Full Text of HB2722 101st General Assembly
HB2722enr 101ST GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning finance.
| 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 Sections 1 and 2 as follows:
| 6 | | (30 ILCS 550/1) (from Ch. 29, par. 15)
| 7 | | Sec. 1. Except as otherwise provided by this Act, all | 8 | | officials, boards,
commissions, or agents of this State, or of | 9 | | any political subdivision thereof, in making contracts for | 10 | | public work of
any kind costing over $50,000 to be performed | 11 | | for the State, or of any political subdivision thereof,
shall | 12 | | require every contractor for the work to furnish, supply and | 13 | | deliver
a bond to the State, or to the political subdivision | 14 | | thereof entering into
the contract, as the case may be, with | 15 | | good and sufficient sureties. The surety on the bond shall be a | 16 | | company that is licensed by the Department of Insurance | 17 | | authorizing it to execute surety bonds and the company shall | 18 | | have a financial strength rating of at least A- as rated by | 19 | | A.M. Best Company, Inc., Moody's Investors Service, Standard & | 20 | | Poor's Corporation, or a similar rating agency. The
amount of | 21 | | the bond shall be fixed by the officials, boards, commissions,
| 22 | | commissioners or agents, and the bond, among other conditions,
| 23 | | shall be
conditioned for the completion of the contract, for |
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| 1 | | the payment of material , apparatus, fixtures, and machinery
| 2 | | used in the work and for all labor performed in the work, | 3 | | whether by
subcontractor or otherwise.
| 4 | | If the contract is for emergency repairs as provided in the | 5 | | Illinois
Procurement
Code, proof of payment for all labor, | 6 | | materials, apparatus, fixtures, and
machinery may be
furnished | 7 | | in lieu of the bond required by this Section.
| 8 | | Each such bond is deemed to contain the following | 9 | | provisions whether
such provisions are inserted in such bond or | 10 | | not:
| 11 | | "The principal and sureties on this bond agree that all the
| 12 | | undertakings, covenants, terms, conditions and agreements of | 13 | | the contract
or contracts entered into between the principal | 14 | | and the State or any
political subdivision thereof will be | 15 | | performed and fulfilled and to pay
all persons, firms and | 16 | | corporations having contracts with the principal or
with | 17 | | subcontractors, all just claims due them under the provisions | 18 | | of such
contracts for labor performed or materials furnished in | 19 | | the performance of
the contract on account of which this bond | 20 | | is given, when such claims are
not satisfied out of the | 21 | | contract price of the contract on account of which
this bond is | 22 | | given, after final settlement between the officer, board,
| 23 | | commission or agent of the State or of any political | 24 | | subdivision thereof
and the principal has been made.". | 25 | | Each bond securing contracts between the Capital | 26 | | Development Board or any board of a public institution of |
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| 1 | | higher education and a contractor shall contain the following | 2 | | provisions, whether the provisions are inserted in the bond or | 3 | | not: | 4 | | "Upon the default of the principal with respect to | 5 | | undertakings, covenants, terms, conditions, and agreements, | 6 | | the termination of the contractor's right to proceed with the | 7 | | work, and written notice of that default and termination by the | 8 | | State or any political subdivision to the surety ("Notice"), | 9 | | the surety shall promptly remedy the default by taking one of | 10 | | the following actions: | 11 | | (1) The surety shall complete the work pursuant to a | 12 | | written takeover agreement, using a completing contractor | 13 | | jointly selected by the surety and the State or any | 14 | | political subdivision; or | 15 | | (2) The surety shall pay a sum of money to the obligee, | 16 | | up to the penal sum of the bond, that represents the | 17 | | reasonable cost to complete the work that exceeds the | 18 | | unpaid balance of the contract sum. | 19 | | The surety shall respond to the Notice within 15 working | 20 | | days of receipt indicating the course of action that it intends | 21 | | to take or advising that it requires more time to investigate | 22 | | the default and select a course of action. If the surety | 23 | | requires more than 15 working days to investigate the default | 24 | | and select a course of action or if the surety elects to | 25 | | complete the work with a completing contractor that is not | 26 | | prepared to commence performance within 15 working days after |
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| 1 | | receipt of Notice, and if the State or any political | 2 | | subdivision determines it is in the best interest of the State | 3 | | to maintain the progress of the work, the State or any | 4 | | political subdivision may continue to work until the completing | 5 | | contractor is prepared to commence performance. Unless | 6 | | otherwise agreed to by the procuring agency, in no case may the | 7 | | surety take longer than 30 working days to advise the State or | 8 | | political subdivision on the course of action it intends to | 9 | | take. The surety shall be liable for reasonable costs incurred | 10 | | by the State or any political subdivision to maintain the | 11 | | progress to the extent the costs exceed the unpaid balance of | 12 | | the contract sum, subject to the penal sum of the bond.".
| 13 | | The surety bond required by this Section may be acquired | 14 | | from the
company, agent or broker of the contractor's choice. | 15 | | The bond and sureties
shall
be subject to the right of | 16 | | reasonable approval or disapproval, including
suspension, by | 17 | | the State or political subdivision thereof concerned. In the
| 18 | | case of State construction contracts, a contractor shall not be | 19 | | required to
post a cash bond or letter of credit in addition to | 20 | | or as a substitute for the
surety bond required by this | 21 | | Section.
| 22 | | When other than motor fuel tax funds, federal-aid funds, or | 23 | | other
funds received from the State are used, a political | 24 | | subdivision may allow
the contractor to provide a | 25 | | non-diminishing irrevocable bank letter of
credit, in lieu of | 26 | | the bond required by this Section, on contracts under
$100,000 |
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| 1 | | to comply with the requirements of this Section. Any such bank
| 2 | | letter of credit shall contain all provisions required for | 3 | | bonds by this
Section.
| 4 | | For the purposes of this Section, the terms "material", | 5 | | "labor", "apparatus", "fixtures", and "machinery" include | 6 | | those rented items that are on the construction site and those | 7 | | rented tools that are used or consumed on the construction site | 8 | | in the performance of the contract on account of which the bond | 9 | | is given. | 10 | | (Source: P.A. 98-216, eff. 8-9-13; 98-1018, eff. 8-22-14.)
| 11 | | (30 ILCS 550/2) (from Ch. 29, par. 16)
| 12 | | Sec. 2.
