65 ILCS 5/11-39-3
2021 Illinois Compiled Statutes|Chapter 65 - MUNICIPALITIES|65 ILCS 5/ - Illinois Municipal Code.|Article 11 - Corporate Powers and Functions

Sec. 11-39-3. Builder or developer cash bond or other surety.(a) A 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 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 municipality accepting such security, in an  amount  equal  to or greater than 110% of the amount of the bid on each project improvement.  A builder or developer has the option to 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 municipality, to  satisfy any cash bond requirement established by a municipality.  Except for a municipality or county with a population of 1,000,000 or more,  the 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 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 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 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 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 municipality in writing of  the  completion of the project improvement for which the bond  was required.  For these purposes, "completion" means that the 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 builder or  developer and the municipality that the project improvement has been completed  to the applicable codes and ordinances.  The municipality shall pay interest to the builder or developer, beginning 60  days after builder or developer notifies the 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) A home rule 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 this Code  as they apply to and guarantee completion of a project improvement that is  required by the 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 municipality of powers and functions exercised by the State.  (Source: P.A. 96-1000, eff. 7-2-10.)