Bill Text: IL SB2674 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Amends the Illinois Procurement Code. Provides that the certification of service-disabled veteran-owned small businesses and veteran-owned small businesses is an exclusive power and function of the State. Denies home rule powers. Effective immediately.

Spectrum: Slight Partisan Bill (Democrat 3-1)

Status: (Introduced) 2024-06-26 - Pursuant to Senate Rule 3-9(b) / Referred to Assignments [SB2674 Detail]

Download: Illinois-2023-SB2674-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB2674 Introduced 1/10/2024, by Sen. Michael E. Hastings SYNOPSIS AS INTRODUCED:
30 ILCS 500/45-57
Amends the Illinois Procurement Code. Provides that the certification of service-disabled veteran-owned small businesses and veteran-owned small businesses is an exclusive power and function of the State. Denies home rule powers. Effective immediately.
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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 Section 45-57 as follows:
(30 ILCS 500/45-57)
Sec. 45-57. Veterans.
(a) Set-aside goal. It is the goal of the State to promote
and encourage the continued economic development of small
businesses owned and controlled by qualified veterans and that
qualified service-disabled veteran-owned small businesses
(referred to as SDVOSB) and veteran-owned small businesses
(referred to as VOSB) participate in the State's procurement
process as both prime contractors and subcontractors. Not less
than 3% of the total dollar amount of State contracts, as
defined by the Commission on Equity and Inclusion, shall be
established as a goal to be awarded to SDVOSB and VOSB. That
portion of a contract under which the contractor subcontracts
with a SDVOSB or VOSB may be counted toward the goal of this
subsection. The Commission on Equity and Inclusion shall adopt
rules to implement compliance with this subsection by all
State agencies.
(b) Fiscal year reports. By each November 1, each chief

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

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veteran-owned small businesses and service-disabled
veteran-owned small businesses to become certified with
the State.
The Commission on Equity and Inclusion shall conduct a
minimum of 2 outreach events per year to ensure that
veteran-owned small businesses and service-disabled
veteran-owned small businesses know about the procurement
opportunities and certification requirements with the State.
The Commission on Equity and Inclusion may receive
appropriations for outreach.
(b-10) The certifications of SDVOSB and VOSB are exclusive
powers and functions of the State. A home rule unit may not
certify a SDVOSB or VOSB. This subsection is a denial and
limitation of home rule powers and functions under subsection
(h) of Section 6 of Article VII of the Illinois Constitution.
(c) Yearly review and recommendations. Each year, each
chief procurement officer shall review the progress of all
State agencies under its jurisdiction in meeting the goal
described in subsection (a), with input from statewide
veterans' service organizations and from the business
community, including businesses owned by qualified veterans,
and shall make recommendations to be included in the
Commission on Equity and Inclusion's report to the General
Assembly regarding continuation, increases, or decreases of
the percentage goal. The recommendations shall be based upon
the number of businesses that are owned by qualified veterans

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and on the continued need to encourage and promote businesses
owned by qualified veterans.
(d) Governor's recommendations. To assist the State in
reaching the goal described in subsection (a), the Governor
shall recommend to the General Assembly changes in programs to
assist businesses owned by qualified veterans.
(e) Definitions. As used in this Section:
"Armed forces of the United States" means the United
States Army, Navy, Air Force, Marine Corps, Coast Guard, or
service in active duty as defined under 38 U.S.C. Section 101.
Service in the Merchant Marine that constitutes active duty
under Section 401 of federal Public Act 95-202 shall also be
considered service in the armed forces for purposes of this
Section.
"Certification" means a determination made by the Illinois
Department of Veterans' Affairs and the Commission on Equity
and Inclusion that a business entity is a qualified
service-disabled veteran-owned small business or a qualified
veteran-owned small business for whatever purpose. A SDVOSB or
VOSB owned and controlled by women, minorities, or persons
with disabilities, as those terms are defined in Section 2 of
the Business Enterprise for Minorities, Women, and Persons
with Disabilities Act, may also select and designate whether
that business is to be certified as a "women-owned business",
"minority-owned business", or "business owned by a person with
a disability", as defined in Section 2 of the Business

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Enterprise for Minorities, Women, and Persons with
Disabilities Act.
"Control" means the exclusive, ultimate, majority, or sole
control of the business, including but not limited to capital
investment and all other financial matters, property,
acquisitions, contract negotiations, legal matters,
officer-director-employee selection and comprehensive hiring,
operation responsibilities, cost-control matters, income and
dividend matters, financial transactions, and rights of other
shareholders or joint partners. Control shall be real,
substantial, and continuing, not pro forma. Control shall
include the power to direct or cause the direction of the
management and policies of the business and to make the
day-to-day as well as major decisions in matters of policy,
management, and operations. Control shall be exemplified by
possessing the requisite knowledge and expertise to run the
particular business, and control shall not include simple
majority or absentee ownership.
"Qualified service-disabled veteran" means a veteran who
has been found to have 10% or more service-connected
disability by the United States Department of Veterans Affairs
or the United States Department of Defense.
"Qualified service-disabled veteran-owned small business"
or "SDVOSB" means a small business (i) that is at least 51%
owned by one or more qualified service-disabled veterans
living in Illinois or, in the case of a corporation, at least

