98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB4219

 

Introduced , by Rep. Greg Harris

 

SYNOPSIS AS INTRODUCED:
 
30 ILCS 500/1-10
30 ILCS 500/1-15.120 new
30 ILCS 500/1-15.125 new
30 ILCS 500/1-15.130 new
30 ILCS 500/45-35
30 ILCS 500/50-2

    Amends the Illinois Procurement Code. Provides that if a form, schedule to a form, or line item in a form issued by the United States Internal Revenue Service (IRS) is mentioned in this Code and that form, schedule to a form, or line item in a form is renumbered, then any reference to that renumbered form, schedule to a form, or line item in a form in this Code shall be construed as though the renumbering had not occurred. Provides that a not-for-profit organization shall not be exempt from this Code if it receives a grant subject to continuing disclosure requirements or was previously exempt under a purchase of care exemption. Sets forth documentation that must be disclosed by these organizations. Adds a Section that sets forth disclosure requirements for not-for-profit organizations subject to this Code. Sets forth additional disclosure requirements, including a copy of the organization's IRS Form 990, for not-for-profit organizations in Sections regarding facilities for persons with severe disabilities and continuing disclosure requirements. Defines terms. Effective immediately.


LRB098 16908 JWD 51983 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB4219LRB098 16908 JWD 51983 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 Sections 1-10, 45-35, and 50-2 and by adding Sections
61-15.120, 1-15.125, and 1-15.130 as follows:
 
7    (30 ILCS 500/1-10)
8    Sec. 1-10. Application.
9    (a) This Code applies only to procurements for which
10contractors were first solicited on or after July 1, 1998. This
11Code shall not be construed to affect or impair any contract,
12or any provision of a contract, entered into based on a
13solicitation prior to the implementation date of this Code as
14described in Article 99, including but not limited to any
15covenant entered into with respect to any revenue bonds or
16similar instruments. All procurements for which contracts are
17solicited between the effective date of Articles 50 and 99 and
18July 1, 1998 shall be substantially in accordance with this
19Code and its intent.
20    (a-5) If a form, schedule to a form, or line item in a form
21issued by the United States Internal Revenue Service is
22specifically cited by number or letter in a provision of this
23Code and if, after the effective date of the Public Act that

 

 

HB4219- 2 -LRB098 16908 JWD 51983 b

1established that citation, the United States Internal Revenue
2Service form, schedule to a form, or line item in a form cited
3is redesignated without any other change whatever being made to
4it, then the provision of this Code containing that citation
5shall be construed as though the redesignation of the form,
6schedule to a form, or line item in a form of the United States
7Internal Revenue Service had not occurred.
8    (a-10) For purposes of this Section, the terms "interested
9persons" and "related for-profit organization" have the
10meanings ascribed to those terms in Sections 1-15.120 and
111-15.125 of this Code.
12    (b) This Code shall apply regardless of the source of the
13funds with which the contracts are paid, including federal
14assistance moneys. This Code shall not apply to:
15        (1) Contracts between the State and its political
16    subdivisions or other governments, or between State
17    governmental bodies except as specifically provided in
18    this Code.
19        (2) Grants, except all grants that are subject to for
20    the filing requirements of Section 20-80 and the
21    not-for-profit organization continuing disclosure
22    requirements of Section 50-2 of this Code. If a
23    not-for-profit organization receives any grant that would
24    be exempt from this Code under this paragraph (2), then the
25    not-for-profit organization must also submit a copy of the
26    IRS Form 990, including, but not limited to, the following

 

 

