Full Text of SB2084 94th General Assembly
SB2084eng 94TH GENERAL ASSEMBLY
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SB2084 Engrossed |
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LRB094 10174 JAM 40440 b |
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| AN ACT concerning finance.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Public Construction Bond Act is amended by | 5 |
| changing Section 1 as follows:
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| (30 ILCS 550/1) (from Ch. 29, par. 15)
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| Sec. 1. Except as otherwise provided by this Act, all | 8 |
| officials, boards,
commissions or agents of this State, or of
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| any political subdivision thereof in making contracts for | 10 |
| public work of
any kind costing over $5,000 to be performed for | 11 |
| the State, or a political
subdivision thereof
shall require | 12 |
| every contractor for the work to furnish, supply and deliver
a | 13 |
| bond to the State, or to the political subdivision thereof | 14 |
| entering into
the contract, as the case may be, with good and | 15 |
| sufficient sureties. The
amount of the bond shall be fixed by | 16 |
| the officials, boards, commissions,
commissioners or agents, | 17 |
| and the bond, among other conditions,
shall be
conditioned for | 18 |
| the completion of the contract, for the payment of material
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| used in the work and for all labor performed in the work, | 20 |
| whether by
subcontractor or otherwise.
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| If the contract is for emergency repairs as provided in the | 22 |
| Illinois
Procurement
Code, proof of payment for all labor, | 23 |
| materials, apparatus, fixtures, and
machinery may be
furnished | 24 |
| in lieu of the bond required by this Section.
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| Each such bond is deemed to contain the following | 26 |
| provisions whether
such provisions are inserted in such bond or | 27 |
| not:
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| "The principal and sureties on this bond agree that all the
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| undertakings, covenants, terms, conditions and agreements of | 30 |
| the contract
or contracts entered into between the principal | 31 |
| and the State or any
political subdivision thereof will be | 32 |
| performed and fulfilled and to pay
all persons, firms and |
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| corporations having contracts with the principal or
with | 2 |
| subcontractors, all just claims due them under the provisions | 3 |
| of such
contracts for labor performed or materials furnished in | 4 |
| the performance of
the contract on account of which this bond | 5 |
| is given, when such claims are
not satisfied out of the | 6 |
| contract price of the contract on account of which
this bond is | 7 |
| given, after final settlement between the officer, board,
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| commission or agent of the State or of any political | 9 |
| subdivision thereof
and the principal has been made." | 10 |
| Each bond securing contracts between the Capital | 11 |
| Development Board or any board of a public institution of | 12 |
| higher education and a contractor shall contain the following | 13 |
| provisions, whether the provisions are inserted in the bond or | 14 |
| not:
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| "Upon the default of the principal with respect to | 16 |
| undertakings, covenants, terms, conditions, and agreements, | 17 |
| the termination of the contractor's right to proceed with the | 18 |
| work, and written notice of that default and termination by the | 19 |
| State or any political subdivision to the surety ("Notice"), | 20 |
| the surety shall promptly remedy the default by taking one of | 21 |
| the following actions: | 22 |
| (1) The surety shall complete the work pursuant to a | 23 |
| written takeover agreement, using a completing contractor | 24 |
| jointly selected by the surety and the State or any | 25 |
| political subdivision; or | 26 |
| (2) The surety shall pay a sum of money to the obligee, | 27 |
| up to the penal sum of the bond, that represents the | 28 |
| reasonable cost to complete the work that exceeds the | 29 |
| unpaid balance of the contract sum. | 30 |
| The surety shall respond to the Notice within 15 working | 31 |
| days of receipt indicating the course of action that it intends | 32 |
| to take. If the surety elects to complete the work with a | 33 |
| completing contractor and if the State or any political | 34 |
| subdivision determines it is in the best interest of the State | 35 |
| to maintain the progress of the work, the State or any | 36 |
| political subdivision may continue to work until the completing |
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| contractor is prepared to commence performance. The surety | 2 |
| shall be liable for reasonable costs incurred by the State or | 3 |
| any political subdivision to maintain the progress to the | 4 |
| extent the costs exceed the unpaid balance of the contract sum, | 5 |
| subject to the penal sum of the bond.".
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| The surety bond required by this Section may be acquired | 7 |
| from the
company, agent or broker of the contractor's choice. | 8 |
| The bond and sureties
shall
be subject to the right of | 9 |
| reasonable approval or disapproval, including
suspension, by | 10 |
| the State or political subdivision thereof concerned. In the
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| case of State construction contracts, a contractor shall not be | 12 |
| required to
post a cash bond or letter of credit in addition to | 13 |
| or as a substitute for the
surety bond required by this | 14 |
| Section.
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| When other than motor fuel tax funds, federal-aid funds, or | 16 |
| other
funds received from the State are used, a political | 17 |
| subdivision may allow
the contractor to provide a | 18 |
| non-diminishing irrevocable bank letter of
credit, in lieu of | 19 |
| the bond required by this Section, on contracts under
$100,000 | 20 |
| to comply with the requirements of this Section. Any such bank
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| letter of credit shall contain all provisions required for | 22 |
| bonds by this
Section.
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| (Source: P.A. 93-221, eff. 1-1-04.)
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| Section 99. Effective date. This Act takes effect upon | 25 |
| becoming law.
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