Bill Text: IL HB0102 | 2013-2014 | 98th General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Amends the Public Utilities Act. Requires the Illinois Commerce Commission to establish a procedure for entities regulated by it and their Commission-regulated subsidiaries and affiliates to submit annual detailed and verifiable plans for increasing female, minority, and disabled veteran business's procurement in all categories. Provides that the Commission shall provide a clearinghouse for the sharing of identification and verification information of qualifying businesses. Sets forth guidelines and goals for each regulated entity's program to ensure that qualifying businesses are encouraged to become potential suppliers of products and services to the regulated entity, including provisions regarding outreach programs and subcontracting programs. Requires each regulated entity to set substantial and verifiable short-term, mid-term, and long-term goals for the utilization of qualifying businesses. Requires each regulated entity to submit an annual report and an annual plan with respect to these goals. Requires the Commission to provide an annual report to the General Assembly on the progress of activities undertaken by each regulated entity. Effective immediately.

Spectrum: Partisan Bill (Democrat 6-0)

Status: (Failed) 2014-12-03 - Session Sine Die [HB0102 Detail]

Download: Illinois-2013-HB0102-Introduced.html

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98TH GENERAL ASSEMBLY State of Illinois 2013 and 2014 HB0102 Introduced , by Rep. William Davis SYNOPSIS AS INTRODUCED:
220 ILCS 5/4-503 new
Amends the Public Utilities Act. Requires the Illinois Commerce Commission to establish a procedure for entities regulated by it and their Commission-regulated subsidiaries and affiliates to submit annual detailed and verifiable plans for increasing female, minority, and disabled veteran business's procurement in all categories. Provides that the Commission shall provide a clearinghouse for the sharing of identification and verification information of qualifying businesses. Sets forth guidelines and goals for each regulated entity's program to ensure that qualifying businesses are encouraged to become potential suppliers of products and services to the regulated entity, including provisions regarding outreach programs and subcontracting programs. Requires each regulated entity to set substantial and verifiable short-term, mid-term, and long-term goals for the utilization of qualifying businesses. Requires each regulated entity to submit an annual report and an annual plan with respect to these goals. Requires the Commission to provide an annual report to the General Assembly on the progress of activities undertaken by each regulated entity. Effective immediately.
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FISCAL NOTE ACT MAY APPLY
A BILL FOR
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AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Public Utilities Act is amended by adding
Section 4-503 as follows:
(220 ILCS 5/4-503 new)
Sec. 4-503. Procurement from female owned, minority owned,
and qualified service-disabled veteran-owned small businesses;
goals; reports.
(a) For the purpose of this Section:
"Certification" means a determination made under the
Business Enterprise for Minorities, Females, and Persons with
Disabilities Act, Section 45-57 of the Illinois Procurement
Code, or the clearinghouse that a business entity is a female
owned business, minority owned business, or qualified
service-disabled veteran-owned small business for whatever
purpose. A business owned and controlled by females shall
select and designate whether such business is to be certified
as (i) a female owned business or minority owned business if
the females are also minorities or (i) a female owned business
or qualified service-disabled veteran-owned small business if
the females are qualified service-disabled veterans.
"Clearinghouse" means the clearinghouse authorized under

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subsection (d) of this Section.
"Control" has the meaning given to that term in the
Business Enterprise for Minorities, Females, and Persons with
Disabilities Act.
"Female owned business" has the meaning given to that term
in the Business Enterprise for Minorities, Females, and Persons
with Disabilities Act.
"Goal" means a target that, when achieved, indicates
progress in a preferred direction. A goal is neither a
requirement nor a quota.
"Long-term goal" means a goal applicable to a period of 5
years.
"Mid-term goal" means a goal applicable to a period of 3
years.
"Minority owned business" has the meaning given to that
term in the Business Enterprise for Minorities, Females, and
Persons with Disabilities Act.
"Product and service categories" means product and service
categories as defined by the Standard Industrial
Classification (SIC) system maintained by the United States
Department of Labor, Occupational Safety and Health
Administration.
"Qualified service-disabled veteran-owned small business"
has the meaning given to that term in Section 45-57 of the
Illinois Procurement Code.
"Qualifying business" means a female owned business,

