SB0506 93rd General Assembly


                                     LRB093 10603 MBS 10859 b

 1        AN ACT concerning building contracts.

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

 4        Section 1. Short title. This Act  may  be  cited  as  the
 5    Building and Construction Contract Payment Act.

 6        Section   5.  Payments  to  subcontractors  and  material
 7    suppliers.
 8        (a)  When  a  contractor  receives   any   payment,   the
 9    contractor   shall   pay  each  subcontractors  and  material
10    suppliers  in  proportion  to  the  work  completed  by  each
11    subcontractor and material supplier  their  application  less
12    any retention.
13        (b)  If  the  contractor  receives  less  than  the  full
14    payment  due  under the construction contract, the contractor
15    shall be obligated to disburse on  a  pro  rata  basis  those
16    funds  received,  with  the  contractor,  subcontractors  and
17    material suppliers each receiving a prorated portion based on
18    the amount of payment.
19        (c)  When the owner does not release the full payment due
20    under  the  contract because there are specific areas of work
21    or materials the  contractor  is  rejecting  or  because  the
22    contractor  has  otherwise  determined  those  areas  are not
23    suitable for payment, then those specific  subcontractors  or
24    suppliers  involved shall not be paid for that portion of the
25    work rejected or deemed not  suitable  for  payment  and  all
26    other subcontractors and suppliers shall be paid in full.

27        Section  10. Failure to make payment within 15 days after
28    receipt of payment under contract. If the contractor, without
29    reasonable cause, fails to make any payment  to  his  or  her
30    subcontractors  and  material  suppliers within 15 days after
                            -2-      LRB093 10603 MBS 10859 b
 1    receipt of  payment  under  the  construction  contract,  the
 2    contractor  shall  pay  to  his  or  her  subcontractors  and
 3    material  suppliers,  in  addition  to  the payment due them,
 4    interest in the amount of 2% per month, calculated  from  the
 5    expiration  of  the  15-day  period  until  fully  paid. This
 6    Section  shall  also  apply   to   any   payments   made   by
 7    subcontractors and material suppliers to their subcontractors
 8    and material suppliers and to all payments made to lower tier
 9    subcontractors   and   material   suppliers   throughout  the
10    contracting chain.

11        Section 99. Effective date.  This  Act  takes  effect  on
12    becoming law.