Community Bankers Association says SB 3052 is detrimental to commercial construction
The Community Bankers Association of Illinois (CBAI) believes Senate Bill 3052 will be a highly disruptive addition to the state's business scene.
The bill would allow the state to dictate when contractor fees held on retainer by commercial real-estate developers would be released. Typically 5 to 10 percent of the money earned by contractors is withheld until a project is complete to ensure there is money available to cover emergency costs and to make sure contractors finish their jobs.
"CBIA, which is a coalition that includes the Illinois Realtor's Association, Credit Union League of Illinois and the Illinois Bankers Association, are all opposed to the bill," Jerry Peck, senior vice president of Governmental Relations for CBAI recently told the Prarie State Wire.
If signed into law, the bill would "disrupt commercial construction practices and override contract provisions between private parties in construction projects," Peck said.
"The General Assembly has repeatedly and soundly rejected bills similar to SB3052 for well over a decade, recognizing the clear danger that this concept poses to private contract rights and local economies in our state," the CBIA explained in a fact sheet shared by Peck.
The sheet also said that SB 3052 would allow the state to choose "winners and losers in private commercial construction agreements."
The CBIA also fears that the bill would interfere with private contracts, increase risks for lenders and owners, and create regulatory risks for Federally Chartered Financial Institutions of all sizes.
The bill was narrowly approved by the House Executive Committee in May and was then sent to the House floor for consideration by the entire House of Representatives before it was sent to the governor in June.
Proponents of SB 3052 include Construction Industry Service Corporation (CISCO), Chicago Roofing Contractors Association, DuPage Building and Construction Trades Council, to name a few.