Illinois Compiled Statutes
Chapter 50 - LOCAL GOVERNMENT
50 ILCS 505/ - Local Government Prompt Payment Act.

(50 ILCS 505/1) (from Ch. 85, par. 5601)
Sec. 1.

This Act shall be known and may be cited as the "Local
Government Prompt Payment Act".

(Source: P.A. 84-731.)
 
(50 ILCS 505/2) (from Ch. 85, par. 5602)
Sec. 2.

This Act shall apply to every county, township, municipality,
municipal corporation, school district, school board, forest preserve
district, park district, fire protection district, sanitary district and
all other local governmental units. It shall not apply to the State or any
office, officer, department, division, bureau, board, commission,
university or similar agency of the State, except as provided in Section 7.

(Source: P.A. 85-1159.)
 
(50 ILCS 505/3) (from Ch. 85, par. 5603)
Sec. 3. The appropriate local governmental official or agency
receiving goods or services must approve or disapprove a bill from a vendor
or contractor for goods or services furnished the local governmental agency
within 30 days after the receipt of such bill or within 30 days after the
date on which the goods or services were received, whichever is later.
If one or more items on a construction related bill or invoice are disapproved, but not the entire bill or invoice, then the portion that is not disapproved shall be paid. When safety or quality assurance testing of goods by the local governmental
agency is necessary before the approval or disapproval of a bill and such
testing cannot be completed within 30 days after receipt of the goods,
approval or disapproval of the bill must be made immediately upon
completion of the testing or within 60 days after receipt of the goods,
whichever occurs first. Written notice shall be mailed to the vendor or
contractor immediately if a bill is disapproved.

(Source: P.A. 94-972, eff. 7-1-07.)
 
(50 ILCS 505/4) (from Ch. 85, par. 5604)
Sec. 4.

Any bill approved for payment pursuant to Section 3 shall be
paid within 30 days after the date of approval. If payment is not
made within such 30 day period, an interest penalty of 1% of any amount
approved and unpaid shall be added for each month or fraction thereof after
the expiration of such 30 day period, until final payment is made.

(Source: P.A. 84-731.)
 
(50 ILCS 505/5) (from Ch. 85, par. 5605)
Sec. 5.

If the local governmental official or agency whose approval
is required for any bill fails to approve or disapprove that bill within
the period provided for approval by Section 3, the penalty for late payment
of that bill shall be computed from the date 60 days after the receipt of
that bill or the date 60 days after the goods or services are received,
whichever is later.

(Source: P.A. 84-731.)
 
(50 ILCS 505/6) (from Ch. 85, par. 5606)
Sec. 6.

The time periods specified in Sections 3, 4 and 5, as they
pertain to particular goods or services, are superseded by any greater time
periods as agreed to by the local government agency and the particular
vendor or contractor.

(Source: P.A. 87-773.)
 
(50 ILCS 505/7) (from Ch. 85, par. 5607)
Sec. 7.

If the funds from which the local governmental official or
agency is to pay for goods or services are funds appropriated or controlled
by the State, then the local governmental official or agency may certify to
the State Treasurer, Comptroller and State agency responsible for
administering such funds that a specified amount is anticipated to be
necessary within 45 days after certification to pay for specified goods or
services and that such amount is not currently available to the local
governmental official or agency. The State Treasurer, Comptroller and
State agency shall than expedite distribution of funds to the local
governmental unit to make such payments. The certification shall be mailed
on the date of certification by certified U. S. mail, return receipt
requested. Any interest penalty incurred by the local governmental unit
under Section 3 or 4 because of the failure of funds to be distributed from
the State to the local governmental unit within the 45 day period shall be
reimbursed by the State to the local governmental unit as an amount in
addition to the funds to be otherwise distributed from the State.

(Source: P.A. 85-1159.)
 
(50 ILCS 505/9) (from Ch. 85, par. 5609)
Sec. 9. Payments to subcontractors and material suppliers; failure to make timely payments; additional amount due.
When a contractor receives any payment, the contractor shall
pay each subcontractor and material supplier in proportion to the work
completed by each subcontractor and material supplier their application
less any retention. If the contractor receives less than the full payment
due under the public construction contract, the contractor shall be
obligated to disburse on a pro rata basis those funds received, with the
contractor, subcontractors and material suppliers each receiving a prorated
portion based on the amount of payment. All interest payments received pursuant to Section 4 also shall be disbursed to subcontractors and material suppliers to whom payment has been delayed, on a pro rata basis. When, however, the public owner
does not release the full payment due under the contract because there are
specific areas of work or materials the contractor is rejecting or because
the contractor has otherwise determined such areas are not suitable for
payment, then those specific subcontractors or suppliers involved shall not
be paid for that portion of the work rejected or deemed not suitable for
payment and all other subcontractors and suppliers shall be paid in full.
If the contractor, without reasonable cause, fails to make any payment to
his subcontractors and material suppliers within 15 days after receipt of
payment under the public construction contract, the contractor shall pay to
his subcontractors and material suppliers, in addition to the payment due
them, interest in the amount of 2% per month, calculated from the
expiration of the 15-day period until fully paid. This Section shall
also apply to any payments made by subcontractors and material suppliers to
their subcontractors and material suppliers and to all payments made to
lower tier subcontractors and material suppliers throughout the contracting
chain.

(Source: P.A. 94-972, eff. 7-1-07.)

Structure Illinois Compiled Statutes