HB1224 - 104th General Assembly (2025-2026)

GOVT CONTRACT RETAINAGE
Last Action
08/15/2025 - House: Public Act . . . . . . . . . 104-0168
Statutes Amended In Order of Appearance
New Act  
30 ILCS 540/1  from Ch. 127, par. 132.401
Synopsis As Introduced
Creates the State Agency Retainage Act. Provides that, if a State agency determines that satisfactory progress has not been achieved by a contractor or subcontractor during any period for which a payment is to be made, a percentage of the payment may be retained by the State agency. Prohibits the amount of retainage under the Act from exceeding 10% of the amount of any and all draw amounts submitted and approved under the terms of the contract until the contract is 50% completed. Prohibits retainage of more than 5% of the contract of the amount of any and all draw amounts submitted and approved under the terms of the contract for the duration of the contract. Authorizes retainage to be adjusted as the contract approaches completion to recognize better than expected performance, the ability to rely on alternative safeguards, and other factors. Further provides that on completion of all contract requirements, amounts retained under the Act must be paid promptly. Defines the terms "retainage" and "State agency". Amends the State Prompt Payment Act. Specifies that the State Prompt Payment Act does not apply to retainage withheld under the State Agency Retainage Act.

House Floor Amendment No. 3
Replaces everything after the enacting clause with the provisions of the introduced bill with the following changes. Deletes the provisions that amended the State Prompt Payment Act. Provides that "retainage" does not include moneys withheld from grants to entities for capital improvements to non-State property. Provides that, if the contractor or subcontractor has displayed unsatisfactory performance on previous State agency projects resulting in a low performance score or suspension of prequalification, the State agency may apply retainage from the beginning of the project. Provides that, notwithstanding any other provision of law, if a State agency has not withheld retainage from a payment to a contractor on a project, then that contractor may not withhold retainage from a payment to a subcontractor for the same project. Provides that, if a State agency has withheld retainage from a contractor under the Act, then the contractor may withhold retainage from a payment to a subcontractor, but only to the extent that the amount retained from payment to the contractor by the State agency is attributable to a failure on the part of the subcontractor to make satisfactory progress with respect to the subcontractor's contractual obligations. Specifies that the Act's limitations on retainage from subcontracts apply only to subcontracts that are entered into on or after the Act's effective date of the Act in connection with a State construction contract that is subject to the Act. Effective July 1, 2026.

Senate Committee Amendment No. 1
Deletes reference to:
New Act  
30 ILCS 540/1  from Ch. 127, par. 132.401
Adds reference to:
30 ILCS 550/1  from Ch. 29, par. 15
Replaces everything after the enacting clause. Amends the Public Construction Bond Act. Provides that, before the completion of 50% of the contract for public works, the State or a local governmental unit, except for the Department of Transportation, may not withhold retainage from any payment to a contractor who furnishes the bond or bond substitute required by the Act in an amount in excess of 10% of any payment made before the date of completion of 50% of the contract for public works. Provides that, when a contract for public works is 50% complete, the State or the local governmental unit, except for the Department of Transportation, shall reduce the retainage so that no more than 5% is held. Allows a State agency, subject to these limitations, to withhold as retainage a portion of the moneys from the payment of a contract that is entered into on or after the effective date of the amendatory Act if and only if the State agency determines that satisfactory progress has not been achieved by a contractor or subcontractor during any period for which a payment is to be made. Requires satisfactory progress to be clearly provided for in the contract between the State agency and the contractor or subcontractor. Provides that retainage may not be used as a substitute for good contract management, and the State agency may not withhold funds without cause. Provides that determinations to retain and the specific amount to be withheld must be made by the State agency on a case-by-case basis based on the performance of milestones under the current contract as provided for in the contract between the State agency and the contractor. Prohibits a contractor from withholding retainage from a subcontractor except to the extent a State agency has withheld retainage from the contractor which is attributable to that subcontractor's subcontract. Defines "retainage". Provides that nothing in the amendatory Act may be construed to modify any provision of the State Prompt Payment Act or the Local Government Prompt Payment Act. Effective June 1, 2027.

