093_SB2002

 
                                     LRB093 09566 LCB 09804 b

 1        AN ACT in relation to 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    Contractor Prompt Payment Act.

 6        Section 5.  Definitions.  In this Act:
 7        "Building  and construction contract" means a contract or
 8    subcontract,  for  the  design,   construction,   alteration,
 9    improvement,   repair,   or   maintenance  of  Illinois  real
10    property, except for contracts that require  the  expenditure
11    of public funds.
12        "Business  day"  means  any calendar day except Saturday,
13    Sunday, or a federal holiday.
14        "Contractor" and "Subcontractor" shall have the  meanings
15    ascribed   them   by   the   Mechanics  Lien  Act  and  cases
16    interpreting that Act.

17        Section 10.  Building  and  construction  contracts.  All
18    building  and  construction  contracts  shall  be  deemed  to
19    provide the following:
20        (a)  Prompt  payment.  Upon  application  for  payment in
21    accordance with the contract, an owner must pay a  contractor
22    within 10 business days for work performed by that contractor
23    and  about which there is no reasonable dispute. Upon receipt
24    of the payment from an owner,  the  contractor  must  forward
25    that  payment  within  10  business  days  of  receipt to the
26    subcontractors who performed the work for which  the  payment
27    was made.
28        (b)  Progress payments.  Periodic progress payments shall
29    be  made at least monthly, based upon reasonable estimates of
30    work completed. Payments made to comply with this  subsection
 
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 1    (b)  shall  not  waive  any  right  to  a cause of action for
 2    defects in the work.
 3        (c)  Retainer.  A retainer may be required for  contracts
 4    made  pursuant to this Act.  The retainer shall not exceed 5%
 5    of any progress payment.
 6        (d)  Application to subcontractors.  Subcontractors shall
 7    have the  same  rights  and  duties  with  respect  to  their
 8    subcontractors as contractors have with their subcontractors.
 9        (e)  Waiver by agreement.  The provisions of this Act may
10    be waived by express written agreement between the parties.

11        Section  20.  Enforcement.  A private civil action may be
12    brought  under  this  Act  to  recover  payments   wrongfully
13    withheld,  as  well as 10% interest from the date the payment
14    was due and reasonable attorneys' fees and expenses  incurred
15    in bringing the action.

16        Section  99.  Effective date.  This Act takes effect upon
17    becoming law.