SB0228 102ND GENERAL ASSEMBLY

LRB102 04023 RJF 14039 b

102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB0228

Introduced 2/17/2021, by Sen. Ann Gillespie

SYNOPSIS AS INTRODUCED:

New Act
30 ILCS 575/5	from Ch. 127, par. 132.605
220 ILCS 5/5-117

Creates the Not-for-Profit Business Enterprise Act. Allows for the certification of and the preference in awarding of State contracts to minority-led not-for-profit organizations, woman-led not-for-profit organizations, and not-for-profit organizations led by a person with a disability under the Act. Provides further requirements concerning the awarding of State contracts and certification. Requires State agencies and institutions of higher education to annually file with the Business Enterprise Council a compliance plan for contracting with minority-led not-for-profit organizations, woman-led not-for-profit organizations, and not-for-profit organizations led by a person with a disability. Provides enforcement provisions. Provides for the adoption of rules necessary to implement and enforce the requirements of the Act. Amends the Business Enterprise for Minorities, Women, and Persons with Disabilities Act. Provides the Business Enterprise Council with the authority and responsibility to devise a certification procedure for not-for-profit organizations and to make a list of all not-for-profit organizations legitimately classified as a minority-led not-for-profit organization, a woman-led not-for-profit organization, or a not-for-profit organization led by a person with a disability for purposes of the Not-for-Profit Business Enterprise Act. Amends the Public Utilities Act. Provides that specified supplier diversity goal requirements under the Act apply to minority-led not-for-profit organizations, woman-led not-for-profit organizations, and not-for-profit organizations led by a person with a disability. Defines terms. Makes other changes.

A BILL FOR

AN ACT concerning finance.

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

Section 1. Short title. This Act may be cited as the Not-for-Profit Business Enterprise Act.

Section 5. Definitions. As used in this Act:

"Board of Directors" has the same meaning as provided under subsection (d) of Section 101.80 of the General Not For Profit Corporation Act of 1986.

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

"Certification" means a determination made by the Business Enterprise 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 not-for-profit organization meets the defined classifications of a "minority-led not-for-profit organization", a "woman-led not-for-profit organization", or a "not-for-profit organization led by a person with a disability".

"Key employees" means an employee of the organization who is:

(1) the person who has ultimate responsibility for implementing the decisions of the Board of Directors or for supervising the management, administration, or operation of the organization;

(2) the person who has ultimate responsibility for managing the organization's finances; or

(3) the person who:

(A) has responsibilities, powers, or influence over the organization as a whole that is similar to the persons described in paragraphs (1) and (2);

(B) manages a discrete segment or activity of the organizations that represents 25% or more of the activities, assets, income, or expenses of the organization, as compared to the organization as a whole, or has or shares authority to control or determine 25% or more of the organization's capital expenditures, operating budget, or compensation for employees; and

(C) is one of the 5 highest compensated employees in the organization.

"Minority-led not-for-profit organization" means an organization that is tax-exempt under Sections 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, and for which:

(1) at least 51% of the organization's Board of Directors are minority persons, or at least 51% of the organization's Board of Directors and key employees are minority persons;

(2) the organization is regularly and actively engaged in the activity for which it is formed;

(3) the organization is not dependent upon or influenced by another non-eligible person or organization; and

(4) the organization has not been established or reorganized for the specific purpose of participating in the Business Enterprise Program.

"Not-for-profit organization led by a person with a disability" means an organization that is tax-exempt under Sections 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, and for which:

(1) at least 51% of the organization's Board of Directors are persons with a disability, or at least 51% of the organization's Board of Directors and key employees are persons with a disability;

(2) the organization is regularly and actively engaged in the activity for which it is formed;

(3) the organization is not dependent upon or influenced by another non-eligible person or organization; and

(4) the organization has not been established or reorganized for the specific purpose of participating in the Business Enterprise Program.

"Public institution 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.

"State agency" means and includes all boards, commissions, agencies, institutions, authorities, and bodies politic and corporate of the State.

"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.

"Woman-led not-for-profit organization" means an organization that is tax-exempt under Sections 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, and for which:

(1) at least 51% of the organization's Board of Directors are women, or at least 51% of the organization's Board of Directors and key employees are women;

(2) the organization is regularly and actively engaged in the activity for which it is formed;

(3) the organization is not dependent upon or influenced by another non-eligible person or organization; and

(4) the organization has not been established or reorganized for the specific purpose of participating in the Business Enterprise Program.

