Acceptance of deposits in lieu of retainage on construction contracts

MAINE STATE LEGISLATURE The following document is provided by the LAW AND LEGISLATIVE DIGITAL LIBRARY at the Maine State Law and Legislative Reference Library http://legislature.maine.gov/lawlib Reproduced from scanned originals with text recognition applied (searchable text may contain some errors and/or omissions) To ST A TE OF MAINE lnter.-Dcpartm.ental Mernorandurn Dute ,Jul ';J-21,._J.:J:15:L_ Richard G. Bachelder, njrector Robert J. Stolt, Depu:t..:ll--- Dept. Bureau of Puhl j c Improvements Dept. Attorney Genera] Subject __ Acceptance of deposits in lieu of retainage on construction contracts MEMORANDUM OF COUNSEL This will respond to your inquiry as to whether or not "quality issues of the Maine Housing Authority" are accept- able as deposits upon withdrawal of retained funds pursuant to 5 M.R.S.A. § 1746. that 1/ As you know, 5 M.R.S.A. § 1746, in pertinent part,- provides " ••• under any contract made or awarded by the State or by any public department or official thereof, including the construction, improvement or repair of any and all ways, roads or bridges with appurtenances which, by law, are under the supervision of the Department of Transportation, the contractor may, from time to time, withdraw the whole or any portion of the·amount retained for payments to the contractor pursuant to the terms of the ·contract, upon depositing with the Treasurer 0£ State: •.• bonds or notes of the State of Maine or bonds of any political subdivision in the State of Maine •••• " (Emphasis added) I presume from your inquiry that when you refer to "quality issues of the Maine Housing Authority" in conjunction with "bonds or notes of the State of Maine or bonds of any political subdivh;ion in the State," that you are characterizing such quality issues ao bonds or notes. The Maine Housing Authority exists by virtue of 30 M.H.S.A. § 4601-A, et seq. as a public body corporate and politic and as an instrumentality of the State. It is not a political subdivision 1/ Your inquiry is directed to only that portion of§ 1746 which refers to "bonds or notes of the State of Maine or bonds of any political subdivision in the State of Maine." Page 2 2/ of the State- and hence its bonds do not come within the meaning " ••• bonds of any political subdivision in the State of Maine" as that language is used in§ 1746. Similarly, the bonds of the Maine Housing Authority are not, for purposes of~ 1746, . bonds or notes of the State of Maine. RJS/ec ROBERT Deputy f/kLT Attorney General The Maine Housing Authority is defined as a political sub- division of the State £or purposes of civil defense and disaster emergency (37-A M.R.S.A. § 53, authorities and other public corporations); and for purposes of govern- mental tort immunity (14 M.R.S.A. § 8102, instrumentality created pursuant to 30 M.R.S.A. c. 239). Its own provisions, however, preclude it from being considered or defined as a political subdivision of the State for purposes of 5 M.R.S.A. § 1746. See 30 M.R.S.A. § 4751, to wit: " ..• The bonds and other obligations of an authority, and such bonds and obligations shall so state on their face, shall not be a debt.of the municipality, tho state or uny political subdivision thereof and neither the municipality n<?r the state or an~J,:>olitical subdivision ther~of shall be liable thereon, nor in any event shall t:luch bond~ or obligations be payable out of any funds or properties other than those of said authority. The bonds shall not constitute an indebLedness within the meaning of any c0nstitutional or statutory debt limitation or restriction •••• 11