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51% of the stock of which is owned by one or more qualified
service-disabled veterans living in Illinois; (ii) that has
its home office in Illinois; and (iii) for which items (i) and
(ii) are factually verified annually by the Commission on
Equity and Inclusion.
"Qualified veteran-owned small business" or "VOSB" means a
small business (i) that is at least 51% owned by one or more
qualified veterans living in Illinois or, in the case of a
corporation, at least 51% of the stock of which is owned by one
or more qualified veterans living in Illinois; (ii) that has
its home office in Illinois; and (iii) for which items (i) and
(ii) are factually verified annually by the Commission on
Equity and Inclusion.
"Service-connected disability" means a disability incurred
in the line of duty in the active military, naval, or air
service as described in 38 U.S.C. 101(16).
"Small business" means a business that has annual gross
sales of less than $150,000,000 as evidenced by the federal
income tax return of the business. A firm with gross sales in
excess of this cap may apply to the Commission on Equity and
Inclusion for certification for a particular contract if the
firm can demonstrate that the contract would have significant
impact on SDVOSB or VOSB as suppliers or subcontractors or in
employment of veterans or service-disabled veterans.
"State agency" has the meaning provided in Section
1-15.100 of this Code.

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"Time of hostilities with a foreign country" means any
period of time in the past, present, or future during which a
declaration of war by the United States Congress has been or is
in effect or during which an emergency condition has been or is
in effect that is recognized by the issuance of a Presidential
proclamation or a Presidential executive order and in which
the armed forces expeditionary medal or other campaign service
medals are awarded according to Presidential executive order.
"Veteran" means a person who (i) has been a member of the
armed forces of the United States or, while a citizen of the
United States, was a member of the armed forces of allies of
the United States in time of hostilities with a foreign
country and (ii) has served under one or more of the following
conditions: (a) the veteran served a total of at least 6
months; (b) the veteran served for the duration of hostilities
regardless of the length of the engagement; (c) the veteran
was discharged on the basis of hardship; or (d) the veteran was
released from active duty because of a service connected
disability and was discharged under honorable conditions.
(f) Certification program. The Illinois Department of
Veterans' Affairs and the Commission on Equity and Inclusion
shall work together to devise a certification procedure to
assure that businesses taking advantage of this Section are
legitimately classified as qualified service-disabled
veteran-owned small businesses or qualified veteran-owned
small businesses.

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The Commission on Equity and Inclusion shall:
(1) compile and maintain a comprehensive list of
certified veteran-owned small businesses and
service-disabled veteran-owned small businesses;
(2) assist veteran-owned small businesses and
service-disabled veteran-owned small businesses in
complying with the procedures for bidding on State
contracts;
(3) provide training for State agencies regarding the
goal setting process and compliance with veteran-owned
small business and service-disabled veteran-owned small
business goals; and
(4) implement and maintain an electronic portal on the
Commission on Equity and Inclusion's website for the
purpose of completing and submitting veteran-owned small
business and service-disabled veteran-owned small business
certificates.
The Commission on Equity and Inclusion, in consultation
with the Department of Veterans' Affairs, may develop programs
and agreements to encourage cities, counties, towns,
townships, and other certifying entities to adopt uniform
certification procedures and certification recognition
programs.
(f-5) A business shall be certified by the Commission on
Equity and Inclusion as a service-disabled veteran-owned small
business or a veteran-owned small business for purposes of

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this Section if the Commission on Equity and Inclusion
determines that the business has been certified as a
service-disabled veteran-owned small business or a
veteran-owned small business by the Vets First Verification
Program of the United States Department of Veterans Affairs,
and the business has provided to the Commission on Equity and
Inclusion the following:
(1) documentation showing certification as a
service-disabled veteran-owned small business or a
veteran-owned small business by the Vets First
Verification Program of the United States Department of
Veterans Affairs;
(2) proof that the business has its home office in
Illinois; and
(3) proof that the qualified veterans or qualified
service-disabled veterans live in the State of Illinois.
The policies of the Commission on Equity and Inclusion
regarding recognition of the Vets First Verification Program
of the United States Department of Veterans Affairs shall be
reviewed annually by the Commission on Equity and Inclusion,
and recognition of service-disabled veteran-owned small
businesses and veteran-owned small businesses certified by the
Vets First Verification Program of the United States
Department of Veterans Affairs may be discontinued by the
Commission on Equity and Inclusion by rule upon a finding that
the certification standards of the Vets First Verification

