Rep. Martin J. Moylan

Filed: 4/25/2017

 

 


 

 


 
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1
AMENDMENT TO HOUSE BILL 3751

2    AMENDMENT NO. ______. Amend House Bill 3751, AS AMENDED, by
3replacing everything after the enacting clause with the
4following:
 
5    "Section 5. The Public Construction Bond Act is amended by
6changing Section 3 as follows:
 
7    (30 ILCS 550/3)
8    Sec. 3. Builder or developer cash bond or other surety.
9    (a) A county or municipality may not require an a cash
10bond, irrevocable letter of credit, surety bond, or letter of
11commitment issued by a bank, savings and loan association,
12surety, or insurance company from a builder or developer to
13guarantee completion of a project improvement when the builder
14or developer has filed with the county or municipal clerk a
15current, irrevocable letter of credit, surety bond, or letter
16of commitment issued by a bank, savings and loan association,

 

 

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1surety, or insurance company, deemed good and sufficient by the
2county or municipality accepting such security, in an amount
3equal to or greater than 110% of the amount of the bid on each
4project improvement. A builder or developer has the option to
5utilize a cash bond, irrevocable letter of credit, surety bond,
6or letter of commitment, issued by a bank, savings and loan
7association, surety, or insurance company, deemed good and
8sufficient by the county or municipality, to satisfy any cash
9bond requirement established by a county or municipality.
10Except for a municipality or county with a population of
111,000,000 or more, the county or municipality must approve and
12deem a surety or insurance company good and sufficient for the
13purposes set forth in this Section if the surety or insurance
14company is authorized by the Illinois Department of Insurance
15to sell and issue sureties in the State of Illinois.
16    (b) If a county or municipality receives an a cash bond,
17irrevocable letter of credit, or surety bond from a builder or
18developer to guarantee completion of a project improvement, the
19county or municipality shall (i) register the bond under the
20address of the project and the construction permit number and
21(ii) give the builder or developer a receipt for the bond. The
22county or municipality shall establish and maintain a separate
23account for all cash bonds received from builders and
24developers to guarantee completion of a project improvement.
25    (c) The county or municipality shall refund a cash bond to
26a builder or developer, or release the irrevocable letter of

 

 

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1credit or surety bond, within 60 days after the builder or
2developer notifies the county or municipality in writing of the
3completion of the project improvement for which the bond was
4required. For these purposes, "completion" means that the
5county or municipality has determined that the project
6improvement for which the bond was required is complete or a
7licensed engineer or licensed architect has certified to the
8builder or developer and the county or municipality that the
9project improvement has been completed to the applicable codes
10and ordinances. The county or municipality shall pay interest
11to the builder or developer, beginning 60 days after the
12builder or developer notifies the county or municipality in
13writing of the completion of the project improvement, on any
14bond not refunded to a builder or developer, at the rate of 1%
15per month.
16    (d) (Blank). A home rule county or municipality may not
17require or maintain cash bonds, irrevocable letters of credit,
18surety bonds, or letters of commitment issued by a bank,
19savings and loan association, surety, or insurance company from
20builders or developers in a manner inconsistent with this
21Section. This Section supersedes and controls over other
22provisions of the Counties Code or Illinois Municipal Code as
23they apply to and guarantee completion of a project improvement
24that is required by the county or municipality, regardless of
25whether the project improvement is a condition of annexation
26agreements. This Section is a denial and limitation under

 

 

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1subsection (i) of Section 6 of Article VII of the Illinois
2Constitution on the concurrent exercise by a home rule county
3or municipality of powers and functions exercised by the State.
4(Source: P.A. 96-1000, eff. 7-2-10.)
 
5    Section 10. The Counties Code is amended by changing
6Section 5-1123 as follows:
 
7    (55 ILCS 5/5-1123)
8    Sec. 5-1123. Builder or developer cash bond or other
9surety.
10    (a) A county may not require an a cash bond, irrevocable
11letter of credit, surety bond, or letter of commitment issued
12by a bank, savings and loan association, surety, or insurance
13company from a builder or developer to guarantee completion of
14a project improvement when the builder or developer has filed
15with the county clerk a current, irrevocable letter of credit,
16surety bond, or letter of commitment, issued by a bank, savings
17and loan association, surety, or insurance company, deemed good
18and sufficient by the county accepting such security, in an
19amount equal to or greater than 110% of the amount of the bid
20on each project improvement. A builder or developer has the
21option to utilize a cash bond, irrevocable letter of credit,
22surety bond, or letter of commitment issued by a bank, savings
23and loan association, surety, or insurance company, deemed good
24and sufficient by the county, to satisfy any cash bond

 

 

