Bill Text: IL SB1395 | 2015-2016 | 99th General Assembly | Introduced

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Bill Title: 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. Effective January 1, 2016.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2015-04-24 - Rule 3-9(a) / Re-referred to Assignments [SB1395 Detail]

Download: Illinois-2015-SB1395-Introduced.html

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99TH GENERAL ASSEMBLY State of Illinois 2015 and 2016 SB1395 Introduced 2/20/2015, by Sen. Wm. Sam McCann 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. Effective January 1, 2016.
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A BILL FOR
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AN ACT concerning business.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Contractor Prompt Payment Act is amended by
changing Section 10 as follows:
(815 ILCS 603/10)
Sec. 10. Construction contracts.
(a) All construction contracts shall be deemed to provide
the following:
(1) If a contractor has performed in accordance with
the provisions of a construction contract and the payment
application has been approved by the owner or the owner's
agent, the owner shall pay the amount due to the contractor
pursuant to the payment application not more than 15
calendar days after the approval. The payment application
shall be deemed approved 25 days after the owner receives
it unless the owner provides, before the end of the 25-day
period, a written statement of the amount withheld and the
reason for withholding payment. If the owner finds that a
portion of the work not in accordance with the contract,
payment may be withheld for the reasonable value of that
portion only. Payment shall be made for any portion of the
contract for which the work has been performed in

SB1395 - 2 - LRB099 06253 JLS 26321 b
accordance with the provisions of the contract.
Instructions or notification from an owner to his or her
lender or architect to process or pay a payment application
does not constitute approval of the payment application
under this Act.
(2) If a subcontractor has performed in accordance with
the provisions of his or her contract with the contractor
or subcontractor and the work has been accepted by the
owner, the owner's agent, or the contractor, the contractor
shall pay to his or her subcontractor and the subcontractor
shall pay to his or her subcontractor, within 15 calendar
days of the contractor's receipt from the owner or the
subcontractor's receipt from the contractor of each
periodic payment, final payment, or receipt of retainage
monies, the full amount received for the work of the
subcontractor based on the work completed or the services
rendered under the construction contract.
(b) Under a construction contract, it is unlawful to
withhold more than 5% retainage on payments earned by
contractors and subcontractors.
(Source: P.A. 95-567, eff. 8-31-07.)
Section 99. Effective date. This Act takes effect January
1, 2016.