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90_HB1111
New Act
Creates the Construction Trust Fund Act. Provides that
moneys paid under a contract by an owner to a contractor or
by an owner or contractor to a subcontractor for work done or
materials furnished for or about a building shall be held in
trust for the purpose of paying those who did the work or
furnished the materials. The moneys need not be held in
separate accounts; commingling does not violate this Act.
Provides that any trustee who knowingly retains or uses the
moneys held in trust for any purpose other than to pay those
subcontractors for whom the moneys are held shall be
personally liable to any person damaged by the action.
Effective immediately.
LRB9003240SMsb
LRB9003240SMsb
1 AN ACT regarding trust relationships in the construction
2 industry.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 1. Short title. This Act may be cited as the
6 Construction Trust Fund Act.
7 Section 5. Purpose. This Act provides that an officer,
8 director, or managing agent of a contractor or subcontractor
9 who has direction over or control of money held in trust by
10 the contractor or subcontractor for certain subcontractors is
11 a trustee for the purposes of paying the money to the
12 subcontractors who are entitled to it; provides which
13 individuals are personally liable for damages; alters the
14 standard by which certain persons who retain or use certain
15 money held in trust may be personally liable to certain
16 persons under certain circumstances; and generally relates to
17 trust relationships in the construction industry.
18 Section 10. Managing agent defined. As used in this
19 Act, "managing agent" means an employee of a contractor or
20 subcontractor who is responsible for the direction over or
21 control of money held in trust by the contractor or
22 subcontractor under Section 15 of this Act.
23 Section 15. Money to be held in trust; trustees.
24 (a) Any moneys paid under a contract by an owner to a
25 contractor, or by the owner or contractor to a subcontractor
26 for work done or materials furnished or both, for or about a
27 building by any subcontractor, shall be held in trust by the
28 contractor or subcontractor, as trustee, for those
29 contractors who did work or furnished materials, or both, for
-2- LRB9003240SMsb
1 or about the building, for purposes of paying those
2 subcontractors.
3 (b) An officer, director, or managing agent of a
4 contractor or subcontractor who has direction over or control
5 of money held in trust by a contractor or subcontractor under
6 subsection (a) of this Section is a trustee for the purpose
7 of paying the money to the subcontractors who are entitled to
8 it.
9 Section 20. How trust moneys held; commingling.
10 (a) Nothing contained in this Act shall be construed as
11 requiring moneys held in trust by a contractor or
12 subcontractor under this Section to be placed in a separate
13 account.
14 (b) If a contractor or subcontractor commingles moneys
15 held in trust under this Section with other moneys, the mere
16 commingling of the moneys does not constitute a violation of
17 this Act.
18 Section 25. Violation of this Act. Any officer,
19 director, or managing agent of any contractor or
20 subcontractor, who knowingly retains or uses the moneys held
21 in trust under this Act, or any part thereof, for any purpose
22 other than to pay those subcontractors for whom the moneys
23 are held in trust, shall be personally liable to any person
24 damaged by the action.
25 Section 99. Effective date. This Act takes effect upon
26 becoming law.