Senate Floor Amendment No. 3
Provides that the provision does not apply to the Illinois State Toll Highway Authority.
Actions
DateChamberAction
01/09/2025HouseFiled with the Clerk by Rep. William "Will" Davis
01/09/2025HouseFirst Reading
01/09/2025HouseReferred to Rules Committee
01/28/2025HouseAdded Co-Sponsor Rep. Dagmara Avelar
01/29/2025HouseAdded Co-Sponsor Rep. Diane Blair-Sherlock
02/06/2025HouseAdded Co-Sponsor Rep. Harry Benton
02/11/2025HouseAssigned to State Government Administration Committee
02/19/2025HouseAdded Co-Sponsor Rep. Rita Mayfield
02/19/2025HouseDo Pass / Short Debate State Government Administration Committee; 009-000-000
02/20/2025HousePlaced on Calendar 2nd Reading - Short Debate
02/26/2025HouseHouse Floor Amendment No. 1 Filed with Clerk by Rep. William "Will" Davis
02/26/2025HouseHouse Floor Amendment No. 1 Referred to Rules Committee
03/04/2025HouseHouse Floor Amendment No. 1 Rules Refers to State Government Administration Committee
03/07/2025HouseAdded Co-Sponsor Rep. Matt Hanson
03/14/2025HouseAdded Co-Sponsor Rep. Martin McLaughlin
03/14/2025HouseRemoved Co-Sponsor Rep. Martin McLaughlin
03/19/2025HouseHouse Floor Amendment No. 2 Filed with Clerk by Rep. William "Will" Davis
03/19/2025HouseHouse Floor Amendment No. 2 Referred to Rules Committee
03/19/2025HouseAdded Chief Co-Sponsor Rep. Nicholas K. Smith
03/20/2025HouseHouse Floor Amendment No. 2 Rules Refers to State Government Administration Committee
03/26/2025HouseSecond Reading - Short Debate
03/26/2025HouseHeld on Calendar Order of Second Reading - Short Debate
04/02/2025HouseHouse Floor Amendment No. 3 Filed with Clerk by Rep. William "Will" Davis
04/02/2025HouseHouse Floor Amendment No. 3 Referred to Rules Committee
04/07/2025HouseAdded Co-Sponsor Rep. Jennifer Sanalitro
04/07/2025HouseHouse Floor Amendment No. 3 Rules Refers to State Government Administration Committee
04/07/2025HouseHouse Floor Amendment No. 3 Recommends Be Adopted State Government Administration Committee; 005-003-000
04/07/2025HouseRemoved Co-Sponsor Rep. Jennifer Sanalitro
04/08/2025HouseAdded Co-Sponsor Rep. La Shawn K. Ford
04/09/2025HouseHouse Floor Amendment No. 3 Adopted
04/09/2025HousePlaced on Calendar Order of 3rd Reading - Short Debate
04/09/2025HouseThird Reading - Short Debate - Passed 079-035-000
04/09/2025HouseHouse Floor Amendment No. 1 Tabled
04/09/2025HouseHouse Floor Amendment No. 2 Tabled
04/10/2025SenateArrive in Senate
04/10/2025SenatePlaced on Calendar Order of First Reading
04/10/2025SenateChief Senate Sponsor Sen. Willie Preston
04/10/2025SenateFirst Reading
04/10/2025SenateReferred to Assignments
04/23/2025SenateAssigned to Executive
05/09/2025SenateRule 2-10 Committee Deadline Established As May 23, 2025
05/23/2025SenateRule 2-10 Committee Deadline Established As June 1, 2025
05/27/2025SenateSenate Committee Amendment No. 1 Filed with Secretary by Sen. Willie Preston
05/27/2025SenateSenate Committee Amendment No. 1 Referred to Assignments
