093_SB0155eng

 
SB155 Engrossed                      LRB093 06706 SJM 06840 b

 1        AN ACT concerning procurement.

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

 4        Section 5.  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
 8    suppliers.
 9        (a)  When a State  official  or  agency  responsible  for
10    administering a contract submits a voucher to the Comptroller
11    for  payment  to  a contractor, that State official or agency
12    shall promptly  make  available  electronically  the  voucher
13    number,  the  date  of  the  voucher,  and  the amount of the
14    voucher.  The  State  official  or  agency  responsible   for
15    administering  the  contract shall provide subcontractors and
16    material suppliers, known to the State  official  or  agency,
17    with   instructions   on   how   to   access  the  electronic
18    information. When a  contractor  receives  any  payment,  the
19    contractor shall pay each subcontractor and material supplier
20    in proportion to the work completed by each subcontractor and
21    material  supplier  their application less any retention.  If
22    the contractor receives less than the full payment due  under
23    the  public  construction  contract,  the contractor shall be
24    obligated to  disburse  on  a  pro  rata  basis  those  funds
25    received,  with  the  contractor, subcontractors and material
26    suppliers each receiving a  prorated  portion  based  on  the
27    amount  of payment.  When, however, the public owner does not
28    release the full payment due under the contract because there
29    are specific areas of work or  materials  the  contractor  is
30    rejecting  or because the contractor has otherwise determined
31    such areas are not suitable for payment, then those  specific
 
SB155 Engrossed             -2-      LRB093 06706 SJM 06840 b
 1    subcontractors  or  suppliers  involved shall not be paid for
 2    that portion of work rejected  or  deemed  not  suitable  for
 3    payment  and  all other subcontractors and suppliers shall be
 4    paid in full.
 5        (b)  If the contractor, without reasonable  cause,  fails
 6    to  make full any payment of amounts due under subsection (a)
 7    to his subcontractors and material suppliers within  15  days
 8    after  receipt  of  payment  under  the  public  construction
 9    contract,  the contractor shall pay to his subcontractors and
10    material suppliers, in addition  to  the  payment  due  them,
11    interest  in  the  amount of 4% 2% per month, calculated from
12    the expiration of the 15-day period until fully  paid.   This
13    subsection   shall   also  apply  to  any  payments  made  by
14    subcontractors and material suppliers to their subcontractors
15    and material suppliers and to all payments made to lower tier
16    subcontractors  and   material   suppliers   throughout   the
17    contracting chain.
18             (1)  If  a  contractor,  without  reasonable  cause,
19        fails  to  make payment in full as provided in subsection
20        (a) within 15 days after receipt  of  payment  under  the
21        public   construction   contract,  any  subcontractor  or
22        material supplier to whom payments are owed  may  file  a
23        written  notice with the State official or agency setting
24        forth  the  amount  owed  by  the  contractor   and   the
25        contractor's failure to timely pay the amount owed.
26             (2)  The  State  official  or agency, within 15 days
27        after receipt of a subcontractor's or material supplier's
28        written notice of the failure to receive payment from the
29        contractor, shall hold a hearing to determine whether the
30        contractor withheld payment,  without  reasonable  cause,
31        from  the  subcontractors and material suppliers and what
32        amount, if any, is due to the subcontractors and material
33        suppliers. The State official  or  agency  shall  provide
34        appropriate  notice to the parties of the date, time, and
 
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 1        location of the hearing.
 2             (3) If the State official or agency determines  that
 3        the  contractor  failed  to make payment in full, without
 4        reasonable cause, as provided in subsection (a), then the
 5        State official or agency shall, in  writing,  direct  the
 6        contractor  to  pay the amount owed to the subcontractors
 7        and material suppliers plus interest within 15 days after
 8        the State official's or agency's finding.
 9             (4)  If a contractor  fails  to  make  full  payment
10        within  15  days  after  the State official's or agency's
11        finding,  then  the  contractor  shall  be  barred   from
12        entering  into a State public construction contract for a
13        period of one year beginning on the  date  of  the  State
14        official's or agency's finding.
15    (Source: P.A. 87-773.)