Illinois is the one state in our reading of 48 whose public-works bond threshold is the same number the federal acquisition regulation states. That coincidence makes it the most useful state on this site for seeing what else differs between a Little Miller Act and the Miller Act — because with the threshold held still, everything that moves is a real difference.
The number, and the date attached to it
The general provision is 30 ILCS 550/1:
“Except as otherwise provided by this Act, until January 1, 2029, all officials, boards, commissions, or agents of this State, or of any political subdivision thereof, in making contracts for public work of any kind costing over $150,000 to be performed for the State, or of any political subdivision thereof, shall require every contractor for the work to furnish, supply and deliver a bond to the State, or to the political subdivision thereof entering into the contract, as the case may be, with good and sufficient sureties.”
FAR 28.102-1(a) states that the Miller Act “requires performance and payment bonds for any construction contract exceeding $150,000.” Same figure, entirely different provenance: the federal number is the inflation-adjusted acquisition threshold sitting on top of the $100,000 in 40 U.S.C. § 3131(b), while the Illinois number is a legislative choice.
The words “until January 1, 2029” are part of the provision, not commentary about it — and they do not mean what a reader naturally assumes.
January 1, 2029 is a step-down, not an expiry
The obvious reading of a date on the face of a statute is that the rule lapses. Illinois does the opposite. 30 ILCS 550/1 carries a second, parallel requirement that switches on at exactly that moment:
“On and after January 1, 2029, all officials, boards, commissions, or agents of this State, or of any political subdivision thereof, in making contracts for public work of any kind costing over $50,000 to be performed for the State, or of any political subdivision thereof, shall require every contractor for the work to furnish, supply and deliver a bond”
The bond requirement does not end in 2029. Under 30 ILCS 550/1 the threshold falls to $50,000, and a great deal of Illinois public work that is unbonded today becomes bonded work then.
That is close to the opposite of a sunset, and it is the single most consequential thing in this section for a contractor planning past that date — a firm whose Illinois work sits between the two figures is currently outside the requirement and will not be.
There is a third figure alongside them in 30 ILCS 550/1. Until the same date, “local governmental units may require a bond, by ordinance or resolution, for public works contracts valued at $150,000 or less” — so below the threshold a bond is not prohibited, it is simply not compelled by the state.
Transportation work has its own, much higher figure
The second provision of 30 ILCS 550/1 covers the state’s two largest road builders:
“Until January 1, 2029, when making contracts for public works to be constructed, the Department of Transportation and the Illinois State Toll Highway Authority shall require every contractor for those works to furnish, supply, and deliver a bond to the Department or the Authority, as the case may be, with good and sufficient sureties only if the public works contract will cost more than $500,000.”
More than three times the general threshold, and the word only is doing the work: below that figure these two bodies are not required to take a bond at all.
Illinois is therefore a two-threshold state in the same family as Texas, Pennsylvania, New Hampshire, Virginia and Louisiana — but it splits on a basis none of them uses. Texas splits by which bond; Pennsylvania by class of contracting body; New Hampshire by state versus subdivision; Virginia by project type. Illinois splits by two named agencies.
Virginia is the closest comparison and it is instructive that they point opposite ways. Va. Code § 2.2-4337 sets transportation lower than general construction — $350,000 against $500,000 — while Illinois sets transportation higher, $500,000 against $150,000. Two legislatures looked at the same question and disagreed about which direction the exception runs.
The terms are in your bond whether you printed them or not
This is the provision with no federal counterpart, and it is unusual drafting:
“Each such bond is deemed to contain the following provisions whether such provisions are inserted in such bond or not: ‘The principal and sureties on this bond agree that all the undertakings, covenants, terms, conditions and agreements of the contract or contracts entered into between the principal and the State or any political subdivision thereof will be performed and fulfilled and to pay all persons, firms and corporations having contracts with the principal or with subcontractors, all just claims due them under the provisions of such contracts for labor performed or materials furnished in the performance of the contract on account of which this bond is given, when such claims are not satisfied out of the contract price of the contract on account of which this bond is given, after final settlement between the officer, board, commission or agent of the State or of any political subdivision thereof and the principal has been made.’”
Two consequences.
A defectively drafted bond still carries the statutory undertakings. A bond form that omits the payment language is not thereby a performance-only bond in Illinois; the statute writes the language back in.
The performance and payment obligations are one instrument. Illinois does not describe two bonds. It describes one bond deemed to contain both undertakings — the contract will be performed, and the people below the principal will be paid. That is a different architecture from the federal scheme at 40 U.S.C. § 3131(b), which requires a performance bond and a payment bond as separate instruments with separate beneficiaries.
Note the timing clause at the end of the payment undertaking: claims are covered “when such claims are not satisfied out of the contract price … after final settlement … has been made”. The bond answers for what the contract price did not.
