Bill Summary – FastDemocracy

CERTIFICATION OF ENROLLMENT
                      SUBSTITUTE SENATE BILL 6108
                       Chapter 101, Laws of 2024
                               68th Legislature
                             2024 Regular Session
         PRIVATE CONSTRUCTION PROJECT RETAINAGE—SUPPLIERS
                      EFFECTIVE DATE: June 6, 2024
Passed by the Senate February 8, 2024                CERTIFICATE
  Yeas 49 Nays 0
                                        I, Sarah Bannister, Secretary of
                                        the   Senate   of   the   State  of
              DENNY HECK                Washington, do hereby certify that
President of the Senate                 the attached is SUBSTITUTE SENATE
                                        BILL 6108 as passed by the Senate
                                        and the House of Representatives on
                                        the dates hereon set forth.
Passed by the House February 27, 2024
  Yeas 94 Nays 0
                                                  SARAH BANNISTER
            LAURIE JINKINS                                           Secretary
Speaker of the House of
Representatives
Approved March 14, 2024 11:40 AM                        FILED
                                                    March 14, 2024
                                                Secretary of State
              JAY INSLEE                        State of Washington
Governor of the State of Washington
                           SUBSTITUTE SENATE BILL 6108
                   Passed Legislature - 2024 Regular Session
     State of Washington         68th Legislature        2024 Regular Session
     By Senate Labor & Commerce (originally sponsored by Senators King,
     Stanford, and Mullet)
     READ FIRST TIME 01/30/24.
 1       AN ACT Relating to retainage on private construction projects;
 2   and amending RCW 60.30.010 and 60.30.020.
 3   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
 4       Sec. 1.   RCW 60.30.010 and 2023 c 373 s 1 are each amended to
 5   read as follows:
 6       (1) An owner, contractor, ((or)) subcontractor, or supplier may
 7   withhold as retainage an amount equal to not more than five percent
 8   of the contract price of the work completed for private construction
 9   projects. Partial payment allowed under this subsection is not
10   acceptance or approval of some of the work or a waiver of defects in
11   the work.
12       (2) The owner, contractor, ((or)) subcontractor, or supplier
13   shall pay interest at the rate of one percent per month on the final
14   payment due the contractor ((or)), subcontractor, or supplier. The
15   interest shall commence 30 days after the contractor ((or)),
16   subcontractor, or supplier has completed and the owner has accepted
17   the work under the contract for construction for which the final
18   payment is due. The interest shall run until the date when final
19   payment is tendered to the contractor ((or)), subcontractor, or
20   supplier.
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 1       (3) When the contractor ((or)), subcontractor, or supplier
 2   considers the work that the contractor ((or)), subcontractor, or
 3   supplier is contracted to perform to be complete, the contractor
 4   ((or)), subcontractor, or supplier shall notify the party to whom the
 5   contractor ((or)), subcontractor, or supplier is responsible for
 6   performing the construction work under the contract.
 7       (4) The party shall, within 15 days after receiving the notice,
 8   either   accept   the   work  or   notify   the   contractor  ((or)),
 9   subcontractor, or supplier of work yet to be performed under the
10   contract or subcontract. If the party does not accept the work or
11   does not notify the contractor ((or)), subcontractor, or supplier of
12   work yet to be performed within the time allowed, the interest
13   required under this subsection shall commence 30 days after the end
14   of the 15-day period. A contractor may provide notice under this
15   subsection to an owner or upper-tier contractor for release of
16   retainage due to a subcontractor or supplier whose work is complete.
17   If   an  owner   or  upper-tier   contractor  does   not  accept the
18   subcontractor's or supplier's work or does not notify the contractor
19   of work yet to be performed by the subcontractor or supplier within
20   15 days after receiving the notice, the interest required under this
21   section shall commence 30 days after the end of the 15-day period. A
22   contractor's obligation to pay interest to a subcontractor or
23   supplier under this section does not begin until the contractor has
24   received payment for the subcontractor's or supplier's retainage
25   provided that the contractor has submitted the subcontractor's or
26   supplier's retainage request to the owner or upper-tier contractor
27   within 30 days after receipt from the subcontractor or supplier.
28       (5) This section does not apply to single-family residential
29   construction less than 12 units.
30       Sec. 2.   RCW 60.30.020 and 2023 c 373 s 2 are each amended to
31   read as follows:
32       (1) In lieu of retainage, a subcontractor, supplier, or
33   contractor may tender, and a contractor or owner must accept, a
34   retainage bond in an amount not to exceed five percent of the moneys
35   earned by the subcontractor, supplier, or contractor.
36       (2) A subcontractor or contractor must provide a good and
37   sufficient bond from an authorized surety company, conditioned that
38   such person or persons must:
39       (a) Faithfully perform all the provisions of such contract;
                                     p. 2                      SSB 6108.SL
 1       (b) Pay all laborers, mechanics, and subcontractors and material
 2   suppliers, and all persons who supply such person or persons, or
 3   subcontractors, with provisions and supplies for the carrying on of
 4   such work; and
 5       (c) Pay the taxes, increases, and penalties incurred on the
 6   project.
 7       (3) The contractor or owner may require that the authorized
 8   surety have a minimum A.M. Best financial strength rating so long as
 9   that minimum rating does not exceed A-. The contractor may withhold
10   the subcontractor's or supplier's portion of the bond premium, to the
11   extent the contractor provides a retainage bond to obtain a release
12   of the subcontractor's or supplier's retainage.
13       (4) The contractor or owner must accept a bond meeting the
14   requirements of this section. The subcontractor, supplier, or
15   contractor's bond and any proceeds therefrom are subject to all
16   claims and liens and in the same manner and priority as set forth for
17   retained percentages in the contract and other applicable provisions.
18       (5) Whenever an owner accepts a bond in lieu of retained funds
19   from a contractor, the contractor must accept like bonds from any
20   subcontractors or suppliers from which the contractor has retained
21   funds. The contractor must then release the funds retained from the
22   subcontractor or supplier to the subcontractor or supplier within 30
23   days of accepting the bond from the subcontractor or supplier.
24       (6) This section does not apply to single-family residential
25   construction less than 12 units.
         Passed by the Senate February 8, 2024.
         Passed by the House February 27, 2024.
         Approved by the Governor March 14, 2024.
         Filed in Office of Secretary of State March 14, 2024.
                                  --- END ---
                                     p. 3                        SSB 6108.SL
Statutes affected: 
Original Bill: 60.30.010, 60.30.020
Substitute Bill: 60.30.010, 60.30.020
Bill as Passed Legislature: 60.30.010, 60.30.020
Session Law: 60.30.010, 60.30.020