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Sen. Martin A. Sandoval
Filed: 3/10/2017
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1 | | AMENDMENT TO SENATE BILL 1266
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2 | | AMENDMENT NO. ______. Amend Senate Bill 1266 by replacing |
3 | | everything after the enacting clause with the following:
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4 | | "Section 5. The State Prompt Payment Act is amended by |
5 | | changing Section 7 as follows:
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6 | | (30 ILCS 540/7)
(from Ch. 127, par. 132.407)
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7 | | Sec. 7. Payments to subcontractors and material suppliers. |
8 | | (a) When a State official or agency responsible for |
9 | | administering a
contract submits a voucher to the Comptroller |
10 | | for
payment to a contractor, that State official or agency |
11 | | shall promptly make
available electronically
the voucher |
12 | | number, the date of the voucher, and
the amount of the voucher.
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13 | | The State official or agency responsible for administering the |
14 | | contract shall
provide subcontractors and material suppliers, |
15 | | known to the State official or
agency, with instructions on how |
16 | | to access the electronic information. When a
contractor |
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1 | | receives any payment, the contractor shall
pay each |
2 | | subcontractor and material supplier in proportion to the work
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3 | | completed by each subcontractor and material supplier their |
4 | | application, plus interest received under this Act,
less any |
5 | | retention. If the contractor receives less than the full |
6 | | payment
due under the public construction contract, the |
7 | | contractor shall be
obligated to disburse on a pro rata basis |
8 | | those funds received, plus interest received under this Act, |
9 | | with the
contractor, subcontractors and material suppliers |
10 | | each receiving a prorated
portion based on the amount of |
11 | | payment. When, however, the public owner
does not release the |
12 | | full payment due under the contract because there are
specific |
13 | | areas of work or materials the contractor is rejecting or |
14 | | because
the contractor has otherwise determined such areas are |
15 | | not suitable for
payment, then those specific subcontractors or |
16 | | suppliers involved shall not
be paid for that portion of work |
17 | | rejected or deemed not suitable for
payment and all other |
18 | | subcontractors and suppliers shall be paid in full, plus |
19 | | interest received under this Act.
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20 | | A contractor with the Department of Transportation may |
21 | | require either a performance bond or retention of payment of a |
22 | | subcontractor as part of the subcontract. However, a contractor |
23 | | may not require both. |
24 | | A contractor with the Capital Development Board may not |
25 | | require a subcontractor to post a performance bond as part of |
26 | | the subcontract. |
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1 | | |
2 | | (b) If the contractor, without reasonable cause, fails to |
3 | | make full payment of amounts due under subsection (a) to
his |
4 | | subcontractors and material suppliers within 15 days after
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5 | | receipt of
payment under the public construction contract, the |
6 | | contractor shall pay to
his subcontractors and material |
7 | | suppliers, in addition to the payment due
them, interest in the |
8 | | amount of
2% per month, calculated from the
expiration of the |
9 | | 15-day period until fully paid. This subsection shall
also |
10 | | apply to any payments made by subcontractors and material |
11 | | suppliers to
their subcontractors and material suppliers and to |
12 | | all payments made to
lower tier subcontractors and material |
13 | | suppliers throughout the contracting
chain.
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14 | | (1) If a contractor, without reasonable cause, fails to |
15 | | make payment in
full as
provided in subsection (a) within |
16 | | 15 days after receipt of payment under the
public
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17 | | construction contract, any subcontractor or material |
18 | | supplier to whom payments
are owed
may file a written |
19 | | notice with the State official or agency setting forth the
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20 | | amount owed by
the contractor and the contractor's failure |
21 | | to timely pay the amount owed.
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22 | | (2) The State official or agency, within 15 days after |
23 | | receipt of a
subcontractor's
or material supplier's |
24 | | written notice of the failure to receive payment from
the |
25 | | contractor,
shall hold a hearing convened by an |
26 | | administrative law judge to determine whether the |
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1 | | contractor withheld payment,
without
reasonable cause, |
2 | | from the subcontractors and material suppliers and what
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3 | | amount, if any,
is due to the subcontractors and material |
4 | | suppliers. The State official or
agency shall
provide |
5 | | appropriate notice to the parties of the date, time, and |
6 | | location of
the hearing. Each contractor, subcontractor, |
7 | | and material supplier has the right to be represented by |
8 | | counsel at the hearing and to cross-examine witnesses and |
9 | | challenge documents.
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10 | | (3) If there is a finding by the administrative law |
11 | | judge that the contractor failed
to make
payment in full, |
12 | | without reasonable cause, as provided in subsection (a), |
13 | | then
the administrative law judge shall, in writing, direct |
14 | | the contractor to pay the amount
owed to the
subcontractors |
15 | | and material suppliers plus interest within 15 days after |
16 | | the
finding.
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17 | | (4) If a contractor fails to make full payment within |
18 | | 15 days after the
administrative law judge's finding, then |
19 | | the contractor shall be barred from
entering into a State
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20 | | public construction contract for a period of one year |
21 | | beginning on the date of
the administrative law judge's |
22 | | finding.
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23 | | (Source: P.A. 94-672, eff. 1-1-06; 94-972, eff. 7-1-07 .)".
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