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1requirement established by a county. The county must approve
2and deem a surety or insurance company good and sufficient for
3the purposes set forth in this Section if the surety or
4insurance company is authorized by the Illinois Department of
5Insurance to sell and issue sureties in the State of Illinois.
6    (b) If a county receives an a cash bond, irrevocable letter
7of credit, or surety bond from a builder or developer to
8guarantee completion of a project improvement, the county shall
9(i) register the bond under the address of the project and the
10construction permit number and (ii) give the builder or
11developer a receipt for the bond. The county shall establish
12and maintain a separate account for all cash bonds received
13from builders and developers to guarantee completion of a
14project improvement.
15    (c) The county shall refund a cash bond to a builder or
16developer, or release the irrevocable letter of credit or
17surety bond, within 60 days after the builder or developer
18notifies the county in writing of the completion of the project
19improvement for which the bond was required. For these
20purposes, "completion" means that the county has determined
21that the project improvement for which the bond was required is
22complete or a licensed engineer or licensed architect has
23certified to the builder or developer and the county that the
24project improvement has been completed to the applicable codes
25and ordinances. The county shall pay interest to the builder or
26developer, beginning 60 days after the builder or developer

 

 

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1notifies the county in writing of the completion of the project
2improvement, on any bond not refunded to a builder or
3developer, at the rate of 1% per month.
4    (d) (Blank). A home rule county may not require or maintain
5cash bonds, irrevocable letters of credit, surety bonds, or
6other adequate securities from builders or developers in a
7manner inconsistent with this Section. This Section supersedes
8and controls over other provisions of this Code as they apply
9to and guarantee completion of a project improvement that is
10required by the county. This Section is a denial and limitation
11under subsection (i) of Section 6 of Article VII of the
12Illinois Constitution on the concurrent exercise by a home rule
13county of powers and functions exercised by the State.
14(Source: P.A. 96-1000, eff. 7-2-10.)
 
15    Section 15. The Illinois Municipal Code is amended by
16changing Section 11-39-3 as follows:
 
17    (65 ILCS 5/11-39-3)
18    Sec. 11-39-3. Builder or developer cash bond or other
19surety.
20    (a) A municipality may not require an a cash bond,
21irrevocable letter of credit, surety bond, or letter of
22commitment issued by a bank, savings and loan association,
23surety, or insurance company from a builder or developer to
24guarantee completion of a project improvement when the builder

 

 

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1or developer has filed with the municipal clerk a current,
2irrevocable letter of credit, surety bond, or letter of
3commitment issued by a bank, savings and loan association,
4surety, or insurance company, deemed good and sufficient by the
5municipality accepting such security, in an amount equal to or
6greater than 110% of the amount of the bid on each project
7improvement. A builder or developer has the option to utilize a
8cash bond, irrevocable letter of credit, surety bond, or letter
9of commitment, issued by a bank, savings and loan association,
10surety, or insurance company, deemed good and sufficient by the
11municipality, to satisfy any cash bond requirement established
12by a municipality. Except for a municipality or county with a
13population of 1,000,000 or more, the municipality must approve
14and deem a surety or insurance company good and sufficient for
15the purposes set forth in this Section if the surety or
16insurance company is authorized by the Illinois Department of
17Insurance to sell and issue sureties in the State of Illinois.
18    (b) If a municipality receives an a cash bond, irrevocable
19letter of credit, or surety bond from a builder or developer to
20guarantee completion of a project improvement, the
21municipality shall (i) register the bond under the address of
22the project and the construction permit number and (ii) give
23the builder or developer a receipt for the bond. The
24municipality shall establish and maintain a separate account
25for all cash bonds received from builders and developers to
26guarantee completion of a project improvement.

 

 

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1    (c) The municipality shall refund a cash bond to a builder
2or developer, or release the irrevocable letter of credit or
3surety bond within 60 days after the builder or developer
4notifies the municipality in writing of the completion of the
5project improvement for which the bond was required. For these
6purposes, "completion" means that the municipality has
7determined that the project improvement for which the bond was
8required is complete or a licensed engineer or licensed
9architect has certified to the builder or developer and the
10municipality that the project improvement has been completed to
11the applicable codes and ordinances. The municipality shall pay
12interest to the builder or developer, beginning 60 days after
13builder or developer notifies the municipality in writing of
14the completion of the project improvement, on any bond not
15refunded to a builder or developer, at the rate of 1% per
16month.
17    (d) (Blank). A home rule municipality may not require or
18maintain cash bonds, irrevocable letters of credit, surety
19bonds, or letters of commitment issued by a bank, savings and
20loan association, surety, or insurance company from builders or
21developers in a manner inconsistent with this Section. This
22Section supersedes and controls over other provisions of this
23Code as they apply to and guarantee completion of a project
24improvement that is required by the municipality, regardless of
25whether the project improvement is a condition of annexation
26agreements. This Section is a denial and limitation under

 

 

10000HB3751ham002- 9 -LRB100 07336 MLM 25578 a

1subsection (i) of Section 6 of Article VII of the Illinois
2Constitution on the concurrent exercise by a home rule
3municipality of powers and functions exercised by the State.
4(Source: P.A. 96-1000, eff. 7-2-10.)".