General contractors and subcontractors working in Oregon are reminded of their ability to use a surety bond in lieu of cash for retainage in contracts entered into after March 7, 2024. House Bill 4006 allowing this passed unanimously during the 2024 short legislative session. The state law is designed to help contractors manage cash flow, reduce progress payment delays, and generally reduce overall cost.
SMACNA Oregon & SW Washington, Plumbing and Mechanical Contractors’ Association Oregon, Ironworkers Local 29, and other contractor groups and unions supported HB 4006 to eliminate the current “escrow account” requirement, while providing contractors a new surety bond option for the 5% owner holdback. This option will be available for both private and public contracts; however, private projects are limited to 20,000 square feet or larger.
If you would like to review how this law works, a webinar sponsored by SMACNA and other signatory contractor groups is available at vimeo.com/941401487 It is approximately 90 minutes. The presentation was led by two experienced attorneys working in construction, along with a representative from one of the Northwest’s largest bond companies admitted in Oregon. These attorneys helped draft the law.
SMACNA Oregon & SW Washington continues to monitor the implementation of this new law and anticipates there may be some resistance to it. Some adjustments or clarifications may be needed in the next legislative session. It is therefore important to gather information and details about issues, problems, and pushback that arise and let the lobby team know of them so they can be addressed. Reach out to cschneider@smacna-oregon.org to discuss. ■
