99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
SB1395

 

Introduced 2/20/2015, by Sen. Wm. Sam McCann

 

SYNOPSIS AS INTRODUCED:
 
815 ILCS 603/10

    Amends the Contractor Prompt Payment Act. Provides that under a construction contract, it is unlawful to withhold more than 5% retainage on payments earned by contractors and subcontractors. Effective January 1, 2016.


LRB099 06253 JLS 26321 b

 

 

A BILL FOR

 

SB1395LRB099 06253 JLS 26321 b

1    AN ACT concerning business.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Contractor Prompt Payment Act is amended by
5changing Section 10 as follows:
 
6    (815 ILCS 603/10)
7    Sec. 10. Construction contracts.
8    (a) All construction contracts shall be deemed to provide
9the following:
10        (1) If a contractor has performed in accordance with
11    the provisions of a construction contract and the payment
12    application has been approved by the owner or the owner's
13    agent, the owner shall pay the amount due to the contractor
14    pursuant to the payment application not more than 15
15    calendar days after the approval. The payment application
16    shall be deemed approved 25 days after the owner receives
17    it unless the owner provides, before the end of the 25-day
18    period, a written statement of the amount withheld and the
19    reason for withholding payment. If the owner finds that a
20    portion of the work not in accordance with the contract,
21    payment may be withheld for the reasonable value of that
22    portion only. Payment shall be made for any portion of the
23    contract for which the work has been performed in

 

 

SB1395- 2 -LRB099 06253 JLS 26321 b

1    accordance with the provisions of the contract.
2    Instructions or notification from an owner to his or her
3    lender or architect to process or pay a payment application
4    does not constitute approval of the payment application
5    under this Act.
6        (2) If a subcontractor has performed in accordance with
7    the provisions of his or her contract with the contractor
8    or subcontractor and the work has been accepted by the
9    owner, the owner's agent, or the contractor, the contractor
10    shall pay to his or her subcontractor and the subcontractor
11    shall pay to his or her subcontractor, within 15 calendar
12    days of the contractor's receipt from the owner or the
13    subcontractor's receipt from the contractor of each
14    periodic payment, final payment, or receipt of retainage
15    monies, the full amount received for the work of the
16    subcontractor based on the work completed or the services
17    rendered under the construction contract.
18    (b) Under a construction contract, it is unlawful to
19withhold more than 5% retainage on payments earned by
20contractors and subcontractors.
21(Source: P.A. 95-567, eff. 8-31-07.)
 
22    Section 99. Effective date. This Act takes effect January
231, 2016.