SB 74 — Clarify Excessive Public Construction Bond Claim Penalty

NOTE:

This bill has been prepared for the signatures of the appropriate legislative officers and the Governor.

To determine whether the Governor has signed the bill or taken other action on it, please consult the legislative status sheet, the legislative history, or the Session Laws.

alsoREPRESENTATIVE(S)CamachoandNguyen,Bacon,Carter,Duran,also REPRESENTATIVE(S)CamachoandNguyen, Bacon, Carter, Duran, Marshall.

CONCERNINGCLARIFICATIONOFTHEPENALTYFORCLAIMINGANEXCESSIVECONCERNINGCLARIFICATIONOFTHEPENALTY FORCLAIMINGANEXCESSIVE AMOUNT ININA A PUBLIC CONSTRUCTION PERFORMANCE BOND DISPUTEDISPUTE. .

Be it enacted by the GeneralGeneralAssembly Assemblyofthe of the State ofofColorado: Colorado:

SECTION1.SECTION 1.

InColoradoRevisedStatutes,38-22-101,amend(1);InColoradoRevised Statutes, 38-22-10I, amend (1);

Liens in favor ofofwhom whom - when filed.

(1) Every person who furnishes or supplies laborers, machinery, tools, or equipment in the prosecution of the work, and mechanics, materialmen,contractors,subcontractors,builders,andallpersonsofeverymaterialmen, contractors, subcontractors, builders, and all persons ofevery class performing labor upon or furnishing directly to the owner or persons furnishinglabor,laborers,ormaterialstobeusedinconstruction,alteration,furnishing labor, laborers, ormaterialstobeused inconstruction, alteration, improvement, addition to, or repair, either in whole or in part, of any building, mill, bridge, ditch, flume, aqueduct, reservoir, tunnel, fence, railroad,wagonroad,tramway,oranyotherstructureorimprovementuponrailroad, wagonroad, tramway, or any other structure orimprovementupon Capital letters or bold & italic numbers indicate new material added to existing law;

dashes through words or numbers indicate deletionsdeletionsfrom from existing law andandsuch such material is notnotpart part of the act.

land, including adjacent curb, gutter, and sidewalk, and also architects, engineers,draftsmen,andartisanswhohavefurnisheddesigns,plans,plats,engineers, draftsmen, and artisanswhohavefurnished designs, plans,plats, maps, specifications, drawings, estimates of cost, surveys, or superintendence,orwhohaverenderedotherprofessionalorskilledservice, or bestowed labor in whole or in part, describing or illustrating, or superintending such structure, or work done or to be done, or any part connected therewith, shall have a lien upon the property upon which they have furnished laborers or supplied machinery, tools, or equipment or rendered service or bestowed labor or for which they have furnished materials or mining or milling machinery or other fixtures, for the value, WHETHERDISPUTEDORUNDISPUTEDWHETHERDISPUTEDORUNDISPUTED, ,ofsuch of such laborers, machinery,machinery' tools, or equipment supplied, or services rendered or labor done or laborers or materials furnished, whether at the instance ofofthe the owner, or of any other person acting by the owner's authority or under the owner, as agent, contractor, or otherwise for the laborers, machinery, tools, or equipment supplied,orworkorlabordoneorservicesrenderedorlaborersormaterialssupplied, orworkor labordone orservicesrenderedor laborers ormaterials furnished by each, respectively, whether supplied or done or furnished or renderedattheinstanceofrendered theownerofatthe thebuildingorotherimprovement,instance ofthe ownerofthe building orotherimprovement, or the owner's agent;

and every contractor, architect, engineer, subcontractor, builder, agent, or other person having charge of the construction, alteration, addition to, or repair, either in whole or in part, of said building or other improvement shall be held to be the agent of the owner for the purposes ofofthis thisarticle articleTICLEARTICLE22. 22.

(7) NOTHINGINTHISARTICLENOTHINGINTHISARTICLE22PROHIBITSTHEINCLUSIONOFCOSTS 22 PROHIBITSTHEINCLUSIONOFCOSTS OTHERWISE ALLOWED UNDER AACONTRACT CONTRACTINA INLIEN, A LIEN , INCLUDING COSTS INCURRED AS A RESULT OF DELAYDELAY, , LOST PRODUCTIVITYPRODUCTIVITY, , OR OTHER DISRUPTIONDISRUPTIONTOTHEWORK. TO THE WORK .

