State of Illinois
92^nd General Assembly
Legislation

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92_HB1904eng

 
HB1904 Engrossed                               LRB9205725DHmb

 1        AN ACT in relation to highways.

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

 4        Section 5.  The  Illinois  Highway  Code  is  amended  by
 5    adding Section 4-104 as follows:

 6        (605 ILCS 5/4-104 new)
 7        Sec.   4-104.  Subcontractors'  trust  agreements.   This
 8    Section applies to subcontractors' retainage amounts expected
 9    to  be  equal  to  or  greater  than   $20,000.    Upon   the
10    contractor's receipt of the first partial or progress payment
11    from  the Department, at the request of the subcontractor and
12    with the approval of the contractor,  the  retainage  of  the
13    subcontract  shall  be deposited under a trust agreement with
14    an Illinois financial institution, whose deposits are insured
15    by an agency or instrumentality of the federal government, of
16    the subcontractor's choice and subject to the approval of the
17    contractor. The subcontractor shall receive any  interest  on
18    the amount deposited.
19        Upon  application by the subcontractor, a trust agreement
20    by the financial institution and the contractor must contain,
21    at a minimum, the following provisions:
22        (1)  The amount to be deposited subject to the trust.
23        (2)  The terms and  conditions  of  payment  in  case  of
24    default of the subcontractor.
25        (3)  The   termination   of   the  trust  agreement  upon
26    completion of the subcontract.
27        The  subcontractor  is  responsible  for  obtaining   the
28    written  consent  of  the  financial institution trustee. Any
29    costs or service fees must be borne by the subcontractor. The
30    trust agreement may, at the discretion of the contractor  and
31    upon  request  of  the subcontractor, become operative at the
 
HB1904 Engrossed            -2-                LRB9205725DHmb
 1    time of the first partial payment in accordance with existing
 2    statutes and Department  procedures.   Subcontractors'  trust
 3    agreements   are  voluntary  and  supersede  any  prohibition
 4    regarding retainage that may be adopted by any transportation
 5    agency.
 6        This Section applies to all subcontracts in effect on and
 7    after the effective date of this amendatory Act of  the  92nd
 8    General Assembly.

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

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