Public Act 094-0672
 		





SB0013 Enrolled
LRB094 06980 JAM 37098 b






    AN ACT concerning finance.

 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:


 
    Section 5.   The State Prompt Payment Act is amended by 
changing
Section 7 as follows:


 



    (30 ILCS 540/7)
  (from Ch. 127, par. 132.407)



    Sec. 7. Payments to subcontractors and material suppliers.

    (a) When a State official or agency responsible for 
administering a
contract submits a voucher to the Comptroller 
for
payment to a contractor, that State official or agency 
shall promptly make
available electronically
the voucher 
number, the date of the voucher, and
the amount of the voucher.

The State official or agency responsible for administering the 
contract shall
provide subcontractors and material suppliers, 
known to the State official or
agency, with instructions on how 
to access the electronic information. When a
contractor 
receives any payment, the contractor shall
pay each 
subcontractor and material supplier in proportion to the work

completed by each subcontractor and material supplier their 
application
less any retention.  If the contractor receives less 
than the full payment
due under the public construction 
contract, the contractor shall be
obligated to disburse on a 
pro rata basis those funds received, with the
contractor, 
subcontractors and material suppliers each receiving a 
prorated
portion based on the amount of payment.  When, however, 
the public owner
does not release the full payment due under 
the contract because there are
specific areas of work or 
materials the contractor is rejecting or because
the contractor 
has otherwise determined such areas are not suitable for

payment, then those specific subcontractors or suppliers 
involved shall not
be paid for that portion of work rejected or 
deemed not suitable for
payment and all other subcontractors 
and suppliers shall be paid in full.

    (b) If the contractor, without reasonable cause, fails to 
make full
any payment of amounts due under subsection (a) to

his subcontractors and material suppliers within 15 days after

receipt of
payment under the public construction contract, the 
contractor shall pay to
his subcontractors and material 
suppliers, in addition to the payment due
them, interest in the 
amount of
2% per month, calculated from the
expiration of the 
15-day period until fully paid.  This subsection shall
also 
apply to any payments made by subcontractors and material 
suppliers to
their subcontractors and material suppliers and to 
all payments made to
lower tier subcontractors and material 
suppliers throughout the contracting
chain.


        (1) If a contractor, without reasonable cause, fails to 
    make payment in
full as
provided in subsection (a) within 
    15 days after receipt of payment under the
public

    construction contract, any subcontractor or material 
    supplier to whom payments
are owed
may file a written 
    notice with the State official or agency setting forth the

    amount owed by
the contractor and the contractor's failure 
    to timely pay the amount owed.

        (2) The State official or agency, within 15 days after 
    receipt of a
subcontractor's
or material supplier's 
    written notice of the failure to receive payment from
the 
    contractor,
shall hold a hearing convened by an 
    administrative law judge to determine whether the 
    contractor withheld payment,
without
reasonable cause, 
    from the subcontractors and material suppliers and what

    amount, if any,
is due to the subcontractors and material 
    suppliers. The State official or
agency shall
provide 
    appropriate notice to the parties of the date, time, and 
    location of
the hearing. Each contractor, subcontractor, 
    and material supplier has the right to be represented by 
    counsel at the hearing and to cross-examine witnesses and 
    challenge documents.

        (3) If there is a finding by the administrative law 
    judge that the contractor failed
to make
payment in full, 
    without reasonable cause, as provided in subsection (a), 
    then
the administrative law judge  shall, in writing, direct 
    the contractor to pay the amount
owed to the
subcontractors 
    and material suppliers plus interest within 15 days after 
    the
finding.

        (4) If a contractor fails to make full payment within 
    15 days after the
administrative law judge's finding, then 
    the contractor shall be barred from
entering into a State

    public construction contract for a period of one year 
    beginning on the date of
the administrative law judge's 
    finding.

(Source: P.A. 87-773.)