Bill Text: IL HB3720 | 2023-2024 | 103rd General Assembly | Introduced

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

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Bill Title: Reinserts the provisions of the introduced bill with the following changes. Provides that a corporation that is a publicly held domestic or foreign corporation with its principal executive office located in Illinois to provide in its annual report the percentage of minority suppliers (rather than professional services) procurements from business enterprises owned by minority persons, women, or persons with disabilities as those terms are defined in the Business Enterprise for Minorities, Women, and Persons with Disabilities Act. Removes provisions concerning the Business Enterprise for Minorities, Women, and Persons with Disabilities Act.

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Engrossed) 2023-05-26 - Rule 3-9(a) / Re-referred to Assignments [HB3720 Detail]

Download: Illinois-2023-HB3720-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3720 Introduced , by Rep. Elizabeth "Lisa" Hernandez SYNOPSIS AS INTRODUCED:
30 ILCS 575/4 from Ch. 127, par. 132.604
805 ILCS 5/8.12
Amends the Business Enterprise for Minorities, Women, and Persons with Disabilities Act. Provides that the Commission on Equity and Inclusion shall establish goals based on the types of communities served by businesses. Requires corporations that are publicly held domestic or foreign corporation with their principal executive office located in Illinois to provide in their annual report the percentage of professional services procurements from business enterprises owned by minority persons, women, or persons with disabilities as those terms are defined in the Business Enterprise for Minorities, Women, and Persons with Disabilities Act. Provides that the Secretary of State shall establish a publicly accessible and searchable database of the information in each annual report.
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A BILL FOR
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AN ACT concerning State government.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Business Enterprise for Minorities, Women,
and Persons with Disabilities Act is amended by changing
Section 4 as follows:
(30 ILCS 575/4) (from Ch. 127, par. 132.604)
(Section scheduled to be repealed on June 30, 2024)
Sec. 4. Award of State contracts.
(a) Except as provided in subsection (b), not less than
30% of the total dollar amount of State contracts, as defined
by the Secretary of the Council and approved by the Council,
shall be established as an aspirational goal to be awarded to
businesses owned by minorities, women, and persons with
disabilities; provided, however, that of the total amount of
all State contracts awarded to businesses owned by minorities,
women, and persons with disabilities pursuant to this Section,
contracts representing at least 16% shall be awarded to
businesses owned by minorities, contracts representing at
least 10% shall be awarded to women-owned businesses, and
contracts representing at least 4% shall be awarded to
businesses owned by persons with disabilities.
(a-5) In addition to the aspirational goals in awarding

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State contracts set under subsection (a), the Commission shall
by rule further establish targeted efforts to encourage the
participation of businesses owned by minorities, women, and
persons with disabilities on State contracts and shall
establish goals based on the types of communities served by
businesses. Such efforts shall include, but not be limited to,
further concerted outreach efforts to businesses owned by
minorities, women, and persons with disabilities.
The above percentage relates to the total dollar amount of
State contracts during each State fiscal year, calculated by
examining independently each type of contract for each agency
or public institutions of higher education which lets such
contracts. Only that percentage of arrangements which
represents the participation of businesses owned by
minorities, women, and persons with disabilities on such
contracts shall be included. State contracts subject to the
requirements of this Act shall include the requirement that
only expenditures to businesses owned by minorities, women,
and persons with disabilities that perform a commercially
useful function may be counted toward the goals set forth by
this Act. Contracts shall include a definition of
"commercially useful function" that is consistent with 49 CFR
26.55(c).
(b) Not less than 20% of the total dollar amount of State
construction contracts is established as an aspirational goal
to be awarded to businesses owned by minorities, women, and

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persons with disabilities; provided that, contracts
representing at least 11% of the total dollar amount of State
construction contracts shall be awarded to businesses owned by
minorities; contracts representing at least 7% of the total
dollar amount of State construction contracts shall be awarded
to women-owned businesses; and contracts representing at least
2% of the total dollar amount of State construction contracts
shall be awarded to businesses owned by persons with
disabilities.
(c) (Blank).
(c-5) All goals established under this Section shall be
contingent upon the results of the most recent disparity study
conducted by the State.
(d) Within one year after April 28, 2009 (the effective
date of Public Act 96-8), the Department of Central Management
Services shall conduct a social scientific study that measures
the impact of discrimination on minority and women business
development in Illinois. Within 18 months after April 28, 2009
(the effective date of Public Act 96-8), the Department shall
issue a report of its findings and any recommendations on
whether to adjust the goals for minority and women
participation established in this Act. Copies of this report
and the social scientific study shall be filed with the
Governor and the General Assembly.
By December 1, 2020, the Department of Central Management
Services shall conduct a new social scientific study that

