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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 
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changing
Section 7 as follows:


 



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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.

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    (a) When a State official or agency responsible for 
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administering a
contract submits a voucher to the Comptroller 
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for
payment to a contractor, that State official or agency 
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shall promptly make
available electronically
the voucher 
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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 
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contract shall
provide subcontractors and material suppliers, 
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known to the State official or
agency, with instructions on how 
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to access the electronic information. When a
contractor 
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receives any payment, the contractor shall
pay each 
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subcontractor and material supplier in proportion to the work

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completed by each subcontractor and material supplier their 
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application
less any retention.  If the contractor receives less 
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than the full payment
due under the public construction 
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contract, the contractor shall be
obligated to disburse on a 
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pro rata basis those funds received, with the
contractor, 
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subcontractors and material suppliers each receiving a 
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prorated
portion based on the amount of payment.  When, however, 
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the public owner
does not release the full payment due under 
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the contract because there are
specific areas of work or 
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materials the contractor is rejecting or because
the contractor 
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has otherwise determined such areas are not suitable for

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payment, then those specific subcontractors or suppliers 
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involved shall not
be paid for that portion of work rejected or 
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deemed not suitable for
payment and all other subcontractors 
 


 






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and suppliers shall be paid in full.

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    (b) If the contractor, without reasonable cause, fails to 
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make full
any payment of amounts due under subsection (a) to

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his subcontractors and material suppliers within 15 days after

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receipt of
payment under the public construction contract, the 
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contractor shall pay to
his subcontractors and material 
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suppliers, in addition to the payment due
them, interest in the 
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amount of 4%
2% per month, calculated from the
expiration of 
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the 15-day period until fully paid.  This subsection shall
also 
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apply to any payments made by subcontractors and material 
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suppliers to
their subcontractors and material suppliers and to 
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all payments made to
lower tier subcontractors and material 
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suppliers throughout the contracting
chain.


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        (1) If a contractor, without reasonable cause, fails to 
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    make payment in
full as
provided in subsection (a) within 
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    15 days after receipt of payment under the
public

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    construction contract, any subcontractor or material 
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    supplier to whom payments
are owed
may file a written 
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    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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    to timely pay the amount owed.

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        (2) The State official or agency, within 15 days after 
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    receipt of a
subcontractor's
or material supplier's 
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    written notice of the failure to receive payment from
the 
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    contractor,
shall hold a hearing to determine whether the 
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    contractor withheld payment,
without
reasonable cause, 
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    from the subcontractors and material suppliers and what

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    amount, if any,
is due to the subcontractors and material 
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    suppliers. The State official or
agency shall
provide 
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    appropriate notice to the parties of the date, time, and 
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    location of
the hearing.

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        (3) If the State official or agency determines that the 
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    contractor failed
to make
payment in full, without 
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    reasonable cause, as provided in subsection (a), then
the 
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    State
official or agency shall, in writing, direct the 
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    contractor to pay the amount
owed to the
subcontractors and 
 


 






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    material suppliers plus interest within 15 days after the

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    State official's
or agency's finding.

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        (4) If a contractor fails to make full payment within 
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    15 days after the
State
official's or agency's finding, 
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    then the contractor shall be barred from
entering into a 
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    State
public construction contract for a period of one year 
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    beginning on the date of
the State
official's or agency's 
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    finding.

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(Source: P.A. 87-773.)