Relating to: retainage on public construction contracts. (FE)

AB 1037 modifies retainage rules for public construction contracts, specifically lowering the maximum withholdable percentage for mechanical, electrical, and plumbing subcontractors from 5% to 3% until 50% project completion. It requires prime contractors to pay these subcontractors within 7 days of receiving payment from the municipality, with full payments due after 50% completion unless work progress is unsatisfactory. The bill sets a 10% cap on total retainage and mandates final payment upon substantial completion, minus costs for corrective work. It directly affects contractors and subcontractors working on public projects, particularly those in MEP (mechanical, electrical, plumbing) specialties. The changes aim to improve cash flow for smaller subcontractors while maintaining safeguards for project completion.