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90_SB0919
30 ILCS 550/3
55 ILCS 5/5-1123
65 ILCS 5/11-39-3
Amends the Public Construction Bond Act, the Counties
Code, and the Illinois Municipal Code. Provides that a
county or municipality may not require a cash bond from a
builder or developer to guarantee completion of a project
improvement when the builder or developer has filed an
irrevocable letter of credit or other commercially reasonable
security substitute with the county or municipal clerk (now,
an irrevocable letter of credit). Effective immediately.
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1 AN ACT concerning cash bond requirements.
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
5 by changing Section 3 as follows:
6 (30 ILCS 550/3)
7 Sec. 3. Builder or developer cash bond.
8 (a) A county or municipality may not require a cash bond
9 from a builder or developer to guarantee completion of a
10 project improvement when the builder or developer has filed a
11 current, irrevocable letter of credit with good and
12 sufficient sureties or other commercially reasonable security
13 substitute with the county or municipal clerk in an amount
14 equal to or greater than 110% of the amount of the bid on
15 each project improvement. A builder or developer may elect to
16 utilize an irrevocable letter of credit or other commercially
17 reasonable security substitute to satisfy any cash bond
18 requirement established by a county or municipality.
19 (b) If a county or municipality receives a cash bond
20 from a builder or developer to guarantee completion of a
21 project improvement, the county or municipality shall (i)
22 register the bond under the address of the project and the
23 construction permit number and (ii) give the builder or
24 developer a receipt for the bond. The county or municipality
25 shall establish and maintain a separate account for all cash
26 bonds received from builders and developers to guarantee
27 completion of a project improvement.
28 (c) The county or municipality shall refund a cash bond
29 to a builder or developer within 60 days after the builder or
30 developer notifies the county or municipality in writing of
31 the completion of the project improvement for which the bond
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1 was required. For these purposes, "completion" means that the
2 county or municipality has determined that the project
3 improvement for which the bond was required is complete or a
4 licensed engineer or licensed architect has certified to the
5 builder or developer and the county or municipality that the
6 project improvement has been completed to the applicable
7 codes and ordinances. The county or municipality shall pay
8 interest to the builder or developer, beginning 60 days after
9 the builder or developer notifies the county or municipality
10 in writing of the completion of the project improvement, on
11 any bond not refunded to a builder or developer, at the rate
12 of 1% per month.
13 (d) A home rule county or municipality may not require
14 or maintain cash bonds from builders or developers in a
15 manner inconsistent with this Section. This Section is a
16 denial and limitation under subsection (i) of Section 6 of
17 Article VII of the Illinois Constitution on the concurrent
18 exercise by a home rule county or municipality of powers and
19 functions exercised by the State.
20 (Source: P.A. 89-518, eff. 1-1-97.)
21 Section 10. The Counties Code is amended by changing
22 Section 5-1123 as follows:
23 (55 ILCS 5/5-1123)
24 Sec. 5-1123. 5-1121. Builder or developer cash bond.
25 (a) A county may not require a cash bond from a builder
26 or developer to guarantee completion of a project improvement
27 when the builder or developer has filed a current,
28 irrevocable letter of credit with good and sufficient
29 sureties or other commercially reasonable security substitute
30 with the county clerk in an amount equal to or greater than
31 110% of the amount of the bid on each project improvement. A
32 builder or developer may elect to utilize an irrevocable
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1 letter of credit or other commercially reasonable security
2 substitute to satisfy any cash bond requirement established
3 by a county.
4 (b) If a county receives a cash bond from a builder or
5 developer to guarantee completion of a project improvement,
6 the county shall (i) register the bond under the address of
7 the project and the construction permit number and (ii) give
8 the builder or developer a receipt for the bond. The county
9 shall establish and maintain a separate account for all cash
10 bonds received from builders and developers to guarantee
11 completion of a project improvement.
12 (c) The county shall refund a cash bond to a builder or
13 developer within 60 days after the builder or developer
14 notifies the county in writing of the completion of the
15 project improvement for which the bond was required. For
16 these purposes, "completion" means that the county has
17 determined that the project improvement for which the bond
18 was required is complete or a licensed engineer or licensed
19 architect has certified to the builder or developer and the
20 county that the project improvement has been completed to the
21 applicable codes and ordinances. The county shall pay
22 interest to the builder or developer, beginning 60 days after
23 the builder or developer notifies the county in writing of
24 the completion of the project improvement, on any bond not
25 refunded to a builder or developer, at the rate of 1% per
26 month.
27 (d) A home rule county may not require or maintain cash
28 bonds from builders or developers in a manner inconsistent
29 with this Section. This Section is a denial and limitation
30 under subsection (i) of Section 6 of Article VII of the
31 Illinois Constitution on the concurrent exercise by a home
32 rule county of powers and functions exercised by the State.
33 (Source: P.A. 89-518, eff. 1-1-97; revised 8-15-96.)
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1 Section 15. The Illinois Municipal Code is amended by
2 changing Section 11-39-3 as follows:
3 (65 ILCS 5/11-39-3)
4 Sec. 11-39-3. Builder or developer cash bond.
5 (a) A municipality may not require a cash bond from a
6 builder or developer to guarantee completion of a project
7 improvement when the builder or developer has filed a
8 current, irrevocable letter of credit or other commercially
9 reasonable security substitute with good and sufficient
10 sureties with the clerk of the municipality in an amount
11 equal to or greater than 110% of the amount of the bid on
12 each project improvement. A builder or developer may elect to
13 utilize an irrevocable letter of credit or other commercially
14 reasonable security substitute to satisfy any cash bond
15 requirement established by a municipality.
16 (b) If a municipality receives a cash bond from a
17 builder or developer to guarantee completion of a project
18 improvement, the municipality shall (i) register the bond
19 under the address of the project and the construction permit
20 number and (ii) give the builder or developer a receipt for
21 the bond. The municipality shall establish and maintain a
22 separate account for all cash bonds received from builders
23 and developers to guarantee completion of a project
24 improvement.
25 (c) The municipality shall refund a cash bond to a
26 builder or developer within 60 days after the builder or
27 developer notifies the municipality in writing of the
28 completion of the project improvement for which the bond was
29 required. For these purposes, "completion" means that the
30 municipality has determined that the project improvement for
31 which the bond was required is complete or a licensed
32 engineer or licensed architect has certified to the builder
33 or developer and the municipality that the project
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1 improvement has been completed to the applicable codes and
2 ordinances. The municipality shall pay interest to the
3 builder or developer, beginning 60 days after builder or
4 developer notifies the municipality in writing of the
5 completion of the project improvement, on any bond not
6 refunded to a builder or developer, at the rate of 1% per
7 month.
8 (d) A home rule municipality may not require or maintain
9 cash bonds from builders or developers in a manner
10 inconsistent with this Section. This Section is a denial and
11 limitation under subsection (i) of Section 6 of Article VII
12 of the Illinois Constitution on the concurrent exercise by a
13 home rule
14 (Source: P.A. 89-518, eff. 1-1-97.)
15 Section 99. Effective date. This Act takes effect upon
16 becoming law.