HB0344sam002 96TH GENERAL ASSEMBLY

Sen. Carole Pankau

Filed: 5/15/2009

09600HB0344sam002 LRB096 04698 KTG 26909 a

AMENDMENT TO HOUSE BILL 344

AMENDMENT NO. ______. Amend House Bill 344 by replacing everything after the enacting clause with the following:

"Section 5. The Contractor Prompt Payment Act is amended by changing Sections 5 and 10 as follows:

(815 ILCS 603/5)

Sec. 5. Definitions. In this Act:

(a) "Payment application" means, in accordance with the terms and definitions of the applicable contract, any invoice, bill or other request for periodic payment, final payment, payment of change order or request for release of retainage from the contractor to the owner.

(b) "Construction contract" means a contract or subcontract, entered into after the effective date of this Act, for the design, construction, alteration, improvement, or repair of Illinois real property, except for contracts that require the expenditure of public funds and contracts for the design, construction, alteration, improvement, or repair of single family residences or multiple family residences with 12 or fewer units in a single building.

(c) "Contractor" and "subcontractor" shall have the meanings ascribed to them by the Illinois Mechanics Lien Act and cases decided under that Act.

(d) "Retainage" means funds that are earned by the contractor but not paid until some agreed upon date, such as the completion of the job.

(Source: P.A. 95-567, eff. 8-31-07.)

(815 ILCS 603/10)

Sec. 10. Construction contracts.

(a) All construction contracts shall be deemed to provide the following:

(1) If a contractor has performed in accordance with the provisions of a construction contract and the payment application has been approved by the owner or the owner's agent, the owner shall pay the amount due to the contractor pursuant to the payment application not more than 15 calendar days after the approval. The payment application shall be deemed approved 25 days after the owner receives it unless the owner provides, before the end of the 25-day period, a written statement of the amount withheld and the reason for withholding payment. If the owner finds that a portion of the work not in accordance with the contract, payment may be withheld for the reasonable value of that portion only. Payment shall be made for any portion of the contract for which the work has been performed in accordance with the provisions of the contract. Instructions or notification from an owner to his or her lender or architect to process or pay a payment application does not constitute approval of the payment application under this Act.

(2) If a subcontractor has performed in accordance with the provisions of his or her contract with the contractor or subcontractor and the work has been accepted by the owner, the owner's agent, or the contractor, the contractor shall pay to his or her subcontractor and the subcontractor shall pay to his or her subcontractor, within 15 calendar days of the contractor's receipt from the owner or the subcontractor's receipt from the contractor of each periodic payment, final payment, or receipt of retainage monies, the full amount received for the work of the subcontractor based on the work completed or the services rendered under the construction contract.

(b) Under a construction contract, it is unlawful to withhold retainage on materials required for completion of the construction contract that are delivered to a job site and are billed in accordance with the periodic payments in the construction contract.

(Source: P.A. 95-567, eff. 8-31-07.)

Section 99. Effective date. This Act takes effect upon becoming law.".