*LRB10405978JRC16011b**LRB10405978JRC24619a* SB0074 104TH GENERAL ASSEMBLY State of Illinois and 2026 SB0074 Introduced 1/13/2025, by Sen.

Willie Preston SYNOPSISFiled: AS INTRODUCED:

New3/31/2025 Act10400SB0074sam001 ILCSLRB104 540/105978 fromJRC Ch.24619 a AMENDMENT TO SENATE BILL 74 AMENDMENT NO.

127,______. par.

132.401Amend CreatesSenate Bill 74 by replacing everything after the Stateenacting Agencyclause Retainagewith Act.the following:

Provides"Section that,1. 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 approved estimated amount under the terms of the contract until the contract is 50% completed.

Prohibits retainage of more than 5% 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.

LRB104 05978 JRC 16011 b A BILL FOR SB0074 LRB104 05978 JRC 16011 b AN ACT concerning government.

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

Section 1.

"Retainage" means a portion of moneymoneys withheld from the payment of a contract for a specified period of time to ensure that a contractor or subcontractor completes a construction project in the manner specified in the contract.

"Retainage" does not include (i) moneys withheld due to violations of local, State, or federal laws.laws or (ii) moneys withheld from grants to entities for capital improvements to non-State property.

"State"Satisfactory agency"progress" hasmeans the meaningadvancement givenof toproject "Statework agencies"without deficiency and in Sectionaccordance 1-7with ofindustry 10400SB0074sam001 -2- LRB104 05978 JRC 24619 a standards and the Illinoiscontractual Stateschedule Auditingand Act.budget.

"State agency" has the meaning given in Section 1-7 of the Illinois State Auditing Act.

IfSubject to the limitations in Section 15, a State agency may 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 this 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,made. a percentage of the payment may be retained by the State agency.

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.

Determinations to retain and the specific amount to be SB0074withheld -must 2be -made LRB104by 05978the JRCState 16011agency bon withhelda case-by-case basis and must be madebased byon an assessment of past performance and the Statelikelihood agencythat onsuch aperformance case-by-casewill basis.continue.

TheseThe determinationsState mustagency beshall basedre-evaluate onits andetermination assessmentat ofsubsequent pastproject performancemilestones. and the likelihood that such performance will continue.

The amount of retainage withheld may not exceed 10% of the contract amount until the contract is 50% completed, may not exceed 5% for the duration of the contract, and may be adjusted as the contract approaches completion to recognize better than expected performance, the ability to rely on alternative safeguards, and other factors.

Upon completion of all contract requirements, amounts retained under this Act must be paid promptly.

TheLimitations Stateon Promptthe Paymentamount Actof isretainage. amended by changing Section 1 as follows:

(30The ILCSamount 540/1)of (fromretainage Ch.withheld may not exceed 10% of the amount 10400SB0074sam001 -3- LRB104 05978 JRC 24619 a of the draw amounts submitted and approved under the terms of the contract until the contract is 50% completed, may not exceed 5% of the amount of the draw amounts submitted and approved under the terms of the contract for the duration of the contract, and may be decreased as the contract approaches completion to recognize better than expected performance, the ability to rely on alternative safeguards, and other factors.

127,Upon par.completion of all contract requirements, amounts retained under this Act must be paid promptly.

132.401)Section Sec.20.

1.Limitations on retainage from subcontractors.

This(a) ActNotwithstanding appliesany toother anyprovision Stateof officiallaw, orif agencya authorizedState toagency providehas fornot paymentwithheld retainage from Statea funds,payment byto virtuea ofcontractor anyon appropriationa ofproject, thethen Generalthat Assembly,contractor formay goodsnot orwithhold servicesretainage furnishedfrom a payment to a subcontractor for the State.same project.

This(b) ActIf doesa notState applyagency tohas withheld retainage withheldfrom undera contractor in accordance with Section 10, 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 Agencyagency Retainageis Act.attributable to a failure on the part of the subcontractor to make satisfactory progress with respect to the subcontractor's contractual obligations.

For(c) purposesThis ofSection thisapplies Act,only "goods or services furnished to thesubcontracts State"entered includeinto buton areor notafter limitedthe toeffective (i)date coveredof healththis careAct provided to eligible members and their covered dependents in accordanceconnection with thea State Employeesconstruction Groupcontract Insurancethat Actis ofsubject 1971,to includingthe coverageprovisions through10400SB0074sam001 a-4- physician-owned health SB0074 - 3 - LRB104 05978 JRC 1601124619 b maintenance organization under Section 6.1 of that Act, (ii) prevention, intervention, or treatment services and supports for persons with developmental disabilities, mental health services, alcohol and substance abuse services, rehabilitation services, and early intervention services provided by a vendor, and (iii) prevention, intervention, or treatment services and supports for youth provided by a vendor by virtue of aSection contractual10.". grant agreement.

ForSection the99. purposes of items (ii) and (iii), a vendor includes but is not limited to sellers of goods and services, including community-based organizations that are licensed to provide prevention, intervention, or treatment services and supports for persons with developmental disabilities, mental illness, and substance abuse problems, or that provides prevention, intervention, or treatment services and supports for youth.

ForEffective thedate. purposes of this Act, "appropriate State official or agency" is defined as the Director or Chief Executive or his designee of that State agency or department or facility of such agency or department.

WithThis respect to covered health care provided to eligible members and their dependents in accordance with the State Employees Group Insurance Act oftakes 1971,effect "appropriateJuly State1, official2026.". or agency" also includes an administrator of a program of health benefits under that Act.

As used in this Act, "eligible member" means a member who is eligible for health benefits under the State Employees Group Insurance Act of 1971, and "member" and "dependent" have SB0074 - 4 - LRB104 05978 JRC 16011 b the meanings ascribed to those terms in that Act.

As used in this Act, "a proper bill or invoice" means a bill or invoice, including, but not limited to, an invoice issued under a contractual grant agreement, that includes the information necessary for processing the payment as may be specified by a State agency and in rules adopted in accordance with this Act.

Beginning on and after July 1, 2021, "a proper bill or invoice" shall also include the names of all subcontractors or subconsultants to be paid from the bill or invoice and the amounts due to each of them, if any.