103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB3859

 

Introduced 2/17/2023, by Rep. Lance Yednock

 

SYNOPSIS AS INTRODUCED:
 
30 ILCS 500/45-57

    Amends the Illinois Procurement Code. In respect to a "qualified veteran-owned small business", provides that the business must have annual gross sales of less than $150,000,000 (rather than $75,000,000) as evidenced by the federal income tax return of the business.


LRB103 30278 HLH 56706 b

 

 

A BILL FOR

 

HB3859LRB103 30278 HLH 56706 b

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

 

 

HB3859- 2 -LRB103 30278 HLH 56706 b

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

 

 

HB3859- 3 -LRB103 30278 HLH 56706 b

1    veteran-owned small businesses and service-disabled
2    veteran-owned small businesses to become certified with
3    the State.
4    The Commission on Equity and Inclusion shall conduct a
5minimum of 2 outreach events per year to ensure that
6veteran-owned small businesses and service-disabled
7veteran-owned small businesses know about the procurement
8opportunities and certification requirements with the State.
9The Commission on Equity and Inclusion may receive
10appropriations for outreach.
11    (c) Yearly review and recommendations. Each year, each
12chief procurement officer shall review the progress of all
13State agencies under its jurisdiction in meeting the goal
14described in subsection (a), with input from statewide
15veterans' service organizations and from the business
16community, including businesses owned by qualified veterans,
17and shall make recommendations to be included in the
18Commission on Equity and Inclusion's report to the General
19Assembly regarding continuation, increases, or decreases of
20the percentage goal. The recommendations shall be based upon
21the number of businesses that are owned by qualified veterans
22and on the continued need to encourage and promote businesses
23owned by qualified veterans.
24    (d) Governor's recommendations. To assist the State in
25reaching the goal described in subsection (a), the Governor
26shall recommend to the General Assembly changes in programs to

 

 

HB3859- 4 -LRB103 30278 HLH 56706 b

1assist businesses owned by qualified veterans.
2    (e) Definitions. As used in this Section:
3    "Armed forces of the United States" means the United
4States Army, Navy, Air Force, Marine Corps, Coast Guard, or
5service in active duty as defined under 38 U.S.C. Section 101.
6Service in the Merchant Marine that constitutes active duty
7under Section 401 of federal Public Act 95-202 shall also be
8considered service in the armed forces for purposes of this
9Section.
10    "Certification" means a determination made by the Illinois
11Department of Veterans' Affairs and the Commission on Equity
12and Inclusion that a business entity is a qualified
13service-disabled veteran-owned small business or a qualified
14veteran-owned small business for whatever purpose. A SDVOSB or
15VOSB owned and controlled by women, minorities, or persons
16with disabilities, as those terms are defined in Section 2 of
17the Business Enterprise for Minorities, Women, and Persons
18with Disabilities Act, may also select and designate whether
19that business is to be certified as a "women-owned business",
20"minority-owned business", or "business owned by a person with
21a disability", as defined in Section 2 of the Business
22Enterprise for Minorities, Women, and Persons with
23Disabilities Act.
24    "Control" means the exclusive, ultimate, majority, or sole
25control of the business, including but not limited to capital
26investment and all other financial matters, property,

 

 

HB3859- 5 -LRB103 30278 HLH 56706 b

1acquisitions, contract negotiations, legal matters,
2officer-director-employee selection and comprehensive hiring,
3operation responsibilities, cost-control matters, income and
4dividend matters, financial transactions, and rights of other
5shareholders or joint partners. Control shall be real,
6substantial, and continuing, not pro forma. Control shall
7include the power to direct or cause the direction of the
8management and policies of the business and to make the
9day-to-day as well as major decisions in matters of policy,
10management, and operations. Control shall be exemplified by
11possessing the requisite knowledge and expertise to run the
12particular business, and control shall not include simple
13majority or absentee ownership.
14    "Qualified service-disabled veteran" means a veteran who
15has been found to have 10% or more service-connected
16disability by the United States Department of Veterans Affairs
17or the United States Department of Defense.
18    "Qualified service-disabled veteran-owned small business"
19or "SDVOSB" means a small business (i) that is at least 51%
20owned by one or more qualified service-disabled veterans
21living in Illinois or, in the case of a corporation, at least
2251% of the stock of which is owned by one or more qualified
23service-disabled veterans living in Illinois; (ii) that has
24its home office in Illinois; and (iii) for which items (i) and
25(ii) are factually verified annually by the Commission on
26Equity and Inclusion.