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minority owned business, or qualified service-disabled
veteran-owned small business.
"Regulated entity" means any entity that is regulated by
the Commission and their Commission-regulated subsidiaries and
affiliates.
"Short-term goal" means a goal applicable to a period of
one year.
"Subcontract" means an agreement or arrangement between a
contractor and any party or person in which the parties do not
stand in the relationship of an employer and an employee (i)
for the furnishing of supplies or services for the use of real
or personal property, including lease arrangements, which, in
whole or in part, is necessary to the performance of any one or
more contracts or (ii) under which any portion of the
contractor's obligation under any one or more contracts is
performed, undertaken, or assumed.
(b) The Commission shall establish a procedure for
regulated entities to submit annual detailed and verifiable
plans for increasing female, minority, and disabled veteran
business's procurement in all categories. In addition, the
Commission may accept such plans from cable operators.
In cases where the application of this Section results in
undue hardship or unreasonable expense to a regulated entity,
the regulated entity may request relief by filing an
application with the Commission. Where the relief requested is
of minor importance or temporary in nature, the regulated

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entity may apply for such relief through an advice letter
filing. Any advice letter filing must, at a minimum, be served
on all parties on the service list of this proceeding.
(c) The clearinghouse shall supply a verification form to
applicants. An applicant may complete the verification forms
and return them to the clearinghouse for processing and
inclusion in the database. In addition to verification by the
clearinghouse, a regulated entity may accept verification of a
qualifying business's status made under the Business
Enterprise for Minorities, Females, and Persons with
Disabilities Act or Section 45-57 of the Illinois Procurement
Code or made by the Supplier Clearinghouse used by the
California Public Utilities Commission.
In assessing the suitability of a qualifying business to
bid for procurement contracts, a regulated entity may require
additional information or the completion of additional forms to
comply with specific requirements created by the unique
character of its business, including, but not limited to,
insurance requirements, product and service codes, and bonding
limits. A regulated entity may not, however, require such
additional information in order to verify that a business is in
fact a qualifying business.
Female owned businesses and minority owned businesses
shall be required to submit verification forms at least once
every 3 years.
Completion of the verification application only initiates

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a verification of the business's status as a female owned
business or minority owned business. Filing of an application
does not guarantee verification.
The fact that a verified qualifying business is included in
the clearinghouse database shall not be construed as an
endorsement of its ability to perform, nor shall such inclusion
guarantee it business with the utilities.
Verification forms for female owned businesses or minority
owned businesses shall be available for inspection by the
Commission.
Falsification of information on the verification form is
subject to penalties as set by the Commission by administrative
rule.
(d) The Commission shall provide a clearinghouse for the
sharing of identification and verification information of
qualifying businesses. The Commission may establish and
operate such a clearinghouse internally or authorize, by
decision or resolution, a regulated entity-formed entity or
arrangement to fund the operation of such a clearinghouse. In
authorizing a regulated entity-formed entity or arrangement,
the Commission must specify sufficient terms and conditions to
specify how verifications and audits shall be performed and to
ascertain and ensure that the clearinghouse is operated in
accordance with this Section and other applicable legal
requirements.
The primary purpose of the clearinghouse shall be to audit

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and verify the status of qualifying businesses and to establish
and maintain a database of qualifying businesses that is
accessible to the Commission and to participating utilities.
The clearinghouse auditing and verification program shall
preclude the need for an individual regulated entity to audit
and verify the status of the qualifying businesses it does
business with.
The clearinghouse shall distribute renewal verification
forms to female owned businesses or minority owned businesses
at least once every 3 years. If the renewal is not completed
and returned within a reasonable time, the clearinghouse shall
notify the female owned business or minority owned business and
utilities that the female owned business or minority owned
business will not be listed as a verified female owned business
or minority owned business in the shared database until the
renewal is completed.
(d) Each regulated entity's program shall be designed to
ensure that qualifying businesses are encouraged to become
potential suppliers of products and services to the utilities
subject to this Section. Nothing in this Section authorizes or
permits a regulated entity to utilize setasides, preferences,
or quotas in administration of its program. The regulated
entity retains its authority to use its legitimate business
judgment to select the supplier for a particular contract.
Each regulated entity shall maintain an appropriately
sized staff to provide overall program direction and guidance

