Letter to Senate Executive Committee Opposing SB157

On behalf of the National Association of Surety Bond Producers (NASBP), a national trade association representing firms employing surety bond producers, including licensed resident and non-resident agents placing contract surety bonds in the state of Illinois, we strongly oppose SB157. This legislation seeks to amend Section 1 (30 ILCS 550/1) of the Public Construction Bond Act, Illinois’ Little Miller Act, by raising the current bond threshold from $50,000 to $5,000,000. The legislation also creates a “self-insured risk pool” to pay claims or damages arising under a public works construction contract valued at $5,000,000 or less because of a contractor’s failure. SB157 elevates the Illinois’ bond threshold to the highest in the Nation, which is 35 times greater than the federal threshold ($150,000) as required by the Miller Act (40 U.S.C. §§ 3131 et seq;) and applicable regulations. In addition, Illinois’ bond threshold will become an outlier to the thresholds of neighboring states, such as Indiana ($200,000), Iowa ($25,000), (Michigan ($50,000), Minnesota ($175,000), Missouri ($50,000) and Wisconsin ($148,000/local/$369,000/state projects), if this bill is enacted, ensuring that Illinois taxpayers will shoulder and be responsible for the most extreme construction default risks compared to those of surrounding states.

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