Section 10. Award of State contracts. Not less than 10% of the total dollar amount of State contracts shall be established as an aspirational goal to be awarded to minority-led not-for-profit organizations, woman-led not-for-profit organizations, and not-for-profit organizations led by a person with a disability. The percentage established under this Section relates to the total dollar amount of State contracts during each State fiscal year, calculated by examining independently each type of contract for each State agency or public institution of higher education which lets such contracts. Only that percentage of arrangements which represents the participation of minority-led not-for-profit organizations, woman-led not-for-profit organizations, and not-for-profit organizations led by a person with a disability on such contracts shall be included.

Section 15. Certification.

(a) For the purpose of assuring that a not-for-profit organization taking advantage of this Act is legitimately classified as a minority-led not-for-profit organization, a woman-led not-for-profit organization, or a not-for-profit organization led by a person with a disability, the Business Enterprise Council shall devise a certification procedure to classify such organizations. The Council shall also maintain a list of all not-for-profit organizations legitimately classified as a minority-led not-for-profit organization, a woman-led not-for-profit organization, or a not-for-profit organization led by a person with a disability to provide to State agencies and public institutions of higher education entering into State contracts under this Act.

(b) When a not-for-profit organization's Board of Directors, or the Board of Directors together with key employees, 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 a 51% share, the 51% membership requirement for purposes of certification under this Act shall be considered met. The certification category for not-for-profit organizations shall be that of the class holding the largest share of positions on the Board of Directors, or on the Board of Directors together with key employees, of a not-for-profit organization. If 2 or more classes have an equal share of positions on the Board of Directors, or on the Board of Directors together with key employees, the certification category shall be determined by the not-for-profit organization.

Section 20. Agency compliance plans. Each State agency and public institution of higher education under the jurisdiction of this Act shall file with the Business Enterprise Council an annual compliance plan which shall outline the goals of the State agency or public institution of higher education for contracting with minority-led not-for-profit organizations, woman-led not-for-profit organizations, and not-for-profit organizations led by a person with a disability for the then current fiscal year, the manner in which the agency intends to reach those goals, and a timetable for reaching those goals. The Council shall review and approve the plan of each State agency and public institution of higher education and may reject any plan that does not comply with this Act.

Section 25. Enforcement. The Business Enterprise Council shall make such findings, recommendations, and proposals to the Governor as are necessary and appropriate to enforce this Act. If, as a result of its monitoring activities, the Council determines that its goals and policies are not being met by any State agency or public institution of higher education, the Council may recommend any actions necessary to enforce compliance with this Act and compliance with contracts entered into under this Act.

Section 30. Rules. The Business Enterprise Council shall adopt any rules necessary to implement and enforce the requirements of this Act.

Section 100. The Business Enterprise for Minorities, Women, and Persons with Disabilities Act is amended by changing Section 5 as follows:

(30 ILCS 575/5) (from Ch. 127, par. 132.605)

(Section scheduled to be repealed on June 30, 2024)

Sec. 5. Business Enterprise Council.

(1) To help implement, monitor, and enforce the goals of this Act, there is created the Business Enterprise Council for Minorities, Women, and Persons with Disabilities, hereinafter referred to as the Council, composed of the Secretary of Human Services and the Directors of the Department of Human Rights, the Department of Commerce and Economic Opportunity, the Department of Central Management Services, the Department of Transportation and the Capital Development Board, or their duly appointed representatives, with the Comptroller, or his or her designee, serving as an advisory member of the Council. Ten individuals representing businesses that are minority-owned, or women-owned, or owned by persons with disabilities, 2 individuals representing the business community, and a representative of public institutions of higher education shall be appointed by the Governor. These members shall serve 2-year 2 year terms and shall be eligible for reappointment. Any vacancy occurring on the Council shall also be filled by the Governor. Any member appointed to fill a vacancy occurring prior to the expiration of the term for which his or her predecessor was appointed shall be appointed for the remainder of such term. Members of the Council shall serve without compensation but shall be reimbursed for any ordinary and necessary expenses incurred in the performance of their duties.

The Director of the Department of Central Management Services shall serve as the Council chairperson and shall select, subject to approval of the council, a Secretary responsible for the operation of the program who shall serve as the Division Manager of the Business Enterprise for Minorities, Women, and Persons with Disabilities Division of the Department of Central Management Services.

The Director of each State agency and the chief executive officer of each public institution institutions of higher education shall appoint a liaison to the Council. The liaison shall be responsible for submitting to the Council any reports and documents necessary under this Act.

(2) The Council's authority and responsibility shall be to:

(a) Devise a certification procedure to assure that businesses taking advantage of this Act are legitimately classified as businesses owned by minorities, women, or persons with disabilities and a registration procedure to recognize, without additional evidence of Business Enterprise Program eligibility, the certification of businesses owned by minorities, women, or persons with disabilities certified by the City of Chicago, Cook County, or other jurisdictional programs with requirements and procedures equaling or exceeding those in this Act.

