- Published: Tuesday, January 09, 2024 03:15 PM
CHICAGO – Illinois formally implemented the nation's biggest reform to contractor redlining in public works law. The General Assembly passed, and Governor JB Pritzker certified on Dec. 8, House Bill 2878. Part of the new law is a larger exception from the requirement that contractors purchase wealth-based surety bonds on public contracts. The law tripled the exception for local governments (from $50K to $150K) and increased it by ten times for IDOT and the Tollway (from $50K to $500K). As of Jan. 1, 2024, contracts under that amount no longer will require surety bonds.
“I am grateful to all the stakeholders for their work on this vital legislation which will remove barriers for small businesses, many of which are women, veteran, and minority owned," said Senator Villivalam. "This legislation will help make our state more equitable and assist agencies in completing projects more efficiently."
“We are over-insuring public contracts, leading to higher costs and locking out minority- and women-owned businesses from participating and growing, because insurance is priced on the wealth of the owner, not on his or her capabilities. Right-sizing insurance requirements like surety bonds will lead to more projects and more generational wealth for communities that need it the most.” said Representative Kam Buckner, who filed HB2482 that would have raised the contract exemption to $5,000,000.
“We are leading the charge against redlining and paving the way for diverse contractors. This accomplishment is a national blueprint for progress. Here in Illinois, we’ve built and opened the road to fairness. This wouldn’t be possible without the Illinois Senate’s unwavering commitment to equality, and I’m proud of the work our caucus has done and the leadership provided by Senators Villivalam and Castro,” said Illinois Senate President Don Harmon.
Senate Bill 157 filed by Senator Villivalam and co-sponsored by Senators Peters, Fine, Hunter, Harris, Lightford and Castro would have raised the minimum contract value from $50,000 to $5,000,000.
“Ensuring access for minority businesses is foundational for a stronger, better Illinois. Surety bonds have locked out entrepreneurs who have the ability and know-how but not the wealth to work on public works projects. This is unacceptable and I’m delighted we are reducing this contractor redlining this year.” said Speaker Emanuel “Chris” Welch.