05/28/2025SenateSenate Committee Amendment No. 1 Assignments Refers to Executive
05/28/2025SenateRule 2-10 Third Reading/Passage Deadline Established As June 1, 2025
05/28/2025SenateSenate Committee Amendment No. 1 Adopted
05/28/2025SenateDo Pass as Amended Executive; 013-000-000
05/28/2025SenatePlaced on Calendar Order of 2nd Reading May 29, 2025
05/29/2025SenateSecond Reading
05/29/2025SenatePlaced on Calendar Order of 3rd Reading May 30, 2025
05/29/2025SenateSenate Floor Amendment No. 2 Filed with Secretary by Sen. Willie Preston
05/29/2025SenateSenate Floor Amendment No. 2 Referred to Assignments
05/30/2025SenateSenate Floor Amendment No. 3 Filed with Secretary by Sen. Willie Preston
05/30/2025SenateSenate Floor Amendment No. 3 Referred to Assignments
05/30/2025SenateSenate Floor Amendment No. 2 Assignments Refers to Executive
05/30/2025SenateSenate Floor Amendment No. 3 Assignments Refers to Executive
05/30/2025SenateSenate Floor Amendment No. 2 Postponed - Executive
05/30/2025SenateSenate Floor Amendment No. 3 Recommend Do Adopt Executive; 012-000-000
05/31/2025SenateRecalled to Second Reading
05/31/2025SenateSenate Floor Amendment No. 3 Adopted; Preston
05/31/2025SenatePlaced on Calendar Order of 3rd Reading
05/31/2025SenateThird Reading - Passed; 056-000-000
05/31/2025SenateSenate Floor Amendment No. 2 Tabled Pursuant to Rule 5-4(a)
05/31/2025SenateAdded as Alternate Chief Co-Sponsor Sen. Mattie Hunter
05/31/2025SenateAdded as Alternate Chief Co-Sponsor Sen. Lakesia Collins
05/31/2025SenateAlternate Chief Co-Sponsor Changed to Sen. Lakesia Collins
05/31/2025SenateAlternate Chief Co-Sponsor Changed to Sen. Mattie Hunter
05/31/2025HouseArrived in House
05/31/2025HousePlaced on Calendar Order of Concurrence Senate Amendment(s) 1, 3
05/31/2025SenateAdded as Alternate Co-Sponsor Sen. Napoleon Harris, III
05/31/2025HouseSenate Committee Amendment No. 1 Motion Filed Concur Rep. William "Will" Davis
05/31/2025HouseSenate Floor Amendment No. 3 Motion Filed Concur Rep. William "Will" Davis
05/31/2025HouseSenate Committee Amendment No. 1 Motion to Concur Referred to Rules Committee
05/31/2025HouseSenate Floor Amendment No. 3 Motion to Concur Referred to Rules Committee
05/31/2025HouseSenate Committee Amendment No. 1 Motion to Concur Recommends Be Adopted Rules Committee; 005-000-000
05/31/2025HouseSenate Floor Amendment No. 3 Motion to Concur Recommends Be Adopted Rules Committee; 005-000-000
05/31/2025HouseMotion Filed to Suspend House Rule(s) for Immediate Consideration Rep. Bob Morgan
05/31/2025HouseMotion Prevailed to Suspend Rule 073-039-000
06/01/2025HouseSenate Committee Amendment No. 1 House Concurs 086-028-000
06/01/2025HouseSenate Floor Amendment No. 3 House Concurs 086-028-000
06/01/2025HouseHouse Concurs
06/01/2025HousePassed Both Houses
06/01/2025SenateAdded as Alternate Co-Sponsor Sen. Laura M. Murphy
06/24/2025HouseSent to the Governor
08/15/2025HouseGovernor Approved
08/15/2025HouseEffective Date June 1, 2027
08/15/2025HousePublic Act . . . . . . . . . 104-0168