Concerning theft by contractors.
HB26-1245 would expand Colorado theft law to specifically cover certain misuse of advance payments on construction projects. Under the bill, a contractor could commit theft if they knowingly or with criminal negligence use, transfer, or divert advance-payment funds for a purpose unrelated to the specific project and that misuse causes unreasonable delay, cessation, or abandonment of the work. The bill defines a “specific construction project” as construction, repair, renovation, or improvement of real property identified in a written contract, estimate, proposal, or scope of work accepted by the customer.
The bill also creates a new advance-payment disclosure requirement for contractors who accept more than $300 up front. Before taking the payment, the contractor must provide a written disclosure describing how the money will be used, when those expenses are expected to occur, when work is expected to begin, and warning that materially inconsistent use of the funds may constitute theft. The bill further states that evidence of using advance-payment money for unrelated purposes, or failing to provide or follow the disclosure, may be considered evidence in civil or criminal proceedings. It also makes conforming changes to Colorado’s construction-contract statutes.
The bill would amend Colorado’s general theft statute, section 18-4-401, to add a contractor-specific theft offense tied to advance payments on construction projects. It would also add a new definition in title 38 for “specific construction project” and create a new part requiring advance-payment usage disclosures for contractors. In practice, the bill would affect contractors, homeowners, and other customers who pay deposits or advances for construction, repair, renovation, or improvement work, and it would give prosecutors and civil litigants additional statutory language to rely on when funds are misused.
The available context suggests the bill was framed as a consumer-protection and anti-fraud measure aimed at preventing contractors from taking deposits and then failing to perform. The bill sponsor lineup and committee placement indicate support from legislators interested in business and labor regulation, but the bill ultimately lost on third reading in the House, suggesting it did not secure enough support to advance. No committee transcript or recorded vote details were provided, so the broader debate cannot be reconstructed from the available materials.
The main point of contention appears to be whether the bill appropriately criminalizes contractor handling of advance payments and whether the standard is too broad or difficult to apply. The bill uses a “criminal negligence” standard and allows failure to comply with the disclosure requirement to be used as evidence in civil or criminal cases, which could raise concerns among contractors about overcriminalization, proof issues, and the risk of turning contract disputes into theft cases. Supporters would likely emphasize protection for customers who pay deposits and are left with delayed or abandoned projects, while opponents would likely focus on the burden on contractors and the possibility of unintended consequences for legitimate project financing and cash flow.