HARRY HUGHES, Governor                                    1649

DOCUMENTS. IF THE CONTRACTOR FAILS TO INDICATE AN ELECTION OR
REFUSES THE ELECTION, THE CONTRACTOR SHALL FORFEIT RIGHTS TO THE
USE OF THE ESCROW ACCOUNT.

(C) (1) EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS

SECTION, AFTER APPROVING THE ESCROW AGREEMENT AND IF FEDERAL

REGULATIONS PERMIT APPLICATION OF THIS REQUIREMENT TO FEDERALLY
FUNDED PROJECTS WITHOUT JEOPARDY TO TIMELY RECOVERY OF FEDERAL
FUNDS, THE DEPARTMENT OF TRANSPORTATION OR THE MARYLAND
TRANSPORTATION AUTHORITY SHALL PAY TO THE ESCROW AGENT THE FUNDS
RETAINED.

(2)  FUNDS WITHHELD FOR LACK OF PROGRESS OR OTHER
DEFICIENCIES CONTRACTOR VIOLATIONS ON THE PART OF THE CONTRACTOR
MAY NOT BE PAID TO THE ESCROW AGENT.

(3)  THE ESCROW AGENT, IN ACCORDANCE WITH THE
STIPULATIONS CONTAINED IN THE ESCROW AGREEMENT MAY:

(I)  INVEST THE FUNDS PAID INTO THE ACCOUNT; AND

(II)  PAY EARNINGS ON THE INVESTMENTS TO THE
CONTRACTOR TO THE EXTENT THE CONTRACTOR IS ENTITLED TO THE
RETAINAGE UNDER SUBSECTION (D) (II) OF THIS SECTION.

(D) (1) RETAINED FUNDS MAY BE RELEASED ONLY AS DIRECTED BY

THE DEPARTMENT OF TRANSPORTATION OR THE MARYLAND TRANSPORTATION
AUTHORITY.

(2) AT THE TIME OF FINAL PAYMENT, THE DEPARTMENT OF
TRANSPORTATION OR THE MARYLAND TRANSPORTATION AUTHORITY SHALL
DIRECT THE ESCROW AGENT TO SETTLE THE ESCROW ACCOUNT BY PAYING
FUNDS IN THE ESCROW ACCOUNT AS FOLLOWS:

(I)  TO THE DEPARTMENT OF TRANSPORTATION OR THE
MARYLAND TRANSPORTATION AUTHORITY FOR ANY CLAIM THE DEPARTMENT OR
AUTHORITY MAY HAVE AGAINST THE CONTRACTOR UNDER THE CONTRACT; AND

(II) UNLESS WAIVED BY THE BOARD OF PUBLIC
WORKS, TO THE COMPTROLLER FOR ANY CLAIM OVER $50 AGAINST THE
CONTRACTOR BY THE STATE, A UNIT, OR A STATE CONTROLLED
GOVERNMENTAL ENTITY; AND

(II) (III) TO THE CONTRACTOR.

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall

be construed only prospectively and may not be applied or

interpreted to have any effect upon or application to any

transportation construction contract awarded prior to the
effective date of this Act.