HB4219- 3 -LRB098 16908 JWD 51983 b

1    sections and corresponding schedules that require the
2    reporting of any ownership interests, operating
3    agreements, partnerships, or other duties, activities, or
4    transactions that exist between the not-for-profit
5    organization, interested persons, and its related
6    for-profit owners, subsidiaries, partners, affiliates, or
7    unrelated organizations: (A) Part IV, Line 28, Schedule L;
8    (B) Part IV, Line 34, Schedule R; and (C) Part VI, Line 3,
9    Schedule O. This disclosure shall, at a minimum, include
10    business identification of the for-profit organization, a
11    list of the business transactions between the related
12    for-profit organization and the not-for-profit
13    organization under the terms of the relationship, and
14    whether more than 50% of the not-for-profit organization's
15    management, including current or former officers,
16    directors, trustees, family members, or key employees, is
17    delivered from the relationship. The not-for-profit
18    organization shall also furnish an affidavit stating that
19    the copy of the IRS Form 990 (and its accompanying
20    schedules) is an authentic copy of the IRS Form 990
21    submitted to the IRS. If a not-for-profit organization has
22    entered into a multi-year grant, then, by July 1 of each
23    fiscal year covered by the grant after the initial fiscal
24    year, the not-for-profit organization must submit a copy of
25    the IRS Form 990 for the most recent fiscal year along with
26    an affidavit verifying the same.

 

 

HB4219- 4 -LRB098 16908 JWD 51983 b

1        (3) Purchase of care.However, if a not-for-profit
2    organization provides services that would be exempt from
3    this Code under this paragraph (3), then the not-for-profit
4    organization must also submit a copy of the IRS Form 990,
5    including, but not limited to, the following sections and
6    corresponding schedules that require the reporting of any
7    ownership interests, operating agreements, partnerships,
8    or other duties, activities, or transactions that exist
9    between the not-for-profit organization, interested
10    persons, and its related for-profit owners, subsidiaries,
11    partners, affiliates, or unrelated organizations: (A) Part
12    IV, Line 28, Schedule L; (B) Part IV, Line 34, Schedule R;
13    and (C) Part VI, Line 3, Schedule O. This disclosure shall,
14    at a minimum, include business identification of the
15    for-profit organization, a list of the business
16    transactions between the related for-profit organization
17    and the not-for-profit organization under the terms of the
18    relationship, and whether more than 50% of the
19    not-for-profit organization's management, including
20    current or former officers, directors, trustees, family
21    members, or key employees, is delivered from the
22    relationship. The not-for-profit organization shall also
23    furnish an affidavit stating that the copy of the IRS Form
24    990 (and its accompanying schedules) is an authentic copy
25    of the IRS Form 990 submitted to the IRS. If a
26    not-for-profit organization has entered into a multi-year

 

 

HB4219- 5 -LRB098 16908 JWD 51983 b

1    purchase of care contract, then, by July 1 of each fiscal
2    year covered by the purchase of care contract after the
3    initial fiscal year, the not-for-profit organization must
4    submit a copy of the IRS Form 990 for the most recent
5    fiscal year along with an affidavit verifying the same.
6        (4) Hiring of an individual as employee and not as an
7    independent contractor, whether pursuant to an employment
8    code or policy or by contract directly with that
9    individual.
10        (5) Collective bargaining contracts.
11        (6) Purchase of real estate, except that notice of this
12    type of contract with a value of more than $25,000 must be
13    published in the Procurement Bulletin within 7 days after
14    the deed is recorded in the county of jurisdiction. The
15    notice shall identify the real estate purchased, the names
16    of all parties to the contract, the value of the contract,
17    and the effective date of the contract.
18        (7) Contracts necessary to prepare for anticipated
19    litigation, enforcement actions, or investigations,
20    provided that the chief legal counsel to the Governor shall
21    give his or her prior approval when the procuring agency is
22    one subject to the jurisdiction of the Governor, and
23    provided that the chief legal counsel of any other
24    procuring entity subject to this Code shall give his or her
25    prior approval when the procuring entity is not one subject
26    to the jurisdiction of the Governor.

