Oregon lawmakers have approved a bill that would limit to 5% the amount that can be withheld as retainage, regardless of whether a payment bond is secured. The measure, which will go into effect Jan. 1 if signed by the governor, is the latest move in a decades-long conflict between contractors and subcontractors. Under current practice, as much as 5% may be withheld by one party to a construction contract if the other party obtains a payment bond, while those without a payment bond typically accept a nonbonded retainage of 10%.

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