This bill amends existing laws regarding retainage on public and private construction contracts in Alaska. Key changes include the requirement for prime contractors to pay subcontractors for satisfactory performance within eight working days after receiving payment, and to pay all retainage due within the period specified in AS 45.45.940(c). Additionally, the bill introduces penalties and interest on retainage withheld from subcontractors, aligning with the provisions in AS 45.45.940(e). For private construction contracts, the bill establishes that retainage cannot exceed five percent of the total progress payment and outlines specific timelines for payment of retainage to subcontractors and contractors.

Furthermore, the bill mandates that any money withheld as retainage must be placed in an interest-bearing escrow account, with interest distributed proportionately. It also stipulates penalties for project owners or contractors who fail to make timely retainage payments, including a two percent penalty on unpaid amounts and the accrual of interest at the prime rate. The bill clarifies definitions related to contractors, project owners, and retainage, and it repeals certain outdated provisions. Overall, the legislation aims to enhance the financial protections for subcontractors and ensure timely payments in construction contracts.

Statutes affected:
HB0389A, AM HB 389, introduced 05/01/2026: 36.90.210, 45.45.940, 36.25.020, 45.45.010, 36.90.240, 36.90.230, 36.90.220, 36.90.250, 36.90.265, 36.90.270, 36.90.200, 36.90.290, 44.88.599, 09.30.065