95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
HB4920


 
Introduced , 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, and that upon completion of 50% of the work under the contract, retainage may not exceed 2.5%. Effective immediately.
















LRB095 18062 WGH 44145 b

















 


 


A BILL FOR









 











HB4920

LRB095 18062 WGH 44145 b






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    AN ACT concerning business.

 
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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 Contractor Prompt Payment Act is amended  by 
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changing Section 10 as follows:
 
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    (815 ILCS 603/10)

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    Sec. 10. Construction contracts.   
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    (a) All construction contracts shall be deemed to provide 
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the following:
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        (1) If a contractor has performed in accordance with 
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    the provisions of a construction contract and the payment 
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    application has been approved by the owner or the owner's 
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    agent, the owner shall pay the amount due to the contractor 
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    pursuant to the payment application not more than 15 
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    calendar days after the approval.  The payment application 
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    shall be deemed approved 25 days after the owner receives 
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    it unless the owner provides, before the end of the 25-day 
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    period, a written statement of the amount withheld and the 
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    reason for withholding payment.  If the owner finds that  a 
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    portion of the work not  in accordance with the contract, 
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    payment may be withheld for the reasonable value of that 
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    portion only.  Payment shall be made for any portion of the 
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    contract for which the work has been performed in 
 


 






HB4920
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LRB095 18062 WGH 44145 b




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

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    (b) Under a construction contract, it is unlawful to 
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withhold more than 5% retainage on payments earned by 
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contractors and subcontractors. Upon completion of 50% of the 
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work under the contract, retainage may not exceed 2.5%. 
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(Source: P.A. 95-567, eff. 8-31-07.)

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