Full Text of SB3235 97th General Assembly
SB3235 97TH GENERAL ASSEMBLY |
| | 97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012 SB3235 Introduced 2/1/2012, by Sen. Martin A. Sandoval SYNOPSIS AS INTRODUCED: |
| 30 ILCS 500/20-120 | | 30 ILCS 540/7 | from Ch. 127, par. 132.407 |
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Amends the Illinois Procurement Code. Provides that the Department of Transportation shall, by rule, implement a pilot program under which select construction contracts shall contain provisions that if a subcontractor has performed in accordance with the provisions of the subcontract and the work has been accepted by the Department, the Department shall pay the subcontractor directly. Provides that the program shall apply only to state-funded contracts under $10 million in value and to those contracts with subcontracts that contain provisions corresponding to pay items that are exclusively and completely performed by the subcontractor. Provides that the program shall be implemented by January 1, 2013 and shall expire on January 1, 2014. Amends the State Prompt Payment Act. Provides that certain provisions concerning payments to subcontractors do not apply to payments to a subcontractor for work performed under a subcontract entered into with a construction contractor if the contract contains a provision that the State agency shall pay the subcontractor directly. Effective immediately.
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| | | FISCAL NOTE ACT MAY APPLY | |
| | A BILL FOR |
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| 1 | | AN ACT concerning finance.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Procurement Code is amended by | 5 | | changing 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 | 9 | | whether the services of a subcontractor will or may be used. | 10 | | The contract shall include the names and addresses of all known | 11 | | subcontractors with subcontracts with an annual value of more | 12 | | than $25,000 and the expected amount of money each will receive | 13 | | under the contract. For procurements subject to the authority | 14 | | of the chief procurement officer appointed pursuant to | 15 | | subsection (a)(2) of Section 10-20, the contract shall include | 16 | | only the names and addresses of all known subcontractors of the | 17 | | primary contractor with subcontracts with an annual value of | 18 | | more than $25,000. The contractor shall provide the chief | 19 | | procurement officer or State purchasing officer a copy of any | 20 | | subcontract with an annual value of more than $25,000 so | 21 | | identified within 20 days after the execution of the State | 22 | | contract or after execution of the subcontract, whichever is | 23 | | later. A subcontractor, or contractor on behalf of a |
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| 1 | | subcontractor, may identify information that is deemed | 2 | | proprietary or confidential. If the chief procurement officer | 3 | | determines the information is not relevant to the primary | 4 | | contract, the chief procurement officer may excuse the | 5 | | inclusion of the information. If the chief procurement officer | 6 | | determines the information is proprietary or could harm the | 7 | | business interest of the subcontractor, the chief procurement | 8 | | officer may, in his or her discretion, redact the information. | 9 | | Redacted information shall not become part of the public | 10 | | record. | 11 | | (b) If at any time during the term of a contract, a | 12 | | contractor adds or changes any subcontractors, he or she shall | 13 | | promptly notify, in writing, the chief procurement officer, | 14 | | State purchasing officer, or their designee of the names and | 15 | | addresses and the expected amount of money each new or replaced | 16 | | subcontractor will receive. The contractor shall provide to the | 17 | | responsible chief procurement officer a copy of the subcontract | 18 | | within 20 days after the execution of the subcontract. | 19 | | (c) In addition to any other requirements of this Code, a | 20 | | subcontract subject to this Section must include all of the | 21 | | subcontractor's certifications required by Article 50 of the | 22 | | Code. | 23 | | (c-5) The Department of Transportation shall, by rule, | 24 | | implement a pilot program under which select construction | 25 | | contracts granted under this Code and all subcontracts pursuant | 26 | | to those contracts shall contain provisions that if a |
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| 1 | | subcontractor has performed in accordance with the provisions | 2 | | of his or her subcontract and the work has been accepted by the | 3 | | Department, the Department shall pay the amount due the | 4 | | subcontractor directly to the subcontractor pursuant to the | 5 | | proper bill or invoice provided by the contractor to the | 6 | | Department in accordance with the provisions of the State | 7 | | Prompt Payment Act. If a construction contract granted under | 8 | | this Code contains a provision that the Department shall pay | 9 | | the subcontractor directly, the contractor shall deliver to the | 10 | | Department a proper bill or invoice, as defined in the State | 11 | | Prompt Payment Act, for each subcontractor with whom the | 12 | | contractor has a subcontract. The pilot program shall apply | 13 | | only to state-funded contracts under $10 million in value and | 14 | | to those contracts with subcontracts that contain provisions | 15 | | corresponding to pay items that are exclusively and completely | 16 | | performed by the subcontractor. The Secretary of | 17 | | Transportation may exempt any contract from the pilot program | 18 | | if the Secretary determines that the particular contract and | 19 | | its related subcontracts are administratively burdensome. The | 20 | | pilot program shall be implemented by January 1, 2013 and shall | 21 | | expire on January 1, 2014. The Department and the Comptroller | 22 | | shall report to the General Assembly the results of the pilot | 23 | | program with recommendations on whether or not to continue the | 24 | | program and any suggested improvements to the program. | 25 | | (d) This Section applies to procurements solicited on or | 26 | | after the effective date of this amendatory Act of the 96th |
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| 1 | | General Assembly.
