HB4219 98TH GENERAL ASSEMBLY

LRB098 16908 JWD 51983 b

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.

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 changing Sections 1-10, 45-35, and 50-2 and by adding Sections 1-15.120, 1-15.125, and 1-15.130 as follows:

(30 ILCS 500/1-10)

Sec. 1-10. Application.

(a) This Code applies only to procurements for which contractors were first solicited on or after July 1, 1998. This Code shall not be construed to affect or impair any contract, or any provision of a contract, entered into based on a solicitation prior to the implementation date of this Code as described in Article 99, including but not limited to any covenant entered into with respect to any revenue bonds or similar instruments. All procurements for which contracts are solicited between the effective date of Articles 50 and 99 and July 1, 1998 shall be substantially in accordance with this Code and its intent.

(a-5) If a form, schedule to a form, or line item in a form issued by the United States Internal Revenue Service is specifically cited by number or letter in a provision of this Code and if, after the effective date of the Public Act that established that citation, the United States Internal Revenue Service form, schedule to a form, or line item in a form cited is redesignated without any other change whatever being made to it, then the provision of this Code containing that citation shall be construed as though the redesignation of the form, schedule to a form, or line item in a form of the United States Internal Revenue Service had not occurred.

(a-10) For purposes of this Section, the terms "interested persons" and "related for-profit organization" have the meanings ascribed to those terms in Sections 1-15.120 and 1-15.125 of this Code.

(b) This Code shall apply regardless of the source of the funds with which the contracts are paid, including federal assistance moneys. This Code shall not apply to:

(1) Contracts between the State and its political subdivisions or other governments, or between State governmental bodies except as specifically provided in this Code.

(2) Grants, except all grants that are subject to for the filing requirements of Section 20-80 and the not-for-profit organization continuing disclosure requirements of Section 50-2 of this Code. If a not-for-profit organization receives any grant that would be exempt from this Code under this paragraph (2), then the not-for-profit organization must also submit a copy of the IRS Form 990, including, but not limited to, the following sections and corresponding schedules that require the reporting of any ownership interests, operating agreements, partnerships, or other duties, activities, or transactions that exist between the not-for-profit organization, interested persons, and its related for-profit owners, subsidiaries, partners, affiliates, or unrelated organizations: (A) Part IV, Line 28, Schedule L; (B) Part IV, Line 34, Schedule R; and (C) Part VI, Line 3, Schedule O. This disclosure shall, at a minimum, include business identification of the for-profit organization, a list of the business transactions between the related for-profit organization and the not-for-profit organization under the terms of the relationship, and whether more than 50% of the not-for-profit organization's management, including current or former officers, directors, trustees, family members, or key employees, is delivered from the relationship. The not-for-profit organization shall also furnish an affidavit stating that the copy of the IRS Form 990 (and its accompanying schedules) is an authentic copy of the IRS Form 990 submitted to the IRS. If a not-for-profit organization has entered into a multi-year grant, then, by July 1 of each fiscal year covered by the grant after the initial fiscal year, the not-for-profit organization must submit a copy of the IRS Form 990 for the most recent fiscal year along with an affidavit verifying the same.

(3) Purchase of care.However, if a not-for-profit organization provides services that would be exempt from this Code under this paragraph (3), then the not-for-profit organization must also submit a copy of the IRS Form 990, including, but not limited to, the following sections and corresponding schedules that require the reporting of any ownership interests, operating agreements, partnerships, or other duties, activities, or transactions that exist between the not-for-profit organization, interested persons, and its related for-profit owners, subsidiaries, partners, affiliates, or unrelated organizations: (A) Part IV, Line 28, Schedule L; (B) Part IV, Line 34, Schedule R; and (C) Part VI, Line 3, Schedule O. This disclosure shall, at a minimum, include business identification of the for-profit organization, a list of the business transactions between the related for-profit organization and the not-for-profit organization under the terms of the relationship, and whether more than 50% of the not-for-profit organization's management, including current or former officers, directors, trustees, family members, or key employees, is delivered from the relationship. The not-for-profit organization shall also furnish an affidavit stating that the copy of the IRS Form 990 (and its accompanying schedules) is an authentic copy of the IRS Form 990 submitted to the IRS. If a not-for-profit organization has entered into a multi-year purchase of care contract, then, by July 1 of each fiscal year covered by the purchase of care contract after the initial fiscal year, the not-for-profit organization must submit a copy of the IRS Form 990 for the most recent fiscal year along with an affidavit verifying the same.

(4) Hiring of an individual as employee and not as an independent contractor, whether pursuant to an employment code or policy or by contract directly with that individual.

(5) Collective bargaining contracts.

