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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB5407

Introduced 2/13/2026, by Rep. Ann M. Williams

SYNOPSIS AS INTRODUCED:

20 ILCS 3501/825-65
20 ILCS 3501/845-45
50 ILCS 105/3

from Ch. 102, par. 3

Amends the Illinois Finance Authority Act. In provisions concerning
bond authorization and financing limits for clean coal projects, coal
projects, energy efficiency projects, PACE projects, and renewable energy
projects, provides that the limitations apply to outstanding bonds
(instead of issued bonds). Provides that those limitations do not include
bonds issued to refund the bonds of the Illinois Finance Authority or bonds
of predecessor authorities. Provides that no member, officer, or employee
of the Illinois Finance Authority may be in any manner financially
interested in any contract or agreement upon which that person may be
called to act or vote. Requires those members, officers, and employees to
abstain from deliberating or voting on the award or material modification
of any contract or agreement in which that person holds a financial
interest. Provides that no member, officer, or employee of the Illinois
Finance Authority may take or receive, or offer to take or receive, any
money or other thing of value as a gift, bribe, or means of influencing
that person's vote or action in that person's official capacity. Amends
the Public Officer Prohibited Activities Act. Provides that certain
provisions do not apply to the members and officers of the Illinois Finance
Authority. Makes other changes.
LRB104 20263 HLH 33714 b

A BILL FOR

HB5407
LRB104 20263 HLH 33714 b
1

AN ACT concerning finance.

2

Be it enacted by the People of the State of Illinois,
3
represented in the General Assembly:

4

Section 5.
The Illinois Finance Authority Act is amended
5
by changing Sections 825-65 and 845-45 as follows:

6

(20 ILCS 3501/825-65)
7

Sec. 825-65.
Clean Coal, Coal, Energy Efficiency, PACE,
8
and Renewable Energy Project Financing.
9

(a) Findings and declaration of policy.
10

(i) It is hereby found and declared that Illinois has
11

abundant coal resources and, in some areas of Illinois,
12

the demand for power exceeds the generating capacity.
13

Incentives to encourage the construction of coal-fueled
14

electric generating plants in Illinois to ensure power
15

generating capacity into the future and to advance clean
16

coal technology and the use of Illinois coal are in the
17

best interests of all of the citizens of Illinois.
18

(ii) It is further found and declared that Illinois
19

has abundant potential and resources to develop renewable
20

energy resource projects and that there are many
21

opportunities to invest in cost-effective energy
22

efficiency projects throughout the State. The development
23

of those projects will create jobs and investment as well

HB5407
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LRB104 20263 HLH 33714 b
1