 

 

HB4219- 6 -LRB098 16908 JWD 51983 b

1        (8) Contracts for services to Northern Illinois
2    University by a person, acting as an independent
3    contractor, who is qualified by education, experience, and
4    technical ability and is selected by negotiation for the
5    purpose of providing non-credit educational service
6    activities or products by means of specialized programs
7    offered by the university.
8        (9) Procurement expenditures by the Illinois
9    Conservation Foundation when only private funds are used.
10        (10) Procurement expenditures by the Illinois Health
11    Information Exchange Authority involving private funds
12    from the Health Information Exchange Fund. "Private funds"
13    means gifts, donations, and private grants.
14        (11) Public-private agreements entered into according
15    to the procurement requirements of Section 20 of the
16    Public-Private Partnerships for Transportation Act and
17    design-build agreements entered into according to the
18    procurement requirements of Section 25 of the
19    Public-Private Partnerships for Transportation Act.
20        (12) Contracts for legal, financial, and other
21    professional and artistic services entered into on or
22    before December 31, 2018 by the Illinois Finance Authority
23    in which the State of Illinois is not obligated. Such
24    contracts shall be awarded through a competitive process
25    authorized by the Board of the Illinois Finance Authority
26    and are subject to Sections 5-30, 20-160, 50-13, 50-20,

 

 

HB4219- 7 -LRB098 16908 JWD 51983 b

1    50-35, and 50-37 of this Code, as well as the final
2    approval by the Board of the Illinois Finance Authority of
3    the terms of the contract.
4    Notwithstanding any other provision of law, contracts
5entered into under item (12) of this subsection (b) shall be
6published in the Procurement Bulletin within 14 days after
7contract execution. The chief procurement officer shall
8prescribe the form and content of the notice. The Illinois
9Finance Authority shall provide the chief procurement officer,
10on a monthly basis, in the form and content prescribed by the
11chief procurement officer, a report of contracts that are
12related to the procurement of goods and services identified in
13item (12) of this subsection (b). At a minimum, this report
14shall include the name of the contractor, a description of the
15supply or service provided, the total amount of the contract,
16the term of the contract, and the exception to the Code
17utilized. A copy of each of these contracts shall be made
18available to the chief procurement officer immediately upon
19request. The chief procurement officer shall submit a report to
20the Governor and General Assembly no later than November 1 of
21each year that shall include, at a minimum, an annual summary
22of the monthly information reported to the chief procurement
23officer.
24    (c) This Code does not apply to the electric power
25procurement process provided for under Section 1-75 of the
26Illinois Power Agency Act and Section 16-111.5 of the Public

 

 

HB4219- 8 -LRB098 16908 JWD 51983 b

1Utilities Act.
2    (d) Except for Section 20-160 and Article 50 of this Code,
3and as expressly required by Section 9.1 of the Illinois
4Lottery Law, the provisions of this Code do not apply to the
5procurement process provided for under Section 9.1 of the
6Illinois Lottery Law.
7    (e) This Code does not apply to the process used by the
8Capital Development Board to retain a person or entity to
9assist the Capital Development Board with its duties related to
10the determination of costs of a clean coal SNG brownfield
11facility, as defined by Section 1-10 of the Illinois Power
12Agency Act, as required in subsection (h-3) of Section 9-220 of
13the Public Utilities Act, including calculating the range of
14capital costs, the range of operating and maintenance costs, or
15the sequestration costs or monitoring the construction of clean
16coal SNG brownfield facility for the full duration of
17construction.
18    (f) This Code does not apply to the process used by the
19Illinois Power Agency to retain a mediator to mediate sourcing
20agreement disputes between gas utilities and the clean coal SNG
21brownfield facility, as defined in Section 1-10 of the Illinois
22Power Agency Act, as required under subsection (h-1) of Section
239-220 of the Public Utilities Act.
24    (g) This Code does not apply to the processes used by the
25Illinois Power Agency to retain a mediator to mediate contract
26disputes between gas utilities and the clean coal SNG facility

 

 