(6) Purchase of real estate, except that notice of this type of contract with a value of more than $25,000 must be published in the Procurement Bulletin within 7 days after the deed is recorded in the county of jurisdiction. The notice shall identify the real estate purchased, the names of all parties to the contract, the value of the contract, and the effective date of the contract.

(7) Contracts necessary to prepare for anticipated litigation, enforcement actions, or investigations, provided that the chief legal counsel to the Governor shall give his or her prior approval when the procuring agency is one subject to the jurisdiction of the Governor, and provided that the chief legal counsel of any other procuring entity subject to this Code shall give his or her prior approval when the procuring entity is not one subject to the jurisdiction of the Governor.

(8) Contracts for services to Northern Illinois University by a person, acting as an independent contractor, who is qualified by education, experience, and technical ability and is selected by negotiation for the purpose of providing non-credit educational service activities or products by means of specialized programs offered by the university.

(9) Procurement expenditures by the Illinois Conservation Foundation when only private funds are used.

(10) Procurement expenditures by the Illinois Health Information Exchange Authority involving private funds from the Health Information Exchange Fund. "Private funds" means gifts, donations, and private grants.

(11) Public-private agreements entered into according to the procurement requirements of Section 20 of the Public-Private Partnerships for Transportation Act and design-build agreements entered into according to the procurement requirements of Section 25 of the Public-Private Partnerships for Transportation Act.

(12) Contracts for legal, financial, and other professional and artistic services entered into on or before December 31, 2018 by the Illinois Finance Authority in which the State of Illinois is not obligated. Such contracts shall be awarded through a competitive process authorized by the Board of the Illinois Finance Authority and are subject to Sections 5-30, 20-160, 50-13, 50-20, 50-35, and 50-37 of this Code, as well as the final approval by the Board of the Illinois Finance Authority of the terms of the contract.

Notwithstanding any other provision of law, contracts entered into under item (12) of this subsection (b) shall be published in the Procurement Bulletin within 14 days after contract execution. The chief procurement officer shall prescribe the form and content of the notice. The Illinois Finance Authority shall provide the chief procurement officer, on a monthly basis, in the form and content prescribed by the chief procurement officer, a report of contracts that are related to the procurement of goods and services identified in item (12) of this subsection (b). At a minimum, this report shall include the name of the contractor, a description of the supply or service provided, the total amount of the contract, the term of the contract, and the exception to the Code utilized. A copy of each of these contracts shall be made available to the chief procurement officer immediately upon request. The chief procurement officer shall submit a report to the Governor and General Assembly no later than November 1 of each year that shall include, at a minimum, an annual summary of the monthly information reported to the chief procurement officer.

(c) This Code does not apply to the electric power procurement process provided for under Section 1-75 of the Illinois Power Agency Act and Section 16-111.5 of the Public Utilities Act.

(d) Except for Section 20-160 and Article 50 of this Code, and as expressly required by Section 9.1 of the Illinois Lottery Law, the provisions of this Code do not apply to the procurement process provided for under Section 9.1 of the Illinois Lottery Law.

(e) This Code does not apply to the process used by the Capital Development Board to retain a person or entity to assist the Capital Development Board with its duties related to the determination of costs of a clean coal SNG brownfield facility, as defined by Section 1-10 of the Illinois Power Agency Act, as required in subsection (h-3) of Section 9-220 of the Public Utilities Act, including calculating the range of capital costs, the range of operating and maintenance costs, or the sequestration costs or monitoring the construction of clean coal SNG brownfield facility for the full duration of construction.

(f) This Code does not apply to the process used by the Illinois Power Agency to retain a mediator to mediate sourcing agreement disputes between gas utilities and the clean coal SNG brownfield facility, as defined in Section 1-10 of the Illinois Power Agency Act, as required under subsection (h-1) of Section 9-220 of the Public Utilities Act.

(g) This Code does not apply to the processes used by the Illinois Power Agency to retain a mediator to mediate contract disputes between gas utilities and the clean coal SNG facility and to retain an expert to assist in the review of contracts under subsection (h) of Section 9-220 of the Public Utilities Act. This Code does not apply to the process used by the Illinois Commerce Commission to retain an expert to assist in determining the actual incurred costs of the clean coal SNG facility and the reasonableness of those costs as required under subsection (h) of Section 9-220 of the Public Utilities Act.

(h) This Code does not apply to the process to procure or contracts entered into in accordance with Sections 11-5.2 and 11-5.3 of the Illinois Public Aid Code.

(i) Each chief procurement officer may access records necessary to review whether a contract, purchase, or other expenditure is or is not subject to the provisions of this Code, unless such records would be subject to attorney-client privilege.

(j) This Code does not apply to the process used by the Capital Development Board to retain an artist or work or works of art as required in Section 14 of the Capital Development Board Act.

