Full Text of SB1890 95th General Assembly
SB1890ham001 95TH GENERAL ASSEMBLY
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State Government Administration Committee
Adopted in House Comm. on May 28, 2008
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| AMENDMENT TO SENATE BILL 1890
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| AMENDMENT NO. ______. Amend Senate Bill 1890 by replacing | 3 |
| everything after the enacting clause with the following:
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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 $50,000 $5,000 to be | 11 |
| performed for the State, and all officials, boards, | 12 |
| commissions, or agents of any political subdivision of this | 13 |
| State in making contracts for public work of any kind costing | 14 |
| over $5,000 to be performed for the political subdivision, or a | 15 |
| political
subdivision thereof
shall require every contractor | 16 |
| for the work to furnish, supply and deliver
a bond to the |
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| State, or to the political subdivision thereof entering into
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| the contract, as the case may be, with good and sufficient | 3 |
| sureties. The
amount of the bond shall be fixed by the | 4 |
| officials, boards, commissions,
commissioners or agents, and | 5 |
| the bond, among other conditions,
shall be
conditioned for the | 6 |
| completion of the contract, for the payment of material
used in | 7 |
| the work and for all labor performed in the work, whether by
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| subcontractor or otherwise.
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| If the contract is for emergency repairs as provided in the | 10 |
| Illinois
Procurement
Code, proof of payment for all labor, | 11 |
| materials, apparatus, fixtures, and
machinery may be
furnished | 12 |
| in lieu of the bond required by this Section.
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| Each such bond is deemed to contain the following | 14 |
| provisions whether
such provisions are inserted in such bond or | 15 |
| 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 | 18 |
| the contract
or contracts entered into between the principal | 19 |
| and the State or any
political subdivision thereof will be | 20 |
| performed and fulfilled and to pay
all persons, firms and | 21 |
| corporations having contracts with the principal or
with | 22 |
| subcontractors, all just claims due them under the provisions | 23 |
| of such
contracts for labor performed or materials furnished in | 24 |
| the performance of
the contract on account of which this bond | 25 |
| is given, when such claims are
not satisfied out of the | 26 |
| contract price of the contract on account of which
this bond is |
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| given, after final settlement between the officer, board,
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| commission or agent of the State or of any political | 3 |
| subdivision thereof
and the principal has been made. | 4 |
| Each bond securing contracts between the Capital | 5 |
| Development Board or any board of a public institution of | 6 |
| higher education and a contractor shall contain the following | 7 |
| provisions, whether the provisions are inserted in the bond or | 8 |
| not: | 9 |
| "Upon the default of the principal with respect to | 10 |
| undertakings, covenants, terms, conditions, and agreements, | 11 |
| the termination of the contractor's right to proceed with the | 12 |
| work, and written notice of that default and termination by the | 13 |
| State or any political subdivision to the surety ("Notice"), | 14 |
| the surety shall promptly remedy the default by taking one of | 15 |
| the following actions: | 16 |
| (1) The surety shall complete the work pursuant to a | 17 |
| written takeover agreement, using a completing contractor | 18 |
| jointly selected by the surety and the State or any | 19 |
| political subdivision; or | 20 |
| (2) The surety shall pay a sum of money to the obligee, | 21 |
| up to the penal sum of the bond, that represents the | 22 |
| reasonable cost to complete the work that exceeds the | 23 |
| unpaid balance of the contract sum. | 24 |
| The surety shall respond to the Notice within 15 working | 25 |
| days of receipt indicating the course of action that it intends | 26 |
| to take or advising that it requires more time to investigate |
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| the default and select a course of action. If the surety | 2 |
| requires more than 15 working days to investigate the default | 3 |
| and select a course of action or if the surety elects to | 4 |
| complete the work with a completing contractor that is not | 5 |
| prepared to commence performance within 15 working days after | 6 |
| receipt of Notice, and if the State or any political | 7 |
| subdivision determines it is in the best interest of the State | 8 |
| to maintain the progress of the work, the State or any | 9 |
| political subdivision may continue to work until the completing | 10 |
| contractor is prepared to commence performance. Unless | 11 |
| otherwise agreed to by the procuring agency, in no case may the | 12 |
| surety take longer than 30 working days to advise the State or | 13 |
| political subdivision on the course of action it intends to | 14 |
| take. The surety shall be liable for reasonable costs incurred | 15 |
| by the State or any political subdivision to maintain the | 16 |
| progress to the extent the costs exceed the unpaid balance of | 17 |
| the contract sum, subject to the penal sum of the bond.".
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| The surety bond required by this Section may be acquired | 19 |
| from the
company, agent or broker of the contractor's choice. | 20 |
| The bond and sureties
shall
be subject to the right of | 21 |
| reasonable approval or disapproval, including
suspension, by | 22 |
| the State or political subdivision thereof concerned. In the
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| case of State construction contracts, a contractor shall not be | 24 |
| required to
post a cash bond or letter of credit in addition to | 25 |
| or as a substitute for the
surety bond required by this | 26 |
| Section.
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| When other than motor fuel tax funds, federal-aid funds, or | 2 |
| other
funds received from the State are used, a political | 3 |
| subdivision may allow
the contractor to provide a | 4 |
| non-diminishing irrevocable bank letter of
credit, in lieu of | 5 |
| the bond required by this Section, on contracts under
$100,000 | 6 |
| to comply with the requirements of this Section. Any such bank
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| letter of credit shall contain all provisions required for | 8 |
| 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 | 11 |
| becoming law.".
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