State of Illinois
Public Acts
92^nd General Assembly

Public Act 92-0270

HB1904 Enrolled                                LRB9205725DHmb

    AN ACT in relation to highways.

    Be it enacted by the People of  the  State  of  Illinois,
represented in the General Assembly:

    Section  5.   The  Illinois  Highway  Code  is amended by
adding Section 4-104 as follows:

    (605 ILCS 5/4-104 new)
    Sec.  4-104.  Subcontractors'  trust  agreements.    This
Section applies to subcontractors' retainage amounts expected
to   be   equal   to  or  greater  than  $20,000.   Upon  the
contractor's receipt of the first partial or progress payment
from the Department, at the request of the subcontractor  and
with  the  approval  of  the contractor, the retainage of the
subcontract shall be deposited under a trust  agreement  with
an Illinois financial institution, whose deposits are insured
by an agency or instrumentality of the federal government, of
the subcontractor's choice and subject to the approval of the
contractor.  The  subcontractor shall receive any interest on
the amount deposited.
    Upon application by the subcontractor, a trust  agreement
by the financial institution and the contractor must contain,
at a minimum, the following provisions:
    (1)  The amount to be deposited subject to the trust.
    (2)  The  terms  and  conditions  of  payment  in case of
default of the subcontractor.
    (3)  The  termination  of  the   trust   agreement   upon
completion of the subcontract.
    The   subcontractor  is  responsible  for  obtaining  the
written consent of the  financial  institution  trustee.  Any
costs or service fees must be borne by the subcontractor. The
trust  agreement may, at the discretion of the contractor and
upon request of the subcontractor, become  operative  at  the
time of the first partial payment in accordance with existing
statutes  and  Department  procedures.  Subcontractors' trust
agreements  are  voluntary  and  supersede  any   prohibition
regarding retainage that may be adopted by any transportation
agency.
    This Section applies to all subcontracts in effect on and
after  the  effective date of this amendatory Act of the 92nd
General Assembly.

    Section 99.  Effective date.  This Act takes effect  upon
becoming law.
    Passed in the General Assembly May 15, 2001.
    Approved August 07, 2001.