SB1479 101ST GENERAL ASSEMBLY

LRB101 09440 RJF 54538 b

101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB1479

Introduced 2/13/2019, by Sen. Ann Gillespie

SYNOPSIS AS INTRODUCED:

30 ILCS 500/45-37 new
30 ILCS 575/2
220 ILCS 5/5-117

Amends the Illinois Procurement Code. Creates a procurement preference for not-for-profit organizations owned by women, minorities, and persons with a disability. Amends the Business Enterprise for Minorities, Women, and Persons with Disabilities Act. Allows for the certification of and the preference in awarding of State contracts to not-for-profit organizations owned by women, minorities, and persons with a disability under the Act. Amends the Public Utilities Act. Provides that specified supplier diversity goal requirements under the Act apply to not-for-profit female-owned (women-owned), minority-owned, veteran-owned, and person with a disability-owned companies or businesses.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning finance.

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

Section 5. The Illinois Procurement Code is amended by adding Section 45-37 as follows:

(30 ILCS 500/45-37 new)

Sec. 45-37. Not-for-profit organizations owned by women, minorities, and persons with a disability.

(a) Qualification. Supplies and services may be procured from any qualified not-for-profit organization owned by women, minorities, or persons with a disability that:

(1) complies with applicable Illinois laws governing private not-for-profit organizations and is recognized by the United States Internal Revenue Service as a tax-exempt entity described in Section 501(c)(3) of the Internal Revenue Code of 1986; and

(2) is certified as a "women-owned business", a "minority-owned business", or a "business owned by a person with a disability" as defined under Section 2 of the Business Enterprise for Minorities, Women, and Persons with Disabilities Act.

(b) Participation. To participate, the not-for-profit organization must have indicated an interest in providing the supplies and services, must meet the specifications and needs of the using agency, and must set a fair and reasonable price.

(c) Conditions for Use. Each chief procurement officer shall, in consultation with the Department of Central Management Services, determine which articles, materials, services, food stuffs, and supplies that are produced, manufactured, or provided by a qualified not-for-profit organization under this Section shall be given preference by purchasing agencies procuring those items.

(d) Subcontracts. Subcontracts shall be permitted for agreements authorized under this Section. For the purposes of this subsection (d), "subcontract" means any acquisition from another source of supplies, not including raw materials, or services required by a qualified not-for-profit organization to provide the supplies or services that are the subject of the contract between the State and the qualified not-for-profit organization.

The Department of Central Management Services shall develop guidelines to be followed by qualified not-for-profit organizations under this Section when seeking and establishing subcontracts in order to fulfill State contract requirements. These guidelines shall include the following:

(A) The Department must approve all subcontracts and substantive amendments to subcontracts prior to execution or amendment of the subcontract.

(B) A qualified not-for-profit organization shall not enter into a subcontract, or any combination of subcontracts, to fulfill an entire requirement, contract, or order without the written approval of the Department.

(C) A qualified not-for-profit organization shall make reasonable efforts to utilize subcontracts with other not-for-profit organizations owned by women, minorities, or persons with a disability.

(D) For any subcontract not currently performed by a qualified not-for-profit organization, the primary qualified not-for-profit organization must provide to the Department the following: (i) a written explanation as to why the subcontract is not performed by a qualified not-for-profit organization; and (ii) a written plan to transfer the subcontract to a qualified not-for-profit agency, as reasonable.

(e) Annual report. Beginning January 1, 2021, and for each year thereafter, the Department of Central Management Services shall submit a report to the Governor and the General Assembly concerning qualified not-for-profit organizations participating under this Section, and the report shall include, but not be limited to: (i) the services provided by participating qualified not-for-profit organizations, including the cost for such services; (ii) the State agencies to which such services were provided; (iii) whether a subcontractor was used in providing the services; and (iv) any other information the Department may deem necessary.

(f) Rules. The Department of Central Management Services shall adopt rules to implement and administer the procurement preference provided under this Section.

Section 10. The Business Enterprise for Minorities, Women, and Persons with Disabilities Act is amended by changing Section 2 as follows:

(30 ILCS 575/2)

(Section scheduled to be repealed on June 30, 2020)

Sec. 2. Definitions.

(A) For the purpose of this Act, the following terms shall have the following definitions:

(1) "Minority person" shall mean a person who is a citizen or lawful permanent resident of the United States and who is any of the following:

(a) American Indian or Alaska Native (a person having origins in any of the original peoples of North and South America, including Central America, and who maintains tribal affiliation or community attachment).

(b) Asian (a person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian subcontinent, including, but not limited to, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the Philippine Islands, Thailand, and Vietnam).

(c) Black or African American (a person having origins in any of the black racial groups of Africa). Terms such as "Haitian" or "Negro" can be used in addition to "Black or African American".

(d) Hispanic or Latino (a person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin, regardless of race).

(e) Native Hawaiian or Other Pacific Islander (a person having origins in any of the original peoples of Hawaii, Guam, Samoa, or other Pacific Islands).