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measures the impact of discrimination on minority and women
business development in Illinois. By June 1, 2022, the
Department shall issue a report of its findings and any
recommendations on whether to adjust the goals for minority
and women participation established in this Act. Copies of
this report and the social scientific study shall be filed
with the Governor and the General Assembly. By December 1,
2022, the Commission on Equity and Inclusion Business
Enterprise Program shall develop a model for social scientific
disparity study sourcing for local governmental units to adapt
and implement to address regional disparities in public
procurement.
(e) All State contract solicitations that include Business
Enterprise Program participation goals shall require bidders
or offerors to include utilization plans. Utilization plans
are due at the time of bid or offer submission. Failure to
complete and include a utilization plan, including
documentation demonstrating good faith efforts when requesting
a waiver, shall render the bid or offer non-responsive.
Except as permitted under this Act or as otherwise
mandated by federal regulation, a bidder or offeror whose bid
or offer is accepted and who included in that bid a completed
utilization plan but who fails to meet the goals set forth in
the plan shall be notified of the deficiency by the
contracting agency or public institution of higher education
and shall be given a period of 10 calendar days to cure the

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deficiency by contracting with additional subcontractors who
are certified by the Business Enterprise Program or by
increasing the work to be performed by previously identified
vendors certified by the Business Enterprise Program.
Deficiencies that may be cured include: (i) scrivener's
errors, such as transposed numbers; (ii) information submitted
in an incorrect form or format; (iii) mistakes resulting from
failure to follow instructions or to identify and adequately
document good faith efforts taken to comply with the
utilization plan; or (iv) a proposal to use a firm whose
Business Enterprise Program certification has lapsed or is not
yet recognized. Cure is not authorized if the bidder or
offeror submits a blank utilization plan, a utilization plan
that shows lack of reasonable effort to complete the form on
time, or a utilization plan that states the contract will be
self-performed, by a non-certified vendor, without showing
good faith efforts or a request for a waiver. All cure activity
shall address the deficiencies identified by the purchasing
agency and shall require clear documentation, including that
of good faith efforts, to address those deficiencies. Any
increase in cost to a contract for the addition of a
subcontractor to cure a bid's deficiency shall not affect the
bid price and shall not be used in the request for an exemption
under this Act, and, in no case, shall an identified
subcontractor with a Business Enterprise Program certification
made under this Act be terminated from a contract without the

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written consent of the State agency or public institution of
higher education entering into the contract. The purchasing
agency or public institution of higher education shall make
the determination whether the cure is adequate.
Vendors certified with the Business Enterprise Program at
the time and date submittals are due and who do not submit a
utilization plan or have utilization plan deficiencies shall
have 10 business days to submit a utilization plan or to
correct the utilization plan deficiencies.
(f) (Blank).
(g) (Blank).
(h) State agencies and public institutions of higher
education shall notify the Commission on Equity and Inclusion
of all non-responsive bids or proposals for State contracts.
(Source: P.A. 101-170, eff. 1-1-20; 101-601, eff. 1-1-20;
101-657, Article 1, Section 1-5, eff. 1-1-22; 101-657, Article
40, Section 40-130, eff. 1-1-22; 102-29, eff. 6-25-21;
102-558, eff. 8-20-21; 102-1119, eff. 1-23-23.)
Section 10. The Business Corporation Act of 1983 is
amended by changing Section 8.12 as follows:
(805 ILCS 5/8.12)
Sec. 8.12. Female, minority, and LGBTQ directors.
(a) Findings and purpose. The General Assembly finds that
women, minorities, and LGBTQ people are still largely

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underrepresented nationally in positions of corporate
authority, such as serving as a director on a corporation's
board of directors. This low representation could be
contributing to the disparity seen in wages made by females
and minorities versus their white male counterparts. Increased
representation of these individuals as directors on boards of
directors for corporations may boost the Illinois economy,
improve opportunities for women, minorities, and LGBTQ people
in the workplace, and foster an environment in Illinois where
the business community is representative of our residents.
Therefore, it is the intent of the General Assembly to gather
more data and study this issue within the State so that
effective policy changes may be implemented to eliminate this
disparity.
(b) As used in this Section:
"Annual report" means the report submitted annually to the
Secretary of State pursuant to this Act.
"Female" means a person who is a citizen or lawful
permanent resident of the United States and who
self-identifies as a woman, without regard to the individual's
designated sex at birth.
"Minority person" means a person who is a citizen or
lawful permanent resident of the United States and who is any
of the following races or ethnicities:
(1) American Indian or Alaska Native (a person having
origins in any of the original peoples of North and South

