Illinois General Assembly - Full Text of SB2674
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Full Text of SB2674  103rd General Assembly

SB2674 103RD GENERAL ASSEMBLY

 


 
103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB2674

 

Introduced 1/10/2024, by Sen. Michael E. Hastings

 

SYNOPSIS AS INTRODUCED:
 
30 ILCS 500/45-57

    Amends the Illinois Procurement Code. Provides that the certification of service-disabled veteran-owned small businesses and veteran-owned small businesses is an exclusive power and function of the State. Denies home rule powers. Effective immediately.


LRB103 36464 MXP 66567 b

 

 

A BILL FOR

 

SB2674LRB103 36464 MXP 66567 b

1    AN ACT concerning finance.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Procurement Code is amended by
5changing Section 45-57 as follows:
 
6    (30 ILCS 500/45-57)
7    Sec. 45-57. Veterans.
8    (a) Set-aside goal. It is the goal of the State to promote
9and encourage the continued economic development of small
10businesses owned and controlled by qualified veterans and that
11qualified service-disabled veteran-owned small businesses
12(referred to as SDVOSB) and veteran-owned small businesses
13(referred to as VOSB) participate in the State's procurement
14process as both prime contractors and subcontractors. Not less
15than 3% of the total dollar amount of State contracts, as
16defined by the Commission on Equity and Inclusion, shall be
17established as a goal to be awarded to SDVOSB and VOSB. That
18portion of a contract under which the contractor subcontracts
19with a SDVOSB or VOSB may be counted toward the goal of this
20subsection. The Commission on Equity and Inclusion shall adopt
21rules to implement compliance with this subsection by all
22State agencies.
23    (b) Fiscal year reports. By each November 1, each chief

 

 

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1procurement officer shall report to the Commission on Equity
2and Inclusion on all of the following for the immediately
3preceding fiscal year, and by each March 1 the Commission on
4Equity and Inclusion shall compile and report that information
5to the General Assembly:
6        (1) The total number of VOSB, and the number of
7    SDVOSB, who submitted bids for contracts under this Code.
8        (2) The total number of VOSB, and the number of
9    SDVOSB, who entered into contracts with the State under
10    this Code and the total value of those contracts.
11    (b-5) The Commission on Equity and Inclusion shall submit
12an annual report to the Governor and the General Assembly that
13shall include the following:
14        (1) a year-by-year comparison of the number of
15    certifications the State has issued to veteran-owned small
16    businesses and service-disabled veteran-owned small
17    businesses;
18        (2) the obstacles, if any, the Commission on Equity
19    and Inclusion faces when certifying veteran-owned
20    businesses and possible rules or changes to rules to
21    address those issues;
22        (3) a year-by-year comparison of awarded contracts to
23    certified veteran-owned small businesses and
24    service-disabled veteran-owned small businesses; and
25        (4) any other information that the Commission on
26    Equity and Inclusion deems necessary to assist

 

 

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1    veteran-owned small businesses and service-disabled
2    veteran-owned small businesses to become certified with
3    the State.
4    The Commission on Equity and Inclusion shall conduct a
5minimum of 2 outreach events per year to ensure that
6veteran-owned small businesses and service-disabled
7veteran-owned small businesses know about the procurement
8opportunities and certification requirements with the State.
9The Commission on Equity and Inclusion may receive
10appropriations for outreach.
11    (b-10) The certifications of SDVOSB and VOSB are exclusive
12powers and functions of the State. A home rule unit may not
13certify a SDVOSB or VOSB. This subsection is a denial and
14limitation of home rule powers and functions under subsection
15(h) of Section 6 of Article VII of the Illinois Constitution.
16    (c) Yearly review and recommendations. Each year, each
17chief procurement officer shall review the progress of all
18State agencies under its jurisdiction in meeting the goal
19described in subsection (a), with input from statewide
20veterans' service organizations and from the business
21community, including businesses owned by qualified veterans,
22and shall make recommendations to be included in the
23Commission on Equity and Inclusion's report to the General
24Assembly regarding continuation, increases, or decreases of
25the percentage goal. The recommendations shall be based upon
26the number of businesses that are owned by qualified veterans

 

 

