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HB 3655

STATE CONTRACTS-SMALL BUSINESS

104th Regular Session Introduced by Dee Avelar and 17 co-sponsors

Establishes a low-interest financing program for Illinois small contractors winning state work and expands construction small-business set-asides (25–40%), with annual reporting.

Rule 19(a) / Re-referred to Rules Committee
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Bill Summary · HB 3655

HB 3655 — STATE CONTRACTS‑SMALL BUSINESS

Status: Rule 19(a) / Re‑referred to Rules Committee (most recent action 2025‑04‑11)

Purpose

HB 3655 is intended to increase small business participation in Illinois State contracting by (1) creating a low‑interest financing program to help small contractors fulfill State contracts and (2) strengthening procurement rules, reporting, and assessment tools that favor or track small business awards.

Key provisions

  • Small business financing program (new 20 ILCS 605/605‑1118)

    • The Department of Commerce and Economic Opportunity (DCEO) shall create, subject to appropriation, a small business financing program to provide low‑interest financing to small businesses that win State contracts to help them perform those contracts.

  • Changes to Illinois Procurement Code (amends 30 ILCS 500/45‑45; adds 30 ILCS 500/50‑95)

    • Small business set‑asides: Chief procurement officers may designate a fair proportion of construction, supply and service contracts as small business set‑asides; advertisements for those bids must note the set‑aside and be uniformly distributed to Illinois small businesses. Only qualified small business bids are considered for set‑aside contracts.
    • Definition and size thresholds: “Small business” is independently owned and not dominant in its field. The chief procurement officer will promulgate detailed rules, but statutory caps include:
    • Wholesale: not small if annual sales > $13,000,000
    • Retail/services: not small if annual sales/receipts > $8,000,000
    • Manufacturing: not small if > 250 employees
    • Construction: not small if annual sales/receipts > $14,000,000
    • Fair proportion for construction set‑asides: executive branch agencies should allocate no less than 25% and no more than 40% of annual construction contract dollars as small business set‑asides.
    • Withdrawal: Agencies may withdraw a set‑aside designation if in the State’s best interest; existing bids/offers are rejected and procurement proceeds without the set‑aside.
    • Small business specialists: Each chief procurement officer must designate one or more specialists to compile lists of potential small contractors, assist with bidding, review agency requests for set‑asides, recommend simplifications to increase participation, and assist in responsibility determinations.
    • Annual reporting: Small business specialists must report in writing (before November 1 each year) to the General Assembly on awards to small businesses, including total value of small business set‑aside awards and the value of awards to businesses owned by minorities, women, and persons with disabilities (per the Business Enterprise for Minorities, Women, and Persons with Disabilities Act).
    • Small business scorecard (new Sec. 50‑95): The Department of Central Management Services (CMS), consulting with State agencies, must develop a bid assessment scorecard for businesses with annual gross sales under $15,000,000 (as shown on federal income tax returns). The scorecard will include factors such as experience, location, time operating in Illinois, staff credentials, innovation, sales and other relevant socioeconomic factors.

Who is affected

  • Small businesses and contractors in Illinois (especially those under the stated size thresholds)
  • Minority‑, women‑, and disability‑owned businesses (reporting and set‑aside tracking)
  • State agencies, chief procurement officers, and procurement staff (new duties, reporting, and use of scorecard)
  • DCEO and CMS (program creation and scorecard development)
  • State budget (the financing program is subject to appropriation)

Fiscal and operational considerations

  • The small business financing program requires legislative appropriation; fiscal impact depends on funding level and loan terms.
  • Implementation will require CMS and agencies to develop processes, a scorecard, and annual reporting mechanisms, and may increase administrative workload.
  • Set‑aside targets (25–40% for construction) could shift procurement outcomes toward smaller vendors.

Procedural timeline / key actions

  • Filed/Introduced: February–March 2025 (filed 2025‑02‑07 / introduced by Rep. William “Will” Davis)
  • Assigned to Small Business, Technology Innovation, & Entrepreneurship Committee: 2025‑03‑11 (Do Pass 2025‑03‑20, 11‑0)
  • Read 1st time / Referred to Pensions, Investments & Financial Services: 2025‑03‑25
  • Placed on 2nd & 3rd Reading calendars; multiple co‑sponsors added March–April 2025
  • 2025‑04‑11: Rule 19(a) / Re‑referred to Rules Committee

Note: Some sections of the engrossed bill text appear editorially disordered; this summary focuses on the bill’s clear policy elements as reflected in the official synopsis and statutory inserts.

Compiled from official sources — confirm details with the bill’s official record.

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