Effective 28 Aug 2002
436.312. Substitute security requirements. — 1. The following shall constitute acceptable substitute security for purposes of sections 436.306 and 436.309:
(1) Certificates of deposit drawn and issued by a national banking association located in this state or by any banking corporation incorporated pursuant to the laws of this state, and mutually agreeable to the project owner and the contractor or subcontractor, in the amount of the retainage released. If the letter of credit is not renewed at least sixty days before the expiration of the letter of credit, the owner may draw upon the letter of credit regardless of the contractor's or subcontractor's performance for an amount equal to or no greater than the value of the amount of work remaining to be performed by the contractor or subcontractor;
(2) A retainage bond naming the owner as obligee issued by any surety company authorized to issue surety bonds in this state in the amount of the retainage released; or
(3) An irrevocable and unconditional letter of credit in favor of the owner, issued by a national banking association located in this state or by any banking corporation incorporated pursuant to the laws of this state, in the amount of the retainage released.
2. The contractor shall be entitled to receive, in all events, all interest and income earned on any securities deposited by the contractor in substitution for retainage.
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(L. 2002 H.B. 1403)
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