(2) "Woman" shall mean a person who is a citizen or lawful permanent resident of the United States and who is of the female gender.

(2.05) "Person with a disability" means a person who is a citizen or lawful resident of the United States and is a person qualifying as a person with a disability under subdivision (2.1) of this subsection (A).

(2.1) "Person with a disability" means a person with a severe physical or mental disability that:

(a) results from:

amputation,

arthritis,

autism,

blindness,

burn injury,

cancer,

cerebral palsy,

Crohn's disease,

cystic fibrosis,

deafness,

head injury,

heart disease,

hemiplegia,

hemophilia,

respiratory or pulmonary dysfunction,

an intellectual disability,

mental illness,

multiple sclerosis,

muscular dystrophy,

musculoskeletal disorders,

neurological disorders, including stroke and epilepsy,

paraplegia,

quadriplegia and other spinal cord conditions,

sickle cell anemia,

ulcerative colitis,

specific learning disabilities, or

end stage renal failure disease; and

(b) substantially limits one or more of the person's major life activities.

Another disability or combination of disabilities may also be considered as a severe disability for the purposes of item (a) of this subdivision (2.1) if it is determined by an evaluation of rehabilitation potential to cause a comparable degree of substantial functional limitation similar to the specific list of disabilities listed in item (a) of this subdivision (2.1).

(3) "Minority-owned business" means a business which is at least 51% owned by one or more minority persons, or in the case of a corporation, at least 51% of the stock in which is owned by one or more minority persons; and the management and daily business operations of which are controlled by one or more of the minority individuals who own it. A not-for-profit organization whose Board of Directors consists of at least 51% minority persons or whose Executive Director is a minority person and that is exempt from taxation under Section 501 of the Internal Revenue Code of 1986 is also considered a "minority-owned business".

(4) "Women-owned business" means a business which is at least 51% owned by one or more women, or, in the case of a corporation, at least 51% of the stock in which is owned by one or more women; and the management and daily business operations of which are controlled by one or more of the women who own it. A not-for-profit organization whose Board of Directors consists of at least 51% women or whose Executive Director is a woman and that is exempt from taxation under Section 501 of the Internal Revenue Code of 1986 is also considered a "women-owned business".

(4.1) "Business owned by a person with a disability" means a business that is at least 51% owned by one or more persons with a disability and the management and daily business operations of which are controlled by one or more of the persons with disabilities who own it. A not-for-profit agency for persons with disabilities or a not-for-profit organization whose Board of Directors consists of at least 51% persons with a disability or whose Executive Director is a person with a disability and that is exempt from taxation under Section 501 of the Internal Revenue Code of 1986 is also considered a "business owned by a person with a disability".

(4.2) "Council" means the Business Enterprise Council for Minorities, Women, and Persons with Disabilities created under Section 5 of this Act.

(5) "State contracts" means all contracts entered into by the State, any agency or department thereof, or any public institution of higher education, including community college districts, regardless of the source of the funds with which the contracts are paid, which are not subject to federal reimbursement. "State contracts" does not include contracts awarded by a retirement system, pension fund, or investment board subject to Section 1-109.1 of the Illinois Pension Code. This definition shall control over any existing definition under this Act or applicable administrative rule.

"State construction contracts" means all State contracts entered into by a State agency or public institution of higher education for the repair, remodeling, renovation or construction of a building or structure, or for the construction or maintenance of a highway defined in Article 2 of the Illinois Highway Code.

(6) "State agencies" shall mean all departments, officers, boards, commissions, institutions and bodies politic and corporate of the State, but does not include the Board of Trustees of the University of Illinois, the Board of Trustees of Southern Illinois University, the Board of Trustees of Chicago State University, the Board of Trustees of Eastern Illinois University, the Board of Trustees of Governors State University, the Board of Trustees of Illinois State University, the Board of Trustees of Northeastern Illinois University, the Board of Trustees of Northern Illinois University, the Board of Trustees of Western Illinois University, municipalities or other local governmental units, or other State constitutional officers.

(7) "Public institutions of higher education" means the University of Illinois, Southern Illinois University, Chicago State University, Eastern Illinois University, Governors State University, Illinois State University, Northeastern Illinois University, Northern Illinois University, Western Illinois University, the public community colleges of the State, and any other public universities, colleges, and community colleges now or hereafter established or authorized by the General Assembly.

(8) "Certification" means a determination made by the Council or by one delegated authority from the Council to make certifications, or by a State agency with statutory authority to make such a certification, that a business entity is a business owned by a minority, woman, or person with a disability for whatever purpose. A business owned and controlled by women shall be certified as a "woman-owned business". A business owned and controlled by women who are also minorities shall be certified as both a "women-owned business" and a "minority-owned business".