HB4219- 9 -LRB098 16908 JWD 51983 b

1and to retain an expert to assist in the review of contracts
2under subsection (h) of Section 9-220 of the Public Utilities
3Act. This Code does not apply to the process used by the
4Illinois Commerce Commission to retain an expert to assist in
5determining the actual incurred costs of the clean coal SNG
6facility and the reasonableness of those costs as required
7under subsection (h) of Section 9-220 of the Public Utilities
8Act.
9    (h) This Code does not apply to the process to procure or
10contracts entered into in accordance with Sections 11-5.2 and
1111-5.3 of the Illinois Public Aid Code.
12    (i) Each chief procurement officer may access records
13necessary to review whether a contract, purchase, or other
14expenditure is or is not subject to the provisions of this
15Code, unless such records would be subject to attorney-client
16privilege.
17    (j) This Code does not apply to the process used by the
18Capital Development Board to retain an artist or work or works
19of art as required in Section 14 of the Capital Development
20Board Act.
21(Source: P.A. 97-96, eff. 7-13-11; 97-239, eff. 8-2-11; 97-502,
22eff. 8-23-11; 97-689, eff. 6-14-12; 97-813, eff. 7-13-12;
2397-895, eff. 8-3-12; 98-90, eff. 7-15-13; 98-463, eff. 8-16-13;
2498-572, eff. 1-1-14; revised 9-9-13.)
 
25    (30 ILCS 500/1-15.120 new)

 

 

HB4219- 10 -LRB098 16908 JWD 51983 b

1    Sec. 1-15.120. Interested persons. For the purposes of
2non-for-profit organization disclosures, "interested persons"
3has the same meaning as "interested persons" used by the
4Internal Revenue Service in Schedule L of Form 990.
 
5    (30 ILCS 500/1-15.125 new)
6    Sec. 1-15.125. Related for-profit organization. For
7purposes of not-for-profit organization disclosures, "related
8for-profit organization" has the same meaning as "related
9organization" used by the Internal Revenue Service in Schedule
10R of Form 990.
 
11    (30 ILCS 500/1-15.130 new)
12    Sec. 1-15.130. Not-for-profit organizations disclosure.
13All bids and offers from responsive bidders or offerors, all
14subcontracts identified under Section 20-120 of this Code that
15are not-for-profit organizations, and not-for-profit
16organization contracts subject to this Code shall be
17accompanied by a copy of the not-for-profit organization's IRS
18Form 990, including, but not limited to, the following sections
19and corresponding schedules that require the reporting of any
20ownership interests, operating agreements, partnerships, or
21other duties, activities, or transactions that exist between
22the not-for-profit organization, interested persons, and its
23related for-profit owners, subsidiaries, partners, affiliates,
24or unrelated organizations: (A) Part IV, Line 28, Schedule L;

 

 

HB4219- 11 -LRB098 16908 JWD 51983 b

1(B) Part IV, Line 34, Schedule R; and (C) Part VI, Line 3,
2Schedule O. This disclosure shall, at a minimum, include
3business identification of the for-profit organization, a list
4of the business transactions between the related for-profit
5organization and the not-for-profit organization under the
6terms of the relationship, and whether more than 50% of the
7not-for-profit organization's management, including current or
8former officers, directors, trustees, family members, or key
9employees, is delivered from the relationship. The
10not-for-profit organization shall also furnish an affidavit
11stating that the copy of the IRS Form 990 (and its accompanying
12schedules) is an authentic copy of the IRS Form 990 submitted
13to the IRS.
 
14    (30 ILCS 500/45-35)
15    Sec. 45-35. Facilities for persons with severe
16disabilities.
17    (a) Qualification. Supplies and services may be procured
18without advertising or calling for bids from any qualified
19not-for-profit agency for persons with severe disabilities
20that:
21        (1) complies with Illinois laws governing private
22    not-for-profit organizations;
23        (2) is certified as a sheltered workshop by the Wage
24    and Hour Division of the United States Department of Labor
25    or is an accredited vocational program that provides

 

 

