Bill Text: IL HB3751 | 2017-2018 | 100th General Assembly | Introduced

---

Bill Title: 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 the preemption of home rule powers. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2019-01-08 - Session Sine Die [HB3751 Detail]

Download: Illinois-2017-HB3751-Introduced.html

---

100TH GENERAL ASSEMBLY State of Illinois 2017 and 2018 HB3751 Introduced , by Rep. Martin J. Moylan SYNOPSIS AS INTRODUCED:
30 ILCS 550/3
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 the preemption of home rule powers. Effective immediately.
LRB100 07336 MLM 17399 b
FISCAL NOTE ACT MAY APPLY
A BILL FOR
HB3751 LRB100 07336 MLM 17399 b
AN ACT concerning local government.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
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) 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 county or municipality builder or
developer has the option to require 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

HB3751 - 2 - LRB100 07336 MLM 17399 b
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.
(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

HB3751 - 3 - LRB100 07336 MLM 17399 b
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) (Blank). 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 99. Effective date. This Act takes effect upon
becoming law.