Full Text of SB1266 100th General Assembly
SB1266 100TH GENERAL ASSEMBLY |
| | 100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018 SB1266 Introduced 2/9/2017, by Sen. Martin A. Sandoval SYNOPSIS AS INTRODUCED: |
| 30 ILCS 540/7 | from Ch. 127, par. 132.407 |
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Amends the Prompt Payment Act. Provides that a contractor may require either a performance bond or retention of payment of a subcontractor as part of the subcontract. Provides that a contractor may not require both.
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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. When, however, the public owner
does not release the | 5 | | full payment due under the contract because there are
specific | 6 | | areas of work or materials the contractor is rejecting or | 7 | | because
the contractor has otherwise determined such areas are | 8 | | not suitable for
payment, then those specific subcontractors or | 9 | | suppliers involved shall not
be paid for that portion of work | 10 | | rejected or deemed not suitable for
payment and all other | 11 | | subcontractors and suppliers shall be paid in full, plus | 12 | | interest received under this Act.
| 13 | | A contractor may require either a performance bond or | 14 | | retention of payment of a subcontractor as part of the | 15 | | subcontract. However, a contractor may not require both. | 16 | | (b) If the contractor, without reasonable cause, fails to | 17 | | make full payment of amounts due under subsection (a) to
his | 18 | | subcontractors and material suppliers within 15 days after
| 19 | | receipt of
payment under the public construction contract, the | 20 | | contractor shall pay to
his subcontractors and material | 21 | | suppliers, in addition to the payment due
them, interest in the | 22 | | amount of
2% per month, calculated from the
expiration of the | 23 | | 15-day period until fully paid. This subsection shall
also | 24 | | apply to any payments made by subcontractors and material | 25 | | suppliers to
their subcontractors and material suppliers and to | 26 | | all payments made to
lower tier subcontractors and material |
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| 1 | | suppliers throughout the contracting
chain.
| 2 | | (1) If a contractor, without reasonable cause, fails to | 3 | | make payment in
full as
provided in subsection (a) within | 4 | | 15 days after receipt of payment under the
public
| 5 | | construction contract, any subcontractor or material | 6 | | supplier to whom payments
are owed
may file a written | 7 | | notice with the State official or agency setting forth the
| 8 | | amount owed by
the contractor and the contractor's failure | 9 | | to timely pay the amount owed.
| 10 | | (2) The State official or agency, within 15 days after | 11 | | receipt of a
subcontractor's
or material supplier's | 12 | | written notice of the failure to receive payment from
the | 13 | | contractor,
shall hold a hearing convened by an | 14 | | administrative law judge to determine whether the | 15 | | contractor withheld payment,
without
reasonable cause, | 16 | | from the subcontractors and material suppliers and what
| 17 | | amount, if any,
is due to the subcontractors and material | 18 | | suppliers. The State official or
agency shall
provide | 19 | | appropriate notice to the parties of the date, time, and | 20 | | location of
the hearing. Each contractor, subcontractor, | 21 | | and material supplier has the right to be represented by | 22 | | counsel at the hearing and to cross-examine witnesses and | 23 | | challenge documents.
| 24 | | (3) If there is a finding by the administrative law | 25 | | judge that the contractor failed
to make
payment in full, | 26 | | without reasonable cause, as provided in subsection (a), |
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| 1 | | then
the administrative law judge shall, in writing, direct | 2 | | the contractor to pay the amount
owed to the
subcontractors | 3 | | and material suppliers plus interest within 15 days after | 4 | | the
finding.
| 5 | | (4) If a contractor fails to make full payment within | 6 | | 15 days after the
administrative law judge's finding, then | 7 | | the contractor shall be barred from
entering into a State
| 8 | | public construction contract for a period of one year | 9 | | beginning on the date of
the administrative law judge's | 10 | | finding.
| 11 | | (Source: P.A. 94-672, eff. 1-1-06; 94-972, eff. 7-1-07 .)
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