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An Act To Limit the Amount of Money That May Be Retained on Construction Contracts
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  10 MRSA §1116, sub-§5  is enacted to read:
 
5.  Limit.     Retainage may not exceed 5% of the contract price. This subsection does not apply to any contract entered into by a governmental entity, as defined in Title 14, section 8102, subsection 2.
Sec. 2. Application. This Act applies to a contract entered into on or after the effective date of this Act.
 
SUMMARY
This bill limits the amount of money that may be retained under a construction contract, pending the completion of contractor or subcontractor performance, to 5% of the contract price. The limit applies only to private contracts and not to contracts entered into by governmental entities and only to contracts entered into on or after the effective date of the legislation.