(a) When requested by the legislative body of a municipality, the agency may, by agreement with these officials, do any construction or maintenance work on any town highway or bridge under the jurisdiction of the legislative body.

(b) When requested by the legislative body of a municipality, the agency may contract the work. The agency in all such cases shall furnish plans and specifications upon which the contract shall be awarded by the legislative body or, if it has been agreed that the agency should make the contract award, the agency, to the lowest responsible bidder. All work shall be done to the satisfaction of and in accordance with the requirements of the agency.

(c) Upon demand of the agency, the municipality shall reimburse the state for the municipality's share of expenditures made under this section, and the amount repaid shall be deposited into the state treasury and credited to the fund from which the cost of the work was paid. The agency is authorized to provide for the payment of interest on unpaid balances owed the state for more than 30 days after demand is made.

(d) To secure reimbursement to the state for the local share of a project, the secretary and the legislative body of a municipality may enter into agreements for the deposit of municipal funds in an interest-bearing escrow account or for posting of a surety bond.

(e) The agency's materials laboratory may perform tests for other units of federal, state, and local government. The agency shall be reimbursed for the costs of the tests. (Added 1985, No. 269 (Adj. Sess.), § 1; amended 1991, No. 175 (Adj. Sess.), § 9, eff. May 15, 1992; 1993, No. 61, § 13, eff. June 3, 1993.)