NASBP Focal Point – March 10, 2026

Federal Report

Federal: Congress will continue to debate funding for the Department of Homeland Security (DHS) before a potential shutdown. Last week, Senate Republican leaders attempted to bring up a 2026 FY Homeland Security funding bill including a resolution to fund the agency and its programs for the remainder of the 2025 FY, but it failed on procedural votes.

Last week, the Senate passed their version of a housing bill package similar to what the House passed earlier this Congress. The comprehensive housing package is set to ease regulatory burdens for contractors while making homes more affordable. The next step will be for reconciliation of the two bills.

State Report

CO HB 1311 (Duran) Amends CO Revised Statutes 38-46-101 to permit a subcontractor or contractor to provide a retainage bond in an amount not to exceed five percent of the amount of the money earned by subcontractor or contractor in lieu of withholding retainage for private contracts. HB 1311 was referred to the House Committee on Business Affairs and Labor.

KS SB 335 (Shallenburger) (update) Amends K.S.A. 16-1901, 16-1907, the Kansas Fairness In Public Construction Contract Act, by requiring public construction contracts to include a mutual waiver of consequential damages provision. Consequential damages are damages suffered that are not directly caused by a breach of contract, and mutual waivers promote clarity, fairness, and balanced risk allocation at the outset of a project, benefiting both contracting parties–the project owner and the contractor. Mutual waivers have become standard practice in the construction industry and are included in widely used contract forms published by the American Institute of Architects (AIA). NASBP’s First Vice President, Monica Donatelli, testified before the Senate Committee on Commerce in support of the SB 335. NASBP and the American Subcontractors Association (ASA) have submitted statements in support of the bill. On February 18, SB335 passed the Senate 37-2 and on March 5 it passed the House 84-34.

UT HB 508 Substitute 3 (Brooks) Originally introduced as a funding bill dedicated to capital facility projects within the Utah System of Higher Education, the bill was amended on Monday morning, March 2, just four days prior to the end of the legislative session, in the Senate Committee on Government Operations and Political Subdivisions. The amendment, Senate Substitute 3, authored by the House Bill Sponsor, and Chair of the House Appropriations Committee, Rep. Walt Brooks, amends Section, 63G-6a-1103, “Bonds or security necessary when contract is awarded,” by adding Section 5 and problematic subsections 5(b), and 5(c). Subsection 5(b) states: “the division (e.g., the Division of Facilities Construction and Management (DFCM)) is not required to obtain from a contractor a performance bond or payment bond for a construction contract administered by the division.” While Section 5(c) states that DFCM “may require” such bonds if DFCM “determines that the bond is necessary to protect the division from financial loss or performance risk.”

Upon passage of HB 508 S3 from committee on Monday, the surety industry and the local contracting community (AGC, ASA, organized labor, and others) immediately mobilized in opposition to the bill. NASBP sent a letter in opposition to the entire Utah Senate and retained an outside lobbying firm to directly engage with members of the Utah Senate to oppose the legislation. NASBP Producer Member, Mike Zahn, worked tirelessly throughout the final days of the legislative session by meeting with legislators in an attempt to persuade them to not advance legislation that will deprive Utah businesses and taxpayers of critical payment and performance protections. Unfortunately, the Senate passed HB 508 S3, 19-7 with 3 members not voting. The House concurred and passed the bill 71-1 with 3 members not voting. The bill was sent to enrollment and will be delivered to Governor Cox where he is expected to sign the measure into law. Next, DFCM and the State Risk Manager will be charged with preparing draft regulations for public review and comment. The surety industry, in collaboration with other contracting groups, plan to play an active role in the commentary process with the goal of including a meaningful regulatory structure for bonding. NASBP will keep you apprised of these efforts.

VA SB 165 (McPike) (update) Amends 11-4.7 to allow the use of retainage bonds in construction contracts, enabling contractors or subcontractors to provide a bond as security in place of cash retainage. When a contractor or subcontractor tenders a retainage bond, they can request the release of equivalent withheld retainage from the owner or general contractor, provided they are not in default. SB 165 is supported by the VA Chapter of the American Subcontractors Association and other construction-related VA organizations. On Jan. 30, SB 165 passed the Senate by voice vote 38-o. On March 3, SB 165 passed the House 97-0.

If you are aware of any bills impacting the industry, please reach out to Larry LeClair, NASBP’s Director of Government Relations, and let us know.