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and to implement program requirements. Each regulated entity
shall ensure that its employees with procurement
responsibilities receive training in the implementation of its
program.
Each regulated entity shall implement an outreach program
to inform and recruit qualifying businesses to apply for
procurement contracts. Outreach activities may vary for each
regulated entity depending on its size, service territory, and
specific lines of business. However, each regulated entity
shall, at a minimum:
(1) actively seek out opportunities to identify
qualifying businesses and to expand qualifying business
source pools;
(2) actively support the efforts of organizations
experienced in the field who promote the interests of
qualifying businesses;
(3) work with qualifying businesses to facilitate
contracting relationships by explaining regulated entity
qualification requirements, bid and contracting
procedures, materials requirements, invoicing and payment
schedules, and other procurement practices and procedures;
(4) at the request of any unsuccessful qualifying
business bidder, provide information concerning the
relative range or ranking of the qualifying business's bid
as contrasted with the successful bid; information on
additional selection criteria, such as warranty periods,

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maintenance costs, and delivery capability, shall be
provided when requested if disclosure would not violate the
proprietary nature of the specific contract element;
(5) to the extent possible, make available to
qualifying businesses lists of regulated entity purchase
and contract categories that offer them the best
opportunity for success;
(6) encourage employees involved in procurement
activities to break apart purchases and contracts as
appropriate to accommodate the capabilities of qualifying
businesses; and
(7) summarize this Section in its outreach program
handouts.
Each regulated entity is directed to offer the same
assistance set forth in this subsection (d) to entities that
are not qualifying businesses, upon request.
(e) Each regulated entity shall establish and maintain a
subcontracting program for the purpose of encouraging its prime
contractors to utilize qualifying businesses. The
subcontracting program shall serve as an enhancement to, and
not as a replacement for, the regulated entity's prime
contractor outreach program. The subcontracting program shall
apply to:
(1) purchases or contracts exceeding $500,000 for
products and services;
(2) construction contracts exceeding $1,000,000; and

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(3) purchases or contracts that offer subcontracting
opportunities to qualifying businesses, regardless of
value, where appropriate.
The subcontracting program need not be applied to the
procurement of products manufactured for general consumption,
such as paper, pens, and the like.
Each regulated entity shall encourage and assist its prime
contractors to develop plans to increase the utilization of
qualifying businesses as subcontractors. Prime contractors
shall be encouraged to submit to the regulated entity plans
that include goals for the utilization of qualifying businesses
as subcontractors. These plans may be incorporated into the
contract between the regulated entity and the prime contractor.
The prime contractor may submit periodic reports on its
compliance with the plan to the regulated entity.
Each regulated entity is encouraged to incorporate in all
purchase orders, requests for bid proposals, and other
appropriate procurement documents related to procurement
efforts subject to the subcontracting program, a statement in
substantially the following form:
"UTILIZATION OF FEMALE OWNED BUSINESSES, MINORITY OWNED
BUSINESSES, AND QUALIFIED SERVICE-DISABLED VETERAN-OWNED
SMALL BUSINESSES
(1) It is the policy of (insert the name of the
regulated entity) that female owned businesses, minority
owned businesses, or qualified service-disabled

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veteran-owned small businesses shall have the maximum
practicable opportunity to participate in the performance
of contracts. However, this policy shall not be used to
exclude other qualified businesses from participating in
regulated entity contracting.
(2) The contractor agrees to use his or her best
efforts to carry out this policy in the award of
subcontracts to the fullest extent consistent with the
efficient performance of this contract.
(3) The contractor agrees to inform prospective female
owned businesses, minority owned businesses, or qualified
service-disabled veteran-owned small businesses of their
opportunity to request from the clearinghouse a
verification application form and to return the completed
form to the clearinghouse for processing and inclusion in
the database.".
Each regulated entity is encouraged to inform suppliers of
products and services that suppliers' good faith efforts to
subcontract with qualifying businesses is a factor that will be
considered in the bid evaluation process. A statement to that
effect could be included in all appropriate procurement
documents.
Each regulated entity shall monitor and include in its
annual report to the Commission a summary of prime contractor
progress in increasing the participation of qualifying
businesses. Each regulated entity shall include in its annual

