowing that if something bad happens, like the case that we've been referencing, that they have the ability to gain access to the video footage that would show what happened to their child because their child is in a place of utmost trust. I mean, it's in the child care center. I mean, for a family, that's your most valuable possession. I mean, I hate to call a child that, but that's the future of the family. And you invest everything in your kids. and to be able to know exactly what happened after something bad happened, especially if there was video footage, you would want to know. And this tells parents that they have a path to be able to get that video footage. Okay. Any other questions? Seeing none, thank you both sponsors. I'm going to go into witness testimony phase. we have one witness that is signed up and that person is katherine mchenry miss mchenry i see you online please unmute you'll have three minutes to give us your testimony thank you so much hello members of the committee my name is kathlyn mchenry and i am here testifying in support of senate bill 50 i represent the early care and education consortium a nationwide nonprofit of high-quality, multi-site, multi-state child care providers. Here in Colorado, our members operate more than 200 early learning centers. We believe that all parents deserve clear, consistent information about the policies that directly affect their child's safety and well-being. This bill is a sensible approach to the growing use of video recording in child care settings. Child care providers' practices around video cameras vary widely, and importantly, decisions about the use of video cameras are up to each individual child care provider. Some providers use cameras to enhance safety and accountability, some use only for staff training purposes, while others do not have video cameras at all. It is important that families have all information about a provider's chosen use of camera policies and procedures in a written and easily accessible format. Critically, this bill does not create new burdensome mandates on providers or require specific camera policies. It leaves decision making up to each individual child care program and simply ensures that every family, regardless of the child care provider they have chosen, has the same level clarity. To answer an earlier question from Representative Brooks, we do not anticipate any burdensome compliance costs with this bill. We think that it is more than reasonable for policies and procedures to be available to parents. And to the enforcement question, the Department of Early Childhood will ensure that these policies are included in parent handbooks when they do their annual inspections. Transparency empowers families, while flexibility empowers providers. We appreciate the work of Senator Marchman and the representatives on this bill, and urge the committee to vote yes. I would be happy to answer any questions. Thank you, Ms. McHenry. Any questions for Ms. McHenry? I see none. Okay, well, thank you for coming today. Is there anybody here in the room or online who wanted to testify and has not testified? See none. Witness testimony is closed. Bill sponsors were in the amendments phase. Are there any amendments? I see nods of no committee. Any amendments? Kelty had one? Maybe not. Okay. So we will say that amendments are closed as well. Wrap up from the bill sponsors. Beth Sober. Thank you, Madam Chair, and thank you, members. I would just say that this is one of those bills that you hate to have to run, but you run it because there was an instance that you hope never repeats itself again, but that you want to ensure that parents have the ability to gain access to video footage if something bad does happen to their child in a child care setting, and that it's not hidden behind non-disclosure agreements or contracts with the video company or just the fact that the child care center wants to frustrate a civil lawsuit. I mean, all these things should not be in the way of a parent being able to see what happened to their child when their child was with individuals who were in a position of trust. And for those reasons, I'd ask for a yes vote. Thank you, Rep. Sofer. Rep. Joseph. Thank you, Madam Chair. Senate Bill 26, 1050 is about uniformity in law, which ensures transparency and accountability, and I ask for a yes vote. Thank you. Thank you. Committee members, any comments, closing comments? Rep Kelty. Thank you, Madam Chair. Thanks for bringing this bill forward. You know, I didn't even realize that child care centers were mandatory reporters, so that's nice to know. I didn't even know that, And I had two children in child care, you know, as a single parent, you know, for a long time. So I appreciate knowing that or understanding that. And I think that's very extremely helpful. And, you know, to be able to access that video or to have that as a parent is very important. Because I can tell you that video would be useful after the fact, after they hurt my child, and they would see me carrying a gas can. So I'm just saying, there's nothing that I wouldn't do to protect my kid. And being able to come across that footage, to be able to protect my child even more, especially after something would have happened that I couldn't control and as a parent, I mean, that's your ultimate priority is to make sure they're safe. So I appreciate this bill, and I'll be a yes. Thank you Rep Kelty Any other comments closing comments Okay Rep Marshall Thank you Madam Chair Since I had to step out and didn see anything I probably have to be a no I already read the bill. I already did my research. I already do. It was a great bill. And again, Senator Bright runs Child Care Centers, so the fact that he's the sponsor and willing to do these things says all the world about it, so I'm a definite yes. Thank you. Any other closing comments? Seeing none, Mr. Vice Chair, please move this bill. Thank you, Madam Chair. I move Senate Bill 50 to the committee of the whole. Second. Okay, it's been moved and seconded by Rep. Leader. English. Leader's not here. Oh, excuse me. It has been moved and seconded by Rep. English. I know we look alike. the second goes to you guys do. Thank you so much. Alright. Ms. Faroja, please call the roll. Representatives Brooks. No. English. Yes. Gonzalez. Yes. Kelty. Yes. Leader. Excuse for now. We'll come back to her. Mabry. Yes. Marshall. Yes. Morrow. Yes. Richardson. Yes. Ryden. Yes. Sukla. No. I'm going to hold for a couple minutes. She went to use the restroom. So just a quick hold, please. The committee will research briefly. I know. Here she comes. The committee will come back to order. Thank you. Ms. Aroja, please continue with the roll call. Representative Leader. Yes. Representative Camacho. Yes. And Madam Chair. Yes. it passes 12 to 1 and you're on your way to the cow two no's two after two 11 to 2 I'm so sorry it passes 11 to 2 and you're on the way to the cow with that business and labor is adjourned thank you very much thank you Madam Chair Thank you. Thank you Thank you Thank you. Thank you. Thank you Thank you. Thank you. . Thank you. Thank you. Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you. . . Thank you. Thank you. Thank you. Thank you. Thank you Thank you. Thank you. Thank you. Thank you. . . Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you Thank you. Thank you.