as decrease environmental impacts and promote energy
2

independence in Illinois. Accordingly, the development of
3

those projects is in the best interests of all of the
4

citizens of Illinois.
5

(iii) The Authority is authorized to issue bonds to
6

help finance Clean Coal, Coal, Energy Efficiency, PACE,
7

and Renewable Energy projects pursuant to this Section.
8

(b) Definitions.
9

(i) "Clean Coal Project" means (A) "clean coal
10

facility", as defined in Section 1-10 of the Illinois
11

Power Agency Act; (B) "clean coal SNG facility", as
12

defined in Section 1-10 of the Illinois Power Agency Act;
13

(C) transmission lines and associated equipment that
14

transfer electricity from points of supply to points of
15

delivery for projects described in this subsection (b);
16

(D) pipelines or other methods to transfer carbon dioxide
17

from the point of production to the point of storage or
18

sequestration for projects described in this subsection
19

(b); or (E) projects to provide carbon abatement
20

technology for existing generating facilities.
21

(ii) "Coal Project" means new electric generating
22

facilities or new gasification facilities, as defined in
23

Section 605-332 of the Department of Commerce and Economic
24

Opportunity Law of the Civil Administrative Code of
25

Illinois, which may include mine-mouth power plants,
26

projects that employ the use of clean coal technology,

HB5407
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1

projects to provide scrubber technology for existing
2

energy generating plants, or projects to provide electric
3

transmission facilities or new gasification facilities.
4

(iii) "Energy Efficiency Project" means measures that
5

reduce the amount of electricity or natural gas required
6

to achieve a given end use, consistent with Section 1-10
7

of the Illinois Power Agency Act. "Energy Efficiency
8

Project" also includes measures that reduce the total Btus
9

of electricity and natural gas needed to meet the end use
10

or uses consistent with Section 1-10 of the Illinois Power
11

Agency Act.
12

(iv) "Renewable Energy Project" means (A) a project
13

that uses renewable energy resources, as defined in
14

Section 1-10 of the Illinois Power Agency Act; (B) a
15

project that uses environmentally preferable technologies
16

and practices that result in improvements to the
17

production of renewable fuels, including but not limited
18

to, cellulosic conversion, water and energy conservation,
19

fractionation, alternative feedstocks, or reduced
20

greenhouse gas emissions; (C) transmission lines and
21

associated equipment that transfer electricity from points
22

of supply to points of delivery for projects described in
23

this subsection (b); or (D) projects that use technology
24

for the storage of renewable energy, including, without
25

limitation, the use of battery or electrochemical storage
26

technology for mobile or stationary applications.

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1

(c) Creation of reserve funds. The Authority may establish
2
and maintain one or more reserve funds to enhance bonds issued
3
by the Authority for a Clean Coal Project, a Coal Project, an
4
Energy Efficiency Project, a PACE Project, or a Renewable
5
Energy Project. There may be one or more accounts in these
6
reserve funds in which there may be deposited:
7

(1) any proceeds of the bonds issued by the Authority
8

required to be deposited therein by the terms of any
9

contract between the Authority and its bondholders or any
10

resolution of the Authority;
11

(2) any other moneys or funds of the Authority that it
12

may determine to deposit therein from any other source;
13

and
14

(3) any other moneys or funds made available to the
15

Authority. Subject to the terms of any pledge to the
16

owners of any bonds, moneys in any reserve fund may be held
17

and applied to the payment of principal, premium, if any,
18

and interest of such bonds.
19

(d) Powers and duties. The Authority has the power:
20

(1) To issue bonds in one or more series pursuant to
21

one or more resolutions of the Authority for any Clean
22

Coal Project, Coal Project, Energy Efficiency Project,
23

PACE Project, or Renewable Energy Project authorized under
24

this Section, within the authorization set forth in
25

subsection (e).
26

(2) To provide for the funding of any reserves or

HB5407
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1

other funds or accounts deemed necessary by the Authority
2

in connection with any bonds issued by the Authority.
3

(3) To pledge any funds of the Authority or funds made
4

available to the Authority that may be applied to such
5

purpose as security for any bonds or any guarantees,
6

letters of credit, insurance contracts or similar credit
7

support or liquidity instruments securing the bonds.
8

(4) To enter into agreements or contracts with third
9

parties, whether public or private, including, without
10

limitation, the United States of America, the State or any
11

department or agency thereof, to obtain any
12

appropriations, grants, loans or guarantees that are
13

deemed necessary or desirable by the Authority. Any such
14

guarantee, agreement or contract may contain terms and
15

provisions necessary or desirable in connection with the
16

program, subject to the requirements established by the
17

Act.
18

(4.5) To make loans under subsection (i) of Section
19

801-40 to finance loans for PACE Projects.
20

(5) To exercise such other powers as are necessary or
21

incidental to the foregoing.
22

(e) Clean Coal Project, Coal Project, Energy Efficiency
23
Project, PACE Project, and Renewable Energy Project bond
24
authorization and financing limits. In addition to any other
25
bonds authorized to be issued under Sections 801-40(w),
26
825-60, 830-25 and 845-5, the Authority may have outstanding,