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plan a description of future plans for encouraging both prime
contractors and grantees to engage qualifying businesses in all
procurement categories that provide subcontracting
opportunities. Each regulated entity may include awards to
verified qualifying businesses in its results.
(f) Each regulated entity shall set substantial and
verifiable short-term, mid-term, and long-term goals for the
utilization of qualifying businesses. Goals shall be set
annually for each major product and service category that
provides opportunities for procurement. A goal shall be
considered substantial if it is realistic and clearly
demonstrates a regulated entity's commitment to encourage the
participation of qualifying businesses in regulated entity
purchases and contracts. The utilities shall consider the
following factors in setting their goals:
(1) total regulated entity purchasing and contracting
projections;
(2) availability of qualifying businesses and
competitiveness in the geographical area served by the
regulated entity;
(3) market dynamics based on historical data and
trends; and
(4) other appropriate factors that would increase the
qualifying businesses' share of regulated entity business.
Each regulated entity shall establish initial minimum
long-term goals for each major category of products and

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services the regulated entity purchases from outside vendors of
not less than 11% for minority owned businesses and not less
than 7% for female owned businesses. For the purposes of this
Section, contracts with minority female owned businesses can be
counted toward either the minority owned business goal or the
female owned business goal, but not toward both. Similarly,
contracts with qualified service-disabled veteran-owned small
businesses can be counted either as service-disabled
veteran-owned small business procurement or the appropriate
female or minority business goal, but not toward both. The goal
for qualified service-disabled veteran-owned small business
participation in procurement programs of the participating
utilities is set at 3%. The specification of initial long-term
goals in this subsection shall not prevent the utilities from
seeking to reach a goal of awarding 30% or more of their
contracts to female owned businesses and minority owned
businesses.
Goals shall also be established for both minority female
owned businesses and non-minority female owned businesses.
These goals are to be a subset of the overall goal for female
owned businesses and minority owned businesses established by
this subsection (f). These goals are intended to ensure that
utilities do not direct their female owned business and
minority owned business procurement programs toward
non-minority female owned businesses and minority male owned
businesses to the detriment or exclusion of minority female

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owned businesses.
Goals shall be set for each major category of products or
services. For each major category of products and services
where the minimum long-term goals required by this subsection
(f) are not met, the regulated entity shall include a
comprehensive discussion and detailed description of any
efforts made to find or recruit qualifying businesses'
suppliers of products or services in areas where qualifying
businesses' suppliers are currently the only available
procurement method. The regulated entity may also explain in
detail in its annual report how its ability to meet its
qualifying business's goals are affected because the
qualifying businesses capable of supplying certain products
and services are unavailable, or because sole source
procurement is the only available procurement method.
A regulated entity that, on the effective date of this
Section, is purchasing products or services from affiliates may
subtract the dollars paid to affiliates for these products or
services from the total dollars used as the basis for
establishing goals for purchases from qualifying businesses of
these categories of products or services, provided that the
regulated entity encourages the affiliate to establish an
appropriate subcontracting program where such affiliate
employs subcontractors. Any regulated entity that subtracts
these dollars must, in its annual report to the Commission,
state whether the affiliates have established a subcontracting

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program and describe the results of any such program. The
regulated entity's annual plan must describe any future plans
to encourage such a subcontracting program.
Goals for each specific product or service category shall
be expressed as a percentage of total dollars awarded by a
regulated entity to outside vendors in that category; however,
where appropriate, non-numeric goals may also be included.
Overall program goals shall be expressed as a percentage of
total dollars awarded to outside vendors in all categories of
products and services purchased by a regulated entity other
than products and services which are included in a fuel
procurement base established pursuant to this subsection (f).
Payments to other utilities, franchise tax fees, other taxes,
and postage need not be included in the standard procurement
base used to establish goals.
Each regulated entity may establish a separate fuel
procurement base for reporting progress and establishing goals
for procurement of fuels from qualifying businesses. Utilities
choosing to report fuel purchases separately from the purchase
of other products and services must follow the following
guidelines:
(i) Fuel used to power vehicles, heat facilities, and
supply emergency generators may not be included in the fuel
procurement base. Such fuel must be included in the
standard procurement base used to establish goals.
(ii) The fuel procurement base must, at a minimum,

