HB0743 Engrossed

LRB095 06522 LCT 26624 b






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    AN ACT concerning construction contracts.

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


 
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    Section 1. Short title. This Act may be cited as the 
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Contractor Prompt Payment Act.
 
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    Section 5. Definitions.    In this Act:
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    (a)  "Billing" means, in accordance with the terms and 
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definitions of
the applicable contract, any invoice, bill or 
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other request for periodic payment, final payment, payment of  
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change order or request for release of retainage.
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    (b)  "Construction contract" means a contract or 
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subcontract, entered into after the effective date of this Act, 
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for  the design, construction, alteration, improvement, or 
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repair of Illinois real property, except for contracts that 
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require the expenditure of public funds and contracts for the 
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design, construction, alteration, improvement, or repair of 
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single family residences.
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    (c)  "Contractor" and "subcontractor" shall have the 
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meanings ascribed to them by the Illinois Mechanics Lien Act 
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and cases decided under that Act.
 
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    Section 10. Construction contracts.   All construction 
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contracts shall be deemed to provide the following unless they 
 


 






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expressly exclude the provisions of this Act:
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    (1) If a contractor has performed in accordance with the 
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provisions of a construction contract and the billing has been 
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approved by the owner or the owner's agent, the owner shall pay 
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the amount due to the contractor pursuant to the billing not 
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more than 15 calendar days after the approval.  The billing 
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shall be deemed approved 25 days after the owner receives it 
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unless the owner provides, before the end of the 25-day period, 
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a written statement of the amount withheld and the reason for 
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withholding payment.  If the owner finds that  a portion of the 
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work not  in accordance with the contract, payment may be 
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withheld for the reasonable value of that portion only.  Payment 
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shall be made for any portion of the contract for which the 
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work has been performed in accordance with the provisions of 
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the contract.
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    (2) If a subcontractor has performed in accordance with the 
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provisions of his or her contract with the contractor or 
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subcontractor and the work has been accepted by the owner, the 
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owner's agent, or the contractor, the contractor shall pay to 
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his or her subcontractor and the subcontractor shall pay to his 
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or her subcontractor, within 15 calendar days of the 
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contractor's receipt from the owner or the subcontractor's 
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receipt from the contractor of each periodic payment, final 
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payment, or receipt of retainage monies, the full amount 
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received for the work of the subcontractor based on the work 
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completed or the services rendered under the construction 
 


 






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contract.
 
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    Section 15. Interest; suspension of performance. 
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    (a) If a payment due pursuant to the provisions of this Act 
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is not made in a timely manner, the delinquent party shall be 
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liable for the amount of money owed under the construction 
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contract, plus interest at a rate equal to 10% per annum.
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    (b) A  contractor or subcontractor who is not paid as 
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required by this Act  may, after providing 7 calendar days' 
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written notice to the party failing to make the required 
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payment, suspend performance of a construction contract 
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without penalty for breach of contract, until the payment 
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required pursuant to this Act  is made.

 
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    Section 99. Effective date. This Act shall take effect upon 
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becoming law.