SB3053sam001 99TH GENERAL ASSEMBLY

Sen. Pamela J. Althoff

Filed: 4/8/2016

09900SB3053sam001 LRB099 20702 AWJ 47223 a

AMENDMENT TO SENATE BILL 3053

AMENDMENT NO. ______. Amend Senate Bill 3053 by replacing everything after the enacting clause with the following:

"Section 5. The Public Construction Bond Act is amended by changing Section 3 as follows:

(30 ILCS 550/3)

Sec. 3. Builder or developer cash bond or other surety.

(a) Except as otherwise provided under subsection (a-5), a A county or municipality may not require a cash bond, irrevocable letter of credit, surety bond, or letter of commitment issued by a bank, savings and loan association, surety, or insurance company from a builder or developer to guarantee completion of a project improvement when the builder or developer has filed with the county or municipal clerk a current, irrevocable letter of credit, surety bond, or letter of commitment issued by a bank, savings and loan association, surety, or insurance company, deemed good and sufficient by the county or municipality accepting such security, in an amount equal to or greater than 110% of the amount of the bid on each project improvement. A builder or developer has the option to utilize a cash bond, irrevocable letter of credit, surety bond, or letter of commitment, issued by a bank, savings and loan association, surety, or insurance company, deemed good and sufficient by the county or municipality, to satisfy any cash bond requirement established by a county or municipality. Except for a municipality or county with a population of 1,000,000 or more, the county or municipality must approve and deem a surety or insurance company good and sufficient for the purposes set forth in this Section if the surety or insurance company is authorized by the Illinois Department of Insurance to sell and issue sureties in the State of Illinois.

(a-5) Notwithstanding subsection (a), a county or municipality may, by ordinance, require a cash bond, irrevocable letter of credit, surety bond, or letter of commitment issued by a bank, savings and loan association, surety, or insurance company from a builder or developer to guarantee completion of a project improvement without regard to whether the builder or developer has filed with the county or municipal clerk a current, irrevocable letter of credit, surety bond, or letter of commitment issued by a bank, savings and loan association, surety, or insurance company, deemed good and sufficient by the county or municipality accepting such security, or the amount of such security. In such an ordinance, the county or municipality may also specify whether any of the following may or may not be used by a builder or developer to satisfy the cash bond requirement of the county or municipality: an irrevocable letter of credit, surety bond, or letter of commitment issued by a bank, savings and loan association, surety, or insurance company.

(b) If a county or municipality receives a cash bond, irrevocable letter of credit, or surety bond from a builder or developer to guarantee completion of a project improvement, the county or municipality shall (i) register the bond under the address of the project and the construction permit number and (ii) give the builder or developer a receipt for the bond. The county or municipality shall establish and maintain a separate account for all cash bonds received from builders and developers to guarantee completion of a project improvement.

(c) The county or municipality shall refund a cash bond to a builder or developer, or release the irrevocable letter of credit or surety bond, within 60 days after the builder or developer notifies the county or municipality in writing of the completion of the project improvement for which the bond was required. For these purposes, "completion" means that the county or municipality has determined that the project improvement for which the bond was required is complete or a licensed engineer or licensed architect has certified to the builder or developer and the county or municipality that the project improvement has been completed to the applicable codes and ordinances. The county or municipality shall pay interest to the builder or developer, beginning 60 days after the builder or developer notifies the county or municipality in writing of the completion of the project improvement, on any bond not refunded to a builder or developer, at the rate of 1% per month.

(d) A home rule county or municipality may not require or maintain cash bonds, irrevocable letters of credit, surety bonds, or letters of commitment issued by a bank, savings and loan association, surety, or insurance company from builders or developers in a manner inconsistent with this Section. This Section supersedes and controls over other provisions of the Counties Code or Illinois Municipal Code as they apply to and guarantee completion of a project improvement that is required by the county or municipality, regardless of whether the project improvement is a condition of annexation agreements. This Section is a denial and limitation under subsection (i) of Section 6 of Article VII of the Illinois Constitution on the concurrent exercise by a home rule county or municipality of powers and functions exercised by the State.

(Source: P.A. 96-1000, eff. 7-2-10.)

Section 10. The Illinois Municipal Code is amended by changing Section 11-39-3 as follows:

(65 ILCS 5/11-39-3)

Sec. 11-39-3. Builder or developer cash bond or other surety.

(a) Except as otherwise provided under subsection (a-5), a A municipality may not require a cash bond, irrevocable letter of credit, surety bond, or letter of commitment issued by a bank, savings and loan association, surety, or insurance company from a builder or developer to guarantee completion of a project improvement when the builder or developer has filed with the municipal clerk a current, irrevocable letter of credit, surety bond, or letter of commitment issued by a bank, savings and loan association, surety, or insurance company, deemed good and sufficient by the municipality accepting such security, in an amount equal to or greater than 110% of the amount of the bid on each project improvement. A builder or developer has the option to utilize a cash bond, irrevocable letter of credit, surety bond, or letter of commitment, issued by a bank, savings and loan association, surety, or insurance company, deemed good and sufficient by the municipality, to satisfy any cash bond requirement established by a municipality. Except for a municipality or county with a population of 1,000,000 or more, the municipality must approve and deem a surety or insurance company good and sufficient for the purposes set forth in this Section if the surety or insurance company is authorized by the Illinois Department of Insurance to sell and issue sureties in the State of Illinois.