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1and on the continued need to encourage and promote businesses
2owned by qualified veterans.
3    (d) Governor's recommendations. To assist the State in
4reaching the goal described in subsection (a), the Governor
5shall recommend to the General Assembly changes in programs to
6assist businesses owned by qualified veterans.
7    (e) Definitions. As used in this Section:
8    "Armed forces of the United States" means the United
9States Army, Navy, Air Force, Marine Corps, Coast Guard, or
10service in active duty as defined under 38 U.S.C. Section 101.
11Service in the Merchant Marine that constitutes active duty
12under Section 401 of federal Public Act 95-202 shall also be
13considered service in the armed forces for purposes of this
14Section.
15    "Certification" means a determination made by the Illinois
16Department of Veterans' Affairs and the Commission on Equity
17and Inclusion that a business entity is a qualified
18service-disabled veteran-owned small business or a qualified
19veteran-owned small business for whatever purpose. A SDVOSB or
20VOSB owned and controlled by women, minorities, or persons
21with disabilities, as those terms are defined in Section 2 of
22the Business Enterprise for Minorities, Women, and Persons
23with Disabilities Act, may also select and designate whether
24that business is to be certified as a "women-owned business",
25"minority-owned business", or "business owned by a person with
26a disability", as defined in Section 2 of the Business

 

 

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1Enterprise for Minorities, Women, and Persons with
2Disabilities Act.
3    "Control" means the exclusive, ultimate, majority, or sole
4control of the business, including but not limited to capital
5investment and all other financial matters, property,
6acquisitions, contract negotiations, legal matters,
7officer-director-employee selection and comprehensive hiring,
8operation responsibilities, cost-control matters, income and
9dividend matters, financial transactions, and rights of other
10shareholders or joint partners. Control shall be real,
11substantial, and continuing, not pro forma. Control shall
12include the power to direct or cause the direction of the
13management and policies of the business and to make the
14day-to-day as well as major decisions in matters of policy,
15management, and operations. Control shall be exemplified by
16possessing the requisite knowledge and expertise to run the
17particular business, and control shall not include simple
18majority or absentee ownership.
19    "Qualified service-disabled veteran" means a veteran who
20has been found to have 10% or more service-connected
21disability by the United States Department of Veterans Affairs
22or the United States Department of Defense.
23    "Qualified service-disabled veteran-owned small business"
24or "SDVOSB" means a small business (i) that is at least 51%
25owned by one or more qualified service-disabled veterans
26living in Illinois or, in the case of a corporation, at least

 

 

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151% of the stock of which is owned by one or more qualified
2service-disabled veterans living in Illinois; (ii) that has
3its home office in Illinois; and (iii) for which items (i) and
4(ii) are factually verified annually by the Commission on
5Equity and Inclusion.
6    "Qualified veteran-owned small business" or "VOSB" means a
7small business (i) that is at least 51% owned by one or more
8qualified veterans living in Illinois or, in the case of a
9corporation, at least 51% of the stock of which is owned by one
10or more qualified veterans living in Illinois; (ii) that has
11its home office in Illinois; and (iii) for which items (i) and
12(ii) are factually verified annually by the Commission on
13Equity and Inclusion.
14    "Service-connected disability" means a disability incurred
15in the line of duty in the active military, naval, or air
16service as described in 38 U.S.C. 101(16).
17    "Small business" means a business that has annual gross
18sales of less than $150,000,000 as evidenced by the federal
19income tax return of the business. A firm with gross sales in
20excess of this cap may apply to the Commission on Equity and
21Inclusion for certification for a particular contract if the
22firm can demonstrate that the contract would have significant
23impact on SDVOSB or VOSB as suppliers or subcontractors or in
24employment of veterans or service-disabled veterans.
25    "State agency" has the meaning provided in Section
261-15.100 of this Code.

