CaliforniaPublic entities would cap retention for architecture and engineering contracts
Starting in 2027, public entities would generally cap withheld payments at 5% for direct design-bid-build contracts with architecture and engineering firms and release them after services end.
What it does
For covered design-bid-build contracts, public entities could withhold no more than 5% from firms’ service payments. Specific, substantially complex projects may have higher retention if required findings and bid details are provided.
Public entities must release retention withheld under the 5% limit within 60 days after a firm completes its services, even if the project is still underway.
Argument forFirms may get more of their contract payments sooner because most covered contracts would cap withheld payments at 5% and require release after services end.
Argument againstPublic entities may need to document complex projects and set higher retention before bidding, which could add work or limit their flexibility.
More detail
Limit retention withheld from a firm’s service payments to 5% of the payment. This covers design-bid-build contracts and amendments made directly between a public entity and a person or organization legally allowed to provide architecture or engineering services. The limit does not apply to specific substantially complex projects when the required finding and bid details are provided. The limit applies to contracts and amendments entered into on or after January 1, 2027.
Release retention withheld under the 5% limit within 60 days after the firm completes its contracted services. This applies to retention withheld from a firm under the 5% limit for covered design-bid-build contracts. The deadline runs from completion of the firm’s services, even if the overall project is not finished. The 60-day period starts when the firm completes its services under contract.
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Where it stands
- Introduced
- Passed Senate
- Passed Assembly
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- Sep 20Chaptered by Secretary of State. Chapter 424, Statutes of 2026.Latest
- Sep 20Approved by the Governor Gavin Newsom.Became Law
- Sep 3Enrolled and presented to the Governor at 3 p.m.To Governor
- Aug 27Assembly amendments concurred in. (Ayes 40. Noes 0. Page 5997.) Ordered to engrossing and enrolling.Major
- Vote recorded Unfinished Business SB1205 Valladares Concurrence. Result: pass.Upper
- Aug 26In Senate. Concurrence in Assembly amendments pending.
- Vote recorded SB 1205 Valladares Senate Third Reading By Carrillo. Result: pass.Lower
- Aug 26Read third time. Passed. (Ayes 78. Noes 0. Page 6613.) Ordered to the Senate.Passed Assembly
- Aug 21Ordered to third reading.Minor
- Aug 21Read third time and amended.Major
- Aug 21Assembly Rule 69(b)(1) suspended. (Ayes 55. Noes 17. Page 6296.)
- Aug 17Read second time. Ordered to third reading.Minor
- Aug 13Read second time and amended. Ordered to second reading.Major
- Vote recorded Do pass as amended. Result: pass.Lower
- Aug 13From committee: Do pass as amended. (Ayes 11. Noes 0.) (August 13).Major
- Aug 13Assembly Rule 63 suspended.
- Jun 24June 24 set for first hearing. Placed on suspense file.
- Jun 10From committee: Do pass and re-refer to Com. on APPR. with recommendation: To consent calendar. (Ayes 18. Noes 0.) (June 10). Re-referred to Com. on APPR.Minor
- Vote recorded Do pass and be re-referred to the Committee on [Appropriations] with recommendation: To Consent Calendar. Result: pass.Lower
- Jun 1Referred to Com. on G.O.Minor
- May 22In Assembly. Read first time. Held at Desk.Minor
- Vote recorded Special Consent. Result: pass.Upper
- May 22Read third time. Passed. (Ayes 33. Noes 0. Page 4420.) Ordered to the Assembly.Passed Senate
- May 20Ordered to special consent calendar.
- May 14Read second time. Ordered to third reading.Minor
- Vote recorded Do pass. Result: pass.Upper
- May 14From committee: Do pass. (Ayes 7. Noes 0. Page 4269.) (May 14).Minor
- May 8Set for hearing May 14.
- May 4May 4 hearing: Placed on APPR. suspense file.
- Vote recorded Placed on suspense file. Result: pass.Upper
- Apr 24Set for hearing May 4.
- Apr 22From committee: Do pass and re-refer to Com. on APPR. with recommendation: To consent calendar. (Ayes 7. Noes 0. Page 4015.) (April 22). Re-referred to Com. on APPR.Minor
- Vote recorded Do pass, but first be re-referred to the Committee on [Appropriations] with the recommendation: To Consent Calendar. Result: pass.Upper
- Apr 14From committee: Do pass and re-refer to Com. on L. GOV. with recommendation: To consent calendar. (Ayes 15. Noes 0. Page 3866.) (April 14). Re-referred to Com. on L. GOV.Minor
- Vote recorded Do pass, but first be re-referred to the Committee on [Local Government] with the recommendation: To Consent Calendar. Result: pass.Upper
- Apr 14Set for hearing April 22 in L. GOV. pending receipt.
- Apr 9From committee with author's amendments. Read second time and amended. Re-referred to Com. on G.O.Major
- Apr 9Set for hearing April 14.
- Apr 8Re-referred to Coms. on G.O. and L. GOV.Minor
- Mar 24From committee with author's amendments. Read second time and amended. Re-referred to Com. on RLS.Major
- Mar 4Referred to Com. on RLS.Minor
- Feb 20From printer. May be acted upon on or after March 22.
- Feb 19Introduced. Read first time. To Com. on RLS. for assignment. To print.Introduced
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