Bill
SB 3825
Authorizes IEPA to issue up to $2 billion in bonds to fund a loan program that accelerates lead service line replacements, including for disadvantaged communities.
Title: Lead Service Line Replacement Bonding Act
Jurisdiction: Illinois
Introduced: February 6, 2026
Sponsor: Sen. Ram Villivalam (co-sponsor)
Status: Introduced and referred to committees; subject to appropriations and rule deadlines (as of the latest action history).
Overall purpose
- Create a new framework for financing the replacement of lead service lines (LSLs) in Illinois by authorizing the Illinois Environmental Protection Agency (IEPA) to issue up to $2.0 billion in bonds to fund a dedicated loan program.
- Accelerate lead service line replacement by leveraging bond proceeds to support low-cost financing and targeted assistance for disadvantaged communities, while also enabling refinancing or refunding of related obligations.
Key provisions
- Short title: Lead Service Line Replacement Bonding Act.
- Findings and purpose: Recognizes public health risks of lead service lines, emphasizes the need for infrastructure investment to ensure safe drinking water, and asserts that bond-financed loans will accelerate LSL removal and leverage other funds.
- Definitions:
- Agency: Illinois Environmental Protection Agency (IEPA).
- Bond(s): Bonds, notes, or other evidences of indebtedness issued by the IEPA under this Act.
- Lead service line: As defined by the Environmental Protection Act (Section 17.12).
- Lead Service Line Replacement Loans Program (LSLR Program): The IEPA-administered loan program to finance full replacement of lead service lines, including both publicly and privately owned portions.
- Authority to issue bonds:
- Bond authorization: IEPA may issue bonds in one or more series, up to a total aggregate principal amount of $2,000,000,000.
- Use of bond proceeds:
1) Provide low-interest or zero-interest loans for LSL replacement projects.
2) Provide principal forgiveness or negative-interest loans for disadvantaged communities, as permitted by law.
3) Pay costs of issuance, administration, and credit enhancement related to the bonds.
4) Refinance or refund outstanding obligations issued for similar purposes if it is in the state's best interest.
- Uses beyond loans: The act contemplates financing-related costs (issuance, administration, credit enhancement) and potential refinancing/refunding of existing debt for similar purposes.
Who is affected
- State government and IEPA: Responsible for issuing bonds and administering the LSLR Program.
- Local governments and water utilities: Potential borrowers of the LSLR Program loans.
- Private property owners: Beneficiaries of LSL replacement where privately owned portions of service lines are involved, given the program covers replacements on both public and private portions.
- Disadvantaged communities: Targeted access to favorable financing terms (principal forgiveness or negative-interest loans) to reduce barriers to replacement.
- Taxpayers and credit markets: The state’s bond issuance will affect state debt levels, debt management strategies, and potential interest rate costs/credit enhancements.
Procedural/timeline considerations
- Legislative process timelines are stated in the action history (e.g., Rule 2-10 committee deadlines and readings), indicating ongoing consideration within appropriations and infrastructure-related committees.
- Specific dates included in the bill’s introduction and subsequent committee deadlines:
- Rule 2-10 Committee deadlines set (e.g., by April 24, 2026, and May 15, 2026, for certain milestones).
- No explicit sunset or expiration date is stated in the introduced text; future amendments could adjust bond limits or program parameters.
Notes for readers
- The bill focuses on financial capability to accelerate LSL replacement through a state bond program, prioritizing affordability for disadvantaged communities and enabling broader program administration costs and potential refinancing.
- It does not itself authorize specific projects; rather, it authorizes financing to fund the LSLR Program and related costs.
Compiled from official sources — confirm details with the bill’s official record.
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