97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB1292
 
Introduced 02/09/11, by Rep. Lou Lang
 
SYNOPSIS AS INTRODUCED:
 


815 ILCS 603/10
    Amends the Contractor Prompt Payment Act. Provides that under a construction contract, it is unlawful to withhold more than 5% retainage on payments earned by contractors and subcontractors. Effective immediately.



LRB097 05215 AEK 45264 b

 
 
A BILL FOR
 


HB1292LRB097 05215 AEK 45264 b



1    AN ACT concerning business.

 
2    Be it enacted by the People of the State of Illinois,
 
3represented in the General Assembly:


 
4    Section 5. The Contractor Prompt Payment Act is amended  by 
5changing Section 10 as follows:
 
6    (815 ILCS 603/10)

7    Sec. 10. Construction contracts.   
8    (a) All construction contracts shall be deemed to provide 
9the following:
10        (1) If a contractor has performed in accordance with 
11    the provisions of a construction contract and the payment 
12    application has been approved by the owner or the owner's 
13    agent, the owner shall pay the amount due to the contractor 
14    pursuant to the payment application not more than 15 
15    calendar days after the approval.  The payment application 
16    shall be deemed approved 25 days after the owner receives 
17    it unless the owner provides, before the end of the 25-day 
18    period, a written statement of the amount withheld and the 
19    reason for withholding payment.  If the owner finds that  a 
20    portion of the work not  in accordance with the contract, 
21    payment may be withheld for the reasonable value of that 
22    portion only.  Payment shall be made for any portion of the 
23    contract for which the work has been performed in 
 
 
HB1292- 2 -LRB097 05215 AEK 45264 b

1    accordance with the provisions of the contract. 
2    Instructions or notification from an owner to his or her 
3    lender or architect to process or pay a payment application 
4    does not constitute approval of the payment application 
5    under this Act.
6        (2) If a subcontractor has performed in accordance with 
7    the provisions of his or her contract with the contractor 
8    or subcontractor and the work has been accepted by the 
9    owner, the owner's agent, or the contractor, the contractor 
10    shall pay to his or her subcontractor and the subcontractor 
11    shall pay to his or her subcontractor, within 15 calendar 
12    days of the contractor's receipt from the owner or the 
13    subcontractor's receipt from the contractor of each 
14    periodic payment, final payment, or receipt of retainage 
15    monies, the full amount received for the work of the 
16    subcontractor based on the work completed or the services 
17    rendered under the construction contract.

18    (b) Under a construction contract, it is unlawful to 
19withhold more than 5% retainage on payments earned by 
20contractors and subcontractors. 
21(Source: P.A. 95-567, eff. 8-31-07.)

 
22    Section 99. Effective date. This Act takes effect upon 
23becoming law.