Full Text of HB2664 100th General Assembly
HB2664 100TH GENERAL ASSEMBLY |
| | 100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018 HB2664 Introduced , by Rep. William Davis SYNOPSIS AS INTRODUCED: |
| 30 ILCS 540/7 | from Ch. 127, par. 132.407 |
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Amends the State Prompt Payment Act. Provides that if a contractor is assessed liquidated damages by the State, the contractor is still responsible to each subcontractor under the subcontracts. For contracts with the Department of Transportation, provides that if a contractor is assessed a liquidated damages penalty equal to or exceeding the total amount of the contract and the contractor is unable to pay its subcontractors, the Department of Transportation shall verify completion of the work performed by the subcontractor and, upon successful verification, pay the subcontractor the amount owed on the subcontract with the contractor.
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| | 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 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 |
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| 1 | | those funds received, plus interest received under this Act, | 2 | | with the
contractor, subcontractors and material suppliers | 3 | | each receiving a prorated
portion based on the amount of | 4 | | payment. If the contractor is assessed liquidated damages by | 5 | | the State, the contractor is still responsible to each | 6 | | subcontractor under the subcontracts. When, however, the | 7 | | public owner
does not release the full payment due under the | 8 | | contract because there are
specific areas of work or materials | 9 | | the contractor is rejecting or because
the contractor has | 10 | | otherwise determined such areas are not suitable for
payment, | 11 | | then those specific subcontractors or suppliers involved shall | 12 | | not
be paid for that portion of work rejected or deemed not | 13 | | suitable for
payment and all other subcontractors and suppliers | 14 | | shall be paid in full, plus interest received under this Act.
| 15 | | For a contract with the Department of Transportation, if a | 16 | | contractor is assessed a liquidated damages penalty equal to or | 17 | | exceeding the total amount of the contract and the contractor | 18 | | is unable to pay its subcontractors, the Department of | 19 | | Transportation shall verify completion of the work performed by | 20 | | the subcontractor and, upon successful verification, pay the | 21 | | subcontractor the amount owed on the subcontract with the | 22 | | contractor. | 23 | | (b) If the contractor, without reasonable cause, fails to | 24 | | make full payment of amounts due under subsection (a) to
his | 25 | | subcontractors and material suppliers within 15 days after
| 26 | | receipt of
payment under the public construction contract, the |
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| 1 | | contractor shall pay to
his subcontractors and material | 2 | | suppliers, in addition to the payment due
them, interest in the | 3 | | amount of
2% per month, calculated from the
expiration of the | 4 | | 15-day period until fully paid. This subsection shall
also | 5 | | apply to any payments made by subcontractors and material | 6 | | suppliers to
their subcontractors and material suppliers and to | 7 | | all payments made to
lower tier subcontractors and material | 8 | | suppliers throughout the contracting
chain.
| 9 | | (1) If a contractor, without reasonable cause, fails to | 10 | | make payment in
full as
provided in subsection (a) within | 11 | | 15 days after receipt of payment under the
public
| 12 | | construction contract, any subcontractor or material | 13 | | supplier to whom payments
are owed
may file a written | 14 | | notice with the State official or agency setting forth the
| 15 | | amount owed by
the contractor and the contractor's failure | 16 | | to timely pay the amount owed.
| 17 | | (2) The State official or agency, within 15 days after | 18 | | receipt of a
subcontractor's
or material supplier's | 19 | | written notice of the failure to receive payment from
the | 20 | | contractor,
shall hold a hearing convened by an | 21 | | administrative law judge to determine whether the | 22 | | contractor withheld payment,
without
reasonable cause, | 23 | | from the subcontractors and material suppliers and what
| 24 | | amount, if any,
is due to the subcontractors and material | 25 | | suppliers. The State official or
agency shall
provide | 26 | | appropriate notice to the parties of the date, time, and |
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| 1 | | location of
the hearing. Each contractor, subcontractor, | 2 | | and material supplier has the right to be represented by | 3 | | counsel at the hearing and to cross-examine witnesses and | 4 | | challenge documents.
| 5 | | (3) If there is a finding by the administrative law | 6 | | judge that the contractor failed
to make
payment in full, | 7 | | without reasonable cause, as provided in subsection (a), | 8 | | then
the administrative law judge shall, in writing, direct | 9 | | the contractor to pay the amount
owed to the
subcontractors | 10 | | and material suppliers plus interest within 15 days after | 11 | | the
finding.
| 12 | | (4) If a contractor fails to make full payment within | 13 | | 15 days after the
administrative law judge's finding, then | 14 | | the contractor shall be barred from
entering into a State
| 15 | | public construction contract for a period of one year | 16 | | beginning on the date of
the administrative law judge's | 17 | | finding.
| 18 | | (Source: P.A. 94-672, eff. 1-1-06; 94-972, eff. 7-1-07 .)
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