Full Text of HB0743 95th General Assembly
HB0743enr 95TH GENERAL ASSEMBLY
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HB0743 Enrolled |
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LRB095 06522 LCT 26624 b |
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| AN ACT concerning construction contracts.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 1. Short title. This Act may be cited as the | 5 |
| Contractor Prompt Payment Act. | 6 |
| Section 5. Definitions. In this Act: | 7 |
| (a) "Payment application" means, in accordance with the | 8 |
| terms and definitions of
the applicable contract, any invoice, | 9 |
| bill or other request for periodic payment, final payment, | 10 |
| payment of change order or request for release of retainage | 11 |
| from the contractor to the owner. | 12 |
| (b) "Construction contract" means a contract or | 13 |
| subcontract, entered into after the effective date of this Act, | 14 |
| for the design, construction, alteration, improvement, or | 15 |
| repair of Illinois real property, except for contracts that | 16 |
| require the expenditure of public funds and contracts for the | 17 |
| design, construction, alteration, improvement, or repair of | 18 |
| single family residences or multiple family residences with 12 | 19 |
| or fewer units in a single building. | 20 |
| (c) "Contractor" and "subcontractor" shall have the | 21 |
| meanings ascribed to them by the Illinois Mechanics Lien Act | 22 |
| and cases decided under that Act. |
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HB0743 Enrolled |
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LRB095 06522 LCT 26624 b |
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| Section 10. Construction contracts. All construction | 2 |
| contracts shall be deemed to provide the following: | 3 |
| (1) If a contractor has performed in accordance with the | 4 |
| provisions of a construction contract and the payment | 5 |
| application has been approved by the owner or the owner's | 6 |
| agent, the owner shall pay the amount due to the contractor | 7 |
| pursuant to the payment application not more than 15 calendar | 8 |
| days after the approval. The payment application shall be | 9 |
| deemed approved 25 days after the owner receives it unless the | 10 |
| owner provides, before the end of the 25-day period, a written | 11 |
| statement of the amount withheld and the reason for withholding | 12 |
| payment. If the owner finds that a portion of the work not in | 13 |
| accordance with the contract, payment may be withheld for the | 14 |
| reasonable value of that portion only. Payment shall be made | 15 |
| for any portion of the contract for which the work has been | 16 |
| performed in accordance with the provisions of the contract. | 17 |
| Instructions or notification from an owner to his or her lender | 18 |
| or architect to process or pay a payment application does not | 19 |
| constitute approval of the payment application under this Act. | 20 |
| (2) If a subcontractor has performed in accordance with the | 21 |
| provisions of his or her contract with the contractor or | 22 |
| subcontractor and the work has been accepted by the owner, the | 23 |
| owner's agent, or the contractor, the contractor shall pay to | 24 |
| his or her subcontractor and the subcontractor shall pay to his | 25 |
| or her subcontractor, within 15 calendar days of the | 26 |
| contractor's receipt from the owner or the subcontractor's |
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HB0743 Enrolled |
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LRB095 06522 LCT 26624 b |
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| receipt from the contractor of each periodic payment, final | 2 |
| payment, or receipt of retainage monies, the full amount | 3 |
| received for the work of the subcontractor based on the work | 4 |
| completed or the services rendered under the construction | 5 |
| contract. | 6 |
| Section 15. Interest; suspension of performance. | 7 |
| (a) If a payment due pursuant to the provisions of this Act | 8 |
| is not made in a timely manner, the delinquent party shall be | 9 |
| liable for the amount of that payment, plus interest at a rate | 10 |
| equal to 10% per annum. | 11 |
| (b) A contractor or subcontractor who is not paid as | 12 |
| required by this Act may, after providing 7 calendar days' | 13 |
| written notice to the party failing to make the required | 14 |
| payment, suspend performance of a construction contract | 15 |
| without penalty for breach of contract, until the payment | 16 |
| required pursuant to this Act is made. | 17 |
| (c) The interest imposed by this Act shall not be | 18 |
| duplicative of the interest charged under the Mechanics Lien | 19 |
| Act.
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| Section 99. Effective date. This Act shall take effect upon | 21 |
| becoming law.
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