(a-5) Devise a certification procedure to assure that not-for-profit organizations taking advantage of the Not-for-Profit Business Enterprise Act are legitimately classified as a minority-led not-for-profit organization, a woman-led not-for-profit organization, or a not-for-profit organization led by a person with a disability, as those classifications are defined under that Act.

(b) Maintain a list of all businesses legitimately classified as businesses owned by minorities, women, or persons with disabilities to provide to State agencies and public institutions of higher education.

(b-5) Maintain a list of all not-for-profit organizations legitimately classified as a minority-led not-for-profit organization, a woman-led not-for-profit organization, or a not-for-profit organization led by a person with a disability, as those classifications are defined under the Not-for-Profit Business Enterprise Act, and provide that list to State agencies and public institutions of higher education.

(c) Review rules and regulations for the implementation of the program for businesses owned by minorities, women, and persons with disabilities.

(d) Review compliance plans submitted by each State agency and public institution institutions of higher education pursuant to this Act.

(e) Make annual reports as provided in Section 8f to the Governor and the General Assembly on the status of the program.

(f) Serve as a central clearinghouse for information on State contracts, including the maintenance of a list of all pending State contracts upon which businesses owned by minorities, women, and persons with disabilities may bid. At the Council's discretion, maintenance of the list may include 24-hour electronic access to the list along with the bid and application information.

(g) Establish a toll-free toll free telephone number to facilitate information requests concerning the certification process and pending contracts.

(3) No premium bond rate of a surety company for a bond required of a business owned by a minority, woman, or person with a disability bidding for a State contract shall be higher than the lowest rate charged by that surety company for a similar bond in the same classification of work that would be written for a business not owned by a minority, woman, or person with a disability.

(4) Any Council member who has direct financial or personal interest in any measure pending before the Council shall disclose this fact to the Council and refrain from participating in the determination upon such measure.

(5) The Secretary shall have the following duties and responsibilities:

(a) To be responsible for the day-to-day operation of the Council.

(b) To serve as a coordinator for all of the State's programs for businesses owned by minorities, women, and persons with disabilities and as the information and referral center for all State initiatives for businesses owned by minorities, women, and persons with disabilities.

(c) To establish an enforcement procedure whereby the Council may recommend to the appropriate State legal officer that the State exercise its legal remedies which shall include (1) termination of the contract involved, (2) prohibition of participation by the respondent in public contracts for a period not to exceed 3 years, (3) imposition of a penalty not to exceed any profit acquired as a result of violation, or (4) any combination thereof. Such procedures shall require prior approval by Council. All funds collected as penalties under this subsection shall be used exclusively for maintenance and further development of the Business Enterprise Program and encouragement of participation in State procurement by minorities, women, and persons with disabilities.

(d) To devise appropriate policies, regulations, and procedures for including participation by businesses owned by minorities, women, and persons with disabilities as prime contractors, including, but not limited to: , (i) encouraging the inclusions of qualified businesses owned by minorities, women, and persons with disabilities on solicitation lists, (ii) investigating the potential of blanket bonding programs for small construction jobs, and (iii) investigating and making recommendations concerning the use of the sheltered market process.

(e) To devise procedures for the waiver of the participation goals in appropriate circumstances.

(f) To accept donations and, with the approval of the Council or the Director of Central Management Services, grants related to the purposes of this Act; to conduct seminars related to the purpose of this Act and to charge reasonable registration fees; and to sell directories, vendor lists, and other such information to interested parties, except that forms necessary to become eligible for the program shall be provided free of charge to a business or individual applying for the program.

(Source: P.A. 100-391, eff. 8-25-17; 100-801, eff. 8-10-18; 101-601, eff. 1-1-20; revised 8-18-20.)

Section 105. 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 and not-for-profit organizations that serve Illinois residents to improve their supplier diversity in a non-antagonistic manner.

(a-5) For the purposes of this Section, "minority-led not-for-profit organization", "woman-led not-for-profit organization", and "not-for-profit organization led by a person with a disability" shall have the same meanings as provided under the Not-for-Profit Business Enterprise Act.

(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, as well as minority-led not-for-profit organizations, woman-led not-for-profit organizations, and not-for-profit organizations led by a person with a disability, 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, as well as minority-led not-for-profit organizations, woman-led not-for-profit organizations, and not-for-profit organizations led by a person with a disability, 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, or a minority-led not-for-profit organization, a woman-led not-for-profit organization, or a not-for-profit organization led by a person with a disability; 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.

(Source: P.A. 98-1056, eff. 8-26-14; 99-906, eff. 6-1-17; revised 7-22-19.)