Senate and House pass Virginia bill introduced by McPike to permit retainage bonds on construction contracts

A measure sponsored by state Sen. Jeremy S. McPike enables contractors and subcontractors in Virginia construction projects to use retainage bonds in place of cash retainage, the Virginia State Senate reports.

The bill was approved in both chambers and officially enrolled on March 9, 2026, after passing the House with a 97-0 vote and the Senate with a 39-0 vote.

Introduced as SB165 on Jan. 14, 2026, during the regular session, the state legislature summarized it as: “Contracts; retainage bonds permitted in construction contracts, effective clause.”

Below is a summary based on the full bill text, with clarifications to explain its components.

Essentially, this legislation authorizes contractors and subcontractors on Virginia construction projects to offer retainage bonds rather than having cash retained. The bill defines a retainage bond as a surety bond equal to the retainage amount, with the project owner as obligee. If a contractor submits a retainage bond and written request, the owner must either release prior retained funds within five business days or stop withholding money to the extent covered by the bond, provided the contractor isn’t in default. The same provisions apply to general contractors and subcontractors, limiting payment to retainage for completed work, and stipulate that the provider of the bond receives all interest and earnings from those funds.

In the House, 62 Democrats and 35 Republicans supported the bill.

In the Senate, 21 Democrats and 18 Republicans voted for it.

The bill had only one sponsor: Sen. Jeremy S. McPike (Democrat-29th District).

McPike earned his BA from George Mason University in 1997.

The Democrat has served in the Virginia State Senate representing the 29th district since 2016, succeeding Charles Colgan.

Virginia’s legislative process begins when legislation is introduced in either the House of Delegates or the Senate, assigned to committees for review or amendment. If passed by committee, the bill moves to the chamber floor for debate and a vote in both bodies. If both approve, the bill goes to the governor for signature, veto, or passage into law without signature. Each year, the Virginia General Assembly convenes in regular session beginning on the second Monday in January, with legislators introducing hundreds of bills, while only a fraction becomes law.

Information in this article was sourced from the Virginia State Senate. Find the original data here.