HB5407
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LRB104 20263 HLH 33714 b
1
at any time, bonds for the purpose enumerated in this Section
2
825-65 in an aggregate principal amount that shall not exceed
3
$3,000,000,000, subject to the following limitations: (i) up
4
to $300,000,000 may be
outstanding

issued
to finance projects,
5
as described in clause (C) of subsection (b)(i) and clause (C)
6
of subsection (b)(iv) of this Section 825-65; (ii) up to
7
$500,000,000 may be
outstanding

issued
to finance projects, as
8
described in clauses (D) and (E) of subsection (b)(i) of this
9
Section 825-65; (iii) up to $2,000,000,000 may be
outstanding

10
issued
to finance Clean Coal Projects, as described in clauses
11
(A) and (B) of subsection (b)(i) of this Section 825-65 and
12
Coal Projects, as described in subsection (b)(ii) of this
13
Section 825-65; and (iv) up to $2,000,000,000 may be
14
outstanding

issued
to finance Energy Efficiency Projects, as
15
described in subsection (b)(iii) of this Section 825-65,
16
Renewable Energy Projects, as described in clauses (A), (B),
17
and (D) of subsection (b)(iv) of this Section 825-65, and PACE
18
Projects.
The limitations on aggregate principal amounts
19
outstanding set forth in this subsection shall exclude bonds
20
issued to refund the bonds of the Authority or bonds of the
21
predecessor authorities issued under this Section 825-65.
An
22
application for a loan financed from bond proceeds from a
23
borrower or its affiliates for a Clean Coal Project, a Coal
24
Project, Energy Efficiency Project, PACE Project, or a
25
Renewable Energy Project may not be approved by the Authority
26
for an amount in excess of $450,000,000 for any borrower or its

HB5407
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LRB104 20263 HLH 33714 b
1
affiliates. A Clean Coal Project, Coal Project, or PACE
2
Project must be located within the State. An Energy Efficiency
3
Project may be located within the State or outside the State,
4
provided that, if the Energy Efficiency Project is located
5
outside of the State, it must be owned, operated, leased, or
6
managed by an entity located within the State or any entity
7
affiliated with an entity located within the State. These
8
bonds shall not constitute an indebtedness or obligation of
9
the State of Illinois and it shall be plainly stated on the
10
face of each bond that it does not constitute an indebtedness
11
or obligation of the State of Illinois, but is payable solely
12
from the revenues, income or other assets of the Authority
13
pledged therefor.
14

(f) The bonding authority granted under this Section is in
15
addition to and not limited by the provisions of Section
16
845-5.
17
(Source: P.A. 100-201, eff. 8-18-17; 100-919, eff. 8-17-18.)

18

(20 ILCS 3501/845-45)
19

Sec. 845-45.
Prohibited financial interest in contracts;
20
other potential conflicts of interest.

21

(a) No member, officer,
agent,
or employee of the
22
Authority
may be in any manner financially interested,
23
directly in that person's own name or indirectly in the name of
24
any other person, association, trust, or corporation, in any
25
contract or agreement upon which that person may be called to

HB5407
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LRB104 20263 HLH 33714 b
1
act or vote. No member, officer, or employee of the Authority
2
may represent before the Authority, either as an agent or
3
otherwise, any person, association, trust, or corporation,
4
with respect to any application or bid for any contract or
5
agreement upon which the person may be called to act or vote.
6
No member, officer, or employee of the Authority may take or
7
receive, or offer to take or receive, either directly or
8
indirectly, any money or other thing of value as a gift, bribe,
9
or means of influencing that person's vote or action in that
10
person's official capacity. Any member, officer, or employee
11
of the Authority who holds a financial interest prohibited by
12
this Section shall abstain from deliberating or voting on the
13
award or material modification of any contract or agreement in
14
which that person holds a financial interest. If an Authority
15
member abstains from deliberation or voting on a matter in
16
accordance with this Section, the abstaining member shall be
17
considered present for the purposes of establishing or
18
maintaining a quorum. An officer or employee of the Authority
19
that has abstained from the deliberation and awarding of a
20
contract or agreement is permitted to perform any
21
non-discretionary administrative duties necessary to carry out
22
the decision of the Authority with respect to the contract or
23
agreement.

shall, in his or her own name or in the name of a
24
nominee, be an officer or director or hold an ownership
25
interest of more than 7 1/2% in any person, association,
26
trust, corporation, partnership, or other entity that is, in

HB5407
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LRB104 20263 HLH 33714 b
1
its own name or in the name of a nominee, a party to a contract
2
or agreement upon which the member, officer, agent, or
3
employee may be called upon to act or vote.
4

(b)
A member, officer, or employee of the Authority shall
5
not be considered to have a financial interest in a contract or
6
agreement if (i) the contract or agreement under consideration
7
by the Authority is with a person, firm, partnership,
8
association, corporation, cooperative association, or public
9
body in which the member, officer, or employee of the
10
Authority has less than a 5% share in the ownership of the
11
entity, (ii) the interested member, officer, or employee
12
discloses the nature and extent of the financial interest
13
prior to deliberations concerning the proposed award or
14
material modification of the contract or agreement, (iii) the
15
contract or agreement is less than $1,500, and (iv) the
16
cumulative amount of all contracts or agreements so awarded to
17
the same person, firm, association, partnership, corporation,
18
or cooperative association in the same fiscal year does not
19
exceed $25,000. The limitations on individual and cumulative
20
contract or agreement amounts shall not apply to contracts or
21
agreements that are awarded after a competitive sealed
22
procurement or, in the case of a competitive grant
23
opportunity, a merit-based review in which the interested
24
member, officer, or employee was not involved. A member,
25
officer, or employee of the Authority shall not be considered
26
to have a financial interest in a contract or agreement

HB5407
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LRB104 20263 HLH 33714 b
1
involving a not-for-profit corporation, a unit of local
2
government, a school district, or any other public body if
3
such member, officer, or employee of the Authority serves as
4
an officer, director, or member of the not-for-profit
5
corporation, unit of local government, school district, or
6
other public body on a volunteer basis with no compensation
7
except for reimbursement by for expenses incurred as the
8
result of the volunteer service.

With respect to any direct or
9
any indirect interest, other than an interest prohibited in
10
subsection (a), in a contract or agreement upon which the
11
member, officer, agent, or employee may be called upon to act
12
or vote, a member, officer, agent, or employee of the
13
Authority shall disclose the interest to the secretary of the
14
Authority before the taking of final action by the Authority
15
concerning the contract or agreement and shall so disclose the
16
nature and extent of the interest and his or her acquisition of
17
it, and those disclosures shall be publicly acknowledged by
18
the Authority and entered upon the minutes of the Authority.
19
If a member, officer, agent, or employee of the Authority
20
holds such an interest, then he or she shall refrain from any
21
further official involvement in regard to the contract or
22
agreement, from voting on any matter pertaining to the
23
contract or agreement, and from communicating with other
24
members of the Authority or its officers, agents, and
25
employees concerning the contract or agreement.

26
Notwithstanding any other provision of law, any contract or

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LRB104 20263 HLH 33714 b
1
agreement entered into in conformity with
subsections (a) and

2
this subsection
(b)
of this Section
shall not be void or
3
invalid by reason of the interest described in this
4
subsection, nor shall any person so disclosing the interest
5
and refraining from further official involvement as provided
6
in
subsections (a) and (b) of this Section

this subsection
be
7
guilty of an offense, be removed from office, or be subject to
8
any other penalty on account of that interest.
9

(c) Any contract or agreement made in violation of
10
paragraphs (a) or (b) of this Section shall be null and void
11
and give rise to no action against the Authority.
12

(d) In making determinations under this Section, to the
13
extent applicable, the Authority may rely on precedent and
14
Attorney General guidance involving the interpretation of
15
Section 3 of the Public Officer Prohibited Activities Act. The
16
Authority may, by resolution, adopt policies to interpret and
17
effectuate this Section. Nothing in this Section shall be
18
interpreted to supersede obligations under the State Officials
19
and Employees Ethics Act, the Governmental Ethics Act, the
20
Illinois Procurement Code, or the Grant Accountability and
21
Transparency Act.
22
(Source: P.A. 93-205, eff. 1-1-04.)