 

 

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1    "Time of hostilities with a foreign country" means any
2period of time in the past, present, or future during which a
3declaration of war by the United States Congress has been or is
4in effect or during which an emergency condition has been or is
5in effect that is recognized by the issuance of a Presidential
6proclamation or a Presidential executive order and in which
7the armed forces expeditionary medal or other campaign service
8medals are awarded according to Presidential executive order.
9    "Veteran" means a person who (i) has been a member of the
10armed forces of the United States or, while a citizen of the
11United States, was a member of the armed forces of allies of
12the United States in time of hostilities with a foreign
13country and (ii) has served under one or more of the following
14conditions: (a) the veteran served a total of at least 6
15months; (b) the veteran served for the duration of hostilities
16regardless of the length of the engagement; (c) the veteran
17was discharged on the basis of hardship; or (d) the veteran was
18released from active duty because of a service connected
19disability and was discharged under honorable conditions.
20    (f) Certification program. The Illinois Department of
21Veterans' Affairs and the Commission on Equity and Inclusion
22shall work together to devise a certification procedure to
23assure that businesses taking advantage of this Section are
24legitimately classified as qualified service-disabled
25veteran-owned small businesses or qualified veteran-owned
26small businesses.

 

 

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1    The Commission on Equity and Inclusion shall:
2        (1) compile and maintain a comprehensive list of
3    certified veteran-owned small businesses and
4    service-disabled veteran-owned small businesses;
5        (2) assist veteran-owned small businesses and
6    service-disabled veteran-owned small businesses in
7    complying with the procedures for bidding on State
8    contracts;
9        (3) provide training for State agencies regarding the
10    goal setting process and compliance with veteran-owned
11    small business and service-disabled veteran-owned small
12    business goals; and
13        (4) implement and maintain an electronic portal on the
14    Commission on Equity and Inclusion's website for the
15    purpose of completing and submitting veteran-owned small
16    business and service-disabled veteran-owned small business
17    certificates.
18    The Commission on Equity and Inclusion, in consultation
19with the Department of Veterans' Affairs, may develop programs
20and agreements to encourage cities, counties, towns,
21townships, and other certifying entities to adopt uniform
22certification procedures and certification recognition
23programs.
24    (f-5) A business shall be certified by the Commission on
25Equity and Inclusion as a service-disabled veteran-owned small
26business or a veteran-owned small business for purposes of

 

 

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1this Section if the Commission on Equity and Inclusion
2determines that the business has been certified as a
3service-disabled veteran-owned small business or a
4veteran-owned small business by the Vets First Verification
5Program of the United States Department of Veterans Affairs,
6and the business has provided to the Commission on Equity and
7Inclusion the following:
8        (1) documentation showing certification as a
9    service-disabled veteran-owned small business or a
10    veteran-owned small business by the Vets First
11    Verification Program of the United States Department of
12    Veterans Affairs;
13        (2) proof that the business has its home office in
14    Illinois; and
15        (3) proof that the qualified veterans or qualified
16    service-disabled veterans live in the State of Illinois.
17    The policies of the Commission on Equity and Inclusion
18regarding recognition of the Vets First Verification Program
19of the United States Department of Veterans Affairs shall be
20reviewed annually by the Commission on Equity and Inclusion,
21and recognition of service-disabled veteran-owned small
22businesses and veteran-owned small businesses certified by the
23Vets First Verification Program of the United States
24Department of Veterans Affairs may be discontinued by the
25Commission on Equity and Inclusion by rule upon a finding that
26the certification standards of the Vets First Verification

 

 

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1Program of the United States Department of Veterans Affairs do
2not meet the certification requirements established by the
3Commission on Equity and Inclusion.
4    (g) Penalties.
5        (1) Administrative penalties. The chief procurement
6    officers appointed pursuant to Section 10-20 shall suspend
7    any person who commits a violation of Section 17-10.3 or
8    subsection (d) of Section 33E-6 of the Criminal Code of
9    2012 relating to this Section from bidding on, or
10    participating as a contractor, subcontractor, or supplier
11    in, any State contract or project for a period of not less
12    than 3 years, and, if the person is certified as a
13    service-disabled veteran-owned small business or a
14    veteran-owned small business, then the Commission on
15    Equity and Inclusion shall revoke the business's
16    certification for a period of not less than 3 years. An
17    additional or subsequent violation shall extend the
18    periods of suspension and revocation for a period of not
19    less than 5 years. The suspension and revocation shall
20    apply to the principals of the business and any subsequent
21    business formed or financed by, or affiliated with, those
22    principals.
23        (2) Reports of violations. Each State agency shall
24    report any alleged violation of Section 17-10.3 or
25    subsection (d) of Section 33E-6 of the Criminal Code of
26    2012 relating to this Section to the chief procurement

 

 

