IL SB2161

Amends the Contractor Prompt Payment Act to cap retainage withholding at 5% of payments earned by contractors and subcontractors on construction contracts.

Requires owners to pay contractors within 15 calendar days after approving a payment application, or within 15 days if the application is deemed approved after 25 days without written objection.

Mandates contractors pay subcontractors within 15 calendar days of receiving payment from the owner for work completed, with payment of the full amount earned based on work performed.

Allows owners to withhold payment only for the reasonable value of work found to be non-conforming with the contract, requiring written notification of the amount and reason for withholding within 25 days of receiving a payment application.

Takes effect January 1, 2014.