Bill Text: IL HB2869 | 2013-2014 | 98th General Assembly | Introduced

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Bill Title: 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.

Spectrum: Slight Partisan Bill (Democrat 3-1)

Status: (Passed) 2013-07-17 - Public Act . . . . . . . . . 98-0094 [HB2869 Detail]

Download: Illinois-2013-HB2869-Introduced.html

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98TH GENERAL ASSEMBLY State of Illinois 2013 and 2014 HB2869 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.
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FISCAL NOTE ACT MAY APPLY
A BILL FOR
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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

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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

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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.

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(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

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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.

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(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.
(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

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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

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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) (h) 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.
(Source: P.A. 96-840, eff. 12-23-09; 96-1331, eff. 7-27-10;
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; revised 8-23-12.)
(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

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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

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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

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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

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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

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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

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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.

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(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

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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

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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.