IL HB1224

Amends the Public Construction Bond Act to extend retainage rules to State agencies (not just local governmental units), limiting retainage to 10% before 50% contract completion and 5% thereafter, with an exception for the Department of Transportation

Allows State agencies to withhold retainage only if they determine a contractor or subcontractor has not achieved satisfactory progress, with progress milestones required to be clearly defined in the contract

Prohibits contractors from withholding retainage from subcontractors except to the extent the State agency has withheld retainage attributable to that subcontractor's work

Defines "retainage" as money withheld to ensure contract completion, explicitly excluding funds withheld for legal violations or grants for capital improvements to non-State property

Takes effect June 1, 2027, and excludes the Illinois State Toll Highway Authority from the new State agency retainage provisions