(20 ILCS 3520/20)
Sec. 20. Surety guarantees.
(a) Subject to the restrictions of this Act, the Department, on application, may guarantee any surety up to 90% of its losses incurred under a bid bond, a payment bond, or a performance bond on a contract of not more than $500,000 for each bond on any contract with the federal, the State, or any local government, with a member of the private sector, or with a utility regulated by the Illinois Commerce Commission. The amount guaranteed on the bond may vary based upon the size and type of job, reputation of the vendor, and other factors the Department considers relevant.
(b) The term of a guaranty under this Act may not exceed the contract term.
(c) The Department may vary the terms and conditions of the guaranty from surety to surety or contract to contract based upon the experience the contracting agency and the Department have had with the principal and the surety involved. The Department may require annual or quarterly progress reports from the contracting agency. The contents of the reports shall be specified by rules and regulations.
(d) The Department may not approve a guaranty under this Act unless the Department considers the contract for which a bond is sought to be guaranteed to have a substantial economic impact. To determine the economic impact of a contract, the Department may consider (i) the amount of the contract, (ii) the number of new jobs that will be created or existing jobs that will be retained, (iii) the economic condition of the area where the work will be performed or where the principal is headquartered, and (iv) any other factors the Department considers relevant.
(e) The funds that guarantee each bond shall be obligated from the Small Business Surety Bond Guaranty Fund when the performance bond is written, and de-obligated after the bond liability is released for performance bonds and after the period for filing claims has expired for payment bonds. Those funds shall be released when the bond is reported as not low for bid bonds.
(f) The maximum amount of outstanding guarantees for all principals shall not exceed 3 times the amount appropriated for the program in the then current fiscal year. No principal may have outstanding at any one time guarantees exceeding 20% of the Department's maximum guaranty limit.
(Source: P.A. 88-407; 88-665, eff. 9-16-94.)
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Last modified: February 18, 2015