Full Text of HB5260 94th General Assembly
HB5260enr 94TH GENERAL ASSEMBLY
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HB5260 Enrolled |
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LRB094 16231 RSP 51475 b |
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| AN ACT concerning finance.
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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 5. The State Prompt Payment Act is amended by | 5 |
| changing Sections 3-2 and 7 as follows:
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| (30 ILCS 540/3-2) (from Ch. 127, par. 132.403-2)
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| Sec. 3-2. Beginning July 1, 1993, in any instance where a | 8 |
| State official or
agency is late in payment of a vendor's bill | 9 |
| or invoice for goods or services
furnished to the State, as | 10 |
| defined in Section 1, properly approved in
accordance with | 11 |
| rules promulgated under Section 3-3, the State official or
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| agency shall pay interest to the vendor in accordance with the | 13 |
| following:
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| (1) Any bill approved for payment under this Section | 15 |
| must be paid
or the payment issued to the payee within 60 | 16 |
| days of receipt
of a proper bill or invoice.
If payment is | 17 |
| not issued to the payee within this 60 day
period, an
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| interest penalty of 1.0% of any amount approved and unpaid | 19 |
| shall be added
for each month or fraction thereof after the | 20 |
| end of this 60 day period,
until final payment is made.
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| (1.1) A State agency shall review in a timely manner | 22 |
| each bill or
invoice after its receipt. If the
State agency | 23 |
| determines that the bill or invoice contains a defect | 24 |
| making it
unable to process the payment request, the agency
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| shall notify the vendor requesting payment as soon as | 26 |
| possible after
discovering the
defect pursuant to rules | 27 |
| promulgated under Section 3-3 ; provided, however, that the | 28 |
| notice for construction related bills or invoices must be | 29 |
| given not later than 30 days after the bill or invoice was | 30 |
| first submitted . The notice shall
identify the defect and | 31 |
| any additional information
necessary to correct the | 32 |
| defect. If one or more items on a construction related bill |
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HB5260 Enrolled |
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LRB094 16231 RSP 51475 b |
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| or invoice are disapproved, but not the entire bill or | 2 |
| invoice, then the portion that is not disapproved shall be | 3 |
| paid.
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| (2) Where a State official or agency is late in payment | 5 |
| of a
vendor's bill or invoice properly approved in | 6 |
| accordance with this Act, and
different late payment terms | 7 |
| are not reduced to writing as a contractual
agreement, the | 8 |
| State official or agency shall automatically pay interest
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| penalties required by this Section amounting to $50 or more | 10 |
| to the appropriate
vendor. Each agency shall be responsible | 11 |
| for determining whether an interest
penalty
is
owed and
for | 12 |
| paying the interest to the vendor.
For interest of at least | 13 |
| $5 but less than $50, the vendor must
initiate a written | 14 |
| request for the interest penalty when such interest is due
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| and payable. The Department of Central Management Services | 16 |
| and the State
Comptroller shall jointly promulgate rules | 17 |
| establishing the conditions under
which interest of less | 18 |
| than $5 may be claimed and paid. In the event an
individual | 19 |
| has paid a vendor for services in advance, the provisions | 20 |
| of this
Section shall apply until payment is made to that | 21 |
| individual.
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| (Source: P.A. 92-384, eff. 7-1-02.)
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| (30 ILCS 540/7)
(from Ch. 127, par. 132.407)
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| Sec. 7. Payments to subcontractors and material suppliers. | 25 |
| (a) When a State official or agency responsible for | 26 |
| administering a
contract submits a voucher to the Comptroller | 27 |
| for
payment to a contractor, that State official or agency | 28 |
| shall promptly make
available electronically
the voucher | 29 |
| number, the date of the voucher, and
the amount of the voucher.
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| The State official or agency responsible for administering the | 31 |
| contract shall
provide subcontractors and material suppliers, | 32 |
| known to the State official or
agency, with instructions on how | 33 |
| to access the electronic information. When a
contractor | 34 |
| receives any payment, the contractor shall
pay each | 35 |
| subcontractor and material supplier in proportion to the work
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LRB094 16231 RSP 51475 b |
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| completed by each subcontractor and material supplier their | 2 |
| application , plus interest received under this Act,
less any | 3 |
| retention. If the contractor receives less than the full | 4 |
| payment
due under the public construction contract, the | 5 |
| contractor shall be
obligated to disburse on a pro rata basis | 6 |
| those funds received, plus interest received under this Act, | 7 |
| with the
contractor, subcontractors and material suppliers | 8 |
| each receiving a prorated
portion based on the amount of | 9 |
| payment. When, however, the public owner
does not release the | 10 |
| full payment due under the contract because there are
specific | 11 |
| areas of work or materials the contractor is rejecting or | 12 |
| because
the contractor has otherwise determined such areas are | 13 |
| not suitable for
payment, then those specific subcontractors or | 14 |
| suppliers involved shall not
be paid for that portion of work | 15 |
| rejected or deemed not suitable for
payment and all other | 16 |
| subcontractors and suppliers shall be paid in full , plus | 17 |
| interest received under this Act .
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| (b) If the contractor, without reasonable cause, fails to | 19 |
| make full payment of amounts due under subsection (a) to
his | 20 |
| subcontractors and material suppliers within 15 days after
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| receipt of
payment under the public construction contract, the | 22 |
| contractor shall pay to
his subcontractors and material | 23 |
| suppliers, in addition to the payment due
them, interest in the | 24 |
| amount of
2% per month, calculated from the
expiration of the | 25 |
| 15-day period until fully paid. This subsection shall
also | 26 |
| apply to any payments made by subcontractors and material | 27 |
| suppliers to
their subcontractors and material suppliers and to | 28 |
| all payments made to
lower tier subcontractors and material | 29 |
| suppliers throughout the contracting
chain.
