Focus on New Laws: Providing Payment Information to Contractors and Subcontractors

Beginning Aug. 1, cities must provide payment details for public improvement projects upon request from eligible contractors and subcontractors.

A 2026 law change requires cities to provide payment information for public improvement projects to contractors and subcontractors that can demonstrate they worked on the project. The new requirements take effect Aug. 1, 2026.

Public improvement projects include construction or improvements performed on property or highways by or for any public agency, including the State of Minnesota and its political subdivisions.

Requirements of the current law

Current law provides protections and legal remedies for contractors and subcontractors working on public improvement projects to help ensure timely payment. Those protections, however, depend on contractors and subcontractors being able to verify that the public owner has paid the prime contractor.

Cities typically enter into a public improvement contract with a single prime contractor, or project manager, who then enters into separate agreements with multiple subcontractors for labor, materials, or equipment.

Payments on public improvement projects are commonly made in monthly installments based on project progress. Under Minnesota, Statutes, section 15.72, a public project owner may withhold a portion of any progress payment as security for completion. When a payment is withheld, the public owner must provide a written statement detailing the amount withheld and the reason. Subcontractors may request a copy of that statement.

Current law also requires prime contractors to release any remaining withheld funds to their subcontractors within 10 days of receiving payment from the public agency unless there is a dispute regarding the subcontractor’s work. Subcontractors whose work is not part of the dispute must still be paid, and the prime contractor must provide a written explanation for any withheld payment.

City obligations under the new law

The new law authorizes contractors and subcontractors at any tier to request payment information directly from the public agency. Any contractor or subcontractor that can demonstrate they worked on the project may request information about a progress payment, retainage payment, final payment, or any other payment made by the public owner.

Cities must respond within seven calendar days and may not charge a fee for the requested information. The response must include:

• The payment amount.
• The payment date.
• A copy of the payment application submitted by the contractor.

Cities also must designate a point of contact for these requests and make that information available to contractors and subcontractors. If the city has a website, the contact information must be posted on the solicitations or bids page, or in another prominent location.

Cities should review and update their public improvement project procedures to incorporate these new requirements. Because requests of this nature often overlap with the Minnesota Government Data Practices Act, cities should also review their existing data practices procedures to ensure they clearly address these requests. Learn more on expenditures, purchasing, and contracts in League’s Handbook for Minnesota Cities, Chapter 22.

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