Illinois General Assembly - Full Text of HB4531
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Full Text of HB4531  100th General Assembly

HB4531eng 100TH GENERAL ASSEMBLY

  
  
  

 


 
HB4531 EngrossedLRB100 16562 HLH 31694 b

1    AN ACT concerning finance.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Public Construction Bond Act is amended by
5changing Section 3 as follows:
 
6    (30 ILCS 550/3)
7    Sec. 3. Builder or developer cash bond or other surety.
8    (a) A county or municipality may not require an a cash
9bond, irrevocable letter of credit, surety bond, or letter of
10commitment issued by a bank, savings and loan association,
11surety, or insurance company from a builder or developer to
12guarantee completion of a project improvement when the builder
13or developer has filed with the county or municipal clerk a
14current, irrevocable letter of credit, surety bond, or letter
15of commitment issued by a bank, savings and loan association,
16surety, or insurance company, deemed good and sufficient by the
17county or municipality accepting such security, in an amount
18equal to or greater than 110% of the amount of the bid on each
19project improvement. A builder or developer has the option to
20utilize a cash bond, irrevocable letter of credit, surety bond,
21or letter of commitment, issued by a bank, savings and loan
22association, surety, or insurance company, deemed good and
23sufficient by the county or municipality, to satisfy any cash

 

 

HB4531 Engrossed- 2 -LRB100 16562 HLH 31694 b

1bond requirement established by a county or municipality.
2Except for a municipality or county with a population of
31,000,000 or more, the county or municipality must approve and
4deem a surety or insurance company good and sufficient for the
5purposes set forth in this Section if the surety or insurance
6company is authorized by the Illinois Department of Insurance
7to sell and issue sureties in the State of Illinois.
8    (b) If a county or municipality receives an a cash bond,
9irrevocable letter of credit, or surety bond from a builder or
10developer to guarantee completion of a project improvement, the
11county or municipality shall (i) register the bond under the
12address of the project and the construction permit number and
13(ii) give the builder or developer a receipt for the bond. The
14county or municipality shall establish and maintain a separate
15account for all cash bonds received from builders and
16developers to guarantee completion of a project improvement.
17    (c) The county or municipality shall refund a cash bond to
18a builder or developer, or release the irrevocable letter of
19credit or surety bond, within 60 days after the builder or
20developer notifies the county or municipality in writing of the
21completion of the project improvement for which the bond was
22required. For these purposes, "completion" means that the
23county or municipality has determined that the project
24improvement for which the bond was required is complete or a
25licensed engineer or licensed architect has certified to the
26builder or developer and the county or municipality that the

 

 

HB4531 Engrossed- 3 -LRB100 16562 HLH 31694 b

1project improvement has been completed to the applicable codes
2and ordinances. The county or municipality shall pay interest
3to the builder or developer, beginning 60 days after the
4builder or developer notifies the county or municipality in
5writing of the completion of the project improvement, on any
6bond not refunded to a builder or developer, at the rate of 1%
7per month.
8    (d) (Blank). A home rule county or municipality may not
9require or maintain cash bonds, irrevocable letters of credit,
10surety bonds, or letters of commitment issued by a bank,
11savings and loan association, surety, or insurance company from
12builders or developers in a manner inconsistent with this
13Section. This Section supersedes and controls over other
14provisions of the Counties Code or Illinois Municipal Code as
15they apply to and guarantee completion of a project improvement
16that is required by the county or municipality, regardless of
17whether the project improvement is a condition of annexation
18agreements. This Section is a denial and limitation under
19subsection (i) of Section 6 of Article VII of the Illinois
20Constitution on the concurrent exercise by a home rule county
21or municipality of powers and functions exercised by the State.
22(Source: P.A. 96-1000, eff. 7-2-10.)
 
23    Section 10. The Counties Code is amended by changing
24Section 5-1123 as follows:
 

 

 

HB4531 Engrossed- 4 -LRB100 16562 HLH 31694 b

1    (55 ILCS 5/5-1123)
2    Sec. 5-1123. Builder or developer cash bond or other
3surety.
4    (a) A county may not require an a cash bond, irrevocable
5letter of credit, surety bond, or letter of commitment issued
6by a bank, savings and loan association, surety, or insurance
7company from a builder or developer to guarantee completion of
8a project improvement when the builder or developer has filed
9with the county clerk a current, irrevocable letter of credit,
10surety bond, or letter of commitment, issued by a bank, savings
11and loan association, surety, or insurance company, deemed good
12and sufficient by the county accepting such security, in an
13amount equal to or greater than 110% of the amount of the bid
14on each project improvement. A builder or developer has the
15option to utilize a cash bond, 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, to satisfy any cash bond
19requirement established by a county. The county must approve
20and deem a surety or insurance company good and sufficient for
21the purposes set forth in this Section if the surety or
22insurance company is authorized by the Illinois Department of
23Insurance to sell and issue sureties in the State of Illinois.
24    (b) If a county receives an a cash bond, irrevocable letter
25of credit, or surety bond from a builder or developer to
26guarantee completion of a project improvement, the county shall

