The City Council of Chicago has passed an ordinance that introduces a new section, 2-68-050, to Chapter 2-68 of the Municipal Code of Chicago, which mandates data residency requirements for city data. According to the new section, any contract that the City enters into for the storage of city data must ensure that the data is processed, stored, transmitted, and disposed of within the United States and is not accessible from outside the country. Furthermore, the ordinance specifies that for contracts involving the storage of city data, a bid preference will be given to contractors who store the data within the State of Illinois or within the city limits, with a six percent preference for state storage and an eight percent preference for city storage.

The ordinance also includes a penalty clause for contractors who receive a bid preference but fail to comply with the data storage location requirements. Such contractors will be fined an amount equal to three times the bid incentive they were awarded. Additionally, the ordinance encourages all Sister Agencies, as defined in Section 1-23-010 of the Municipal Code of Chicago, to adopt similar data residency policies. The ordinance is set to take effect upon its passage and publication.