What the surety must do when you default
For one class of Illinois contract, the statute prescribes the remedy rather than leaving it to the bond form:
“Upon the default of the principal with respect to undertakings, covenants, terms, conditions, and agreements, the termination of the contractor’s right to proceed with the work, and written notice of that default and termination by the State or any political subdivision to the surety (‘Notice’), the surety shall promptly remedy the default by taking one of the following actions: (1) The surety shall complete the work pursuant to a written takeover agreement, using a completing contractor jointly selected by the surety and the State or any political subdivision; or (2) The surety shall pay a sum of money to the obligee, up to the penal sum of the bond, that represents the reasonable cost to complete the work that exceeds the unpaid balance of the contract sum.”
This applies to bonds securing contracts between the Capital Development Board — or a board of a public institution of higher education — and a contractor.
Three preconditions have to line up before the duty attaches: default, termination of the right to proceed, and written notice of both to the surety. Then the surety chooses one of two routes, and the choice is the surety’s: take over with a jointly selected completing contractor, or write a check for the excess completion cost up to the penal sum.
For a defaulting contractor that matters because the two outcomes produce very different indemnity exposures. For an owner it matters because the statute puts the surety on a clock — “shall promptly remedy” — rather than leaving the pace to negotiation.
Why Illinois is the comparison state
Set the two statutes side by side with the threshold held constant and the real differences stand out: the federal scheme is two separate instruments, Illinois is one deemed-content instrument; the federal penal sum is 100 percent of the original contract price under FAR 28.102-2(b), Illinois does not state a percentage in the provisions we have read; the federal claim mechanics at 40 U.S.C. § 3133 are detailed and Illinois’s are not in this section at all; and Illinois carries a sunset date, which no federal provision here does.
Same number, different statute, almost entirely.
Three ways out of the bond, and one way not
The section names substitutes, each fenced differently.
Emergency repairs. “If the contract is for emergency repairs as provided in the Illinois Procurement Code, proof of payment for all labor, materials, apparatus, fixtures, and machinery may be furnished in lieu of the bond required by this Section.” Proof that everyone has been paid, after the fact — the same shape as Oklahoma’s affidavit under 61 O.S. § 1, but reached through urgency rather than contract size.
A letter of credit, on local money only (30 ILCS 550/1). “When other than motor fuel tax funds, federal-aid funds, or other funds received from the State are used, a political subdivision may allow the contractor to provide a non-diminishing irrevocable bank letter of credit, in lieu of the bond required by this Section, on contracts under $100,000.” Note the funding test: the substitute is available only when no state or federal money is in the job.
A transportation pilot, in the same section of 30 ILCS 550/1. “In order to reduce barriers to entry for diverse and small businesses, the Department of Transportation may implement a 5-year pilot program to allow a contractor to provide a non-diminishing irrevocable bank letter of credit in lieu of the bond required by this Section on contracts under $500,000.”
And the way that is closed: “in the case of State construction contracts, a contractor shall not be required to post a cash bond or letter of credit in addition to or as a substitute for the surety bond required by this Section.” The State may not stack security on top of the bond.
Who may write the bond
Illinois is unusually specific about the surety itself. The company must be “licensed by the Department of Insurance authorizing it to execute surety bonds” and must “have a financial strength rating of at least A- as rated by A.M. Best Company, Inc., Moody’s Investors Service, Standard & Poor’s Corporation, or a similar rating agency.”
A named rating floor in the statute is rare. South Carolina delegates surety eligibility to regulations under S.C. Code § 11-35-3030; Illinois writes the standard into the section.
Retainage is capped, and the cap steps down at half
Like Connecticut, Illinois ties retainage to the presence of a bond. Under 30 ILCS 550/1, a local governmental unit may not withhold “in an amount in excess of 10% of any payment made prior to the date of completion of 50% of the contract for public works”, and “when a contract for public works is 50% complete, the local governmental unit shall reduce the retainage so that no more than 5% is held.”
The same limits flow down within 30 ILCS 550/1: the contractor and its subcontractors “shall not withhold from their subcontractors retainage in excess of 10%” before the halfway point, reducing to 5% after it.
Connecticut’s equivalent caps sit at seven and one-half per cent stepping to five per cent under Conn. Gen. Stat. § 49-41. Two states, the same mechanism, different numbers.
The surety is on a clock
The deemed default provisions above come with timing that most statutes leave to negotiation. The surety “shall respond to the Notice within 15 working days of receipt indicating the course of action that it intends to take or advising that it requires more time”, and “in no case may the surety take longer than 30 working days to advise the State or political subdivision on the course of action it intends to take.”
The questions 30 ILCS 550 leaves open
This page reads the triggering and deemed-terms provisions. Several things it does not answer.
The Act still does not state a penal sum as a formula. It says only that “the amount of the bond shall be fixed by the officials, boards, commissions, commissioners or agents” — so the figure comes from the solicitation, with no statutory floor of the kind Idaho and Nevada impose.
The claim mechanics are not here. Notice requirements, who may claim, and the deadline for suit are not in the provisions quoted above, and this page does not import another state’s. If you are pursuing an unpaid Illinois claim, that is the part that decides it and it is not on this page.
And bid security is elsewhere again, as in most states.