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| (1) If a contractor, without reasonable cause, fails to | 31 |
| make payment in
full as
provided in subsection (a) within | 32 |
| 15 days after receipt of payment under the
public
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| construction contract, any subcontractor or material | 34 |
| supplier to whom payments
are owed
may file a written | 35 |
| notice with the State official or agency setting forth the
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| amount owed by
the contractor and the contractor's failure |
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LRB094 16231 RSP 51475 b |
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| to timely pay the amount owed.
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| (2) The State official or agency, within 15 days after | 3 |
| receipt of a
subcontractor's
or material supplier's | 4 |
| written notice of the failure to receive payment from
the | 5 |
| contractor,
shall hold a hearing convened by an | 6 |
| administrative law judge to determine whether the | 7 |
| contractor withheld payment,
without
reasonable cause, | 8 |
| from the subcontractors and material suppliers and what
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| amount, if any,
is due to the subcontractors and material | 10 |
| suppliers. The State official or
agency shall
provide | 11 |
| appropriate notice to the parties of the date, time, and | 12 |
| location of
the hearing. Each contractor, subcontractor, | 13 |
| and material supplier has the right to be represented by | 14 |
| counsel at the hearing and to cross-examine witnesses and | 15 |
| challenge documents.
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| (3) If there is a finding by the administrative law | 17 |
| judge that the contractor failed
to make
payment in full, | 18 |
| without reasonable cause, as provided in subsection (a), | 19 |
| then
the administrative law judge shall, in writing, direct | 20 |
| the contractor to pay the amount
owed to the
subcontractors | 21 |
| and material suppliers plus interest within 15 days after | 22 |
| the
finding.
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| (4) If a contractor fails to make full payment within | 24 |
| 15 days after the
administrative law judge's finding, then | 25 |
| the contractor shall be barred from
entering into a State
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| public construction contract for a period of one year | 27 |
| beginning on the date of
the administrative law judge's | 28 |
| finding.
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| (Source: P.A. 94-672, eff. 1-1-06.)
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| Section 10. The Local Government Prompt Payment Act is | 31 |
| amended by changing Sections 3 and 9 as follows:
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| (50 ILCS 505/3) (from Ch. 85, par. 5603)
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| Sec. 3. The appropriate local governmental official or | 34 |
| agency
receiving goods or services must approve or disapprove a |
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LRB094 16231 RSP 51475 b |
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| bill from a vendor
or contractor for goods or services | 2 |
| furnished the local governmental agency
within 30 days after | 3 |
| the receipt of such bill or within 30 days after the
date on | 4 |
| which the goods or services were received, whichever is later.
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| If one or more items on a construction related bill or invoice | 6 |
| are disapproved, but not the entire bill or invoice, then the | 7 |
| portion that is not disapproved shall be paid. When safety or | 8 |
| quality assurance testing of goods by the local governmental
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| agency is necessary before the approval or disapproval of a | 10 |
| bill and such
testing cannot be completed within 30 days after | 11 |
| receipt of the goods,
approval or disapproval of the bill must | 12 |
| be made immediately upon
completion of the testing or within 60 | 13 |
| days after receipt of the goods,
whichever occurs first. | 14 |
| Written notice shall be mailed to the vendor or
contractor | 15 |
| immediately if a bill is disapproved.
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| (Source: P.A. 87-773.)
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| (50 ILCS 505/9) (from Ch. 85, par. 5609)
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| Sec. 9. Payments to subcontractors and material suppliers; | 19 |
| failure to make timely payments; additional amount due.
When a | 20 |
| contractor receives any payment, the contractor shall
pay each | 21 |
| subcontractor and material supplier in proportion to the work
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| completed by each subcontractor and material supplier their | 23 |
| application
less any retention. If the contractor receives less | 24 |
| than the full payment
due under the public construction | 25 |
| contract, the contractor shall be
obligated to disburse on a | 26 |
| pro rata basis those funds received, with the
contractor, | 27 |
| subcontractors and material suppliers each receiving a | 28 |
| prorated
portion based on the amount of payment. All interest | 29 |
| payments received pursuant to Section 4 also shall be disbursed | 30 |
| to subcontractors and material suppliers to whom payment has | 31 |
| been delayed, on a pro rata basis. When, however, the public | 32 |
| owner
does not release the full payment due under the contract | 33 |
| because there are
specific areas of work or materials the | 34 |
| contractor is rejecting or because
the contractor has otherwise | 35 |
| determined such areas are not suitable for
payment, then those |
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HB5260 Enrolled |
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LRB094 16231 RSP 51475 b |
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| specific subcontractors or suppliers involved shall not
be paid | 2 |
| for that portion of the work rejected or deemed not suitable | 3 |
| for
payment and all other subcontractors and suppliers shall be | 4 |
| paid in full.
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| If the contractor, without reasonable cause, fails to make | 6 |
| any payment to
his subcontractors and material suppliers within | 7 |
| 15 days after receipt of
payment under the public construction | 8 |
| contract, the contractor shall pay to
his subcontractors and | 9 |
| material suppliers, in addition to the payment due
them, | 10 |
| interest in the amount of 2% per month, calculated from the
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| expiration of the 15-day period until fully paid. This Section
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| subsection shall
also apply to any payments made by | 13 |
| subcontractors and material suppliers to
their subcontractors | 14 |
| and material suppliers and to all payments made to
lower tier | 15 |
| subcontractors and material suppliers throughout the | 16 |
| contracting
chain.
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| (Source: P.A. 87-773.)
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| Section 99. Effective date. This Act takes effect July 1, | 19 |
| 2007.
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