IL SB1266

Contractors may require either a performance bond OR retention of payment from subcontractors, but not both as part of subcontract agreements.

Contractors must pay subcontractors and material suppliers within 15 days of receiving payment from the State, in proportion to work completed.

Contractors who fail to pay subcontractors without reasonable cause within 15 days must pay 2% monthly interest from the expiration of the 15-day period until fully paid.

Subcontractors or material suppliers may file a written notice with the State agency if a contractor fails to pay; the State must hold an administrative hearing within 15 days to determine if payment is owed.

Contractors who fail to pay within 15 days after an administrative law judge's finding are barred from entering into State public construction contracts for one year.