2026 Government Contracting Reform Package
PURPOSE: Combined, the three bills below are intended to improve the speed with which state grant-making agencies issue grant agreements and contracts, improve the timeliness and predictability of payments made under state grants and contracts, provide both grant-making agencies and contractors with flexibility in how related funds are used, reduce confusion and improve education among state grant-making agency employees and nonprofit employees about various parts of the grant-making process, and help contractors track their bills and invoices more clearly
SUPPORTED BY: Forefront, Illinois Partners for Human Service, Illinois Health and Human Services Coalition
EQUITY NOTE: Organizations with the smallest budgets and those led by, or serving, Communities of Color are the most likely to face challenges with the State’s contracting and payment systems (see 2023 survey results). Since conducting this research, federal cuts are targeting many minority and/or community of color serving organizations, which is exacerbating these challenges
- Promptly Issue and Fully Fund Grants and Contracts – HB4707 / SB2844: Makes changes to the Government Accountability and Transparency Act (GATA); Requires GOMB to train State Agency staff on what services are subject to Prompt Payment Act, how to determine if an awardee is eligible for advance payments, and the Court of Claims process; Requires State Agencies to issue grant agreements within 60 days of the grant’s effective date; Requires grant agreements to include time frames for billing, Prompt Payment Act eligibility, and payment methodology; Forbids State Agencies from restricting indirect costs to less than 20% of the grant agreement or federally negotiated rate, whichever is higher
- Ensure Timely Payments – HB4288 / SB2845 – Makes changes to the Prompt Payment Act (PPA); Requires State Agencies to: Confirm receipt of a bill or invoice within 15 days or receipt; Review bill or invoice and transmit approved amounts to the Comptroller within 30 days of receipt; Make a voucher number, date, and amount electronically available within 15 days of submitting voucher to the Comptroller; Also allows agencies to use any appropriated fund to pay interest
- Modernize Court of Claims – HB4340 / SB2843 – Makes changes to the Court of Claims Act (COC); Requires State Agencies to confirm or reject uncontested claims arising from lapsed appropriations that are <$2,500 within 30 days of being notified of the claim by the Attorney General; Allows the Court to administratively determine small uncontested claims; Requires Court to confirm receipt within 30 days and notify vendors of defect(s) and how to correct defect(s) within 30 days; Requires the Comptroller to issue payment within 30 days of the Court entering an award for a claim described above. See ICOY Court of Claims Flow Chart.
- FACT SHEET (for all three bills)
Legacy Impact through Fair Transfers (LIFT) – HB4206 / SB2748
PURPOSE: Unlike gifts left in wills or trusts, Illinois has no law requiring financial institutions to timely transfer non-probate gifts left to 501(c)(3) tax-exempt charitable beneficiaries (i.e., retirement accounts, securities, payable/transfer-on-death accounts). This bill sets a standard for faster, more efficient transfers, reducing administrative delays and helping charities (including houses of worship, community foundations, & direct service providers) put donated dollars to work sooner.
SUPPORTED BY: Jewish United Fund, Forefront, and others (see page 2 of fact sheet below)
IMPACT: When a nonprofit or foundation has been left a non-probate gift, financial institutions often require extensive administrative paperwork to access these funds leading to administrative burdens, delayed timelines, and the sharing of sensitive personal information. These roadblocks delay charitable organizations from putting these donated dollars to use
Road to Census 2030 Act – HBXXXX / SB3459
PURPOSE: Include 3 appropriations totaling $2.6M in the state’s Fiscal Year 2027 budget support preparation for the 2030 Census. This amount may evolve as budget negotiations ensue, but is intended to be a starting point
SUPPORTED BY: Forefront
IMPACT: The recommended funding is intended to support the following planning activities: 1) for the Illinois Department of Human Services: relaunching the State Census Office and the Census Advisory Panel and planning for a statewide NOFO ($500,000); 2) for the Illinois Secretary of State’s office: beginning a public communication campaign and planning for the relaunch of the Complete Count Commission ($500,000); and 3) for the Illinois Department of Public Health: supporting the office of the State Demographer and coordinating with local governments to plan and participate in the Local Update of Census addresses (LUCA)
EQUITY NOTE: Children under age 5, Black and Latino communities, immigrants, and those living in group settings (dorms, nursing homes, jails, etc.) are most at risk for being undercounted. Undercounting then impacts representation in Congress and the distribution of federal funds, as well as other planning activities in economic development, transportation, and public health (for example)
- FACT SHEET (will be updated soon!)
Nonprofit Investment Pool – HB5314 / SB2968
PURPOSE: Will allow nonprofit organizations to invest money through the Illinois Funds Program, gaining access to higher interest rate investment opportunities, while keeping money safe and liquid
SUPPORTED BY: Illinois State Treasurer Michael Frerichs, Forefront
IMPACT: Potential benefits are aimed at small to medium sized NPOs (i.e., $1-10M) and could include increased liquidity and lower fees than a private bank. In exchange, nonprofits would have achieved slightly lower returns than they might have in an investment fund managed by a private bank. The Treasurer manages a similar program currently for units of local government in Illinois
EQUITY NOTE: The investment opportunity would have allowed smaller and medium sized nonprofits to access better investment opportunities than they are able to access on their own. Smaller nonprofits are more likely to be led by people of color. The bill also specifies that any nonprofit seeking to invest in the pool must be in compliance with the Illinois Human Rights Act.
Small 501c3 Lobbying Fee Waiver – HB 1169 / SB1196
PURPOSE: Allow the Secretary of State to grant a waiver to the lobbyist registration fee for qualifying 501c3 nonprofit organizations, including a fee waiver for any lobbyist registered to lobby under that entity
SUPPORTED BY: For a full list of supporters, see Fact Sheet below
IMPACT: Illinois grants no waivers to nonprofits and has no time or exemption thresholds before registration or fees apply, making Illinois’ fees the highest in the country. (See fees in other states.) This is particularly hard on nonprofits, who often rely on grants, contracts, and charitable donations that cannot be used for lobby fees. Waiving fees for 501c3s also aligns the state with the City of Chicago, which already provides a nonprofit fee waiver for lobbyist registration fees. Read more about lobbying rules in IL
EQUITY NOTE: The bills provide the fee waiver for the smallest 501c3s only. Small nonprofits are more likely to be led by, and serve, People of Color
FACT SHEETS:
Workforce Development through Charitable Loan Repayment Trailer Bill – HB5491 / SB3802
PURPOSE: Follow up bill to the Workforce Development through Charitable Loan Repayment Act which allows for a matching charitable loan repayment to support local workers. Updates the definition of a Qualified Community Foundation (QCF) in the Act to match the definition in the Illinois Gives Tax Credit Act.
SUPPORTED BY: Alliance of Illinois Community Foundations, Illinois Student Assistance Commission, Forefront
IMPACT: By updating the definition in Illinois statute, this trailer bill will ensure that this definition falls into compliance with the national standards set forth by the Community Foundations National Standards for community foundations across the U.S.
EQUITY NOTE: Black students are more likely to borrow to pay for college at 90% compared to white students at 68%. Even after a decade, black borrowers hold more student loan debt than the amount they originally borrowed. The Workforce Development through Charitable Loan Repayment Act has prioritized applicants with a lower net wealth so that community foundations can uplift and attract workers in their own communities.
FACT SHEET (Coming soon!)