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1    officers appointed pursuant to Section 10-20. The chief
2    procurement officers appointed pursuant to Section 10-20
3    shall subsequently report all such alleged violations to
4    the Attorney General, who shall determine whether to bring
5    a civil action against any person for the violation.
6        (3) List of suspended persons. The chief procurement
7    officers appointed pursuant to Section 10-20 shall monitor
8    the status of all reported violations of Section 17-10.3
9    or subsection (d) of Section 33E-6 of the Criminal Code of
10    1961 or the Criminal Code of 2012 relating to this Section
11    and shall maintain and make available to all State
12    agencies a central listing of all persons that committed
13    violations resulting in suspension.
14        (4) Use of suspended persons. During the period of a
15    person's suspension under paragraph (1) of this
16    subsection, a State agency shall not enter into any
17    contract with that person or with any contractor using the
18    services of that person as a subcontractor.
19        (5) Duty to check list. Each State agency shall check
20    the central listing provided by the chief procurement
21    officers appointed pursuant to Section 10-20 under
22    paragraph (3) of this subsection to verify that a person
23    being awarded a contract by that State agency, or to be
24    used as a subcontractor or supplier on a contract being
25    awarded by that State agency, is not under suspension
26    pursuant to paragraph (1) of this subsection.

 

 

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1    (h) On and after the effective date of this amendatory Act
2of the 102nd General Assembly, all powers, duties, rights, and
3responsibilities of the Department of Central Management
4Services with respect to the requirements of this Section are
5transferred to the Commission on Equity and Inclusion.
6    All books, records, papers, documents, property (real and
7personal), contracts, causes of action, and pending business
8pertaining to the powers, duties, rights, and responsibilities
9transferred by this amendatory Act from the Department of
10Central Management Services to the Commission on Equity and
11Inclusion, including, but not limited to, material in
12electronic or magnetic format and necessary computer hardware
13and software, shall be transferred to the Commission on Equity
14and Inclusion.
15    The powers, duties, rights, and responsibilities
16transferred from the Department of Central Management Services
17by this amendatory Act shall be vested in and shall be
18exercised by the Commission on Equity and Inclusion.
19    Whenever reports or notices are now required to be made or
20given or papers or documents furnished or served by any person
21to or upon the Department of Central Management Services in
22connection with any of the powers, duties, rights, and
23responsibilities transferred by this amendatory Act, the same
24shall be made, given, furnished, or served in the same manner
25to or upon the Commission on Equity and Inclusion.
26    This amendatory Act of the 102nd General Assembly does not

 

 

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1affect any act done, ratified, or canceled or any right
2occurring or established or any action or proceeding had or
3commenced in an administrative, civil, or criminal cause by
4the Department of Central Management Services before this
5amendatory Act takes effect; such actions or proceedings may
6be prosecuted and continued by the Commission on Equity and
7Inclusion.
8    Any rules of the Department of Central Management Services
9that relate to its powers, duties, rights, and
10responsibilities under this Section and are in full force on
11the effective date of this amendatory Act of the 102nd General
12Assembly shall become the rules of the Commission on Equity
13and Inclusion. This amendatory Act does not affect the
14legality of any such rules in the Illinois Administrative
15Code. Any proposed rules filed with the Secretary of State by
16the Department of Central Management Services that are pending
17in the rulemaking process on the effective date of this
18amendatory Act and pertain to the powers, duties, rights, and
19responsibilities transferred, shall be deemed to have been
20filed by the Commission on Equity and Inclusion. As soon as
21practicable hereafter, the Commission on Equity and Inclusion
22shall revise and clarify the rules transferred to it under
23this amendatory Act to reflect the reorganization of powers,
24duties, rights, and responsibilities affected by this
25amendatory Act, using the procedures for recodification of
26rules available under the Illinois Administrative Procedure

 

 

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1Act, except that existing title, part, and section numbering
2for the affected rules may be retained. The Commission on
3Equity and Inclusion may propose and adopt under the Illinois
4Administrative Procedure Act such other rules of the
5Department of Central Management Services that will now be
6administered by the Commission on Equity and Inclusion.
7(Source: P.A. 102-166, eff. 7-26-21; 102-671, eff. 11-30-21;
8103-570, eff. 1-1-24.)
 
9    Section 99. Effective date. This Act takes effect upon
10becoming law.