Maryland 2025 Regular Session

Maryland House Bill HB1166 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2
3	3	EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
4	4	[Brackets] indicate matter deleted from existing law.
5	5	hb1166
6	6
7	7	HOUSE BILL 1166
8	8	P2 5lr2514
9	9	HB 994/24 – HGO CF SB 835
10	10	By: Delegates Adams and Hutchinson
11	11	Introduced and read first time: February 6, 2025
12	12	Assigned to: Health and Government Operations
13	13
14	14	A BILL ENTITLED
15	15
16	16	AN ACT concerning 1
17	17
18	18	State Finance and Procurement – Retention Proceeds 2
19	19
20	20	FOR the purpose of requiring that certain retention proceeds retained by a unit or a certain 3
21	21	contractor under a State procurement contract be paid within a certain period of time 4
22	22	after the date of substantial completion; and generally relating to the payment of 5
23	23	retention proceeds under a State procurement contract. 6
24	24
25	25	BY repealing and reenacting, with amendments, 7
26	26	Article – State Finance and Procurement 8
27	27	Section 13–225 9
28	28	Annotated Code of Maryland 10
29	29	(2021 Replacement Volume and 2024 Supplement) 11
30	30
31	31	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 12
32	32	That the Laws of Maryland read as follows: 13
33	33
34	34	Article – State Finance and Procurement 14
35	35
36	36	13–225. 15
37	37
38	38	(a) (1) In this section the following words have the meanings indicated. 16
39	39
40	40	(2) “Payment security” has the meaning stated in § 17–101 of this article. 17
41	41
42	42	(3) “Performance security” has the meaning stated in § 17–101 of this 18
43	43	article. 19
44	44
45	45	(b) (1) If a contractor has furnished 100% payment security and 100% 20
46	46	performance security in accordance with Title 17, Subtitle 1 of this article under a State 21
47	47	procurement contract for construction, the percentage specified in the contract for 22
48	48	retainage may not exceed 5% of the total amount. 23 2 HOUSE BILL 1166
49	49
50	50
51	51
52	52	(2) In addition to retainage, a primary procurement unit and the Maryland 1
53	53	Transportation Authority may withhold from payments otherwise due a contractor any 2
54	54	amount that the unit reasonably believes necessary to protect the State’s interest. 3
55	55
56	56	(3) Retainage withheld by a primary procurement unit and the Maryland 4
57	57	Transportation Authority may be deposited in an interest–bearing escrow account in 5
58	58	accordance with § 15–108 of this article. 6
59	59
60	60	(c) (1) A contractor may not retain a percentage of payments due a 7
61	61	subcontractor that exceeds the percentage of payments retained by the primary 8
62	62	procurement unit or the Maryland Transportation Authority. 9
63	63
64	64	(2) Paragraph (1) of this subsection may not be construed to prohibit a 10
65	65	contractor from withholding any amount in addition to retainage if the contractor 11
66	66	determines that a subcontractor’s performance under the subcontract provides reasonable 12
67	67	grounds for withholding the additional amount. 13
68	68
69	69	(d) (1) A subcontractor may not retain a percentage of payments due a lower 14
70	70	tier subcontractor that exceeds the percentage of payments retained from the 15
71	71	subcontractor. 16
72	72
73	73	(2) Paragraph (1) of this subsection may not be construed to prohibit a 17
74	74	subcontractor from withholding any amount in addition to retainage if the subcontractor 18
75	75	determines that a lower tier subcontractor’s performance under the subcontract provides 19
76	76	reasonable grounds for withholding the additional amount. 20
77	77
78	78	(e) UNDISPUTED RETENTION PROCEEDS RETAINED BY A UNIT OR A 21
79	79	CONTRACTOR U NDER THIS SECTION SH ALL BE PAID WITHIN 90 DAYS AFTER THE 22
80	80	DATE OF SUBSTANTIAL COMPLETION , AS DEFINED BY THE AP PLICABLE CONTRACT 23
81	81	OR SUBCONTRACT . 24
82	82
83	83	(F) If retainage has been placed in escrow under § 15–108 of this article, each 25
84	84	payment of retainage shall include a pro rata portion of interest earned. 26
85	85
86	86	[(f)] (G) This section may not be construed to limit the application of the 27
87	87	provisions of Title 17, Subtitle 1 of this article. 28
88	88
89	89	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 29
90	90	October 1, 2025. 30