Full Text of HB0262 97th General Assembly
HB0262 97TH GENERAL ASSEMBLY |
| | 97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012 HB0262 Introduced 01/25/11, by Rep. Linda Chapa LaVia SYNOPSIS AS INTRODUCED: |
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Amends the Public Construction Bond Act concerning a cash bond or other surety from a builder or developer. Allows a county or municipality to require a cash bond or other surety (instead of requiring the county or municipality to accept a letter of credit or other instrument issued by a financial institution). Eliminates a procedure allowing an engineer or architect to certify completion of a project and requiring the county or municipality to pay interest on any unrefunded bond beginning 60 days after written notification of completion. Eliminates the preemption of home rule powers. Effective immediately.
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| | | FISCAL NOTE ACT MAY APPLY | |
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| 1 | | AN ACT concerning local government.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Public Construction Bond Act is amended by | 5 | | changing 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 a cash bond, | 9 | | irrevocable
letter of credit, surety bond, or letter of | 10 | | commitment issued by a bank,
savings and loan association, | 11 | | surety, or insurance company from a builder or
developer to
| 12 | | guarantee completion of a project improvement when the builder | 13 | | or developer
has filed with the county or municipal clerk a
| 14 | | current, irrevocable letter of credit, surety bond, or letter | 15 | | of commitment
issued by a bank, savings and loan association, | 16 | | surety, or insurance company,
deemed good and sufficient by the | 17 | | county or
municipality accepting such security, in an amount | 18 | | equal
to or greater than 110% of the amount of the bid on each | 19 | | project improvement .
A county or municipality builder or | 20 | | developer has the option to require utilize a
cash bond, | 21 | | irrevocable letter of credit,
surety bond, or letter of | 22 | | commitment, issued by a bank, savings and loan
association, | 23 | | surety, or insurance company, deemed good and
sufficient
by the |
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| 1 | | county or municipality, to
satisfy any cash bond requirement | 2 | | established by a county or municipality.
Except for a | 3 | | municipality or county with a population of 1,000,000 or more,
| 4 | | the county or municipality must approve and deem a surety or
| 5 | | insurance company good and sufficient for the purposes set | 6 | | forth in this
Section if the surety or insurance company is | 7 | | authorized by the
Illinois Department of Insurance to sell and | 8 | | issue sureties in the State of
Illinois.
| 9 | | (b) If a county or municipality receives a cash bond, | 10 | | irrevocable letter
of credit, or surety bond from a builder or
| 11 | | developer to
guarantee completion of a project improvement, the | 12 | | county or municipality shall
(i) register
the bond under
the | 13 | | address of the project and the construction permit number and | 14 | | (ii) give the
builder or developer a receipt for the bond. The | 15 | | county or municipality shall
establish and
maintain a separate | 16 | | account for all cash bonds received from builders and
| 17 | | developers to guarantee completion of a project improvement.
| 18 | | (c) The county or municipality shall refund a cash bond to | 19 | | a builder or
developer, or release the irrevocable letter of | 20 | | credit or surety bond,
within
60 days after the builder or | 21 | | developer notifies the county or municipality in
writing of the
| 22 | | completion of the project improvement for which the bond
was | 23 | | required.
For these purposes, "completion" means that the | 24 | | county or municipality has
determined
that the project | 25 | | improvement for which the bond was required is complete or a
| 26 | | licensed engineer or licensed architect has certified to the |
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| 1 | | builder or
developer and the county or municipality that the | 2 | | project improvement has been
completed to the
applicable codes | 3 | | and ordinances.
The county or municipality shall pay interest | 4 | | to the builder or developer,
beginning 60 days
after the | 5 | | builder or developer notifies the county or municipality in | 6 | | writing
of the completion
of the
project improvement, on any | 7 | | bond not refunded to a builder or developer, at
the rate of 1%
| 8 | | per month .
| 9 | | (d) (Blank). A home rule county or municipality may not | 10 | | require or maintain cash
bonds, irrevocable
letters of credit, | 11 | | surety bonds, or letters of commitment issued by a bank,
| 12 | | savings and loan association, surety, or insurance company
from | 13 | | builders
or developers in a manner inconsistent with this | 14 | | Section. This Section supersedes
and controls over other | 15 | | provisions of the Counties Code or
Illinois Municipal Code as | 16 | | they apply to and guarantee completion of a project
improvement | 17 | | that is required by the county or municipality, regardless of
| 18 | | whether the project improvement is a condition of annexation | 19 | | agreements.
This Section is a
denial and limitation under | 20 | | subsection (i) of Section
6 of Article VII of the Illinois | 21 | | Constitution on the concurrent exercise by a
home rule
county | 22 | | or municipality of powers and functions exercised by the State.
| 23 | | (Source: P.A. 96-1000, eff. 7-2-10.)
| 24 | | Section 99. Effective date. This Act takes effect upon | 25 | | becoming law.
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