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AB1037: Bill Text
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2025 - 2026 LEGISLATURE
LRB-5318/1
MDE:skw
2025 ASSEMBLY BILL 1037
February 25, 2026 - Introduced by Representatives
Wittke
,
Knodl
,
Mursau
and
Armstrong
, cosponsored by Senators
Bradley
and
Nass
. Referred to Committee on State Affairs.
AB1037,1,3
1
An Act
to amend
16.855 (19) (a), 16.855 (19) (b) and 66.0901 (9) (b);
to create
2
66.0901 (1) (ap) and 66.0901 (9) (c) of the statutes;
relating to:
retainage on
3
public construction contracts.
Analysis by the Legislative Reference Bureau
Under current law, as the work progresses on a public construction project, the state or the local governmental unit makes payments to the contractors, but retains not more than 5 percent of the value of the work performed until 50 percent of the value of the work is completed. After 50 percent of the work is completed, additional amounts, not to exceed 10 percent, may be retained if the progress of the work is not satisfactory. A similar retainage requirement exists for subcontractors that perform mechanical, electrical, plumbing, or fire protection work for a construction project for the state. Under current law, all retainage amounts are retained by the prime contractor.
Under this bill, this retainage requirement extends also to a subcontractor that performs mechanical, electrical, plumbing, or fire protection work for a construction project for a local governmental unit.
The bill also decreases from 5 percent to 3 percent the initial maximum retainage for all retainage requirements between a subcontractor and a prime contractor and between a prime contractor and the state or a local governmental unit for a public construction project.
For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:
AB1037,1
1
Section
1
.
16.855 (19) (a) of the statutes is amended to read:
AB1037,2,18
2
16.855
(19)
(a) As the work progresses under any contract for construction of
3
a project the department, from time to time, shall grant to the contractor an
4
estimate of the amount and proportionate value of the work properly completed,
5
which shall entitle the contractor to receive the amount, less the retainage, from the
6
proper fund. The retainage shall be an amount equal to not more than
5
3
percent
7
of the estimate until 50 percent of the work has been completed. At 50 percent
8
completion, no additional amounts shall be retained, and partial payments shall be
9
made in full to the contractor unless the department certifies that the job is not
10
proceeding satisfactorily. At 50 percent completion or any time thereafter when the
11
progress of the work is not satisfactory, additional amounts may be retained but in
12
no event shall the total retainage be more than 10 percent of the value of the work
13
completed. Upon substantial completion of the work, any amount retained shall be
14
paid to the contractor, less the value of any required corrective work or uncompleted
15
work. For the purposes of this section, estimates may include any fabricated or
16
manufactured materials and components specified, previously paid for by
17
contractor and delivered to the work or properly stored and suitable for
18
incorporation in the work embraced in the contract.
AB1037,2
19
Section
2
.
16.855 (19) (b) of the statutes is amended to read:
AB1037,3,16
20
16.855
(19)
(b) As the work progresses under any subcontract under sub. (14)
1
(e) for construction of a project, the general prime contractor shall, upon request of
2
a subcontractor, pay to the subcontractor an amount equal to the proportionate
3
value of the subcontractor’s work properly completed, less retainage. The retainage
4
shall be an amount equal to not more than
5
3
percent of the subcontractor’s work
5
completed until 50 percent of the subcontractor’s work has been completed. At 50
6
percent completion, no additional amounts may be retained, and partial payments
7
shall be made in full to the subcontractor unless the department or the Board of
8
Regents certifies that the subcontractor’s work is not proceeding satisfactorily. At
9
50 percent completion or any time thereafter when the progress of the
10
subcontractor’s work is not satisfactory, additional amounts may be retained but
11
the total retainage may not be more than 10 percent of the value of the work
12
completed. Upon substantial completion of the subcontractor’s work, any amount
13
retained shall be paid to the subcontractor, less the value of any required corrective
14
work or uncompleted work. All payments the general prime contractor makes
15
under this paragraph shall be within 7 calendar days after the date on which the
16
general prime contractor receives payment from the department or board.
AB1037,3
17
Section
3
.
66.0901 (1) (ap) of the statutes is created to read:
AB1037,3,20
18
66.0901
(1)
(ap) “Mechanical, electrical, or plumbing subcontractor” means a
19
subcontractor that performs mechanical, electrical, plumbing, or fire protection
20
work pursuant to a contract with a prime contractor.
AB1037,4
21
Section
4
.
66.0901 (9) (b) of the statutes is amended to read:
AB1037,4,24
22
66.0901
(9)
(b) As the work progresses under a contract involving $1,000 or
23
more for the construction, execution, repair, remodeling or improvement of a public
24
work or building or for the furnishing of supplies or materials, regardless of
1
whether proposals for the contract are required to be advertised by law, the
2
municipality, from time to time, shall grant to the contractor an estimate of the
3
amount and proportionate value of the work done, which entitles the contractor to
4
receive the amount of the estimate, less the retainage, from the proper fund. The
5
retainage shall be an amount equal to not more than
5
3
percent of the estimate
6
until 50 percent of the work has been completed. At 50 percent completion, further
7
partial payments shall be made in full to the contractor and no additional amounts
8
may be retained unless the architect or engineer certifies that the job is not
9
proceeding satisfactorily, but amounts previously retained shall not be paid to the
10
contractor. At 50 percent completion or any time after 50 percent completion when
11
the progress of the work is not satisfactory, additional amounts may be retained but
12
the total retainage may not be more than 10 percent of the value of the work
13
completed. Upon substantial completion of the work, an amount retained may be
14
paid to the contractor. When the work has been substantially completed except for
15
work which cannot be completed because of weather conditions, lack of materials or
16
other reasons which in the judgment of the municipality are valid reasons for
17
noncompletion, the municipality may make additional payments, retaining at all
18
times an amount sufficient to cover the estimated cost of the work still to be
19
completed or may pay out the entire amount retained and receive from the
20
contractor guarantees in the form of a bond or other collateral sufficient to ensure
21
completion of the job. For the purposes of this section, estimates may include any
22
fabricated or manufactured materials and components specified, previously paid for
23
by the contractor and delivered to the work or properly stored and suitable for
24
incorporation in the work embraced in the contract.
AB1037,5
1
Section
5
.
66.0901 (9) (c) of the statutes is created to read:
AB1037,5,19
2
66.0901
(9)
(c) As the work progresses under any subcontract between a
3
mechanical, electrical, or plumbing subcontractor and a prime contractor for the
4
construction, execution, repair, remodeling, or improvement of a public work, the
5
prime contractor shall, upon request of the subcontractor, pay to the subcontractor
6
an amount equal to the proportionate value of the subcontractor’s work properly
7
completed, less retainage. The retainage shall be an amount equal to not more than
8
3 percent of the subcontractor’s work completed until 50 percent of the
9
subcontractor’s work has been completed. At 50 percent completion, no additional
10
amounts may be retained, and partial payments shall be made in full to the
11
subcontractor unless the municipality certifies that the subcontractor's work is not
12
satisfactory. At 50 percent completion or any time after 50 percent completion when
13
progress of the work is not satisfactory, additional amounts may be retained but the
14
total retainage may not be more than 10 percent of the value of the work completed.
15
Upon substantial completion of the subcontractor’s work, any amount retained
16
shall be paid to the subcontractor, less the value of any required corrective work or
17
uncompleted work. All payments the prime contractor makes under this paragraph
18
shall be made within 7 calendar days after the date on which the prime contractor
19
receives payment from the municipality.
AB1037,5,20
20
(end)
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