Page 1 of 3
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Regular Session, 2010 ENROLLED
SENATE BILL NO. 218
BY SENATOR APPEL
AN ACT1
To enact R.S. 9:4815, relative to the Private Works Act; to provide for the escrow of funds2
due under certain contracts; to provide for the duties of an escrow agent; to provide3
for the release of funds from escrow; to provide for exceptions; to provide for a4
limitation of liability; and to provide for related matters.5
Be it enacted by the Legislature of Louisiana:6
Section 1. R.S. 9:4815 is hereby enacted to read as follows: 7
ยง4815. Escrow of funds due under contract; procedures8
A. When, under the provisions of this Part, a contract in the amount of9
fifty thousand dollars or more is entered into between an owner and a10
contractor and if in accordance with the terms of such contract funds earned by11
the contractor are withheld as retainage by the owner from periodic payments12
due to the contractor then such funds shall be deposited by the owner into an13
interest bearing escrow account. The provisions of this Section shall not apply14
to a contract for a single family residence or double family residence. The15
provisions of this Section also shall not apply to a contract for the construction16
or improvement of the following types of industrial facilities that are, or will be,17
engaged in activities defined or classified under one or more of the following18
subsectors, industry groups, or industries of the 1997 North American Industry19
Classifications System (NAICS):20
(1) 22111 electric power generation.21
(2) 321 wood products manufacturing.22
(3) 322 paper manufacturing.23
(4) 324 petroleum and coal products manufacturing.24
(5) 325 chemical manufacturing.25
(6) 326 plastics and rubber products manufacturing.26
(7) 331 primary metals manufacturing.27 SB NO. 218 ENROLLED
Page 2 of 3
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
(8) 562211/562212 hazardous and solid waste landfills.1
(9) 422710 bulk stations and materials.2
(10) 486110 crude oil pipelines.3
(11) 486910 refined petroleum products pipelines.4
(12) 486210 natural gas pipelines.5
(13) 486990 other pipelines.6
(14) 211112 natural gas processing plants.7
B. An escrow account under the provisions of this Section shall be8
located at a qualified financial institution and shall be under the control of an9
escrow agent. The escrow account and escrow agent shall be selected by mutual10
agreement between the owner and the contractor.11
C. Upon completion of the work that is the subject of the contract, the12
funds, including any interest located in the escrow account shall be released13
from escrow under the following conditions:14
(1) If there are no existing claims by the owner, the whole amount shall15
be paid to the contractor within three business days upon receipt by the escrow16
agent of a written release signed by the contractor and the owner.17
(2) If there is a dispute between the owner and contractor and the18
contract does not provide for binding arbitration of such dispute:19
(a) Undisputed amounts shall be released by the escrow agent within20
three business days of receipt of a notarized request of the contractor.21
(b) Disputed amounts that are the subject of a judicial proceeding shall22
be released by the escrow agent within three business days of the receipt of a23
final order by the court. Upon receipt of the order of the court, the escrow24
agent shall pay the contractor or owner such amounts as are determined by the25
court.26
(3) If there is a dispute between the owner and contractor and the27
contract provides for binding arbitration of such dispute, the following shall28
occur:29
(a) Undisputed amounts shall be released by the escrow agent within30 SB NO. 218 ENROLLED
Page 3 of 3
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
three business days of receipt of a notarized request of the contractor.1
(b) Disputed amounts that are the subject of binding arbitration under2
the contract shall be released by the escrow agent within three business days of3
the receipt of a final order by the arbitrator who has been selected by mutual4
agreement between the owner and the contractor. Upon receipt of the order of5
the arbitrator, the escrow agent shall pay the contractor or owner such amounts6
as are determined by the arbitrator under the rules as defined in the contract7
between the owner and the contractor. 8
D. Receipt by the escrow agent or the qualified financial institution in9
which the escrow account is maintained of what purports to be a written release10
signed by the contractor and owner, or an order by a court or arbitrator, shall11
be a full release and discharge of the escrow agent for transfer of funds to the12
contractor. Neither the escrow agent nor the qualified financial institution in13
which the escrow account is maintained shall be held liable to any party based14
on any claim that the written release is unauthorized, forged, or otherwise15
fraudulent.16
E. Neither the escrow agent nor the qualified financial institution in17
which the escrow account is maintained pursuant to the provisions of this18
Section shall have any liability to the owner, contractor, or any other person19
when complying with the provisions of this Section.20
PRESIDENT OF THE SENATE
SPEAKER OF THE HOUSE OF REPRESENTATIVES
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: