HOUSE BILL REPORT
SHB 1575
This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent. |
As Passed Legislature
Title: An act relating to retainage bonds on public contracts.
Brief Description: Regulating retainage bonds on public contracts.
Sponsors: House Committee on Capital Budget (originally sponsored by Representatives Buys, Dunshee, DeBolt and Stanford).
Brief History:
Committee Activity:
Capital Budget: 2/6/15, 2/10/15 [DPS].
Floor Activity:
Passed House: 3/5/15, 98-0.
Passed Senate: 4/13/15, 49-0.
Passed Legislature.
Brief Summary of Substitute Bill |
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HOUSE COMMITTEE ON CAPITAL BUDGET |
Majority Report: The substitute bill be substituted therefor and the substitute bill do pass. Signed by 9 members: Representatives Dunshee, Chair; Stanford, Vice Chair; DeBolt, Ranking Minority Member; Smith, Assistant Ranking Minority Member; Kilduff, Kochmar, Peterson, Riccelli and Walsh.
Staff: Steve Masse (786-7115).
Background:
A surety bond is a promise to pay one party a certain amount if a second party fails to meet some obligation, such as fulfilling the terms of a contract.
Retainage bonds are a type of bond that protects the obligee after a construction project is complete. They guarantee that the principal contractor will carry out all necessary work to correct structural and/or other defects discovered immediately after completion of the contract, even if full payment has been made to the principal. Typically retainage ranges from 2 to 5 percent of the contract amount.
The Office of the Insurance Commissioner is responsible for overseeing the regulation of surety insurance. Under current law, a surety bond must be approved and accepted by a court, public official, or public body if it is proper and guaranteed by an authorized surety insurer.
Summary of Substitute Bill:
All retainage bonds that are executed, posted, or given as security are required to comply with statute. A public body may require up to an A-minus rating for retainage bonds.
Appropriation: None.
Fiscal Note: Available.
Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is passed.
Staff Summary of Public Testimony:
(In support) Providing a retainage bond with an A-minus or less will benefit the public body and help small contractors.
(Opposed) None.
Persons Testifying: Gary Strannigan, Safeco and Liberty Mutual; and Duke Shaub, Associated General Contractors of Washington.
Persons Signed In To Testify But Not Testifying: None.