HRS §103D-703.5
Settling a contractor's default with money
When a contractor fails to finish a job, the government agency can accept money from the contractor's bond, insurance, or other sources to cover the default. This money is held in a trust account and used to complete the contract. Any leftover money goes to the general fund unless the law says otherwise.
contractorsstate agencies
The statute, as written — Settlement of default by contractor
Upon default of a contractor, the purchasing agency may accept moneys in satisfaction of the contractor's obligation on a contract whether the moneys are realized from the performance surety's obligation on its bond, an insurer's obligation on the contractor's policy, or any other source of moneys paid to satisfy a contractor's default. Such moneys shall be deemed to be trust moneys and shall be deposited into a trust account with and under the control of the purchasing agency. These moneys and the interest earned thereon shall be used for the completion of such contract. Upon completion of the contract, any excess moneys shall be deposited in the general fund unless otherwise restricted.
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