InColoradoRevisedStatutes,38-22-128,add(2)andIn ColoradoRevised Statutes, 38-22-128, add (2) and (3) as follows:

(2) ANANAWARDBYACOURTHAYINGJURISDICTIONOFANAMOUNT AWARD BY A COURT HAVING JURISDICTION OF AN AMOUNT THAT ISISLESSTHANTHEAMOUNTFORWHICHAPERSON'S LESSLIENW THANASFILED THEDOESNOTRENDERTHEAMOUNTEXCESSIVEFORPURPOSESOFSUBSECTION AMOUNT FOR WHICH A PERSON S LIEN WAS FILED DOES NOT RENDER THE AMOUNT EXCESSIVE FOR PURPOSES OF SUBSECTION (1)OFTHISSECTIONIFTHEPERSONHADAGOODFAITHBASISTOBELIEVETHE LIENLIENAMOUNTW AMOUNTASDUEATTIMEOFFILING. WAS DUE AT TIME OF FILING .

PAGE 2-SENATE BILL 26-074 (3) FFOR OR PURPOSES OF THIS SECTIONSECTION, ,ANAN AMOUNT IS "DUE"DUE" " IF A PERSON REASONABLY BELIEVESBELIEVES, ,ININ GOOD FAITHFAITH, , THAT THE AMOUNT REPRESENTSREPRESENTSTHEVALUEOFTHELABOR, THESERVICES, VALUEEQUIPMENT, OFOROTHER THE LABOR , SERVICES ,EQUIPMENT ,OR OTHER MATERIALS ORORPERSONS PERSONSFURNISHEDORSUPPLIEDTOACONTRACTOR, FURNISHEDAS ORDESCRIBEDINSECTION38-22-101 SUPPLIED(1), TOWHETHERORNOTTHEAMOUNT A CONTRACTOR ,AS DESCRIBED IN SECTION 38-22-101 (1),WHETHER OR NOT THE AMOUNT IS UNLIQUIDATEDUNLIQUIDATEDORDISPUTED. OR DISPUTED .

SECTION3.SECTION 3.

In ColoradoRevisedStatutes,38-26-107,amend(1)ColoradoRevised Statutes, 38-26-107, amend (1) as follows:

(1) Any person, as defined in section 2-4-401 (8), C.R.S.,atC.R.S., that has furnished labor, materials,EQUIPMENTmaterials, ,EQUIPMENT, SERVICESSERVICES, , sustenance, or other suppliesusedorconsumedbyacontractororhisorhersupplies used orconsumed byacontractororhis e,her THEIRsubcontractor in or about the performance of the work contracted to be done or that supplies laborers, rental machinery, tools, or equipment to the extent used in the prosecution ofofthe the work whose claim therefor has not been paid by thecontractororthesubcontractorthe may,contractororthe subcontractormay, at anytimeany time up to and includingthe time of final settlement for the work contracted to be done, file with the board, officer, person, ororothercontracting otherbody contractingbywhom bodybywhomthethe contractcontractwas was awarded a verified statement ofofthe the amount due and unpaid on account of theclaim, WHETHERTHEAMOUNTISDISPUTEDORUNDISPUTEDWHETHERTHEAMOUNTISDISPUTEDORUNDISPUTED.NOTHINGIN .NTHIS OTHINGINARTICLE THISARTICLE 26 PROHIBITSTHE INCLUSIONOFCOSTSINCLUSION OTHERWISEOFCOSTS ALLOWEDOTHERWISEALLOWED UNDERACONTRACTINAVERIFIEDSTATEMENTOFCLAIMUNDERACONTRACTINAVERIFIEDSTATEMENTOFCLAIM, ,INCLUDINGCOSTSINCLUDING COSTS INCURRED AS A RESULT OF DELAYDELAY, , LOST PRODUCTIVITYPRODUCTIVITY, , OR OTHER DISRUPTIONDISRUPTIONTOTHE TOWORK. THE WORK .

If the amount of the contract awarded to the contractor exceeds one hundred fifty thousand dollars, the board, officer, person,orotherperson, orother contracting bodybywhomthecontractwasawardedshall,body bywhom the contractwas awarded shall, no later than ten days before the final settlement is made, publish a notice ofofthe the final settlement at least twice in a newspaper ofofgeneral general circulation in any county where the work was contracted for or performed or in an electronicmediumapprovedelectronicmedium approved bythe executive directorofdirector thedepartmentofofthe department of personnel.