HB4219- 12 -LRB098 16908 JWD 51983 b

1    transition services to youth between the ages of 14 1/2 and
2    22 in accordance with individualized education plans under
3    Section 14-8.03 of the School Code and that provides
4    residential services at a child care institution, as
5    defined under Section 2.06 of the Child Care Act of 1969,
6    or at a group home, as defined under Section 2.16 of the
7    Child Care Act of 1969; and
8        (3) meets the applicable Illinois Department of Human
9    Services just standards.
10    (b) Participation. To participate, the not-for-profit
11agency must
12        (1) have indicated an interest in providing the
13    supplies and services,
14        (2) must meet the specifications and needs of the using
15    agency, and must set a fair market price.
16        (3) submit a copy of the IRS Form 990, including, but
17    not limited to, the following sections and corresponding
18    schedules that require the reporting of any ownership
19    interests, operating agreements, partnerships, or other
20    duties, activities, or transactions that exist between the
21    not-for-profit organization, interested persons, and its
22    related for-profit owners, subsidiaries, partners,
23    affiliates, or unrelated organizations: (A) Part IV, Line
24    28, Schedule L; (B) Part IV, Line 34, Schedule R; and (C)
25    Part VI, Line 3, Schedule O. This disclosure shall, at a
26    minimum, include business identification of the for-profit

 

 

HB4219- 13 -LRB098 16908 JWD 51983 b

1    organization, a list of the business transactions between
2    the related for-profit organization and the not-for-profit
3    organization under the terms of the relationship, and
4    whether more than 50% of the not-for-profit organization's
5    management, including current or former officers,
6    directors, trustees, family members, or key employees, is
7    delivered from the relationship. The not-for-profit
8    organization shall also furnish an affidavit stating that
9    the copy of the IRS Form 990 (and its accompanying
10    schedules) is an authentic copy of the IRS Form 990
11    submitted to the IRS.
12    (c) Committee. There is created within the Department of
13Central Management Services a committee to facilitate the
14purchase of products and services of persons so severely
15disabled by a physical, developmental, or mental disability or
16a combination of any of those disabilities that they cannot
17engage in normal competitive employment. This committee is
18called the State Use Committee. The committee shall consist of
19the Director of the Department of Central Management Services
20or his or her designee, the Director of the Department of Human
21Services or his or her designee, one public member representing
22private business who is knowledgeable of the employment needs
23and concerns of persons with developmental disabilities, one
24public member representing private business who is
25knowledgeable of the needs and concerns of rehabilitation
26facilities, one public member who is knowledgeable of the

 

 

HB4219- 14 -LRB098 16908 JWD 51983 b

1employment needs and concerns of persons with developmental
2disabilities, one public member who is knowledgeable of the
3needs and concerns of rehabilitation facilities, and 2 public
4members from a statewide association that represents
5community-based rehabilitation facilities, all appointed by
6the Governor. The public members shall serve 2 year terms,
7commencing upon appointment and every 2 years thereafter. A
8public member may be reappointed, and vacancies shall be filled
9by appointment for the completion of the term. In the event
10there is a vacancy on the Committee, the Governor must make an
11appointment to fill that vacancy within 30 calendar days after
12the notice of vacancy. The members shall serve without
13compensation but shall be reimbursed for expenses at a rate
14equal to that of State employees on a per diem basis by the
15Department of Central Management Services. All members shall be
16entitled to vote on issues before the committee.
17    The committee shall have the following powers and duties:
18        (1) To request from any State agency information as to
19    product specification and service requirements in order to
20    carry out its purpose.
21        (2) To meet quarterly or more often as necessary to
22    carry out its purposes.
23        (3) To request a quarterly report from each
24    participating qualified not-for-profit agency for persons
25    with severe disabilities describing the volume of sales for
26    each product or service sold under this Section.

