Uncollectible judgements against prime contractors permitted to be paid from contract retainage, and direct payments to subcontractors under certain circumstances required.

HF 552 modifies Minnesota's prompt payment law for state contracts. It requires state agencies to pay subcontractors directly from contract retainage funds (money held back from payments) if a prime contractor becomes unable to pay (e.g., due to bankruptcy), up to the amount owed for completed work. If retainage funds are insufficient, payments must be distributed proportionally based on amounts owed. The law applies to contracts entered into on or after July 1, 2025, and affects state agencies, prime contractors, and subcontractors working on state projects.