4100

VETOES

Harry Hughes
Governor

House Bill No. 1690

AN ACT concerning

Procurement - Escrow Account for Retained Funds - Department

of Transportation

FOR the purpose of establishing an escrow account procedure for
retained funds held by State agencies certain contracts by a
certain State agency under procurement contracts; providing
for an escrow agreement form; providing for the investment
by the escrow agent of the escrow funds, the earnings of
which are to be paid to the contractor; providing for a
certain contingency; providing for a delayed effective date;
providing for a termination date; and generally relating to
escrow accounts for retained funds under procurement
contracts.

BY adding to

Article 21 - Procurement

Section 3-1106 under the subtitle "Subtitle 11. Payment of

State Obligations"
Annotated Code of Maryland
(1981 Replacement Volume and 1984 Supplement)

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:

Article 21 - Procurement

3-1106.

(A) (1) IN A ROAD CONSTRUCTION OR RECONSTRUCTION CONTRACT,

IN ORDER TO HAVE RETAINED FUNDS PAID TO AN ESCROW AGENT, AS

DEFINED BY THE CONTRACT, A CONTRACTOR, THE CONTRACTOR'S ESCROW
AGENT, AND THE CONTRACTOR'S SURETY MUST EXECUTE AN ESCROW
AGREEMENT FORM TO BE SUBMITTED TO THE STATE AGENCY DEPARTMENT OF
TRANSPORTATION FOR APPROVAL.

(2)  THE ESCROW AGREEMENT FORM SHALL CONTAIN THE
COMPLETE ADDRESS OF THE ESCROW AGENT, AS DEFINED BY THE CONTRACT
AND SURETY.

(3)  THE EXECUTED ESCROW AGREEMENT AUTHORIZES THE
STATE AGENCY DEPARTMENT OF TRANSPORTATION TO MAKE PAYMENT OF
RETAINED FUNDS TO THE ESCROW AGENT, AS DEFINED BY THE CONTRACT.