HB1224ham001 104TH GENERAL ASSEMBLY

Rep. William "Will" Davis

Filed: 2/26/2025

10400HB1224ham001 LRB104 06221 HLH 22555 a

AMENDMENT TO HOUSE BILL 1224

AMENDMENT NO. ______. Amend House Bill 1224 by replacing everything after the enacting clause with the following:

"Section 1. Short title. This Act may be cited as the State Agency Retainage Act.

Section 5. Definitions. As used in this Act:

"Retainage" means a portion of moneys withheld from the payment of a contract for a specified period of time to ensure that a contractor or subcontractor completes a construction project in the manner specified in the contract. "Retainage" does not include moneys withheld due to violations of local, State, or federal laws.

"Satisfactory progress" means that a project is moving forward according to the established schedule and budget and that the work has been performed in accordance with industry standards and without deficiencies.

"State agency" has the meaning given to "State agencies" in Section 1-7 of the Illinois State Auditing Act.

Section 10. Determination of satisfactory progress. Subject to the limitations set forth in Section 15, with respect to a contract entered into on or after the effective date of this Act, a State agency may withhold a portion of the moneys from the payment of a contract as retainage if and only if the State agency determines that satisfactory progress has not been achieved by a contractor or subcontractor during any period for which a payment is to be made. Retainage may not be used as a substitute for good contract management, and the State agency may not withhold funds without cause. Determinations to retain and the specific amount to be withheld must be made by the State agency on a case-by-case basis. These determinations must be based on an assessment of past performance and the likelihood that such performance will continue.

Section 15. Limitations on the amount of retainage. The amount of retainage withheld may not exceed 10% of the amount of any and all draw amounts submitted and approved under the terms of the contract until the contract is 50% completed, may not exceed 5% of the amount of any and all draw amounts submitted and approved under the terms of the contract for the duration of the contract, and may be adjusted as the contract approaches completion to recognize better than expected performance, the ability to rely on alternative safeguards, and other factors. Upon completion of all contract requirements, amounts retained under this Act must be paid promptly.