ROBERT L. EHRLICH, JR., Governor                             Ch. 292

(II) SUBMITS TO THE PUBLIC BODY AN ESCROW AGREEMENT THAT
MEETS THE REQUIREMENTS OF SUBSECTION (C) OF THIS SECTION.

(2) THE PROCUREMENT CONTRACT SHALL IDENTIFY THE ESCROW
AGENT.

(C) THE ESCROW AGREEMENT SHALL:

(1) BE ON A FORM THAT THE PUBLIC BODY PROVIDES;

(2) INCLUDE THE COMPLETE ADDRESS OF BOTH THE ESCROW AGENT
AND THE SURETY;

(3) AUTHORIZE THE PUBLIC BODY TO PAY RETAINAGE TO THE ESCROW
AGENT; AND

(4) BE SIGNED BY;

(I) THE CONTRACTOR;

(II) THE SURETY FOR THE CONTRACTOR; AND

(III) THE ESCROW AGENT.

(D) ON COMPLIANCE WITH THE REQUIREMENTS OF SUBSECTION (B) OF THIS
SECTION, THE PUBLIC BODY SHALL PAY THE RETAINAGE TO THE ESCROW AGENT
UNLESS;

(1) FEDERAL MONEY IS INVOLVED AND APPLICATION OF THIS SECTION
WOULD JEOPARDIZE TIMELY RECOVERY OF THAT FEDERAL MONEY; OR

(2) RETAINAGE IS WITHHELD FOR:

(I) LACK OF PROGRESS ON THE PART OF THE CONTRACTOR; OR

(II) OTHER VIOLATIONS BY THE CONTRACTOR.

(E) IN ACCORDANCE WITH THE ESCROW AGREEMENT, A CONTRACTOR MAY
REQUIRE AN ESCROW AGENT;

(1) TO INVEST THE RETAINAGE PLACED IN THE ESCROW ACCOUNT; AND

(2) TO THE EXTENT THE CONTRACTOR IS ENTITLED TO RETAINAGE
UNDER SUBSECTION (F)(2)(II) OF THIS SECTION, TO PAY THE EARNINGS ON THE
INVESTMENT TO THE CONTRACTOR.

(F) (1) RETAINAGE MAY BE RELEASED TO THE CONTRACTOR ONLY AS
DIRECTED BY THE PUBLIC BODY.

(2) AT THE TIME FINAL PAYMENT, THE PUBLIC BODY SHALL DIRECT
THE ESCROW AGENT TO SETTLE THE ESCROW ACCOUNT BY DISTRIBUTING MONEY
IN THE ESCROW ACCOUNT IN THE FOLLOWING ORDER:

(I) TO THE PUBLIC BODY FOR ANY CLAIM IT MAY HAVE AGAINST
THE CONTRACTOR UNDER THE PROCUREMENT CONTRACT; AND

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