23

Section 10.
The Public Officer Prohibited Activities Act
24
is amended by changing Section 3 as follows:

HB5407
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LRB104 20263 HLH 33714 b
1

(50 ILCS 105/3)

(from Ch. 102, par. 3)
2

Sec. 3.
Prohibited interest in contracts.
3

(a) No person holding any office, either by election or
4
appointment under the laws or Constitution of this State, may
5
be in any manner financially interested directly in his own
6
name or indirectly in the name of any other person,
7
association, trust, or corporation, in any contract or the
8
performance of any work in the making or letting of which such
9
officer may be called upon to act or vote. No such officer may
10
represent, either as agent or otherwise, any person,
11
association, trust, or corporation, with respect to any
12
application or bid for any contract or work in regard to which
13
such officer may be called upon to vote. Nor may any such
14
officer take or receive, or offer to take or receive, either
15
directly or indirectly, any money or other thing of value as a
16
gift or bribe or means of influencing his vote or action in his
17
official character. Any contract made and procured in
18
violation hereof is void. This Section shall not apply to any
19
person serving on an advisory panel or commission,
to the
20
members and officers of the Illinois Finance Authority,
to any
21
director serving on a hospital district board as provided
22
under subsection (a-5) of Section 13 of the Hospital District
23
Law, or to any person serving as both a contractual employee
24
and as a member of a public hospital board as provided under
25
Article 11 of the Illinois Municipal Code in a municipality
26
with a population between 13,000 and 16,000 that is located in

HB5407
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LRB104 20263 HLH 33714 b
1
a county with a population between 50,000 and 70,000.
2

(b) However, any elected or appointed member of the
3
governing body may provide materials, merchandise, property,
4
services, or labor, subject to the following provisions under
5
either paragraph (1) or (2):
6

(1) If:
7

A. the contract is with a person, firm,
8

partnership, association, corporation, or cooperative
9

association in which such interested member of the
10

governing body of the municipality has less than a 7
11

1/2% share in the ownership; and
12

B. such interested member publicly discloses the
13

nature and extent of his interest prior to or during
14

deliberations concerning the proposed award of the
15

contract; and
16

C. such interested member abstains from voting on
17

the award of the contract, though he shall be
18

considered present for the purposes of establishing a
19

quorum; and
20

D. such contract is approved by a majority vote of
21

those members presently holding office; and
22

E. the contract is awarded after sealed bids to
23

the lowest responsible bidder if the amount of the
24

contract exceeds $1500, or awarded without bidding if
25

the amount of the contract is less than $1500; and
26

F. the award of the contract would not cause the

HB5407
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LRB104 20263 HLH 33714 b
1

aggregate amount of all such contracts so awarded to
2

the same person, firm, association, partnership,
3

corporation, or cooperative association in the same
4

fiscal year to exceed $25,000.
5

(2) If:
6

A. the award of the contract is approved by a
7

majority vote of the governing body of the
8

municipality provided that any such interested member
9

shall abstain from voting; and
10

B. the amount of the contract does not exceed
11

$2,000; and
12

C. the award of the contract would not cause the
13

aggregate amount of all such contracts so awarded to
14

the same person, firm, association, partnership,
15

corporation, or cooperative association in the same
16

fiscal year to exceed $4,000; and
17

D. such interested member publicly discloses the
18

nature and extent of his interest prior to or during
19

deliberations concerning the proposed award of the
20

contract; and
21

E. such interested member abstains from voting on
22

the award of the contract, though he shall be
23

considered present for the purposes of establishing a
24

quorum.
25

(b-5) In addition to the above exemptions, any elected or
26
appointed member of the governing body may provide materials,

HB5407
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LRB104 20263 HLH 33714 b
1
merchandise, property, services, or labor if:
2

