SECTION 1. Section 29F of Chapter 149 of the General Laws, as appearing in the most recent edition, is hereby amended by striking out all after the enacting clause and inserting in place thereof the following:

Section 29F. (a) As used in this section, the following words shall have the following meanings unless the context clearly requires otherwise:

“Contract for construction”, a contract, which provides for retainage to be held in full until substantial completion, for which a lien may be established under sections 2 or 4 of chapter 254, on a project for which the person whose contract with the project owner has an original contract price of not less than $3,000,000; provided, however, that contract for construction shall not include a project containing or designed to contain at least 1 but not more than 4 dwelling units, and provided further, shall not include any contract for a project that is financed or supported in whole or in part by state or federal mortgage assistance, special taxing arrangements, tax credits, grants, issuance of bonds, loans, loan guarantees, debt or equity assistance.

“Retainage”, a portion or percentage of payment due pursuant to a contract for construction that is withheld to ensure full performance of the contract for construction.

(b) No contract for construction shall include retainage that exceeds 5 per cent of the contract price.

(c) A provision in a contract for construction which purports to require or permit retainage in excess of 5% of the contract price shall be void and unenforceable insofar as any such excess is concerned.

SECTION 2. Notwithstanding any general or special law to the contrary, section 29F of chapter 149 of the General Laws shall not apply to a contract for construction relating to a project for which the owner's contract was entered into prior to the effective date of this act.