It is unlawful for any person to divide a public works contract into two or more separate contracts for the sole purpose of evading or attempting to evade the requirements ofofthis this subsection (1).

SECTION4.SECTION 4.

InColoradoRevisedStatutes,38-26-110,amend(1)In ColoradoRevised Statutes, 38-26-110, amend ( 1) introductory portion;

andandadd add (2) and (3) as follows:

(1) Any person who files a verified statement of a claim or asserts a claim against a principal or surety that has furnished a bond under this articleARTICLE 26 for an amount greater than the amount due without a reasonable possibility that the amount claimed is due and with the knowledgethattheamountclaimedisgreaterthantheamountdue,andthatknowledge thatthe amount claimed is greaterthan the amountdue, and that fact is demonstrated in anyproceedingsunderthisarticleARTICLEany proceedings under this arARTICLE 26, shall forfeit all rights to the amount claimedFIEDclaVERIFIED STATEMENTSTATEMENTOF OFCLAIMCLAIM and shall be liable to the following in an amount equal to all costs and all attorneyfeesreasonablyincurredinbondingattorney fees reasonably incurred in bonding over, contesting,orotherwisecontesting, or otherwise responding in any way to the excessive verified statement of claim or excessive bond claim:

(2) AN AWARD BY A COURT HAVING JURISDICTION OF AN AMOUNT THAT IS LESS THAN THE AMOUNT IN A PERSONPERSON'S 'S VERIFIED STATEMENT OF CLAIM DOES NOT RENDER THAT AMOUNT EXCESSIVE FOR PURPOSES OF SUBSECTIONSUBSECTION( (1)OFTHISSECTIONIFTHEPERSONHADAGOODFAITHBASISTO1)OFTHISSECTION IFTHE PERSONHADAGOODFAITHBASIS TO BELIEVE THE AMOUNT IN THE VERIFIED STATEMENT OF CLAIM WAS DUE AT THE TIME OF FILING.

(3) FOR PURPOSES OF THIS SECTIONSECTION, ,"AMOUNT AMOUNTDUE" DUE " MEANS THE AMOUNT OF MONEY A PERSON REASONABLY BELIEVESBELIEVES, , IN GOOD FAITHFAITH, , REPRESENTS THE VALUE OF THE LABORLABOR, ,MATERIALSMATERIALS, ,SUSTENANCESUSTENANCE, , OTHER SUPPLIES, LABORERSLABORERS, , RENTAL MACHINERYMACHINERY, ,TOOLS, TOOLS , OR EQUIPMENTEQUIPMENT, , FURNISHED OR SUPPLIED TO A CONTRACTORCONTRACTOR, , AS DEFINED IN SECTION 38-26-101, OR THEIR SUBCONTRACTORSUBCONTRACTOR, ,WHETHERWHETHER OR NOT THE AMOUNT IS UNLIQUIDATED OR DISPUTEDDISPUTED, ,ASAS SET FORTH IN SECTION 38-26-107 (1).

on the day following the expiration of the ninety-dayperiodninety-day period after final adjournment ofofthe the general assembly(Augustassembly (August 12, 2026, if adjournment sine die is on May 13, 2026);

except that, if a referendumpetitionisfiledpursuanttosection1(3)ofarticleVofthestatereferendumpetition is filed pursuantto section 1(3) ofarticle V ofthe state constitution against this act or an item, section, or part of this act within such period, then the act, item, section, or part will not take effect unless PAGE 4-SENATE BILL 26-074 approvedbythepeopleatthegeneralelectiontobeheldinNovember2026approved bythe people atthe general electionto be held inNovember2026 and, in such case, will take effect on the date ofofthe the official declaration of the vote thereon by the governor.

____________________________ ____________________________ James Rashad Coleman, Sr.

Julie McCluskie PRESIDENT OF SPEAKER OF THE HOUSE THE SENATE OF REPRESENTATIVES ____________________________lier ____________________________ Esther van Mourik Vanessa~ ~ Reilly SECRETARY OF CHIEF CLERK OF THE HOUSE THE SENATE OF REPRESENTATIVES APPROVED________________________________________APPROVED (Dateon Y\'\c:1\8\prl--t' io'tvlo..\r.OOowY\ (bate and Time) _________________________________________ESTATE JaredOF S.COLORADO PAGE 5-SENATE BILL 26-074

Polis GOVERNOR OF THE STATE OF COLORADO PAGE 5-SENATE BILL 26-074