§ 54-18-18 — Contractor to be paid during progress of work - Retainage - Failure to pay - Rate of interest - Investment of retainage

Rate of interest - Investment of retainage.
If the contractor to whom a contract for construction or the provision of equipment to the
association is let properly performs the work therein designated, the mill manager, at least once

in each calendar month during the continuance of the contract work, shall meet, receive, and
consider estimates furnished by the agent, engineer, or architect acting for the association or if
not so furnished, then by the contractor, and shall allow such estimates in an amount of the
estimated value of the labor and material furnished upon the contract, and of the material then
upon the ground for use in the contract, subject to retentions of ten percent of each estimate
presented until the time the project is fifty percent completed, with no further retainage on
estimates during the continuance of the contract. Notwithstanding the requirements of any other
law, the industrial commission may authorize the mill manager to prepay for equipment prior to
delivery to the construction site if the industrial commission determines:
1. Prepayment is in the best interest of the association;
2. The association's interest will be adequately protected; and
3. The equipment is of a type that is not fungible and could not be sold except at a
discount to another because it is constructed to specifications required by the
association.
Upon completion of ninety-five percent of the contract according to the estimates, the
association may pay to the contractor ninety-five percent of the amount retained from previous
estimates. Any amount retained after ninety-five percent completion of the contract must be paid
to the contractor in such amounts and at such times as are approved by the association, upon
estimates by its agent, engineer, or architect or the contractor, with final payment of all moneys
due to the contractor to be made immediately following completion and acceptance of the
project. Immediately after considering and allowing any such estimate, the association shall
certify and promptly draw a warrant upon the proper fund and transmit it to the contractor
entitled to it. If the association fails or neglects to receive and allow the estimate or certify any
estimate or final payment upon completion and acceptance for a period of more than thirty days
from the date of the estimate or completion date, then the estimate or final payment, with any
retainage properly payable, shall draw interest from its date at the rate per annum of two
percentage points below the Bank of North Dakota prime interest rate as set thirty days from the
date of the estimate or completion date until the issuance of a proper warrant therefor. Such
interest must be computed and added to the face of the estimate, final payment, or retainage by
the officer required to issue the warrant, must be included in the warrant when drawn, and must
be charged to the fund from which payment for the improvement is to be made. On the amounts
of estimates retained, as provided herein, the association may invest or deposit the retained
amounts in the Bank of North Dakota earning interest or dividends for the benefit of the
contractor. Any amount so invested or deposited must remain in the name of the association
until final payment of all moneys due to the contractor is to be made. Further, no contractor shall
use such account in any manner whatsoever until released and received by the contractor upon
completion of the contract.