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

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-Amended.html

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Rep. William Davis

Filed: 3/5/2013

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AMENDMENT TO HOUSE BILL 102
AMENDMENT NO. ______. Amend House Bill 102 by replacing
everything after the enacting clause with the following:
"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) Definitions. 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, minority owned, or qualified service-disabled
veteran-owned small business for whatever purpose. A business

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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 (ii) a female owned business or qualified
service-disabled veteran-owned small business if the females
are qualified service-disabled veterans.
"Clearinghouse" means the Commission-supervised entity
authorized under subsection (d) of this Section whose primary
purpose is to audit and verify the status of female and
minority owned businesses, and to establish and maintain a
database of female, minority, and service-disabled
veteran-owned businesses that is accessible to the Commission
and participating entities.
"Commission" means the Illinois Commerce Commission.
"Control" has the meaning given to that term in the
Business Enterprise for Minorities, Females, and Persons with
Disabilities Act.
"Executive Director" means the Executive Director of the
Illinois Commerce Commission.
"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

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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.
"Participating entity" means a public utility, as defined
in this Section, that is required to participate in this
procurement program as well as any other entity, including
cable and wireless operators, that may voluntarily participate
in this procurement program.
"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.
"Public utility" means all regulated gas, electric, water
companies and incumbent local exchange telecommunications
carriers with at least 100,000 customers.
"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,
minority owned business, or qualified service-disabled
veteran-owned small business.
"Short-term goal" means a goal applicable to a period of

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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) Annual reporting requirement. Within 90 days after the
effective date of this amendatory Act of the 98th General
Assembly, the Commission shall enter an order to establish a
format for participating entities' annual reports required by
subsection (h) and annual plans required by subsection (k).
(c) Verification rules and guidelines regarding
eligibility of business enterprises.
(1) The Clearinghouse, as described in subsection (d),
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 participating entity may accept
verification of a qualifying female or minority owned
business's status made under the Business Enterprise for
Minorities, Females, and Persons with Disabilities Act or

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Section 45-57 of the Illinois Procurement Code or, for
verification of a qualifying service-disabled
veteran-owned business, under Section 45-57 of the
Illinois Procurement Code.
(2) In assessing the suitability of a qualifying
business to bid for procurement contracts, a participating
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 participating entity may not, however, require
such additional information in order to verify that a
business is in fact a qualifying business.
(3) Female owned businesses and minority owned
businesses shall be required to submit verification forms
at least once every 3 years.
(4) Service-disabled veteran-owned businesses must
present proof of certification as determined by the
Illinois Department of Veterans' Affairs.
(5) Completion of the verification application only
initiates a verification of the business's status as a
female owned business or minority owned business. Filing of
an application does not guarantee verification.
(6) The fact that a verified qualifying business is
included in the Clearinghouse database shall not be

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construed as an endorsement of its ability to perform, nor
shall such inclusion guarantee it business with the
participating entities.
(7) Verification forms for female owned businesses or
minority owned businesses shall be available for
inspection by the Commission.
(8) Falsification of information on the verification
form shall disqualify owners from reapplying for
verification for 5 years after the date the falsification
is discovered.
(d) Clearinghouse for the sharing of identification and
verification information of qualifying businesses. The
Commission shall within 90 days after the effective date of
this amendatory Act of the 98th General Assembly, after hearing
and by order, authorize a participating entity-formed entity or
arrangement whereby participating entities shall operate and
fund the operation of a Commission-supervised Clearinghouse.
In authorizing a participating entity-formed entity or
arrangement, the Commission must identify sufficient terms and
conditions to specify how verifications and audits shall be
performed, to develop a Request for Proposals to solicit bids
from vendors who will design and maintain the Clearinghouse
website, 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 entities.
The Clearinghouse auditing and verification program shall
preclude the need for an individual participating 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
participating entities 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.
(e) Participating entity implementation.
(1) Each participating entity's program shall be
designed to ensure that qualifying businesses are
encouraged to become potential suppliers of products and
services to the participating entities subject to this
Section. Nothing in this Section authorizes or permits a
participating entity to utilize set asides, preferences,
or quotas in administration of its program. The
participating entity retains its authority to use its
legitimate business judgment to select the supplier for a

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particular contract.
(2) Each participating entity shall maintain an
appropriately sized staff to provide overall program
direction and guidance and to implement program
requirements. Each participating entity shall ensure that
its employees with procurement responsibilities receive
training in the implementation of its program.
(3) Each participating entity shall implement an
outreach program to inform and recruit qualifying
businesses to apply for procurement contracts. Outreach
activities may vary for each participating entity
depending on its size, service territory, and specific
lines of business. However, each participating entity
shall, at a minimum:
(A) actively seek out opportunities to identify
qualifying businesses and to expand qualifying
business source pools;
(B) actively support the efforts of organizations
experienced in the field who promote the interests of
qualifying businesses;
(C) work with qualifying businesses to facilitate
contracting relationships by explaining participating
entity qualification requirements, bid and contracting
procedures, materials requirements, invoicing and
payment schedules, and other procurement practices and
procedures;

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(D) 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, maintenance costs, and delivery capability,
shall be provided when requested if disclosure would
not violate the proprietary nature of the specific
contract element;
(E) to the extent possible, make available to
qualifying businesses lists of participating entity
purchase and contract categories that offer them the
best opportunity for success;
(F) encourage employees involved in procurement
activities to break apart purchases and contracts as
appropriate to accommodate the capabilities of
qualifying businesses; and
(G) summarize this Section in its outreach program
handouts.
Each participating entity is directed to offer the same
assistance set forth in this subsection (e) to entities that
are not qualifying businesses, upon request.
(f) Subcontracting. Each participating 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

