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| Public Act 094-0672 |
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AN ACT concerning finance.
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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 State Prompt Payment Act is amended by | ||||
changing
Section 7 as follows:
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(30 ILCS 540/7)
(from Ch. 127, par. 132.407)
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Sec. 7. Payments to subcontractors and material suppliers.
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(a) When a State official or agency responsible for | ||||
administering a
contract submits a voucher to the Comptroller | ||||
for
payment to a contractor, that State official or agency | ||||
shall promptly make
available electronically
the voucher | ||||
number, the date of the voucher, and
the amount of the voucher.
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The State official or agency responsible for administering the | ||||
contract shall
provide subcontractors and material suppliers, | ||||
known to the State official or
agency, with instructions on how | ||||
to access the electronic information. When a
contractor | ||||
receives any payment, the contractor shall
pay each | ||||
subcontractor and material supplier in proportion to the work
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completed by each subcontractor and material supplier their | ||||
application
less any retention. If the contractor receives less | ||||
than the full payment
due under the public construction | ||||
contract, the contractor shall be
obligated to disburse on a | ||||
pro rata basis those funds received, with the
contractor, | ||||
subcontractors and material suppliers each receiving a | ||||
prorated
portion based on the amount of payment. When, however, | ||||
the public owner
does not release the full payment due under | ||||
the contract because there are
specific areas of work or | ||||
materials the contractor is rejecting or because
the contractor | ||||
has otherwise determined such areas are not suitable for
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payment, then those specific subcontractors or suppliers | ||||
involved shall not
be paid for that portion of work rejected or | ||||
deemed not suitable for
payment and all other subcontractors | ||||
and suppliers shall be paid in full.
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(b) If the contractor, without reasonable cause, fails to | ||
make full
any payment of amounts due under subsection (a) to
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his subcontractors and material suppliers within 15 days after
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receipt of
payment under the public construction contract, the | ||
contractor shall pay to
his subcontractors and material | ||
suppliers, in addition to the payment due
them, interest in the | ||
amount of
2% per month, calculated from the
expiration of the | ||
15-day period until fully paid. This subsection shall
also | ||
apply to any payments made by subcontractors and material | ||
suppliers to
their subcontractors and material suppliers and to | ||
all payments made to
lower tier subcontractors and material | ||
suppliers throughout the contracting
chain.
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(1) If a contractor, without reasonable cause, fails to | ||
make payment in
full as
provided in subsection (a) within | ||
15 days after receipt of payment under the
public
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construction contract, any subcontractor or material | ||
supplier to whom payments
are owed
may file a written | ||
notice with the State official or agency setting forth the
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amount owed by
the contractor and the contractor's failure | ||
to timely pay the amount owed.
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(2) The State official or agency, within 15 days after | ||
receipt of a
subcontractor's
or material supplier's | ||
written notice of the failure to receive payment from
the | ||
contractor,
shall hold a hearing convened by an | ||
administrative law judge to determine whether the | ||
contractor withheld payment,
without
reasonable cause, | ||
from the subcontractors and material suppliers and what
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amount, if any,
is due to the subcontractors and material | ||
suppliers. The State official or
agency shall
provide | ||
appropriate notice to the parties of the date, time, and | ||
location of
the hearing. Each contractor, subcontractor, | ||
and material supplier has the right to be represented by | ||
counsel at the hearing and to cross-examine witnesses and | ||
challenge documents.
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(3) If there is a finding by the administrative law | ||
judge that the contractor failed
to make
payment in full, | ||
without reasonable cause, as provided in subsection (a), | ||
then
the administrative law judge shall, in writing, direct | ||
the contractor to pay the amount
owed to the
subcontractors | ||
and material suppliers plus interest within 15 days after | ||
the
finding.
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(4) If a contractor fails to make full payment within | ||
15 days after the
administrative law judge's finding, then | ||
the contractor shall be barred from
entering into a State
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public construction contract for a period of one year | ||
beginning on the date of
the administrative law judge's | ||
finding.
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(Source: P.A. 87-773.)
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