(Source: P.A. 97-96, eff. 7-13-11; 97-239, eff. 8-2-11; 97-502, eff. 8-23-11; 97-689, eff. 6-14-12; 97-813, eff. 7-13-12; 97-895, eff. 8-3-12; 98-90, eff. 7-15-13; 98-463, eff. 8-16-13; 98-572, eff. 1-1-14; revised 9-9-13.)

(30 ILCS 500/1-15.120 new)

Sec. 1-15.120. Interested persons. For the purposes of non-for-profit organization disclosures, "interested persons" has the same meaning as "interested persons" used by the Internal Revenue Service in Schedule L of Form 990.

(30 ILCS 500/1-15.125 new)

Sec. 1-15.125. Related for-profit organization. For purposes of not-for-profit organization disclosures, "related for-profit organization" has the same meaning as "related organization" used by the Internal Revenue Service in Schedule R of Form 990.

(30 ILCS 500/1-15.130 new)

Sec. 1-15.130. Not-for-profit organizations disclosure. All bids and offers from responsive bidders or offerors, all subcontracts identified under Section 20-120 of this Code that are not-for-profit organizations, and not-for-profit organization contracts subject to this Code shall be accompanied by a copy of the not-for-profit organization's IRS Form 990, including, but not limited to, the following sections and corresponding schedules that require the reporting of any ownership interests, operating agreements, partnerships, or other duties, activities, or transactions that exist between the not-for-profit organization, interested persons, and its related for-profit owners, subsidiaries, partners, affiliates, or unrelated organizations: (A) Part IV, Line 28, Schedule L; (B) Part IV, Line 34, Schedule R; and (C) Part VI, Line 3, Schedule O. This disclosure shall, at a minimum, include business identification of the for-profit organization, a list of the business transactions between the related for-profit organization and the not-for-profit organization under the terms of the relationship, and whether more than 50% of the not-for-profit organization's management, including current or former officers, directors, trustees, family members, or key employees, is delivered from the relationship. The not-for-profit organization shall also furnish an affidavit stating that the copy of the IRS Form 990 (and its accompanying schedules) is an authentic copy of the IRS Form 990 submitted to the IRS.

(30 ILCS 500/45-35)

Sec. 45-35. Facilities for persons with severe disabilities.

(a) Qualification. Supplies and services may be procured without advertising or calling for bids from any qualified not-for-profit agency for persons with severe disabilities that:

(1) complies with Illinois laws governing private not-for-profit organizations;

(2) is certified as a sheltered workshop by the Wage and Hour Division of the United States Department of Labor or is an accredited vocational program that provides transition services to youth between the ages of 14 1/2 and 22 in accordance with individualized education plans under Section 14-8.03 of the School Code and that provides residential services at a child care institution, as defined under Section 2.06 of the Child Care Act of 1969, or at a group home, as defined under Section 2.16 of the Child Care Act of 1969; and

(3) meets the applicable Illinois Department of Human Services just standards.

(b) Participation. To participate, the not-for-profit agency must

(1) have indicated an interest in providing the supplies and services,

(2) must meet the specifications and needs of the using agency, and must set a fair market price.

(3) submit a copy of the IRS Form 990, including, but not limited to, the following sections and corresponding schedules that require the reporting of any ownership interests, operating agreements, partnerships, or other duties, activities, or transactions that exist between the not-for-profit organization, interested persons, and its related for-profit owners, subsidiaries, partners, affiliates, or unrelated organizations: (A) Part IV, Line 28, Schedule L; (B) Part IV, Line 34, Schedule R; and (C) Part VI, Line 3, Schedule O. This disclosure shall, at a minimum, include business identification of the for-profit organization, a list of the business transactions between the related for-profit organization and the not-for-profit organization under the terms of the relationship, and whether more than 50% of the not-for-profit organization's management, including current or former officers, directors, trustees, family members, or key employees, is delivered from the relationship. The not-for-profit organization shall also furnish an affidavit stating that the copy of the IRS Form 990 (and its accompanying schedules) is an authentic copy of the IRS Form 990 submitted to the IRS.

(c) Committee. There is created within the Department of Central Management Services a committee to facilitate the purchase of products and services of persons so severely disabled by a physical, developmental, or mental disability or a combination of any of those disabilities that they cannot engage in normal competitive employment. This committee is called the State Use Committee. The committee shall consist of the Director of the Department of Central Management Services or his or her designee, the Director of the Department of Human Services or his or her designee, one public member representing private business who is knowledgeable of the employment needs and concerns of persons with developmental disabilities, one public member representing private business who is knowledgeable of the needs and concerns of rehabilitation facilities, one public member who is knowledgeable of the employment needs and concerns of persons with developmental disabilities, one public member who is knowledgeable of the needs and concerns of rehabilitation facilities, and 2 public members from a statewide association that represents community-based rehabilitation facilities, all appointed by the Governor. The public members shall serve 2 year terms, commencing upon appointment and every 2 years thereafter. A public member may be reappointed, and vacancies shall be filled by appointment for the completion of the term. In the event there is a vacancy on the Committee, the Governor must make an appointment to fill that vacancy within 30 calendar days after the notice of vacancy. The members shall serve without compensation but shall be reimbursed for expenses at a rate equal to that of State employees on a per diem basis by the Department of Central Management Services. All members shall be entitled to vote on issues before the committee.

