Highway improvement contracts may provide for partial payments.

1. (1) Construction and preventive maintenance contracts. Construction contracts and preventive maintenance contracts will provide for partial payments of an amount not exceeding 95% of the value of the work done. The department will retain 5.0% percent of the contract price until the entire work has been completed and accepted. At the request of a contractor and with the approval of the department and the state treasurer, the retained amount may be deposited under the terms of a trust agreement with a state or national bank domiciled in Texas as selected by the contractor, provided that the contract price exceeds $300,000. The trust agreement shall provide that:

   1. (A) interest earned on deposited funds will be paid to the contractor unless otherwise specified under the terms of the agreement;
   2. (B) all expenses incident to the deposit and all charges made by the escrow agent for custody of the securities and forwarding of interest shall be paid solely by the contractor;
   3. (C) the department may, at any time and with or without reason, demand in writing that the bank return or repay, within 30 days of the demand, the retainage or any investments in which it is invested; and
   4. (D) any other terms and conditions prescribed by the department and the state treasurer as necessary to protect the interests of the state.
2. (2) Routine maintenance and professional services contracts. The department will not retain funds for routine maintenance contracts or contracts for the making of all necessary plans and surveys preliminary to construction, reconstruction, or maintenance.

Source Note:The provisions of this §9.20 adopted to be effective September 22, 1995, 20 TexReg 7085.