| 2 | | (Source: P.A. 96-795, eff. 7-1-10 (see Section 5 of P.A. 96-793 | 3 | | for the effective date of P.A. 96-795); 96-920, eff. 7-1-10.) | 4 | | Section 10. The State Prompt Payment Act is amended by | 5 | | changing Section 7 as follows:
| 6 | | (30 ILCS 540/7)
(from Ch. 127, par. 132.407)
| 7 | | Sec. 7. Payments to subcontractors and material suppliers. | 8 | | (a) When a State official or agency responsible for | 9 | | administering a
contract submits a voucher to the Comptroller | 10 | | for
payment to a contractor, that State official or agency | 11 | | shall promptly make
available electronically
the voucher | 12 | | number, the date of the voucher, and
the amount of the voucher.
| 13 | | The State official or agency responsible for administering the | 14 | | contract shall
provide subcontractors and material suppliers, | 15 | | known to the State official or
agency, with instructions on how | 16 | | to access the electronic information. When a
contractor | 17 | | receives any payment, the contractor shall
pay each | 18 | | subcontractor and material supplier in proportion to the work
| 19 | | completed by each subcontractor and material supplier their | 20 | | application, plus interest received under this Act,
less any | 21 | | retention. If the contractor receives less than the full | 22 | | payment
due under the public construction contract, the | 23 | | contractor shall be
obligated to disburse on a pro rata basis | 24 | | those funds received, plus interest received under this Act, |
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| 1 | | with the
contractor, subcontractors and material suppliers | 2 | | each receiving a prorated
portion based on the amount of | 3 | | payment. When, however, the public owner
does not release the | 4 | | full payment due under the contract because there are
specific | 5 | | areas of work or materials the contractor is rejecting or | 6 | | because
the contractor has otherwise determined such areas are | 7 | | not suitable for
payment, then those specific subcontractors or | 8 | | suppliers involved shall not
be paid for that portion of work | 9 | | rejected or deemed not suitable for
payment and all other | 10 | | subcontractors and suppliers shall be paid in full, plus | 11 | | interest received under this Act.
| 12 | | (b) If the contractor, without reasonable cause, fails to | 13 | | make full payment of amounts due under subsection (a) to
his | 14 | | subcontractors and material suppliers within 15 days after
| 15 | | receipt of
payment under the public construction contract, the | 16 | | contractor shall pay to
his subcontractors and material | 17 | | suppliers, in addition to the payment due
them, interest in the | 18 | | amount of
2% per month, calculated from the
expiration of the | 19 | | 15-day period until fully paid. This subsection shall
also | 20 | | apply to any payments made by subcontractors and material | 21 | | suppliers to
their subcontractors and material suppliers and to | 22 | | all payments made to
lower tier subcontractors and material | 23 | | suppliers throughout the contracting
chain.
| 24 | | (1) If a contractor, without reasonable cause, fails to | 25 | | make payment in
full as
provided in subsection (a) within | 26 | | 15 days after receipt of payment under the
public
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| 1 | | construction contract, any subcontractor or material | 2 | | supplier to whom payments
are owed
may file a written | 3 | | notice with the State official or agency setting forth the
| 4 | | amount owed by
the contractor and the contractor's failure | 5 | | to timely pay the amount owed.
| 6 | | (2) The State official or agency, within 15 days after | 7 | | receipt of a
subcontractor's
or material supplier's | 8 | | written notice of the failure to receive payment from
the | 9 | | contractor,
shall hold a hearing convened by an | 10 | | administrative law judge to determine whether the | 11 | | contractor withheld payment,
without
reasonable cause, | 12 | | from the subcontractors and material suppliers and what
| 13 | | amount, if any,
is due to the subcontractors and material | 14 | | suppliers. The State official or
agency shall
provide | 15 | | appropriate notice to the parties of the date, time, and | 16 | | location of
the hearing. Each contractor, subcontractor, | 17 | | and material supplier has the right to be represented by | 18 | | counsel at the hearing and to cross-examine witnesses and | 19 | | challenge documents.
| 20 | | (3) If there is a finding by the administrative law | 21 | | judge that the contractor failed
to make
payment in full, | 22 | | without reasonable cause, as provided in subsection (a), | 23 | | then
the administrative law judge shall, in writing, direct | 24 | | the contractor to pay the amount
owed to the
subcontractors | 25 | | and material suppliers plus interest within 15 days after | 26 | | the
finding.
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| 1 | | (4) If a contractor fails to make full payment within | 2 | | 15 days after the
administrative law judge's finding, then | 3 | | the contractor shall be barred from
entering into a State
| 4 | | public construction contract for a period of one year | 5 | | beginning on the date of
the administrative law judge's | 6 | | finding. | 7 | | (c) The provisions of this Section do not apply to payments | 8 | | to a subcontractor for work performed under a subcontract | 9 | | entered into with a construction contractor if the contract | 10 | | contains a provision that the State agency shall pay the | 11 | | subcontractor directly as required under a pilot program | 12 | | implemented by the Department of Transportation.
| 13 | | (Source: P.A. 94-672, eff. 1-1-06; 94-972, eff. 7-1-07 .)
| 14 | | Section 99. Effective date. This Act takes effect upon | 15 | | becoming law. |
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