Every person furnishing material , apparatus, | 13 | | fixtures, machinery, or performing labor, either
as an | 14 | | individual or as a sub-contractor, hereinafter referred to as | 15 | | Claimant, for any contractor, with the
State, or a political | 16 | | subdivision thereof where bond or letter of
credit shall be | 17 | | executed as provided in this Act, shall have the right to
sue | 18 | | on such bond or letter of credit in the name of the State, or | 19 | | the
political subdivision thereof entering into such contract, | 20 | | as the case may
be, for his use and benefit, and in such suit | 21 | | the plaintiff shall file a
copy of such bond or letter of | 22 | | credit, certified by the party or parties in
whose charge such | 23 | | bond or letter of credit shall be, which copy shall,
unless | 24 | | execution thereof be denied under oath, be prima facie evidence | 25 | | of
the execution and delivery of the original; provided, |
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| 1 | | however, that this
Act shall not be taken to in any way make | 2 | | the State, or the political
subdivision thereof entering into | 3 | | such contract, as the case
may be, liable to such | 4 | | sub-contractor, materialman or laborer to any
greater extent | 5 | | than it was liable under the law as it stood before the
| 6 | | adoption of this Act. | 7 | | Provided, however, that any Claimant having a claim
for | 8 | | labor , and material , apparatus, fixtures, and machinery | 9 | | furnished to the State shall have no such right of action
| 10 | | unless it shall have filed a verified notice of said claim with | 11 | | the
officer, board, bureau or department awarding the contract, | 12 | | within 180
days after the date of the last item of work or the | 13 | | furnishing of the
last item of materials , apparatus, fixtures, | 14 | | and machinery , and shall have furnished a copy of such verified
| 15 | | notice to the contractor within 10 days of the filing of the | 16 | | notice with
the agency awarding the contract. | 17 | | When any Claimant has a claim for labor , and material , | 18 | | apparatus, fixtures, and machinery furnished to a political | 19 | | subdivision, the Claimant shall have no right of action unless | 20 | | it shall have filed a verified notice of that claim with the | 21 | | Clerk or Secretary of the political subdivision within 180 days | 22 | | after the date of the last item of work or furnishing of the | 23 | | last item of materials , apparatus, fixtures, and machinery , and | 24 | | shall have filed a copy of that verified notice upon the | 25 | | contractor in a like manner as provided herein within 10 days | 26 | | after the filing of the notice with the Clerk or Secretary. |
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| 1 | | The Claimant may file said verified notice by using | 2 | | personal service or by depositing the verified notice in the | 3 | | United States Mail, postage prepaid, certified or restricted | 4 | | delivery return receipt requested limited to addressee only. | 5 | | The verified notice shall be deemed filed on the date personal | 6 | | service occurs or the date when the verified notice is mailed | 7 | | in the form and manner provided in this Section.
| 8 | | The claim shall be verified and shall contain
(1) the name | 9 | | and address of the claimant; the business address of the
| 10 | | Claimant within this State and if the Claimant shall be a | 11 | | foreign
corporation having no place of business within the | 12 | | State, the notice
shall state the principal place of business | 13 | | of said corporation and in
the case of a partnership, the | 14 | | notice shall state the names and
residences of each of the | 15 | | partners; (2) the name of the contractor for
the government; | 16 | | (3) the name of the person, firm or corporation by whom
the | 17 | | Claimant was employed or to whom he or it furnished materials , | 18 | | apparatus, fixtures, or machinery ; (4)
a brief description of | 19 | | the public
improvement; (5) a description of the Claimant's | 20 | | contract as it pertains to the public improvement, describing | 21 | | the work done by the Claimant and stating the total amount due | 22 | | and unpaid as of the date of verified notice.
| 23 | | No defect in the notice herein provided for shall deprive | 24 | | the
Claimant of his right of action under this article unless | 25 | | it shall
affirmatively appear that such defect has prejudiced | 26 | | the rights of an
interested party asserting the same.
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| 1 | | Provided, further, that no action shall be brought later | 2 | | than one year after the date of the
furnishing of the last item | 3 | | of work , or materials , apparatus, fixtures, or machinery by the | 4 | | Claimant. Such action shall be
brought only in the circuit | 5 | | court of this State in the judicial circuit in
which the | 6 | | contract is to be performed.
| 7 | | The remedy provided in this Section is in addition to and | 8 | | independent of
any other rights and remedies provided at law or | 9 | | in equity. A waiver of rights
under the Mechanics Lien Act | 10 | | shall not constitute a waiver of rights under this
Section | 11 | | unless specifically stated in the waiver.
| 12 | | For the purposes of this Section, the terms "material", | 13 | | "labor", "apparatus", "fixtures", and "machinery" include | 14 | | those rented items that are on the construction site and those | 15 | | rented tools that are used or consumed on the construction site | 16 | | in the performance of the contract on account of which the bond | 17 | | is given. | 18 | | (Source: P.A. 99-673, eff. 1-1-17 .)
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