The committee shall have the following powers and duties:

(1) To request from any State agency information as to product specification and service requirements in order to carry out its purpose.

(2) To meet quarterly or more often as necessary to carry out its purposes.

(3) To request a quarterly report from each participating qualified not-for-profit agency for persons with severe disabilities describing the volume of sales for each product or service sold under this Section.

(4) To prepare a report for the Governor annually.

(5) To prepare a publication that lists all supplies and services currently available from any qualified not-for-profit agency for persons with severe disabilities. This list and any revisions shall be distributed to all purchasing agencies.

(6) To encourage diversity in supplies and services provided by qualified not-for-profit agencies for persons with severe disabilities and discourage unnecessary duplication or competition among facilities.

(7) To develop guidelines to be followed by qualifying agencies for participation under the provisions of this Section. The guidelines shall be developed within 6 months after the effective date of this Code and made available on a nondiscriminatory basis to all qualifying agencies.

(8) To review all bids submitted under the provisions of this Section and reject any bid for any purchase that is determined to be substantially more than the purchase would have cost had it been competitively bid.

(9) To develop a 5-year plan for increasing the number of products and services purchased from qualified not-for-profit agencies for persons with severe disabilities, including the feasibility of developing mandatory set-aside contracts. This 5-year plan must be developed no later than 180 calendar days after the effective date of this amendatory Act of the 96th General Assembly.

(c-5) Conditions for Use. Each chief procurement officer shall, in consultation with the State Use Committee, determine which articles, materials, services, food stuffs, and supplies that are produced, manufactured, or provided by persons with severe disabilities in qualified not-for-profit agencies shall be given preference by purchasing agencies procuring those items.

(d) Former committee. The committee created under subsection (c) shall replace the committee created under Section 7-2 of the Illinois Purchasing Act, which shall continue to operate until the appointments under subsection (c) are made.

(Source: P.A. 96-634, eff. 8-24-09; 97-895, eff. 8-3-12.)

(30 ILCS 500/50-2)

Sec. 50-2. Continuing disclosure; false certification.

(a) Multi-year contracts. Every person that has entered into a multi-year contract and every subcontractor with a multi-year subcontract shall certify, by July 1 of each fiscal year covered by the contract after the initial fiscal year, to the responsible chief procurement officer whether it continues to satisfy the requirements of this Article pertaining to eligibility for a contract award. If a contractor or subcontractor is not able to truthfully certify that it continues to meet all requirements, it shall provide with its certification a detailed explanation of the circumstances leading to the change in certification status. A contractor or subcontractor that makes a false statement material to any given certification required under this Article is, in addition to any other penalties or consequences prescribed by law, subject to liability under the Illinois False Claims Act for submission of a false claim.

(b) Not-for-profit organizations; multi-year contracts. If a not-for-profit organization has entered into a multi-year contract to supply or provide goods or services, then, by July 1 of each fiscal year covered by the contract after the initial fiscal year, the not-for-profit organization must also submit a copy of the IRS Form 990, including, but not limited to, the following sections and corresponding schedules that require the reporting of any ownership interests, operating agreements, partnerships, or other duties, activities, or transactions that exist between the not-for-profit organization, interested persons, and its related for-profit owners, subsidiaries, partners, affiliates, or unrelated organizations: (A) Part IV, Line 28,Schedule L; (B) Part IV, Line 34, Schedule R; and (C) Part VI, Line 3, Schedule O. This disclosure shall, at a minimum, include business identification of the for-profit organization, a list of the business transactions between the related for-profit organization and the not-for-profit organization under the terms of the relationship, and whether more than 50% of the not-for-profit organization's management, including current or former officers, directors, trustees, family members, or key employees, is delivered from the relationship. The not-for-profit organization shall also furnish an affidavit stating that the copy of the IRS Form 990 (and its accompanying schedules) is an authentic copy of the IRS Form 990 submitted to the IRS.

(Source: P.A. 96-795, eff. 7-1-10 (see Section 5 of P.A. 96-793 for the effective date of P.A. 96-795); 96-1304, eff. 7-27-10.)

Section 99. Effective date. This Act takes effect upon becoming law.