(a) To determine the amount of retainage to be withheld, a state agency shall elect one (1) of the following options:

1. (1) Withhold no more than six percent (6%) of the dollar value of all work satisfactorily completed until the public work is fifty percent (50%) complete, and nothing further after that.
2. (2) Withhold no more than three percent (3%) of the dollar value of all work satisfactorily completed until the public work is substantially complete.

(b) If upon substantial completion of the work there are any remaining uncompleted minor items, an amount computed under section 6 of this chapter shall be withheld until those items are completed.

As added by Acts 1980, P.L.33, SEC.1. Amended by P.L.133-2007, SEC.7; P.L.28-2025, SEC.1.