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include all purchases of natural gas from domestic on-shore
natural gas markets.
(iii) Utilities that purchase fuels other than
domestic on-shore natural gas from qualifying businesses
must include such purchases in the fuel procurement base.
Each regulated entity shall make special efforts to
increase utilization and encourage entry into the marketplace
of qualifying businesses in product or service categories where
there has been low utilization of qualifying businesses, such
as legal and financial services, fuel procurement, and areas
that are considered technical in nature.
No penalty shall be imposed for failure of any regulated
entity to meet or exceed goals.
(g) Utilities shall report their goals in an annual report.
Each regulated entity shall serve 12 copies of its annual
report on its qualifying business program on the Executive
Director by March 1 of each year beginning in 2014. The annual
report shall contain at least:
(1) a description of the activities of its qualifying
business program engaged in during the previous calendar
year, including both internal and external activities;
(2) a summary of purchases and contracts with
qualifying businesses, with breakdowns by ethnicity,
product, and service categories compared with total
contract dollars awarded to outside vendors in those
categories;

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(3) an itemization of its qualifying business program
expenses, provided in the format required by the
Commission;
(4) a description of its progress in meeting or
exceeding set goals and an explanation of any circumstances
that may have caused the regulated entity to fall short of
its goals;
(5) a summary of prime contractor utilization of
qualifying business subcontractors; and
(6) a description of any efforts made to recruit
qualifying business suppliers of products or services in
procurement categories where qualifying business
utilization has been low, such as legal and financial
services, fuel procurement, and areas that are considered
highly technical in nature.
Utilities shall retain all documents and data they rely on
in preparing their annual report for the longer of either 3
years or in conformance with the utilities' individual document
retention policies, and shall provide these documents and data
to the Commission upon request.
(h) Each regulated entity that elects to report fuel
procurement separately must file with the Executive Director by
March 1 of each year, beginning in 2014, a separate detailed
and verifiable report on qualifying business participation in
fuel markets. These reports must include, at a minimum, the
results of purchases in each fuel category. Each regulated

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entity shall report purchases by:
(1) market origin and fuel type;
(2) volume and dollar magnitude;
(3) the term of sale, such as spot, intermediate, or
long-term; and
(4) the ethnicity and gender of the supplier.
Each regulated entity shall provide (i) an explanation of
how existing and changing market conditions are affecting the
regulated entity's ability to meet or exceed its qualifying
business goals for fuel; (ii) a comprehensive description of
the specific out-reach programs used to seek qualifying
business fuel suppliers in each market in which fuel is
purchased; and (iii) a justification for any exclusion of a
specific fuel category from the regulated entity's fuel
procurement base.
(i) Nothing in this Section shall prohibit any regulated
entity from breaking down specific categories further than
specifically required under this Section.
(j) Utilities shall serve 12 copies of a detailed and
verifiable plan for encouraging qualifying business
procurement in all categories on the Executive Director by
March 1 of each year, beginning in 2014. The annual plan shall
contain at least:
(1) the short-term, mid-term, and long-term goals set
as required by this Section;
(2) a description of qualifying business program

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activities planned for the next calendar year, which shall
include both internal and external activities;
(3) plans for recruiting qualifying business suppliers
of products or services where utilization of qualifying
businesses has been low, such as legal and financial
services, fuel procurement, and areas that are considered
highly technical in nature;
(4) plans for seeking and recruiting qualifying
business suppliers of products or services where
qualifying business suppliers are currently unavailable;
(5) plans for encouraging both prime contractors and
grantees to engage qualifying businesses in subcontracts
in all categories that provide subcontracting
opportunities; and
(6) plans for complying with the qualifying business
program guidelines established by the Commission by rule.
(k) The Commission shall provide an annual report to the
General Assembly, beginning in January of 2015, on the progress
of activities undertaken by each regulated entity to implement
this Section. In this report, the Commission shall recommend a
program for carrying out the policy declared in this Section,
together with recommendations for legislation it deems
necessary or desirable to further that policy. This report
shall include recommendations to the utilities for the
achievement of maximum results in implementing this Section.
Section 99. Effective date. This Act takes effect upon

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becoming law.