(a-5) Notwithstanding subsection (a), a municipality may, by ordinance, require a cash bond, irrevocable letter of credit, surety bond, or letter of commitment issued by a bank, savings and loan association, surety, or insurance company from a builder or developer to guarantee completion of a project improvement without regard to whether the builder or developer has filed with the municipal clerk a current, irrevocable letter of credit, surety bond, or letter of commitment issued by a bank, savings and loan association, surety, or insurance company, deemed good and sufficient by the municipality accepting such security, or the amount of such security. In such an ordinance, the municipality may also specify whether any of the following may or may not be used by a builder or developer to satisfy the cash bond requirement of the municipality: an irrevocable letter of credit, surety bond, or letter of commitment issued by a bank, savings and loan association, surety, or insurance company.

(b) If a municipality receives a cash bond, irrevocable letter of credit, or surety bond from a builder or developer to guarantee completion of a project improvement, the municipality shall (i) register the bond under the address of the project and the construction permit number and (ii) give the builder or developer a receipt for the bond. The municipality shall establish and maintain a separate account for all cash bonds received from builders and developers to guarantee completion of a project improvement.

(c) The municipality shall refund a cash bond to a builder or developer, or release the irrevocable letter of credit or surety bond within 60 days after the builder or developer notifies the municipality in writing of the completion of the project improvement for which the bond was required. For these purposes, "completion" means that the municipality has determined that the project improvement for which the bond was required is complete or a licensed engineer or licensed architect has certified to the builder or developer and the municipality that the project improvement has been completed to the applicable codes and ordinances. The municipality shall pay interest to the builder or developer, beginning 60 days after builder or developer notifies the municipality in writing of the completion of the project improvement, on any bond not refunded to a builder or developer, at the rate of 1% per month.

(d) A home rule municipality may not require or maintain cash bonds, irrevocable letters of credit, surety bonds, or letters of commitment issued by a bank, savings and loan association, surety, or insurance company from builders or developers in a manner inconsistent with this Section. This Section supersedes and controls over other provisions of this Code as they apply to and guarantee completion of a project improvement that is required by the municipality, regardless of whether the project improvement is a condition of annexation agreements. This Section is a denial and limitation under subsection (i) of Section 6 of Article VII of the Illinois Constitution on the concurrent exercise by a home rule municipality of powers and functions exercised by the State.

(Source: P.A. 96-1000, eff. 7-2-10.)

Section 15. The Illinois Highway Code is amended by changing Sections 5-701.15 and 7-202.21a as follows:

(605 ILCS 5/5-701.15) (from Ch. 121, par. 5-701.15)

Sec. 5-701.15. The formula allocation for counties for the distribution of motor fuel tax funds, provided for in Section 8 in the "Motor Fuel Tax Law", may be used by the county board for the maintenance or improvement of nondedicated subdivision roads established prior to July 23, 1959. Any such improved road becomes, by operation of law, a part of the township or district road system in accordance with Section 6-325 of this Code. The county board may shall condition its approval, as required by this Section, upon proportional matching contributions, whether in cash, kind, services or otherwise, by property owners in the subdivision where such a road is situated. No more than the amount of the increase in allocation of such funds allocated under the formula as provided in Section 8 in the "Motor Fuel Tax Law" which is attributable to this amendatory Act of 1979 and any subsequent amendatory Act and subsequently approved as provided in this Section, may be expended on eligible nondedicated subdivision roads.

(Source: P.A. 83-957.)

(605 ILCS 5/7-202.21a) (from Ch. 121, par. 7-202.21a)

Sec. 7-202.21a. The formula allocation for municipalities for the distribution of motor fuel tax funds, provided for in Section 8 in the "Motor Fuel Tax Law", may be used by the municipal authority for the maintenance or improvement of nondedicated subdivision roads established prior to July 23, 1959. Any such improved road becomes, by operation of law, a part of the municipal street system of such municipality. The municipal authority may shall condition its approval, as required by this Section, upon proportional matching contributions, whether in cash, kind, services or otherwise, by property owners in the subdivision where such a road is situated. No more than the amount of the increase in allocation of such funds allocated under the formula as provided in Section 8 in the "Motor Fuel Tax Law" which is attributable to this amendatory Act and any subsequent amendatory Act and subsequently approved as provided in this Section may be expended on eligible nondedicated subdivision roads.

(Source: P.A. 86-447.)".