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Program of the United States Department of Veterans Affairs do
not meet the certification requirements established by the
Commission on Equity and Inclusion.
(g) Penalties.
(1) Administrative penalties. The chief procurement
officers appointed pursuant to Section 10-20 shall suspend
any person who commits a violation of Section 17-10.3 or
subsection (d) of Section 33E-6 of the Criminal Code of
2012 relating to this Section from bidding on, or
participating as a contractor, subcontractor, or supplier
in, any State contract or project for a period of not less
than 3 years, and, if the person is certified as a
service-disabled veteran-owned small business or a
veteran-owned small business, then the Commission on
Equity and Inclusion shall revoke the business's
certification for a period of not less than 3 years. An
additional or subsequent violation shall extend the
periods of suspension and revocation for a period of not
less than 5 years. The suspension and revocation shall
apply to the principals of the business and any subsequent
business formed or financed by, or affiliated with, those
principals.
(2) Reports of violations. Each State agency shall
report any alleged violation of Section 17-10.3 or
subsection (d) of Section 33E-6 of the Criminal Code of
2012 relating to this Section to the chief procurement

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officers appointed pursuant to Section 10-20. The chief
procurement officers appointed pursuant to Section 10-20
shall subsequently report all such alleged violations to
the Attorney General, who shall determine whether to bring
a civil action against any person for the violation.
(3) List of suspended persons. The chief procurement
officers appointed pursuant to Section 10-20 shall monitor
the status of all reported violations of Section 17-10.3
or subsection (d) of Section 33E-6 of the Criminal Code of
1961 or the Criminal Code of 2012 relating to this Section
and shall maintain and make available to all State
agencies a central listing of all persons that committed
violations resulting in suspension.
(4) Use of suspended persons. During the period of a
person's suspension under paragraph (1) of this
subsection, a State agency shall not enter into any
contract with that person or with any contractor using the
services of that person as a subcontractor.
(5) Duty to check list. Each State agency shall check
the central listing provided by the chief procurement
officers appointed pursuant to Section 10-20 under
paragraph (3) of this subsection to verify that a person
being awarded a contract by that State agency, or to be
used as a subcontractor or supplier on a contract being
awarded by that State agency, is not under suspension
pursuant to paragraph (1) of this subsection.

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(h) On and after the effective date of this amendatory Act
of the 102nd General Assembly, all powers, duties, rights, and
responsibilities of the Department of Central Management
Services with respect to the requirements of this Section are
transferred to the Commission on Equity and Inclusion.
All books, records, papers, documents, property (real and
personal), contracts, causes of action, and pending business
pertaining to the powers, duties, rights, and responsibilities
transferred by this amendatory Act from the Department of
Central Management Services to the Commission on Equity and
Inclusion, including, but not limited to, material in
electronic or magnetic format and necessary computer hardware
and software, shall be transferred to the Commission on Equity
and Inclusion.
The powers, duties, rights, and responsibilities
transferred from the Department of Central Management Services
by this amendatory Act shall be vested in and shall be
exercised by the Commission on Equity and Inclusion.
Whenever reports or notices are now required to be made or
given or papers or documents furnished or served by any person
to or upon the Department of Central Management Services in
connection with any of the powers, duties, rights, and
responsibilities transferred by this amendatory Act, the same
shall be made, given, furnished, or served in the same manner
to or upon the Commission on Equity and Inclusion.
This amendatory Act of the 102nd General Assembly does not

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affect any act done, ratified, or canceled or any right
occurring or established or any action or proceeding had or
commenced in an administrative, civil, or criminal cause by
the Department of Central Management Services before this
amendatory Act takes effect; such actions or proceedings may
be prosecuted and continued by the Commission on Equity and
Inclusion.
Any rules of the Department of Central Management Services
that relate to its powers, duties, rights, and
responsibilities under this Section and are in full force on
the effective date of this amendatory Act of the 102nd General
Assembly shall become the rules of the Commission on Equity
and Inclusion. This amendatory Act does not affect the
legality of any such rules in the Illinois Administrative
Code. Any proposed rules filed with the Secretary of State by
the Department of Central Management Services that are pending
in the rulemaking process on the effective date of this
amendatory Act and pertain to the powers, duties, rights, and
responsibilities transferred, shall be deemed to have been
filed by the Commission on Equity and Inclusion. As soon as
practicable hereafter, the Commission on Equity and Inclusion
shall revise and clarify the rules transferred to it under
this amendatory Act to reflect the reorganization of powers,
duties, rights, and responsibilities affected by this
amendatory Act, using the procedures for recodification of
rules available under the Illinois Administrative Procedure

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Act, except that existing title, part, and section numbering
for the affected rules may be retained. The Commission on
Equity and Inclusion may propose and adopt under the Illinois
Administrative Procedure Act such other rules of the
Department of Central Management Services that will now be
administered by the Commission on Equity and Inclusion.
(Source: P.A. 102-166, eff. 7-26-21; 102-671, eff. 11-30-21;
103-570, eff. 1-1-24.)