 

 

HB4219- 15 -LRB098 16908 JWD 51983 b

1        (4) To prepare a report for the Governor annually.
2        (5) To prepare a publication that lists all supplies
3    and services currently available from any qualified
4    not-for-profit agency for persons with severe
5    disabilities. This list and any revisions shall be
6    distributed to all purchasing agencies.
7        (6) To encourage diversity in supplies and services
8    provided by qualified not-for-profit agencies for persons
9    with severe disabilities and discourage unnecessary
10    duplication or competition among facilities.
11        (7) To develop guidelines to be followed by qualifying
12    agencies for participation under the provisions of this
13    Section. The guidelines shall be developed within 6 months
14    after the effective date of this Code and made available on
15    a nondiscriminatory basis to all qualifying agencies.
16        (8) To review all bids submitted under the provisions
17    of this Section and reject any bid for any purchase that is
18    determined to be substantially more than the purchase would
19    have cost had it been competitively bid.
20        (9) To develop a 5-year plan for increasing the number
21    of products and services purchased from qualified
22    not-for-profit agencies for persons with severe
23    disabilities, including the feasibility of developing
24    mandatory set-aside contracts. This 5-year plan must be
25    developed no later than 180 calendar days after the
26    effective date of this amendatory Act of the 96th General

 

 

HB4219- 16 -LRB098 16908 JWD 51983 b

1    Assembly.
2    (c-5) Conditions for Use. Each chief procurement officer
3shall, in consultation with the State Use Committee, determine
4which articles, materials, services, food stuffs, and supplies
5that are produced, manufactured, or provided by persons with
6severe disabilities in qualified not-for-profit agencies shall
7be given preference by purchasing agencies procuring those
8items.
9    (d) Former committee. The committee created under
10subsection (c) shall replace the committee created under
11Section 7-2 of the Illinois Purchasing Act, which shall
12continue to operate until the appointments under subsection (c)
13are made.
14(Source: P.A. 96-634, eff. 8-24-09; 97-895, eff. 8-3-12.)
 
15    (30 ILCS 500/50-2)
16    Sec. 50-2. Continuing disclosure; false certification.
17     (a) Multi-year contracts. Every person that has entered
18into a multi-year contract and every subcontractor with a
19multi-year subcontract shall certify, by July 1 of each fiscal
20year covered by the contract after the initial fiscal year, to
21the responsible chief procurement officer whether it continues
22to satisfy the requirements of this Article pertaining to
23eligibility for a contract award. If a contractor or
24subcontractor is not able to truthfully certify that it
25continues to meet all requirements, it shall provide with its

 

 

HB4219- 17 -LRB098 16908 JWD 51983 b

1certification a detailed explanation of the circumstances
2leading to the change in certification status. A contractor or
3subcontractor that makes a false statement material to any
4given certification required under this Article is, in addition
5to any other penalties or consequences prescribed by law,
6subject to liability under the Illinois False Claims Act for
7submission of a false claim.
8    (b) Not-for-profit organizations; multi-year contracts. If
9a not-for-profit organization has entered into a multi-year
10contract to supply or provide goods or services, then, by July
111 of each fiscal year covered by the contract after the initial
12fiscal year, the not-for-profit organization must also submit a
13copy of the IRS Form 990, including, but not limited to, the
14following sections and corresponding schedules that require
15the reporting of any ownership interests, operating
16agreements, partnerships, or other duties, activities, or
17transactions that exist between the not-for-profit
18organization, interested persons, and its related for-profit
19owners, subsidiaries, partners, affiliates, or unrelated
20organizations: (A) Part IV, Line 28,Schedule L; (B) Part IV,
21Line 34, Schedule R; and (C) Part VI, Line 3, Schedule O. This
22disclosure shall, at a minimum, include business
23identification of the for-profit organization, a list of the
24business transactions between the related for-profit
25organization and the not-for-profit organization under the
26terms of the relationship, and whether more than 50% of the

 

 

HB4219- 18 -LRB098 16908 JWD 51983 b

1not-for-profit organization's management, including current or
2former officers, directors, trustees, family members, or key
3employees, is delivered from the relationship. The
4not-for-profit organization shall also furnish an affidavit
5stating that the copy of the IRS Form 990 (and its accompanying
6schedules) is an authentic copy of the IRS Form 990 submitted
7to the IRS.
8(Source: P.A. 96-795, eff. 7-1-10 (see Section 5 of P.A. 96-793
9for the effective date of P.A. 96-795); 96-1304, eff. 7-27-10.)
 
10    Section 99. Effective date. This Act takes effect upon
11becoming law.