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America, including Central America, and who maintains
tribal affiliation or community attachment).
(2) Asian (a person having origins in any of the
original peoples of the Far East, Southeast Asia, or the
Indian subcontinent, including, but not limited to,
Cambodia, China, India, Japan, Korea, Malaysia, Pakistan,
the Philippine Islands, Thailand, and Vietnam).
(3) Black or African American (a person having origins
in any of the black racial groups of Africa). Terms such as
"Haitian" or "Negro" can be used in addition to "Black" or
"African American".
(4) Hispanic or Latino (a person of Cuban, Mexican,
Puerto Rican, South or Central American, or other Spanish
culture or origin, regardless of race).
(5) Native Hawaiian or Other Pacific Islander (a
person having origins in any of the original peoples of
Hawaii, Guam, Samoa, or other Pacific Islands).
(6) "Publicly held domestic or foreign corporation"
means a corporation with outstanding shares listed on a
major United States stock exchange.
(c) Reporting to the Secretary of State. As soon as
practical after August 27, 2019 (the effective date of Public
Act 101-589), but no later than January 1, 2021, the following
information shall be provided in a corporation's annual report
submitted to the Secretary of State under this Act and made
available by the Secretary of State to the public online as it

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is received:
(1) Whether the corporation is a publicly held
domestic or foreign corporation with its principal
executive office located in Illinois.
(2) Where the corporation is a publicly held domestic
or foreign corporation with its principal executive office
located in Illinois, data on specific qualifications,
skills, and experience that the corporation considers for
its board of directors, nominees for the board of
directors, and executive officers.
(3) Where the corporation is a publicly held domestic
or foreign corporation with its principal executive office
located in Illinois, the self-identified gender of each
member of its board of directors.
(4) Where the corporation is a publicly held domestic
or foreign corporation with its principal executive office
located in Illinois, whether each member of its board of
directors self-identifies as a minority person and, if so,
which race or ethnicity to which the member belongs.
(5) Where the corporation is a publicly held domestic
or foreign corporation with its principal executive office
located in Illinois, the self-identified sexual
orientation of each member of its board of directors.
(6) Where the corporation is a publicly held domestic
or foreign corporation with its principal executive office
located in Illinois, the self-identified gender identity

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of each member of its board of directors.
(7) Where the corporation is a publicly held domestic
or foreign corporation with its principal executive office
located in Illinois, a description of the corporation's
process for identifying and evaluating nominees for the
board of directors, including whether and, if so, how
demographic diversity is considered.
(8) Where the corporation is a publicly held domestic
or foreign corporation with its principal executive office
located in Illinois, a description of the corporation's
process for identifying and appointing executive officers,
including whether and, if so, how demographic diversity is
considered.
(9) Where the corporation is a publicly held domestic
or foreign corporation with its principal executive office
located in Illinois, a description of the corporation's
policies and practices for promoting diversity, equity,
and inclusion among its board of directors and executive
officers.
(10) Where the corporation is a publicly held domestic
or foreign corporation with its principal executive office
located in Illinois, the percentage of professional
services procurements from business enterprises owned by
minority persons, women, or persons with disabilities as
those terms are defined in Section 2 of the Business
Enterprise for Minorities, Women, and Persons with

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Disabilities Act.
Information reported under this subsection shall be
updated in each annual report filed with the Secretary of
State thereafter. The Secretary of State shall establish a
publicly accessible and searchable database of the information
in each annual report.
(d) Beginning no later than March 1, 2021, and every March
1 thereafter, the University of Illinois Systems shall review
the information reported and published under subsection (c)
and shall publish on its website a report that provides
aggregate data on the demographic characteristics of the
boards of directors and executive officers of corporations
filing an annual report for the preceding year along with an
individualized rating for each corporation. The report shall
also identify strategies for promoting diversity and inclusion
among boards of directors and corporate executive officers.
(e) The University of Illinois System shall establish a
rating system assessing the representation of women,
minorities, and LGBTQ people on corporate boards of directors
of those corporations that are publicly held domestic or
foreign corporations with their principal executive office
located in Illinois based on the information gathered under
this Section. The rating system shall consider, among other
things: compliance with the demographic reporting obligations
in subsection (c); the corporation's policies and practices
for encouraging diversity in recruitment, board membership,

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and executive appointments; and the demographic diversity of
board seats and executive positions.
(Source: P.A. 101-589, eff. 8-27-19; 102-223, eff. 1-1-22;
102-813, eff. 5-13-22.)