A. the contract is with a person, firm, partnership,
3

association, corporation, or cooperative association in
4

which the interested member of the governing body of the
5

municipality, advisory panel, or commission has less than
6

a 1% share in the ownership; and
7

B. the award of the contract is approved by a majority
8

vote of the governing body of the municipality provided
9

that any such interested member shall abstain from voting;
10

and
11

C. such interested member publicly discloses the
12

nature and extent of his interest before or during
13

deliberations concerning the proposed award of the
14

contract; and
15

D. such interested member abstains from voting on the
16

award of the contract, though he shall be considered
17

present for the purposes of establishing a quorum.
18

(c) A contract for the procurement of public utility
19
services by a public entity with a public utility company is
20
not barred by this Section by one or more members of the
21
governing body of the public entity being an officer or
22
employee of the public utility company or holding an ownership
23
interest of no more than 7 1/2% in the public utility company,
24
or holding an ownership interest of any size if the public
25
entity is a municipality with a population of less than 7,500
26
and the public utility's rates are approved by the Illinois

HB5407
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LRB104 20263 HLH 33714 b
1
Commerce Commission. An elected or appointed member of the
2
governing body of the public entity having such an interest
3
shall be deemed not to have a prohibited interest under this
4
Section.
5

(d) Notwithstanding any other provision of this Section or
6
any other law to the contrary, until January 1, 1994, a member
7
of the city council of a municipality with a population under
8
20,000 may purchase real estate from the municipality, at a
9
price of not less than 100% of the value of the real estate as
10
determined by a written MAI certified appraisal or by a
11
written certified appraisal of a State certified or licensed
12
real estate appraiser, if the purchase is approved by a
13
unanimous vote of the city council members then holding office
14
(except for the member desiring to purchase the real estate,
15
who shall not vote on the question).
16

(e) For the purposes of this Section only, a municipal
17
officer shall not be deemed interested if the officer is an
18
employee of a company or owns or holds an interest of 1% or
19
less in the municipal officer's individual name in a company,
20
or both, that company is involved in the transaction of
21
business with the municipality, and that company's stock is
22
traded on a nationally recognized securities market, provided
23
the interested member: (i) publicly discloses the fact that he
24
or she is an employee or holds an interest of 1% or less in a
25
company before deliberation of the proposed award of the
26
contract; (ii) refrains from evaluating, recommending,

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1
approving, deliberating, or otherwise participating in
2
negotiation, approval, or both, of the contract, work, or
3
business; (iii) abstains from voting on the award of the
4
contract though he or she shall be considered present for
5
purposes of establishing a quorum; and (iv) the contract is
6
approved by a majority vote of those members currently holding
7
office.
8

A municipal officer shall not be deemed interested if the
9
officer owns or holds an interest of 1% or less, not in the
10
officer's individual name but through a mutual fund or
11
exchange-traded fund, in a company, that company is involved
12
in the transaction of business with the municipality, and that
13
company's stock is traded on a nationally recognized
14
securities market.
15

(f) Under either of the following circumstances, a
16
municipal, county, or township officer may hold a position on
17
the board of a not-for-profit corporation that is interested
18
in a contract, work, or business of the municipality, county,
19
or township:
20

(1) If the municipal, county, or township officer is
21

appointed by the governing body of the municipality,
22

county, or township to represent the interests of the
23

municipality, county, or township on a not-for-profit
24

corporation's board, then the municipal, county, or
25

township officer may actively vote on matters involving
26

either that board or the municipality, county, or

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LRB104 20263 HLH 33714 b
1

township, at any time, so long as the membership on the
2

not-for-profit board is not a paid position, except that
3

the municipal, county, or township officer may be
4

reimbursed by the not-for-profit board for expenses
5

incurred as the result of membership on the not-for-profit
6

board.
7

(2) If the municipal, county, or township officer is
8

not appointed to the governing body of a not-for-profit
9

corporation by the governing body of the municipality,
10

county, or township, then the municipal, county, or
11

township officer may continue to serve; however, the
12

municipal, county, or township officer shall abstain from
13

voting on any proposition before the municipal, county, or
14

township governing body directly involving the
15

not-for-profit corporation and, for those matters, shall
16

not be counted as present for the purposes of a quorum of
17

the municipal, county, or township governing body.
18
(Source: P.A. 103-25, eff. 1-1-24
.)

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