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enhancement to, and not as a replacement for, the participating
entity's prime contractor outreach program. The subcontracting
program shall apply to:
(A) purchases or contracts exceeding $500,000 for
products and services;
(B) construction contracts exceeding $1,000,000; and
(C) 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 participating 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 participating entity plans
that include goals for the utilization of qualifying businesses
as subcontractors. These plans may be incorporated into the
contract between the participating entity and the prime
contractor. The prime contractor may submit periodic reports on
its compliance with the plan to the participating entity.
Each participating 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:

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"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
participating entity) that female owned businesses,
minority owned businesses, or qualified service-disabled
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
participating 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 participating 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

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statement to that effect could be included in all appropriate
procurement documents.
Each participating 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 participating entity shall include in its
annual plan a description of future plans for encouraging prime
contractors to engage qualifying businesses in all procurement
categories that provide subcontracting opportunities. Each
participating entity may include awards to verified qualifying
businesses in its results.
(g) Goals. Each participating 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 participating entity's commitment to encourage
the participation of qualifying businesses in participating
entity purchases and contracts. The participating entities
shall consider the following factors in setting their goals:
(A) total participating entity purchasing and
contracting projections;
(B) availability of qualifying businesses and
competitiveness in the geographical area served by the
participating entity;

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(C) market dynamics based on historical data and
trends; and
(D) other appropriate factors that would increase the
qualifying businesses' share of participating entity
business.
Each participating entity shall establish initial minimum
long-term goals for each major category of products and
services the participating 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 entities is set at 3%.
The specification of initial long-term goals in this
subsection shall not prevent the participating entities from
seeking to reach a goal of awarding 20% or more of their
contracts to female owned, minority owned, and
service-disabled veteran-owned businesses.
Goals shall also be established for both minority female

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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 (g). These goals are intended to ensure that
participating entities 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 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
(g) are not met, the participating 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 participating 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 participating 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

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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
participating entity encourages the affiliate to establish an
appropriate subcontracting program where such affiliate
employs subcontractors. Any participating entity that
subtracts these dollars must, in its annual report to the
Commission, state whether the affiliates have established a
subcontracting program and describe the results of any such
program. The participating 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
participating 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 participating entity other
than products and services related to fuel procurement.
Payments to other public utilities, franchise tax fees,
other taxes, and postage need not be included in the standard
procurement base used to establish goals.
Each participating entity shall make special efforts to
increase utilization and encourage entry into the marketplace
of qualifying businesses in product or service categories where

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there has been low utilization of qualifying businesses, such
as legal and financial services and areas that are considered
technical in nature.
No penalty shall be imposed for failure of any
participating entity to meet or exceed goals.
Participating entities shall report their goals in an
annual report.
(h) Annual report. Each participating entity shall submit
its annual report on its qualifying business program to the
Executive Director by February 1 of each year beginning in
2015. 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 qualifying
business (female, minority, service-disabled veteran),
product, and service categories compared with total
contract dollars awarded to outside vendors in those
categories;
(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 participating entity to fall short

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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 and areas that are considered highly technical in
nature.
Participating entities 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 a participating
entity's individual document retention policies, and shall
provide these documents and data to the Commission upon
request.
(i) Complaint process. The Commission shall within 90 days
after the effective date of this amendatory Act of the 98th
General Assembly establish, after hearing and by order, a
complaint process that addresses:
(A) complaints by business enterprises whose status
has been denied by the Clearinghouse, or who have been
deverified by the Clearinghouse;
(B) third-party complaints challenging the status of a
business whose verification is pending or who has already
been verified by the Clearinghouse; and
(C) the complaint and appeal process.

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(j) Limitation. Nothing in this Section shall prohibit any
participating entity from breaking down specific categories
further than specifically required under this Section.
(k) Annual plan. Participating entities shall also submit a
detailed and verifiable plan for encouraging qualifying
business procurement in all categories to the Executive
Director by February 1 of each year, beginning in 2015. The
annual plan shall contain at least:
(A) the short-term, mid-term, and long-term goals set
as required by this Section;
(B) a description of qualifying business program
activities planned for the next calendar year, which shall
include both internal and external activities;
(C) plans for recruiting qualifying business suppliers
of products or services where utilization of qualifying
businesses has been low, such as legal and financial
services and areas that are considered highly technical in
nature;
(D) plans for seeking and recruiting qualifying
business suppliers of products or services where
qualifying business suppliers are currently unavailable;
(E) plans for encouraging prime contractors to engage
qualifying businesses in subcontracts in all categories
that provide subcontracting opportunities; and
(F) plans for complying with the qualifying business
program guidelines established by the Commission.

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(l) Commission report. The Commission shall provide a
report to the General Assembly on or before January 31, 2014,
describing the Commission's and participating entities'
progress toward implementing this Section. Thereafter, the
Commission shall provide an annual report to the General
Assembly, beginning with the first such report on or before May
1, 2015, on the progress of activities undertaken by each
participating entity to implement this Section. In this report,
the Commission shall recommend a program to enhance
implementation of 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 participating entities for the
achievement of maximum results in implementing this Section.
Section 99. Effective date. This Act takes effect upon
becoming law.".