As Introduced

136th General Assembly

Regular Session H. B. No. 568

2025-2026

To enact section 4113.63 of the Revised Code to limit retainage in certain private construction projects.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That section 4113.63 of the Revised Code be enacted to read as follows:

Sec. 4113.63. (A) As used in this section:

(1) "Contractor," "lower tier material supplier," and "lower tier subcontractor" have the same meanings as in section 4113.61 of the Revised Code.

(2) "Material supplier" and "subcontractor" have the same meanings as in section 1311.01 of the Revised Code.

(3) "Owner" means a person who is not a public authority and relates to all the interests either legal or equitable that the person may have in the real estate upon which improvements are made, including interests held by any person under contracts of purchase, whether in writing or otherwise.

(4) "Private project" means construction, alteration, erection, improvement, demolition, removal, digging, or drilling any part of a structure or improvement, directly or indirectly, under a contract with an owner. "Private project" includes work or labor performed, or materials furnished, under a contract with an owner, contractor, subcontractor, material supplier, lower tier subcontractor, or lower tier material supplier, so long as the owner of the structure or improvement on which the work or labor is performed, or the materials are used, is not a public authority.

(5) "Public authority" has the same meaning as in section 1311.25 of the Revised Code.

(B) Notwithstanding any provision of section 4113.61 of the Revised Code to the contrary, no construction contract or subcontract for a private project with an expected value of greater than one million dollars that is entered into on or after the effective date of this section shall include any provision that requires or permits the withholding of retainage in an amount greater than five per cent of the expected value of the contract or subcontract.

(C) Nothing in this section shall be construed to require payment of a retainage where there is a good faith claim directly related to the work or labor performed, or the materials furnished, by the contractor, subcontractor, material supplier, lower tier subcontractor, or lower tier material supplier.