(9) "Control" means the exclusive or ultimate and sole control of the business including, but not limited to, capital investment and all other financial matters, property, acquisitions, contract negotiations, legal matters, officer-director-employee selection and comprehensive hiring, operating responsibilities, cost-control matters, income and dividend matters, financial transactions and rights of other shareholders or joint partners. Control shall be real, substantial and continuing, not pro forma. Control shall include the power to direct or cause the direction of the management and policies of the business and to make the day-to-day as well as major decisions in matters of policy, management and operations. Control shall be exemplified by possessing the requisite knowledge and expertise to run the particular business and control shall not include simple majority or absentee ownership.

(10) "Business" means a business that has annual gross sales of less than $75,000,000 as evidenced by the federal income tax return of the business. A firm with gross sales in excess of this cap may apply to the Council for certification for a particular contract if the firm can demonstrate that the contract would have significant impact on businesses owned by minorities, women, or persons with disabilities as suppliers or subcontractors or in employment of minorities, women, or persons with disabilities.

(11) "Utilization plan" means a form and additional documentations included in all bids or proposals that demonstrates a vendor's proposed utilization of vendors certified by the Business Enterprise Program to meet the targeted goal. The utilization plan shall demonstrate that the Vendor has either: (1) met the entire contract goal or (2) requested a full or partial waiver and made good faith efforts towards meeting the goal.

(12) "Business Enterprise Program" means the Business Enterprise Program of the Department of Central Management Services.

(B) When a business is owned at least 51% by any combination of minority persons, women, or persons with disabilities, even though none of the 3 classes alone holds at least a 51% interest, the ownership requirement for purposes of this Act is considered to be met. When a not-for-profit organization's Board of Directors consists of at least 51% of any combination of minority persons, women, or persons with disabilities even though none of the 3 classes alone holds at least 51% share, the Board membership requirement for purposes of this Act is considered to be met. The certification category for the business or not-for-profit organization is that of the class holding the largest ownership interest in the business. If 2 or more classes have equal ownership interests, the certification category shall be determined by the business or not-for-profit organization.

(Source: P.A. 99-143, eff. 7-27-15; 99-462, eff. 8-25-15; 99-642, eff. 7-28-16; 100-391, eff. 8-25-17.)

Section 15. The Public Utilities Act is amended by changing Section 5-117 as follows:

(220 ILCS 5/5-117)

Sec. 5-117. Supplier diversity goals.

(a) The public policy of this State is to collaboratively work with companies that serve Illinois residents to improve their supplier diversity in a non-antagonistic manner.

(b) The Commission shall require all gas, electric, and water companies with at least 100,000 customers under its authority, as well as suppliers of wind energy, solar energy, hydroelectricity, nuclear energy, and any other supplier of energy within this State, to submit an annual report by April 15, 2015 and every April 15 thereafter, in a searchable Adobe PDF format, on all procurement goals and actual spending for female-owned, minority-owned, veteran-owned, person with a disability-owned, and small business enterprises in the previous calendar year. These goals shall be expressed as a percentage of the total work performed by the entity submitting the report, and the actual spending for all female-owned, minority-owned, veteran-owned, person with a disability-owned, and small business enterprises shall also be expressed as a percentage of the total work performed by the entity submitting the report.

(c) Each participating company in its annual report shall include the following information:

(1) an explanation of the plan for the next year to increase participation;

(2) an explanation of the plan to increase the goals;

(3) the areas of procurement each company shall be actively seeking more participation in in the next year;

(4) an outline of the plan to alert and encourage potential vendors in that area to seek business from the company;

(5) an explanation of the challenges faced in finding quality vendors and offer any suggestions for what the Commission could do to be helpful to identify those vendors;

(6) a list of the certifications the company recognizes;

(7) the point of contact for any potential vendor who wishes to do business with the company and explain the process for a vendor to enroll with the company as a minority-owned, women-owned, or veteran-owned, or person with a disability-owned company; and

(8) any particular success stories to encourage other companies to emulate best practices.

(d) Each annual report shall include as much State-specific data as possible. If the submitting entity does not submit State-specific data, then the company shall include any national data it does have and explain why it could not submit State-specific data and how it intends to do so in future reports, if possible.

(e) Each annual report shall include the rules, regulations, and definitions used for the procurement goals in the company's annual report.

(f) The Commission and all participating entities shall hold an annual workshop open to the public in 2015 and every year thereafter on the state of supplier diversity to collaboratively seek solutions to structural impediments to achieving stated goals, including testimony from each participating entity as well as subject matter experts and advocates. The Commission shall publish a database on its website of the point of contact for each participating entity for supplier diversity, along with a list of certifications each company recognizes from the information submitted in each annual report. The Commission shall publish each annual report on its website and shall maintain each annual report for at least 5 years.

(g) For the purposes of this Section, female-owned (women-owned), minority-owned, veteran-owned, and person with a disability-owned companies or businesses include not-for-profit organizations that are exempt from taxation under Section 501(c)(3) of the Internal Revenue Code of 1986, in which at least 50% of the managing board are women, minorities, veterans, or persons with a disability, or in which the executive director is a woman, minority, veteran, or person with a disability.

(Source: P.A. 98-1056, eff. 8-26-14; 99-906, eff. 6-1-17.)