Theft by Contractor

Second Regular Session Seventy-fifth General Assembly STATE OF COLORADO ENGROSSED This Version Includes All Amendments Adopted on Second Reading in the House of Introduction HOUSE BILL 26-1245 LLS NO. 26-0776.01 Lindy Schaible x4215 HOUSE SPONSORSHIP Keltie and English, SENATE SPONSORSHIP Pelton R., House Committees Senate Committees Business Affairs & Labor A BILL FOR AN ACT CONCERNING THEFT BY CONTRACTORS. Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.) The bill specifies that a person commits theft when the person knowingly uses an advance payment for a construction project for an unrelated purpose that results in the delay, end, abandonment, or material nonperformance of the construction project. The bill requires that before a contractor can take an advance payment from a customer, a contractor shall provide the customer with a written disclosure identifying the intended use of the advance payment, the anticipated timing of expenses identified in the disclosure, and the Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.

Capital letters or bold & italic numbers indicate new material to be added to existing law. Dashes through the words or numbers indicate deletions from existing law.

HOUSE Amended 2nd Reading April 17, 2026 project's anticipated start date.

Be it enacted by the General Assembly of the State of Colorado:

SECTION 1. In Colorado Revised Statutes, 18-4-401, amend (1) introductory portion, (1)(e), and (1)(f); and add (1)(g) as follows:

18-4-401. Theft.

(1) A person commits theft when he or she THE PERSON knowingly obtains, retains, or exercises control over anything of value of another without authorization or by threat or deception; receives, loans money by pawn or pledge on, or disposes of anything of value or belonging to another that he or she THE PERSON knows or believes to have been stolen, and:

(e) Knowingly retains the thing of value more than seventy-two hours after the agreed-upon time of return in any lease or hire agreement;

or

(f) Intentionally misrepresents or withholds a material fact for determining eligibility for a public benefit and does so for the purpose of obtaining or retaining public benefits for which the person is not eligible;

OR

(g) WITH CRIMINAL NEGLIGENCE USES, TRANSFERS, OR DIVERTS MONEY PROVIDED AS AN ADVANCE PAYMENT FOR A SPECIFIC CONSTRUCTION PROJECT, AS DEFINED IN SECTION 38-46-101 (4.5), AND THE USE, TRANSFER, OR DIVERSION:

(I) IS FOR A PURPOSE UNRELATED TO THE SPECIFIC CONSTRUCTION PROJECT FOR WHICH THE MONEY WAS PROVIDED; AND (II) RESULTS IN UNREASONABLE DELAY, CESSATION, OR ABANDONMENT OF THE SPECIFIC CONSTRUCTION PROJECT.

SECTION 2. In Colorado Revised Statutes, 38-46-101, add (4.5) as follows:

38-46-101. Definitions.

As used in this article 46, unless the context otherwise requires:

"SPECIFIC CONSTRUCTION PROJECT" MEANS THE CONSTRUCTION, REPAIR, RENOVATION, OR IMPROVEMENT OF REAL PROPERTY THAT IS IDENTIFIED IN A WRITTEN CONTRACT, ESTIMATE, PROPOSAL, OR SCOPE OF WORK ACCEPTED BY THE CUSTOMER, INCLUDING THE LOCATION OF THE PROPERTY AND THE WORK TO BE PERFORMED, FOR WHICH AN ADVANCE PAYMENT IS PROVIDED.

SECTION 3. In Colorado Revised Statutes, add part 2 to article 46 of title 38 as follows:

PART 2 ADVANCE PAYMENT USAGE DISCLOSURE

38-46-201. Advance payment usage disclosure by contractors.

(1) BEFORE ACCEPTING AN ADVANCE PAYMENT EXCEEDING THREE HUNDRED DOLLARS FOR A SPECIFIC CONSTRUCTION PROJECT, A CONTRACTOR SHALL PROVIDE THE CUSTOMER WITH A WRITTEN DISCLOSURE THAT STATES:

(a) THE INTENDED USE OF THE ADVANCE PAYMENT, INCLUDING MATERIALS, LABOR, PERMITS, OVERHEAD, OR OTHER PROJECT-RELATED EXPENSES;

(b) THE ANTICIPATED TIMING OF THE IDENTIFIED EXPENSES;

(c) THE PROJECTED DATE ON WHICH THE WORK ON THE SPECIFIC CONSTRUCTION PROJECT WILL BEGIN; AND

(d) THAT THE CONTRACTOR USING ADVANCE PAYMENT FUNDS IN A MANNER THAT IS MATERIALLY INCONSISTENT WITH THE WRITTEN DISCLOSURE AND THAT RESULTS IN DELAY, CESSATION, OR ABANDONMENT OF THE CONSTRUCTION PROJECT MAY CONSTITUTE THEFT PURSUANT TO

SECTION 18-4-401 (1)(g).

EVIDENCE THAT A CONTRACTOR KNOWINGLY USED, TRANSFERRED, OR DIVERTED ADVANCE PAYMENT MONEY FOR PURPOSES UNRELATED TO THE WRITTEN DISCLOSURE MAY BE CONSIDERED EVIDENCE OF THE INTENT REQUIRED FOR THEFT PURSUANT TO SECTION 18-4-401.

(3) FAILURE OF A CONTRACTOR TO PROVIDE OR TO ADHERE TO THE ADVANCE PAYMENT USAGE DISCLOSURE REQUIRED PURSUANT TO THIS SECTION MAY BE CONSIDERED EVIDENCE OF USE, TRANSFER, OR DIVERSION OF MONEY IN ANY CIVIL OR CRIMINAL PROCEEDING.

SECTION 4. In Colorado Revised Statutes, 38-46-102, amend (1) introductory portion and (2) introductory portion as follows:

38-46-102. Applicability of part.

(1) Except as provided in subsection (2) of this section, this article 46 PART 1 applies to:

(2) This article 46 PART 1 does not apply to:

SECTION 5. In Colorado Revised Statutes, 38-46-103, amend

(2) introductory portion as follows:

Private construction contracts - retainage - conditions precedent.

(2) This article 46 PART 1 addresses only the amount of retainage that may be withheld by a property owner, contractor, or subcontractor and does not change, override, or invalidate any other provision in a contract, subcontract, or supply agreement. Such a provision includes, but is not limited to:

SECTION 6. In Colorado Revised Statutes, amend 38-46-104 as follows:

38-46-104. Lien waivers.

To receive payment under this article 46 PART 1, the recipient of the payment must provide an executed lien waiver for amounts actually paid if required by the contract, subcontract, or supply agreement.

SECTION 7.

Act subject to petition - effective date - applicability. (1) This act takes effect August 15, 2026; except that, if a referendum petition is filed pursuant to section 1 (3) of article V of the state constitution against this act or an item, section, or part of this act within the ninety-day period after final adjournment of the general assembly, then the act, item, section, or part will not take effect unless approved by the people at the general election to be held in November 2026 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.

This act applies to offenses committed on or after the applicable effective date of this act.