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| 1 | AN ACT concerning business.
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| 2 | Be it enacted by the People of the State of Illinois,
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| 3 | represented in the General Assembly:
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| 4 | Section 5. The Contractor Prompt Payment Act is amended by | ||||||
| 5 | changing Section 10 as follows: | ||||||
| 6 | (815 ILCS 603/10)
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| 7 | Sec. 10. Construction contracts. | ||||||
| 8 | (a) All construction contracts shall be deemed to provide | ||||||
| 9 | the 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 | ||||||
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| 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.
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| 18 | (b) Under a construction contract, it is unlawful to | ||||||
| 19 | withhold more than 5% retainage on payments earned by | ||||||
| 20 | contractors and subcontractors. | ||||||
| 21 | (Source: P.A. 95-567, eff. 8-31-07.)
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| 22 | Section 99. Effective date. This Act takes effect upon | ||||||
| 23 | becoming law.
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