Sen. Martin A. Sandoval

Filed: 3/10/2017

 

 


 

 


 
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AMENDMENT TO SENATE BILL 1266

2    AMENDMENT NO. ______. Amend Senate Bill 1266 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The State Prompt Payment Act is amended by
5changing Section 7 as follows:
 
6    (30 ILCS 540/7)   (from Ch. 127, par. 132.407)
7    Sec. 7. Payments to subcontractors and material suppliers.
8    (a) When a State official or agency responsible for
9administering a contract submits a voucher to the Comptroller
10for payment to a contractor, that State official or agency
11shall promptly make available electronically the voucher
12number, the date of the voucher, and the amount of the voucher.
13The State official or agency responsible for administering the
14contract shall provide subcontractors and material suppliers,
15known to the State official or agency, with instructions on how
16to access the electronic information. When a contractor

 

 

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1receives any payment, the contractor shall pay each
2subcontractor and material supplier in proportion to the work
3completed by each subcontractor and material supplier their
4application, plus interest received under this Act, less any
5retention. If the contractor receives less than the full
6payment due under the public construction contract, the
7contractor shall be obligated to disburse on a pro rata basis
8those funds received, plus interest received under this Act,
9with the contractor, subcontractors and material suppliers
10each receiving a prorated portion based on the amount of
11payment. When, however, the public owner does not release the
12full payment due under the contract because there are specific
13areas of work or materials the contractor is rejecting or
14because the contractor has otherwise determined such areas are
15not suitable for payment, then those specific subcontractors or
16suppliers involved shall not be paid for that portion of work
17rejected or deemed not suitable for payment and all other
18subcontractors and suppliers shall be paid in full, plus
19interest received under this Act.
20    A contractor with the Department of Transportation may
21require either a performance bond or retention of payment of a
22subcontractor as part of the subcontract. However, a contractor
23may not require both.
24    A contractor with the Capital Development Board may not
25require a subcontractor to post a performance bond as part of
26the subcontract.

 

 

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2    (b) If the contractor, without reasonable cause, fails to
3make full payment of amounts due under subsection (a) to his
4subcontractors and material suppliers within 15 days after
5receipt of payment under the public construction contract, the
6contractor shall pay to his subcontractors and material
7suppliers, in addition to the payment due them, interest in the
8amount of 2% per month, calculated from the expiration of the
915-day period until fully paid. This subsection shall also
10apply to any payments made by subcontractors and material
11suppliers to their subcontractors and material suppliers and to
12all payments made to lower tier subcontractors and material
13suppliers throughout the contracting chain.
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
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
20    amount owed by the contractor and the contractor's failure
21    to timely pay the amount owed.
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
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.
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.
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
20    public construction contract for a period of one year
21    beginning on the date of the administrative law judge's
22    finding.
23(Source: P.A. 94-672, eff. 1-1-06; 94-972, eff. 7-1-07.)".