 

 

HB4531 Engrossed- 5 -LRB100 16562 HLH 31694 b

1(i) register the bond under the address of the project and the
2construction permit number and (ii) give the builder or
3developer a receipt for the bond. The county shall establish
4and maintain a separate account for all cash bonds received
5from builders and developers to guarantee completion of a
6project improvement.
7    (c) The county shall refund a cash bond to a builder or
8developer, or release the irrevocable letter of credit or
9surety bond, within 60 days after the builder or developer
10notifies the county in writing of the completion of the project
11improvement for which the bond was required. For these
12purposes, "completion" means that the county has determined
13that the project improvement for which the bond was required is
14complete or a licensed engineer or licensed architect has
15certified to the builder or developer and the county that the
16project improvement has been completed to the applicable codes
17and ordinances. The county shall pay interest to the builder or
18developer, beginning 60 days after the builder or developer
19notifies the county in writing of the completion of the project
20improvement, on any bond not refunded to a builder or
21developer, at the rate of 1% per month.
22    (d) (Blank). A home rule county may not require or maintain
23cash bonds, irrevocable letters of credit, surety bonds, or
24other adequate securities from builders or developers in a
25manner inconsistent with this Section. This Section supersedes
26and controls over other provisions of this Code as they apply

 

 

HB4531 Engrossed- 6 -LRB100 16562 HLH 31694 b

1to and guarantee completion of a project improvement that is
2required by the county. This Section is a denial and limitation
3under subsection (i) of Section 6 of Article VII of the
4Illinois Constitution on the concurrent exercise by a home rule
5county of powers and functions exercised by the State.
6(Source: P.A. 96-1000, eff. 7-2-10.)
 
7    Section 15. The Illinois Municipal Code is amended by
8changing Section 11-39-3 as follows:
 
9    (65 ILCS 5/11-39-3)
10    Sec. 11-39-3. Builder or developer cash bond or other
11surety.
12    (a) A municipality may not require an a cash bond,
13irrevocable letter of credit, surety bond, or letter of
14commitment issued by a bank, savings and loan association,
15surety, or insurance company from a builder or developer to
16guarantee completion of a project improvement when the builder
17or developer has filed with the municipal clerk a current,
18irrevocable letter of credit, surety bond, or letter of
19commitment issued by a bank, savings and loan association,
20surety, or insurance company, deemed good and sufficient by the
21municipality accepting such security, in an amount equal to or
22greater than 110% of the amount of the bid on each project
23improvement. A builder or developer has the option to utilize a
24cash bond, irrevocable letter of credit, surety bond, or letter

 

 

HB4531 Engrossed- 7 -LRB100 16562 HLH 31694 b

1of commitment, issued by a bank, savings and loan association,
2surety, or insurance company, deemed good and sufficient by the
3municipality, to satisfy any cash bond requirement established
4by a municipality. Except for a municipality or county with a
5population of 1,000,000 or more, the municipality must approve
6and deem a surety or insurance company good and sufficient for
7the purposes set forth in this Section if the surety or
8insurance company is authorized by the Illinois Department of
9Insurance to sell and issue sureties in the State of Illinois.
10    (b) If a municipality receives an a cash bond, irrevocable
11letter of credit, or surety bond from a builder or developer to
12guarantee completion of a project improvement, the
13municipality shall (i) register the bond under the address of
14the project and the construction permit number and (ii) give
15the builder or developer a receipt for the bond. The
16municipality shall establish and maintain a separate account
17for all cash bonds received from builders and developers to
18guarantee completion of a project improvement.
19    (c) The municipality shall refund a cash bond to a builder
20or developer, or release the irrevocable letter of credit or
21surety bond within 60 days after the builder or developer
22notifies the municipality in writing of the completion of the
23project improvement for which the bond was required. For these
24purposes, "completion" means that the municipality has
25determined that the project improvement for which the bond was
26required is complete or a licensed engineer or licensed

 

 

HB4531 Engrossed- 8 -LRB100 16562 HLH 31694 b

1architect has certified to the builder or developer and the
2municipality that the project improvement has been completed to
3the applicable codes and ordinances. The municipality shall pay
4interest to the builder or developer, beginning 60 days after
5builder or developer notifies the municipality in writing of
6the completion of the project improvement, on any bond not
7refunded to a builder or developer, at the rate of 1% per
8month.
9    (d) (Blank). A home rule municipality may not require or
10maintain cash bonds, irrevocable letters of credit, surety
11bonds, or letters of commitment issued by a bank, savings and
12loan association, surety, or insurance company from builders or
13developers in a manner inconsistent with this Section. This
14Section supersedes and controls over other provisions of this
15Code as they apply to and guarantee completion of a project
16improvement that is required by the municipality, regardless of
17whether the project improvement is a condition of annexation
18agreements. This Section is a denial and limitation under
19subsection (i) of Section 6 of Article VII of the Illinois
20Constitution on the concurrent exercise by a home rule
21municipality of powers and functions exercised by the State.
22(Source: P.A. 96-1000, eff. 7-2-10.)