SB 1205: Public contracts: retention: architecture or engineering services. - California

08/30/26 - Enrolled → SB1205 · 2 edits

MINOR

No substantive policy changes were made between these two versions. The diff reflects a reformatting of the enrolled bill text into a web-published layout, adding website navigation elements, version history, status metadata, and a digest key (vote: majority, appropriation: no, fiscal committee: yes, local program: no). The actual legal text of Section 7204 is identical in both versions.

TECHNICAL

Website navigation, bill tracking tools, version history listing, and status metadata were added as part of converting the document from a formal legislative format to a web page layout.

Formal legislative document elements (page numbers, signature blocks, 'Passed the Senate/Assembly' lines, Governor receipt line) were removed in favor of the web-based status display.

08/21/26 - Amended Assembly → 08/30/26 - Enrolled · 1 edit · Aug 30, 2026

MINOR

SB 1205 was enrolled after passing both chambers. The only substantive change from the Amended Assembly version to the Enrolled version is a simplification of subdivision (a), which removed an inline exception for 'substantially complex' projects from the general 5% retention cap. That exception was redundant because subdivisions (b) and (c) already provide the specific mechanisms for state agencies and local entities to exceed 5% on a project-by-project basis. All other changes are formatting: removal of amendment history headers, addition of passage dates, addition of the Governor's approval block, and removal of line numbers.

TECHNICAL

Subdivision (a) was simplified by removing the inline exception that allowed retention above 5% when a public entity made a finding of substantial complexity. The general rule now simply states retention shall not exceed 5 percent of the payment, with all exceptions handled exclusively through subdivisions (b) and (c). This is a drafting clarification that eliminates redundancy without changing the practical effect of the law.

08/13/26 - Amended Assembly → 08/21/26 - Amended Assembly · 5 edits · Aug 21, 2026

MODERATE

The August 21 amendment significantly restructures the exception process for exceeding the 5 percent retention cap on design-bid-build contracts with architecture and engineering firms. It splits the prior single exception into separate procedures for state-level and local public entities, adds a new requirement that any 'substantially complex' finding must explain why the project is unique and not routinely performed, and specifies that findings must be made prior to bid and included in bid documents.

REQUIREMENT

New subdivision (b) creates a specific exception for state-level awarding entities listed in Section 10106(a)(1)-(5). The director of the department must make a finding prior to bid that the project is substantially complex, and the department must include details explaining the basis and actual retention amount in the bid documents.

New subdivision (c) creates a specific exception for local public entities (cities, counties, districts, etc.). The governing body or designee must approve a finding on a project-by-project basis during a properly noticed and normally scheduled public hearing, prior to the bid, that the project is substantially complex, and the awarding entity must include details in the bid documents.

DEFINITION

New subdivision (d) requires that any 'substantially complex' finding must include a description of the specific project and an explanation of why it is unique - specifically that it is not regularly, customarily, or routinely performed by the agency or licensed contractors.

SCOPE

The prior single exception (old subdivision (a) language about 'substantially complex' projects) was restructured. The 5 percent cap in subdivision (a) now stands as the general rule, with the detailed exceptions moved to separate subdivisions (b) and (c) for state and local entities respectively, each with distinct procedural requirements.

TECHNICAL

Old subdivisions (b) and (c) were renumbered to (e) and (f) respectively. Page numbers changed from 96 to 95. The bill summary was updated to reflect the new structure.

04/09/26 - Amended Senate → 08/13/26 - Amended Assembly · 2 edits · Aug 13, 2026

MINOR

The Assembly amendment narrows the bill's scope from applying to all contracts between public entities and architecture/engineering firms to only contracts under design-bid-build. It also adds a new exception allowing public entities to exceed the 5 percent retention cap when they find a project is substantially complex, provided they document the basis for that finding in the contract.

SCOPE

The 5 percent retention cap now applies only to contracts under design-bid-build (and amendments thereto), rather than to all contracts between public entities and architecture or engineering firms.

ELIGIBILITY

A new exception allows a public entity to retain more than 5 percent if it makes a finding that the project is substantially complex and requires a higher retention amount, and includes in the contract details explaining the basis for the finding and the actual retention amount.

03/24/26 - Amended Senate → 04/09/26 - Amended Senate · 5 edits · Apr 9, 2026

MODERATE

SB 1205 was significantly revised to soften its approach to retention payments on architecture and engineering contracts with public entities. Instead of completely prohibiting retention, the amended bill now caps retention at 5 percent of payment and requires release within 60 days of service completion. The bill also dropped a separate amendment to Section 6100 regarding contractor license verification.

REQUIREMENT

The core requirement changed from a complete ban on retention payments to a cap: retention may not exceed 5 percent of the payment for architecture or engineering services contracts with public entities.

A new provision requires that any retention withheld be released no later than 60 days after completion of the firm's services under contract, regardless of whether the overall project has been completed.

SCOPE

The bill now explicitly references contracts under design-bid-build in addition to all contracts, clarifying the type of procurement process covered.

The entire amendment to Section 6100 of the Public Contract Code (regarding state agency verification of contractor licenses with the Contractors State License Board) was removed from the bill.

FISCAL

The fiscal committee designation changed from 'no' to 'yes,' indicating the bill now requires fiscal impact review, likely because a 5 percent cap still allows some retention revenue rather than eliminating it entirely.

02/19/26 - Introduced → 03/24/26 - Amended Senate · 6 edits · Mar 24, 2026

MODERATE

The amended version adds a new Section 7204 to the Public Contract Code that prohibits any retention of payment on contracts between public entities and architecture or engineering firms entered into on or after January 1, 2027. The original bill only made minor nonsubstantive edits to Section 6100 (contractor license verification), but the amendment significantly expands the bill's scope by adding a new substantive prohibition on payment retention for A&E services. A fiscal committee review was also added, indicating the change has budgetary implications.

REQUIREMENT

New Section 7204 prohibits any retention of payment for all contracts and amendments entered into on or after January 1, 2027, directly between a public entity and a firm practicing architecture or engineering.

DEFINITION

Defines 'firm' as an individual, partnership, corporation, association, or other legal entity permitted by law to practice architecture or engineering.

Defines 'public entity' broadly to include the state and all its agencies, CSU, UC, cities, counties (including charter), districts, special districts, public authorities, political subdivisions, public corporations, and nonprofit transit corporations wholly owned by a public agency.

SCOPE

The bill's title and scope expanded from only amending Section 6100 to also adding new Section 7204, shifting the primary purpose from nonsubstantive cleanup to a substantive prohibition on payment retention for A&E contracts.

FISCAL

Fiscal committee review changed from 'no' to 'yes', indicating the amendment was found to have fiscal impact.

TECHNICAL

Section 6100 retains its nonsubstantive edits: 'prior to' changed to 'before', and gendered pronouns 'his or her' replaced with 'their' in the license verification provision.

Public contracts: retention: architecture or engineering services.

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