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Public Act 92-0270
HB1904 Enrolled LRB9205725DHmb
AN ACT in relation to highways.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Highway Code is amended by
adding Section 4-104 as follows:
(605 ILCS 5/4-104 new)
Sec. 4-104. Subcontractors' trust agreements. This
Section applies to subcontractors' retainage amounts expected
to be equal to or greater than $20,000. Upon the
contractor's receipt of the first partial or progress payment
from the Department, at the request of the subcontractor and
with the approval of the contractor, the retainage of the
subcontract shall be deposited under a trust agreement with
an Illinois financial institution, whose deposits are insured
by an agency or instrumentality of the federal government, of
the subcontractor's choice and subject to the approval of the
contractor. The subcontractor shall receive any interest on
the amount deposited.
Upon application by the subcontractor, a trust agreement
by the financial institution and the contractor must contain,
at a minimum, the following provisions:
(1) The amount to be deposited subject to the trust.
(2) The terms and conditions of payment in case of
default of the subcontractor.
(3) The termination of the trust agreement upon
completion of the subcontract.
The subcontractor is responsible for obtaining the
written consent of the financial institution trustee. Any
costs or service fees must be borne by the subcontractor. The
trust agreement may, at the discretion of the contractor and
upon request of the subcontractor, become operative at the
time of the first partial payment in accordance with existing
statutes and Department procedures. Subcontractors' trust
agreements are voluntary and supersede any prohibition
regarding retainage that may be adopted by any transportation
This Section applies to all subcontracts in effect on and
after the effective date of this amendatory Act of the 92nd
Section 99. Effective date. This Act takes effect upon
Passed in the General Assembly May 15, 2001.
Approved August 07, 2001.
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