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Public Act 098-0216 Public Act 0216 98TH GENERAL ASSEMBLY |
Public Act 098-0216 | HB1404 Enrolled | LRB098 04290 OMW 34317 b |
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| AN ACT concerning finance.
| 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 1 as follows:
| (30 ILCS 550/1) (from Ch. 29, par. 15)
| Sec. 1. Except as otherwise provided by this Act, all | officials, boards,
commissions, or agents of this State , or of | any political subdivision thereof, in making contracts for | public work of
any kind costing over $50,000 to be performed | for the State, or of any political subdivision thereof, and all | officials, boards, commissions, or agents of any political | subdivision of this State in making contracts for public work | of any kind costing over $5,000 to be performed for the | political subdivision,
shall require every contractor for the | work to furnish, supply and deliver
a bond to the State, or to | the political subdivision thereof entering into
the contract, | as the case may be, with good and sufficient sureties. The
| amount of the bond shall be fixed by the officials, boards, | commissions,
commissioners or agents, and the bond, among other | conditions,
shall be
conditioned for the completion of the | contract, for the payment of material
used in the work and for | all labor performed in the work, whether by
subcontractor or |
| otherwise.
| If the contract is for emergency repairs as provided in the | Illinois
Procurement
Code, proof of payment for all labor, | materials, apparatus, fixtures, and
machinery may be
furnished | in lieu of the bond required by this Section.
| Each such bond is deemed to contain the following | provisions whether
such provisions are inserted in such bond or | not:
| "The principal and sureties on this bond agree that all the
| undertakings, covenants, terms, conditions and agreements of | the contract
or contracts entered into between the principal | and the State or any
political subdivision thereof will be | performed and fulfilled and to pay
all persons, firms and | corporations having contracts with the principal or
with | subcontractors, all just claims due them under the provisions | of such
contracts for labor performed or materials furnished in | the performance of
the contract on account of which this bond | is given, when such claims are
not satisfied out of the | contract price of the contract on account of which
this bond is | given, after final settlement between the officer, board,
| commission or agent of the State or of any political | subdivision thereof
and the principal has been made.". | Each bond securing contracts between the Capital | Development Board or any board of a public institution of | higher education and a contractor shall contain the following | provisions, whether the provisions are inserted in the bond or |
| not: | "Upon the default of the principal with respect to | undertakings, covenants, terms, conditions, and agreements, | the termination of the contractor's right to proceed with the | work, and written notice of that default and termination by the | State or any political subdivision to the surety ("Notice"), | the surety shall promptly remedy the default by taking one of | the following actions: | (1) The surety shall complete the work pursuant to a | written takeover agreement, using a completing contractor | jointly selected by the surety and the State or any | political subdivision; or | (2) The surety shall pay a sum of money to the obligee, | up to the penal sum of the bond, that represents the | reasonable cost to complete the work that exceeds the | unpaid balance of the contract sum. | The surety shall respond to the Notice within 15 working | days of receipt indicating the course of action that it intends | to take or advising that it requires more time to investigate | the default and select a course of action. If the surety | requires more than 15 working days to investigate the default | and select a course of action or if the surety elects to | complete the work with a completing contractor that is not | prepared to commence performance within 15 working days after | receipt of Notice, and if the State or any political | subdivision determines it is in the best interest of the State |
| to maintain the progress of the work, the State or any | political subdivision may continue to work until the completing | contractor is prepared to commence performance. Unless | otherwise agreed to by the procuring agency, in no case may the | surety take longer than 30 working days to advise the State or | political subdivision on the course of action it intends to | take. The surety shall be liable for reasonable costs incurred | by the State or any political subdivision to maintain the | progress to the extent the costs exceed the unpaid balance of | the contract sum, subject to the penal sum of the bond.".
| The surety bond required by this Section may be acquired | from the
company, agent or broker of the contractor's choice. | The bond and sureties
shall
be subject to the right of | reasonable approval or disapproval, including
suspension, by | the State or political subdivision thereof concerned. In the
| case of State construction contracts, a contractor shall not be | required to
post a cash bond or letter of credit in addition to | or as a substitute for the
surety bond required by this | Section.
| When other than motor fuel tax funds, federal-aid funds, or | other
funds received from the State are used, a political | subdivision may allow
the contractor to provide a | non-diminishing irrevocable bank letter of
credit, in lieu of | the bond required by this Section, on contracts under
$100,000 | to comply with the requirements of this Section. Any such bank
| letter of credit shall contain all provisions required for |
| bonds by this
Section.
| (Source: P.A. 95-1011, eff. 12-15-08; 96-1000, eff. 7-2-10.)
| Section 99. Effective date. This Act takes effect upon | becoming law.
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Effective Date: 8/9/2013
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