HARRY HUGHES, Governor

3417

Any contractor prior to receiving a progress or final payment
under a contract covered hereunder shall certify in writing that
he has made payment from proceeds of prior payments, and that he
will make timely payments from the proceeds of the progress or
final payment then due hint, to his subcontractors and suppliers
in accordance with his contractual arrangements with them.

[(3)] (2) Any governmental entity specified in this
subsection, other than the State of Maryland and any officer,
board, commission, or agency of the State of Maryland, may
require performance and/or payment bonds for any construction
contract exceeding $25,000 in amount but not greater than $50,000
in amount. Any such bond shall be in an amount not to exceed
one-half of the contract amount.

(b)  Nothing in this section shall be construed to limit the
authority of the State of Maryland or other public body
hereinabove mentioned to require a performance bond or other
security in addition to those, or in cases other than the cases
specified in subsection (a) of this section.

(c)  Every person who has furnished labor or material in the
prosecution of the work provided for in such contract, in respect
of which a payment bond or other security is furnished under this
section and who has not been paid in full therefor before the
expiration of a period of 90 days after the day on which the last
of the labor was done or performed by him or material was
furnished or supplied by him for which such claim is made, shall
have the right to sue on the payment bond or other security for
the amount, or the balance thereof, unpaid at the time of
institution of such suit and to prosecute said action to final
judgment and execution for the sum or sums justly due him;
provided, however, that any person having direct contractual
relationship with a subcontractor of the contractor, or with any
sub-subcontractor of the contractor but no contractual
relationship express or implied with the contractor furnishing
said payment bond or other security, shall have a right of action
upon the payment bond or other security upon giving written
notice to the contractor within 90 days from the date on which
such person did, or performed the last of the labor or furnished
or supplied the last of the material for which such claim is
made, stating with substantial accuracy the amount claimed and
the name of the party to whom the material was furnished or
supplied or for whom the labor was done or performed. Such notice
shall be served by mailing the same by registered or certified
mail, postage prepaid, in an envelope addressed to the contractor
at any place he maintains an office or conducts his business, or
his residence.

(d)  Every suit instituted under this section shall be
brought in the appropriate court in the political subdivision in
which the contract was to be performed and executed or in the
political subdivision where the contractor has his principal
place of business and not elsewhere, but no such suit shall be
commenced after the term of 1 year after the date of final