 

 

HB3859- 6 -LRB103 30278 HLH 56706 b

1    "Qualified veteran-owned small business" or "VOSB" means a
2small business (i) that is at least 51% owned by one or more
3qualified veterans living in Illinois or, in the case of a
4corporation, at least 51% of the stock of which is owned by one
5or more qualified veterans living in Illinois; (ii) that has
6its home office in Illinois; and (iii) for which items (i) and
7(ii) are factually verified annually by the Commission on
8Equity and Inclusion.
9    "Service-connected disability" means a disability incurred
10in the line of duty in the active military, naval, or air
11service as described in 38 U.S.C. 101(16).
12    "Small business" means a business that has annual gross
13sales of less than $150,000,000 $75,000,000 as evidenced by
14the federal income tax return of the business. A firm with
15gross sales in excess of this cap may apply to the Commission
16on Equity and Inclusion for certification for a particular
17contract if the firm can demonstrate that the contract would
18have significant impact on SDVOSB or VOSB as suppliers or
19subcontractors or in employment of veterans or
20service-disabled veterans.
21    "State agency" has the meaning provided in Section
221-15.100 of this Code.
23    "Time of hostilities with a foreign country" means any
24period of time in the past, present, or future during which a
25declaration of war by the United States Congress has been or is
26in effect or during which an emergency condition has been or is

 

 

HB3859- 7 -LRB103 30278 HLH 56706 b

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

 

 

HB3859- 8 -LRB103 30278 HLH 56706 b

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

 

 

HB3859- 9 -LRB103 30278 HLH 56706 b

1Program of the United States Department of Veterans Affairs,
2and the business has provided to the Commission on Equity and
3Inclusion the following:
4        (1) documentation showing certification as a
5    service-disabled veteran-owned small business or a
6    veteran-owned small business by the Vets First
7    Verification Program of the United States Department of
8    Veterans Affairs;
9        (2) proof that the business has its home office in
10    Illinois; and
11        (3) proof that the qualified veterans or qualified
12    service-disabled veterans live in the State of Illinois.
13    The policies of the Commission on Equity and Inclusion
14regarding recognition of the Vets First Verification Program
15of the United States Department of Veterans Affairs shall be
16reviewed annually by the Commission on Equity and Inclusion,
17and recognition of service-disabled veteran-owned small
18businesses and veteran-owned small businesses certified by the
19Vets First Verification Program of the United States
20Department of Veterans Affairs may be discontinued by the
21Commission on Equity and Inclusion by rule upon a finding that
22the certification standards of the Vets First Verification
23Program of the United States Department of Veterans Affairs do
24not meet the certification requirements established by the
25Commission on Equity and Inclusion.
26    (g) Penalties.

 

 

HB3859- 10 -LRB103 30278 HLH 56706 b

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

 

 

HB3859- 11 -LRB103 30278 HLH 56706 b

1    a civil action against any person for the violation.
2        (3) List of suspended persons. The chief procurement
3    officers appointed pursuant to Section 10-20 shall monitor
4    the status of all reported violations of Section 17-10.3
5    or subsection (d) of Section 33E-6 of the Criminal Code of
6    1961 or the Criminal Code of 2012 relating to this Section
7    and shall maintain and make available to all State
8    agencies a central listing of all persons that committed
9    violations resulting in suspension.
10        (4) Use of suspended persons. During the period of a
11    person's suspension under paragraph (1) of this
12    subsection, a State agency shall not enter into any
13    contract with that person or with any contractor using the
14    services of that person as a subcontractor.
15        (5) Duty to check list. Each State agency shall check
16    the central listing provided by the chief procurement
17    officers appointed pursuant to Section 10-20 under
18    paragraph (3) of this subsection to verify that a person
19    being awarded a contract by that State agency, or to be
20    used as a subcontractor or supplier on a contract being
21    awarded by that State agency, is not under suspension
22    pursuant to paragraph (1) of this subsection.
23    (h) On and after the effective date of this amendatory Act
24of the 102nd General Assembly, all powers, duties, rights, and
25responsibilities of the Department of Central Management
26Services with respect to the requirements of this Section are

 

 

HB3859- 12 -LRB103 30278 HLH 56706 b

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

 

 

HB3859- 13 -LRB103 30278 HLH 56706 b

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

 

 

HB3859- 14 -LRB103 30278 HLH 56706 b

1Department of Central Management Services that will now be
2administered by the Commission on Equity and Inclusion.
3(Source: P.A. 102-166, eff. 7-26-21; 102-671, eff. 11-30-21.)