97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB0133

 

Introduced 1/27/2011, by Sen. Martin A. Sandoval

 

SYNOPSIS AS INTRODUCED:
 
30 ILCS 500/20-120
30 ILCS 540/7  from Ch. 127, par. 132.407

    Amends the Illinois Procurement Code. Provides that all subcontracts shall be deemed to provide that if the subcontractor has performed in accordance with the provisions of his or her subcontract and the work has been accepted by the appropriate State official or agency, the State official or agency shall pay the amount due the subcontractor directly to the subcontractor pursuant to the proper bill or invoice provided by the contractor to the State official or agency. Amends the State Prompt Payment Act. Provides that the provisions of a Section concerning payments to subcontractors and material suppliers do not apply to subcontracts entered into pursuant to the Illinois Procurement Code.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB0133LRB097 06276 PJG 46352 b

1    AN ACT concerning finance.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Procurement Code is amended by
5changing Section 20-120 as follows:
 
6    (30 ILCS 500/20-120)
7    Sec. 20-120. Subcontractors.
8    (a) Any contract granted under this Code shall state
9whether the services of a subcontractor will or may be used.
10The contract shall include the names and addresses of all known
11subcontractors with subcontracts with an annual value of more
12than $25,000 and the expected amount of money each will receive
13under the contract. For procurements subject to the authority
14of the chief procurement officer appointed pursuant to
15subsection (a)(2) of Section 10-20, the contract shall include
16only the names and addresses of all known subcontractors of the
17primary contractor with subcontracts with an annual value of
18more than $25,000. The contractor shall provide the chief
19procurement officer or State purchasing officer a copy of any
20subcontract with an annual value of more than $25,000 so
21identified within 20 days after the execution of the State
22contract or after execution of the subcontract, whichever is
23later. A subcontractor, or contractor on behalf of a

 

 

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1subcontractor, may identify information that is deemed
2proprietary or confidential. If the chief procurement officer
3determines the information is not relevant to the primary
4contract, the chief procurement officer may excuse the
5inclusion of the information. If the chief procurement officer
6determines the information is proprietary or could harm the
7business interest of the subcontractor, the chief procurement
8officer may, in his or her discretion, redact the information.
9Redacted information shall not become part of the public
10record.
11    (b) If at any time during the term of a contract, a
12contractor adds or changes any subcontractors, he or she shall
13promptly notify, in writing, the chief procurement officer,
14State purchasing officer, or their designee of the names and
15addresses and the expected amount of money each new or replaced
16subcontractor will receive. The contractor shall provide to the
17responsible chief procurement officer a copy of the subcontract
18within 20 days after the execution of the subcontract.
19    (c) In addition to any other requirements of this Code, a
20subcontract subject to this Section must include all of the
21subcontractor's certifications required by Article 50 of the
22Code.
23    (c-5) All contracts granted under this Code and all
24subcontracts pursuant to those contracts shall be deemed to
25provide that if a subcontractor has performed in accordance
26with the provisions of his or her subcontract and the work has

 

 

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1been accepted by the appropriate State agency, the State agency
2shall pay the amount due the subcontractor directly to the
3subcontractor pursuant to the proper bill or invoice provided
4by the contractor to the State agency in accordance with the
5provisions of the State Prompt Payment Act. For any contract
6granted under this Code, a contractor shall deliver to the
7State agency, upon completion of the contract, a proper bill or
8invoice, as defined in the State Prompt Payment Act, for each
9subcontractor with whom the contractor has a subcontract.
10    (d) This Section applies to procurements solicited on or
11after the effective date of this amendatory Act of the 96th
12General Assembly.
13(Source: P.A. 96-795, eff. 7-1-10 (see Section 5 of P.A. 96-793
14for the effective date of P.A. 96-795); 96-920, eff. 7-1-10.)
 
15    Section 10. The State Prompt Payment Act is amended by
16changing Section 7 as follows:
 
17    (30 ILCS 540/7)   (from Ch. 127, par. 132.407)
18    Sec. 7. Payments to subcontractors and material suppliers.
19    (a) When a State official or agency responsible for
20administering a contract submits a voucher to the Comptroller
21for payment to a contractor, that State official or agency
22shall promptly make available electronically the voucher
23number, the date of the voucher, and the amount of the voucher.
24The State official or agency responsible for administering the

 

 

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1contract shall provide subcontractors and material suppliers,
2known to the State official or agency, with instructions on how
3to access the electronic information. When a contractor
4receives any payment, the contractor shall pay each
5subcontractor and material supplier in proportion to the work
6completed by each subcontractor and material supplier their
7application, plus interest received under this Act, less any
8retention. If the contractor receives less than the full
9payment due under the public construction contract, the
10contractor shall be obligated to disburse on a pro rata basis
11those funds received, plus interest received under this Act,
12with the contractor, subcontractors and material suppliers
13each receiving a prorated portion based on the amount of
14payment. When, however, the public owner does not release the
15full payment due under the contract because there are specific
16areas of work or materials the contractor is rejecting or
17because the contractor has otherwise determined such areas are
18not suitable for payment, then those specific subcontractors or
19suppliers involved shall not be paid for that portion of work
20rejected or deemed not suitable for payment and all other
21subcontractors and suppliers shall be paid in full, plus
22interest received under this Act.
23    (b) If the contractor, without reasonable cause, fails to
24make full payment of amounts due under subsection (a) to his
25subcontractors and material suppliers within 15 days after
26receipt of payment under the public construction contract, the

 

 

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1contractor shall pay to his subcontractors and material
2suppliers, in addition to the payment due them, interest in the
3amount of 2% per month, calculated from the expiration of the
415-day period until fully paid. This subsection shall also
5apply to any payments made by subcontractors and material
6suppliers to their subcontractors and material suppliers and to
7all payments made to lower tier subcontractors and material
8suppliers throughout the contracting chain.
9        (1) If a contractor, without reasonable cause, fails to
10    make payment in full as provided in subsection (a) within
11    15 days after receipt of payment under the public
12    construction contract, any subcontractor or material
13    supplier to whom payments are owed may file a written
14    notice with the State official or agency setting forth the
15    amount owed by the contractor and the contractor's failure
16    to timely pay the amount owed.
17        (2) The State official or agency, within 15 days after
18    receipt of a subcontractor's or material supplier's
19    written notice of the failure to receive payment from the
20    contractor, shall hold a hearing convened by an
21    administrative law judge to determine whether the
22    contractor withheld payment, without reasonable cause,
23    from the subcontractors and material suppliers and what
24    amount, if any, is due to the subcontractors and material
25    suppliers. The State official or agency shall provide
26    appropriate notice to the parties of the date, time, and

 

 

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1    location of the hearing. Each contractor, subcontractor,
2    and material supplier has the right to be represented by
3    counsel at the hearing and to cross-examine witnesses and
4    challenge documents.
5        (3) If there is a finding by the administrative law
6    judge that the contractor failed to make payment in full,
7    without reasonable cause, as provided in subsection (a),
8    then the administrative law judge shall, in writing, direct
9    the contractor to pay the amount owed to the subcontractors
10    and material suppliers plus interest within 15 days after
11    the finding.
12        (4) If a contractor fails to make full payment within
13    15 days after the administrative law judge's finding, then
14    the contractor shall be barred from entering into a State
15    public construction contract for a period of one year
16    beginning on the date of the administrative law judge's
17    finding.
18    (c) The provisions of this Section do not apply to payments
19to a subcontractor for work performed under a subcontract
20entered into with a contractor under the Illinois Procurement
21Code.
22(Source: P.A. 94-672, eff. 1-1-06; 94-972, eff. 7-1-07.)