103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB2729
 
Introduced 1/12/2024, by Sen. Ram Villivalam
 
SYNOPSIS AS INTRODUCED:
 
New Act
    Creates the Government Contract Retainage Act. Defines terms, including that "retainage" means a portion of money withheld from the payment of a contract for a specified period of time to ensure that a contractor or subcontractor finishes a construction project completely and finishes in the manner specified in the contract. Provides that interest shall accrue monthly on the first day of each month on retainage withheld by a governmental unit at a specified rate set by the State Treasurer. Requires retainage withheld by a governmental unit to be paid not more than 60 days after being retained, including interest accrued, unless the retainage was withheld on the last pay period of a project shall, which shall be paid not more than 120 days after being retained. Limits the concurrent exercise of home rule powers.


LRB103 36029 AWJ 66116 b

 
 
A BILL FOR
 
SB2729LRB103 36029 AWJ 66116 b

1    AN ACT concerning government.
 
2    Be it enacted by the People of the State of Illinois, 
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the 
5Government Contract Retainage Act.
 
6    Section 5. Definitions. As used in this Act:
7    "Governmental unit" means a State agency or a unit of 
8local government.
9    "State agency" has the meaning given to "state agencies" 
10in Section 1-7 of the Illinois State Auditing Act.
11    "Retainage" means a portion of money withheld from the 
12payment of a contract for a specified period of time to ensure 
13that a contractor or subcontractor finishes a construction 
14project completely and finishes in the manner specified in the 
15contract.
 
16    Section 10. Interest on retainage. Interest shall accrue 
17monthly on the first day of each month on retainage withheld by 
18a governmental unit. The accrual rate shall be equal to the 
19rate set by the Treasurer on the first of each month for the 
20Local Government Investment Pool Fund Daily Rates. 
 
21    Section 15. Payment of retainage. Retainage withheld by a 
 
 
SB2729- 2 -LRB103 36029 AWJ 66116 b

1governmental unit shall be paid not more than 60 days after 
2being retained, including interest accrued under Section 10, 
3except that retainage withheld on the last pay period of a 
4project shall be paid not more than 120 days after being 
5retained.
 
6    Section 90. Home rule. A home rule unit may not regulate 
7retainage in a manner inconsistent with this Act. This Act is a 
8limitation under subsection (i) of Section 6 of Article VII of 
9the Illinois Constitution on the concurrent exercise by home 
10rule units of powers and functions exercised by the State.